• CalSTRS will invest up to $2 billion through Nuveen’s Energy Infrastructure Credit business.
• The partnership will finance renewable power, storage, industrial decarbonization, energy efficiency and circular economy projects.
• Capital will also target domestic manufacturing and the power infrastructure needed for artificial intelligence and digital growth.

Nuveen and the California State Teachers’ Retirement System have formed a strategic partnership to invest up to $2 billion in sustainable infrastructure.

The mandate will provide tailored financing for clean energy and critical infrastructure projects in the United States and other markets. It will operate through Nuveen’s Energy Infrastructure Credit business, known as Nuveen EIC.

Nuveen manages $1.4 trillion across public and private markets. CalSTRS is the world’s largest educator-only pension fund and serves more than one million California public-school educators and beneficiaries.

The partnership brings together a large institutional investor and a specialist infrastructure credit platform at a time of rising power demand. Artificial intelligence, industrial onshoring and wider electrification are placing pressure on energy systems and supply chains.

CalSTRS anchors infrastructure credit strategy

CalSTRS will serve as an anchor investor in the sustainable infrastructure portfolio of Nuveen’s Energy & Power Infrastructure Credit Fund II, or EPIC II.

The pension fund could also anchor future complementary investment strategies. These vehicles would support additional infrastructure required for the clean energy economy.

The investment scope covers renewable power generation, energy storage and industrial decarbonization. It also includes energy efficiency technologies and circular economy investments.

Capital may support the onshoring of infrastructure supply chains and domestic manufacturing capacity. The partnership will also finance assets linked to artificial intelligence and the digital economy.

These sectors are becoming increasingly connected. Data centers require reliable electricity, while domestic manufacturing needs resilient power networks and secure supply chains.

“The demand for new energy, power, and digital infrastructure has never been greater,” said Don Dimitrievich, Global Head of Nuveen Energy Infrastructure Credit. “The rapid expansion of artificial intelligence, the onshoring of manufacturing and industrial supply chains, and the broad electrification of the economy are collectively creating a generational need for new infrastructure investment. We believe private credit is uniquely positioned to play a leading role in financing that buildout while also achieving positive sustainable outcomes. We are thrilled to work with CalSTRS as a long-term partner to scale strategies that seek to deliver strong risk-adjusted financial performance while also investing in communities and businesses to make energy more readily accessible and clean for all stakeholders.”

Private credit targets growing capital gap

Infrastructure credit has become an important financing channel as developers face higher borrowing costs and constrained bank balance sheets.

Nuveen EIC provides credit facilities, structured debt, equity solutions and preferred equity investments. It works with project developers, management teams and infrastructure sponsors across development, construction and long-term ownership.

This flexibility can help finance projects that do not fit traditional lending models. It can also provide capital during the development and construction stages, when projects often carry greater risk.

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The approach may appeal to pension funds seeking predictable income and long-duration assets. Sustainable infrastructure can also provide exposure to energy transition growth without relying solely on public equity markets.

For CalSTRS, the allocation supports its fiduciary duty to generate competitive risk-adjusted returns. It also offers the pension fund a route to reduce or avoid financed emissions through investments in cleaner infrastructure.

“This investment with Nuveen EIC aligns with our long-term outlook and mission to provide a secure retirement for our members,” said Nick Abel, Investment Director at CalSTRS. “We believe sustainable infrastructure credit requires specialists’ expertise to originate, underwrite and structure bespoke capital solutions. Sustainable infrastructure credit also represents an important allocation for CalSTRS as we seek to generate strong risk-adjusted returns and contribute to a cleaner, more resilient, and affordable clean-energy economy.”

AI demand reshapes infrastructure priorities

U.S. power demand linked to artificial intelligence and digitalization is projected to increase two to three times by 2035, according to figures cited by the companies.

That growth is changing the investment case for energy infrastructure. Investors must now weigh decarbonization goals against concerns over grid reliability, affordability and energy security.

For corporate leaders, access to clean and dependable power is becoming a strategic issue. Energy constraints could affect data center expansion, manufacturing investment and supply chain resilience.

Institutional investors also face tighter scrutiny over how sustainability commitments align with fiduciary obligations. Infrastructure credit can offer measurable exposure to real assets while retaining contractual protections and defined repayment structures.

The Nuveen and CalSTRS partnership reflects a broader shift in climate finance. Large investors are moving beyond listed securities and directing capital toward the physical systems that support economic growth.

Its success will depend on disciplined underwriting, transparent impact measurement and the ability to manage technology, construction and policy risks. Those factors will shape whether private credit can deliver both durable returns and credible sustainability outcomes at scale.