Australian Government-owned Green Bank Clean Energy Finance Corporation (CEFC) is increasing its investment in Australia’s clean energy fixed income sector by backing Artesian’s green fund, alongside its cornerstone investor Future Super.
The fund, the Green and Sustainable Bond Fund which was set up in late 2020, currently has $52.7 million in assets under management (AUM), would be supported by a further $25 million investment from the CEFC.
The fund, which is open-ended and actively managed by Artesian’s fixed income team, is investing in highly liquid investment-grade green and sustainable corporate bonds issued by Australian and international issuers, as well as cash, and it aimed to outperform the Bloomberg AusBond Composite 0-5 Year Index benchmark.
CEFC chief executive, Ian Learmonth said the CEFC investment would support the further development of Australia’s clean energy fixed income sector, which was critical to meet growing investor demand for sustainable investment opportunities.
Future Super founder and CEO, Simon Shieke, added: “Superannuation is an incredibly powerful tool to help build Australia’s renewable energy future. We are pleased to work with the CEFC and Artesian to support Australia’s transition into renewable energy.
“For the first time in history, we had a moment last month where solar power in Australia overtook coal-fired electricity. Australia is one of the sunniest and windiest countries in the world, so the triangle of investor pressure, consumer demand, and plentiful supply gives me great hope that this transition is fast reaching a tipping point."
According to the company, the CEFC had been active in the development of Australia’s green bond market, having invested more than $700 million in innovative green bonds since inception.
Additionally, as a cornerstone investor in many of these issuances, the CEFC helped increase private sector investment into a range of emissions reduction activities. Together, these bonds raised around $4 billion, substantially expanding the private sector clean energy investor market.
Through the Clean Energy Innovation Fund, the CEFC and Artesian would be also working together on the successful Clean Energy Seed Fund.
According to the Responsible Investment Association of Australia, the environmental factors were increasingly a priority for Australian investors as demand continued to grow and lifting the number of investible products available would act as a catalyst to further expand impact investment.
Also, global sustainable bond issuances were projected to grow by 32% to US$850 billion ($109.8 billion) around the world this year and the Australian green bond market was still in its early years.