The CEFC’s 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.
The CEFC’s update on its investment commitments over the past 12 months highlighted its heightened focus on emissions challenges and innovative technology.
New records in the number and value of investment commitments in 2017-18 were set, with the CEFC maintaining its role as a leading investor in Australia’s renewable energy sector and further extending its reach into emissions reduction activities in infrastructure, agriculture, property, transport and waste. In addition, its venture capital finance for innovative clean energy companies saw continued growth.
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.
As of 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. It has directly invested in more than 110 individual transactions and delivered finance for more than 5,500 smaller-scale clean energy projects.
CEFC reported that each dollar of CEFC investment commitments have been matched by more than $1.80 of private sector finance. Equally important, its 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.
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. It has now financed more than 20 large-scale solar projects and more than 10 wind farms Australia-wide, including its most recent investment in Tasmania’s largest wind farm, at Granville Harbour, which closed just after years end.
Together these projects are targeting more than 2,400MW of additional renewable energy, sufficient to power more than 800,000 homes.
Since inception, CEFC’s 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 its co-finance partnerships.
Clean energy innovation fund
CEFC is 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 investment 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, the CEFC is providing finance for market-leading projects, which can also provide practical insights for others to adopt.
This is an innovative way for the CEFC to maximise the impact of its 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 its finance to support investment in smaller-scale clean energy projects.
Through its asset co-finance partnerships, the CEFC delivers the benefits of clean energy right to the energy user, whether on the farm, to households, on the road or in a factory.
The CEFC has 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. Each year, the CEFC has materially increased the scale and impact of its investment commitments, together with the co-investors and project developers who share its commitment to cutting emissions.