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Australia’s public investment capacity is significant, but the system is outdated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.
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