Overview
Australia’s Clean Energy Finance Corporation – the CEFC – is a specialist investor with a deep sense of purpose: to invest as Australia’s ‘green bank’ to help achieve the national goal of net zero emissions by 2050.
The CEFC works across the economy to capture the benefits of the net zero transition – from renewable energy generation and transmission to energy efficiency, cleantech innovation, hydrogen and beyond. The CEFC invests alongside private investors, innovators and industry leaders, drawing on deep sector experience, investment expertise and portfolio strength to fill market gaps and maximise its impact.
Established in 2012, the CEFC operates under the CEFC Act. The CEFC was initially allocated $10 billion to invest in renewable energy, energy efficient and low emissions technologies. The Australian Government substantially increased CEFC funding, to $30.5 billion, in June 2023.
The additional $20.5 billion capital allocation will be used to deliver three new investment priorities:
- $19 billion to help deliver the Rewiring the Nation program, with investments including high voltage transmission, long duration grid storage and electricity distribution network infrastructure.
- $1 billion to create the Household Energy Upgrades Fund, to provide discounted consumer finance to increase sustainability across the housing sector.
- $500 million for a new Powering Australia Technology Fund, to support the growth or expansion of clean technology projects, businesses and funds to facilitate the development, commercialisation and take up of clean energy technologies.
*Australian dollars.
Activities
Just as CEFC capital and expertise has helped transform Australia’s renewable energy sector, it is forging into new areas, decarbonising the hardest sectors of the Australian economy, including in industry, transport, infrastructure, resources and natural capital. Through its investment activities it is:
Backing the clean energy system of the future: Australia requires significant new investment to support a substantial uplift in renewable energy generation and storage. The CEFC is investing in critical large-scale grid transmission projects, landmark battery storage, large-scale renewable energy developments and innovative bioenergy opportunities.
Investing across the economic landscape: Investing in low emissions solutions in property, infrastructure, industry, natural capital and resources can deliver benefits right across the economy, from lower energy consumption to alternative approaches to production, reducing demand on the energy network and abating carbon emissions.
Tapping into new investment models and opportunities: Developing new financial markets and products, building investor confidence and crafting tailored and innovative investment solutions for new and emerging industries to help Australia meet the challenges of decarbonisation and create a strong low emissions economy of the future.
CEFC tailored investment solutions include:
Direct investments: For small and large scale clean energy projects, these direct investments include flexible debt and equity finance, or a combination of both, tailored to individual projects.
Debt markets: The CEFC is a leading investor in Australia’s emerging green bonds market, creating new options for investors, issuers and developers.
Asset finance: The CEFC works with banks and co-financiers to deliver discounted finance to businesses, farmers and manufacturers for their clean energy investments.
Alternatives: The CEFC invests in new and established investment funds to co-deliver clean energy developments in agribusiness, infrastructure, property and more.
Impact
From inception to 31 December 2022, the CEFC made $11.7 billion in commitments with a total transaction value of $42.8 billion. The CEFC directly invested in more than 285 individual transactions and financed more than 46,000 smaller-scale projects through its asset finance programs. In investing on behalf of the Australian Government, the CEFC has a strong commitment to deliver a positive return across its portfolio.
The CEFC investment strategy recognises the urgent nature of the emissions challenge, and the important role of the CEFC in anticipating and responding to market conditions, developing new markets, building investor confidence and crafting tailored and innovative investment products to drive lower emissions. Equally, the CEFC recognises that its investment activities are just the start of what is required – while the size of the investment requirement is seismic, so too are the opportunities.
Last updated June 28, 2023
