Australia’s Clean Energy Finance Corporation (CEFC) has announced its largest-ever investment commitment, with AU$3.8 billion (US$2.5 billion) allocated to support the Marinus Link interconnector connecting the states of Tasmania and Victoria.
The landmark financing represents a substantial increase in the CEFC’s support for grid modernisation and marks a critical step forward for Australia’s renewable energy transition. It will enable greater integration of Tasmania’s hydroelectric resources with mainland Australia’s growing renewable generation capacity.
Marinus Link will become the second electricity interconnector between Tasmania and Victoria. It will consist of two 750MW high-voltage direct current (HVDC) undersea cables between Northwest Tasmania and Victoria’s Latrobe Valley.
At the beginning of August, Marinus Link received a positive Final Investment Decision (FID) and approval under the Environment Protection and Biodiversity Conservation (EPBC) Act.
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The potential of Tasmania as the ‘Battery of the Nation’
The Marinus Link could be critical in enabling Tasmania’s renewable energy assets to participate more in the National Electricity Market (NEM) and help the island state become the ‘Battery of the Nation‘, with Tasmania’s grid currently connected to mainland Australia via the sole 500MW Basslink interconnector.
Together, Basslink and Marinus Link will create a robust transmission network capable of meeting up to 20% of Victoria’s winter electricity demand.
Meanwhile, the ‘Battery of the Nation’ initiative was proposed by utility Hydro Tasmania in 2022, with plans to develop a further 1,500MWh to 3,500MWh of pumped hydro energy storage (PHES), providing dispatchable power to the NEM.
By doubling interstate transmission capacity, the Marinus Link interconnector will help address the intermittency challenges associated with wind and solar generation, while optimising Tasmania’s PHES potential.
CEFC CEO Ian Learmonth described the project as “another critical piece in the renewable energy transformation of Australia’s electricity grid.”
“As a specialist green energy investor, the CEFC is committed to using our capital to accelerate the delivery of nation-building projects of this scale,” Learmonth added.
“As with all our transmission-related investments, we have taken care to structure our finance in a way that maximises the benefits to consumers, by lowering project borrowing costs, which in turn will lower overall project costs.”
The investment comes from the CEFC’s Rewiring the Nation (RTN) Fund, which has now committed over AU$7 billion across grid modernisation projects in New South Wales, Victoria, the Australian Capital Territory, and Tasmania.
The fund has supported critical infrastructure, including the Central-West Orana Renewable Energy Zone (REZ), HumeLink, and elements of the Victoria-NSW Interconnector.
Economic and consumer benefits
The Marinus Link is expected to create approximately 2,400 jobs and inject AU$2.4 billion into Tasmania and Victoria’s economies. The CEFC’s AU$3.8 billion investment will cover about 80% of the project’s first phase initial costs.
Beyond construction benefits, the proponent behind the interconnector, Marinus Link Pty Ltd, said that it is projected to reduce wholesale electricity prices by AU$15/MWh in Tasmania and AU$17/MWh in Victoria, translating to annual household savings of AU$25–AU$36.
The Marinus Link commitment comes during a record investment period for the CEFC. At the end of July, the green bank announced it had invested AU$4.7 billion in large-scale renewables, energy storage and transmission projects during the 2024-2025 financial year.
Of this total, AU$3.5 billion was allocated specifically to renewables and grid upgrades, including AU$2.07 billion for clean energy transmission projects. The CEFC’s lifetime clean energy investments have now reached AU$18.3 billion.
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