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CEFC continues to lead transformation of investment in Australian clean energy

Tuesday 26 July 2016

The Clean Energy Finance Corporation (CEFC) committed a record $837 million to new investments in the Australian clean energy sector in the 2015-16 financial year, contributing to projects with a total value of $2.5 billion. The CEFC’s investment commitments since its inception in 2013 have now reached $2.3 billion, contributing to projects with a total value of $5.7 billion.

CEFC CEO Oliver Yates said: “The CEFC is fulfilling its leadership role in transforming clean energy investment in the Australian economy. This year we committed more funds to a greater number and more diverse range of investments than in any other year. We have also mobilised an even greater amount of private sector capital into clean energy activities. Across the economy, we are working to accelerate investment in renewable energy, increase energy efficiency in the manufacturing and transport sectors and improve energy standards in the built environment. Our investments are delivering clean energy solutions to rural and regional Australia, as well as to our cities.”

In its third year of operation, the CEFC achieved a 73% year-on-year increase in the value of new investment commitments, including a substantial increase in the number of indirect investments and new capital products, demonstrating the growing strength and breadth of the CEFC’s co-financing models.

Mr Yates added: “We are actively targeting areas of economic activity where clean energy investment can improve energy efficiency, cut carbon emissions as well as lower operating costs. The CEFC’s involvement in projects continues to attract additional private sector investment, which is critical if Australia is to achieve its emissions reduction commitments and meet the Renewable Energy Target. We are pleased with the level of private sector interest we are seeing in clean energy, but this will need to further increase in the years ahead. Australia still faces a considerable investment challenge to deliver the clean energy solutions necessary to reduce emissions.”

STRATEGIC PRIORITY AREAS

The CEFC’s investment commitments in 2015-16 targeted three strategic priority areas:

Strategic priority areas

2015-16

2014-15

Since Inception

Cleaner power solutions, including wind, large and small scale solar, grid and storage, waste, bioenergy and agriculture sectors.

$110m 

 

$115m 

 

$840m 

 

Better cities and built environment, including infrastructure and transport; property, manufacturing and industry; governments and not for profits, including universities and social housing.

$217m

$125m 

$661m

New sources of capital, with the development of investments in climate bonds, equity funds and working with co-financiers to increase investment in clean energy projects.

$510m

$244m 

$754m

TOTAL

$837m

$484m

$2,255m

COMMITMENTS BY TECHNOLOGY

The CEFC’s investment commitments by technology are:

Technologies

2015-16

2014-15

Since Inception

Renewable energy

$379m

$189m  

$1,056m  

Energy efficiency

$458m

$295m

$1,124m  

Low emissions technologies

-

$75m

TOTAL

$837m

$484m

$2,255m

 

KEY INVESTMENT COMMITMENTS IN 2015-16 INCLUDED:

Cleaner power solutions

  • Up to $20m in cornerstone debt finance for the Barcaldine Solar Farm, providing competitively-priced renewable energy.

  • $67m to Australia’s third largest wind farm, at Ararat in Victoria.

  • $8m to Windlab, the Canberra-based global wind energy development company that is successfully commercialising CSIRO renewable energy research.

Better cities and built environment

  • In an Australian-first, up to $60m for not-for-profit community housing provider SGCH to build more than 200 new energy efficient homes and upgrade a proportion of its 4,300 existing, older properties with energy efficient technologies.

  • $68m towards the construction of an exemplar green building in an historic Geelong landmark, to ‘stretch’ the design of the $120m 14-level commercial office tower to a market leading 5.5 star standard under the National Australian Built Environment Rating System.

  • $50m to support the increased uptake of low emissions vehicles by corporate, government and not-for-profit fleet buyers, with Eclipx Group, one of Australia’s largest independent fleet leasing companies.

  • Up to $30 million for the City of Melbournefor the installation of energy saving street lights and reduced emissions associated with Council and community facilities.

  • Up to $9.1m for the University of Melbourne to accelerate the use of innovative energy efficient and renewable energy technologies, including voltage optimisation, freezer upgrades, solar photovoltaics, solar thermal and micro-turbines. 

New sources of capital

The CEFC’s commitment to cleaner power solutions and a better built environment were also facilitated by the development of the following new sources of capital:

  • $100m cornerstone equity commitment to the new Australian Bioenergy Fund, to support investment in a broad range of projects seeking to produce energy from agricultural, council, and forestry waste streams.

  • $90m cornerstone investment in the $500 million Westpac Climate Bond, to finance a $1b Australian-based clean energy portfolio, including energy efficient commercial buildings.

  • $200m to the WestpacEnergy Efficient Financing Program to support small businesses across Australia that want to invest in solar, energy efficient technologies and low emissions vehicles.

  • $20m in a FlexiGroup green bond certified by the global Climate Bonds Initiative and secured against a portfolio of solar PV and renewable energy assets. This was the first certified green bond transaction of its type in the Australian market.

COMMERCIAL RIGOUR

The CEFC operates with the rigour of a commercial financier, while delivering on its clean energy public policy purpose. Each dollar of CEFC investment commitments in 2015-16 was matched by $1.95 from the private sector. All investments generate a return above the Government’s costs of funds. The CEFC has remained profitable since inception.

Mr Yates added: “Changes to the CEFC’s Investment Mandate have included new areas of focus in emerging and innovative technologies, with the creation of the Clean Energy Innovation Fund from 1 July 2016. We anticipate further changes in 2016, to support investments to improve the health of the Great Barrier Reef and Australia’s cities.  We look forward to continuing to work with all types of business, co-financiers and all levels of government to help tackle Australia’s significant emissions challenges, with practical, competitive and targeted financial solutions.”

ABOUT THE CEFC

The Clean Energy Finance Corporation invests commercially to increase the flow of funds into the clean energy sector. Our mission is to accelerate Australia's transformation towards a more competitive economy in a carbon constrained world, by acting as a catalyst to increase investment in emissions reduction. We do this through an investment strategy focused on cleaner power solutions, including large-scale and small-scale solar, wind and bioenergy, and a better built environment, with investments to drive more energy efficient property, vehicles, infrastructure and industry. The CEFC also invests with co-financiers to develop new sources of capital for the clean energy sector, including climate bonds, equity funds and other financial solutions. The CEFC operates under the Clean Energy Finance Corporation Act 2012. Please visit our website: www.cleanenergyfinancecorp.com.au