CEFC’s role in making Australia the next global force of renewable energy
Given this massive opportunity to lead the world in renewable energy, banks and investors play a crucial role in order to fulfill it. The Clean Energy Finance Corporation (CEFC) is Australia’s green investment bank which is being shelved by the government. There is a need for a financial institution that will support new technology including those geared towards renewable energy sources and other sectors because the banking industry is not usually keen on backing up such.
More often than not, investments are expected to have returns within short periods. In addition, he renewable energy sector has been something that a lot of companies are hesitant to venture on. In order to help the sector, the CEFC offers to “de-risk” it to encourage banks and investors to embark on such projects. CEFC aims to build banks and companies’ confidence in the renewable energy sector which might drive more investments and eventually constant funding to sustain the sector.
Currently, CEFC faces some hurdles with the government’s apparent efforts against CEFC which might be measure to protect the coal industry. It has been made more costly for the CEFC to lend any of its funds with the additional 4.5 percentage points from the government's long-term bond rate, which is more than a twofold increase. The government tries to change the mandate of the CEFC to do away with investments in solar panels and major wind farms programs.
Despite such challenges, CEFC continues to fare and is still able to launch new projects such as the $100 million, 12-year fund with Origin Energy to encourage more commercial use of solar panels. The renewable energy sector is set to rise globally and Australia undeniably has the capacity to become a global force with its remarkable renewable energy potential.