CEFC hits record $837m of clean energy investments in 2015-16

The Clean Energy Finance Corporation has marked its third year of operation with a record $837 million committed to new investments in the Australian clean energy sector, contributing to projects with a total value of $2.5 billion.

In a report on the green bank’s 2015-16 financial year performance, the CEFC said its total investments since its inception in 2013 had now reached $2.3 billion, contributing to projects with a total value of $5.7 billion.

The achievement is particularly impressive in light of the uncertainty that has overshadowed the CEFC, having been earmarked for abolition by the Coalition the moment it was created by the Labor Gillard government – a position the current Abbott/Turnbull administration has never officially backed away from.

Nevertheless, the LNP seems to have warmed to the “giant green hedge fund” in recent years, as the party swung from calling it “a honeypot to every white-shoe salesman imaginable,” to claiming it as a major national success.

Indeed, in its third year of operation, the CEFC achieved a 73 per cent year-on-year increase in the value of new investment commitments, including a substantial increase in the number of indirect investments and new capital products, demonstrating the growing strength and breadth of the CEFC’s co-financing models.

“The CEFC is fulfilling its leadership role in transforming clean energy investment in the Australian economy,” said Oliver Yates, who has headed up the CEFC since his appointment to the role in November 2012.

“This year we committed more funds to a greater number and more diverse range of investments than in any other year. We have also mobilised an even greater amount of private sector capital into clean energy activities,” Yates said on Tuesday.

“Across the economy, we are working to accelerate investment in renewable energy, increase energy efficiency in the manufacturing and transport sectors and improve energy standards in the built environment. Our investments are delivering clean energy solutions to rural and regional Australia, as well as to our cities.”

Some of the CEFC’s biggest success stories include the $20 million in cornerstone debt finance provided for the Barcaldine Solar Farm, Queensland’s largest solar plant to date; $67 million to Australia’s third largest wind farm, at Ararat in Victoria; and $8 million to Windlab, the Canberra-based global wind energy development company that is successfully commercialising CSIRO renewable energy research.

More recently, the CEFC has illustrated the success of its “demonstration effect,” with the announcement that Uniting Financial Services has joined it in the effort to drive a more energy efficient commercial property sector in Australia.

As a CEFC media release said on Tuedsay, the UFS is the Treasury and Investment Services arm of the Uniting Church in Australia Synod of NSW and the ACT, so its commitment of $25 million to the High Income Sustainable Office Trust (HISOT) is a major coup.

HISOT, to which the CEFC has already made a cornerstone equity investment of $125 million, is managed by real estate fund manager EG Funds Management (EG), and is targeting a $400 million portfolio of decentralised city office buildings for refurbishment and retrofitting to boost their sustainability and carbon emissions.

“We are actively targeting areas of economic activity where clean energy investment can improve energy efficiency, cut carbon emissions as well as lower operating costs,” Yates sad on Tuesday.

“The CEFC’s involvement in projects continues to attract additional private sector investment, which is critical if Australia is to achieve its emissions reduction commitments and meet the Renewable Energy Target.”

And while Yates said his team was pleased with the current level of private sector interest in clean energy investment, but warned it would have to ramp up in the near future.

“Australia still faces a considerable investment challenge to deliver the clean energy solutions necessary to reduce emissions,” he said.