Australia’s green bank celebrates $10bn investments, still has another $5bn to spend

Australia’s Clean Energy Finance Corporation has celebrated hitting a milestone of $10 billion in lifetime investment commitments, and says it expects to continue to be a major investor in Australia’s transition to zero net emissions.

The milestone has been reached as the CEFC prepares to enter its tenth year of operation and is now established as one of the world’s largest government-backed green banks.

CEO Ian Learmonth said the CEFC has already secured the return of $2.8 billion of earlier investments and has access to a remaining pool of $4.7 billion of so far uninvested funds, providing significant room for future projects.

“The CEFC began operating with access to $10 billion in capital, a charter to catalyse private sector investment to cut emissions and a commitment to make a positive return for Australians through our investment activity,” Learmonth said.

“Working together with the private sector as Australia’s ‘green bank’, we are proud to report that our investments are making a positive difference right across the economy.

“As a specialist investor, we remain at the forefront of market developments from renewable energy generation to energy storage and cleantech innovation.”

Of the $10.3 billion invested to date, the CEFC said around $5.8 billion has been invested in renewable energy projects, $3.8 billion in energy efficiency projects and a further $764 million in ‘low emissions’ ventures.

Learmonth told RenewEconomy the green bank will continue to focus on investments in emerging areas for investment in clean tech and emissions reductions, supporting both new technologies and investors to enter the market.

This will include investments in new energy storage and grid projects, hard-to-abate industries, the hydrogen technologies and ongoing support for the electrification of transport and cutting emissions in the agricultural sector.

Learmonth said the CEFC will also continue to provide investment support for further utility scale renewable energy technologies, building off its previous successes in areas like large-scale solar.

“Just as CEFC capital and expertise has helped transform Australia’s renewable energy sector, we must forge into new areas in the years ahead, decarbonising even the hardest sectors of our economy,” Learmonth said.

“Our role is to anticipate and respond to market conditions, developing new markets, building investor confidence and crafting tailored and innovative investment products.

“In filling market gaps where the private sector is absent, we are helping position Australia to take advantage of the employment and economic potential of the low emissions economy of the future.”

Learmonth said that the CEFC will also look to ‘crowd-in’ private sector funds from new investors, including from larger institutional investors, as well as fostering Australia’s emerging venture capital sector for clean energy technologies.

The CEFC was created by the Gillard government as part of its package of policies introduced with the now-repealed carbon price.

It was designed to become an active investor in the emerging clean technology space, funding projects that has led to reductions in greenhouse gas emissions while generating positive investment returns for taxpayers.

The fund started with an initial allocation of $10 billion but has worked to grow that amount by successful investments in profitable clean energy projects, while supporting an estimated 200 million tonnes of emissions reduction.

The CEFC survived attempts by subsequent Coalition governments to abolish it altogether and has gone on to underpin around $36.5 billion in clean energy investment, achieving a level of leverage where each dollar of CEFC investment secures $2.50 of private sector investment.

It has also so far avoided attempts by the current Morrison government to open up the fund into a range of its preferred technologies, including gas investments and carbon capture and storage projects.

The CEFC made $1.37 billion worth of investment commitments in the 2020-21 financial year and has already made almost $950 million worth of the investments in the current financial year to date – with Learmonth adding that he anticipated the CEFC continuing to make around $1.5 billion of new investments each year.