Optimising Australia’s Specialist Investment Vehicles for the Net Zero Journey
10.12.2025 - 01:12
Mandala, in partnership with IGCC, explores how Australia’s Specialist Investment Vehicles (SIVs) are deploying public capital to accelerate the net zero transition. The report examines the current funding landscape, identifies structural challenges that limit the effectiveness of public investment, and sets out a pathway to evolve the SIV system into a more coordinated, capital-led model aligned with national priorities.
Australia’s public investment capacity is significant, but the system is outdated
The research provides an analysis of Australia’s Specialist Investment Vehicles (SIVs) focused on clean energy which collectively manage over $60 billion in public funds. This includes Clean Energy Finance Corporation (CEFC), Australian Renewable Energy Agency (ARENA), National Reconstruction Fund Corporation (NRFC), Northern Australia Infrastructure Facility (NAIF) and Export Finance Australia (EFA).
It shows that while Australia has substantial public investment capacity, the framework governing these vehicles was built for a slower, more stable era - not for the pace, scale and global competition defining today’s clean-industry transition. With more than $30 billion yet to be deployed, the report underscores the importance of ensuring these public funds are directed efficiently to maximise national benefit and drive Australia’s transition ambitions.
Commercial return expectations constrain innovation
Most SIVs are mandated to deliver commercial-grade returns, typically targeting yields close to those of superannuation funds and the Future Fund. While this approach supports financial discipline, it also draws public funds into the same investment space as private capital. As a result, public capital can compete rather than complement private finance, limiting its ability to de-risk early-stage or higher-risk transition projects.
These dynamics have shaped how funding is distributed. Around 80% of SIV investment has been directed toward lower-risk, commercial-ready projects, while early-stage innovation and demonstration activities remain underfunded. This overlap and risk aversion mean that public capital may not always be achieving its most catalytic potential.
Evolving SIVs into a coordinated, capital-led system
The report recommends that Australia’s SIVs evolve from independent deployers into an integrated network of capital-led vehicles that align around national transition priorities.
This evolution could unfold in three stages:
- Improved ways of working - enhancing coordination and capability across existing SIVs.
- Coordinated priority setting - establishing a central body to guide investment focus and reduce duplication.
- Unified fund model - creating a single framework that pools public capital, sets performance targets, and mobilises private investment at scale.
A unified approach would allow public capital to drive strategic national outcomes more effectively, ensuring that every dollar invested delivers maximum transition impact.
Read and download the full report here.
Read our latest posts
Decarbonising Australia’s road freight network
Mandala’s latest research, prepared for Energy Futures Foundation, sets out a policy roadmap for decarbonising Australia’s road freight network which could help to drive economic, environmental and social benefits. Emissions in the transport sector grew 0.3 Mt CO2-e in 2025. Emissions in all other sectors fell. Australia has a critical window to decarbonise its road freight network, but the current policy settings have Australia on the wrong track. A policy suite that targets cost, infrastructure and regulatory barriers could add an additional 1.5 million battery electric trucks to the road by 2050 and be cost neutral for the budget. Setting up the right policies now could deliver $138 billion in economic growth over the next 25 years, create 900 thousand jobs by 2050 and reduce emissions by 181 Mt CO2-e – equivalent to 41% of Australia’s 2025 annual emissions. These policies would also save 3,300 lives and reduce externality costs associated with heavy vehicles by $18.5 billion by 2050.
27 Mar, 2026
How EV adoption insulates Australia against oil supply shocks
Mandala’s latest research finds that the adoption of electric vehicles is helping to insulate Australians from the oil supply shocks. This analysis looks at the contribution of Australia’s electric vehicle fleet to our petrol reserves, as well as the savings in fuel costs for Australian households.
16 Mar, 2026
Shaping the Australian banking system for a changing economy
Mandala’s latest research, prepared for the Commonwealth Bank of Australia, finds that Australian banking has been transformed beyond recognition by technology, globalisation, and regulatory change. However, policy has not kept pace. Major banks now face a shrinking revenue base while providing a growing suite of collective goods including regional branches, ATM networks, and payment infrastructure, that comparable financial institutions are not required to provide. The report finds that declining profitability and an uneven regulatory playing field amid rising geopolitical uncertainty place Australia's financial resilience at risk. It recommends three principles for policymakers to shape Australia’s banking system to best serve our national interest. First, consider system-wide impacts of policy settings. Second, apply the same obligations to firms conducting the same activities with the same risk. Third, assess how overseas firms operating in critical parts of the financial system would behave in a crisis.
15 Mar, 2026
The Fragmentation Tax
Australian retailers operate across a patchwork of inconsistent state and territory regulations that, left unchecked, will cost the economy $26 billion and households $9.4 billion over the next decade. Commissioned by the Australian Retail Council, this Mandala report finds that regulatory fragmentation in retail - Australia's second-largest employer, generating $649 billion in economic activity annually - is compounding the country's productivity crisis at the worst possible time. The report identifies specific issues in transport and logistics, and packaging and waste as priority areas for reform, where harmonisation alone would inject up to $1.65 billion into the economy over 10 years. It recommends the Federal Government use its National Competition Policy framework to drive reform - including a $260 million increase to the National Productivity Fund, a new National Harmonisation Council, and a mandate that Regulatory Impact Statements explicitly quantify fragmentation risks.
23 Feb, 2026