RBA’s Guy Debelle joins Andrew Forrest’s green brigade at Fortescue Future Industries

The Reserve Bank heir apparent made the surprise move following a chat with an old uni friend, Andrew Hagger, boss of Andrew Forrest’s private investment arm Tattarang.

Reserve Bank deputy governor Guy Debelle: ‘There were a few sleepless nights.’ Picture: John Feder

It was Andrew Haggar – the former banking executive turned Andrew Forrest adviser – who was the first to raise with Guy Debelle the suggestion he should quit the Reserve Bank and take up with the mining billionaire.

Haggar and Debelle, who ends his time as deputy RBA chairman on Wednesday, had known each other since their time together at the University of Adelaide.

Hagger told him that Forrest’s Fortescue Metals had been looking for a new executive for its green energy arm, Fortescue Future Industries, as Michael Masterman was planning to step back from the role.

Hagger, a former chief executive of MLC and senior executive of the National Australia Bank, who has been working for Forrest over the past three years, knew his friend Debelle had a passion for climate change as well as a deep knowledge of financial markets from his years at the RBA.

“Andrew and I go back more than either of us would care to admit,” Debelle said on Thursday, after the surprise announcement that he would leave the RBA to take up his appointment as chief financial officer of FFI.

Debelle admits that Hagger’s suggestion, over their weekend phone chat – they could not meet in person because Hagger was stuck in Perth due to the state’s strict Covid-19 travel restrictions – was “a bit out of left field”.

As deputy RBA governor, Debelle would have been in line for the top job once Phil Lowe retired.

“I agonised over it a lot,” Debelle admitted over the decision to leave the bank. “There were a few sleepless nights. It was an important ­decision in my life which I had to give a lot of thought.”

But Debelle has had a long interest in climate change and saw Forrest’s FFI, which was established in 2020 to focus on building green energy projects, as a key Australian player in tackling the issue. “I have had an interest in climate change,” he said.

“The evidence has been pretty incontrovertible for some time. Something needs to be done.

“If you look at which company has been doing the most in this area in Australia and has the capacity to deliver on its goals, then FFI is clearly the answer.”

Debelle had a few “virtual conversations” with Forrest and then met in person two weeks ago when Forrest was in Sydney, and he decided to make what will be one the biggest changes in his career. Debelle then told a surprised Lowe of his decision.

FFI is a fully owned subsidiary of Fortescue Metals. Its goal is to produce 15 million tonnes of green hydrogen a year by 2030 for global market distribution.

The company said Debelle’s appointment would help to “facilitate this goal while delivering value for shareholders and economic value for the communities where FFI operates”.

“Bringing someone in of Debelle’s economic credibility goes to the heart of our vision for FFI,” says Forrest, chairman of Fortescue Metals. “Not only are we committed to arresting climate change, we are also committed to creating economic growth, increasing jobs and growing our business profitably.

Debelle’s appointment is the latest in a series of high-profile moves by Forrest as he pushes ahead to transform Fortescue from an iron ore miner to a green energy and resources company.

Forrest has told Fortescue shareholders that FFI will be funded by 10 per cent of the after-tax profits of the iron ore miner but, after that, it will raise its own finance for specific projects.

Debelle’s role as chief financial officer means he will play a key role in raising the finance for FFI’s green energy projects.

Debelle does not have the traditional accounting background for a CFO but his role as deputy governor of the RBA – which he has held since 2016 – has seen him oversee the administrative operation of the bank, including its HR and internal finance and audits.

Debelle will be based in Sydney, initially working out of the office of iconic Australian clothing company R.M. Williams, which Tattarang bought recently.

He says fundraising will be a key part of his role. His new job, which begins in June, would involve “tapping into pools of finance … for FFI,” he adds.

It would see the Perth-based FFI have a broader footprint closer to the financial markets on the east coast. The “potential was there” for FFI to become self-financing. “It will be there and it should be,” Debelle said.

Forrest’s appointments to his FFI group, which is run by mining executive Julie Shuttleworth, include former prime minister Malcolm Turnbull as chair of the Australian arm of FFI, and former director general of the Office of National Intelligence, Nick Warner, as a special adviser.

Hagger was recruited by Forrest three years ago to run his investment and philanthropic arm, Tattarang, and has become a close Forrest adviser.

Forrest has also hired former South Australian premier Jay Weatherill to run his charitable arm focusing on early childhood education, Thrive by Five.

Forrest has pushed ahead with the expansion of FFI, signing up a series of hydrogen power deals in countries around the world over the past two years.

While its rapid expansion into the green energy sector has been criticised by some shareholders, FMG said its total shareholder base by number has more than doubled over the past year or so, as new investors came on to the register because of its credentials as a developer of green energy.

Debelle’s past experience with global organisations including the International Monetary Fund, the Bank for International Settlements, and the Treasury could come in useful if FFI seeks to draw on funding from the IMF or the World Bank to fund renewable energy projects in Africa and South America.

Fortescue investors will also be watching the next move by Masterman who has been one of the Fortescue chairman’s go-to executives since Forrest’s early days in the mining sector.

He was the chief financial officer at Anaconda Nickel under Forrest, and then played a role in the early days of Fortescue.

He rejoined the iron ore miner in 2010 to negotiate a deal that brought in Taiwanese steelmaker Formosa and China’s Baowu to partner with Fortescue in developing the Iron Bridge magnetite mine in the Pilbara.

Forrest said on Thursday his long-term lieutenant would retain a deal-making role within FFI and would help the company in “releasing the substantial unrealised value established by FFI’s Technology group”.