Chair's Report

CEFC ANNUAL REPORT / 2015–16

Chair's Report

Jillian Broadbent AO

The CEFC ended the financial year as a relatively new but increasingly mature organisation after just three full years in operation.
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We are now a central part of Australia’s clean energy sector, reflected in the volume, diversity and scale of our investments, our reach across the Australian economy, and the important role we are playing in drawing in new capital to support the nation’s efforts in emissions reduction.

We have made cumulative commitments of nearly $2.3 billion to projects valued at some $5.7 billion, while continuing to earn a return above the Government’s cost of funds. For every dollar committed in 2015-16, the Corporation leveraged $1.95 in additional private sector capital.

The Corporation continues to meet our key objectives, catalysing and accelerating investment and growing the portfolio of clean energy investments across technologies and geographically.

These investments are contributing to Australia’s abatement task through each of the CEFC’s strategic priority areas – cleaner power solutions, a better built environment and driving new and innovative sources of finance for the clean energy sector.

Making the necessary shift to a lower carbon economy requires significant capital investment. With the private sector showing some hesitancy in recent years, we’ve arguably had a bigger role to play in catalysing the necessary finance.

The Government has endorsed our purpose and requested a greater focus towards emerging and innovative opportunities, as well as energy efficiency across the built environment.

Our experience suggests that the pathway towards decarbonisation of the Australian economy can be a catalyst for innovation and growth. The CEFC has been able to demonstrate how renewable energy and productivity-enhancing technologies can drive competitive advantage.

The year just passed saw a substantial increase in our investment activity as well as that of the broader market. We continue to see supportive co-investment from private financial institutions in the majority of our projects.

The market continues to be very receptive to the CEFC’s role as a sector specialist. Private sector and foreign investors seek us out and welcome our involvement in projects alongside them.

We have matched debt and equity providers with investment opportunities, sometimes without CEFC investment.

Our focus now is to continue scaling up and contributing to the achievement of the Government’s innovation agenda and Australia’s emissions reduction target. Scale matters for the transformation of assets in the real economy and to underpin the Corporation’s long-term sustainability so that we can continue contributing to Australia’s clean energy transition.

The worldwide transition to the use of cleaner, smarter and more distributed energy technologies presents opportunities and challenges for the Australian economy in areas of our natural competitive advantage.

By catalysing investment at scale, working alongside private sector investors, we are helping deliver least-cost greenhouse gas abatement, as well as productivity gains and broader economic benefits.

Over the year, we continued to work constructively with the Australian Government in response to changes to our Investment Mandate. These changes directed the Corporation to focus on emerging and innovative clean energy technologies, energy efficiency, and the built environment. The Investment Mandate Direction 2016 directed us to work with the Australian Renewable Energy Agency (ARENA) on the creation of a new Clean Energy Innovation Fund. We look forward to investing in this important area and to supporting innovative technologies as they achieve commercial reach.

I would like to thank the Hon. Greg Hunt MP, for a constructive relationship in his role as Minister for the Environment and our responsible Minister for much of the 2015-16 year.

I would also like to welcome our new responsible Minister, the Hon. Josh Frydenberg MP, Minister for the Environment and Energy. The CEFC provides a platform for strong alignment between environment and energy policy. Having these two portfolios brought together at a Commonwealth level will further help facilitate Australia’s transition to a cleaner energy outcome.

I would like to thank my fellow Board Members Paul Binsted, Ian Moore, Anna Skarbek, Andrew Stock and Martijn Wilder AM, for their tireless commitment to the Corporation over the year. In addition, I recognise the contribution of Michael Carapiet as a founding member of the Board through to his resignation in December 2015.

I congratulate our CEO, Oliver Yates, the CEFC Executive team and the entire staff for their efforts throughout the year. As we enter our fourth year, the CEFC is now an established financial corporation with a robust and scalable clean energy investment platform across origination, transactions and portfolio management.

I acknowledge the skills and passion of my colleagues in our achievements to date. The private sector skills of the CEFC’s employees are working effectively in the market to support the public policy objective of reaching Australia’s emission reduction commitment, progressing the innovation agenda and positioning Australia to be competitive in a carbon constrained world.

I look forward to our continued contribution as an effective policy tool to address Australia’s energy and environment challenges.


 

 

 

Jillian Broadbent AO
Chair