capacity investment scheme 11: One instrument, a range of circumstances
The CIS Set Aside qualifies bids on 5 per cent equity or equivalent revenue sharing, a structure that suits some First Nations organisations well and sits awkwardly with others, which raises the question of whether the qualifying test could be broadened so that more communities are able to participate on terms matched to their own capability.
What Tender 11 does
Bids for CIS Tender 11 opened on 27 August 2026 and close at 5pm AWST on 22 October, with outcomes expected in March 2027, and the tender seeks around 1.8 GW of renewable generation into Western Australia's Wholesale Electricity Market. Government has indicated it is likely to be the final CIS tender in the WEM.
Within it sits a First Nations Equity and Revenue Sharing Set Aside, available to projects committing to at least 5 per cent equity, revenue sharing equivalent to 5 per cent equity, or a combination reaching the same economic interest. That represents 10 per cent of the tender, the same proportion reserved in the Tender 9 pilot, and nomination remains optional, with bids that do not qualify assessed under the standard process against the same eligibility and merit criteria.
Why the design settled here
DCCEEW's stated rationale is that the Set Aside promotes leading practice engagement, co-design and benefit sharing in support of the First Nations Clean Energy Strategy, and that equity and revenue sharing have the potential to deliver lasting economic benefit from the transition.
Our own reading, drawn from practice rather than from any published statement, is that these two instruments were chosen because they solve an enforceability problem that the sector has struggled with for a long time. Employment targets, training commitments and discretionary community funds have proved difficult to make binding, difficult to measure, and vulnerable to a change in project ownership or personnel, whereas equity and revenue share are contractual, quantifiable and capable of surviving a sale where they have been drafted for it. That is a real advance on where this sector sat a decade ago, and the question worth asking is not whether the instruments are sound but whether the policy objective and the instrument that tests for it are the same thing.
Access to capital, and the capacity to hold the agreement
A 5 per cent equity threshold assumes two things the tender neither tests for nor funds, which are, that a community can raise the money and then run the agreement for the life of the asset.
Raising the money can be harder for First Nations organisations than for a commercial co-investor. Reserves are usually committed elsewhere, and borrowing depends on security that many corporations cannot give, because native title rights cannot be mortgaged and land held under land rights regimes is generally inalienable. That leaves concessional finance where it can be obtained, or an arrangement in which the proponent funds the stake and recovers it from later distributions, which pushes real income well into the future. The demand also repeats, since cost overruns or refinancing can trigger further calls, and a shareholder who cannot meet them is diluted.
Running the agreement is a corporate function lasting decades, covering directors and their duties, tax, reporting, audit and a distributions policy, and it has to survive turnover in both staff and boards. It also raises a role question where the same corporation is both the native title party making heritage and access decisions and a shareholder in the project those decisions affect, which is workable with the right structuring but needs to be planned for rather than discovered later.
The instrument may also return relatively little for that effort at this size, because equity sits behind debt and carries the project risk, while a holding of 5 per cent may come with real governance limitations, so the influence that ownership implies depends heavily on what is negotiated into the project documents.
None of this is an argument against equity, and the organisations that have built the capability are putting it to good use. Capability is unevenly spread for reasons that have little to do with how capable or how willing a community is, so a Set Aside that can only be met through equity or its revenue sharing equivalent will tend to reach the groups already set up for it and miss the rest.
Broadening the qualifying test
The Tender 9 and 10 pilots are to be reviewed following those tenders with adjustments possible in future rounds, and three options seem worth modelling at that point, each carrying a trade-off that would need to be weighed.
Letting the 5 per cent be delivered in whatever form suits the community. The rules currently recognise two ways of meeting the threshold, being equity and revenue sharing. A bid could instead qualify on a commitment to hand over 5 per cent of the project's value in whichever form the community chooses, which might be shares or a revenue share, but could equally be a payment for every megawatt hour generated, land payments above the market rate, guaranteed work for a community business, or a funded solar and battery system for the community itself. The cost is that bids become harder to compare against each other, and harder for the assessor to check that what is on offer really is worth 5 per cent.
Letting communities lock in the value now and choose the form later. To qualify today, the structure has to be settled before bids close, which forces a community to decide on a timetable set by the proponent and before anyone knows whether the project will win. A bid could instead qualify on an agreement that commits the proponent to 5 per cent of project value while leaving the community to decide how that value is delivered within a set period after the project has been awarded and financed. The cost is that government and lenders would not know the final shape of the arrangement at the point of award.
Funding participation capability rather than advice alone. The First Nations Clean Energy Advice Grants of $5,000 to $80,000 available through business.gov.au cover legal, financial, governance and commercial advice, but they are not designed to meet the standing cost of holding an equity position, and a facility that did so would make the choice between instruments a genuine one rather than a nominal one, at a fiscal cost that would need to be justified.
The Set Aside is an improvement on benefit commitments that were easy to make and hard to enforce, and it is working well for organisations that already hold the capital and the corporate capability to take a stake.
The difficulty is that when there is only one way to qualify, communities without the capital or the corporate set-up are left out, however much they want to take part and however much they have to offer. That has more to do with where a community is starting from than with anything about the community itself. Broadening the test so that 5 per cent of project value can be delivered in the form that aligns with the community aspirations and ability, allowing that form to be chosen after award rather than before the bid, and funding the cost of holding a stake rather than only the advice on taking one, would widen who can take part without lowering what gets committed.