Speaker 1: Welcome to Zero. I'm Akshatrati. This week elections, electrification and
Speaker 1: energy storage. Over the past few weeks, I've had the
Speaker 1: pleasure of traveling to Singapore and Australia, visiting startups, companies,
Speaker 1: and even the Great Barrier REEF to meet the people
Speaker 1: behind some of the most pioneering climate solutions coming out
Speaker 1: of these regions. We'll be playing some of those interviews
Speaker 1: on Zero over the next few weeks, and we begin
Speaker 1: in Sydney where I met Ian Leermanth. He's the chief
Speaker 1: executive officer of the Clean Energy Finance Corporation, or the CEFC,
Speaker 1: which describes itself as the world's largest green bank. The
Speaker 1: CEFC was set up by the Labor Greens coalition government
Speaker 1: in twenty twelve with an initial funding of ten billion
Speaker 1: Australian dollars or six and a half billion US too.
Speaker 1: It was tasked with financing green projects at a time
Speaker 1: when large scale investments in things like wind and solar
Speaker 1: were seen as too risky for many private players. As
Speaker 1: uncontroversial as that might sound today, it almost never happened.
Speaker 1: The CFC was nearly shut down in twenty thirteen when
Speaker 1: the climate skeptic Liberal National coalition government took power with
Speaker 1: a campaign promise of closing the bank. There was a
Speaker 1: lot of drama, but the fatal event didn't come to pass. Now,
Speaker 1: the CFC has become a big part of the energy
Speaker 1: transition in Australia, with over twelve and a half billion
Speaker 1: dollars invested to date. In twenty twenty two, the CFC
Speaker 1: celebrated its tenth year and its star is still rising.
Speaker 1: It has just received twenty and a half billion Australian
Speaker 1: dollars from the government to accelerate the country's energy transition.
Speaker 1: For context, last year, the country's total investment in all
Speaker 1: things energy transition was about twenty three billion Australian dollars.
Speaker 1: This new cash injection is the first in a decade,
Speaker 1: and bills on what became known as Australia's Climate elections,
Speaker 1: which took place in May twenty twenty two. We covered
Speaker 1: those elections in an episode we published last year, which
Speaker 1: we'll put in the show notes. But to cut a
Speaker 1: long story short, a wave of new independent politicians campaigned
Speaker 1: successfully on tackling climate change, and a climate progressive labor
Speaker 1: government took over from the incumbent climate skeptic government. Since then,
Speaker 1: the government has been busy passing some ambitious climate policies,
Speaker 1: including a target for the country to reach eighty two
Speaker 1: percent renewable electricity by twenty thirty, up from a little
Speaker 1: over thirty percent today. It's a massive undertaking and the
Speaker 1: CFC has been tasked with distributing billions of dollars to
Speaker 1: make it happen. Today I'm zero. I talked with Ian
Speaker 1: about how this huge amount of money will be spent,
Speaker 1: why the CEFC had so many enemies early on, and
Speaker 1: what kind of innovative start up and fintech projects. Ian
Speaker 1: is looking diffund Ian, Welcome to the show. Nice to
Speaker 1: be here and we are joining you at an exciting time.
Speaker 1: The CFC has just been given a massive new round
Speaker 1: of cash to invest. But first, can you give us
Speaker 1: the context of why the CFC was created and what
Speaker 1: its purpose has become?
Speaker 2: Certainly so, the CFC was created just over ten years
Speaker 2: ago by the Australian government. The Labor government at the
Speaker 2: time was forming a coalition with Greens and the Greens
Speaker 2: said we want a green bank. It was a prescient
Speaker 2: move by the politicians at the time and we had
Speaker 2: ten bin in Australian dollars to invest in renewable energy,
Speaker 2: energy efficiency, lower mission technologies.
Speaker 3: We could do debt, we could do equity.
Speaker 1: We'll hear more about equity and debt as we go
Speaker 1: through this episode. So a quick explainer, Equity is the
Speaker 1: money you can put into a company in exchange for shares.
