22 July 2014
The Clean Energy Finance Corporation (CEFC) has announced an agreement with the Direct Infrastructure division of Colonial First State Global Asset Management (CFSGAM) to establish Australia's first unlisted clean energy direct infrastructure investment platform for institutional investors, the CFS Australian Clean Energy Infrastructure Fund.
The CEFC will provide up to $80 million as the initial cornerstone investor in the wholesale infrastructure investment platform that will invest in renewable energy, energy efficiency or low emissions technology. To grow the opportunity, CFSGAM will seek to raise a further $300-$500 million over the next three to five years.
The platform will commence investing immediately in both green field developments ready for construction and mature operating assets using established eligible technologies.
CEFC Chief Executive Officer, Oliver Yates said Australian institutional investors were looking for ways to invest in clean energy but needed a mechanism for doing so.
"Australian superannuation funds have been increasing their investment in infrastructure over the last decade and have an estimated $40 to $65 billion now invested in the sector."
"At the same time, a growing number of these funds and their members want to invest in the clean energy and new energy efficient technology sectors to take advantage of their strong growth and future potential. The establishment of Australia's first clean-energy focused wholesale infrastructure platform will meet this need and help develop this market for the benefit of existing investors and attract new institutions to the sector," he said.
Superannuation funds and other institutional investors have increasingly recognised that reducing the emissions exposures in their portfolios is a strategic investment priority, but finding such investments has proved a challenge.
This unlisted clean energy infrastructure investment platform will help meet both the needs of these direct investors and of superannuation fund members who have shown growing interest in financially robust socially responsible investments. Further, it will help attract new sources of investment in renewable energy, unlocking new sources of capital for the market and expanding the investor base for this sector.
Perry Clausen, Head of Direct Infrastructure at CFSGAM said "Australian superannuation funds and other institutional investors have expressed interest in finding an attractive way to invest directly into low carbon energy infrastructure. The CEFC cornerstone investment is a first step in establishing a unique clean energy platform and working with those institutional investors in achieving their investment objectives."
The CEFC investment will demonstrate the potential of this investment class and provide a positive model and experience that might be adopted more widely.
About Colonial First State Global Asset Management
Colonial First State Global Asset Management (CFSGAM) is the consolidated asset management division of the Commonwealth Bank of Australia. It is a global asset management business with experience across a range of asset classes and specialist investment sectors. It is one of the largest managers of Australian sourced funds, with a growing presence in international markets. CFSGAM and First State Investments collectively manage over A$171.7 billion (as at 30 June 2014) on behalf of institutional investors, pension funds, wholesale distributors and platforms, financial planners and their clients worldwide.
CFSGAM Direct Infrastructure was established in 1994 and has over 19 years' experience in unlisted infrastructure investments with over A$4.5 billion funds under management.