CEFC backs USD-149m green loans portfolio in Australia

The Clean Energy Finance Corp (CEFC) will be making a AUD-90-million (USD 67m/EUR 58m) cornerstone investment in the so-called Low Carbon Shared Portfolio, which is backed by senior loans to wind and solar farms.

This AUD-200-million portfolio creates a new investment model in the Australian market and unveils opportunities for fixed income investors, including superannuation funds.

“The Low Carbon Shared Portfolio creates an opportunity for institutional investors to participate in the renewable energy sector even though they may not be able to enter into individual project financing transactions. This offering is unique in giving investors credit exposure to the underlying projects, a significant innovation in the market,” explains CEFC debt markets lead Richard Lovell.

The National Australia Bank (NAB) has financed the seven wind and large-scale solar farms in the portfolio. The new investment model will release capital for NAB to go on with reinvesting in the renewable energy industry, according to NAB chief customer officer of corporate and institutional banking, Mike Baird.

NAB Trust Services Ltd has issued secured floating rate portfolio notes with an estimated weighted average tenor of 3.2 years. They offer quarterly principal and interest distributions. NAB retains at least 25% of each low carbon loan on its own balance sheet and continues to manage the loans for the shared portfolio. If NAB exits a particular loan, the shared portfolio will also divest.

(AUD 1.0 = USD 0.744/EUR 0.640)

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