Ex-Macquarie Banker Looks Abroad to Staff Green Fund
Oliver Yates, the former Macquarie Group Ltd. (MQG) banker who started this week as head of Australia’s A$10 billion ($10.5 billion) Clean Energy Finance Corp., plans to tap overseas expertise to strengthen his investment team.
Yates, 47, said he plans to ask the U.K.’s 3 billion-pound ($4.8 billion) Green Investment Bank and Germany’s KfW development bank to consider temporarily assigning a few staff members to Australia to assist with the start-up.
“We have a large pot of money here, and this can be a real demonstration for the globe,” said Yates, previously a director at Sydney-based Driftwood Capital. “I’d love to have that international experience down here in our market, people who have seen the good sides and the bad sides.”
Australia’s clean-energy bank, formed as part of Prime Minister Julia Gillard’s legislation last year to reduce carbon emissions, plans to hire 20 to 30 people before investing its first A$2 billion starting in July, Yates said in a telephone interview today from Sydney. The bank will take a conservative approach and initially focus on providing loans.
“This is a massive challenge for us all, and it’s also going to create an enormous amount of opportunities,” said Yates, who spent more than two decades at Macquarie before leaving in 2010. “Australia has had a pretty volatile policy outlook, and a lot of people have been burned trying to participate in the sector. The market hasn’t been stable, and what we need to do is encourage investors to try again.”
Yates’s new organization will work with other banks to maximize its scope, he said. While the focus will be company loans, it will also be able to take equity stakes.
“We are here not to cost taxpayers money,” said Yates, named chief executive officer on Nov. 25. “We are not going to be stretching too far into equity land because that’s a higher risk profile than what we’re comfortable with.”
The organization will invest at least half its funds in renewable-energy suppliers such as wind, solar and geothermal projects. The rest will go to low-emissions and energy- efficiency technologies, the government said earlier this year.
The market value of the 71 stocks in the ACT Australian CleanTech Index, which tracks the country’s listed renewable energy companies, plunged to A$6.6 billion in October from a peak of A$16.3 billion in 2007.
The outlook for investment in clean-energy technologies will improve with growing acceptance that the government should address climate changes, Yates said.
Australia started charging about 300 of its largest polluters a fixed price of A$23 a ton in July for their carbon emissions. It plans to move to a market-based, emissions trading system in 2015 and aims to get 20 percent of its power from renewable energy by the end of the decade.
Greg Hunt, the opposition climate and environment spokesman with the Liberal-National coalition, has said the Gillard-led government is putting A$10 billion of taxpayer money at risk. Hunt cited the example earlier this year of Solyndra LLC, the failed solar-panel maker that received a $535 million U.S. Energy Department loan guarantee before going bankrupt.
Opposition leader Tony Abbott has pledged to overturn Gillard’s price on carbon emissions if his coalition wins elections due by November 2013.
The Clean Energy Finance Corp. will aim for a rate of return comparable to the government’s bond rate, the government said. Finance will go to projects at later stages of development, it said in April.
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