From our CEO
Despite the many challenges that arose this year, I am pleased to report that the CEFC made a number of ground-breaking investments in 2019–20, including in new technologies and new sectors. We also saw the ongoing evolution and maturity of our substantial portfolio.
Importantly, 2019–20 demonstrated that the deployment of CEFC capital, combined with our unparalleled financial and industry expertise, is vital to the decarbonisation of the Australian economy and the growth of the clean energy sector.
Our continued strong financial performance and sound technology and systems enabled us to invest through the economic disruption of the COVID-19 pandemic.
The CEFC made new investment commitments of more than $1 billion in 2019–20, across 23 clean energy investments with a combined transaction value of $4.2 billion. These new CEFC investment commitments attracted an additional $3 billion in private sector investment, further magnifying the impact of our finance.
We also advanced $187 million in CEFC wholesale finance to partners underpinning about 6,700 smaller scale investments in clean energy projects, including in agribusiness, property and transport.
New investment commitments in 2019–20 targeted more than one million tonnes of carbon abatement annually. In addition, 2019–20 saw a record amount of CEFC capital repaid or recouped through loan repayment, sale or redemption, at almost $942 million.
The annual rate of new CEFC investments in 2019–20 slowed compared with previous years, reflecting challenges in the renewable energy sector, including marginal loss factors, grid constraints and connection delays. We are working with investors, project proponents and regulators to address these structural issues where possible.
Our investments in 2019–20 reflect success in our role as catalysts for change, leading the market with pioneering investments across agriculture, cleantech, clean energy generation and storage, infrastructure, property, transport and waste.
The CEFC was the cornerstone investor in Australia’s first dedicated green bond fund alongside Australian Unity and Crestone Wealth Management. The fund will invest in a combination of green, social and sustainable fixed interest securities with the purpose of helping to lower carbon emissions and attracting new capital to the clean energy sector.
We committed up to $60 million in Australia’s first green home loan based on energy efficiency, working with Bank Australia to deliver discounted interest rates to qualifying home buyers and spearhead the construction of market leading, energy efficient housing.
We also helped finance the 50 per cent expansion of the world’s biggest battery, committing up to $50 million in project finance for South Australia’s Hornsdale Power Reserve. We are pleased to be working with Neoen, ARENA and the SA Government to improve grid security and reliability and maximise the benefits of renewable energy.
And as Australia’s largest cleantech investor we committed up to $16.6 million in new and follow-on investment commitments in cleantech innovators, via our Clean Energy Innovation Fund. New investments included JET Charge, a company deploying smart charging hardware for electric vehicles; Tenacious Ventures, a specialist agrifood tech investment fund; and the Soil Carbon Company, an exciting team developing a microbial treatment to increase organic carbon in soil.
In 2020 we continued to make an active contribution to the development of the Australian Government’s Technology Investment Roadmap. Increasing investment in clean energy technologies has been central to the role of the CEFC since we began investing, and as advances make these technologies more investable, we see a corresponding lift in investor interest. In 2019–20 our specialist Clean Futures Team focused on unlocking investment opportunities in multiple new and emerging technologies. These include hydrogen from clean energy sources, which is an emerging sector that will benefit from our role in catalysing investment in new areas.
Our new $300 million Advancing Hydrogen Fund will support the growth of a clean, innovative, safe and competitive Australian hydrogen industry. We are seeking to drive large scale deployment of electrolyser technologies, with an early priority to invest in projects included in the $70 million ARENA funding round. Our work alongside ARENA here recalls our previous collaborations in renewable energy and we are grateful for the contribution they are making to develop this emerging Australian industry.
Through our new $100 million Australian Recycling Investment Fund, we are also focused on investing in large scale projects to recycle waste plastics, paper, glass and tyres.
The Australian Government has also foreshadowed the creation of a CEFC-led Grid Reliability Fund, enabling the CEFC to further expand our focus on grid-related investments. While we await passage of the legislation to create this important new $1 billion fund, we are already investigating how we can contribute to these nation building projects, through support for Renewable Energy Zones, grid connections, Snowy 2.0 and Project Marinus, the second interconnector between Tasmania and Victoria.
We appreciate the engagement and guidance of our Board under Chair Steven Skala AO, and our constructive working relationship with the Minister for Energy and Emissions Reduction, the Hon Angus Taylor MP. We also acknowledge the contribution of Minister for Finance, Senator the Hon Mathias Cormann and wish him well in his retirement from Parliament. The Department of Industry, Science, Energy and Resources continues to provide strong support and advice and we recognise the positive impact this has on our activities.
As Australia embarks on the post-pandemic economic recovery, the CEFC has much to offer this essential endeavour: through our mandate to stimulate investment in clean energy and essential infrastructure as well as our appetite to support related emerging technologies. We appreciate the scale of the task ahead and look forward to seeing clean energy investment play a central role in the anticipated revival over coming years.
Chief Executive Officer, CEFC