A performance audit into the effectiveness of the Clean Energy Finance Corporation’s (CEFC) selection of investments has found the Corporation had suitable arrangements in place to assess and approve them.
In his report, Investments by the Clean Energy Finance Corporation, Auditor-General, Grant Hehir said the CEFC met its legislative requirement to invest at least 50 per cent of funds into renewable technologies.
“The CEFC has largely met its legislated objective of facilitating increased flows of finance into the clean energy sector, consistent with legislative requirements and directions,” Mr Hehir said.
“The CEFC’s arrangements to manage and report on investments are largely suitable.”
He said however there was a need for the CEFC’s policy statement to include more detail on its environmental, social and governance policies.
Mr Hehir said the CEFC had not yet met the target benchmark rates of return set by the Minister for Energy and Emissions Reduction and the Minister for Finance in their Investment Mandate and did not have a strategy in place to meet them.
“The CEFC also does not have a suitable measure of aggregate portfolio risk and the Board does not regularly record its assessment of the mandated requirement that the investment portfolio in aggregate has an acceptable but not excessive level of risk,” the Auditor-General said.
“While the CEFC has facilitated increased flows of finance into the clean energy sector, the extent to which it has leveraged additional funds is unclear,” he said.
Mr Hehir made eight recommendations aimed at providing clarity on the CEFC’s investment policies in relation to environmental, social and governance issues and benchmarking its performance in terms of clean energy outcomes.
The Auditor-General’s online report can be accessed at this PS News link and the 80-page pdf report at this link.
The Audit team was Michael White and an outside consultant.
