Just five months after the Clean Energy Finance Corporation received a government directive to stop investing in wind and solar power projects, the public fund has committed $67 million in funding to Australia’s third largest wind farm.
Former prime minister Tony Abbott, who once described wind farms as “visually awful,” ordered the change to the corporation’s investment mandate in July, prohibiting funding for wind and solar projects.
But Wednesday’s announcement on the corporation’s website, to commit $67 million as part of a five-year, $276 million senior secured debt financing to the Ararat Wind Farm in Victoria, is yet another sign that attitudes towards renewable energy are changing under the Turnbull government.
“It’s unlikely we would have seen this investment under Tony Abbott, but I think time will tell whether these investments become a regular thing,” said Andrew Bray, national co-ordinator at the Australian Wind Alliance.
“This is the first investment the CEFC has made in wind farms since control for the corporation was moved into the environment minister’s office, so that’s potentially a good sign.”
Mr Bray said the role of the corporation has always been to facilitate investment that wouldn’t otherwise occur.
“Given how few projects have started to proceed under the RET since the evolution of a new lower target, there is still clearly a role for the Clean Energy Finance Corporation.
“I think the market is still really recovering from the drubbing it got from Tony Abbott. The Renewable Energy Target now has a clear direction … that there is an estimated 3800 megawatts of new, large-scale renewable energy that needs to be kicked off in the next 12 months to meet the target, so it’s really important these projects get underway.”
A spokesperson for the corporation said the debt finance for the Ararat Wind Farm was within the provisions of the current investment mandate, which was issued by the government in March this year.
The mandate provides the corporation with high-level policy direction and articulates the government’s expectations about how the corporation will invest and be managed.
The Ararat Wind Farm is expected to inject up to $8 million into the local economy over two years, and could potentially produce enough electricity to power about 20,000 homes every year, depending on capacity. The farm will employ about 165 workers in the construction phase and another 120 indirectly.
“The project has attracted almost half a billion dollars of direct international investment into Victoria and Keppel Prince will construct 35 towers at its facility in Portland, Victoria, providing local employment,” a corporation spokesperson said.
“The project is helping grow Australia’s local industry so that it can meet the demand we expect will result from the revised RET.”
Earlier this year, the National Australia Bank signed a $120 million funding program with the corporation offering businesses discounted equipment finance for assets that cut energy use or generate renewable energy.
A spokesperson for the bank said climate change was a significant and complex challenge affecting the economy and required action by all stakeholders.
“We have arranged more than $2 billion worth of loans for renewable energy projects since 2006 – our commitment to the industry has been long-term and consistent.”