Media release | Tuesday, 5 March 2024
Australia’s peak body for international development cautiously welcomes the federal government’s $2 billion finance facility to drive clean energy investment in Southeast Asia.
But Australian Council for International Development (ACFID) CEO Marc Purcell said the details of the new financing facility mattered.
“In particular, we will need to see what proportion of finance is delivered as loans to governments of developing countries, and how much is private sector funds mobilized to address climate change,” he said.
“The problem is that government loans require repayments from budgets, often at the expense of development fundamentals like health and education.”
The $2 billion South-East Asia Investment Financing Facility (SEAIFF), to be managed by Export Finance Australia (EFA), will provide loans, guarantees, equity and insurance to support the energy transition and infrastructure development in the region. EFA has struggled with transparency at times due to commercial-in-confidence preferences.
“To address climate change in our region, the international development sector has called upon the government to contribute its fair share towards climate finance, in grants-based, new and additional finance through real increases to Australia’s Official Development Assistance,” Mr Purcell said.
ACFID Chief of Policy and Advocacy Jessica Mackenzie also pointed to caution within the sector about Export Finance Australia’s management of clean energy funding.
“Export Finance Australia is not known for its climate expertise,” Ms Mackenzie said.
“Some voices have pointed to Export Finance Australia traditionally being part of the problem, not the solution, when it comes to the region’s clean energy transition.”
Until Australia last year agreed to end the financing of fossil fuel projects overseas, Export Finance Australia contributed $4.4 billion to coal, oil and gas developments between 2009 and 2021.
“By contrast, NGOs in our membership have a wealth of climate expertise and experience, as do existing regional and bilateral climate bodies,” Ms Mackenzie said.
