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Clean Energy Finance Corporation Under Review

Time: 1/10/2018 9:44:38 AM                       Publisher: Staff
Image: Clean Energy Finance Corporation
 
The Department of the Environment and Energy is overseeing a review examining the effectiveness of the Clean Energy Finance Corporation (CEFC) in boosting flows of finance into Australia’s clean energy sector.
 
The CEFC was originally set up by the Gillard government in 2012 to stimulate capital investment in renewables, low-emissions technology and energy efficiency in Australia, and to accelerate the nation’s transformation towards a more competitive economy in what’s becoming an increasingly carbon constrained world.
 
The Corporation has invested in a wide range of projects – everything from providing financing to council street light upgrades to huge wind and solar farms.
 
The CEFC is not a charity and does not give out grants – it expects a return on its investments. The Corporation provides finance to projects it deems solid that may not otherwise receive it. Through leading by example, this builds confidence in other entities to do the same.
 
“We invest responsibly and manage risk prudently, using a commercially rigorous approach to investment activities and risk management practices,” states (PDF) the Corporation.
 
Up until June 30 last year, the CEFC has made investment commitments of over $4.3 billion to 79 projects with a total value of $11 billion. Nearly half of the investment figure occurred during 2016/17 – $2.1 billion over 35 transactions.
 
In 2016-17, the portfolio return achieved was 4.5%.
 
In terms of solar power, the CEFC reached a significant milestone by mid-December last year – supporting the delivery of more than 1GW of PV capacity across 20 Australian large-scale solar projects. This was followed by $55 million in debt finance committed to the 55MW Oakey 2 solar farm project in south-east Queensland in late December.
 
Statutory Review, Public Comment Invited
 
While the CEFC has been in the crosshairs of the Coalition in the past (particularly Tony Abbott, who desperately wanted it axed), this review isn’t a surprise affair. Section 81 of the Clean Energy Finance Corporation Act 2012 states:
 
  1. The nominated Minister must arrange for a review of the operation of this Act to be undertaken as soon as practicable after 1 July 2016.
  2. The review must include a review of the effectiveness of the Corporation in facilitating increased flows of finance into the clean energy sector.
  3. The review must make provision for public consultation.
  4. The persons who undertake the review must give the nominated Minister a written report of the review.
 
.. so, if anything this review is quite overdue.
 
The review is being carried out Deloitte Touche Tohmatsu, which recently released a consultation paper for public comment. Deloitte will gauge the CEFC’s performance in relation to four key questions:
 
  1. How has the Australian clean energy sector evolved?
  2. How effective has the CEFC been in the evolution of the Australian clean energy sector? 
  3. How has the Act enabled the CEFC to efficiently allocate its resources?
  4. Are there any gaps in the scope of the Act?
 
The consultation paper, which can be downloaded here, is open for public comment until 16 February 2018.
 
Source: solarquotes
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