Alphabet, Google’s owner, is a city builder now.

The conglomerate, which has companies involved in fields as diverse as autonomous vehicles to energy systems, has joined hands with the Ontario Teachers Pension Plan and Sidewalk Labs LLC., its subsidiary, to launch an infrastructure holding company called the Sidewalk Infrastructure Partners or SIP.

According to a WSJ report, SIP will focus on investing in technology-enabled infrastructure relating to advanced mobility, energy, water and waste, digital infrastructure, and social infrastructure. Jonathan Winer, co-chief executive of SIP, told the publication that there was a “growing unmet need to modernize aging urban systems” and that sponsors of infrastructure systems typically try to avoid “technology risks” in their systems. (I am guessing that he was referring to the risk that comes with automating infrastructure or incorporating technology that has not been tested at scale before being introduced to the mass population).

Google has its own investment arm called Google Ventures. It has 300 active portfolio companies and $4.5 billion under management. But there are very few energy companies in its portfolio. The most prominent one is Dandelion Energy, a geothermal energy provider that was originally conceived at X. While it is not directly related to energy, Nest is another company that has become successful for monitoring energy consumption. That said, several companies from its portfolio could be useful for utilities to crunch numbers gleaned from massive amounts of data.

A Mixed Blessing

The announcement is a mixed blessing of sorts for the energy sector and utilities. Startups and companies in the sector have another avenue for funding and tackling problems in the energy and utility industry. Alphabet’s geographical reach and brand will ensure that companies have a platform for scaling their product globally. Uber, which was a portfolio company for Google Ventures, is a case in point.

The presence of Sidewalk Labs in the venture is also a possible pointer to future ambitions. In case you didn’t already know it, Sidewalk Labs has been tasked with developing a smart city in Toronto. Could its investments find a possible test bed in Sidewalks Labs’ smart city? Winer’s statements certainly seem to indicate as much. Cities across the world are incorporating technology into their daily administration and Sidewalk could set up a situation of mutual benfits by investing in transformative technologies and startups.

But it might be worthwhile to remember the elephant in Google’s room, namely privacy and data sharing. Sidewalk Labs has already landed in hot water in Toronto for going beyond its tasked scope and for being secretive about its plans. That might be a cross its investments from the venture will have to bear.