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04 Appendices

Glossary and Abbreviations

Glossary

Term Description
Abatement Refers to reductions in CO2-e emissions.
Aggregation finance The provision of CEFC finance via co-finance intermediary partners, to aggregate customer demand that would otherwise be too expensive to be serviced directly by the CEFC.
Appropriations The means by which money from the Treasury is made available to the Australian Government by the Parliament.
Clean Energy Finance Corporation Act 2012 (CEFC Act) The enabling legislation which creates and empowers the CEFC.
Clean Energy Innovation Fund The Clean Energy Innovation Fund uses CEFC finance to invest in innovative clean energy companies and projects. It is operated in consultation with ARENA, drawing on the complementary experience and expertise of the two organisations. Final investment approval is provided by the CEFC Board, which is responsible for all CEFC investment commitments made under the CEFC Act.
Clean energy and clean energy technology The types of technology the CEFC is permitted to invest in, which includes ‘renewable energy technologies’, ‘energy efficiency technologies’ and ‘low emissions technologies’ as defined in the CEFC Act.
Climate (or green) bonds A specific type of green bond issued by the Climate Bond Standards and Certification initiative.
CO2-e Carbon dioxide equivalent is a standard measure that takes account of the different global warming potential of greenhouse gases and expresses the cumulative effect in a common unit (definition from the National Carbon Offset Standard).
Co-finance partner, co-financed products CEFC finance is indirectly provided to end users via a third party, such as a bank or financial institution. The CEFC develops products with co-financiers to leverage their capital and customer networks. These products can be distinguished from a direct CEFC loan where the finance moves directly from the CEFC to the project owner.
Committed investment Where the CEFC has made a commitment to invest funds if all necessary pre-conditions are fulfilled by the counterparties.
Concessionality Concessionality is defined by the Investment Mandate and reflects the mark-to-market valuation of loans committed that financial year. It is measured as the difference between the net present value of each loan’s future cash flows, discounted at market rates, and the net present value of each loan’s future cash flows, discounted at the given concessional rate.
Cornerstone investor Cornerstone investors are usually large institutional investors, or reputable individuals of substance, whose early stage involvement in an investment signals to the market that an opportunity may be worthwhile for other investors to also consider.
Corporate facility or corporate loan Typically, a loan to a company (rather than a specific project) for smaller-scale projects, or a bundle of projects, often secured against the assets or operations of the corporate entity.
Dollars ($) All references to dollars are Australian dollars unless otherwise specified.
Ecologically Sustainable Development (ESD) A set of principles that corporations and government entities must report against under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).
Energy efficiency technologies Energy efficiency technologies, as defined in the CEFC Act, include technologies (including enabling technologies) that are related to energy conservation and demand management technologies.
Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) The Australian Government’s central piece of environmental legislation, which provides a legal framework to protect and manage nationally and internationally important flora, fauna, ecological communities and heritage places.
External benefits Benefits that are enjoyed by parties outside a transaction e.g. emissions reduction that benefits the environment.
Forecast lifetime yield The annualised weighted average of forecast income on outstanding principal balance over the life of the investment.
Government Policy Order An instrument to direct government entities made under the PGPA Act.
Green price The price for renewable energy certificates (RECs) that are created and sold by electricity generation facilities registered as accredited renewable energy facilities under the Renewable Energy (Electricity) Act 2000. Renewable energy facilities typically benefit from both the ‘black price’ and the ‘green price’ for each megawatt hour of electricity generated.
Greenhouse gases The six Kyoto Protocol classes of greenhouse gases are carbon dioxide (CO2-e), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
Hybrid technology A combination of technologies that integrate a renewable energy generation technology with other technologies into a combined system.
Investment Mandate A formal Ministerial Direction made under the CEFC Act which specifies conditions under which the CEFC may perform its investment function.
Large-scale In reference to renewables, a power station large enough to earn certificates under the LRET (i.e. above 100kW for solar PV).
Large-scale generation certificates Tradeable certificates created under Section 17 of the Renewable Energy (Electricity) Act 2000. One LGC is equivalent to 1MWh (megawatt hour) of eligible renewable electricity produced by an accredited renewable power station above its baseline.
Large-scale Renewable Energy Target The LRET creates a financial incentive for the establishment or expansion of renewable energy power stations, such as wind, solar farms and hydro-electric power stations. It does this by legislating demand for Large-scale Generation Certificates (LGCs). One LGC can be created for each megawatt hour of eligible renewable electricity produced by an accredited renewable power station.
Lifetime abatement The estimated amount of abated emissions over a project’s useful life.
Low emissions technology The CEFC Board considers low emissions technologies on a case-by-case basis. See the Investment Guidelines on the CEFC website: www.cefc.com.au
Merchant basis In respect of renewable energy generation, energy sold onto the spot market without the benefit of a fixed price power purchase agreement where the price received is the prevailing market price at the time of sale.
National Australian Built Environment Rating System: NABERS A national ratings system that measures the environmental performance of a building or tenancy including energy efficiency, water usage, waste management and indoor environment quality.
Nationwide House Energy Rating Scheme: NatHERS A national star rating system (out of 10) that rates the energy efficiency of a home, based on its design.
National Electricity Market A regulated electricity trading market that interconnects the electricity grids of the states and territories of New South Wales, Victoria, Queensland, South Australia, Tasmania and the ACT.
Off-grid Not connected to the electricity grid, such as in remote areas.
Offtake agreement An agreement between a producer (of energy or crops) and a purchaser to purchase production output for a defined period at a defined price.
Photovoltaic A type of technology that converts energy from the sun into electricity, as in solar PV.
Portfolio Benchmark Return A long-term target rate of return established by the CEFC Investment Mandate, against which the performance of the portfolio invested by the Corporation is measured.
Positive externalities Benefits which are not exclusive to parties to a contract, such as an investment contract. May include reduced carbon emissions which benefit society as a whole. It is a requirement of the CEFC Investment Mandate that positive externalities be considered when the CEFC makes investment decisions.
Power Purchase Agreement A type of offtake agreement where a purchaser agrees to purchase and a supplier agrees to supply future generated electricity, usually at a specified price for a defined period.
Project finance Long-term financing of infrastructure and industrial projects (such as a utility-scale generator or an onsite generation facility) which will be repaid from the projected cash flows of the project without recourse to the balance sheets of the sponsors.
Project proponents The ‘proposers’ or owners of a given project, as distinct from the project financiers.
Public Governance, Performance and Accountability Act 2013 (PGPA Act) An Act about the governance, performance and accountability of, and the use and management of public resources by, the Commonwealth, Commonwealth entities and Commonwealth companies, and for related purposes.
Reef Funding Program The Reef Funding Program is a $1 billion investment program targeting clean energy projects in the Reef catchment area. The program makes CEFC finance available for clean energy businesses and projects which support the delivery of the Government’s Reef 2050 plan, aiming to bring the benefits of clean energy to support the long-term health of the Great Barrier Reef.
Refinancing Repayment of an existing loan with a new loan.
Renewable Energy Certificates A generic term for tradeable certificates under the Renewable Energy (Electricity) Act 2000.
Renewable Energy Target A target for the production of electricity from renewable energy sources under the Renewable Energy (Electricity) Act 2000. Made up of the small-scale renewables scheme (SRES) and the large-scale target (LRET).
Renewable energy technologies Clean energy technologies that are defined as ‘renewable energy technologies’ under the CEFC Act, and include hybrids that integrate renewable energy technologies, and technologies that are related to renewable technologies, including enabling technologies.
Roll-off Investment amounts that exit the portfolio (e.g. by sale, repayment, cancellation of all or part of the facility, reduction in quantum borrowed etc).
Senior debt Debt that takes priority in repayment over other unsecured or more junior debt.
Special Account A type of Australian Government account in which funds are held for a specified purpose. The CEFC Act creates a Special Account in order to fund the CEFC.
Subordinated debt Where two or more financiers are involved in offering finance, one may take a ‘subordinated’ or ‘junior debt’ position relevant to the other (‘senior debt’) in the event of a loss (i.e. one financier may rank after the other financier in priority for recovery in the event the finance recipient becomes insolvent and cannot repay the loan).
Sustainable Cities Investment Program The Sustainable Cities Investment Program aims to invest $1 billion in CEFC finance over 10 years in clean energy and energy efficient technology solutions in cities and the built environment.
tCO2-e Tonnes of carbon dioxide equivalent greenhouse gas.
Tenor Length or term of a loan.
Total Annual Remuneration Package Total remunerative benefits for staff including salary, superannuation and any other benefits.


