Australian Prime Minister Proposes $10 Billion Green Fund

Australian Prime Minister Anthony Albanese has introduced legislation to establish a $10.26 billion (A$15 billion) green fund that would invest in several key areas of the country’s economy. [Source]

The proposed National Reconstruction Fund is modeled after the Clean Energy Finance Corporation, an Australian government-owned green bank that was established a decade ago “to facilitate increased flows of finance into the clean energy sector.”

The proposed fund would invest up to A$3 billion in renewable energy and low-emissions technologies, such as wind turbine components and battery and solar-panel production. Other prospective investments include up to A$1.5 billion in medical manufacturing, A$1 billion in value-adding in resources, A$1 billion for critical technologies, A$1 billion for advanced manufacturing and A$500 million for value-adding in agriculture, forestry, fisheries, food and fiber.

The fund would also be required to generate a positive return across its investment portfolio and will not provide grants. It is intended to help attract and secure funding from private-sector investors.

The Albanese administration is seeking input on the fund and has issued a consultation paper to help define the priority areas of the Australian economy. It also said the fund will be administered by an independent board appointed by the minister for industry and science and the minister for finance. Staying “at arm’s length,” the Australian government would provide guidance on expectations and policy priorities through a legislative instrument and an investment mandate.

If Australia’s parliament passes the legislation, a board will be established to make independent investment decisions and manage the fund’s investment portfolio. The government said it will also develop co-investment plans that are expected to be released by the end of 2023.

“The National Reconstruction Fund will help Australia capture the opportunities of today and tomorrow, building on our natural and competitive strengths to create a future made in Australia,” Albanese said in a statement. “It will help create secure local jobs, boost sovereign capability and diversify our nation’s industry and economy.”