The Clean Energy Finance Corporation claims to have increased its investment in WA 10-fold since 2018.
The Clean Energy Finance Corporation claims to have increased its investment in WA 10-fold since 2018.
The Clean Energy Finance Corporation has sharpened its focus on Western Australia during the past year, according to chief executive Ian Learmonth.
The federal government-backed fund has significantly lifted its commitments to WA projects, from $35 million as at 2018 to $376 million as at June 2019, he said.
The $10 billion CEFC was created in 2012 to support emerging emissions reduction technologies.
Mr Learmonth told Business News the corporation had made a concerted effort in the WA market in the past two years.
“We thought we probably haven’t been tackling it as well as we could, we were approaching it from a fly-in, fly-out basis,” Mr Learmonth said.
Setting up a local office headed by former Wesfarmers business development officer Rob Wilson, and having a WA-based director in Samantha Tough had improved links to the west, he said.
“That has really helped with the pipeline,” Mr Learmonth said.
“It’s always hard to crack a market when you don’t actually have a presence.
“We’re getting an impressive number of opportunities.”
But he also noted that a bigger portion of the energy sector was state owned here compared with elsewhere, meaning there were fewer private projects in need of capital.
The two biggest WA investments were $113.5 million for energy efficiency at Curtin University, in June this year, and $90 million for the Avertas Energy waste power plant in Kwinana in October 2018 (see table).
A further $97 million was invested in cofinancing deals for 1,100 smaller projects, including helping farmers and small businesses buy more energy efficient equipment. CEFC said.
Another federal government agency, the Northern Australia Infrastructure Fund, has also been active in WA.
It has committed to lend $307 million to six projects, with the latest a $12.5 million loan to Australian Aboriginal Mining Corporation for its First Iron project.
Remote power and projects to improve grid reliability and stability are top-of-mind for CEFC going forward, Mr Learmonth said.
Similarly, the state government’s Energy Transformation Taskforce is currently considering how to incentivise projects for grid reliability.
“WA will be much like the east coast, where the state governments are very focused on increasing investment in battery storage, increased investment in pumped storage,” Mr Learmonth said.
“We’re expecting to see plenty of that happening over here in WA and we’re hoping to support that with our capital.
“Batteries will become competitive in all states eventually, they’re still receiving government support at this stage.
“The frequency control market … the arbitrage opportunities, and the fall in costs will lead to increases in those technologies.”
Crowding
Mr Learmonth said the CEFC sought to fill gaps in the market while not crowding out the private sector.
“We’re about being a catalyst in the market,” he said.
“We have to balance that at the same time as … making a return.
“The target across the portfolio is 3 to 4 per cent above the government five-year bond rate.
“We try to get in early, while banks or equity are still uncertain about a project, so we can give support.”
CEFC also invests through managed funds, with the intention of changing their behaviour, Mr Learmonth said.
He cited the example of the investment in Viridis Ag’s The Grange farming project through the Macquarie Infrastructure and Real Assets fund.
