Defensive Asset Class
A diverse category with a resilient nature
The energy infrastructure category spans a number of economic models, technologies and geographies with different regulatory regimes – yet the asset class is united by its critical role in today’s economies, setting these assets apart from other infrastructure sub-sectors and asset classes.
Due to their macroeconomic importance, energy infrastructure investments tend to be more resilient to economic downturns and less exposed to market fluctuation compared to other asset classes. Energy infrastructure is thus defensive in nature and characterized by real asset characteristics with unique advantages compared to other sectors in the infrastructure space.
Infrastructure: Generating sustainable returns
Infrastructure requirements exceed supply
The energy sector represents a significant portion of global capital requirements and is anticipated to face tremendous growth over the coming decades. This expectation is supported by fundamental macro trends such as population growth, urbanization and broad political support for decarbonization.
Energy Infrastructure Partners is one of the few managers of collective assets exclusively focused on energy infrastructure investments. We carefully identify and select the right assets, structure them appropriately and manage them actively on an ongoing basis.
Energy Infrastructure Partners is one of the few managers of collective assets exclusively focused on energy infrastructure investments. We carefully identify and select the right assets, structure them appropriately and manage them actively on an ongoing basis.
International investments in energy infrastructure are covered by the Energy Charter Treaty
Description
- The Energy Charter Treaty was signed in 1994 and provides a multilateral framework for energy cooperation with the incentive to promote security of energy supply through more open and competitive markets
- The treaty focuses on the protection of foreign investments, reliable conditions for trade, the resolution of disputes between investors and host states and the promotion of energy efficiency and sustainability
- Currently negotiations are taking place to make the treaty more sustainable and supportive of the energy transition
Members
The 56 members of the energy charter treaty include the following European parties:
Objective
- Promote transparency and efficiency of energy markets through a legal framework
- Facilitate international private sector investments in energy infrastructure through additional legal & regulatory protection
- The Energy Charter Secretariat tracked 114 publicly known investment arbitration cases where the ECT was invoked and brought before the ICSID1, SCC2, UNCITRAL3 or PCA4 by May 2018
- Example: Vattenfall claimed EUR 1.4bn in 2009 and subsequently received a settlement at ICSID from the Federal Republic of Germany due to expropriation related to the construction of a coal-fired power plant