CEFC to shift focus from renewables to grid, hydrogen projects

The Clean Energy Finance Corporation (CEFC) has reported a successful year with new investment commitments of more than $1 billion across 23 clean energy projects with a combined value of $4.2 billion. Despite the challenging economic environment and the disruption of the Covid-19 pandemic, the Australian government’s green bank has continued strong financial performance, with a significant uplift in the level of the capital repaid in the year.

In 2019-20, the CEFC’s finance extended to new areas of the economy, delivering Australia’s first dedicated green bond fund, the CEFC’s first green home loan, and a material uplift in the capacity of the world’s largest battery, Neoen’s Hornsdale Power Reserve that increased capacity from 100 to 150 MW. Its new investment commitments span the agriculture, cleantech, energy, infrastructure, transport and waste sectors.

“While our annual rate of new investments in 2019-20 slowed compared with previous years, we remained an active investor in the year,” CEFC CEO Ian Learmonth said. “New CEFC investment commitments in 2019-20 attracted an additional $3 billion in additional investment, further magnifying the impact of our finance.”

Since its inception, total CEFC commitments reached $8 billion by the end of June, helping spur $27.3 billion in investment commitments to clean energy initiatives across the economy. The bulk of the funding went to large-scale investments helping more than 3 GW of solar and wind get off the ground. Now, the CEFC says it is looking to expand into areas that can further assist the country’s energy transition with a focus on catalyzing finance into Renewable Energy Zones, grid upgrades, the integration of significant storage and renewables and the potential for grid security services. 

“We recognise that the scale and breadth of our portfolio represents just the start of the decarbonisation effort, with much more to be done – whether in delivering a cleaner, stronger electricity grid, decarbonising all areas of economic activity or supporting the growth of a clean and competitive Australian hydrogen industry,” Learmonth said.

The CEFC’s annual investment update also shows that funds repaid to the green bank from its investments reached $942 million in 2019-20 through the repayment of loans and the sale of assets. This was markedly higher than the record $321 million recycled in 2018-19, putting the total repayments since it began investing at $1.66 billion. Such a financial performance allows the CEFC to reinvest these funds into new projects thus expanding on its original funding of $10 billion.

“As our investment portfolio matures, this is an increasingly important demonstration of our commitment to earn a positive return on our investments and reinvest our capital on behalf of the Australian community,” Learmonth said.