The Clean Energy Finance Corporation (CEFC) was established under the Clean Energy Finance Corporation Act 2012 (CEFC Act) ‘to facilitate increased flows of finance into the clean energy sector’ (section 3). It has been provided with access to $10 billion in capital through a special account, which is drawn down over time.
Section 58 of the CEFC Act states that the function of the CEFC is to invest, directly and indirectly, in clean energy technologies, which are defined in section 60 as:
- energy efficiency technologies;
- low emission technologies; and
- renewable energy technologies (under subsection 58(3), from 1 July 2018 at least half of the funds invested are to be in renewable energy technologies).
The audit provides assurance to Parliament on the effectiveness of the CEFC’s selection of investments, including determination of an appropriate risk level and investment return. The audit also provides assurance over the ongoing management of the portfolio of funded projects, and the extent to the which the CEFC is meeting its function of funding clean energy technologies through energy efficiency, low emission and renewable technologies.
- The CEFC has largely met its legislated objective of facilitating increased flows of finance into the clean energy sector, consistent with legislative requirements and directions.
- The CEFC’s arrangements to manage and report on investments are largely suitable. There is a need for the CEFC’s policy statement to include more detail on its environmental, social and governance policies. There is an opportunity for the screening documents for new investments to specifically address all Investment Mandate requirements and for the CEFC to benchmark its performance in terms of clean energy outcomes and leverage against one or more other green banks.
- While the CEFC has facilitated increased flows of finance into the clean energy sector, the extent to which it has leveraged additional funds is unclear.