INVESTMENT COMMITMENTS BY SECTOR
The CEFC’s portfolio of investment commitments is diversified across sectors of the economy.
Of the sector-specific commitments, the largest share of CEFC investments fall into utilities ($481 million or 40 per cent), followed by commercial buildings ($197 million or 16 per cent), residential ($150 million or 12 per cent) and agriculture, forestry and fishing ($144 million or 12 per cent). The remaining commitments were split across mining ($75 million or 6 per cent), manufacturing and industry ($56 million or 5 per cent), government ($53 million or 4 per cent) and transport ($50 million or 4 per cent).
The utilities sector accounts for the largest share of the CEFC portfolio, as this includes larger utility-scale renewable energy projects. The CEFC Act stipulates that at any time on or after 1 July 2018, at least half of CEFC funds invested are in renewable energy technologies and therefore it is to be expected that the portfolio has significant investments in the utilities sector.
In 2014–15, the sector mix of the CEFC portfolio changed due to:
- An increase in investment into the residential sector via the $100 million investment in the Origin Solar as a Service program
- An increase in investment into commercial buildings, due to the $125 million equity investment into the EG Group High Income Sustainable Office Trust (HISOT), offset by a $100 million reduction to the portfolio in the commercial building sector due to funds not being utilised.
- A $75 million investment into the NAB Climate Bond.
Figure 19: CEFC investment by sector
At 30 June 2015 ($m)
Investments by geography
The CEFC portfolio remains well-diversified geographically, with 63 per cent of investments targeted at nation-wide initiatives and 37 per cent targeted at state-specific projects or opportunities.
The largest share of state-specific CEFC investments are in New South Wales (30 per cent) and Victoria (30 per cent), followed by Queensland (20 per cent), Western Australia (16 per cent), the Northern Territory (four per cent) and South Australia and Tasmania (less than one per cent).
In 2014–15, there were some shifts in the portfolio geographic mix.
Over time the state-by-state portfolio distribution is subject to change due to multiple factors, including maturity of individual investments and market changes. For example, the significant investment committed to South Australia by the CEFC in the Sundrop Farms project was not in the end required as the project successfully attracted $100 million in private sector investment, and therefore did not require the $40 million CEFC commitment. The CEFC remains active in seeking out other South Australian opportunities.
There will also be changes in these relativities through time as the CEFC continues to build out its portfolio, including the amount of funds committed to nation-wide programs.
Once constructed and operational, projects in the CEFC portfolio (as at June 30 2015) are expected to achieve annual CO2-e abatement of 4.2 million tonnes, with project forecast lifetime abatement of 77 million tonnes. The CEFC does not claim that this abatement occurs independently of complementary policy, such as the RET.
Figure 20: CEFC investments by geography
At 30 June 2015 (national or state-specific) ($m and %)
Figure 21: CEFC investments by state
At 30 June 2015 ($m)