Export Finance Australia empowers energy transition, sustainable development in Indo-Pacific
From infrastructure advancements to green technologies, Export Finance Australia’s financing powers are helping to steer the energy transition towards a greener, more resilient future.
As governments and industries consider the imperative to shift away from traditional energy sources and embrace cleaner alternatives, the concept of energy transition has emerged as a pivotal driver of change. This transition, driven by a collective commitment to mitigate climate change and ensure a sustainable future, is fostering innovative projects that span a diverse spectrum of sectors.
From cutting-edge infrastructure developments to revolutionary advancements in clean energy technology, the Indo-Pacific region is at the forefront of shaping a more environmentally conscious and economically resilient future.
In the realm of project finance, Export Finance Australia is driving sustainability and energy transition throughout Southeast Asia. Through a blend of innovative financing, strategic collaborations, and a commitment to sustainability, Export Finance Australia is helping to reshape the region's energy and infrastructure sectors.
As Australia's Export Credit Agency (ECA), Export Finance Australia facilitates trade and supports infrastructure projects across the Pacific and Indo-Pacific regions. Its flexible finance solutions cater to a wide range of businesses, from small businesses to major corporations seeking to expand their reach into new markets.
A cornerstone of Export Finance Australia's mission is its involvement in financing overseas infrastructure ventures, aligning with Australia's broader goals of economic security and regional resilience.
Fostering energy transition
In 2019, Export Finance Australia experienced an expansion of its powers. This expansion opened doors for the agency to diversify its financing portfolio across sectors, with a particular focus on energy and electrification.
As the world embarked on the journey to reduce carbon emissions, this expanded mandate has positioned Export Finance Australia to back renewable energy and infrastructure projects across the Indo-Pacific. “We’ve been able to support renewable energy projects in the region. We have successfully financed our first wind power and electric bus infrastructure projects, both located in Vietnam. These are the kinds of infrastructure the region wants, and we are very happy to be able to support,” Amanda Copping, Chief Investment Officer for Export Finance Australia, said.
The agency’s largest-ever transaction of US$ 1.3b, was for a financing package to Telstra, involving debt, equity-like securities and insurance to acquire the Digicel Pacific mobile network across six Pacific Island nations. The transaction is supporting economic development across the region and is a great demonstration of the comprehensive nature of its finance.
Energy transition projects are intricate affairs that require the collaboration of various stakeholders. Export Finance Australia's approach to collaboration aims to amplify the impact of energy transition projects by drawing in private finance.
By joining forces with various institutions, Export Finance Australia has formed a network committed to advancing energy transition opportunities across the region.
“We work with a diverse set of partners, including commercial banks, multilateral institutions like the Asian Development Bank (ADB), development finance institutions, and other ECAs. These partnerships extend across the Pacific and Indo-Pacific regions, creating a network of stakeholders committed to identifying and supporting energy transition opportunities,” Copping said.
Picturing and empowering the future
As the landscape of energy and infrastructure financing evolves across the region, Export Finance Australia remains prepared to anticipate and address emerging trends. One prominent trend is the diversification of technologies driving the transition from traditional fossil fuels to cleaner energy sources.
“Given the diverse nature of countries within the Indo-Pacific, we recognise that a mix of different technologies need to be considered for each market and that a long-term perspective is needed from financiers to deliver commercially successful projects. We are actively collaborating with partners to identify and finance large-scale projects, while also looking at smaller-scale initiatives,” Copping said.
With a pipeline including solar, onshore and offshore wind and geothermal energy projects in the region, Export Finance Australia has built a solid reputation as a government-backed financier in the region in just a few years.
Export Finance Australia is currently working with PLN, Indonesia's state-owned electricity company, to establish aUS$200 million loan facility. This facility aims to drive improvements in PLN's operations to reduce emissions throughout the energy generation, distribution, and transmission processes.
Its support for the Australian critical minerals sector is also helping to supply materials, like lithium, to the Indo-Pacific. These minerals are crucial to clean energy technologies such as batteries and solar, providing supply chain support for electrification and the move to renewable energy across the region.
Whilst Export Finance Australia is actively collaborating with partners on financing projects, it also places a strong emphasis on environmental and social standards to ensure responsible development, a commitment exemplified by its participation in the Equator Principles.
“At Export Finance Australia, we have consistently championed robust environmental and social standards, recognising the importance of responsible development,” Copping said. Export Finance Australia's participation in global events, including TXF Asia, underscores its commitment to working with industry players and sharing insights. These platforms not only facilitate partnerships but also provide Export Finance Australia with an avenue to showcase its role, expertise, and offerings to a diverse array of industry stakeholders. Moreover, the agency's reach extends beyond events, thanks to its integration with Australia's Department of Foreign Affairs and Trade and Austrade.
With a commitment to environmental stewardship and societal well-being, Export Finance Australia embodies Australia's vision of becoming a renewable energy superpower. As Asia propels the energy transition narrative, the agency's role promises to continue shaping the trajectory towards sustainable progress.