Renewable loans hard work for CEFC
High yielding loans eluded the Clean Energy Finance Corp over the year to 2015, playing a part in the watering down of already low returns from the "green bank".The CEFC put its yield at 6.1 per cent for the year, pointing out that this return "is lower than the figure of seven per cent from the corresponding period last financial year."It put its profit at A$32 million up from $25 million. It had $322 million in loans, up $100 million over a year, and another $600 million in financial assets.Total assets of $1.3 billion are well short of the $3 billion vision promoted when Labor and the Greens set the financier up three years ago.There was "a decrease in the volume of high yielding project finance loans … due to reduced levels of investment in the face of policy uncertainty around the renewable energy target and electricity market conditions of oversupply," it said.Two more factors wore blame for the fall: "an overall compression in interest rates due to declining credit margins and market base rates … [and] an increase in the volume of corporate loans written which achieve a lower projected yield, reflecting their lower risk profile."The Australian government wants to scrap the CEFC but cannot secure the support of the Parliament.In the 2012/13 and 2013/14 financial years, "renewable energy accounted for 63-66 per cent of new CEFC contracted investments by value," the lender said."In 2014/15, renewable energy accounted for only 38 per cent of new contracted investments."The CEFC argues it fosters private sector investment. "Across the CEFC portfolio, for each dollar of CEFC investment, the private sector has invested an average of $1.80. If other government funding is included, such as grants from ARENA, a total of $1.92 in additional funds have been mobilised for every $1 of CEFC investment."