The Australian Government has recently set up the country's
largest renewable energy venture capital fund to help
high-potential Australian renewable energy start-ups launch and
market their innovative technology and products.
As part of its Clean Energy Future plan, the Australian
Government has announced the establishment of the Southern Cross
Renewable Energy Fund, a $200 million, 13-year coinvestment
arrangement between the Australian Government, Softbank China
Venture Capital (who have each committed to contribute $100
million) and fund manager Southern Cross Venture Partners.
Here, HopgoodGanim partner Nicole Radice and solicitor Karyn
Silcock outline the Fund's investment criteria and how
renewable energy start-ups can make the most of this opportunity
for capital investment.
In a nutshell
Australian companies developing pioneering renewable energy
technologies can find it difficult to source venture capital, often
due to limited operating histories and difficulty demonstrating
measureable results in the market.
The Southern Cross Renewable Energy Fund's primary
objective is to make critical, early-stage equity investments and
provide ongoing investment management strategies to support and
develop Australia's renewable energy sector.
Both listed and unlisted Australian companies seeking capital
can apply to the fund manager, provided they meet specific criteria
related to their operations, size and revenue.
Criteria for obtaining venture capital funding
To be eligible to receive investment capital from the Fund, an
Australian company can be either listed or unlisted and must, at
the time the Fund first invests in it:
be incorporated under the Corporations Act and have an
Australian Business Number (ABN);
be commercialising or have the potential to develop renewable
energy technologies for commercialisation (if the company does not
yet market its renewable energy products or services, it must agree
to do so under an investment arrangement with the Fund);
have business activity at the seed, start-up or early expansion
stage of its development;
be providing all of the goods and services it produces through
commercialising renewable energy technologies to third parties who
are not associates;
have a majority of its employees (by number) and assets (by
value) inside Australia at the time the Fund first invests in it,
or will use the whole of the proceeds from that initial investment
have an average annual revenue over the previous two years that
does not exceed $20 million; and
not be an associate of a company (other than an eligible
education or research body) which has an average annual revenue,
over the previous two years, of over $100 million. The calculation
of revenue for a year will exclude any abnormal items.
Further details of the program's administrative guidelines
and investment criteria will be available from Southern Cross
Venture Partners, who are charged with making the Fund's
What are 'renewable energy technologies'?
Renewable energy technologies are technologies that use, or
enable the use of (termed 'enabling technologies'), one or
more renewable energy sources. This may include technologies
generate and/or supply energy, including hybrid systems;
provide a direct energy input for other uses, such as
transport, heating, cooling, cogeneration and trigeneration;
are otherwise associated with, or used in conjunction with,
renewable energy technologies.
The Fund has adopted further technical definitions for assessing
suitable applicants. Please click here or contact us for further
Applying to the Southern Cross Renewable Energy Fund
HopgoodGanim is experienced in advising renewable energy
companies and can assist you by:
assessing aspects of your company's eligibility for a
venture capital injection from the Fund;
providing specialised advice on an appropriate investment
proposal and capital raising strategy to grow your company;
drafting a prospectus or other capital raising disclosure
document and working with financial advisers and brokers to market
your company to potential investors.
This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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