Speaker 1: Debt is a little more conservative effectively alone to the company,
Speaker 1: which the company has to pay back with interest. The
Speaker 1: CFC is able to invest money both as equity and
Speaker 1: as debt.
Speaker 2: We had to invest in Australia otherwise we were kind
Speaker 2: of on our own scenes. So it really came out
Speaker 2: of I guess, you know, the motivation of the government
Speaker 2: at the time to have capital, very substantial capital, certainly
Speaker 2: relative to Strategy DP, to invest in climate change, carbon
Speaker 2: abatement and the clin energy transition.
Speaker 1: Now, in that ten years political change in Australia has
Speaker 1: been quite substantial. There have been swings left and right,
Speaker 1: and of course politics of climate around the world has
Speaker 1: become more polarized. The CFC came under lots of criticism
Speaker 1: from the opposition when it was first created. How close
Speaker 1: did it come to being shut down.
Speaker 3: Within a whisker?
Speaker 2: It was really close, because not long after we were
Speaker 2: set up, and it took it. It takes a year
Speaker 2: or more for something of this scale to be put together.
Speaker 2: And by that time there was an election in came
Speaker 2: a new coalition government, a kind of conservative government, and
Speaker 2: one of their undertakings was to shut down the CEFC
Speaker 2: because they saw it as symbolic of one of the
Speaker 2: kind of bargaining chips that kept them out of power
Speaker 2: in the previous election. So they put up a couple
Speaker 2: of abolition bills. This is when the CFC was in
Speaker 2: its early days and out there trying to write its
Speaker 2: first project finance deals and wind farms and other things,
Speaker 2: and they struggled to get it through the upper house
Speaker 2: here in Australia, through the Senate, and there was at
Speaker 2: the time a guy called Clive Palmer, very kind of
Speaker 2: quite a divisive character. Clive Palmer to be run in
Speaker 2: the country.
Speaker 3: He can work.
Speaker 1: If it can't work, it can't be private this. Claive
Speaker 1: Farmer is a billionaire businessman and a former member of
Speaker 1: Parliament who made his fortune in mining, mostly iron and call.
Speaker 1: After the twenty thirteen elections, the party he founded held
Speaker 1: the balance of part in Australia Senate. Which played a
Speaker 1: crucial role in keeping the CFC alive in the face
Speaker 1: of attacks from the ruling Liberal National Coalition.
Speaker 2: He had control of the Upper House at the time.
Speaker 2: I don't know whether he was unsure about which way
Speaker 2: he was going to go. Al Gore happened to be
Speaker 2: in town. Someone put them together. Al said, hey, let's
Speaker 2: I think it's really important that you vote against the
Speaker 2: abolition bill. They held a press conference and the rest
Speaker 2: is history. And funnily enough, I reminded al Gore of
Speaker 2: that just about when I started six years ago, and
Speaker 2: he still remembered it very fondly. So yes, we were
Speaker 2: within a whisker of being abolished.
Speaker 1: What is the CFC's relationship with government now?
Speaker 3: It's interesting.
Speaker 2: I mean, we always play a very straight hand with
Speaker 2: these with governments. We have a responsible Minister of the day,
Speaker 2: and for nine years we had Coalition or Liberal and
Speaker 2: National Government representatives or ministers as our responsible ministers. So
Speaker 2: we do as directed in a sense, although it's important
Speaker 2: to note that the CFC Act says that no minister
Speaker 2: can tell the CFC what deal to do and what
Speaker 2: deal not to do, so there's a very strong sense
Speaker 2: of independence with the new government who have been empowered
Speaker 2: just over a year now they have you know, they
Speaker 2: obviously have a quite a different gender. You know, they
Speaker 2: are embracing the CFC in in a much great way.
