‘Green Bank’ Faces The Axe After Vote Down Under
The Coalition has vowed to axe the Green Investment Bank if it wins the federal election, saying it is backing speculative ventures with borrowed money, which the private sector would not support.
Steve Garner says he was close to letting go 75 workers from his manufacturing plant when he was thrown a lifeline.
Mr Garner’s company, Keppel Prince, is one of a handful of Australian firms specialising in building components for wind turbines. Through a deal with the Clean Energy Finance Corporation, it landed a contract to build 51 towers for the $280 million Taralga wind farm, near Goulburn, in NSW.
”We were not going to be the successful builder of these towers, Chinese imported towers were cheaper than us,” said Mr Garner, whose firm is based in Portland, Victoria. ”If we didn’t get that Taralga job we would have just turned our toes up and said that’s enough.”
Mr Garner said the intervention of the government-owned corporation was the reason the firm won the work. All up, the Clean Energy Finance Corporation provided the project $37.5 million in debt for the construction and operation of the 107-megawatt wind farm. Other partners were ANZ, EKF, Santander, and CBD Energy.
Since its creation the $10 billion bank has invested close to $800 million in renewables and energy-efficiency projects across the country. Projects include $60 million for a solar farm in Moree and $75 million for plants capturing waste coal mine and landfill gas and turning it into power. But its existence is seriously contested.
Tony Wood, energy program director at think tank the Grattan Institute, said the corporation to date had done little but provide cheap financing to projects, meaning it was just competing with existing market players.
”If the government is going to intervene in the market you need to have a clear rationale and I’m not sure they have made a clear case,” he said. Mr Wood said the corporation’s energy-efficiency work was worthy but did not require $10 billion.
The Coalition has vowed to axe the corporation if it wins the federal election, saying it is backing speculative ventures with borrowed money, which the private sector would not support.
”Why would you pay more than you had to for renewable energy – it’s a wacky idea,” said opposition climate spokesman Greg Hunt.
On the first day of the election campaign Tony Abbott wrote to the corporation’s chairman, Jillian Broadbent, to reiterate his government would close it down. It followed similar letters from other Coalition frontbenchers in recent months threatening not to honour contracts signed by the corporation.
On Monday, Fairfax Media reported that banks and other major investors were expecting about $4 billion to be sucked from the renewable energy sector as a result of regulatory uncertainty and the likelihood of lower returns under a Coalition government.