US major private capital firm KKR and Australian-listed asset manager HMC Capital have agreed a new strategic partnership under which KKR-managed funds will invest up to A$603 million ( US$417 million ) into HMC’s energy transition platform.

The investment will introduce KKR as a strategic partner alongside HMC in the platform’s existing 652-megawatt operational assets and its 5.7-gigawatt battery energy storage system and wind development pipeline.

KKR’s investment will support the platform’s continued expansion, including the development of new battery storage and wind projects critical to grid reliability and Australia’s energy transition.

The investment needed to fund Australia’s energy transition is considerable, KKR notes, and the platform is well-placed to bring to market its significant clean energy generation capacity to support the growing energy demand from consumer, industrial and emerging artifical intelligence users over the coming decades.

This transaction establishes the foundation for HMC and KKR, they argue, to significantly scale the existing platform and identify growth opportunities, alongside the platform’s experienced management team.

KKR is funding this investment from its global climate transition strategy. The firm has committed more than US$44 billion to climate and environmental sustainability investments since 2010 and is a leading investor in the energy transition.

This investment marks KKR’s second climate investment in Australia, following CleanPeak, an Australian distributed energy platform.

“As renewable generation in Australia continues to expand, the country’s energy system is at a pivotal moment,” says Neil Arora, KKR partner and head of its climate transition strategy for Asia. “Delivering Australia’s ambition will require investment in flexible infrastructure, such as battery storage, to keep the grid secure and reliable.”