A new infrastructure investment fund is helping funnel more private capital into large scale solar and other critical assets for Indigenous communities.
The Indigenous Infrastructure Investment Fund was launched a few months ago by infrastructure investment manager, Impact Investment Partners.
According to IIP managing director Chris Croker, who is a Luritja man from Central Australia, the purpose of the fund is to improve Indigenous economic participation and access to infrastructure services such as reliable electricity, clean and safe drinking water, improved health care and better access to quality education.
It will also create jobs for Indigenous Australians and boost economic engagement through procurement and leasing from Indigenous landholders.
The fund will not only deliver positive social impact for Indigenous communities, it will also deliver attractive returns for investors.
How it all started
Croker grew up in remote desert communities, so has a deep understanding of the issues facing these communities when it comes to essential infrastructure, or lack thereof.
He and his business partners founded Impact Investment Partners around five years ago, which started out providing business consulting services to Aboriginal communities to help them increase the economic participation, particularly largescale development on their land.
“The traditional owners want to have a role in mining developments and renewable investments on their land, rather than being a stakeholder, it’s about how do they actively participate.”
From this work they noticed that there were plenty of social infrastructure asset opportunities and a wealth of interested parties to develop them. The problem was the perceived level of difficulty working with a diverse set of community groups and alongside government.
Setting out to remove these barriers, the company landed on a private wholesale trust open to all wholesale investors targeting total investments of $500 million over five years and across 15-20 direct investments.
Critically, it will be easy for aboriginal investors and socially minded investors to enter. The ambition is to have half Indigenous investors within two to five years.
There’s now a considerable pipeline of investable projects. The fund will start with improving energy reliability in Aboriginal communities in Northern Australia and health assets in metropolitan NSW and Victoria (where there are some of the largest populations of Indigenous Australians).
Only infrastructure projects that provide social and economic return to both the communities and investors are selected, such as solar farms that provide electricity generation for the community.
And once this investment is made in one Aboriginal community, Croker says it will be easy to roll out similar assets in other communities across Australia.
“The underlying business model is the same from community to community.”
It’s early days but there’s a big appetite for responsible investment
The fund started capital raising in June and is still in capital raising phase.
Croker says although there’s nothing announcable yet in terms of large investments, the fund is appealing to the super industry that is under “ongoing demand from their members, mums and dads, to put their dollars to good use in environment and ethical investments”.
“There’s actually not that many opportunities that present themselves to big super that meets that criteria.
“We think the indigenous social investments tick all the boxes – high social and financial returns.”
He also believes these types of opportunities are flying under the radar, with socially earmarked capital ending up in worthy and but also higher visibility impact investment opportunities overseas, rather than similar social causes here in Australia.
He suspects the fund is the first of its kind. He says although there are some private infrastructure funds open to Aboriginal funds and trusts, the fund is open to all whole sale investors and it’s also “quite unusual to be committing to both commercial returns and social outcomes.”
Perpetual Corporate Trust has been appointed as the custodian and wholesale trustee for the fund.