Abbreviations

Abbreviation Full name
AAO Administrative Arrangements Orders
AAS Australian Accounting Standards
AASB Australian Accounting Standards Board
AEMO Australian Energy Market Operator
AMEC Australian Energy Market Commission
AIPP Australian Industry Participation Plans
AML/CTF Act Anti-Money Laundering and Counter-Terrorism Financing Act 2006
ANAO Australian National Audit Office
ARENA Australian Renewable Energy Agency
ASX Australian Securities Exchange
BNEF Bloomberg New Energy Finance
CCS Carbon capture and storage
CEFC Clean Energy Finance Corporation
CEFC Act Clean Energy Finance Corporation Act 2012
CO2 Carbon dioxide
CSP Concentrated solar power
EAP Employee Assistance Program
EEO Act Equal Employment Opportunity (Commonwealth Authorities) Act 1987
Efic Export Finance and Insurance Corporation
EPBC Act Environment Protection and Biodiversity Conservation Act 1999
ERF Emissions Reduction Fund
ESB Energy Security Board
ESD Ecologically sustainable development
ESG Environmental, social and governance
FBT Fringe benefits tax
FOI Act Freedom of Information Act 1982
FRR Public Governance, Performance and Accountability (Financial Reporting) Rule 2015
FTE Full-time equivalent
FVPL Financial assets at fair value through profit and loss
GGS General government sector
GHG Greenhouse gases
GIB Green Investment Bank
GIG Green Investment Group
GPO Government Policy Order
GST Goods and Services Tax
GW Gigawatt
GWh Gigawatt hour
HTM Held to maturity
IPS Information Publication Scheme
JCPAA Joint Committee of Public Accounts and Audit
KPI Key performance indicators
kW Kilowatt
kWh Kilowatt hour
LED Light emitting diode
LGC Large-scale generation certificate
LRET Large-scale Renewable Energy Target
MP Member of Parliament
MW Megawatt
MWh Megawatt hour
NABERS National Australian Built Environment Rating System
NatHERS Nationwide House Energy Rating Scheme
NEG National Energy Guarantee
NEM National Electricity Market
NGO Non-Governmental Organisation
PBO Parliamentary Budget Office
PBR Portfolio Benchmark Return
PBS Portfolio Budget Statement
PGPA Act Public Governance, Performance and Accountability Act 2013
PID Act Public Interest Disclosure Act 2013
PPA Power Purchase Agreement
PPP Public Private Partnership
PV Photovoltaic
RECs Renewable Energy Certificates
RET Renewable Energy Target
TARP Total Annual Remuneration Package
WHS Act Work, Health and Safety Act 2011
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