Australia’s Clean Energy Finance Corporation has invested $100m in mid-scale renewable energy. The sovereign climate fund’s investment, structured as concessional senior debt, will target projects with up to 5MW of capacity. The project piepline includes 16 hybrid solar, battery and battery retrofit assets.
The allocation is part of a new CEFC financing initiative – the Distribution Connected Accelerator Program (DCAP). DCAP is being developed in partnership with Infradebt, an infrastructure debt fund manager.
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Monique Miller, CEFC’s chief investment officer for renewables and sustainable finance says the DCAP’s focus on mid-scale assets is intended to solve a ‘missing middle’.
“Mid-scale renewables are a powerful lever in unlocking Australia’s renewable energy future and are often referred to as the ‘missing middle’ between individual rooftop solar and utility-scale renewables”, Miller commented.
CEFC’s concessional debt financing is aimed at reducing investment barriers for smaller scale, distribution connected projects. Miller says these barriers have to do with transaction costs and scale.
“By providing targeted capital and certainty and efficiency of process, CEFC finance is helping to unlock a constrained segment of the market while supporting a more resilient energy system and utilising latent capacity in distribution networks”, she adds.
Infradebt CEO Alexander Austin notes that mid-scale renewables have a role to play in Australia’s energy transition, alongside large-scale assets.
“Australia's energy transition will not be delivered through a handful of mega-projects alone. Smaller, distribution-connected projects have a critical role to play because they can often move from development to operation significantly faster.”, he says.
CEFC has invested with Infradebt in the past, with previous transactions targeting projects up to 35MW and 50MW in capacity.
