Executive summary

Australia’s energy systems are undergoing a significant transformation, requiring investment in essential energy infrastructure estimated to be worth over $140 billion by 2050. This energy transition offers a major opportunity for cooperation and mutual financial benefit for investors and First Nations groups. It is estimated that 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 communities have rights, interests, and aspirations. The report identifies five significant quantifiable benefits of increased participation: quicker project development cycles, greater access to capital at potentially lower costs, preference amongst offtake parties, secondary market premium valuations, and local workforce benefits.

Introduction

Like many countries around the globe, Australia is embarking on a clean energy transition with a target of net zero emissions by 2050. To contribute to this target, the Australian Energy Market Operator (AEMO) has estimated the need for a six-fold increase in the capacity of utility-scale renewable energy, growing from 21GW to 127GW, and the construction of 10,000km of new transmission lines. This portfolio of projects will require hundreds of billions of dollars of investment. Despite a strategic desire for partnering, First Nations involvement in Australia has been largely consultative in nature, with minimal financial benefits achieved for investors or Indigenous groups to date. Currently, there are no operational utility-scale clean energy projects in Australia with First Nations equity participation, though over 20 project partnerships have been announced.

First Nations participation in clean energy projects in Australia

First Nations participation exists on a spectrum that ranges from basic consultation to service provision and full ownership. To date, investor support for First Nations involvement has often been reactive to land tenure requirements rather than focused on mutual benefits. The report highlights several real and perceived barriers that prevent benefits from being realised by both parties. These include information barriers regarding financial benefits, uncertain valuation of participation due to opaque markets, and perceived high transaction costs for early movers. Investors also often perceive an increase in risk when adding new parties and governance structures. Furthermore, a lack of capacity and capability on both sides—developers and First Nations groups—can impede meaningful engagement. Historical context and mistrust arising from previous infrastructure and mining projects also play a significant role in limiting current participation rates, which currently represent less than 1% of clean energy projects in Australia.

Investor benefits of First Nations participation in clean energy projects

The research details five core investor benefits that deliver material value across the project life cycle. Firstly, a quicker project development cycle is achieved through broader community support and prioritisation by planning authorities. Leading or co-designing cultural heritage approvals can decrease complexity and reduce the risk of disputes. Secondly, participation increases access to capital and can lower its cost. Socially responsible projects attract broader pools of capital, and schemes like the Commonwealth’s Capacity Investment Scheme (CIS) include merit criteria for First Nations engagement activities. Thirdly, offtake parties increasingly prefer projects with Indigenous involvement, allowing developers to negotiate improved commercial terms in a competitive market. Fourthly, projects can achieve a secondary market premium valuation due to reputational and branding implications. Finally, partnering with local groups provides access to a local workforce, which can optimise construction and management costs in remote locations by reducing reliance on fly-in fly-out labour.

Beyond these, the report mentions nascent benefits such as the First Nations Certificate of Origin (FNCO). This proposed market-based instrument is designed to reward verified participation in clean energy generation, potentially increasing per-MWh project revenue. Knowledge sharing and the building of trusted relationships also pave the way for easier access to land and a capable workforce for future project pursuits, helping investors develop a common interest in long-term success.

Call to action

To unlock these investor benefits and support the burgeoning Indigenous economy, the report suggests a call to action focused on three main areas. Investors should raise awareness of available tools and resources, such as the First Nations Clean Energy Network’s Building Capacity of Proponent toolkit and the Indigenous Engagement Strategy Toolkit. Secondly, stakeholders should review national and international case studies to understand various participation models. Finally, investors must acknowledge that while early movers may incur higher costs to establish workable legal and commercial models, these transaction costs will reduce rapidly as transparent models emerge and the benefits of increased partnering are realised across the industry.

Appendix case studies detailed list – international

The report provides an extensive list of international projects with First Nations equity, primarily in Canada, New Zealand, and Scotland. In Canada, approximately 20% of operational clean energy projects involve First Nations ownership. Examples include the China Creek Hydro Plant, which secured an additional $2 million in government funding due to First Nations ownership, and the McLean’s Mountain Wind Farm, a 50% equity partnership. In New Zealand, the Mōkai geothermal energy field and the Nga Awa Purua Geothermal Power Station demonstrate how First Nations ownership can lead to strong brand recognition and long-term lease arrangements for geothermal resources. These international models provide real-life examples of how barriers can be addressed to benefit both investors and Indigenous peoples through ecological knowledge sharing and secure land access.