CEFC tips $100 million into ARIF for equity renewable investment

Australia’s love of acronyms is seemingly only rivalled by investors’ increasing appetitie for investment in large scale renewables. Confirming both today, the CEFC added $100 million to ICG’s ARIF.

While it may be somewhat of an alphabet soup, the announcement adds further momentum to the trend towards ‘responsible investing’ in big solar and wind projects. In mature utility scale PV and wind markets, investor appetite in projects is outpacing supply, such as in the United States.

While this might not yet be the case in Australia, the CEFC is looking to accelerate the trend by adding substantially to ARIF’s investment pool. The government funded ‘green bank’, which is reportedly already providing modest returns to Australian taxpayers, says that increasing equity funding available for large scale renewables will compliment maturing debt finance markets.

“Through ARIF, investors will have exposure to a broad range of renewable energy technologies, providing attractive options to deepen their exposure to clean energy opportunities,” said CEFC CEO Ian Learmonth in a statement.

ARIF is targeting investments in operational as well as new renewable projects. It will fund both proven technologies, like wind and large scale solar, as well as less established, although hardly high risk, applications like waste energy, large scale storage and pumped hydro.

“ICG has invested in renewable energy assets on behalf of investors since 2007, over which time institutional demand has grown significantly,” said Tom Laidlaw, IGC Managing Director. The company reports “strong initial support” from investors in its renewable asset portfolio.

For the CEFC, the investment in ARIF represents a major increase in its equity activities. While it has provided more than $2 billion in debt finance to the renewables since 2013 – for almost 3 GW of capacity – it has to date made only $355 million in equity stakes. Previous equity invesments have been made by the CEFC with Palisade Investment Partners, the Foresight Group and HRL Morrison & Co.

“We see an important opportunity here to expand the availability of tailored renewable energy investment options for investors, and to respond to the expectations of fund members,” said Rory Lonergan, who heads up the CEFC’s equity activities. He pointed to the need for early stage development investments in the Australian large scale renewable sector as being particularly important.

A CEFC spokesperson has confirmed to pv magazine Australia that the body has a portfolio of some $5.3 billion of clean technology asset, as of 30 June 2018 – after allowing for repayment, amortisation and any cancellations. “Each dollar of CEFC investment commitments has been matched by more than $1.80 of private sector finance,” a CEFC spokesperson noted.