Why infrastructure investors should embrace the energy transition

With climate and energy security challenges intensifying, the demand for reliable and cleaner sources for energy is rising.

According to analysis by nonprofit research group RMI, the global shift towards clean energy is advancing faster than nearly all previous forecasts¹. This demonstrates continued demand despite scepticism and some governments and corporates rowing back on previous net zero commitments.

LPs are also prioritising investments that not only promise stable returns but also drive sustainable change.

This was a key finding from Infrastructure Investor’s 2024 Investor Report, where both renewables and energy storage assets were the two areas where LPs said they would be investing more capital over the year ahead².

As parts of the world accelerate towards the use of cleaner energy, we believe that the energy transition is a macro trend that impacts the value creation plans for the majority of infrastructure investments.

Engaging with this trend is far broader than just investing in renewable energy. With many nations focusing on energy security and resilience, businesses which can facilitate the availability of energy when and where it is needed and at a predictable and competitive cost, whilst also being environmentally sustainable, are crucial.

As a leading investor in mid-market infrastructure, through our investment activity and in energy transition opportunities within our portfolio, Ancala has invested more than €1bn in companies and projects related to the energy transition. Here, we uncover how infrastructure managers can approach the energy transition across their portfolio to deliver lasting value.

The sooner the better

Infrastructure managers who recognise the value creation opportunities within the energy transition, map out the opportunities and risks from the very first stages of screening an investment. Doing so proactively helps to identify and pursue the areas which will deliver the most impact and start creating value for the business as soon as an investment completes.

The on-site 10MW solar panel installed at liquified natural gas terminal Dragon LNG during our ownership is a good example of this. As we were assessing the investment, we identified an opportunity to decarbonise Dragon’s site with on-site renewables whilst also reducing energy costs. Working with the business, we developed the project right through from an idea to delivery. The success of the project has led to plans to install a 13MWp wind farm, supplying a significant part of the terminal’s demand for power with self-sufficient, renewable electricity and further reducing energy costs.

A consideration throughout the investment lifecycle

Proactively measuring and managing energy transition objectives at board level throughout the lifecycle of an investment is essential, just like any other value creation initiative.

At Ancala, we recognise that we are investing in companies that serve local communities. This is a serious responsibility and one that needs to be considered carefully to deliver lasting positive outcomes. As a result, all of our portfolio companies are engaged on climate change mitigation and adaptation. We have also embedded expertise across our businesses to deliver sustainability and ESG improvement plans, whilst ensuring they are aligned with value creation.

This foundation of support and expertise promotes regular reviews and assessments of risks and opportunities and allows us to be agile and responsive as new opportunities emerge.

At Liverpool Airport, we have developed a comprehensive decarbonisation plan. This includes upgrading the energy consumption and control systems at the airport to reduce emissions and costs and incorporating low carbon technologies on site like heat pumps, EV charging infrastructure to support the use of electric ground support vehicles, and a solar farm.

The upgrades have already helped reduce the airport’s Scope 1 and 2 greenhouse gas emissions by more than 60% in comparison to 2011 data. In addition, the improved efficiency has reduced power consumption across the airport by c. 40% over the same period, reducing costs. It demonstrates the benefits sustainable initiatives can have on cost efficiency and adding greater predictability to cash flows, particularly when energy prices have been so volatile in recent years.

Collaboration is key

Developing major energy transition and energy security projects successfully requires extensive collaboration across a wide group of stakeholders which can involve regulators, central government, local government, and importantly, the communities that will benefit from the infrastructure.

Leading infrastructure fund managers utilise a wide network of portfolio companies and their own teams to build these relationships and ensure that key stakeholders are brought along in the journey to maximise success.

In Norway, our portfolio company Fjord Base, the country’s largest supply base is exploring becoming a major service provider to offshore renewable energy companies. We are working with leading renewable energy developers and technology providers who use the base to manage offshore windfarms and sustainable fuels in the region.

In Spain, Magnon Green Energy, another Ancala portfolio company, is leading a pioneering project to capture and recover biogenic CO₂ at its biomass-based renewable electricity generation plant in Huelva. The project will enable the shift from ‘grey methanol,’ which is produced from natural gas, to e-methanol, a sustainable alternative with a significantly lower carbon footprint. Its success so far has been driven by strong support and engagement with local environmental and sustainability government agencies in parallel with leading energy companies that will use the e-methanol.

Projects like these are critical to accelerate the transition to cleaner energy sources and can have a material positive impact on the value of businesses.

A sustainable future

There remains a significant requirement for investment to support a smooth transition and this is an opportunity which many infrastructure companies can capitalise on, no matter the sub-sector.

We expect the energy transition to continue to be an investment priority. It will be essential for infrastructure managers to think broadly about how the energy transition is approached, applied and aligned with value creation to truly unlock the full breadth of opportunities.

Interested to find out more about Ancala’s approach to investing in infrastructure? Register your interest, here.

References

1. https://rmi.org/insight/the-cleantech-revolution/

2. https://media.infrastructureinvestor.com/uploads/2025/01/2024-full-year-investor-report-infrastructure-investor.pdf