Clean Energy Finance Corporation Act 2012 (CEFC Act)

The CEFC Act establishes the Clean Energy Finance Corporation, sets out the organisation’s purpose and functions and establishes arrangements for the Board, CEO and staff.

The objective of the CEFC under the CEFC Act is “to facilitate increased flows of finance into the clean energy sector”. The main function of the CEFC is to invest, directly and indirectly, in clean energy technologies (the investment function). The CEFC Act also specifies a number of other functions, including:

• liaising with relevant individuals, businesses, agencies and State and Territory governments to facilitate the CEFC investment function
• performance of any other functions conferred by the CEFC Act or any other Commonwealth law
• anything incidental or conducive to the performance of the investment function or the other functions.

Clean energy technologies are broadly defined in the CEFC Act to be energy efficiency, renewable energy and low emissions technologies. The Act expressly excludes CEFC investment in carbon capture and storage, nuclear technology and nuclear power.

During 2018–19 there were no substantial amendments to the CEFC’s enabling legislation. Prior to the reporting period (on 31 May 2017), the Australian Government introduced the Clean Energy Finance Corporation Amendment (Carbon Capture and Storage) Bill 2017 into the Parliament to amend the CEFC Act to remove the prohibition on investing in carbon capture and storage. Following the dissolution of the 45th Parliament, the Bill lapsed.

Responsible Ministers

Under the CEFC Act, the CEFC has two responsible Ministers. At the beginning of the 2018–19 reporting period, they were:

• The Hon Josh Frydenberg MP, Minister for the Environment and Energy; and
• Senator the Hon Mathias Cormann, Minister for 

On 28 August 2018, the responsible Ministers became:

• The Hon Angus Taylor MP, Minister for Energy (until 29 May 2019) and Minister for Energy and Emissions Reduction (from 29 May 2019); and
• Senator the Hon Mathias Cormann, Minister for 

For the period 2018–19 the CEFC was located within the Environment and Energy portfolio.

Nominated Minister

The nominated Minister is one of the responsible Ministers and exercises additional powers and functions under the CEFC Act.

The CEFC Act provides that the responsible Ministers must determine between them which is to be the nominated Minister. For the period 2018–19 the nominated Minister was the Hon Josh Frydenberg MP, the Minister for the Environment and Energy until 28 August 2018 and then the Hon Angus Taylor MP, Minister for Energy and Emissions Reduction.

Ministerial powers of direction

CEFC Act

The CEFC Act is structured in such a way as to maximise the CEFC’s operational independence, particularly with respect to investment decision making. Ministerial powers to direct under the CEFC Act are limited primarily to the Investment Mandate.

The CEFC can be directed by Ministers to pay surplus funds to the CEFC Special Account, since the CEFC was not conceived as having a treasury function. Such a direction has been made in the past and was in effect throughout the reporting period.

Figure 26: Ministerial directions

Investment Mandate

The responsible Ministers may issue one or more directions to the CEFC Board under sub-section 64(1) of the CEFC Act, known as the Investment Mandate. This is the means by which the Government of the day provides instruction as to policies to be pursued by the CEFC in performing its investment function, provided that this:

• does not have a purpose of directing the CEFC to make or not make a particular investment
• is not inconsistent with the CEFC Act (including the object of the CEFC Act).

Figure 27: Investment Mandates in effect 2018–19

Government policy orders

The PGPA Act allows the Australian Government to issue directions to the CEFC by means of a Government Policy Order (GPO). No GPOs applied to the CEFC during 2018–19.

Statement of compliance

The CEFC had no instances of non-compliance with Ministerial Directions (including the Investment Mandate) or GPOs in the 2018–19 year.

Procurement

The Commonwealth Procurement Rules are not applicable to the CEFC. Procurement is undertaken in a manner which is efficient, effective, economical and ethical, which can involve direct engagement of service providers based on quotes, select tenders, engagement of external advisors, and in some instances joining Australian Government procurement arrangements. Under section 74 of the CEFC Act, the CEFC must specify in the Annual Report the details for each procurement contract on foot within the financial year valued at above $80,000.

Figure 28: Procurement contracts 2018–19