The besieged Clean Energy Finance Corporation says it has so far unlocked finance for $2.5 billion in projects and is having a close look at another $3 billion worth of projects.
The CEFC, which the Abbott conservative government is seeking to dismantle, says it has so far allocated $700 million since it began formal operations on July 1, and could lift this total to $1 billion by the end of the financial year.
The Labor/Green majority in the Senate has so far protected the CEFC from the Coalition’s repeal bill, although this has been resubmitted in what could be a trigger for a double dissolution.
How the Senate votes after July 1 is not yet clear. The WA Senate re-run will take place this coming weekend, and while Labor and the Greens will lose their majority, some independent senators such as Nick Xenophon and John Madigan will likely support the venture.
Chief executive Oliver Yates issued an update on the CEFC’s activities late last week, which he said he considered “timely” given the re-introduction of the abolition bill.
“There is a reasonable expectation that the Corporation will be able to continue its operations at least until July,” Yates said.
“The CEFC is on track to reach our target of $800 million to $1 billion invested in our first financial year with further new investments to be announced shortly.”
Yates said the CEFC is in “active” discussions with more than 30 project proponents seeking a total of $1.2 billion in CEFC finance for projects worth more than $3 billion.
These are part of total current proposals from over 150 project proponents seeking CEFC finance of approximately $4 billion for total project costs of around $11 billion
The CEFC has a total budget of $10 billion, with up to $2 billion available each year. It has argued that it will unlock up to $3 of private investmnt for every $1 it commits, and it will deliver a profit to the government, and abatement with net benefits, but this has failed to sway the coalition government.
Yates said in his update that the CEFC has demonstrated its capability and its potential to assist Australia’s economy make the transition to Australia’s future energy mix.
“By catalysing investment in new energy infrastructure and energy efficiency, the CEFC can play a valuable part in developing the capabilities and capacity for lowering emissions and enabling a globally competitive Australian economy in a carbon constrained world.”
The CEFC has made a string of financing announcements in recent weeks, including $100 million towards energy efficiency investments in buildings, and an innovative $20 million financing for the first major project from Carnegie Wave Energy.
Yates said the portfolio of projects would bring positive benefits in many industries across regional and rural Australia, including agribusiness, property, manufacturing, utilities and local government.
“Importantly, these projects are profitable for the businesses involved. They are realising productivity gains for these businesses and the Australian economy while at the same time, helping to build Australia’s clean energy supply chain capability and skills base for sub-contractors and others providing value-added products and services.”
He said the CEFC had obtained assurances from the government about honouring obligations protected by contract with the CEFC.
Giles Parkinson is founder and editor of RenewEconomy.com.au, and is also the founder of OneStepOffTheGrid.com.au and founder/editor of www.TheDriven.io. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.