Investing for impact while decarbonising Australia
The CEFC has notched up a record $2.3 billion in new investment commitments in its most active year to date, with the common thread of a focus on technological innovation to cut energy costs and lower emissions. In just five short years the CEFC has delivered investment commitments in projects that will result in lifetime cuts to greenhouse gas emissions of more than 190 million tonnes.
In all CEFC commitments have contributed to clean energy projects with a total project value of around $19 billion, with direct investment in more than 110 individual transactions and financing of more than 5,500 smaller-scale clean energy projects through CEFC partners.
The figures are particularly heartening given the existence of the CEFC was under serious threat from a coalition government hell bent on supporting the fossil fuel industry and obstructing renewable energy.
Instead the CEFC which is responsible for investing $10 billion in clean energy projects has thrived and is continuing to identify worthy projects in the push toward decarbonisation. A look at the breakup of new commitments in 2017-18 revealed a diverse portfolio: $1.1 billion in renewable energy, $944 million in energy efficiency, $100 million in transport and $127 million in waste-related projects.
In the 12 months to 30 June 2018, the CEFC directly committed to 39 transactions, up from 36 direct investments in 2016-17. Total new CEFC commitments in 2017-18 were $2.3 billion, up from $2.1 billion in the previous year.
The annual report released last week emphasised heightened focus on “some of the nation’s toughest emissions challenges through our support for innovative projects, technologies and investment partnerships across Australia” during the past year, evidenced by the number and value of investment commitments.
“The CEFC has a clear charter to be a catalyst for investment in and financing of clean energy to achieve the long-term goal of decarbonising the Australian economy,” said CEFC Chair Steven Skala.
“We are a global leader among institutions of our type. Our methodology is to seek to crowd in private sector investment and engage capital markets to operate effectively in the private energy sector.
“A record $2.3 billion in new investment commitments were made during the year. These investments include marquee projects and highlight that decarbonisation can be achieved profitably and effectively right across the clean energy sector – in renewable energy, energy efficiency, transport and waste- related projects.
“The types of underlying assets that attract CEFC investment commitments are broad and touch all aspects of our national economy,” Skala explained.
“This year has seen industry seizing the challenges and opportunities offered by decarbonisation and accelerating its consideration of emerging duties associated with carbon disclosure. The financial markets have also moved in this regard.
“The question now is not one of direction, but of pace. This means the CEFC will continue to have a significant number of opportunities available in its investment pipeline.”
CEFC chief executive Ian Learmonth commented “Much has changed since the CEFC began investing in 2013 … we see clean energy technologies embraced by home owners and small businesses; essential infrastructure projects and landmark property developments; innovative start-ups and institutional investors with an eye to a sustainable future.
“In the year ahead, we will sharpen our focus on the emissions impact of our investments – from the direct carbon reductions of projects we finance, to the indirect demonstration benefits of the projects and companies we invest in, and our increasing focus on biocarbon.
“While the pace of the clean energy transition varies from year to year, our investment pipeline is robust. We look forward to expanding our work alongside market leading businesses, entrepreneurs and developers for the benefit of the Australian community.”