The latest iteration of PGGM’s impact investing journey sees a core/satellite structure around 3D investing, more active management, a total portfolio approach and the hiring of fund managers that align with the mission. Amanda White spoke to chief fiduciary investments Arjen Pasma.

Central to PGGM’s impact investing approach is that risk, return and sustainability share equal airtime in the selection of investments.

The challenge comes in the implementation of the philosophy, which PGGM deploys via a core/satellite approach. The core portfolio, which is about 95 per cent of the assets, will be returns-based with different degrees of sustainability. Then it invests for real-world impact in smaller satellite portfolios around three themes: the energy transition, healthcare and biodiversity.

“These are investments where we want to claim real measurable impact. Smaller and more focused investments, still a focus on high financial returns but more degrees of freedom in those, and a specific impact,” says Arjen Pasma, the fund’s chief fiduciary investments.

As part of this multi-year journey, which ranks PGGM as one of the leading funds globally in its commitment to impact, the core portfolio has become more active with inclusion rather than exclusion at the centre.

“The core portfolio was more or less passive, and then to make it more sustainable we used screening. But we think that’s inefficient. Now we are selecting by starting with a blank piece of paper and adding companies. This makes it efficient in financial returns and a better sustainable profile than the index.”

This will be applied across all asset classes, and while PGGM would rather approach the capital allocation in a more asset class agnostic way, the Dutch law requires it to have an asset allocation in its investment plan.

“We can’t quite do TPA in the same way as some other funds. We still need to have asset-liability modelling that gives us an asset allocation,” Pasma explains.

The fund invests across equity, credit, real estate, private equity, infrastructure and alternative credit, plus there is a protection portfolio, hedging the liabilities of retirees.

“This approach won’t massively change the asset allocation, because that’s largely determined by the outcome of the ALM. I can only change how we are investing in those asset classes,” he says, adding active risk has substantially increased.

“In public equities our tracking error was below 50 basis points and now our active risk is about 300 basis points. It allows us to deviate from the benchmark so we can make some choices, but it’s not highly concentrated. We don’t allow our financial returns to suffer from the fact we want a more sustainable portfolio, it needs to be efficient in all of those three factors.”

The impact portfolios are still in their infancy, with only a “few hundred million euros” deployed so far.

The impact themes don’t have specific target allocations but Pasma says the energy transition themed investments will be a couple of billion euros, healthcare a little less and “biodiversity we are still figuring out”.

Of course, PGGM has been investing through an ESG or sustainable lens for many years and by many definitions would have more than a few hundred million euros classified as sustainable investments. But for its impact investments, which use the Theory of Change (ToC) as a framework, allocations follow the Global Impact Investing Network (GIIN) standards, which have a much higher bar, including intentionality.

For example, aligning investments with the UN’s sustainable development goals does not meet the GIIN standards, Pasma says, so those investments are in the core allocation rather than the impact satellite funds.

“The satellite mandates are very focused and asset class agnostic. Our smallest investment is €1 million – that is something we would never do in the core portfolio,” Pasma says.

The approach is allowing a fund the size of PGGM, with €261 billion, to invest in assets like new technology companies in the healthcare sector, and Pasma says there will be an increase in these types of investment over time.

“People are very enthusiastic about those investments. It’s a fun job – hard but fun,” he says.

Designing portfolios and manager alignment

Pasma says the team has taken its time to build the portfolio, because “we want to do a proper job”. This has included consulting with a lot of people, including seeking out people who think ESG investing is a terrible idea.

There has also been some criticism in the Netherlands about the potential concentration risk resulting from a focus on impact investing and this has been front and centre in designing the portfolios, given the fund’s size.

“We know we will not move into a highly concentrated portfolio. We still have a sufficient amount of companies in the portfolio – it’s north of 1000 names, but not the 7000 we used to have,” he says.

“We are designing the portfolios now and have completed the public equity and credit portfolios. We know what changes we want to make, and which managers we will hire. Those transitions are planned for this year.”

The overhaul won’t necessarily result in using fewer external managers, but there will be changes to the manager roster.

“It’s important to us that those managers we use have a vision and some experience in managing portfolios that are efficient in those 3D terms. That’s a challenge because sustainability data is something you need to invest in,” he says. “We are seeking out managers that also differ in their approach. We want to learn from external teams and internal teams about what is the best approach to managing a portfolio like that. It’s also about spreading risk and diversifying strategies.

