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01 Performance

Annual performance statement

The CEFC’s careful investment over six years... is further supported by its pillars of good governance, responsible client selection and considered risk management, an approach which continues to give confidence to private sector market participants.

Steven Skala AO
Chair, CEFC

Introductory statement

The CEFC Board, as the accountable authority of the Clean Energy Finance Corporation, presents the 2018–19 Annual Performance Statements, as required under paragraph 39(1)(a) of the Public Governance, Performance and Accountability Act 2013 (PGPA Act).

In our opinion, these Annual Performance Statements are based on properly maintained records, accurately reflect the performance of the Corporation, and comply with subsection 39(2) of the PGPA Act.

Entity purpose

The CEFC was established by the Clean Energy Finance Corporation Act 2012 (CEFC Act)

“… to facilitate increased flows of finance into Australia’s clean energy sector”.

Ultimately, this objective is achieved through investing directly and indirectly with co-investors and, in doing so, encouraging and facilitating others to also invest in renewable energy, energy efficiency and low emissions technologies and projects.

Results

The CEFC had a strong year in 2018–19. A summary of the CEFC’s performance outcomes is included in Figure 16. Performance has been assessed against the performance criteria set out in the 2018–19 CEFC Corporate Plan and the 2018–19 Portfolio Budget Statements.

Figure 16: CEFC performance summary
Criteria Measure Outcome 2018–19
Impact
Operating result* Financial operating result $159m against $92m target
Performance against portfolio benchmark return set by the government in the 2018 Investment Mandate
Optimise portfolio returns while recognising the Corporation’s public policy purpose, and taking all reasonable steps to achieve portfolio benchmark return targets# The core portfolio cumulative return from inception to 30 June 2019 was 5.29 per cent against a benchmark of 5.39 per cent to 6.39 per cent

The Innovation Fund cumulative return from its inception to 30 June 2019 was negative 27.05 per cent against a benchmark of 3.22 per cent
  Operating expenditure before concession and impairment < 1.5 per cent of the deployed portfolio balance# 1.0 per cent against a target of < 1.5 per cent
Capital committed Dollar value of capital committed $1.5b against $1b target
Capital deployed Dollar value of capital deployed $1.3b against $1b target
Financial leverage Financial leverage in transactions financed $3:$1 against $2:$1 target
Contribution to emissions reduction Forecast emissions reduction per year from capital committed during the period 2.9Mt CO2-e against 1.9Mt CO2-e target
  Expected carbon abatement from committed projects at ‘cost’ to the Corporation of < $0# Expected carbon abatement from committed projects at a cost of negative $4.70 per tonne against < $0 target
Innovation
Develop markets in new sectors, technologies and geographies The degree to which we contribute to transformation of the clean energy investment market across all States and Territories through investments that are catalytic The CEFC completed a number of first-of-a-kind investments across different sectors, technologies and geographies; research initiatives also provided insights for stakeholders on opportunities and challenges in various market sectors
Build asset and capital management capability Build asset and capital management capability to support continued investment in clean energy technologies The CEFC appointed our first Chief Asset Management Officer and implemented a new asset management framework; obtained a financial services licence and completed our first asset sell down
Organisational effectiveness
Business systems enhancements and security Deliver phase one of the Enterprise Information Management Project; achieve a cyber security framework score of 2.5 under the National Institute of Standards and Technology (NIST) Phase 1 of the Enterprise Information Management Project was delivered in 2018–19; NIST cyber security framework score was independently assessed at 2.5
Design and implement a refreshed People and Culture strategy to strengthen engagement and build an inclusive, high performing workplace culture Develop a People and Culture Strategy that will address priorities from the 2018 Employee Engagement Survey; implement the strategy to deliver improved 2019 Employee Engagement Survey results Revised People and Culture Strategy endorsed by the Board People and Culture Committee; 2019 Employee Engagement Survey showed a nine per cent improvement in both employee engagement and alignment
Design and implement a refreshed brand strategy to further our ability to unlock investable opportunities in the clean energy sector Design a refreshed brand strategy, including confirmation of CEFC purpose and values, refreshed market positioning and messaging and recommendations re the CEFC visual brand A refreshed brand strategy developed, drawing on the insights of a wide range of external and internal stakeholders; work to strengthen the ability to catalyse private sector investment into low emissions opportunities

* Calculated as net surplus from continuing operations, excluding concessional loan charges and unwind of concessional interest rate discount and excluding fair value adjustments from loans, bonds and Innovation Fund investments.
# Measure originates from the 2018–19 Portfolio Budget Statements only.

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