The Australian Government announced on the weekend it will set up a "Clean Energy Finance Corporation" (CEFC) as a statutory body. The initiative is part of a large package of climate change finance measures, including a long-awaited carbon tax.
Described by 'Responsible Investor' magazine as Australia's version of a Green Investment Bank, the CEFC will have $10 billion of funding (twice what the UK has so far allocated for its proposed Green Investment Bank) to be spent over a period of 5 years from 2013/14. The funding will be allocated via commercial loans, concessional loans, loan guarantees and equity.
(For those of you interested in where the proposals came from, see the influential Australian Conservation Foundation's report on "Funding the Transition to a Low Carbon Economy". It, of course, included a section on Climate Bonds.)
Half of the CEFC's funds will be reserved for a renewable energy “stream”, while the other half will be allocated to a “general clean energy“ stream, but may also invest in renewables.
According to Climate Spectator magazine, officials say the first stream is designed to support emerging technologies such as solar and geothermal, as well as battery storage, although not necessarily as an extra boost to wind farms. The other stream might include “hybrid” plants that combine solar and gas, or solar and coal. Carbon capture and storage is not included, but will continue to be managed by government separate schemes.
The CEFC will have an independent board, made up of "experts in banking, investment management and clean energy and low emission technologies". A chair will be appointed to report back by 2012 on a proposed investment mandate and how to frame risk management policies.
An Australian Renewable Energy Agency will also be created to coordinate $3.2 billion in existing renewable energy technology grant programs. It will also receive future funding from dividends from the CEFC. There will also be a $200m Clean Technology Innovation Program.
The government also announced a new $946m Biodiversity Fund to "support projects that establish, restore, protect or manage biodiverse carbon stores." That's on the back of last month's very interesting Carbon Farming legislation, creating tradeable carbon credits for each tonne of carbon stored or reduced on land.
Great to see some real progress from the Australian Government! Now for Canada and the USA?
