An amendment to the Clean Energy Finance Corporation Act passed this week, opening the way for the “green bank” to receive additional capital and operate with a wider mandate, including establishing a new program with co-financiers.
The CEFC was established in 2012 with A$10 billion to facilitate the flow of finance into the clean energy sector, including supporting the green finance initiatives of a number of financial institutions.
Following the amendment, its mandate now includes facilitating the financing of initiatives to help meet Australia’s greenhouse gas emissions reduction target. It has been allocated an additional $20.5 billion, with $11.5 billion to be available “as soon as practicable”, to accelerate progress to net zero emissions by 2050.
The new capital allocation includes $19 million for the redevelopment of Australia’s energy grid infrastructure (the Rewiring the Nation program); $1 billion to establish a Household Energy Upgrade Fund; and $500 million to establish the Powering Australia Technology Fund, which will aim to commercialise clean energy innovations.
The amendment has also made future funding of the CEFC more flexible, with appropriations to be included in budget bills in future, removing the need to amend the CEFC ACT for any funding increases.
The Household Energy Upgrade Fund will provide discounted finance for purchases that cut household emissions. The CEFC said it will work with lenders to provide finance to consumers for household energy efficiency upgrades, high performing appliances and solar installations.
It said the program would be similar to its existing asset finance program, where it works with co-financiers to provide discounted finance for the purchase of electric vehicles and emissions reductions investments by small businesses.
The CEFC has committed $1.8 billion and contributed to financing 46,000 projects under the asset finance program.
One of its recent investments under this program was $40 million to back discounted green car loans offered by lender Firstmac, whose green loan is discounted by 1 percentage point compared with its standard car loan.