The Gillard Government has appointed Ms Jillian Broadbent AO to chair an expert review to advise on the design of the $10 billion Clean Energy Finance Corporation (CEFC), which will provide a new source of finance to renewable energy, energy efficiency and low emissions technologies.
Ms Broadbent is a board member of the Reserve Bank, a position she has held for over thirteen years. She also serves on the boards of Woolworths Limited and ASX Limited, and was previously a director of Woodside Petroleum Limited, Coca-Cola Amatil Limited and Qantas Airways Limited. Ms Broadbent is Chancellor of Wollongong University and was made a companion of the Order of Australia in 2003 for service to economic and financial development in Australia.
The Government has also appointed Mr David Paradice and Mr Ian Moore to the expert review panel. Mr Paradice has over two decades of experience in funds management, specialising in smaller company investing, and now manages some $6.6 billion in assets through the boutique investment fund he established in 1999. Mr Moore has over two decades of banking, finance and actuarial experience, predominately at Bankers Trust, and is an expert in risk and return profiles of debt and equity financing.
The expert review panel will consult with key stakeholders and report to the Government by mid‑March 2012 with recommendations on the:
The recommendations of the review will inform the drafting of legislation, which will be introduced into Parliament next year in order to allow the CEFC to commence operations from 2013-14.
The Government announced the CEFC as part of the Clean Energy Future package in order to encourage private investment and help overcome capital market barriers to commercialising clean energy technologies. The CEFC will also invest in firms utilising these technologies as well as manufacturing businesses which focus on producing inputs to these technologies.
Together with putting a price on carbon pollution, the establishment of the CEFC will help Australia meet the environmental and economic challenges of competing in a low-pollution world.
12 October 2011
On 10 July 2011 the Australian Government announced that it will establish a $10 billion commercially oriented Clean Energy Finance Corporation (the CEFC) as part of the Clean Energy Future Package.
The objective is to overcome capital market barriers that hinder the financing, commercialisation and deployment of renewable energy, energy efficiency and low emissions technologies.
The CEFC will invest in firms utilizing these technologies as well as manufacturing businesses that focus on producing the inputs required. It will not invest in carbon capture and storage technologies.
It is not the intention of the CEFC to directly compete with the private sector in the provision of financing to these businesses. The CEFC would act as a catalyst to private investment which is currently not available and thereby contribute to carbon reduction and cleaner energy.
Capital that is returned from investments will be retained for reinvestment by the CEFC, with the Board to determine the timing and quantum of dividends payable to the Australian Renewable Energy Agency.
The establishment of the Chair's Review is intended to assist the Government in framing the enabling legislation, associated instruments and determining what operational issues can be left to the CEFC's Board after the corporation has been established. Following consideration of the Chair's Review, the Government will introduce legislation for the establishment of the Corporation in sufficient time to allow the CEFC to fully develop its systems and products before it commences operations from 2013-14.
Reporting to the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP and the Minister for Finance and Deregulation, Senator the Hon Penny Wong, by mid-March 2012, the Chair and Review members are requested to:
1. Develop an implementation plan for the establishment of the CEFC.
2. Develop and recommend a proposed investment and operating mandate for the CEFC, with the mandate reflecting:
2.1 the market area in which the CEFC will operate, including broad guidelines for how the corporation would invest and manage risk;
2.2 how it will approach the intention that funding be divided into two streams:
2.2.1 a renewable energy and enabling technology stream which will have one half of the funding allocated; and
2.2.2 an energy efficiency and low emissions technologies stream which will have half of the funding allocated and will be able to fund renewable energy projects in addition to the dedicated stream.
2.3 how the CEFC is positioned within the broader objectives of the Government's Clean Energy Future Package.
3.Consistent with statutory requirements and the guidance set out in Governance Arrangements for Australian Government Bodies, suggest appropriate governance principles and mechanisms, including:
3.1 responsibilities, powers and statutory duties of office holders including the Board, Chair and Chief Executive Officer;
3.2 appropriate Board structure, representation and skills;
3.3 reporting obligations of the Board;
3.4 relationship between the Board and responsible Ministers; and
3.5 duties and functions of the CEFC employees.
4. In the context of the proposed operating mandate, assess how the CEFC will interact with other Australian Government bodies and initiatives, including the Australian Renewable Energy Agency and Low Carbon Australia. Where appropriate, recommend a path for transitioning from the current arrangements to arrangements which streamline support for cost-effective carbon reduction.
5. In conducting the Review, the Chair is to put in place a process for consulting key stakeholders, including wind producers, about the role of the CEFC and its relationship with the Renewable Energy Target.