The Clean Energy Finance Corporation (CEFC) has issued a $70 million loan for the construction of the Portland wind farm in southwestern Victoria in what many expect to be its last major financing due to Coalition plans to scrap the green investment bank.
According to Pacific Hydro, the CEFC’s decision to make the loan has played a vital role in the project’s final fruition, since it has in turn prompted commercial banks to contribute capital totaling over $150 million.
“The extra amount that CEFC is offering allows the final phase to be built,” said Lane Crockett, general manager for Pacific Hydro’s operations in Australia. “Where the Clean Energy Finance Corporation has come in is that they’ve addressed the area of risk where there’s uncertainty in the renewable energy market.”
The fourth stage of Pacific Hydro’s Portland wind farm will see the addition of 47 megawatts in installed capacity, bringing the total amount to 179 megawatts.
The loan to Pacific Hydro is likely to be the last made by the CEFC, with the Coalition flagging its determination to shut what government climate spokesman Greg Hunt has referred to as a “giant green hedge fund.”
“It was going to borrow $10 billion of taxpayers’ money to invest in speculative ventures which the taxpayer would have to fund and which the private sector would not fund,” Hunt told listeners of commercial radio last week. “In the end it was a giant green hedge fund…in the tradition of pink batts and green loans and cash for clunkers.”
Crockett said the whole point of the CEFC was to remedy the trepidation and uncertainty surrounding renewable energy investment which were the result of “market failure,” and the decision to scrap the bank will be disastrous for green project in future
“The Clean Energy Finance Corporation has played a role in addressing some market failures. I guess all I would say is that if it’s no longer operating in that role then that opportunity is lost for future projects,” he said.
The Coalition’s decision to bring an end to the CEFC has drawn heavy censure from the domestic renewable energy industry.
Andrew Want, chairman of the Australian Solar Thermal Energy Association, whose ambition is to foster the development of concentrated solar thermal power plants, said the end of the CEFC is a factor which has “pretty much killed energy development stone dead in Australia.”