Australia’s government-owned Clean Energy Finance Corporation (CFEC) has signed a memorandum of understanding (MOU) with the Japan Bank for International Cooperation (JBIC) to boost the development of key industries and technologies that can potentially fast-track the deployment of and make use of clean energy.
Under the MOU, the two financial institutions will look into co-investment opportunities in Australia and share knowledge and expertise to support and accelerate investment in the clean energy transition in Australia and Japan.
The MOU intends to strengthen the cooperation of the parties across the hydrogen, renewable energy, and electricity infrastructure sectors.
CEFC CEO Ian Learmonth said that Australia is facing challenges in meeting renewable energy targets and emphasised the importance of the partnership in the global pursuit of net zero by 2050.
“Teaming up with a significant investment powerhouse like JBIC has the potential to move the dial on decarbonisation around the world,” Mr. Learmonth said. “Australia faces a big challenge to meet its renewable energy targets and emission reduction goals but on the other side of the challenge is opportunity.”
The Australian government allocated CFEC $19 billion to deliver the transmission infrastructure to upgrade and modernise Australia’s electricity grid under the Rewiring the Nation program.
JBIC Resident Executive Officer for Asia and Pacific, Negishi Yasuaki, said that hydrogen will play a crucial role in Japan and the world becoming carbon neutral.
“Japanese companies are trying to develop hydrogen supply chains connecting Australia and Japan in collaboration with Australian companies. The two governments are introducing hydrogen-enabling policies in order to support first-movers,” Mr. Yasuaki said.
Recommendations for Net Zero Transition
In its “Investing in Australia’s Vital Regions“ report, the Investor Group on Climate Change (IGCC) outlined recommendations for policymakers and investors to secure more capital in Australia’s industrial regions to implement net-zero strategies.The IGCC highlighted the significance of policy solutions to ensure Australia can attract the investments needed to transition into net zero, citing how the U.S. Inflation Reduction Act and the European Green Deal Investment Plan have played crucial roles in making these markets more attractive than Australia for significant green industry investments.
The IGCC recommended policymakers to develop investible and socially supported transition plans for emissions-intensive sectors and the regions that currently host these industries and ensure the national Net Zero Authority acts as a “front door” to enhance coordination within and between levels of government and key stakeholders working to transform priority regions and sectors.
It also recommended legislators to address barriers to the growth of businesses in priority regions and bring timely and targeted financial support to the market to lure diverse capital types, creating a pipeline of investible opportunities for priority regions and sectors.
For investors, the IGCC recommended to integrate just transition objectives within portfolio net zero strategies and ensure climate solutions targets to bring about just transition outcomes.
It also advised investors to engage with investee companies to ensure strong outcomes for workers and communities affected by the closure or sale of emissions-intensive assets and new project developments.
