Budget signals major funding boost for CEFC as part of Rewiring the Nation program
27 October 2022
The CEFC today welcomed confirmation of its leading role in delivery of the Australian Government’s Rewiring the Nation (RTN) infrastructure program. The Federal Budget included an $8.6 billion capital injection to the CEFC for RTN-related investments, as part of the broader $20 billion RTN policy initiative.
Subject to parliamentary approval, the new funding will be the first injection of new capital to the CEFC in its 10-year history.
The substantial allocation recognises the strong track record of the CEFC in driving investment in decarbonisation. The CEFC expects to draw on this new capital to invest in priority grid-related projects to fast-track the decarbonisation of the electricity sector and secure a strong and stable clean energy supply.
CEFC CEO Ian Learmonth said: “The CEFC has already played a significant part in Australia’s clean energy transition and this experience will be crucial to a successful push to net zero emissions. This new capital allocation is a welcome endorsement by the Government of our impact over the past decade, acknowledging our investment expertise and careful stewardship of taxpayers’ money.
“Transforming our electricity grid is one of the most important investments we can make as we transition to net zero emissions, providing a critical pathway to bringing low-cost renewable energy to consumers.
“As Australia steps up its ambitions to decarbonise, the CEFC will help deliver a 21st century electricity grid, powered by clean energy and supported by the nation-building infrastructure that will enable it to thrive in the low emissions future economy.
“The CEFC will also continue our important task of investing across the economy to cut emissions. In our first decade we made investment commitments of $10.76 billion, across some 265 large-scale transactions. After allowing for repayments and returns on our investment commitments we have access to $4.57 billion in investment capital from our initial $10 billion allocation, in addition to the ongoing returns from our investment commitments.”
The CEFC will lead the financial and investment aspects of RTN-related investments, working closely with the new Rewiring the Nation Office, AEMO, and the Australian Energy Infrastructure Commissioner, which will lead on non-financial related aspects.
Eligible RTN projects include large-scale transmission infrastructure, such as Tasmania’s Marinus Link and the Victoria-New South Wales Interconnector West (VNI-West), as well as energy storage, renewable energy zones and large-scale hydro storage assets. The CEFC has been closely involved in shaping the proposed investment structures in the Tasmanian and Victorian interconnector projects.
The CEFC has a strong track record of delivering grid infrastructure and has invested more than $580 million to deliver three key projects:
- EnergyConnect, our single largest investment to date and a significant first step in the delivery of the AEMO Integrated System Plan
- Southern Downs Renewable Energy Zone, to connect multiple Queensland clean energy assets to the National Electricity Market (NEM), and
- Snowy 2.0, to help connect the pumped hydro project to the NEM.
CEFC finance has also played a significant role in the development of Australia’s large scale storage capacity, including the Victorian Big Battery, the expansion of the Hornsdale Power Reserve in South Australia and, most recently, the Capital Battery in the ACT.
Since inception, the CEFC has also backed the accelerated development of Australia’s large-scale solar and wind sectors, delivering an additional 3.6 GW of generation capacity.
Mr Learmonth added: “Our record of achievement in the past decade demonstrates the ongoing value of the unique CEFC model in tackling the emissions reduction challenge that is so critical to our future.
“In our first 10 years CEFC capital helped transform the clean energy sector. As we look to the future, the CEFC has the deep sector experience, investment expertise and portfolio strength to deliver on Australia’s ambitious new decarbonisation targets.
“Importantly, we will continue our important task of investing across the economy to cut emissions.”
In 2022 the CEFC marked 10 years of operation and surpassed $10 billion in lifetime investment commitments. CEFC capital spurred transactions with a total value of more than $37 billion across the economy and around the nation.
CEFC investments have attracted $2.42 in private sector capital for every $1 CEFC invested. Since inception, some $3.3 billion of capital has been returned or repaid to the CEFC, money available to be reinvested.
Media release, 2022