Episode 6: Unlocking Private Debt for Energy and Infrastructure

(Editor’s note: The following transcript has been edited for clarity.)

Episode 6: Unlocking Private Debt for Energy and Infrastructure | 6.11.25

Shellka Arora-Cox: Welcome to Resilience, the podcast where we explore how grit and innovation intersect to build the next generation of energy and infrastructure. Today, I’m pleased to be joined by Brian Callahan, Senior Vice President at Brookfield Asset Management. Brookfield is one of the world’s largest institutional investors, and Brian plays a key role in deploying capital into infrastructure opportunities. Brian, welcome.

Brian Callahan: Thanks so much, Shellka. I really appreciate the opportunity to be here, and I’m looking forward to the discussion.

Arora-Cox: Let’s start with your professional journey. You’ve worked across both traditional and alternative financial solutions. What drew you to the private debt market, and what keeps you motivated in your current role at Brookfield?

Callahan: What initially attracted me to private credit, as opposed to more traditional financing roles, was the long-term mindset it requires. We’re not just making investments—we’re focused on realizing them over the medium to long term while building enduring partnerships with borrowers. It’s about funding their business plans, not just a single transaction. That emphasis on relationship and growth really resonated with me.

Arora-Cox: Absolutely. In fact, I’m reminded of some of the deals we worked on over a decade ago. For our listeners, let’s unpack private debt. It’s often described as a flexible, high-yielding alternative to public markets. How do you define private debt, especially within infrastructure? And how has the market evolved since Brookfield launched its first infrastructure debt fund?

Callahan: To me, one of the defining features of private debt is the creativity it allows. While other debt markets—like bank lending or leveraged finance—have their place, they often come with constraints. Private credit lets us tailor financing solutions, which is intellectually rewarding.

When we launched our infrastructure credit strategy nearly a decade ago, the market in North America was around $100 billion annually. Today, it’s tripled in size. We’re seeing greater demand for capital and more participation from private lenders. Brookfield has evolved with the market, too. We now manage over $100 billion of insurance capital, and our offerings span senior secured debt, unitranche solutions, mezzanine and other capital stack solutions. We’ve also supported a wide array of sectors. Recent examples include Pine Gate, a utility-scale solar developer; Encore Renewable Energy, a community solar developer—our first structured tax equity deal; and Central States Water Resources, a regulated water and wastewater utility. It’s exciting to see more sectors appreciating the value of private credit.

Arora-Cox: What sectors are you looking to fund in your next infrastructure debt fund? Is energy transition still a major focus?

Callahan: Definitely. At Brookfield, we define infrastructure through characteristics like essential service, long asset life, contracted cash flows and high barriers to entry—whether through capital intensity or regulation. Renewables and digital infrastructure are still top priorities for Fund IV. We’re also seeing growing activity in transport infrastructure, especially where it overlaps with our definition of core or core-plus assets. Shifts in global trade patterns—tariffs, for example—are creating opportunities in short rail, shipping and trucking.

On the midstream side, we expect a handful of LNG export projects to reach final investment decisions in 2025. These projects will need major financing—possibly from private credit if banks scale back.

In the utilities sector, growing data center demand and grid digitization are placing pressure on balance sheets. We anticipate providing flexible funding solutions as utilities respond to this demand-driven stress.

Arora-Cox: From a credit investor’s perspective, what metrics do you prioritize when assessing infrastructure risk?

Callahan: Loan-to-value is our primary focus. While some traditional lenders prioritize debt service coverage or ratings, we’re more interested in maintaining a consistent loan-to-value over time.

That means considering factors like contract duration, competitive landscape and asset life. Being part of one of the largest infrastructure equity investment platforms helps—we get insights that inform both underwriting and structuring.

Arora-Cox: So maintaining loan-to-value is about ensuring your exposure remains below the rising asset value?

Callahan: Exactly. Especially with delayed draw loans, as we fund our commitments, the asset is often appreciating due to successful execution. That’s a win-win: the borrower de-risks, and our collateral strengthens.

Arora-Cox: Where do you see private credit playing the most critical role today? Refinancing? Construction? Hybrid deals?

Callahan: A key theme we’re seeing is that private credit shines when supporting businesses going through capital expenditure-intensive cycles, particularly where structural flexibility is required. Hybrid capital has also become increasingly popular—especially among listed corporates looking for equity-like capital solutions while maintaining disciplined leverage levels. In many cases, these companies may sell a structured joint venture interest to an investor like Brookfield. From there, we’re able to deploy a wide range of capital strategies—drawing from insurance capital, high-yield instruments, and equity—so we can efficiently capitalize the vehicle with the right structure for the situation.