“The managers we want are those that have said ‘we understand what you need, a 3D-efficient portfolio, and we want to build that for you.”

He said some managers have said they don’t want anything to do with ESG because of the political pressure in the US, and that’s ok. He’s also aware that with experience the portfolio and the managers will evolve.

“If we need to change managers then we will do so. But we are quite convinced the managers we have selected are in a great position to build a great 3D portfolio.”

The portfolio of the future

Pasma says a new governance structure and a focus on total portfolio management is also required for 3D investing and really knowing what you own.

From a behavioural incentive perspective, financial KPIs are not individual but judged on the overall portfolio and split 50/50 between financial and sustainability metrics.

“Twenty years ago, the only important thing was you were a financial economist and good at optimisation and calculating risk and return. Now you need to understand the sustainability profiles of the businesses and the real-world experience in your due diligence because the financial risk and return is only telling part of the story.

“With that, and the supernova of data coming into the market, there is a lot more information out there, available at a much faster pace, and if you want to use that you need to transform the raw data into information and insights and need the people to do that.”

The information required, and the way it is consumed, is a focus for PGGM as it looks to the future and invests in hiring more people with experience across AI, data platforms, and data analytics.

“Having a transition in your workforce, people who are more balanced in the teams themselves and tech they use. The entire team needs to make a transformation to AI.”

The journey to impact is a 2030 strategy but the first transitions in public markets will take place this year.

There’s been a lot to absorb and Pasma says the fund is reaching the change capacity of the organisation, which means taking it more slowly with new projects.

“Managing the story is also something we underestimated,” he says. “We need to sit together more and discuss where we are going and why it is important and fun, especially when there is a change in climate and the anti-ESG movement in the US, people are less confident.”

This article was produced by Capital Group without involvement from the Top1000funds.com editorial team.

Uncertainty surrounding the impact of the US administration’s policy plans weighed on markets, including the implementation and reversal of tariffs, job cuts across the federal workforce and tightened immigration enforcement.

US growth momentum has slowed, with significant uncertainty in the outlook and risks likely skewed to the downside. Fundamentals had been resilient, with consumer spending supported by real income growth, firm labour market demand and relatively low unemployment on a historical basis. However, tariff announcements and broader policy uncertainty have contributed to weakening consumer and business sentiment and have the potential to negatively impact real incomes, business investment and inflation. Recession risks appear to be rising.

Inflation dynamics complicate the Federal Reserve’s (Fed’s) policy decisions. Inflation implied by the Consumer Price Index and the core Personal Consumption Expenditures Index remains elevated. The Fed has indicated that it is seeking clarity on the impact of the Trump administration’s policies before it moves again, having cut the federal funds target rate by 100 bps in the last few months of 2024. Still, broader economic growth challenges and possible labour market weakness could lead to more cuts this year.

Potential policy changes from the Trump administration have raised the degree of uncertainty in the economic outlook and could weigh on global growth. The distribution of outcomes related to tariffs, taxes, regulation and international relations seems unusually wide. The initial impact of announced tariffs could meaningfully lower global growth. While the starting point for growth looks stronger in the US than in other global regions, the risks to the US seem skewed to the downside.

While economic fundamentals in many international regions currently look weaker than in the US, fiscal responses could be supportive over time. Following decades of a stable alliance, Europe is responding to a more isolationist US with increases in fiscal stimulus, which could in turn spur economic growth over the medium-to-longer term.

German stimulus and the EU’s plan to raise defense spending under ReArm EU are positive steps that should pave the way for closer European integration and faster growth in the coming years. Meanwhile, the European Central Bank appears set to lower interest rates, with the balance of risks tilted toward additional cuts given the growing chance of a trade war between the US and Europe.

In Asia, China has started to stabilise, although stimulus remains limited. That trend could change as Chinese officials look toward more fiscal measures to offset tariff risks.

Given heightened uncertainty, we are focused on building resilience and balance in portfolios. The implications of recently announced tariffs in the US could significantly alter the global growth picture, a scenario which markets are beginning to appreciate. We have looked to construct portfolios that reflect balanced risks across excess return drivers. We favour credit sectors where the income component is relatively more compelling.

