Document ID: chunk:federal_register_of_legislation:F2023L01023:body:0:p9
Version: federal_register_of_legislation:F2023L01023
Segment Type: other
Provision Reference: 
Character Range: 22143–25088

the object of the Act, the Board must have regard to positive externalities and public policy outcomes for its investments.
The Fund must support clean energy technology measures for existing residential dwellings and knock down rebuild projects that exceed the then current national construction code requirements, prioritising those in lower categories of energy performance. The design eligibility criteria shall exclude high value properties, on the basis owners are more likely to be in a stronger position to self-finance relevant upgrades and the housing stock is likely to have higher levels of clean energy technology integration.
No Household Energy Upgrades Fund investment shall have a repayment or termination date (or otherwise involve an anticipated repayment or return of capital from a counterparty to the Corporation, howsoever described in the relevant investment documentation) later than the date being 10 years from the Household Energy Upgrades Fund commencement date described in subsection 16(4)(a) of this direction.
Benchmark rate of return
In relation to investments made for the purposes of the Household Energy Upgrades Fund, the Board must target an average return of at least the 5-year Australian Government bond rate +0.5 per cent per annum over the medium to long term. Performance against this benchmark will be measured before operating expenses and any concession charges, such as impairment or mark-to-market adjustments resulting from any concessional component.
Risk level
In targeting the benchmark return for the Household Energy Upgrades Fund and operating with a commercial approach, the Board must seek to develop a portfolio that in aggregate has an acceptable but not excessive level of risk, having regard to the terms of the Act and the focus on particular areas identified in this subsection.
The level of risk deemed acceptable by the Board may be higher for the Household Energy Upgrades Fund than for the General Portfolio. This reflects the differences in the types of investments being made for the purposes of the Household Energy Upgrades Fund.
The Board must periodically review its investment practices for the purposes of managing the risk of the Household Energy Upgrades Fund portfolio over time and must advise the responsible Ministers of specific measures taken in this regard.
Limits on concessionality
The Board, in relation to all investments made for the purposes of the Household Energy Upgrades Fund, may deploy the amount of concessionality it deems required in order to provide concessional loans to incentivise uptake of clean energy technology measures for residential dwellings. The Board will only apply concessionality in line with the risk and return settings and to optimise impact in line with the Government's objectives for the Household Energy Upgrades Fund. Concessionality reflects the mark-to-market valuation of loans made that financial year and should be