New research shows investor backing of First Nations participation in clean energy projects offers mutual benefit for investors and First Nations groups and reduces project risk, cost and delay.
Produced from domestic and international case studies and interviews with project developers and First Nations groups in Australia that have partnered on projects, the market-leading report Investor Benefits of First Nations participation in clean energy projects by EY and the First Nations Clean Energy Network is being launched to an investor/industry audience at EY’s Sydney office today.
Launch speakers include Karrina Nolan, Chair of the First Nations Clean Energy Network, Cara Graham, Partner at EY Australia, Professor Robynne Quiggin, Pro-Vice Chancellor, Indigenous Leadership and Engagement at the University of Technology Sydney, Board member of Net Zero Economy Authority and 2025 Order of Australia awardee, and Chris Croker, steering group member of First Nations Clean Energy Network.
First Nations people, communities and groups are increasingly looking to co-design, lead and partner or own clean energy systems.
Valuing First Nations land, sea and water is essential to Australia’s social and economic success. Modelling by Net Zero Australia estimates 43% of all clean energy infrastructure required to get Australia to net zero emissions by 2060 will be sited in regional and remote areas where First Nations groups and communities have rights, interests and aspirations.
Even outside these areas, First Nations groups are rights-holders, represent an integral stakeholder, and have the potential to play a significant role in clean energy projects.
The report steps through the quantifiable benefits to investors when First Nations equity participation and partnership on clean energy projects is included; case studies, partnership models and lessons learnt from other jurisdictions; and how industry and government can collaborate and scale up First Nations participation and partnership to necessarily accelerate project development in Australia’s clean energy transition.
Report findings highlight significant investor benefits including increased fast-tracking of projects, access to pools of capital, offtaker preferencing and secondary market premium valuation, and a decrease in a project's risk profile and the time taken to progress projects through the development cycle.
And for First Nations, significant benefits include engagement and enabling of free, prior and informed consent (FPIC), co-design and faster access to land and sea country, recognition of rights and interests and value add, the local workforce and First Nations-businesses prioritised, and socially responsible and sustainable projects providing a demonstrable benefit for generations to come.
The report finds that by harnessing the cultural knowledge, experience and political impact of First Nations groups, and incentivising success of the project, First Nations participation and partnership can assist project developers to realise a magnitude of benefits.
Professor Robynne Quiggin says:
“Compliance remains a critical matter for us, but incorporating First Nations peoples, rights and protocols enables not just mutual economic and social benefits but fairness and equity in Australia’s clean energy transition.
“Investors have at their disposal a plethora of tools and guidance enabling world-class excellence in First Nations engagement, consent, participation and collaboration towards real outcomes not yet seen in this county – First Nations equity, partnership and ownership of energy projects. Their implementation can ameliorate current and future risks for all of us.”
Karrina Nolan says:
“This is the largest transition we're going to see of the energy system in our lifetime, and could be a significant opportunity for economic development for our people.
“When large-scale projects are genuinely designed with our communities, through early engagement, projects are better sited with consideration of sacred places and impacts on country. Working together can mean approvals are smoother, which can mean a more stable investment environment for investors, proponents and communities.
“Our consent and participation is critical, and from an economic perspective, it means good agreements, sound projects with equity stakes and a range of other outcomes, and people genuinely benefiting from them.
“Many communities are now engaging with and benefiting from the transition to clean energy and projects on Country, with over 20 and counting First Nations clean energy partnerships in development, including 10 utility-scale clean energy project partnerships with First Nations equity, equating to less than 1% of clean energy projects in Australia, according to the Clean Energy Council.
“And there’s policy initiatives at a state and territory level, like the Federal government’s Capacity Investment Scheme incentivising investors to meet agreed outcomes, including First Nations benefits and also equity participation in current and future tenders.
“This is about not just jobs and business opportunities, but ownership and genuine participation of our people, bringing mutual benefits for investors and communities.
“We’re seeing industry genuinely wanting to move towards arrangements where Traditional Owners and rights-holders’ consent are given information early and upfront and our communities can genuinely participate. Financiers are also moving towards that principle in how they make financing decisions.
“The government is bringing in public money, and if you want to do the transition at scale, you also need to crowd that in with private investment.
“A good example of a majority First Nations owned and led venture is Yindjibarndi Aboriginal Corporation’s partnership with ACEN Australia.
“They've got the right ingredients, including strong land tenure and 25-50% First Nations equity on all projects. They’ve been fast-tracked by the Western Australia government through approvals. They’ve attracted significant capital. They've got an offtake agreement with Rio. And they've got a really good history of good governance and negotiating good agreements.
“Other First Nations clean energy equity agreements are being developed regardless of tenure and still offer strong benefit arrangements for communities.
“If investors earmark projects that are designed around what First Nations people need and want and aspire to, and enable First Nations ownership and benefit-sharing, they’ll get better outcomes. It unlocks mutual opportunities for economic development and project success.”
The report highlights quantitative benefits for investors of increased First Nations participation and inclusion across the clean energy project life-cycle, including:
- Quicker project development cycle
- Greater access to, and potentially lower cost of, capital
- Access to, and preference amongst, offtake parties
- Secondary market premium valuation
- Local workforce benefits.
It concludes that investors in clean energy projects in Australia are advised to accelerate and enjoy the additional value and broader economic benefits that partnering with First Nations groups can bring.
Download the report