02 Governance, Structure & People INVESTMENT STRATEGY

CEFC ANNUAL REPORT / 2014–15

INVESTMENT STRATEGY

The CEFC investment strategy is part of the CEFC Investment Policies and includes the 2018 Portfolio Vision.

When the CEFC evaluates an opportunity for investment, two broad threshold factors are considered:

  • Eligibility constraints: the CEFC’s ability to invest is limited by the CEFC Act, the Investment Mandate and the PGPA Act.

  • Investment selection criteria: The CEFC evaluates the commercial merits and relative investment attractiveness of each prospective investment, influenced by the risk management approach of the CEFC and the implications of each potential investment decision for the 2018 Portfolio Vision.

The portfolio is still being built, but the Portfolio Vision identifies that, in accord with the CEFC Act, that at least 50 per cent renewable energy portion of the portfolio includes investments in wind, solar PV, thermal and CSP, biomass, geothermal, tidal and other renewable energy. This will include both on-grid and off-grid projects, and utilise creative and innovative structures to reduce the cost of capital, and will enable transactions in energy storage and transmission.

The balance of the portfolio, of up to 50 per cent low emissions and energy efficiency technologies, will be balanced between low emissions and energy efficiency transactions and consist of investments in manufacturing inputs, transport, government, private and other sectors.

The total portfolio will be diversified across Australia, diversified by borrower and include both direct and indirect financial participation.