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01 Performance

Investing for impact and innovation

The CEFC set new records in the number and value of investment commitments in 2017-18, delivering a heightened focus on some of the nation’s toughest emissions challenges through our support for innovative projects, technologies and investment partnerships across Australia.

Investing for impact and innovation

In 2017-18, we maintained our role as a leading investor in Australia’s renewable energy sector and further extended the impact of our investment in emissions reduction initiatives in infrastructure, agriculture, property, transport and waste. In addition, our venture capital finance for innovative clean energy companies saw continued growth.

In the 12 months to 30 June 2018, the CEFC directly committed to 39 transactions, up from 36 direct investments in 2016-17. Total new CEFC commitments in 2017-18 were $2.3 billion, up from $2.1 billion in the previous year.

Our commitments in 2017-18 included $1.1 billion in renewable energy, $944 million in energy efficiency, $100 million in transport and $127 million in waste-related projects, demonstrating the diversity of our approach to finance and investment.

At 30 June 2018, total CEFC investment commitments since inception exceeded $6.6 billion. After allowing for fully amortised, repaid or exited, and expired or cancelled undrawn commitments, the CEFC investment portfolio commitments stood at $5.3 billion, a 55 per cent increase on the $3.4 billion portfolio a year earlier.

In five years of investing, CEFC commitments have contributed to clean energy projects Australia-wide, with a total project value of around $19 billion. We have directly invested in more than 110 individual transactions and financed more than 5,500 smaller-scale clean energy projects through our partners.

Each dollar of CEFC investment commitments made in 2017-18 has been matched by more than $1.80 of private sector finance. Our portfolio of investment commitments made in 2017-18 is expected to deliver annual cuts to greenhouse gas emissions of more than 3 million tonnes of CO2-e.

Taking into account our full portfolio of investment commitments since 2013, lifetime cuts to greenhouse gas emissions of more than 190 million tonnes of CO2-e are forecast (once funds are deployed and projects are fully operational).

We do not claim that abatement associated with our investment commitments occurs independently of complementary government policies such as the Renewable Energy Target.

Investing for impact

Australia’s emissions task

The Australian Government has committed to reduce Australia’s emissions by 26 to 28 per cent below 2005 levels by 2030 under the Paris Agreement, as part of initial international efforts to cap any rise in global temperatures to well below 2°C above pre-industrial levels. In order to achieve this objective, all parties are aiming to pursue net zero global emissions in the second half of this century.

The most recent projections from the Department of the Environment and Energy show that the electricity sector currently accounts for 34 per cent of Australia’s emissions, with direct combustion (18 per cent), transport (17 per cent) and agriculture (13 per cent) the other major emitting sectors.

Figure 1
Figure 1: Australia’s historical emissions and illustrative trajectories to 2030 – by sector

Source: Australian Government, CEFC.

Note: From 2018–2030, illustrative emissions trajectories are in line with an emissions reduction of 28 per cent in each sector.