Clean Energy Finance Corporation

Clean Energy Finance Corporation
Industry Clean energy investor
Headquarters Sydney, Australia
Key people
 CEO Oliver Yates
Chairperson Jillian Broadbent
Owner Commonwealth of Australia
Website www.cleanenergyfinancecorp.com.au

The Clean Energy Finance Corporation (CEFC) is an Australian government owned organisation which commenced investment in renewable energy generation in July 2013. It was established by the Gillard Government to work in conjunction with the Australian Renewable Energy Agency, mandatory renewable energy targets and a carbon pricing market mechanism to mitigate climate change in Australia.

It was established under the Clean Energy Finance Corporation Bill 2012 which passed through the Parliament of Australia on the 22 July 2012.[1]

CEFC is not supported by the Coalition Government. Then Opposition Leader Tony Abbott wrote to Jillian Broadbent, chair of CEFC on 5 August 2013 asking it to stop making new loans and to cease assessing new projects.[2] Mr Abbott and Assistant Treasurer Arthur Sinodinos confirmed the government will scrap the CEFC.

On Thursday, 5 December 2013, CEFC Chairperson Jillian Broadband complained to ABC Radio National, begging the government to "break an election promise" and keep the CEFC in operation citing a 7% profit. Mr Sinodinos said that if it's making a profit, it should survive without the government and essentially confirmed the government will shut the corporation down.[3]

Loans Made

The CEFC became operational on 1 July 2013. It has committed $225 million. In most cases, CEFC has been a minority lender as part of a commercial consortium, or participated with an Australian Government grant program as summarised below:

Date CEFC amount Total Loan Other lenders Borrower Purpose
1 Jul 13 $50 M $529 M ANZ, NAB, ING, Shinsei, ICBC, EKF Malakoff Corporation Berhad Acquisition of 50% of Macarthur wind farm
2 Jul 13 $37.5 M $175 M ANZ, EKF Banco Santander (90%), CBD Energy (10%) New Taralga wind farm
30 Jul 13 $75 M $520 M Babson Capital Australia, Bank of America, ING, Investec, Macquarie, NAB and UBSEnergy Developments Limited New gas fired and hybrid generation
31 Jul 13 $0.5 M $1.0 M NAB AACo Solar PV
1 Aug 13$0.6 M $1.0 M Australian Govt (CEEP) Baw Baw shire Street lighting
1 Aug 13 $1.0 M $2.4 M NAB, Australian Govt (CTFFIP) Darling Downs Fresh Eggs Biogas electricity generation
2 Aug 13 $0.6 M $1.2 M Quantum Power Biogas electricity generation
2 Aug 13 $60 M Not known Not finalised at the date of the announcement. Borrowers said there is uncertainty on the Renewable Energy Target which was hampering progress. Fotowatio Renewable Ventures, Pacific Hydro 56 MW solar PV at Moree
  1. On 1 July 2013, CEFC announced it had provided $50 million in senior debt financing to Meridian Energy for refinancing its 50% stake in the Macarthur wind farm in NSW. CEFC was one of seven lenders providing a $529 loan (the others are ANZ, NAB, ING, Shinsei, ICBC and EKF).[4] However, three days earlier on 28 June 2013, Meridian Energy announced it had sold its share in the Macarthur wind farm to Malakoff Corporation Berhad, a Malaysian power generator and retailer. Meridian said the deal had an Enterprise Value of A$659 million.[5]
  2. On 2 July 2013, CEFC announced it will provide $37.5 million in senior debt finance for the construction and operation of the Taralga Wind Farm in NSW.[6] CEFC is part of a three lender consortium (with ANZ and EKF) proving a total of $175 million. The Taralga wind farm is owned 90% by Banco Santander and 10% by CBD Energy.[7] Banco Santander is a Spanish bank, the largest in Europe and the 2012 “BestBank in the World”. CBD Energy is a small ASX listed company. On 11 July 2013, nine days after the CEFC financing was announced, trading in CBD Energy's shares was stopped on the ASX. CBD says it is in negotiations with its financiers and major creditors in relation to a proposed restructuring.[8]
  3. On 30 July 2013, CEFC said it was lending $75 million to Energy Developments Limited. EDL had previously financed over 70 small gas and diesel fired generation plants, mostly in Australia with a small number in US and UK. EDL had an existing $445 million loan facility with commercial banks Babson Capital Australia, Bank of America, ING, Investec, Macquarie, NAB and UBS. The CEFC loan is on terms consistent with the commercial loans and will be used for electricity generation plants running on waste coal mine gas and landfill gas as well as remote hybrid renewables projects.[9]
  4. On 31 July 2013, CEFC said it and NAB would co-finance 15 solar PV systems, all in Queensland. These are on grid-connected sites for AACo, Australia's largest cattle company. The total size of the PV installations was not stated. At an average installed cost of $5000 per kW, this would represent 200 kW of peak capacity. On the same day, AACo announced its CEO would be ceasing employment with the company.
  5. On 1 August 2013, CEFC said it was joining with the Australian Government's Community Energy Efficiency Program (CEEP) to fund the entire $1 million cost of changing street lighting in Baw Baw shire to more energy efficient (but undisclosed) lights. The street lights are owned by public company SP Ausnet.
  6. On 1 August 2013, CEFC said it will co-finance along with NAB a bio-gas electricity generation system at Darling Downs Fresh Eggs. The project cost is $2.86 million. There is an Australian government grant of $333,000 through the Clean Technology Food and Foundries Investment Program.
  7. On 2 August 2013, CEFC said it will provide $0.6 M for a $1.2 million project to add four biogas engines at a plant owned by Quantum Power to produce 1 MW at a rendering plant run by AJ Bush & Sons, the largest in Australia. AJ Bush has a parallel $12.4 million program which is receiving $6.2 M in a grant from the Australian Government CTFFIP.
  8. On 2 August 2013, CEFC said it had agreed to provide $60 million of senior debt finance to the planned 56 MW Moree Solar Farm Partners solar farm. The project is owned by Fotowatio Renewable Ventures and Pacific Hydro. FRV and Pac Hydro said that uncertainty on the Renewable Energy Target post the 2013 federal election is hampering progress. At the time of the announcement, the project was not at financial close stage

