Australia’s Clean Energy Finance Corporation has surpassed $10 billion in lifetime investment commitments, a major milestone in the roadmap to net-zero emissions by 2050, writes Gavin Dennett.
Since its inception in 2012 under the Clean Energy Finance Corporation Act, the Federal Government-owned company – the world’s largest green bank – has made $10.3 billion in investment commitments.
Despite the challenges of COVID-19, the lifetime investment milestone came after a strong six months to December 2021, which saw the Clean Energy Finance Corporation (CEFC) make $1 billion in new investment commitments across 20 transactions.
“The CEFC began operating with access to $10 billion in capital, a charter to catalyse private sector investment to cut emissions, and a commitment to make a positive return for Australians through our investment activity,” said Clean Energy Finance Corporation CEO Ian Learmonth.
“Working together with the private sector, we are proud our investments are making a positive difference across the economy. As a specialist investor, we remain at the forefront of market developments, from renewable energy generation to energy storage and cleantech innovation.
“Our investments in energy, agriculture, infrastructure, property and resources demonstrate the enormous potential to cut emissions in established industries. Our work with institutional investors, co-financiers and fund managers underscores the increasing attractiveness of sustainability and carbon abatement as an investment class.”
Reflecting the commercial approach of its investment activities, the CEFC has also had $2.8 billion repaid or returned as of 31 December, 2021 – almost exclusively from the private sector.
“During our lifetime, $2.8 billion of our capital has been repaid or returned to be available for reinvestment. As our portfolio matures, we expect the rate of capital repayments and returns to remain strong, underpinning our capacity to continue investing,” said Learmonth.
“We are also pleased to report that projects in which we have investment commitments are forecast to avoid estimated lifetime emissions of 200 MtCO2-e, with our abatement activity and influence spanning the Australian economy across various sectors, supply chains, technologies and businesses.
“Despite the strength of these numbers, we must view them in the context of the emissions challenge ahead. As we heard at COP26 in Glasgow, we need to act now if we are to achieve net-zero emissions by 2050.”
Having drawn on $5.4 billion from its original $10 billion funding allocation from the Federal Government, the CEFC has access to a further $4.6 billion for investment in the clean energy sector.
“Rigorous investment and financial management have been a hallmark of our approach since we began investing on behalf of the Australian Government,” said Learmonth.
“Despite making more than $10 billion in lifetime investment commitments, we have access to a further $4.6 billion from the Commonwealth, as well as ongoing returns from our existing investments. These factors mean we have substantial capacity to extend our investment impact beyond our initial $10 billion allocation as we continue to contribute to emissions reduction.
“We now must forge into new areas in the years ahead, decarbonising even the hardest sectors of our economy, whether in energy, industry, transport, infrastructure or agriculture.”