Australia should follow successful renewable energy economy banks in Europe, China USA
Why we need a big green bank for low carbon transition, REneweconomy By Giles Parkinson 9 February 2012 One of the arguments that has been thrown forward against the proposed Clean Energy Finance Corporation – and will no doubt continue to be so in the coming months – is that it will be good money thrown after bad, and the $10 billion planned injection by the federal Government over a five year period is out of all proportion to the task at hand. There is a general assumption, as there was in the carbon debate, that Australia is doing something that no-one else has contemplated, and that it is recklessly and needlessly leading the world. But as in the carbon pricing debate, this is not so.
The experience of the Solar Flagships, and other grants-based programs for that matter, highlight the need and the opportunity for the CEFC. Institutional investors, noting the $100 billion that will be required in renewable energy investments at a minimum over the next two decades, insist that such an independent financial institutions will play a critical role in stimulating the transition to a clean economy.
Recent surveys suggest that this is the approach of all the countries that are currently playing a leading role in clean energy investment – Germany, China, the US and Brazil – and each have state-owned development banks, or their equivalent, underwriting the majority of cleantech investment.
An analysis conducted by Bloomberg New Energy Finance found that possibly the most influential player in the global energy market in the past year has been the German state-owned development bank, known as KfW, which in 2011 alone committed €22.8 billion ($29 billion) to climate and environment projects – mostly through lending at discounted rates and providing loan guarantees. The funding was split among energy efficiency investments (€10.1 billion), renewable energy (€9.4 billion) and waste management (€3.3 billion). KfW accounted for nearly half of all German clean-tech investment……
The BNEF survey found that the global leader in the number of large scale solar deals completed in 2011 was the US Federal Financing Bank, …..
….the China Development Bank provided $45 billion in cheap lines of credits to solar and wind investments. BNEF also notes that Brazil’s development bank, Banco Nacional de Desenvolvimento Economico e Social, or BNDES, has been a significant lender to Brazilian biofuels and wind projects, and ranked second in identified clean energy deals across the globe in 2011.
The European Investment Bank is also playing a critical role……
the $10 billion to be invested in the CEFC appears relatively modest. But it could, given the experience elsewhere, play a key role in unlocking money from superannuation funds and other institutional funds as a co-investor, in much the same way as the DoE has forged a path for the likes of Warren Buffett, Bill Gates, Google and others to follow in its footsteps. http://reneweconomy.com.au/2012/why-we-need-a-big-green-bank-for-low-carbon-transition-43600
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