Speaker 2: They've changed our Act first time really ever to say
Speaker 2: that not only do we have the object of creating
Speaker 2: in funds into the clean energy sector, but we are
Speaker 2: to deliver on their climate ambitions, which of course is
Speaker 2: to reduce emissions by forty three percent by twenty thirty
Speaker 2: competed to two thousand and five, and through the investment mandate,
Speaker 2: also helped get to twenty two percent renewables by twenty thirty,
Speaker 2: so that has been a very significant thing. And of course,
Speaker 2: as you mentioned, the twenty in fact twenty point five billion,
Speaker 2: just not to forget that last five hundred million of
Speaker 2: additional funds have been appropriate to us. So yes, they
Speaker 2: see us as a very significant platform to deliver on
Speaker 2: their climate policy.
Speaker 1: Now thirty two percent to eighty two percent renewables in
Speaker 1: the electricity mix within a span of seven years.
Speaker 2: It's a big challenge and you are identifying something that
Speaker 2: does of course speculated widely in the Australian media. We're
Speaker 2: up to the challenge we're going to do everything we
Speaker 2: can to help the country get to that place, but
Speaker 2: we don't shy away from the obstacles and the challenges,
Speaker 2: and I think we.
Speaker 3: All know what they are.
Speaker 2: Inflationary pressures, grid connection challenges, the supply chain, the cost
Speaker 2: of money has gone up, all those issues and social license.
Speaker 2: Of course, when you're you know, your building out, particularly
Speaker 2: wind farms on shore, and you're building transmission, you're going
Speaker 2: to get people who are acutely interested in where it's
Speaker 2: going because it might be across the bottom paddic and
Speaker 2: they might want to talk about that. Of course, So
Speaker 2: there are all those things. But we've got a vast
Speaker 2: amounts of capital, we've got the States putting their shoulder
Speaker 2: to the wheel as well, So a lot of work
Speaker 2: to be done. But yes, it is a big challenge.
Speaker 1: So the target here is to try and focus on
Speaker 1: renewable deployment. But the climate challenge is really an emissions challenge,
Speaker 1: and building clean energy will help reduce emissions, no doubt.
Speaker 1: There are other ways in which you also have to
Speaker 1: reduce emissions. Australia could build nuclear, it could build carbon capture.
Speaker 1: Those are not things you fund.
Speaker 3: Why when the CFC was established.
Speaker 2: The negotiations with the political parties, the Greens and Labor
Speaker 2: decided they were two technologies that the clein Energy Finance
Speaker 2: Corporation will and invest in. It was generally a feeling,
Speaker 2: I think with carbon capture and storage that it could
Speaker 2: potentially be used in a way to extend the life
Speaker 2: of colified power stations, so that I think was something
Speaker 2: that discouraged the Greens. So I mean having said that,
Speaker 2: we haven't seen necessarily any great opportunities in that space
Speaker 2: to date. And nuclear of course is whilst a conversation
Speaker 2: in Australia is still.
Speaker 3: A long way off I think being a reality.
Speaker 1: What's different about this twenty point five billion dollars relative
Speaker 1: to the money you already manage.
Speaker 2: Yeah, well, the first ten as I say, has had
Speaker 2: a very broad remit and you know we've invested right
Speaker 2: across the economy with it. That twenty point five has
Speaker 2: broken up into three different categories. Nineteen billion is part
Speaker 2: of the Rewiring the Nation funding, which is the government's
Speaker 2: policy to build out transmission to help reach eighty two
Speaker 2: percent renewables by twenty thirty and that's building out poles
Speaker 2: and wires across the countryside capture winds, soulard storage long
Speaker 2: duration batteries like Snowy two point zero.
Speaker 1: Snowy two point zero is a hydro electricity generation and
Speaker 1: storage project being built in the Snowy Mountains in Southeast Australia.
Speaker 1: In November twenty twenty, the CEFC invested one hundred and
Speaker 1: twenty five million Australian dollars to help build out grid
Speaker 1: infrastructure and transmission lines for Snowy two point er, which
Speaker 1: is due to open in twenty twenty nine.
