CEO's Report

CEFC ANNUAL REPORT / 2015–16

CEO's Report

Oliver Yates

The CEFC committed a record $837 million in new investment in 2015-16, a 73 per cent increase on the previous year, supporting projects with a total value of $2.5 billion.
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Through our 15 new investments, we mobilised an even greater amount of private sector capital into clean energy activities, working across a diverse range of technologies and geographies.

We were pleased to directly invest in major projects, as well as increase our work alongside co-financiers to contribute to the transformation of Australia’s clean energy investment, catalysing new finance into this exciting area of the national economy. 

At the same time we sharpened our strategic focus, to ensure CEFC finance is deployed to the greatest impact.

At the end of the 2015-16 year, we are pleased to report that the CEFC has made total cumulative investment commitments of almost $2.3 billion since we began investing in 2013, towards projects valued at $5.7 billion.

Commercial rigour

We continue to apply commercial rigour to our investment decisions, so that we deliver a positive return on investment for taxpayers across our portfolio. Every CEFC investment is expected to earn a positive return above the Government cost of borrowing.

During the year we saw a number of projects in our portfolio achieve important milestones, either commencing or completing construction, or securing offtake agreements for electricity and/or large-scale generation certificates (LGCs). Others achieved asset sales, repaid loans or deployed significant capital from facilities with the CEFC.

At the end of 2015-16, our portfolio of investment commitments stood at $1.7 billion, a 44 per cent increase on the previous year. More than $150 million in investments were repaid to the CEFC, a pleasing outcome ensuring this return of taxpayers’ money is now available to fund more projects.

A diverse clean energy portfolio

Our activity in the clean energy sector continues to catalyse additional private sector investment and innovation.

We have a clear strategic focus on delivering cleaner power solutions, creating a better built environment and catalysing new sources of capital to support clean energy investment.

Following a sharpening of our organisational structure during the year, we have dedicated Origination and Transaction Team leaders for 12 targeted business platforms, increasing our focus, expertise and efficiency to areas of the economy with the strongest potential to deliver clean energy benefits.

We are fortunate to have increasingly strong relationships with a wide array of financial organisations, which ensures our finance has extended reach across the Australian economy. Our seven co-finance and aggregation programs have delivered more than $100 million in finance to more than 500 smaller projects and businesses across Australia. Today, in branches of major banks across Australia, relationship managers are encouraging their customers to make better and more clean energy focused decisions, with the benefit of a 0.7% interest rate discount on CEFC-powered energy efficient finance.

A scalable investment model

We’ve built a scalable investment model and our challenge, and indeed the challenge for the entire Australian economy, is to accelerate progress towards achievement of the Renewable Energy Target and reduced emissions.

We want to help accelerate progress towards low carbon and highly energy efficient commercial building refurbishment and construction.

We want to help build more energy efficient housing and accommodation, especially for occupants who can least afford high electricity bills that could be avoided through access to renewables or energy efficient design.

We want to help build greener infrastructure for cities, local government and universities.

We want to help accelerate the uptake of very low or zero emission vehicles.

We want to help grow the market for green and climate finance in Australia, supporting new debt and equity product structures to provide new sources of capital for clean energy assets across the country.

These goals continue to drive the CEFC’s investment approach.

Clear pathway to net zero emissions

In Paris in December 2015, at the 21st Conference of the Parties, the global commitments to reducing emissions sent a clear signal – to stay well below two degrees Celsius and attempt to limit warming to 1.5 degrees Celsius above pre-industrial levels.

Investors need to make decisions about assets with a clear understanding that the global goal must be net zero emissions before 2050. This pathway to net zero emissions well before 2050 must be an overlay to all business and policy decisions if we want to ensure we are making the right investment decisions, and acting with sufficient speed.

For Australia, as an Annex I country under the United Nations Framework Convention on Climate Change, we are obligated to be a leader.

Appreciation

I’d like to recognise our Chair, Jillian Broadbent AO, and our Board, who continue to lead the CEFC with a clear vision and commitment to clean energy.

I also thank my fellow Executives and the entire CEFC team for what has been a very successful year. The organisations we work with are to be acknowledged for their leadership in investing in clean energy solutions. We look forward to continuing and extending these relationships, with tailored investment solutions that support and encourage accelerated investment in clean energy.

We are expecting an even bigger and more exciting year in 2016-17, driven by the purposeful, passionate and professional individuals I’m privileged to work with every day.

It is important that the urgent clean energy action we need to take in Australia is achieved as efficiently and effectively as possible. At the CEFC we have concluded another year demonstrating that we have a scalable platform to accelerate our investment activities and to continue to contribute to the transformation of clean energy investment in Australia.









Oliver Yates

CEO