Australia's Clean Energy Finance Corporation has launched its first investment, committing to a joint $100 million energy-efficiency loan program with the Commonwealth Bank.
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The deal sets up a stand-off with the Coalition, which has vowed not to honour any contracts signed by the $10 billion corporation if it wins office later in the year.
Chief executive Oliver Yates (below) said on Friday the corporation would co-finance loans for medium-size businesses for energy-efficiency projects such as energy-saving lighting, solar panels, and co-generation and tri-generation plants.
The corporation and the Commonwealth Bank will each chip in $50 million to the program, which will hand out loans from $500,000 to $5 million.
It builds on an existing scheme put in place by another government agency, Low Carbon Australia - which has been folded into the clean energy corporation - which has so far delivered $10.2 million to projects in manufacturing firms.
The corporation is also working on larger deals. It is reportedly negotiating to help New Zealand company Meridian Energy increase its debt in the massive Victorian Macarthur wind farm with a $100 million-plus loan, before it sells its share in the project.
The Coalition has vowed to axe the corporation along with the carbon price. It has written to the corporation saying any contracts it signs before the election would not be honoured by the Coalition if it forms government.
Opposition climate action spokesman Greg Hunt said: ''Our position has been that we will not claw back funds advanced before the writs are issued [for the election], but we will not advance any further funds if we form government.''
The corporation could face other funding pressures. Newly reinstalled Prime Minister Kevin Rudd has mooted moving quicker to an emissions trading scheme from the current carbon tax, which would dramatically reduce the revenue the scheme brings in. The corporation is slated to get $2 billion in annual carbon price revenue for five years, which could come under pressure under an earlier move to a trading scheme.
This comes as prominent Australians have signed an open letter to the head of Australia's big four banks calling on them to divest investments in fossil fuel projects to ensure global warming is not pushed past safe levels.
The group asks the banks to place a prohibition on loans for new fossil-fuel projects and associated infrastructure, and for them to sell down stakes in coal and gas companies.
