Macquarie Acquires Island Green Power, Accelerating Infrastructure Funds' Rise in BESS

Major European utilities, including Enel, RWE and Iberdrola, were among the first to invest in battery energy storage systems, designated by the acronym BESS, more than a decade ago. These groups deployed their corporate balance sheets and internal capabilities—engineering, construction, electricity market trading, asset management—to develop and operate the first generation of storage projects. Their early engagement responded more to strategic and technical imperatives than commercial ones.

Infrastructure Funds Seize Development Platforms

This maturity enabled battery storage to establish itself as an investable asset class, now suited to private institutional capital. Infrastructure funds acquire or create large-scale BESS development platforms equipped with advanced go-to-market capabilities. By leveraging optimization-focused operators, these sponsors accelerate the segment's institutionalization and its scaling in fragmented markets.

The typical mechanism involves acquiring stakes in development platforms to access their project portfolios. Funds then provide construction financing or so-called brown-to-green funding—the conversion of existing assets into low-emission infrastructure—to realize these projects. This approach enables capital deployment at each stage of an asset's lifecycle.

Macquarie and Island Green Power, Emblematic Example of the Trend

Macquarie Asset Management's May 2025 acquisition of Island Green Power exemplifies this dynamic. Island Green Power develops solar and BESS projects across the United Kingdom. According to the sector, this transaction represents a typical case of the strategy adopted by major infrastructure funds to gain a foothold in Europe's battery storage market.

This dynamic reflects battery storage's maturation as an asset class in Europe. Utilities such as Enel, RWE and Iberdrola built the foundations of a sector now attractive to private institutional capital. Infrastructure funds, by supporting agile optimization-focused operators, bring rapid deployment capacity to structurally fragmented markets.