The energy transition is underpinned by infrastructure that either directly produces or contributes to producing clean energy, such as renewable power, nuclear energy, electricity grids and low-emission fuels. PE firms can play a crucial role in investing in and developing these infrastructures. Closing the gaps in these infrastructure areas will require a major reallocation of capital, above and beyond what is already underway.

PE firms, SWFs and PPFs combine significant financial resources: some US$32.8 trillion of assets under management, as of the end of 2023. If aligned with the priorities of the energy transition, their resources could go a long way towards bridging the financing gap that exists today. These funds stand to benefit, as well; the energy transition offers multiple investment opportunities with long-term prospects.

• Adopting the trailblazer approach, which involves pioneering new investment theses and developing innovative solutions for energy-transition projects, especially in emerging economies where private investors often perceive high risks. An example of a trailblazer is Masdar, a UAE-based energy company and long-term investor that has been among the first movers for several renewable technologies in various countries.
• The whole-of-life approach, which involves holding an energy-transition asset for its entire life cycle, from early-stage development through operations, and capitalising on its potential for long-term revenue growth. This approach enables PE firms, SWFs and PPFs to finance clean energy projects spanning the entire maturity spectrum, without being constrained by specific investment mandates or restrictions. An example of a whole-of-life investor is GIC, a Singapore-based SWF that has made several energytransition–related investments in both developed and developing countries.
• The blended finance approach, which involves collaborating with multilateral development banks, development finance institutions and private investors to finance energy-transition projects that generate solid financial returns and socioeconomic benefits. In this approach, PE firms, SWFs and PPFs can absorb initial losses through subordinated tranches in investment structures, thereby enhancing the project's risk-adjusted returns and attracting other investors. An example of a blended finance investor is Temasek, a Singapore-based SWF that has several investment platforms aimed at providing such solutions for the energy transition.