Unlocking investor value through increased levels of First Nations participation in Australia’s clean energy transition

As Australia’s clean energy buildout accelerates, there are opportunities for investors to partner with First Nations groups to unlock faster, fairer outcomes.

• Forty-three percent of Australia’s future clean energy infrastructure will be sited on First Nations land, but no operational projects today include First Nations equity participation.
• International case studies and feedback from investors demonstrate the benefits of policy, incentives and co-investment models that align First Nations equity with national energy goals.

So, how can Australia accelerate genuine partnerships?

The First Nations Clean Energy Network and EY Australia joined forces to explore this question, and some answers are found in a new report, Investor benefits of First Nations participation in clean energy projects.

Canada’s path: Policy, precedent and partnership

Canada’s clean energy story provides some compelling lessons, and these are unpacked in the report.

In Canada, approximately 20% of operational clean energy projects include First Nations equity participation. In comparison, there are 10 Australian utility-scale clean energy projects with First Nations’ equity, none beyond the development stage. This equates to less than 1% of clean energy projects in Australia.

What accounts for this difference?

The answer lies in a combination of supportive legislation, clear policy, funding programs and other incentives, which have encouraged co-investment models that align commercial and community interests. For example:

• Legislation: Canadian Supreme Court decisions have progressively strengthened the requirement to consult and accommodate First Nations groups in development decisions, culminating in a legal consent obligation on many projects.
• Project priorities: Provincial projects must have at least 25% First Nations equity ownership. The BC Hydro 2024 Call for Power, for instance, is operated by the government-owned provider in British Columbia, which delivers electricity to 95% of the population. BC Hydro engaged extensively with First Nations groups and eight of the nine successful energy projects will have 51% equity ownership. This represents up to CA$3 billion of First Nations ownership in the province’s new renewable energy projects.
• Funding programs: Dedicated funding vehicles, such as the First Nations Clean Energy Business Fund, provide capital to support equity stakes and build commercial capability. This includes equity funding of up to CA$500,000, as well as capacity funding of up to CA$50,000 to help with feasibility studies, planning and engaging with project proponents.

Canadian research has found that the combination of Indigenous partnership, governance and equity is a “catalyst that triggers a cascade of outcomes with material value to project development, reliability and cost competitiveness”, as well as benefits First Nations communities. Case studies that illustrate these benefits are shared in the report.

Paving the way: Opportunities and obstacles

Australia is well-placed to adapt the lessons from Canada. Recent initiatives like the First Nations Guidelines for the NSW Electricity Infrastructure Roadmap, and the Australian government’s Capacity Investment Scheme (CIS) are beginning to define clearer pathways for participation.

For example, the CIS includes eligibility criteria requiring the protection of First Nations cultural heritage and the environment, as well as merit criteria that demonstrate ongoing engagement and benefit sharing.

However, several persistent barriers stand in our way:

• Low awareness: Limited understanding of the financial benefits of First Nations participation leads investors to focus only on minimum legal requirements.
• Uncertain valuation: Few precedent projects make it difficult to assess the true value of participation for both investors and First Nations groups.
• Perceived high transaction cost: Early movers may incur higher costs to establish and refine workable legal and commercial models, contributing to a perception that participation is expensive.
• Perceived additional risk: Investors associate participation with added governance layers, increasing perceived project risk.
• Capacity and capability gaps: Many First Nations groups have not yet developed the capability and resources to engage effectively, while some developers lack the experience or skills to build robust partnerships.
• Legacy of mistrust: Australia’s colonial history of inadequate consultation and adversarial relationships has led many First Nations groups to approach projects with concerns about fairness and informed consent.

First mover opportunities

Early movers can set the standard. The Yindjibarndi Renewable Energy Project in Western Australia demonstrates the potential. The project is jointly owned by ACEN Renewables (75%) and the Yindjibarndi Aboriginal Corporation (25%), with Stage 1 comprising 400MW of solar generation, options for battery storage and 300MW of wind generation capacity. The initial stage alone represents an investment of more than AU$1 billion.

Embedded within the project’s commercial framework are clear commitments to First Nations participation: Yindjibarndi approval is required for all proposed project sites; the Corporation must hold equity of 25% to 50% in all projects; Yindjibarndi-owned businesses receive preferred contracting opportunities; and there are dedicated training and employment pathways for Yindjibarndi people.

Our interviews with both project owners revealed a range of investor benefits already being realised. ACEN Renewables highlighted speed to market, improved offtake terms, faster land access that reduces project delays and risks, and a reputational uplift that enhances brand value and increases secondary market appeal.

The Yindjibarndi Aboriginal Corporation emphasised that Indigenous Land Use Agreements and environmental approvals were completed significantly faster than comparable projects, enabled by the strong equity partnership and broad First Nations support. In addition, the project has unlocked strong relationships with a local workforce.

Time to act

Australia’s clean energy transition is a complex undertaking – technically, financially and socially – but it also presents an opportunity for investors and policymakers to redefine success. We can build a system that delivers affordable, reliable, clean energy while recognising the rights, interests and potential of First Nations peoples.