The Clean Energy Finance Corporation has made its third investment announcement in as many days, taking its commitments now to $137.5 million, despite the continuing protests of the Opposition.
The CEFC’s latest investment is a commercial loan in another wind farm project. It is putting up $37.5 million in senior debt finance on commercial terms as part of a consortium of bankers funding the construction of the 107MW Taralga wind farm, 45 km north of Goulburn in NSW.
Other members of the consortium that provided about $280 million for the project are ANZ, EKF (the official export credit agency of Denmark) and Spanish bank, Santander, which is a majority shareholder in the project. The other shareholder is the small listed renewable energy developer CBD Energy.
The decision follows yesterday’s confirmation that the CEFC had contributed $50 million into the refinancing of the 420MW Macarthur wind farm, and last Friday’s announcement that it had committed $50 million to expanding funding for energy efficiency investments to help businesses reduce energy bills.
The focus on wind energy and energy efficiency may disappoint those yearning for more cutting edge projects, but it was to be expected given that the projects need to be ready to roll to obtain CEFC funding. It is not like grants funding, where proposals are made and then parties go out and try to put a project together.
Still, the Coalition continues to rail against the CEFC and its investments. Climate change spokesman Greg Hunt and finance spokesman Andrew Robb have said repeatedly that they didn’t support the CEFC because it would invest in projects that other banks wouldn’t touch. Now they accuse the CEFC of investing in projects that commercial banks do touch, and of pushing other banks out of the way.
The Coalition has also argued that the CEFC should cease investment because the date for the election has been called and the Coalition doesn’t like it and wants it disbanded. However, the CEFC has said that it is legally required to deliver on its mandate, although it has agreed informally not to make new decisions during the “caretaker period”.
“Labor has no electoral mandate for the CEFC and it would be prudent for Kevin Rudd to suspend its activities until after the election to prevent the wanton waste of taxpayers’ money,” the spokesmen said in a statement
However, the date for the election is now up in the air following the reincarnation of Prime Minister Kevin Rudd, and could be put back to late October, giving the CEFC plenty more room to make investments.
CEFC CEO Oliver Yates said providing senior debt finance to projects such as Taralga showed it could play a valuable commercial role to catalyse renewable energy investment in Australia.
The wind towers for the Vestas turbines will be made in Portland by Keppel Prince Engineering, using Bluescope steel. The nacelles and blades will be imported, because the Australian factories that made those components were closed in 2006 after the Coalition refused to extend the then Mandatory Renewable Energy Target, effectively bringing the wind industry to a halt.
“This project is Santander’s first significant Australian project where they are the developer. Santander is a leading global developer of renewable projects and we are delighted that they have had the confidence to invest in Australia,” Yates said. “The CEFC is established to encourage and support the provision of additional capital to this sector.”