Arora-Cox: When is an energy transition project considered “debt-ready”? What’s your lens?

Callahan: I’ve worked on many first-of-a-kind projects—they’re incredibly rewarding but require a high degree of rigor. We always start with the fundamentals: Is there genuine technology risk involved? Are we working with proven industrial technologies, or are we scaling a pilot model? From there, we assess offtake agreements, the role of tax credits, and broader commercial assumptions. Are we relying on a green premium? Is the feedstock supply secure? Clear and thoughtful answers to these questions allow us to build a compelling credit thesis.

Arora-Cox: Let’s talk battery storage. The revenue is often weather- and event-dependent. How do you underwrite that?

Callahan: Battery storage plays a valuable role in the grid—offering stabilization, ancillary services and decarbonization support. But forecasting revenue is a challenge, as each ISO evaluates contributions differently. Our job is to summarize these complex revenue streams into credit theses that are concise and easily digestible. The flexibility of private credit allows us to align terms—such as interest payments and amortization—with seasonal or variable revenue streams. That’s where our approach adds real value.

Arora-Cox: What advice would you give borrowers or sponsors raising private debt?

Callahan: Engage early, and communicate often. Private lenders are sophisticated—we don’t need a fully formed transaction from the outset. The better we understand your goals, the more effectively we can tailor a financing structure. Flexibility is built on strong dialogue, and no two deals are the same.

Arora-Cox: Looking ahead, what innovations in private credit excite you most?

Callahan: I’m particularly excited about our ability to remain format agnostic when it comes to deploying capital. Depending on the lifecycle stage of the asset, we can apply a range of lending technologies—including asset-based lending (ABL), asset-backed securities (ABS) and traditional project finance structures. This flexibility allows us to tailor financing solutions that meet the specific needs and risk profiles of each opportunity. Another significant area of growth is hybrid capital, which blends characteristics of both debt and equity. It’s increasingly being used by companies seeking equity-like capital while maintaining leverage discipline. It’s a space where Brookfield has a strong edge. We’re seeing a real consolidation of expertise and capital around these kinds of innovative solutions. The market has matured, and the top-tier firms and advisory platforms are now squarely focused on infrastructure credit. That consolidation is driving higher quality execution—and it’s a big part of what makes this moment so exciting.

Arora-Cox: And what gives you optimism about the future of private credit in a sustainable world?

Callahan: The market has matured significantly. Leading firms and advisors are now focused on infrastructure credit, and that’s attracting top-tier talent. Private capital has already played a major role in reducing renewable energy costs, launching U.S. LNG exports, and fostering innovation. I expect that momentum to continue.

Arora-Cox: Final question. In today’s macro climate—geopolitical risk, interest rates, inflation—how is Brookfield adapting?

Callahan: While our strategy has remained consistent, we make tactical adjustments depending on the market environment. For example, we may lean into senior or mezzanine debt based on the interest rate landscape at any given time. Infrastructure debt continues to be attractive because of its lower default rates and higher recovery rates. That fundamental aspect of infrastructure debt I would expect to continue across different macroeconomic cycles.

The market has grown massively. There’s now a much broader set of players focused on infrastructure credit—top firms and advisory groups are prioritizing it, and that’s bringing in a lot of great talent. We’ve also stepped up our diligence—taking a closer look at tariffs, construction costs and timing. These are all real risk factors, but what’s interesting is that they can also create opportunity. If you’ve already secured your steel, for example, your project’s value has probably gone up. So, we’re seeing both sides of the equation—risk, but also real embedded value.

Arora-Cox: One last fun fact: You’ve climbed the tallest mountains in the Northeast. What inspired that—and how does it relate to private debt?

Callahan: I don’t ski—so I took up winter hiking! It’s rewarding and great way to spend time outside in winters. There’s a great parallel: risk and return. You manage your nutrition, timing and exposure. Reaching the summit is like closing a deal—if the risk’s too high, you don’t proceed.

Arora-Cox: Brian, thank you for joining me. It’s been a pleasure exploring what it takes to climb mountains—and markets.

Callahan: Thanks, Shellka. It’s been terrific.

Arora-Cox: And thank you for listening. Until next time—stay resilient.