Australia

AU-3:Clean Energy Finance Corporation (CEFC) funding

Policy Description

 

The Clean Energy Finance Corporation (CEFC) is a legislated fund established as part of the Clean Energy Future policy package. It has been established to drive innovation through commercial investments in clean energy through loans, loan guarantees and equity investments and focus on renewable energy, energy efficiency and low emissions.  The CEFC leverages private sector financing for renewable energy and clean technology projects, investments critical to the transformation of the Australian economy.

Description

 

The Clean Energy Finance Corporation (CEFC) is a legislated fund established as part of the Clean Energy Future policy package. It has been established to drive innovation through commercial investments in clean energy through loans, loan guarantees and equity investments and focus on renewable energy, energy efficiency and low emissions.  The CEFC leverages private sector financing for renewable energy and clean technology projects, investments critical to the transformation of the Australian economy [1].

The statutory governance arrangements for the CEFC are set out primarily in the Clean Energy Finance Corporation Act 2012 (CEFC Act). Investment activities will be funded through special appropriation of $2 billion every year for five years, which commenced on July 1, 2013 with the aim of the CEFC becoming self-sustaining within a few years. The CEFC Act excludes investment in carbon capture and storage, nuclear technology or nuclear power and specifies that at least 50% of the CEFC portfolio must be invested in renewable energy technologies by 1 July 2018, or within five years of the first receipt of the Corporation's funding into the Special Account. The remaining funds will be distributed between energy efficiency and low emissions technologies [2].

CEFC is primarily a financier, investing directly and indirectly in clean energy technologies and not building or buying projects in its own right. It also aims to work with other private sector co-financiers, to both leverage the total amount of funding available and to enhance the expertise and capacity of the clean energy financial sector.

An independent Board made up of experts in banking, investment management and clean energy and low emissions technologies administer the CEFC. CEFC is required to produce an annual report and quarterly investment reports on its activities, with its first report expected in October 2013.

While it is too early to make any assessments, as of August 2013, the CEFC had invested in bioenergy, solar and wind farms [3].

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2013

Policy Linkages

Supports Carbon Pricing Mechanism (CPM) Effort Defining
Supports Generator Efficiency Standards (GES) (ENDED) Effort Defining

Agencies Responsible

Clean Energy Finance Cooperation
Climate Change Authority

Primary Objective: Energy

Objective

­To overcome capital market barriers that hinder the financing, commercialisation and deployment of renewable energy, energy efficiency and low emissions technologies.

Target Group

Business wanting to invest in clean technologies or business that produce/provide input for clean technologies.

Driver of energy consumption or emissions affected by policy: Energy, Emissions

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

Not available

Quantitative Target? no

Target: Information not available

Progress Monitored? no

Verification Required? no

Enforced? no

Sanctions: Information not available

Requirements on the Target Group

Information not available.

Support by Government

Information not available.

Implementation Toolbox

Information not available.

Complexity of Implementation

Government

No details available yet, but in general, investment support is relatively simple to administer compared to other types of policy measures. Most complex part of the scheme is likely to relate to risk management

Target Group

Complexity will depend on the application procedure requirements. No details available yet, but in general participation in financial support schemes is relatively simple compared to other types of policy measures. Also, participation is voluntary.

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions Not available
Estimated costs/benefits for industry Reduces cost for clean investments
Estimated cost for government Funding amounts to AUS$10 billion for 4 years. No information is as yet available on the transaction costs.

References & Footnotes

References

[1] Australian Government, Clean Energy Future website, http://www.cleanenergyfuture.gov.au/clean-energy-future/renewable-energy/

[2] Australian Government, Clean Energy Finance Corporation website, http://www.cleanenergyfinancecorp.com.au/

[3] Australian Government, Clean Energy Finance Corporation, Media Releases website, http://www.cleanenergyfinancecorp.com.au/media/media-releases.aspx