We believe positioning for a steeper yield curve offers favourable risk-reward dynamics and could serve as a risk-off hedge to complement risk exposures elsewhere. In our view, the steepener position could benefit either in a worse-than-expected economic slowdown or with inflation and deficit dynamics driving long-term yields higher. We view duration more positively given that growth momentum is slowing, uncertainty is building and recession risks are rising. An underweight position in global duration could be beneficial as fiscal stimulus in non-US developed markets might cause the differential between US and non-US rates to narrow.

Within credit, we are maintaining an up-in-quality bias with a tilt toward more defensive areas of the market. This positioning reflects our concerns around increased macro and policy uncertainties. Though credit fundamentals have been sound, volatility and downside risks are likely to remain elevated. We believe select exposures across high-yield and emerging markets debt remain attractive, though credit selection is key.

We believe positioning for a steeper yield curve offers favorable risk-reward dynamics and could serve as a risk-off hedge to complement risk exposures elsewhere. In our view, the steepener position could benefit either in a worse-than-expected economic slowdown or with inflation and deficit dynamics driving long-term yields higher. We view duration more positively given that growth momentum is slowing, uncertainty is building and recession risks are rising. An underweight position in global duration could be beneficial as fiscal stimulus in non-US developed markets might cause the differential between US and non-US rates to narrow.

Within credit, we are maintaining an up-in-quality bias with a tilt toward more defensive areas of the market. This positioning reflects our concerns around increased macro and policy uncertainties. Though credit fundamentals have been sound, volatility and downside risks are likely to remain elevated. We believe select exposures across high-yield and emerging markets debt remain attractive, though credit selection is key.

 

To read more about Capital Group’s fixed income capabilities, click here. 

The private markets allocation at the United Kingdom’s Brunel Pension Partnership, one of eight Local Government Pension Fund pools set up 2017, is valued at £8 billion ($10.7 billion) spread across 162 investments, including prized sustainable investments in wind, solar green hydrogen and waste.

The allocation is split between different fund types – primaries, secondaries and co-investment – as well as direct co-investments and fund secondaries, overseen by Richard Fanshawe who joined Brunel as head of private markets seven years ago. Back then, the combined allocation to private markets (excluding property) amongst the ten client funds in the partnership was just £1.3 billion.

Fanshawe credits much of the growth in the allocation to private markets to Brunel’s “innovative model”, characterised by selecting fund investments internally alongside working with strategic partners (that are also global leaders in their asset classes) to select co-investments and funds where applicable. He says their expertise complements and acts as an extension of Brunel’s internal team of 12 private markets investment professionals – there were just five at the start.

“We are already able to achieve what the Canadian model aspires to,” he says in a reference to Canada’s model which combines robust governance with independent managers and large teams who select investments themselves to create a deep allocation to private markets and has helped create the second-largest pension system in the world, according to the OECD.

The pool’s own resources and those it can tap with its partners, plus Brunel’s combination of leadership in responsible investment and a dual investment committee process, has created a proven track record of scalable, resilient and cost-effective investment, he continues. Moreover, co-investing with a wider number of sponsors adds a critical layer of diversification that single-sponsor platforms can’t replicate. Similarly, he says access to “top-class, voluminous deal flow” is fundamental to the ability to be highly selective when choosing investments.

To date, Brunel has made 32 co-investments in global infrastructure projects and platforms, nine of which are in the UK. Co-investing is saving the pension funds in the pool around £5 million annually. In private equity, flagship investments include cornerstone Neuberger Berman Impact Private Equity (PE) Funds 1 and 2 which are 60-70 per cent co-investments.

“Co-investing is most certainly not just an extension of fund selection, but a spectrum from basic post-deal syndication to the upper end of complexity – it is an entirely new ball game requiring distinct expertise, continuous primary allocations to funds in their investment periods and compensation structures that are beyond pension funds in order to make them sustainable.”

Net returns of early realisations from Brunel’s more mature vintages already offer an early indication of success, but he says Brunel won’t increase the allocation to private markets anymore at the moment. Around 33 per cent of partner funds assets are invested in private markets, and he says there is “little more capital available to deploy until capital is recycled or strategic asset allocation weights change.”

For all the growth in Brunel’s private markets allocation over the last seven years, Fanshawe flags an enduring lack of opportunity in the UK. “There have been few exciting UK investment opportunities during the last seven years, and certainly not as many as there could have been,” he says.