Speaker 2: So nineteen billion dollars for the rewiring the nation and
Speaker 2: with probably more direct instructions if you like, than the
Speaker 2: first ten billion, which is very much you're on your
Speaker 2: own out there in the economy. A further billion dollars
Speaker 2: for a housing Energy Upgrade Fund, which is to use
Speaker 2: that money with intermediary banks and securitization houses and other
Speaker 2: credit unions other non bank lenders to help provide low
Speaker 2: cost finance to allow people to renovate their homes and
Speaker 2: improve energy efficiency in the home. And then the last
Speaker 2: half a billion dollars is for equity investments either directly
Speaker 2: or through funds in growing interesting Australian companies with innovative
Speaker 2: clean tech companies.
Speaker 1: It's one thing to get to eighty two percent renewables,
Speaker 1: to build wind and solar. We know that getting to
Speaker 1: that level of penetration requires them to be connected and
Speaker 1: that requires huge cables. And everywhere democratic governments have traded
Speaker 1: to do it, they've been met with opposition. It's no
Speaker 1: different here in Australia. So what is being done to
Speaker 1: overcome the opposition to transmission lines?
Speaker 3: Yeah, look, it's a very good question.
Speaker 2: And as you say, Australia's embarking on literally thousands and
Speaker 2: thousands of kilometers of transmission, and the state governments and
Speaker 2: the federal government are acutely aware that there is a
Speaker 2: very significant social license question around that we haven't built
Speaker 2: transmission like this in a decade. So for many farmers
Speaker 2: having these transmission lines potentially go through their land is
Speaker 2: a real challenge. So there's a whole lot of engagement.
Speaker 3: That's going on.
Speaker 2: There's a massive sort of social license strategy that's been
Speaker 2: devised to see how we can that this transmission can
Speaker 2: be built. Can it be in the least intrusive way
Speaker 2: in the right places. Maybe it even needs to go underground.
Speaker 2: Obviously that's far more expensive and we're going to have
Speaker 2: to look at this compensation. Some of the states have
Speaker 2: come out with reasonably generous compensation packages.
Speaker 3: Although that may be debated by a.
Speaker 2: Farmer who may say that's not sufficient. So I hope
Speaker 2: that it doesn't add many years onto the buildout of
Speaker 2: rewarring the nation, but it will look it will be
Speaker 2: a little bit of a bumpy ride. But you know
Speaker 2: we are as the financier to many of these big projects,
Speaker 2: we are also extremely sensitive to it.
Speaker 1: So going down that list, then a billion dollars for
Speaker 1: the household energy upgrades? What are they and how exactly
Speaker 1: will you deplay it?
Speaker 2: The finishing touches on the policy are still being made,
Speaker 2: but the broad understanding and policy objective is to help
Speaker 2: Australian households mayhap certainly have access to low cost finance
Speaker 2: so they can go out and double glaze their windows,
Speaker 2: they can electrify their homes so get rid of gas
Speaker 2: put in induction heating and cooking, those sorts of things
Speaker 2: to improve energy efficiency kind of in the home and idea,
Speaker 2: and of course reduce power bills. As a result, the
Speaker 2: government would also like there to be a particular focus
Speaker 2: on middle to low income households because they see that's kind.
Speaker 3: Of where the need is.
Speaker 2: So we're in the process of talking to the financial sector,
Speaker 2: you know, the sort of people who who have a
Speaker 2: consumer finance reach whereby we can you know, we can
Speaker 2: get to these people. And we're also talking to industry
Speaker 2: and regulators to talk about what standards should we require
Speaker 2: before this cheap finance is made available, and making sure
Speaker 2: that if people are going into Australian homes and installing
Speaker 2: various pieces of equipment technology, that they are fit for purpose.
Speaker 2: So we are in the process of developing all.
Speaker 1: That and then the last five hundred million dollars, which
Speaker 1: is to try and invest in companies and technologies that
Speaker 1: Australia can grow. You've had some experience doing that already.
Speaker 1: What have you learned from that past experience that you
Speaker 1: would apply for a larger sum of money that's going
Speaker 1: to be invested in front of your technologies.
Speaker 3: You're right.
