The agriculture sector consumes a large amount of energy in many countries. Energy is consumed in several major forms on most farms: general electricity (lighting, appliances), fuel (machinery, vehicles and freight costs), and heating/cooling and refrigeration (especially in industries such as dairy, horticulture, piggeries and poultry). For many small and medium-sized farming enterprises, rising energy costs are a serious concern—they increase operating costs and reduce competitiveness.

Now, many new technologies (or innovative combinations of existing technologies) are now available to help lower energy costs for businesses in the agricultural sector. However, many of these new technologies have limited track record, making them difficult to finance through traditional banks alone.

Waste is another area of opportunity. Agricultural waste, other commercial waste products, and household waste is plentiful in many areas, and disposal sometimes presents a challenge to local governments.

Now, waste that was previously destined for landfills can be used to generate useful forms of energy—heat, fuel, and electricity. Yet the technologies that turn waste products into energy are relatively new and unfamiliar to traditional financing entities, and benefit greatly from involvement of Green Banks.

See below for two successful programs that finance agricultural and other waste energy projects.

UKGIB Waste and Bioenergy Investments

The UK Green Investment Bank has a dedicated team devoted to financing projects in the waste and bioenergy investment sector.  The UKGIB has invested in a wide variety of waste-energy projects all over the country, including: anaerobic digestion plants, processing food and garden waste, and large-scale waste-to-energy facilities. The UKGIB has also invested in various biomass projects, including coal-to-biomass conversion projects and combined heat and power projects. The UKGIB has financed waste projects both directly and through use of funds.

Through the projects it has financed, the UKGIB has helped divert large amounts of household and commercial waste from landfills and has greatly increased renewable energy generation in the country.

CEFC Agriculture Co-Investments

CEFC provides co-financing and cornerstone investments in new projects, helping build track records and bringing in investors. In particular, CEFC works with National Australia Bank (NAB) and Commonwealth Bank to finance projects in the agriculture sector across Australia. Together, they have a $120 million program available across a broad commercial base, with a particular emphasis on agribusiness and regional Australia. The finance supports small and large scale projects of up to $5 million, with the benefits of the CEFC investment flowing directly through to the business operators.

The CEFC also works with the Commonwealth Bank on the Energy Efficient Loan program, an AUD 100 million initiative that is financing energy efficiency and renewable energy improvements, including in the agricultural sector. The Energy Efficient Loan program, co-funded by the CEFC and Commonwealth Bank, provides financing for SME projects valued at up to $5 million.

CEFC has provided financing for projects in the agriculture sector in a diverse set of projects, helping property owners use more renewable energy, save on energy costs, offset the impact of rising energy prices, and increase competitiveness. Electricity runs refrigeration, compressors, electrical motors, air compressors and lighting, while thermal energy is consumed by on-site treatment of waste products and hot water heating.

Examples of the financing offered by the CEFC (or previously by LCAL) for agriculture projects include:

  • A rendering plant/abattoir in regional NSW is installing a $4 million gas-fired trigeneration unit to save more than $480,000 a year on energy costs by supporting the electricity, hot water and steam needs of the rendering plant and associated abattoir
  • Australia’s largest renderer will increase its onsite biogas utilisation, lowering costs and reducing grid electricity consumption and the associated carbon emissions by 35 per cent
  • A pastoral company upgraded its air compressor system to achieve energy savings of more than 40 per cent
  • Australia’s largest pork producer upgraded its industrial refrigeration to save 10 per cent in total energy consumption, including gas and electricity; and
  • A major Goulburn Valley supplier of apples and pears is reducing its energy costs by over $140,000 and its refrigeration energy use by 24 per cent.