He traces the lack of opportunity in UK infrastructure to the shift away from private/public partnerships in social infrastructure projects renowned for highly attractive ‘availability payments’. Now the focus is on energy, economic and utility-related assets with “fundamentally different return profiles and drivers.”

It means there are more attractive opportunities in Europe and the US with “fundamentally different business models” to those in the UK where, according to asset manager Equitix, there is now a backlog of between £50 billion and £300 billion of capital maintenance in the public sector and social infrastructure facilities.

Brunel has invested 50 per cent of all infrastructure capital in the broad energy transition, diversifying across geographies, regulatory regimes, technologies, stages, vintages and GPs. However, Fanshawe concludes that putting money to work in the transition has grown more challenging.

The consequences of the review of the UK’s electricity market arrangements are looming into view. Other challenges include “the urgent need to focus on energy efficiency measures,” the lack of proven long-duration energy storage technologies with subsidy arrangements to support higher renewable penetration and few new low-carbon baseload opportunities.

“Lack of certainty will discourage further investment,” he says.

Norges Bank Investment Management (NBIM) which oversees Norway’s sovereign wealth fund managing the country’s oil and gas revenues, is expanding its investments in hedge funds to include mandates to Asian, US and European long/short external managers. The number of managers and invested value will depend on market opportunities, said Erik Hilde, global head of external strategies at NBIM.

NBIM already invests in internally managed long/short funds. The investor also allocates approximately $90 billion to 110 external fund managers, all of whom follow bottom-up fundamental investment strategies.

“Everything will continue to be managed within our mandate and within the limits we have for deviations from the index,” said Hilde, who added that fees will be structured similarly to NBIM’s existing external mandates.

The strategies will be held in separately managed accounts. Hilde said that under the strategy, NBIM’s external managers will borrow stocks held in NBIM’s large index portfolio to position on falling prices, selling them in the market. “This way the fund avoids being net short in any company, even though some of the mandates will be long/short,” he explained.

According to NBIM’s public invitation to tender, the investor plans to award mandates across long/short and market-neutral strategies with initial funding for each mandate ranging from $150 million to $500 million. NBIM is looking to allocate mandates to single-country long/short equity strategies in Australia and Japan, regional long/short strategies focused on Europe, and long/short equity strategies in the US, where it is looking for expertise in healthcare and technology in particular.

The open invitation to external managers reflects growing investor interest in long/short equity strategies as market volatility and stock dispersion create fresh opportunities for active managers. NBIM’s move also comes as some investors grow increasingly concerned that equity market valuations look stretched, increasing the risks for long-only investors at a time when the impact of President Trump’s policies on the US economy, particularly his tariff plans, remains unknown.

Equities account for 70 per cent of the total assets under management. NBIM  has a 27.7 per cent allocation to fixed income and a 1.9 per cent allocation to unlisted real estate. Last April, Norway’s finance ministry rejected NBIM’s petition to invest in private equity citing higher fees, lower transparency of information, and the need for a broad political consensus.

Today’s new uncertainty contrasts with last year. NBIM attributes its 2024 return of 13 per cent to gains in global equity markets supported by solid corporate earnings, more optimistic growth expectations and declining inflation expectations.

Still, in 2024 the overall contribution from security selection was negative. External management made a positive contribution, but the negative contribution from internal management was larger. “The security selection strategy is not expected to contribute positively to the fund’s relative return every year, and the results for 2024 followed a period of five consecutive years of positive contributions from security selection,” states the fund.

NBIM has delivered annualised returns of 7.5 per cent over the past decade.

The fund had a 0.6 per cent loss in the first quarter of 2025 largerly weighed down by equities, which recorded a loss of 1.6 per cent or 415 billion kroner ($39 billion) driven by fluctuations in the tech sector.

With investment markets uncertain, being an investor with a global view and the flexibility to take advantage of opportunities has seen OPTrust “doing well”, its chief investment officer James Davis says. An evolution of its total portfolio approach keeps it focused on the key metric that matters to members: generating the return needed to pay pensions.

The evolution of the total portfolio approach used by OPTrust has been critical to the investment team’s ability to take advantage of the current uncertainty in markets according to chief investment officer, James Davis.

“Markets are absolutely crazy, everyone is hoping we will see something to alleviate the uncertainty, but we are doing well through it,” Davis says. “Being a global investor makes all the difference in this type of environment.”

