Australian financiers are wearing their clean energy hearts on their sleeves.
A Deloitte study commissioned by the Clean Energy Council found overwhelming support for the Clean Energy Finance Corporation, an entity that is expected to help the nation overcome a “fear of the unknown,” as termed by the council’s acting CEO, Kane Thornton.
The $10 billion CEFC is part of a broader federal government initiative — the biggest in Australia’s history — announced last July to promote clean energy technologies as it aims to cut emissions by 5% (from year 2000 levels) in 2020, and lower emissions by a whopping 80% by 2050.
The Australian government’s Clean Energy Future plan, unveiled last July, aims to deliver transitional aid to businesses and industry including through the $8.6 billion Jobs and Competitiveness Program, the $1.2 billion Clean Technology Program, the $300 million Steel Transformation Plan and the $1.3 billion Coal Sector Jobs Package.
Handmaiden to private sector
Australia also plans to invest over $13 billion in clean energy projects. It also has launched a $200 million Renewable Energy Venture Capital Fund in order to tap private sector initiatives. Half this investment comes from Softbank China Venture Capital, an arm of Japan’s Softbank. The fund forms part of the Australian government’s $3.2 billion Australian Renewable Energy Agency and will be managed by Southern Cross Venture Partners.
The Deloitte study surveyed over 40 senior executives from Australian banks, super funds, venture capital firms and major investors, and sought to identify potential financing gaps — unproven technologies or simply capital-intensive projects, for example — and ways in which the CEFC would help plug these, and sustain the momentum towards a cleaner energy environment.
“Investors are keen to support new clean energy technologies, they just need the CEFC to help share the investment load and to take a longer term view,” said Thornton. “Shopping centres and toll roads are familiar propositions for investors but large-scale solar plants, for example, come with a risk premium in Australia even though they have been built successfully in countries such as Spain and the United States.”
Thornton also believes CEFC has a key role to play in condensing a “generation of energy innovation into a much shorter period to meet the challenges of decarbonising our economy.”
Reserve Bank board member Jillian Broadbent is leading a team that is finalising design of the CEFC.