The investment mandate of the Clean Energy Finance Corporation may be reshaped, as a workaround by the Australian government to cope with the refusal of the Senate to pass a bill to abolish the specialist financier.
The Australian reported the CEFC may be instructed to favour direct action-style programs such as providing leasing for households to install solar hot water systems and for energy-efficiency programs instead of, for example, funding wind farms.
Under the legislation establishing the CEFC, the Treasurer and Finance Minister can provide direction on matters of risk and return, eligibility criteria for investments, allocation of investments between different types of clean-energy technologies, the types of financial instruments that may be invested in and "broad operational matters."
While the government can alter the investment mandate of the CEFC, existing legislation guarantees the CEFC the ability to write up to $10 billion in loans over the next five years.
The CEFC legislation allows the corporation to write $2 billion of loans every year and, if it fails to reach the ceiling, the unused portion can be carried over to the next year.
The CEFC has a pedestrian investment performance mandate (which the financier is exceeding) of "a weighted average of the five-year Australian Government bond rate" net of operating expenses.
The target return was around three per cent, based on the yield on a five-year bond over the last year, the level at which it remains.