CEFC charges up renewables market with record equity investment

A specialist renewable energy investment fund targeting the development of both proven and emerging technologies, including large-scale battery storage, has received a record equity investment from the Clean Energy Finance Corporation.

The Australian Renewables Income Fund (ARIF), a newly launched investment vehicle of the Infrastructure Capital Group, raised $150 million from the CEFC and Australian superannuation funds, increasing its kitty to $540 million.

The $100 million from the CEFC was the largest equity investment in renewables by the $10 billion green bank to date, representing an almost 40 per cent increase in its renewables equity portfolio.

ARIF – which currently counts just the Bald Hills, Hallett 4 and Mumbida wind farms in its portfolio – lists its investment criteria as solar, wind, hydro, waste-to-energy and renewable related battery storage.

ICG managing director Tom Laidlaw said the additional capital had put ARIF in a good position to further diversify its existing portfolio with “a number of prospective investments” identified across a range of renewable technologies.

“ARIF offers investors access to a high-quality portfolio of operating renewable energy assets and a platform for future growth in the sector,” he said in comments on Wednesday.

“It is a portfolio that has been built over an extended period and is designed to provide investors with a diversified exposure across the sector.”

CEFC CEO Ian Learmonth said the green bank’s investment in ARIF was about creating new opportunities for institutional investors to take a larger role in Australia’s clean energy transition.

“Renewables still represent less than 20 per cent of total electricity generation, highlighting the very large investment opportunity in order to deliver a clean energy electricity grid,” he said.

“Through ARIF, investors will have exposure to a broad range of renewable energy technologies, providing attractive options to deepen their exposure to clean energy opportunities.”

The investment in ARIF caps off what has been a record year for the CEFC, with its recent annual report revealing a total of $2.3 billion in new finance commitments made across the year.

CEFC equity lead Rory Lonergan said institutional investors were increasingly looking for environmentally responsible investment opportunities, both for their returns and to minimise carbon risk in their portfolios.

“We see an important opportunity here to expand the availability of tailored renewable energy investment options for investors, and to respond to the expectations of fund members.

“It’s also critical that we increase the amount of finance available for large-scale renewable energy projects, especially at the early stage of development.

“These projects require a strong capital base and a long-term commitment to investment returns, making them ideally suited to institutional investors.

“While there are currently limited fund style opportunities for institutional investors to get equity exposure to renewable energy assets, we expect this investment class to continue to grow in the future as renewables deliver a larger share of our energy generation.”