Future Fund to increase focus on energy transition with new investment mandate
The updated mandate reaffirms the independence of Australia’s sovereign wealth fund while acknowledging its potential to contribute to national priorities renewable energy, housing, and infrastructure.
The Federal Government has announced updates to the Future Fund's Investment Mandate, introducing a stronger focus on Australia’s energy transition as part of a broader strategy to adapt to long-term economic changes.
The Future Fund is Australia’s sovereign wealth fund and was valued at $229.7 billion as of September 2024. Moving forward, the Fund will consider national priorities when making investment decisions, provided this does not compromise its objective of achieving strong financial returns. New areas of focus include renewable energy, housing supply, and infrastructure projects within Australia.
The Fund’s primary goal remains to deliver investment returns of CPI plus 4–5% per year over the long term. However, the updated mandate directs the Fund to explore opportunities aligned with Australia’s economic goals, such as supporting net zero initiatives and bolstering energy infrastructure.
“Delivering that investment target remains the focus for the Future Fund under this new investment mandate. The Board of Guardians will continue to make investment decisions independent of Government with the priority of generating commercial returns,” said Greg Combet, Chair of the Future Fund Board of Guardians.
To bolster efforts in the energy sector, the Future Fund plans to appoint an Executive Director for Energy Transition. This role will drive investments in renewable energy and support emerging projects, building on the Fund’s existing $12 billion infrastructure portfolio.
Current renewable investments include assets through Tilt Renewables, which operates and develops 1.8 GW of wind, solar, and battery storage projects. The Fund is also considering additional opportunities to strengthen Australia’s renewable energy capacity.
The Fund’s broader portfolio includes key infrastructure projects such as runway expansions at Melbourne and Perth Airports and a 400 MW development pipeline at data centre operator CDC.
“The announcements by the Government mean that the Future Fund will be in place for years to come. This is a great outcome for all Australians. With that certainty, we will be able to continue to invest for the long term, make sustainable contributions to the Federal Budget, and continue to grow the value of the Fund long into the future,” Mr Combet added.
To support its sustainability goals, the Government confirmed that no withdrawals would be made from the Future Fund until at least 2032–33, allowing it to continue building its portfolio. By then, the Fund’s value is projected to grow to $380 billion.
