Australia remains one of the most attractive destinations globally for long‑term infrastructure investment, supported by economic stability, transparent regulation and deep domestic pools of capital.
However, investors say delivery risk, not access to capital, is increasingly constraining new investment. Recent government deliberations on retrospective capital gains tax reform add a further layer of complexity for investors, despite the attractive profile Australia has built to date.
Australia’s overall strong investment pull was the clear message from a roundtable of leading national and global institutional infrastructure investors convened by management consultancy Baringa, in partnership with the Global Infrastructure Investor Association (GIIA).
Investor appetite for Australian infrastructure remains strong. Major superannuation funds also expect their infrastructure allocations to rise materially, with one respondent noting that their capital allocation is set to almost double by 2030 in absolute terms. This is underlined by findings of the 2025 Australian Infrastructure Investment Monitor, which previously showed 85% of surveyed investors are ‘highly likely’ to invest in Australian infrastructure over the next three years.
Participants said Australia continues to screen well relative to other developed markets, particularly for long‑dated energy, transport and data centre investments. However, this is leading to intensified competition for a limited pipeline of investable opportunities.
In renewable energy, investors said auctions are increasingly characterised by aggressive bidding, often driven by strategic positioning rather than pure financial returns. In regulated sectors, some investors described returns as “predictable but average” on a risk‑adjusted basis, reflecting Australia’s structurally lower risk premiums compared with the US, Asia or parts of Europe.
Investors also pointed to tangible benefits flowing to consumers and governments from competition for capital. In regulated sectors, efficiency gains and disciplined capital deployment are improving value outcomes for consumers. For governments, private ownership and co‑investment models enable capital recycling, freeing up balance sheets for new infrastructure and other policy priorities. New South Wales’ asset recycling program remains a leading global example.
Where concern is growing is on execution.
Investors said planning delays, fragmented approvals, labour shortages and land access constraints are increasingly undermining timetables and project bankability, particularly for large‑scale energy transition infrastructure such as transmission.
Examples were cited of projects stuck in development for years due to overlapping regulatory and environmental processes, in contrast to projects in less constrained jurisdictions that have moved from approval to operation far more quickly. Labour shortages, particularly skilled workers in the energy sector, are now seen as a binding constraint, while land access issues are materially increasing costs.
“Australia’s fundamentals remain strong overall, but coordination, delivery risk and policy predictability create some uncertainty” said Jon Phillips, Chief Executive of GIIA. “In the near term, this includes considering how proposals to retroactively tax international investors may play out. Such a move is deeply concerning and would clearly have damaging impact on current investor sentiment if enacted.”
Baringa said Australia remains well positioned to mobilise private capital at scale, but warned that without reform, delivery risks could erode its competitive advantage.
“Private investment is one of Australia’s most effective tools for funding essential infrastructure while protecting public balance sheets. The broader pipeline of medium-term recycling opportunities should not be ignored,” said Ben Nethersole, director at Baringa and lead for its infrastructure advisory work. “Maintaining Australia’s attractiveness for greenfield investment will depend on addressing the structural factors that are delaying projects and driving up costs, particularly approvals complexity, labour constraints and delivery models.”
Investors agreed that streamlining permitting, improving coordination across jurisdictions and clarifying the role of government in project delivery will be critical if Australia is to unlock the next phase of infrastructure investment, and ensure the benefits flow to consumers, businesses and governments alike.
About Baringa
Baringa is a global consulting firm that partners with leaders to drive change and create value. With deep industry expertise, and enabled by advanced technology, the firm helps clients to deliver with greater confidence and certainty. With over 2,000 people across Australia, Asia the UK, Europe and North America, the firm combines global insight with local understanding. The firm works across the energy, financial services and government sectors in Australia. Outside Australia, Baringa also works for clients in consumer products, retail, pharmaceuticals and life sciences, manufacturing, and the technology, media and telecommunications sectors, with capabilities spanning strategy, transformation and operational excellence – all powered by advanced technology, data, AI and digital innovation.