Speaker 2: We have been in that business for some time and
Speaker 2: we've probably for well over six and a half years
Speaker 2: or so. We have invested in a very exciting and
Speaker 2: interesting portfolio of innovative companies, effectively clean tech, benure capital
Speaker 2: and a terrific team, which we've now partly spun out
Speaker 2: for and Ventures, who are a very exciting clean tech manager,
Speaker 2: very much still connected to the organization, and they're kind
Speaker 2: of raising their first funds. But I guess what we've
Speaker 2: learned when we look at the twenty seven or so
Speaker 2: companies that we've invested in over the years.
Speaker 3: I mean some obvious things that not.
Speaker 2: Everyone will get past the valley of death, as they say,
Speaker 2: which is when you know your cash flow negative and
Speaker 2: trained to get to break even. Some of the technologies
Speaker 2: will struggle to reach a commercial phase, and you know,
Speaker 2: you've got to kind of make a decision about whether
Speaker 2: you continue to support those companies.
Speaker 3: Or you let them go.
Speaker 2: There'll be some that will roll along quite comfortably and
Speaker 2: then you'll have your starts of course that will shine
Speaker 2: and you'll continue to support them with what they refer
Speaker 2: to us follow on rounds, and you know at some
Speaker 2: point there'll be hopefully a liquidity event, there'll be a
Speaker 2: trade sale or an IPO. Venture capital is a numbers game.
Speaker 2: You've got to try and make sure that every day
Speaker 2: is a good one. Even though you can't predict the future,
Speaker 2: you have to manage them very actively. It's hugely labor intensive.
Speaker 2: Of course, there's probably two out of three or three
Speaker 2: out of four of our investments we have a board
Speaker 2: seat on. There's a very high engagement with these companies.
Speaker 2: But I guess one thing that I've been incredibly impressed
Speaker 2: by is the ingenuity and just the innovation in the
Speaker 2: Australian clinic sector, particularly around sectors like distributed energy, solar
Speaker 2: and the household batteries and even in agriculture, things that
Speaker 2: Australia is very strong on, and that's very exciting. We
Speaker 2: look forward to using this additional half a billion dollars
Speaker 2: to make further investments across that sector.
Speaker 1: Are there examples of startups that just shin or stand
Speaker 1: out or are sort of the diversity that Australia has
Speaker 1: to offer, because the nice thing about technology is they
Speaker 1: don't have to remain in Australia.
Speaker 3: Yeah, that's absolutely right.
Speaker 2: And maybe just to pick one or two, there's a
Speaker 2: next generation solar panel company called Sunman, which has come
Speaker 2: out of the extraordinary alumni of the University of New
Speaker 2: South Wales. And Sunman makes an ultra light solar PV panel.
Speaker 2: It's about a seventh of the weight of a conventional
Speaker 2: glass topped panel and it as already flourishing. It's selling
Speaker 2: into many markets Australia, Europe, North America. We've had companies
Speaker 2: like Zumo, which is an electric buy company that doing
Speaker 2: last mild delivery sundry that's looking at replacing the silver
Speaker 2: that's used in solar PV with copper and maintaining there
Speaker 2: or thereabouts the same efficiency but considerably cheaper. There's also
Speaker 2: agriculture technologies in that AC sector, like Lowing Buyer, which
Speaker 2: is a soil carbon company which is growing rapidly and
Speaker 2: has huge amounts of support. There's software companies that are
Speaker 2: regulating the flows of power in the home. A wide
Speaker 2: variety of very exciting companies.
Speaker 1: After the break, what lessons can other countries learn from
Speaker 1: the CFC and why is Australia betting big on batteries.
Speaker 1: In Junior also announced one hundred million dollar investment in
Speaker 1: the super Battery, the largest standby network battery in the
Speaker 1: Southern Hemisphere. Could we use this as a case study
Speaker 1: of how the CFC chooses what to finance and how
Speaker 1: much money it ends up giving them.
Speaker 3: Yeah.