The most recent evolution of the TPA journey, that began a decade ago when Davis introduced the member-driven investing strategy, is folding all the liquid market asset classes into one fund with a single investment objective.

“The team has a lot of flexibility, if it wants to be in credit, or gold, or equities or whatever they want to be in as long as it is liquid, they have huge freedom,” Davis says.

The newly named total portfolio management group, formerly the capital markets group, has flexibility to adjust the portfolio so long as it is within the risk budget that the CIO decides is acceptable, considering input from the portfolio and market review committee. This committee which includes senior management across investments, finance and risk meets every two weeks to discuss the overall portfolio and macro environment, and dynamically sets the desired risk profile and foreign currency exposure.

More recently the total portfolio management group has been dialling down credit exposures significantly, Davis says, recognising that credit spreads were quite tight especially late last year.

“It wasn’t something I directed them to do,” he says.

Another recent example is the geographical exposures within equities.

“They have been concerned about the situation in the US especially the concentration risk in the Mag 7, and have been exploring opportunities outside of the US,” Davis says.

They have also recently been allocating more to external hedge fund managers, looking specifically for uncorrelated alpha.

“The way the team approaches external managers is very different given this TPA mandate,” Davis says. “They are very focused on absolute return and finding uncorrelated strategies and managers that complement the beta strategies that we run internally.

The structure also allows the fund to look at assets that don’t fall within an asset class.

“It allows us to look at the spectrum,” Davis says.

“For example, are data centres real estate or infrastructure? Some people didn’t invest because they couldn’t decide what it was,” he says.

“We were early movers in gold and that served us well last year. We had more than 6 per cent in gold last year, and that was because the TPA process doesn’t force us to hold things in a benchmark or relative to the benchmark.”

Davis says the investment team is focused on excellence and continuous improvement.

“We can always be building on something better, striving to be more and more innovative,” he says. “We were early movers in machine learning and we are focusing on that and more recently in developing our AI capabilities.”

Systematic investing supports the focus on portfolio resilience and being able to adjust the portfolio through the portfolio completion team.

“It’s great to have something rules based when difficult times come.”

The evolution of TPA

Davis joined the fund as CIO in September 2015 and introduced the member-driven investing strategy and so began the decade-long evolution of its own unique total portfolio approach.

The idea was to stay focused on the key metric that was important for members, the funded status.

Davis says that naturally led to TPA because the aim is not to beat a benchmark but a focus on “the mission that really matters”, which is earning the return needed to pay pensions.

In a slightly unique take on TPA, and to take advantage of the fund’s natural strengths, the approach starts with the ideal illiquid assets allocation and then the portfolio is completed with liquid asset exposures to get the best portfolio to meet objectives.

“While in the perfect TPA-world all capital is at competition, I was always challenged by that because there’s a different liquidity horizon for different assets. So I felt we had to treat liquid and illiquid assets differently,” Davis says.

Private equity and infrastructure were already managed by the same team, and the private markets group uses skills from both asset classes.

“It’s one of our secret sauces in our overall recipe,” Davis says. “It allows us to look at the entire spectrum of private markets as a continuum, as a single pool of capital.”

To manage the overall risk in the fund it was necessary to be able to adjust the liquid portfolio due to changes in the illiquid portfolio or the macro environment. So a capital markets team was internalised, as a kind of portfolio completion group, allowing the use of leverage which was important for managing risk.

“That is something difficult to do if you don’t have internal capabilities,” Davis says.

The fund still uses external hedge funds and credit managers, as well as external managers in private markets.

The maximum potential allocation to illiquid assets is currently 60 per cent, but the actual allocation is less.

“We have a higher allocation to assets we think offer the highest possibility of value creation for the risk we take. We try to maximise that if the opportunities are there, but teams don’t have to be invested,” he says.

“If there’s no good opportunities within the illiquid portfolio then the overall allocations will go down and the allocation to the liquid completion portfolio will go up.

“Right now we have an abundance of liquidity which is important given the uncertainty in this current environment.”

Davis believes that opportunities will present themselves in infrastructure and private equity “in the next little while”, so OPTrust is well positioned to be able to capture some of those.

In addition he’s confident that the uncertainty in public markets will present opportunities.

“Volatility and uncertainty allows for bargain hunting, and more differentiation,” Davis says. “Before if you weren’t in tech stocks you were missing everything, now more variation and less correlation across different stocks and asset classes creates opportunities. There are also opportunities in the commodities space as well, so we are keeping a close eye on those.”

