Australia's Clean Energy Finance Corp Showing 7% Returns, Facing Axe Thanks To Abbott
Clean Energy Finance Corp., Australia’s green development bank earmarked for closing by Prime Minister Tony Abbott, is making a profit and prodding commercial banks to lend, according to its chief executive officer.
“We’re operating profitably already, with our contracted investments expected to earn an average return of around 7 percent,” which is above the bank’s capital cost of about 3 percent, Oliver Yates, CEO of the bank founded less than four months ago by the previous government, told delegates at a conference in London. He declined to comment on Abbott’s plan to close CEFC, citing public-service rules.
Abbott has vowed to close the bank and repeal a law creating a carbon market passed by former Prime Minister Julia Gillard in 2011. Canceling the legislation will save the average household $521 in fiscal 2014-15 and cut costs for business and manufacturers, Environment Minister Greg Hunt said Oct. 16. A 30 percent tax on coal and iron ore profits, which Abbott is also seeking to remove, was forecast to raise $4.4 billion in the four years to June 30, 2017, the Treasury said in August.
The development bank has built a loan portfolio of around $536 million and helped projects get debt and equity of about $2.2 billion, including from other institutions, Yates said at the Climate Markets & Investment Association event earlier this week. The deals will cut emissions by about 3.9 million metric tons of carbon dioxide annually, he said. They include wind farms and a tomato farm that uses solar energy to desalinate seawater.
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http://www.smh.com.au/business/carbon-economy/green-investment-bank-profitable-as-abbott-axe-looms-ceo-yates-says-20131019-2vt12.html
