Saturday, June 29, 2013

Clean Energy Finance Corp inks first deal - $100 million for business in renewables and energy efficiency

The Clean Energy Finance Corporation (CEFC), set up as part of the Clean Energy Future/Carbon Price law, has just signed it's first deal to supply up to $100 million dollars in loans to businesses looking to improve their energy efficiency, buy solar panels or set up cogeneration and trigeneration plants.

The CEFC, which will have $10 billion dollars to invest over the next 5 years, was set up to help fund renewable energy, low emission technologies and energy efficiency investments. The general idea is the fund will partner with the private sector and chip in some of the money for these investments, for example this new deal includes $50 million from both the CEFC and $50 million from the Commonwealth bank. In this way the CEFC can use it's $10 billion to stimulate much greater amounts of investment in clean energy and energy efficiency. Operating at arms reach from the government, the CEFC also aims to make it's money back in the long term.

Unfortunately, the Coalition has vowed to scrap the CEFC if it wins the election, which would be a shame because the CEFC plays an essential role in promoting renewable energy. Currently it can be difficult for renewable energy plants to attract financing and get built, this is especially so where the technology is new and/or the first of a kind in Australia. This so called "valley of death" makes it extremely difficult for renewable technologies to get started and start to power Australia. By making at least part of the financing required available, the CEFC makes such projects more attractive to the private sector and spurs investment in renewable. Scrap the CEFC and it will likely be much harder and more expensive for Australia to meet it's targets for generating renewable electricity and lowering greenhouse gas emissions, as well as for companies to bring new and innovative technologies to the market.

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