Speaker 2: The Watch super Battery was the largest battery to be
Speaker 2: built in New South Wales, the largest Australia possibly the
Speaker 2: world for a short period of time when someone else
Speaker 2: will ever take it. It was being developed by an
Speaker 2: exciting new company called a Kaisha who had some mixed
Speaker 2: Tesla execs and had recently been a by black Rock,
Speaker 2: so they had a terrific pedigree of players, knew what
Speaker 2: they were doing. They had a contract for part of
Speaker 2: the capacity with the new South Wales government. It was
Speaker 2: going to provide some very significant grid stability and reliability,
Speaker 2: which is sort of incredibly important to us. So we
Speaker 2: have kind of come in as as one hundred million
Speaker 2: dollar equity investor in what's a very substantial investment, a
Speaker 2: billion dollars all up the capitol, and it gives us
Speaker 2: I guess you know one. I think the CFC's name
Speaker 2: attached to as an investor helped their fundraising and help
Speaker 2: crowd in other investors. It gave us a ringside seat
Speaker 2: at the biggest battery in the country. Also predicted to
Speaker 2: make a reasonably good return, and we obviously keep an
Speaker 2: eye on that because we do seek to make a
Speaker 2: return these days at about two to three percent above
Speaker 2: the five year government bond rate, so we try and
Speaker 2: make a good return to tax pus whilst abating carbon emissions.
Speaker 1: Here in Australia, that investment mandate to try and get
Speaker 1: two to three percent return above the bond rate is
Speaker 1: written into the law that created CFC, But according to
Speaker 1: the National Audit Office, it has failed to keep up
Speaker 1: with that return so far, and while it attempts to
Speaker 1: reach that, it doesn't yet have a plan to do so.
Speaker 1: So why hasn't the CFC been able to meet this
Speaker 1: target yet?
Speaker 2: Maybe just to go back a step the original more
Speaker 2: certainly for the last seven or eight year is the
Speaker 2: target return the government had given us was three to
Speaker 2: four percent above the five year government bond rate. And yes,
Speaker 2: you're right, we haven't met that particular target, but we
Speaker 2: we only even saw it as a guiding light because
Speaker 2: when you're doing a lot of project finance, you know,
Speaker 2: we were seventy percent debt give or take over that
Speaker 2: period of time with thirty percent equity. You're not going
Speaker 2: to reach those sorts of returns, and to try and
Speaker 2: do so, we'd have to take a lot of probably
Speaker 2: unnecessary risks.
Speaker 3: So we were.
Speaker 2: Always about a percent below the bottom end of that range.
Speaker 2: Now the new government came in and we said the
Speaker 2: time has come to revisit this target, and we gave
Speaker 2: them all the reasons why, we showed them our performance
Speaker 2: and we said that it's probably not that helpful to
Speaker 2: have an unrealistic target return. They considered that, went to Finance,
Speaker 2: did the numbers and said yes, all right, we'll lower
Speaker 2: it five percent. You guys now need to target two
Speaker 2: to three percent above the five year government bond rate
Speaker 2: and we're now squarely within that.
Speaker 3: So good news.
Speaker 2: The government and the CFC have kind of come to
Speaker 2: a landing on what is a sensible return and we
Speaker 2: now fit snuggly in it.
Speaker 1: So compared to a commercial bank, a high street bank,
Speaker 1: Australia has the Big Four, what is it that CFC
Speaker 1: does that makes it a more attractive partner to have
Speaker 1: than just going to a commercial bank.
Speaker 3: It's a very good question and an important question.
