Thought leadership
Infrastructure investors have become far more sophisticated about the role individual assets play within a portfolio, and that is changing the nature of project due diligence.
The scale of investment alone demands it. Infrastructure Australia's 2025 Infrastructure Market Capacity Report captures $1.14 trillion of forecast construction activity over five years. Within that, the Major Public Infrastructure Pipeline has reached a record $242 billion, up 14% on the previous year's outlook.
Against that backdrop, due diligence can no longer be mainly about checking whether approvals, contracts and reports exist. The more important question is whether the project can actually be financed, built and operated on the assumptions being presented to investors.
That means diligence has to start earlier in development, and it has to work across disciplines. Reviewing each contract on its own isn't enough — the real value is in understanding how the technical, commercial, planning, grid, financial and contractual positions interact, and where they don't.
Connection is now a fundamental investment issue, not just an engineering workstream. AEMO's June 2026 Connections Scorecard shows a 75 GW pipeline of projects working through the NEM connection process. In FY26, 9.1 GW reached full output — more than double the year before — while 14.2 GW of applications were approved. Batteries now make up 53% of the capacity in that pipeline.
For investors, it's not enough to know that a connection application has been lodged. Diligence needs to get into connection timing, congestion, curtailment, system strength, commissioning risk and what all of that means for revenue. Sponsors need credible connection strategies and downside cases showing what happens if energisation or full output lands six or twelve months later than the base case.
The Capacity Investment Scheme was expanded to 40 GW in July 2025 and is expected to support around $73 billion of electricity-sector investment between 2024 and 2027. But the tenders also show how competitive the market has become. Tender 4 drew 84 bids representing 25.6 GW against a 6 GW target; 20 projects totalling 6.6 GW were selected. Tender 7 drew 53 bids representing 18.6 GW, with 19 projects totalling 7.8 GW selected. Those Tender 7 projects have also committed, subject to final contracts, around $504.6 million in community benefits and $678.7 million in First Nations benefits.
A CIS Agreement materially improves a project's revenue position, but it doesn't make an otherwise weak project bankable. Land, connection, planning, construction contracts, equipment, financing and delivery capability still all have to work.
Environmental and social diligence has moved well beyond obtaining a planning approval. Lenders and investors are looking more closely at biodiversity, water, human rights, Indigenous engagement, land access, community impacts and benefit sharing.
Delivery capability is one area we think deserves particular attention. A good financial model is only as useful as the delivery assumptions sitting behind it. Infrastructure Australia estimates Australia had an infrastructure workforce of about 204,000 people in October 2025, against a shortage of around 141,000 workers. That shortage is forecast to exceed 300,000 by mid-2027, while regional workforce shortages are expected to quadruple over the same period. In Infrastructure Australia's 2025 survey, 63% of firms identified labour costs and 59% identified labour and skills shortages as substantial threats to project delivery. At the same time, investment in utilities — driven largely by electricity transmission — has more than doubled to $36 billion over the five-year outlook.
For sponsors, procurement plans need to be more than schedules sitting in a data room. Investors want evidence of contractor appetite, supplier engagement, equipment lead times, labour availability, realistic contingencies, and a delivery model that can actually be executed.
Contractual risk allocation is getting the same scrutiny. An EPC contract may say risk has been transferred, but diligence should test whether that transfer holds up in practice. Liability caps, liquidated damages, interface risk, warranties, change in law, termination rights, insurance and security packages all need to be weighed against the underlying technical and financial assumptions.
One of the simplest tests is also one of the most valuable: do the technical model, financial model, connection program, EPC contract, offtake arrangements and financing documents all assume the same dates, capacities and performance standards? Surprisingly often, they don't.
Operational resilience and cybersecurity have also become standard diligence items rather than specialist add-ons. Amendments to the Security of Critical Infrastructure Act expanded its scope to 11 sectors and 22 asset classes, and subsequent reforms introduced Critical Infrastructure Risk Management Program obligations for relevant assets. These programs cover risks including cyber and information security, personnel, supply chains, physical security and natural hazards. For energy and other critical infrastructure, that means operational diligence needs to look at control systems, software providers, remote access, incident response, spare parts and operational governance, not just the physical asset.
The broader shift is toward integrated diligence — not replacing the standard legal, financing, tax and accounting workstreams, but sitting alongside them. A credible review of an infrastructure or energy project should bring together:
The most valuable diligence identifies where these workstreams intersect. A delayed connection changes revenue. A changed construction program affects financing. A planning condition can alter design and cost. A poorly allocated interface risk can undermine an apparently fixed-price EPC contract.
For project owners and sponsors, the practical lesson is simple: prepare for diligence before the investor arrives. Projects with a well-structured data room, aligned technical and financial assumptions, credible delivery evidence, and material risks already resolved will generally move through investment committees faster and with fewer surprises.
Good due diligence does not make a bad project good. It makes it much harder for a bad project to look good, and much easier for a good project to prove its value.
Tell us the asset or the decision and we will tell you what a review would cover.