Purpose of CEFC and Its Funding

The CEFC says "its flexible mandate and commercial approach provide an opportunity to achieve genuine market-based change by helping overcome the financial barriers that have previously prevented clean energy investment at scale."[4]

Sixty-two wind farms have been financed in Australia before the advent of CEFC. In its deals to date, CEFC has been a minor party along with commercial banks and lenders.

The Australian Government is providing $2 billion per year in funding to CEFC on 1 July for five years commencing in 2013 (Clean Energy Finance Corporation Bill 2012)[10] The CEFC will be exempt from tax in order to overcome capital market barriers.[11]

Offices

CEFC is headquartered in Sydney with offices also in Brisbane.[12] In the 2013 Australian federal budget the organisation had a forecast budget of $19.5 m.[13]

The chief executive officer is Oliver Yates.[13] Yates was a former Macquarie Group investment banker.[14]

See also


References

  1. ↑ "Clean Energy Finance Corporation Bill 2012". Parliament of Australia. Commonwealth of Australia. 16 August 2012. Retrieved 19 May 2013.
  2. ↑ Abbott, Tony. "Coalition Leader's Letter to CEFC 5 Aug 2013". Leader of the Opposition. Retrieved 6 August 2013.
  3. ↑ Bourne, James. "CEFC fights for its life.". Australian Broadcasting Corporation. Retrieved 7 December 2013.
  4. ↑ 4.0 4.1 Yates, Oliver. "CEFC participates in Macarthur Wind Farm Refinancing". CEFC. Retrieved 24 July 2013.
  5. ↑ Binns, Mark. "Meridian sells its share in Macarthur wind farm". Meridian Energy. Retrieved 24 July 2013.
  6. ↑ Yates, Oliver. "CEFC finances Taralga Wind Farm". Clean Energy Finance Corporation. Retrieved 24 July 2013.
  7. ↑ McGowan, Gerry. "Santander to join CBD Energy in developing the Taralga Wind Project". CBD Energy. Retrieved 24 July 2013.
  8. ↑ "CBD ASX Announcement - Restructure Update 22 July 2013". CBD Energy. Retrieved 24 July 2013.
  9. ↑ "CEFC finances expansion of low emissions generators". Clean Energy Finance Corporation. Retrieved 31 July 2013.
  10. ↑ http://www.comlaw.gov.au/Details/C2012B00083
  11. ↑ "Clean Energy Finance Corporation income tax exemption". Australian Taxation Office. Australian Taxation Office for the Commonwealth of Australia. 14 November 2012. Retrieved 19 May 2013.
  12. ↑ Alice Uribe (26 April 2013). "$10bn CEFC fund gets govt mandate". Financial Standard (Rainmaker Group). Retrieved 18 May 2013.
  13. ↑ 13.0 13.1 Lauren Wilson (18 May 2013). "Clean energy head disputes Abbott's 'green savings'". The Australian (News LImited). Retrieved 18 May 2013.
  14. ↑ Peter Hannam (19 December 2012). "Green fund names climate lawyer, banker to board". Sydney Morning Herald (Fairfax Media). Retrieved 19 May 2013.

External links