Speaker 2: CFC is always trying to play a role to fill
Speaker 2: a gap in the marketplace and help draw in the
Speaker 2: Big Four or the investment banks, or the international equity
Speaker 2: in the Infrastructure Fund and whatever it might be, and
Speaker 2: we do that in different ways. We take risks that
Speaker 2: others might not be prepared to take. So we might
Speaker 2: provide a much longer duration for our debt, which allows
Speaker 2: shorter term debt to come in from the private sector
Speaker 2: or the Big Four or the Japanese banks or the
Speaker 2: European banks, for example, in a big win farm. You know,
Speaker 2: that's a true live example. So we might commit early
Speaker 2: and people go. CFC has underwritten part of this. We
Speaker 2: know that they're a sensible investor. They've been around a
Speaker 2: long time, we know the people there, and they're owned
Speaker 2: by the Australian government. That's a vote of confidence in
Speaker 2: this particular project or company. For the reasons we've been around,
Speaker 2: we've invested. You know, we've done over you know, two
Speaker 2: hundred kind of large deals and there's been tens of
Speaker 2: thousands of smaller deals using intomediories. We've lost very little money,
Speaker 2: almost immaterial amount of money, and you know, we've made
Speaker 2: a good return for the taxpayer.
Speaker 1: Now, CFC users it's money to leverage two point five
Speaker 1: dollars from private investors for every dollar it spends. Can
Speaker 1: this number go higher?
Speaker 2: Yeah, it's it's an interesting kind of question, the one
Speaker 2: of leverage, and governments are always very focused on not
Speaker 2: being the only dollars in things. We've always tried to
Speaker 2: push leverage as far as we can, But this was
Speaker 2: a bit of a natural tension between If you have
Speaker 2: very very high leverage, it sort of suggests that there
Speaker 2: was a lot of people there alongside you. Did they
Speaker 2: really need you? So sometimes you've got to kind of
Speaker 2: keep that in mind. Could we go higher? I think
Speaker 2: in fact we in the last twelve months our leverage
Speaker 2: was even a bit higher than that. Again, so I
Speaker 2: guess we're always trying to shoot between two and four
Speaker 2: times if we can. There are some deals when it's
Speaker 2: much higher. In other times we might put in nearly
Speaker 2: all the capital because we're providing concessional debt to a
Speaker 2: bank which is on learning to Remote Australia to try
Speaker 2: and put more SOLA on the rooftops out there in
Speaker 2: the country.
Speaker 1: We spoke with Jigashan the podcast earlier this year. He
Speaker 1: runs the Lawn Program's office and the US Department of Energy,
Speaker 1: but he'd said that they had received a lot of
Speaker 1: interests from other countries around the world for setting up
Speaker 1: similar institutions. Have you received interest from other countries to
Speaker 1: figure out a CEFC tape model in their countries.
Speaker 2: We have had a lot of interest from Asian countries,
Speaker 2: even some African countries. Everyone has a slightly different take
Speaker 2: on it. Sometimes it's state government, sometimes it's a federal government.
Speaker 2: Sometimes there's a model where people want to talk to
Speaker 2: you about combining the lending activity with the grant making activity,
Speaker 2: whereas in Australia it's bifurcated. We do the lending and
Speaker 2: investing an arena. The Australian Renewable Energy Agency, which is
Speaker 2: a terrific organization, does grant making, so that we have
Speaker 2: separate governance and but a very complementary approach and often
Speaker 2: in on the same deals from time to time, and
Speaker 2: we try and share our experience knowledge as widely and
Speaker 2: broadly as we can. We help the New Zealand Green
Speaker 2: Bank Investment Bank become established, stay in close touch with
Speaker 2: the team over there. We active members of the green
Speaker 2: banking network which kind of gets together around cop So
Speaker 2: it's interesting. The only other green bank green investment bank
Speaker 2: that's probably been quite similar to us was the UK's
Speaker 2: Green Investment Bank, which was two and a half million pounds,
Speaker 2: so smaller than US despite a bigger economy, but maybe
Speaker 2: a little more focused and they did a lot of
Speaker 2: offshore wind and then, of course after a number of years,
Speaker 2: sold themselves to my old employer, Macquarie, and.
Speaker 1: I think Australian jan Yeah, that's.
Speaker 2: Right, and look we work with private sector players like Mcquarie.
Speaker 2: I think the Brits did a good job with that
Speaker 2: in the sense they got something up and running.
Speaker 3: And sold it.
