The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

24 April 2013

Investment Mandate for the Clean Energy Finance Corporation

Joint media release with
The Hon Greg Combet AM MP
Minister for Climate Change, Industry and Innovation
and
Senator the Hon Penny Wong
Minister for Finance and Deregulation

The Gillard Government is today pleased to issue the investment mandate governing the Clean Energy Finance Corporation (CEFC) Board.

The Gillard Government is building a clean energy future which will strengthen our economy and protect our environment, and the CEFC is a vital part of that reform agenda.
In the future the most competitive and most productive economies will be substantially powered by cleaner energy. The CEFC is a $10 billion fund dedicated to investing in renewable energy, energy efficiency and clean technology. The CEFC will play a crucial role in driving the investment we need to develop and deploy those new technologies.

The investment mandate will ensure the CEFC develops a robust and rigorous investment process that will help Australia move towards a clean energy future. The intention of the fund is to encourage private investment and help overcome capital market barriers to commercialising and deploying cleaner energy technologies.

The CEFC Board has endorsed the investment mandate and recognises the expectations it places upon it.

The investment mandate provides the CEFC Board with the Government's broad expectations for how the CEFC's funds will be invested and managed by the Board. The mandate does not attempt to influence the independent decision making of the CEFC.

The investment mandate reinforces the Government's expectations that the CEFC will apply commercial rigour to its investment decisions and seek to make a commercial return for taxpayers. The mandate requires the Board to meet a benchmark return calculated on a weighted average of five-year Australian Government bond rate. The benchmark return is a long-term target and is expected to be earned across the portfolio and over a period of time.

The CEFC will also focus on investing in projects and technologies at the later stages of development. By adopting a commercial approach, the CEFC is expected to invest responsibly and manage risks so it is financially self-sufficient and achieves its benchmark rate of return. The CEFC will also consider its potential impact on other market participants when making its investment decisions.

The CEFC has a key role in developing industries critical to achieving Australia's Clean Energy Future. To ensure Australian industry is provided with full, fair and reasonable opportunity to participate in projects, CEFC project proponents will be required to prepare Australian Industry Participation (AIP) Plans in accordance with the Government's AIP Plan policy.

The investment mandate is issued to the Board under section 64 of the Clean Energy Finance Corporation Act 2012 (the Act). It can be found on the Comlaw website: http://www.comlaw.gov.au/Details/F2013L00680