$10bn for clean energy to flow despite poll
6 Feb 2013
Marcus Priest, AFR
The Gillard government's $10 billion clean energy fund has rejected an opposition call to hold off investing before the September federal election, with the fund saying it has been in talks with banks interested in projects and is set to start investing from July 2.
Opposition finance spokesman Andrew Robb said earlier that given the election date had been announced, the government was "effectively" in caretaker mode and it had become inappropriate to give out major funding in advance of poll day.
But Clean Energy Finance Corporation chief executive Oliver Yates told The Australian Financial Review on Tuesday he was legally obliged to start investing from July.
"I have legislation I am obligated to operate under," Mr Yates, a former Macquarie Bank executive, said. "That act means I will be investing when I have available money and I will invest during the election, during the caretaker period, after the election and until such time as I am effectively able to not continue performing my obligations," Mr Yates said.
He was backed by new Attorney-General Mark Dreyfus. Mr Yates revealed there were already projects identified as suitable for investment from July 2. A chief investment officer will be appointed next month and projects will be assessed and loan documentation prepared before that date.
"There are a number of firm proposals that people have put on the table and they are predominantly coming from some of the banking groups," Mr Yates said. "These are real projects that existing financiers are working on trying to work out how they get funded, over the line and into operation ... energy efficiency , wind, solar and bio-mass projects. They may have a problem getting a power purchase agreement or there's a renewable energy target risk or they are unable to get a loan for [a term of] more than 10 years."
But Mr Robb called the $10 billion fund "effectively a slush fund which will be devoted to risky clean energy projects that the private sector wouldn't touch with a barge pole".
"We are being totally upfront about the CEFC. We will abolish this fund because there has been enough waste, there has been enough borrowing and it has to stop," he said.
Mr Dreyfus said the opposition was disregarding long-standing parliamentary practice. According to the Prime Minister and Cabinet handbook, the caretaker convention "begins at the time the House of Representatives is dissolved".
"This is an attempt to disrupt the government of our country," Mr Dreyfus said.
Investor Group on Climate Change chief executive Nathan Fabian said activity in the market had grown substantially since the CEFC began operations. "Investors see the CEFC as a reliable counterparty and we assume that once a contract is signed it can't be revoked," Mr Fabian said. Legislation to establish the CEFC was passed by Parliament last year based on a report by an expert panel headed by Reserve Bank board member Jillian Broadbent.