CEFC commits to the Australian Bioenergy Fund

The Clean Energy Finance Corporation (CEFC) has announced a $100 million cornerstone commitment to the new Australian Bioenergy Fund, with the aim of accelerating investment in Australia’s bioenergy sector.

The fund will support investment in a broad range of projects seeking to produce energy from agricultural, council, forestry and mining waste streams. It will invest in a range of technologies, including:

• energy from waste,
• anaerobic digestion,
• sustainably sourced biomass-to-energy projects,
• landfill gas capture,
• wood pelletisation,
• the production of biofuels.

The fund is aiming to raise more than $200 million in equity and will be managed by the Foresight Group, which has already invested more than $1 billion in bioenergy and energy from waste projects.

“We see this new fund as playing an important role in accelerating and widening the market uptake of bioenergy and energy from waste technologies that have a proven track record overseas but are not yet widely deployed in Australia’s energy mix,” said CEFC CEO Oliver Yates.

“A number of projects that the CEFC has assessed have been held back by a lack of equity capital, and that needs to change. Converting waste from agricultural production, mining, forestry and landfill has the potential to lower business operating costs, reduce the reliance on grid electricity and create a more sustainable way to manage waste disposal.”

The CEFC estimates that Australia has the potential to double its bioenergy output over the next five years. Yates said there is “significant potential” in the bioenergy sector, even though Australia is currently delivering just 0.9% of its electricity output from bioenergy — well below the OECD average of 2.4%.

“Our own investment pipeline has identified about $3 billion of bioenergy sector projects that could be developed,” continued Yates. “Much of the opportunity in the sector consists of small-scale operations which have found it difficult to attract equity support and institutional investors.

“By creating the Australian Bioenergy Fund we are looking to draw in private sector equity investors who recognise the bioenergy sector’s potential to invest alongside the CEFC with an experienced international manager in Foresight.”