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Clean Energy fund keeps investing despite being on chopping block

The Clean Energy Finance Corp has made new investments exceeding $50 million, despite on-going efforts by the Abbott government to axe the fund.

The new outlays include a $20 million deal announced on Wednesday to invest in new biogas projects with Quantum Power, which will contribute a similar amount.

Under the deal, Quantum will supply food processors and other agribusinesses in all five mainland states with energy generated from organic waste, reducing the need for grid power and cutting costs.

The deals, along with others expected to be unveiled over the next week or so, will bring the fund’s total investments to about $590 million compared with $536 million towards the end of 2013.

The Coalition has dubbed the CEFC a “giant green hedge fund” that provides unnecessary competition for the private sector. 

Supporters of the $10 billion fund, which was set up by the Gillard government as part of its clean energy package, note that private banks and other firms have spent three dollars for each dollar invested by the fund, for a total of more than $2.2 billion since its inception last July.

The investments, which include about half going to energy efficiency projects, have saved almost 4 million tonnes of carbon emissions at a negative-cost of $2.40 per tonne, the fund estimates.

Pipeline of projects

As of February 20, the CEFC was in active discussions with 34 project proponents seeking finance for more than $1.2 billion. All up, the projects would be worth more than $3 billion, the fund said.

The CEFC is also considering proposals from more than 150 proponents seeking CEFC finance for more than $4.3 billion, with total project costs exceeding $11.8 billion.

The bill to abolish the fund has already been defeated once in the Senate by Labor and the Greens. Along with the Climate Change Authority - which this week survived a second vote in the Senate - the CEFC is hoping for support from the Palmer United Party and other independent senators in the new Senate to avoid its abolition.

The Quantum Power deal will finance a series of projects, most of which are worth between $2 million and $4 million.

Quantum will build, own, operate and maintain the biogas plants “leaving businesses free to keep focused on their core operations”, said Oliver Yates, chief executive of the CEFC.

Under the current legislation, the fund is required to invest $2 billion a year for five years.

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