Davis says a concern about inflation is ever-present at the back of his mind.

“It’s hard to predict which way the economy will go, but the potential for inflation is higher now than the past several decades,” he says.

“Positioning the portfolio to capture gains in an inflationary environment is difficult but it can done.”

Private equity fees and a lack of high-quality, United Kingdom-focused fund managers targeting the scale-up sector is impeding UK pension funds’ ability to invest in private equity, according to a new report published by LGPS pool Border to Coast Pensions Partnership which has gathered views from its investment team, partner funds and senior executives at nearly a dozen leading asset managers.

The UK attracts a large slice of global private equity and venture flows into sectors like fintech, creative industries, life sciences and software, but very little of that money comes from domestic pension funds which are deterred by high fee structures that don’t accommodate defined contribution (DC) funds.

UK pension funds also have a statutory duty to cap fees which ignores the additional returns that investments with higher fees can deliver. Calling for clearer guidance from government and regulators, the paper argues pension schemes should assess value for money in their investments so that the focus isn’t just on management fees and value in isolation.

Government and regulators must lead the charge on highlighting the importance of considering net returns and the gains delivered after all costs, which in turn will ensure value for members both financially and in terms of broader economic benefit, says the paper.

“The Local Government Pension Scheme (LGPS) is already a significant investor in the UK, deploying a greater proportion of funds domestically than private defined contribution equivalents. But if government wants to unleash the full potential of the LGPS – and its £425 billion of assets – it should continue in its active engagement with the industry, and take note of the current blockers outlined in this report,” says Border to Coast CEO, Rachel Elwell.

Positively, large pension schemes, including the LGPS, are already significant investors in the UK.  Border to Coast, for example, has already invested more than £12 billion (23 per cent of total pooled investments) on behalf of its partner funds into UK public and private markets to date. This includes nearly £1.3 billion directly into UK private markets, making up 17 per cent of its partner fund’s pooled global private markets investment programme.

Since launching its private markets programme in 2019, Border to Coast has reduced the fees paid by its partner funds by 28 per cent relative to the industry standard. This success is down to the scale that pooling brings and the in-house team of investment experts that can build strong relationships with the right managers for the job. Expertise includes the design of bespoke investment vehicles with clear UK mandates like its UK Opportunities strategy, as well as access to co-investments offered by asset managers which were hard for partner funds to access individually.

Border to Coast aims to outperform a public market benchmark by 300 basis points and achieve annual net returns of 10 per cent from its private equity portfolio.

Limits to the UK asset management ecosystem

It’s not just fees that deter local private equity investment. Another challenge comes from the underdeveloped UK-focused asset management ecosystem. The report points to limited size, strength and number of domestic private equity managers – in particular those focused on earlier-stage companies in comments voiced by Border to Coast CIO Joe McDonell last year.

Fast-growing, young UK companies needing large-scale capital injections of over £20 million often struggle to find UK investors. Ensuring that more UK funds emerge to fill this expansion capital gap should be top of the agenda for the British Business Bank.

“Right now, UK pension schemes allocate so little to venture and growth equity that even the most in-demand UK-based managers are raising the bulk of their capital from overseas investors,” states the report.

It suggests that the government should also consider France’s Tibi scheme as a blueprint for channelling more capital into UK businesses. The scheme provides incentives for institutions that back innovative French technology companies and has significantly boosted France’s asset management ecosystem.

The report also highlights the need for reform in the UK’s planning system to encourage more infrastructure investment at home. Echoing other investors like IFM Investors, part-owned by DC-fund NEST, Border to Coast states that investment is being held back by the uncertainty created by the UK’s complex planning system and historical changes in government policy in areas like the green transition timeline. The report argues that these issues could be addressed by a more stable policy environment.

The authors call for a rapid passage of the Planning and Infrastructure Bill in a form that unblocks the UK’s planning system and the roll out of a well-designed ‘catalytic’ initiatives managed by the UK National Wealth Fund and GB Energy to develop infrastructure projects to the point where private sector capital can step in, de-risking greenfield projects and enabling the ’crowding in’ of private capital.

Amendments to the tax regime to incentivise wider infrastructure investment, akin to the Contracts for Difference regime for renewable energy infrastructure, would also support more investment.