CEFC establishes $250 million program to help councils reduce energy bills and lower emissions

3 December 2015

Australian councils are being encouraged to invest in clean technologies to reduce their energy bills and lower emissions, via a new $250 million program from the Clean Energy Finance Corporation (CEFC).

The CEFC Local Government Finance Program is designed to provide flexible and competitive fixed-rate, long-term finance tailored to the needs of Australian councils.

The CEFC's Paul McCartney, Executive Director - Corporate and Project Finance, said there are compelling reasons for Australian councils to take proactive steps to manage their energy use.

"Australia-wide, councils are under continued pressure to effectively and efficiently manage their operations," Mr McCartney said. "Local governments across Australia administer a vast network of street lights, community centres, libraries, sport and recreation facilities and other public access buildings.

"We see strong potential for operational savings through a range of renewable energy, energy efficiency and low emissions technologies. This program will provide councils with access to finance to help accelerate the adoption of these improvements."

Key elements of the CEFC Local Government Finance Program include:

• Finance for eligible projects across renewable energy, energy efficiency and low emissions technologies
• Loans of at least $10 million for a single project or package of works
• Finance can be drawn over three years
• Ability for multiple councils to enter into joint financing agreements for eligible projects
• Access to competitive fixed-rate longer-dated senior debt (up to 10 years)
• A straightforward approval process with simple loan documentation.

Mr McCartney added: "This program will support major investment activities across a range of eligible projects. For example, there are clear benefits to councils from converting street lighting to more efficient LED lighting, as well as installing rooftop solar PV on council-owned buildings.

"The CEFC has identified energy from waste projects as an area where councils can generate energy by reusing landfill waste. We'll also be speaking with councils about improving air conditioning, installing smart controls and voltage optimisers to improve the energy efficiency and performance of their buildings."

The new program builds on the CEFC's strong experience working with local government, including a new $30 million program of clean energy initiatives to help the City of Melbourne reach its goal of zero net emissions by 2020.

"Australia's has more than 560 local councils, which spend more than $32 billion annually on housing and community amenities, as well as transport and communications infrastructure," Mr McCartney said.

"The CEFC's financing solutions can help councils proactively manage these costs, whether through reducing energy consumption in high use areas such as leisure and aquatic centres or accessing fleet financing to enable the council's conversion to electric vehicles.

"In a period of historically low interest rates, now is the time for councils to act to reduce energy costs and lock in the long term benefits of energy efficiency.

"Because these investments lead to lower energy use, councils can reduce their ongoing operating costs. These savings may be sufficient for councils to repay the loan without impacting their net cash flows."