Speaker 2: But yes, so it's an ongoing dialogue where you know,
Speaker 2: we're very flattered that people are constantly coming to us
Speaker 2: and asking you can hear about how we were established
Speaker 2: and what lessons will learned, what's you know, what's been good,
Speaker 2: what's not been not so good? And I think when
Speaker 2: I look at the US, there are some states that have,
Speaker 2: you know, green banks. You probably as well plugged into
Speaker 2: this stuff as I am. And I think through the
Speaker 2: Inflation Reduction Act, there's a move to purvacly wholesale capital
Speaker 2: and push it out to various banking agencies, non bank
Speaker 2: lenders and others down at the state level, so they
Speaker 2: kind of reach communities, which is something that we have
Speaker 2: done a bit of. But yes, I expect to see
Speaker 2: more of it overcoming years.
Speaker 1: You completed ten years last year, we did, and you've
Speaker 1: now got this massive new capital injection to do more.
Speaker 1: But if you were to sum up the last ten
Speaker 1: years in lessons learned, how would you beast sum it up?
Speaker 2: I think the flexibility and reach that we've had debt
Speaker 2: equity and being able to invest across nearly all sectors,
Speaker 2: but nuclear carbon capture storage has allowed us to see
Speaker 2: so much. And there's such an enormous interconnection now between
Speaker 2: various sectors that built environment, agriculture, residential Australia, distributed energy,
Speaker 2: utility scale energy, and I think all of that coming
Speaker 2: together is something that I've really witnessed over the last
Speaker 2: well I've been CEO over six and a half years.
Speaker 2: I've really witnessed that the world is coming to the transition.
Speaker 2: We were, in some way at the forefront of it,
Speaker 2: and now we've seen capital, regulators, governments, industries, everyone signed
Speaker 2: on too. Netz. If you're not, you're probably kind of concerned.
Speaker 2: And markets are changing all the time. You know, what
Speaker 2: was kind of made sense in a utility scale solar
Speaker 2: in twenty ten is a very very different proposition in
Speaker 2: twenty twenty three. So things are changing all the time,
Speaker 2: the sectors moving more quickly than ever, taxonomy and regulation
Speaker 2: is coming.
Speaker 3: Down the pipe. We're having to adapt to that.
Speaker 2: That's probably another new frontier that we yet to really
Speaker 2: tackle financed emissions reporting on that. Corporate Austrade is going
Speaker 2: to have to report on its exposure to climate. So,
Speaker 2: in a nutshell, it's probably the most dynamic and fast
Speaker 2: moving environment that I've ever witnessed.
Speaker 3: Thank you for coming on the shew my absolute pleasure.
Speaker 3: Thanks for having me.
Speaker 1: A lot more money is needed to finance clean energy
Speaker 1: projects and cut emissions, which is why it's so exciting
Speaker 1: to see a government commit large sums of money to
Speaker 1: doing just that. Since recording this conversation with Ian, the
Speaker 1: CFC has announced a three billion dollar investment in the
Speaker 1: state of Western Australia. It comes out of the Rewiring
Speaker 1: the Nation Fund and will help expand the state's transmission
Speaker 1: lines and renewable sector. If you enjoyed listening to this episode,
Speaker 1: I recommend you go back and listen to our interview
Speaker 1: with Jiggersha. He's playing a role that's similar to Ian's,
Speaker 1: but in the US and with a lot more money
Speaker 1: to work with. Thanks so much for listening to Zero.
Speaker 1: If you liked this episode, please take a moment to
Speaker 1: rate and review the show. Subscribe on Apple podcasts or Spotify.
Speaker 1: Send it to a friend or send it to someone
Speaker 1: who loves Australia. Get in touch at zero pod at
Speaker 1: Bloomberg dot Net. Zero's producer is Oscar Boyd and senior
Speaker 1: producer is Christine driscoll Our. Theme music is composed by Wondering.
Speaker 1: Special thanks this week to kiramintern I am Akshatrati.
Speaker 3: Back next week.