CEFC and NAB agree on $300m green financing for industry, farmers
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The news: The Clean Energy Finance Corporation (CEFC) has committed $300 million in a new co-finance program with National Australia Bank to cut the borrowing costs of manufacturers, businesses and farmers, as part of Australia's transition to net zero.
The numbers: The CEFC, an Australian government-owned green bank that invests in clean energy, will commit $300 million in discounted interested rates for eligible borrowers through two NAB programs.
The CEFC will provide $200 million to support a 0.5% interest discount on investments in manufacturing, transport and recycling, as well as industry more broadly. Through NAB's 'green finance for vehicles and equipment' program, eligible borrowers can seek loans for investment between $10,000 and $5 million.
It has also committed $100 million to support a 1.15% interest rate discount backing financing solutions for farmers, to reduce the emissions of their operations. The CEFC said the finance can be used for a range of emissions reduction activities, such as enhanced fertilisers and methane inhibitors. Customer loans for these investments are expected to range from $1 million to $5 million.
The context: The CEFC commitment coincides with the launch of 'Towards Net Zero Agriculture Pathfinder', an online resource co-developed by the CEFC and Australia's national science agency, the CSIRO. Pathfinder includes information on a range of emissions reduction activities, including those which may be eligible for discounted CEFC finance.
What they said: "These tailored programs are a tried and tested way for the CEFC to use our finance to accelerate Australia’s transition to net zero emissions," said CEFC executive director of debt markets, Richard Lovell.
"By tapping into the considerable customer base of our co-financiers, our capital is giving borrowers a meaningful incentive to cut their emissions and be part of our clean energy economy of the future."
NAB group executive for business and private banking, Rachel Slade, said: "Providing lower-cost, green finance makes it easier for Australian businesses to invest in technologies and practices that reduce emissions and operating costs, drive long-term business growth and enhance their competitiveness".
"... Providing customers with not just the know-how but the access to low-cost green finance will help drive meaningful change," she said.
The source: CEFC media release
