26 November 2015
The Clean Energy Finance Corporation (CEFC) is aiming to accelerate investment in Australia’s bioenergy sector through a $100 million cornerstone commitment to the new Australian Bioenergy Fund.
The Australian Bioenergy Fund will support investment in a broad range of projects seeking to produce energy from agricultural, council, forestry and mining waste streams. It is aiming raise more than $200 million in equity and will be managed by the Foresight Group (Foresight).
The Australian Bioenergy Fund will invest in a range of technologies including:
Foresight, which manages funds on behalf of the UK Green Investment Bank and the European Investment Bank, has invested more than $1 billion in bioenergy and energy from waste projects.
CEFC CEO Oliver Yates said the Australian Bioenergy Fund is targeting equity investments in projects that will help unlock important opportunities across the economy to harness waste and turn it into energy.
“We see this new fund as playing an important role in accelerating and widening the market uptake of bioenergy and energy from waste technologies that have a proven track record overseas but are not yet widely deployed in Australia’s energy mix,” Mr Yates said.
“A number of projects that the CEFC has assessed have been held back by a lack of equity capital, and that needs to change. Converting waste from agricultural production, mining, forestry and landfill has the potential to lower business operating costs, reduce the reliance on grid electricity and create a more sustainable way to manage waste disposal.”
In its first market report – The Australian bioenergy and energy from waste market – the CEFC estimated Australia has the potential to double its bioenergy output over the next five years, developing a new energy source that will lower carbon emissions and provide an important energy from waste option for business and local government.
Mr Yates added: “Our analysis shows there is significant potential in the bioenergy sector. Australia is delivering just 0.9 per cent of our electricity output from bioenergy, which is well below the OECD average of 2.4 per cent.
“Our own investment pipeline has identified about $3 billion of bioenergy sector projects that could be developed. Much of the opportunity in the sector consists of small-scale operations which have found it difficult to attract equity support and institutional investors.
“By creating the Australian Bioenergy Fund we are looking to draw in private sector equity investors who recognise the bioenergy sector’s potential to invest alongside the CEFC with an experienced international manager in Foresight.”
The CEFC has provided debt capital to several bioenergy projects to date which are already delivering lower energy costs, and providing important solutions for effective waste management including:
Headquartered in the UK, and with international offices in San Francisco and Rome, Foresight has more than $3.25 billion of assets under management and is currently establishing a presence in the Australian market.
Nigel Aitchison, Partner, Foresight, said: “Having seen the success of similar funds mandated to invest in waste in the UK, Foresight is well positioned to implement a similar strategy in Australia where the market already has a strong appetite for investment in renewable energy.
“For Foresight, this fund presents the perfect platform to help build the Australian bioenergy market. We very much look forward to working with CEFC to develop these projects over the coming years and to unlocking the potential of bioenergy in the Australian market.”
About Foresight Group LLP (“Foresight”)
Foresight is a leading UK independent Infrastructure and Private Equity investment manager established in 1984. Foresight manages the Foresight Environmental Fund (“FEF”) and two funds on behalf of the UK Green Investment Bank; UK Waste Resources and Energy Investment Fund (“UKWREI”) and Recycling and Waste LP (“RAW”). Foresight has also recently launched a new Biomass platform, Bioenergy Infrastructure Group (“BIG”) with co-investment from other UK environmental players.
Foresight has deployed circa $1 billion across energy from waste, anaerobic digestion and biomass technologies in the UK. As part of its agreement with the CEFC, Foresight Group will establish an office in Sydney for its Australian investments.