The CEFC Board, as the accountable authority of the Clean Energy Finance Corporation, presents the 2019–20 Annual Performance Statements, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
In our opinion, these Annual Performance Statements are based on properly maintained records, accurately reflect the performance of the Corporation and comply with subsection 39(2) of the PGPA Act.
The CEFC was established by the Clean Energy Finance Corporation Act 2012 (CEFC Act) ‘… to facilitate increased flows of finance into Australia’s clean energy sector’.
Ultimately, this objective is achieved through investing directly and indirectly with co-investors and, in doing so, encouraging and facilitating others to also invest in renewable energy, energy efficiency and low emissions technologies and projects.
The CEFC has performed well in 2019–20, achieving the majority of the targets set by its Board, notwithstanding the broader economic and societal challenges posed by the COVID-19 pandemic. The non-executive Board and its sub-committees monitor and evaluate the performance of the CEFC, against criteria detailed in the 2019–20 CEFC Corporate Plan and the 2019–20 Portfolio Budget Statements (PBS). The outcome of this evaluation is detailed in the following Performance Summary and Analysis of Performance Criteria.
|Strategic priority: Increasing the impact of our investment activities|
|Operating result1||Financial operating result||$89m against targets of $110m (Corporate Plan) and $100m-$110m (PBS)|
|Performance against portfolio benchmark return set in the Investment Mandate Direction 2018||Optimise portfolio returns while recognising the CEFC’s public policy purpose, and taking all reasonable steps to achieve portfolio benchmark return (PBR) targets of the five-year Australian Government bond rate +3% to +4% per annum for the core portfolio and the five-year Australian Government Bond rate +1% per annum for the Clean Energy Innovation Fund.3||For the core portfolio, the cumulative return was 4.75% versus a benchmark target of 5.28%-6.28%, a deficit of 0.53%-1.53%. This represented a deficit increase during the year of 0.4%. For the Clean Energy Innovation Fund, the cumulative return was –6.02%, versus a benchmark target of 3.15%. This is a 21.03% improvement during the year.|
|Capital committed||Dollar value of capital committed.||$1.1b against targets of $0.8b (Corporate Plan) and >$1b (PBS)|
|Capital deployed||Dollar value of capital deployed.||$0.9b against targets of $0.7b (Corporate Plan) and >$1b (PBS)|
|Financial leverage||Financial leverage in transactions financed.||3:1 against 2:1 target (Corporate Plan)|
|Contribution to emissions reduction||Forecast emissions reduction per year2 from capital committed during the period.||1.1 Mt CO2-e against targets of 1.5 Mt CO2-e (Corporate Plan) and 2.0 Mt CO2-e (PBS)|
|Strategic priority: Developing innovative investment solutions|
|Strengthen the CEFC leadership role in supporting the sustainable energy transition||Develop an organisational capability to support a stronger innovation focus. Continue to invest in innovation, including technologies, businesses and financing structures across Australia.||Clean Futures Team established, including teams focused on Grid Infrastructure and Hydrogen. First grid scale storage financing completed, along with a second significant energy from waste facility. Specialist investment leads operating across identified focus areas including Electricity Grid Infrastructure, Renewable Energy Zones, Storage and Hydrogen, reflecting priorities of the Technology Investment Roadmap.|
|Build collaborative stakeholder relationships to accelerate the sustainable energy transition||Take the lead in establishing collaborative relationships across industry, government stakeholders and key decision-making bodies to influence the direction of the sustainable energy transition.||Strong collaboration with AEMO in respect of new investments, particularly with respect to stability and reliability matters and inputs into the ISP process. Resourcing support provided to DISER to assist in analysis related to the UNGI program and Technology Investment Roadmap initiatives. Strong engagement with the NSW Government with respect to the first Renewable Energy Zone in Australia.|
|Contribution to transformation of the clean energy investment market||Meaningful progress based on integrated development plans for storage, electric vehicles, biofuels, markets development, general policy and green bond markets, as well as nation building projects.3||CEFC finance extended to new areas of the economy, delivering Australia’s first dedicated green bond fund, the CEFC first green home loan and a material uplift in the capacity of Australia’s largest battery in South Australia. New Innovation Fund investment commitments of just over $13 million in three cleantech innovators, including in EVs, agritech and soil carbon. Creation of the Advancing Hydrogen and Australian Recycling Investment Funds. Delivery of ~6,700 smaller scale investments, including clean energy projects, including in agribusiness, manufacturing, property and transport.|
|Dissemination of information to industry stakeholders and initiatives to build industry capacity||Increase the value and diversity of the investment pipeline. Significant marketing and communications activity, including media outreach and targeted participation in conferences and industry events. Positive stakeholder awareness and knowledge.3||Led or contributed to the development of a range of market reports and information materials to build market awareness and understanding. Produced 18 market reports and investment insights, delivered 97 speaking engagements and 42 media releases and articles. Launch of The Green Room | Clean Energy Conversations with the CEFC. Continued leadership role in the industry–wide Women in Sustainable Finance initiative.|
|Strategic priority: Operating with organisational effectiveness|
|Further develop our capital management capability||Continue to develop, demonstrate and implement the CEFC capability in the areas of asset recycling and capital management.||First round of capital recycling transactions completed during the year.|
|Build the culture, capability and IT infrastructure necessary to deliver the strategy||Continue to build culture by embedding the refreshed values into key people processes. Assess and acquire the diversity of capabilities and skills needed to enable the CEFC to transition into new sectors and technologies. Deliver a significant uplift in enterprise information management maturity and continued investment in infrastructure and systems to support the business.||Refreshed values embedded throughout the organisation, supported through CEO Values Award and acknowledgment of employee ‘values moments’ to further strengthen the CEFC culture. Introduction of the first Reconciliation Action Plan (RAP), representing the Reflect phase of the reconciliation process. New Head of Hydrogen appointed; appointment of a secondee from ARENA to the Clean Energy Innovation Fund; engagement with UNSW Energy Labs. New electronic workflows implemented, including introduction of enhanced analytics capabilities via the PowerBI tool and creation of the CEFC intranet.|
Achieved Partially achieved Not achieved
1 Annual emission reduction targets and estimates of actuals are based on the first full year of operations.
2 Measured before concessionality, excluding gains/losses from mark-to-market bonds and debt instruments and excluding gains/losses from fair value adjustments to Innovation Fund investments.
3 Measure originates from the 2019–20 PBS only. All other measures originate from the 2019–20 CEFC Corporate Plan.