Some of Australia's biggest funds are pouring money into U.S. clean energy projects as they butt up against a shortage of green opportunities at home.
AustralianSuper, the country's largest retirement fund, recently joined Queensland Investment Corp. in a $1 billion funding round for Generate, a San Francisco-based green-finance company. And Construction and Building Unions Superannuation, another retirement-savings giant, made its first U.S. clean power investments last year.
The investments come as the wildfires that charred an area about the size of New York state have put increasing pressure on funds to do more to fight global warming. The problem, investors say, is the Australian government isn't promoting clean energy development, leaving the nation without enough sizable projects to back.
"At this point the platforms of scale don't exist in Australia," said Nik Kemp, head of infrastructure at AustralianSuper. "The size of the U.S. market makes for a much larger market and much better long-term growth opportunities."
Clean energy investments in Australia plummeted 38% last year to $6 billion, down from a record high in 2018. The decline came as Prime Minister Scott Morrison's government, a staunch supporter of the coal industry, has opted not to set a more ambitious renewable energy target for the nation.
"There's no driving force for future growth," said Leonard Quong, head of Australia research for BloombergNEF.
AustralianSuper, which manages more than A$180 billion ($119 billion), has been investing in the U.S. for more than a decade. The deal with Generate, announced earlier this month, was the superannuation fund's first foray into the American renewable energy market. In conjunction with the funding, executives from AustralianSuper and QIC joined Generate's board.
Cbus, which manages A$56 billion in retirement savings for construction workers, closed on investments with Capital Dynamics Inc. in July and August. The asset manager will use the funds to back solar and wind farms.
"We will look at more investment if the opportunities stack up," Cbus CIO Kristian Fok said in an email.