Deals

Macquarie gets A$100m from Australia’s Clean Energy Finance Corporation

The state-backed financier is investing in sustainability improvements across assets managed by the firm, with a new business created to help reduce energy consumption and carbon emissions.

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The Clean Energy Finance Corporation has pledged A$100 million ($64 million; €79 million) to the agricultural platform of Macquarie Infrastructure and Real Assets.

The equity investment will go towards large-scale row cropping assets, such as wheat and grains, and permanent crops including avocados. It will target “improved on-farm energy efficiency and reduced carbon emissions,” the CEFC said.

It is not clear which fund structure the capital will be allocated to, and what returns the CEFC stands to receive from the investment. Macquarie had not responded to requests for further detail at the time of publication.

The Commonwealth Scientific and Industrial Research Organization is involved in the project, contributing “clean energy learnings” to be shared across sectors, the CEFC said. MIRA added it would be investing in farms “across multiple climatic zones, production regions and end markets.”

As the portfolio of assets gets bigger, a number of farm management team will be put together across different regions of Australia to help unlock productivity gains. Viridis Ag, a business headquartered in Albury, in New South Wales, will be specifically created to support the effort, the CEFC said.

Agriculture covers 344 million hectares in Australia, the institution pointed out, representing nearly half of the country’s landmass. It also accounts for 13 percent of total emissions.

3EAC, a committee advising on the adoption of new on-farm standards in energy efficiency and emissions reductions, notably through the development of a dedicated benchmark, will be established as part of the investment.

It is not the first instance of collaboration between the CEFC and Macquarie. In September, the two entities teamed up to help accelerate the use of electric vehicles in Australia through a A$100 million asset finance program.

Since its 2012 inception, the CEFC has supported projects with a value totaling about A$11 billion. It made A$2.1 billion in commitments in 2016/2017, its latest financial year.