Deployment speed is key obstacle to investing in renewables, survey finds

Speed of deployment is the main obstacle to investing in renewables infrastructure, according to a survey of UK pension funds and insurers.

The study, commissioned by real assets investment manager AlphaReal, solicited the views of 100 UK senior investment professionals in public and private pension funds and insurance firms which collectively manage £359.82 billion in AuM.

When asked to name the top barriers to investing in renewable infrastructure, almost four-fifths (79%) of respondents selected putting their capital to work swiftly, while 70% selected policy and regulatory uncertainty.  Sixty-eight per cent cited illiquidity in their top three barriers.

Almost half (47%) of those surveyed like pre-greenfield development stage projects. One-third (33%) like greenfield fully consented projects with energisation dates, and one-fifth (19%) prefer brownfield sites where the asset is operational and generating revenues.

Eight-two per cent of respondents said they look to invest in the UK only; 12% consider opportunities across Europe; and 6% worldwide.

Raza Ali, fund manager for renewable infrastructure at AlphaReal, said: “Speed of deployment is a concern to many investors, making it important to partner with an established investment manager with a track record in the sector.

“Doing so ensures ample access to opportunities including off market transactions, as well as efficient evaluation. Buying unlevered also allows due diligence to be targeted solely for the needs of investors, as opposed to debt where the interests of debt holders need to be factored in, further improving speed of deployment.”

Interviews for the survey were conducted online in November 2023.

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