The integration of renewable energy and digital infrastructure to meet a surging power demand is a growing area attracting investors while simultaneously addressing the increasing net zero objectives of data centre operators, a new IMF Investors report has found.

Melbourne-headquartered IFM Investors Executive Director Marigold Look said corporates are developing tailored solutions such as co-locating renewable energy sources with data centres to help ensure power security and to gain competitive advantages.

The company’s Private Markets 700 Barometer report, which analyses global institutional investor expectations and sentiment on private markets investment found data centre operators are now ‘following the power’ and approaching renewable energy generators to build new data centres on existing renewable energy sites.

It also found from 700 respondents surveyed that governments are focusing on energy independence and boosting advanced manufacturing capabilities, leading to opportunities for investors in infrastructure debt.

Surveyed investors cited the energy transition / net zero imperative as a significant megatrend shaping infrastructure investment plans.

Canada-headquartered corporate finance company Manulife Global Head Corporate Finance and Infrastructure John Anderson told the IMF survey that renewable energy is a very active space for the company.

“Digital infrastructure is likely our second priority and, within that, the growing demand for computational power and data centres is drawing a lot of attention,” Anderson said.

He added the growing demand for AI will give rise to a need for new physical infrastructure, as well as a greatly increased power supply.

IMF’s reports says more than four in five investors says environmental infrastructure such as renewable energy systems is a priority for both infrastructure equity and debt.

Funds dedicated to the energy transition and environmental infrastructure have grown in recent years, representing a global market of $2.8 trillion (USD1.8 trillion).

Sustainability considerations of the respondents were found to include the energy efficiency of infrastructure (39%) with true benefit to local communities topping 40% of participants surveyed and increased social equality as a consequence of infrastructure having the greatest pull at 55%.

Although there is currently no legal mandate for Australian asset owners to integrate sustainability into investment decisions, many are adopting voluntary frameworks such as the task force on climate-related financial disclosures (TCFD) ahead of climate-related disclosures being mandate for Australia institutions and companies from 2025, the report says.

IFM Investors Chief Strategy Officer Luba Nikulina said the opportunity set and investment universe of these infrastructure technology opportunities are only limited by the speed of technological developments emerging.

“These new opportunities span a range of important investment themes and megatrends, from capturing the energy transition to digitisation and automation,” Nikulina said.

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