The Clean Energy Finance Corporation (CEFC) has been allocated an additional $20.5 billion by the Australian Government to accelerate progress towards Australia’s transition to net zero emissions by 2050.
The Australian Parliament has passed the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022, providing for the CEFC to receive the first $11.5 billion and allowing for a further $9 billion to be added by other new appropriations.
The additional funding provides for the creation of three new investment priorities to be delivered by the CEFC:
- $19 billion to help deliver the Rewiring the Nation program, with investments including high voltage transmission, long duration grid storage and electricity distribution network infrastructure
- $1 billion to create the Household Energy Upgrades Fund, to provide discounted consumer finance to increase sustainability across the housing sector
- $500 million for a new Powering Australia Technology Fund, to support the growth or expansion of clean technology projects, businesses and funds to facilitate the development, commercialisation and take up of clean energy technologies
The $20.5 billion additional capital allocation will be invested alongside ongoing CEFC investment activities across the economy, including in renewable energy and energy efficiency, emerging cleantech and hydrogen opportunities, among others.
CEFC Chair, Steven Skala AO, said this support by the Australian Government and Parliament for CEFC’s work as Australia’s ‘green bank’ was significant.
“The additional funding recognises the success of the CEFC model in investing to lead the market, proving up investment opportunities and operating with commercial rigour,” Mr Skala said.
“The Rewiring the Nation program, Household Energy Upgrades Fund and Powering Australia Technology Fund substantially expand the role of the CEFC, alongside its ongoing core businesses. New large-scale investments in priority grid infrastructure projects complement our existing work in transforming our energy system and bringing the benefits of decarbonisation to key sectors of our economy.
“After a decade as Australia’s specialist clean energy investor, the CEFC has the experience and track record to finance complex infrastructure projects, back clean energy generation and support significant decarbonisation across the Australian economy. With this additional $20.5 billion capital allocation, we recognise the challenges and opportunities of building on our investment portfolio in our second decade of operation.”
CEFC CEO, Ian Learmonth, welcomed the substantial increase in CEFC’s investment capacity and acknowledged the demonstrated confidence in the unique role it is playing across the Australian economy.
“This additional capital will enable the CEFC to make a significant contribution to the achievement of net zero emissions by 2050, an ambitious and important national goal that will transform our economy and improve our environment,” Mr Learmonth said.
“Subject to commercial considerations, we expect to make substantial grid-related investment decisions within the next 12 months. While these transactions are often large and complex, we must move quickly to invest in the expansion and augmentation of our grid and related infrastructure to deliver on Australia’s net zero objectives.
“Analysis from the Intergovernmental Panel on Climate Change provides an important reminder of the scale of the climate challenge and the urgency to accelerate meaningful action in this decade.
“In Australia, this means transforming our energy system to low cost, low emissions renewables, backed by large-scale energy storage and a modernised two-directional grid, connecting distributed generation with industrial, commercial and residential power users.
“This must occur in parallel with an unprecedented adjustment in the way we use energy across our economy, transforming the way we farm, manufacture, travel and extract our resources.
“At the intersection of this revolution in low emissions energy generation and distribution is Government and private sector capital, delivered via new and tailored investment models that leverage the considerable market momentum toward sustainable green investment opportunities.
“We do not underestimate the scale of the challenge or the pace at which this transformation must occur, especially in light of the economic and supply chain headwinds impacting many sectors of our economy, including energy.”
The CEFC said it will provide further information on the investment approach for each of the three new investment priorities in due course.
As of 31 December 2022, the CEFC had made lifetime investment commitments of $11.7 billion. After repayments and returns on its investments, the CEFC had $4.6 billion available for ongoing investment activities from its original $10 billion funding allocation from the Australian Government.
