Overview

Established by the Clean Energy Finance Corporation Act of 2012, the Australian Clean Energy Finance Corporation (CEFC) invests with commercial rigour to increase the flow of funds into renewable energy, energy efficiency and low emissions technologies.

It is an independently-operated Government institution that operates like a traditional financier. The CEFC does not provide grants but rather lends at risk-adjusted terms at, or as close as possible to, commercial markets rates. In addition to applying commercial rigour when making its investments, the CEFC is directed to target a benchmark rate of return on its portfolio.

The CEFC’s mission is to accelerate Australia’s transformation towards a more competitive economy in a carbon constrained world by acting as a catalyst to increase investment in emissions reduction.

Under the CEFC Act, AUD 2 billion (USD 1.52 billion) is credited to the CEFC Special Account each 1 July, for five years from 1 July 2013. The CEFC will ultimately be capitalised with AUD 10 billion (USD 7.6 billion) by 1 July 2017.

The CEFC’s portfolio includes projects across the Australian economy, benefitting a diverse range of businesses, large and small. The CEFC Act excludes investment by the CEFC in carbon capture and storage, nuclear technologies and nuclear power.

Activities

The CEFC invests in businesses or projects for the development and commercialisation of clean energy technologies. The CEFC may also invest in businesses that supply goods or services needed to develop or commercialise clean energy technologies.

To help address Australia’s greenhouse gas emissions reduction challenge, the CEFC’s strategic priorities are focused on the delivery of investment across three areas of economic activity where clean energy investment can cut carbon emissions, improve energy efficiency and lower operating costs. These strategic priority areas are:

  1. Cleaner power solutions, including wind, large and small-scale solar, grid and storage, waste, bioenergy and agriculture.
  2. A better built environment, including infrastructure and transport; property, manufacturing and industry; governments and not for profits, including universities and social housing.
  3. In addition, the CEFC identifies new sources of capital, with the development of structured investments and new capital products such as climate bonds, equity funds and working with co-financiers to increase investment in clean energy projects, including the establishment and operation of the Clean Energy Innovation Fund.

The CEFC invests using a broad range of debt and equity financing structures and products, including project finance, corporate loans and aggregation programs with co-financiers, as well as through funds, green bonds and other products.

The CEFC recognises that innovation and entrepreneurial business activity is vital across all sectors of the Australian economy, especially in growth sectors such as clean energy, energy efficiency and low emissions technologies. Through the Clean Energy Innovation Fund, the CEFC also focuses on companies, businesses and projects at early stages of development that are seeking growth or early stage capital to assist their businesses get to the next stage of their development.

Impact

As evidenced by its comprehensive Quarterly and Annual Reports, the CEFC has a demonstrated record of success and transparency. From its inception in 2013 to 30 June 2016, the CEFC made AUD 2.255 billion (USD 1.72 billion) in cumulative investment commitments for projects valued at AUD 5.7 billion (USD 4.34 billion). In the 2015-16 financial year, 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.

Exchange rate 1.31 AUD: 1 USD

Last updated October 25 2016

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Additional Reference

CEFC’s Media Releases

Read more about CEFC’s investments in specific technology areas on their website: http://www.cleanenergyfinancecorp.com.au/.