The CEFC have released their end of year financial report, and have set new records in the number and value of investment commitments in 2017-18, delivering a heightened focus on some of the nation’s toughest emissions challenges through our support for innovative projects, technologies and investment partnerships.
FY18 HIGHLIGHTS
In the 12 months to June 2018, the CEFC directly committed to 39 projects, up from 36 direct investments in FY17. Total new CEFC commitments in FY18 were $2.3 billion, up from $2.1 billion in the previous year. Our commitments in FY18 included $1.1 billion in renewable energy, $939 million in energy efficiency, $100 million in transport and $127 million in waste-related projects.
CEFC PORTFOLIO
At 30 June 2018, total CEFC investment commitments since inception exceeded $6.6 billion. After allowing for repayment, amortisation and any cancellations, the CEFC investment portfolio was $5.3 billion at 30 June 2018.
In five years of investing, CEFC commitments have now contributed to clean energy projects Australia-wide, with a total project value of $19 billion. We have directly invested in more than 110 individual transactions and delivered finance for more than 5,500 smaller-scale clean energy projects.
We are proud to report that each dollar of CEFC investment commitments has been matched by more than $1.80 of private sector finance. Equally important, our portfolio of investment commitments is targeting annual cuts to greenhouse gas emissions of 10.8 million tonnes of CO2-e, and lifetime cuts to greenhouse gas emissions of more than 190 million tonnes of CO2-e.
RENEWABLE ENERGY
In FY18, the CEFC invested in 10 large-scale solar projects, and four wind farms, to deliver an additional 1,100MW in clean energy Australia-wide. We have now financed more than 20 large-scale solar projects and more than 10 wind farms Australia-wide, including our most recent investment in Tasmania’s largest wind farm, at Granville Harbour, which closed just after year end.
Together these projects are targeting more than 2,400MW of additional renewable energy, sufficient to power more than 800,000 homes.
Since inception, our investment commitments have included four large-scale renewable energy projects that also include a storage component, reflecting the critical role of storage technologies in extending the benefits of low cost solar and wind power across the electricity market. A further 24 smaller-scale storage projects have been financed through our co-finance partnerships.
CLEAN ENERGY INNOVATION FUND
We are now well-established as Australia’s largest dedicated investor in clean energy innovation. Through the Clean Energy Innovation Fund, operated in consultation with ARENA, the CEFC has committed venture capital of more than $56 million to nine innovative companies. Together, these companies have raised more than $140 million of new capital for clean energy projects.
These companies illustrate the strength of Australian innovation in the clean energy space, and are pursuing diverse opportunities, including behind-the-meter and storage technologies, and low emissions transport solutions.
AGRIBUSINESS, INFRASTRUCTURE, TRANSPORT AND PROPERTY
CEFC investments commitments in agribusiness, infrastructure, transport and property include partnerships with leading sustainability-focused investors, including Dexus, IFM Australia, Lend Lease, Macquarie Infrastructure and Real Assets and Mirvac.
These commitments are characterised by accelerated emissions reduction targets, higher technology and construction standards, and the creation of new mechanisms to share insights and performance with other asset owners and operators.
It is simply not possible for the CEFC to directly influence the emissions and energy profile of every asset in the economy. By working with these industry leaders, we are providing finance for market-leading projects, which can also provide practical insights for others to adopt.
This is an innovative way for us to maximise the impact of our finance. It is also an important way of developing new investment vehicles to meet the growing investor appetite for deeper exposure to sustainable investment.
SMALLER-SCALE ASSET FINANCE
The CEFC has a strong focus on extending the reach of our finance to support investment in smaller-scale clean energy projects.
Through our asset co-finance partnerships, we deliver the benefits of clean energy right to the energy user, whether on the farm, to households, on the road or in a factory.
We are proud to have helped finance more than 5,500 individual projects, involving farmers, small businesses, manufacturers, schools, local community facilities and more. Projects range from $10,000 to $5 million, with an average investment of $125,000. Ten of these projects, with a total value of more than $2 million, financed on-farm irrigation equipment in the Reef Catchment Area, designed to reduce water use and improve water filtration and quality.
CONTINUING INVESTMENT IN CLEAN ENERGY
Five years is a relatively short investment period for any organisation. Each year we have materially increased the scale and impact of our investment commitments, together with the co-investors and project developers who share our commitment to cutting our emissions. We thank them for their support.
We continue to invest with a clear commercial focus, to deliver a positive return on our investment commitments from the $10 billion in public funds entrusted to us. As our portfolio matures and our finance is repaid, we will increasingly recycle our capital in order to continue to make a positive impact on Australia’s emissions.
The opportunities are substantial, as is clearly demonstrated by the strong pipeline of projects seeking CEFC investment. Technology is advancing rapidly, and costs are continuing to fall across the clean energy economy. We see a growing impetus from asset owners, businesses and investors to cut emissions and to capitalise on the exciting economic potential of clean energy.
Cutting greenhouse gas emissions remains a substantial business and investment challenge for Australia. We welcome the level of private investment we have catalysed alongside our own finance. At the same time, we recognise there is considerably more work to do, requiring action right across the economy, in renewable energy and beyond.
We remain committed to increasing the impact of our capital, supporting innovative approaches to cutting greenhouse gas emissions with other investors.