CEFC backs 'missing middle' of clean energy transition

The Clean Energy Finance Corporation (CEFC) has committed $100 million to unlock the 'missing middle' of Australia's clean energy transition, helping accelerate delivery of mid-scale renewable energy assets.

Working in partnership with infrastructure debt manager Infradebt, the program will finance the development of up to 16 hybrid solar, battery and battery retrofit projects.

"Mid-scale renewables are a powerful lever in unlocking Australia's renewable energy future and are often referred to as the 'missing middle' between individual rooftop solar and utility-scale renewables," CEFC chief investment officer of renewables and sustainable finance Monique Miller said.

The initiative is designed to reduce financing barriers for smaller projects through concessional senior debt financing. CEFC said the debt will help create a financing pathway for distributed energy projects, supporting them to reach operations and accelerate Australia's energy transition using existing network infrastructure.

"Smaller, ready-to-connect wholesale generation projects can face barriers due to size and transaction costs," Miller added.

"By providing targeted capital and certainty and efficiency of process, CEFC finance is helping to unlock a constrained segment of the market while supporting a more resilient energy system and utilising latent capacity in distribution networks."

The investment will be delivered through a new financing initiative, the Distribution Connected Accelerator Program (DCAP) and Infradebt will establish the program through a competitive process to shortlist prospective proponents.

The DCAP supports a pipeline of distribution-connected projects to be ready to commence construction in 2027. It will focus on projects up to 5MW with capacity to encompass larger projects.

Infradebt chief executive Alexander Austin said: "Australia's energy transition will not be delivered through a handful of mega-projects alone. Smaller, distribution-connected projects have a critical role to play because they can often move from development to operation significantly faster."

The DCAP builds on a separate previous $150 million CEFC commitment to Infradebt. This investment applies that experience to new, targeted financing bringing smaller distributed energy projects to market more efficiently.