CEFC invests A$20 million with P2P ‘green loan’ marketplace
(26 May 2017 – Australia) The Clean Energy Finance Corporation will invest A$20 million over the peer-to-peer lending platform RateSetter to fund “green loans” for households and businesses wanting to buy clean energy products like solar panels, batteries or electric vehicles.
In a unique partnership between a government authority and a fintech lending platform, RateSetter expects the A$20 million to be deployed over the next 12 months and for CEFC’s presence in its new “green loan marketplace” to attract other retail and institutional investors into the asset class, including local superannuation funds.
The investment committee at CEFC – which has invested around A$2.8 billion in the clean energy sector since it was established by the former Labor government in 2012 – has approved the A$20 million of lending and expects to deploy the capital at an interest rate of about seven percent. Actual rates will be determined by investors on the platform.
This would compare favourably to an interest rate at major lenders for unsecured personal loans of around 17 percent per annum. Banks rarely take security over assets like solar panels given the costs of removing equipment and speed at which the technology is developing.
The RateSetter platform is targeting total new lending over the next 12 months of A$180 million, and expects the green loan market could comprise about 20 percent of that total. Investors will have the option to fund loans for terms up to seven years.
As well as solar and storage equipment, eligible assets will include low-emission equipment such as power factor correction, LED lighting and energy-efficient heating and air-conditioning, as well as electric vehicles. RateSetter will audit loan applications to ensure the products meet “green” eligibility criteria.
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