CEFC capital pushes into new frontiers in a year of firsts for trailblazing clean energy investor
18 August 2021
Landmark investment commitments in new areas of the economy, innovative technologies and nation-building transmission projects have burnished the CEFC reputation as a trailblazing investor in Australia’s low emissions economy.
In a year of firsts, the CEFC defied the constraints of the Covid 19 pandemic to make new investment commitments of $1.37 billion across 22 transactions in the 12 months to 30 June 2021. With a total transaction value of $5 billion, the new investments further underscore the success of the CEFC in attracting additional private sector finance into the clean energy economy.
Over the same period, the CEFC's specialist Clean Energy Innovation Fund marked its fifth year of investment with important milestones. Lifetime investments to 30 June 2021 reached $117.6 million, driven by a record 11 investments in the year, including five follow on investments. Together with its co-financiers, Innovation Fund finance has now reached almost 100 individual cleantech pioneers.
CEFC CEO Ian Learmonth said: “The CEFC began life with $10 billion to invest on behalf of the Australian Government. We’re proud to report that our lifetime investment commitments have played a key role in driving $33 billion in new investments aimed at cutting Australia’s carbon emissions. These investments are delivering benefits Australia-wide, from the farm gate to the city, encompassing businesses large and small, helping our economy capitalise on the exciting opportunities of the global clean energy transition.
“Reflecting our role as a market leader, we are increasingly using our capital to drive investment in hard-to-abate activities. We’re excited to be backing the evolution of clean hydrogen as a low emissions energy source for transport, manufacturing and industry. We’re also pleased to be investing in complex large-scale transmission infrastructure, which is so essential for Australia to leverage our natural advantage as a renewable energy powerhouse.
The CEFC portfolio of investment commitments at 30 June 2021 was $6.5 billion, after allowing for almost $2.5 billion in amortisation and repayments since the CEFC began investing. This capital is available for CEFC reinvestment in clean energy projects.
A year of firsts
Mr Learmonth added: “The year was notable for inaugural CEFC investments in new areas of the economy that are key to Australia’s push to reduce its emissions, demonstrating the market leading role played by CEFC capital.
“CEFC investments into new areas accounted for about a third of new investment commitments in the past year, across hydrogen, transmission and embodied carbon, and broke new ground in recycling, PV technology, green home loans and climate-indexed bonds.
- Single largest investment: up to $295 million to support delivery of Project EnergyConnect, including new transmission infrastructure spanning more than 900 kilometres in three states1
- First major transmission transaction: $125 million to TransGrid Services to help deliver grid infrastructure critical to the Snowy 2.0 pumped storage project
- First investment through the Australian Recycling Investment Fund: $16.5 million to Circular Plastics Australia to recycle the equivalent of an estimated one billion PET bottles into high-grade new food packaging
- First hydrogen-related investment: $750,000 through the CEFC's Innovation Fund to Wollongong University start up Hysata to commercialise innovative electrolyser production technology
- First embodied carbon in property construction: $95 million to support the use of low carbon concrete at Roe Highway Logistics Park
- First all green residential mortgage-backed securitisation:$108.5 million to Firstmac tohelp deliver sustainable housing through green home loans
- First forward-looking climate transition equity index in Australia: $60 million to cornerstone the BNP Paribas green bond, linked to the Australian Climate Transition Index
- First solar PV technology investment: $10 million to Sunman to develop its revolutionary lightweight, flexible solar panels for use across a wider range of applications and buildings
Clean Energy Innovation Fund
The $200 million Clean Energy Innovation Fund also reported a strong performance in 2020-21, cementing its position as Australia’s largest dedicated cleantech investor. The Innovation Fund has participated in financing rounds which have raised more than $408 million at 30 June 2021, as portfolio companies secure early growth opportunities.
Innovation Fund Director Ben Gust said: “Australia’s cleantech entrepreneurs are bringing increasingly innovative opportunities to market, attracting strong interest from specialist investors who recognise the commercial potential of their ideas.
“In the past year we’ve worked with businesses and investors across a diverse range of technologies and business models, from e-bikes to flexible solar panels and on-farm livestock management and soil carbon solutions.
“Since we began investing, each dollar of Innovation Fund capital has attracted an additional $2.60 in investment from the private sector, including new entrants to the Australian market. We’re also seeing portfolio companies attract strong interest in follow on investment rounds, a critical indicator of the potential of these emerging businesses.”
1 Transaction closed just after year end. The $295 million CEFC investment commitment will be reflected in 2021-22 numbers, rather than 2020-21.
Media release, 2021