The Clean Energy Finance Corporation annual report for 2016-17 has been tabled in the Australian Senate, showing commitments for the financial year of $2 billion in 35 transactions.
The activity eclipsed prior year commitments and the portfolio returned 5.4% to taxpayers, an increase from the 2015-16 result of 5.2%.
“The CEFC has delivered a strong performance in its fourth full year of operation, achieving new highs in the number, impact and value of commitments across the clean energy sector,” CEFC chair Steven Skala AO commented in the report.
The CEFC was created with a charter to stimulate investment in clean energy and encourage decarbonisation of the economy.
“Our hands-on experience as financiers in the energy market and a range of industry sectors provides the CEFC with an intimate view of market expectations and preferences, allowing us to bring an additional perspective to policy forums which continues to be well received,” Skala said.
CEO Ian Learmonth said the 35 transactions finalised during the year exceeded the combined transactions of the previous three years.
“We committed more than $2 billion in CEFC capital to projects valued at $6.5 billion,” Learmonth said, adding that each $1 of CEFC investment since 2013 helped catalyse an additional $2.10 from the private sector.
“Equally important, our current investments upon financial close will fund projects that are estimated to achieve annual abatement of almost 7.3 million tonnes CO2-e, or more than 121 million tonnes CO2-e over their lifetimes.”
CEFC commitments in 2016-17 focused on industry sectors with strong potential for decarbonisation, including low carbon electricity, such as solar, wind, battery storage and bioenergy; ambitious energy efficiency, such as property, infrastructure, manufacturing and agribusiness; and electrification and fuel switching, such as vehicles and biofuels.
“Our own days as a ‘start up’ organisation are behind us, as we deepen our exposure across the economy and seek to apply CEFC capital to areas where we can have the greatest impact on decarbonisation – whether in supporting cleaner electricity, ambitious energy efficiency or electrification and fuel switching of our transport sector in particular,” Learmonth said.
“We continue to also seek the best financial return possible for the taxpayer whilst ensuring our portfolio risk is appropriate and continues to be well managed.”
Changes to the Investment Mandate during the year also saw the CEFC direct investment activities to the following areas:
- Clean Energy Innovation Fund: $30 million invested across four transactions, with each dollar of CEFC finance attracting an additional $2.16 in private sector investment. The investments have an estimated lifetime abatement of 14,000 tCO2-e.
- Sustainable Cities Investment Program: $800 million investment in projects with a combined project value of $1.8 billion. The investments have an estimated lifetime abatement of 17 million tCO2-e.
- Reef Funding Program: $150 million investment in more than 240 large and small-scale projects in the Great Barrier Reef catchment area. The investments have an estimated lifetime abatement of 11 million tCO2-e.
Learmonth said he expects the CEFC will seek out opportunities in even more diverse areas of the energy space, such as distributed energy, energy storage, improved grid transmission, network security and demand response management.