The half in numbers
- Global infrastructure finance around $1.3trn in the half, +18%, on 8.9% fewer deals (IJGlobal)
- Project finance $682.7bn, +53.6% (IJGlobal)
- US power and utilities M&A $216bn against $79bn a year earlier — across the same 23 deals (PwC)
- Infrastructure fundraising $40.8bn in the half, well below the prior year (Infrastructure Investor)
- Renewable energy investment fell 9.5% in 2025 to $690bn, while grid spending rose (BNEF)
- UK listed renewables trusts near their widest ever discount to NAV, around 35% (AIC)
What happened
Capital came back — to power, not to panels. US power and utilities M&A almost tripled in value across an unchanged 23 transactions, led by NextEra and Dominion at $67bn and the $49.6bn take-private of AES.
Renewables did not share it. Investment fell 9.5% in 2025 even as grid spending climbed toward $550bn, China’s solar installations fell 66% in the half, and corporate clean power buying fell for the first time in nearly a decade. Equity is scarce too: 58% of that $40.8bn was earmarked for renewables.
Where the capital went
Into electrons and wires. Data centres are set to take roughly half of US electricity demand growth to 2030, and more than 2,500GW of projects sit stalled in connection queues. Hyperscalers have contracted around 13GW of nuclear — under a fifth of their own projected need. Prices are splitting: North American solar PPAs fell 4.8% in the quarter, the first drop in two years, while wind rose 17.5% on the year on tariffs and permitting delay. The stress sits with the incumbents. Ørsted took a DKK 1.2bn impairment on its US offshore portfolio, attributed to long-dated US rates. Developers have accepted over $12bn to relinquish US offshore leases. And Bluefield Solar went to Drax at a 31% premium to the share price and a 9% discount to NAV — the clearest read on where listed renewables value sits.
What the authorities did
Four moves, and three of them land on the same structure.
Australia finalised its third party debt test guidance. Funding distributions, dividends or returns of capital is not a commercial activity connected with Australia. Back-to-back swaps fail where any amount is referable to an associate, even one that passes it straight on. And credit support rights are “unlikely to ever be” minor or insignificant assets. The transitional concessions expire on 1 January 2027 — already past, for most 30 June year-ends.
The UK codified the other half. From accounting periods beginning in 2026, financial transactions must be priced reflecting group financial support, including implicit support and explicit guarantees affecting borrowing capacity. Australia’s draft financing guidance red-flags the same thing from the other direction: using a guarantee to raise more debt than the borrower could have raised alone.
Brussels went the other way. The EU Tax Omnibus would make the group escape rule mandatory, aimed expressly at capital-intensive leveraged sectors, and widens the infrastructure exclusion to public-benefit projects — but leaves it optional, and only 20 Member States adopted the existing one. Third-party debt is carved out unless it funds equity contributions within the group, which is most holdco structures. Application is 2029.
And Pillar Two’s new substance-based tax incentive safe harbour names electricity production as a qualified incentive, with the cap driven by depreciation on tangible assets.
The ajiho view
Project finance is a guarantee business. The sponsor support deed, the completion guarantee, the cost-overrun undertaking and the parent comfort behind the swap are what let an SPV with no trading history carry 70% gearing at 1.25 times cover. None of that was ever priced as a transaction. It is about to have to be.
Three moves point the same way. Australia says credit support can never be dismissed as insignificant. The UK says borrowing capacity created by implicit or explicit support must be reflected in the price. And Australia’s draft guidance red-flags a guarantee used to raise debt the borrower could not raise alone. Read together, that is a requirement to establish what the SPV could have borrowed standalone and to price the difference — the analysis almost no project file contains.
The second exposure is quieter and compounds. Shareholder loans into project vehicles are routinely deferred or rolled up behind a cash sweep. Two courts decided this year that this changes nothing: Uganda held that capitalising accrued interest is a payment, so withholding tax crystallises then rather than on remittance; Hong Kong held that deferred, cash-contingent shareholder interest is still interest, not a return on equity. A structure built to defer cash has not deferred the tax.
Our call. Guarantee and credit support pricing becomes the contested point on project structures through 2027, ahead of the loan margin — and the exposure lands first in Australia, where the concessions have already expired.
What this means for your business
- Inventory the credit support before the next financing. Support deeds, completion guarantees and cost-overrun undertakings are transactions, and at least two authorities now say so.
- Establish what the project company could borrow standalone. The gap between that and the actual facility is what the support is paying for, and what has to be priced.
- Australian structures: the third party debt test concessions have expired for most 30 June filers. Debt-funded distributions and associate-referable swaps are the two that bite.
- Test rolled-up shareholder interest for withholding at the point it capitalises, not when it is paid. Deferring the cash does not defer the obligation.
Sources
IJGlobal / Green Street, H1 2026 Infrastructure and Project Finance League Table Report; Infrastructure Investor H1 2026 Fundraising Report; PwC, Power and Utilities: US Deals 2026 Midyear Outlook; BloombergNEF Energy Transition Investment Trends 2026 and corporate clean energy buying (February 2026); IEA, World Energy Investment 2026 and Electricity 2026; LevelTen Energy North American PPA Price Index Q2 2026; Association of Investment Companies; Ørsted Q2 2026 results; Evercore H1 2026 Secondary Market Review. ATO, TR 2025/2 and PCG 2025/2 Schedule 3. Finance Act 2026 (UK), transfer pricing. European Commission, direct tax Omnibus proposal, 24 June 2026. OECD Inclusive Framework, side-by-side package, January 2026. Uganda Court of Appeal, ATC Uganda Ltd, 2026. Hong Kong Court of First Instance, Sinolink Shanghai Investments Ltd, July 2026. Market data as at 21 August 2026.