According to the National Environmental Law Association (NELA) none of Australia’s big four banks are not interested in the conservative Liberal-National government Direct Action climate plan.
NELA says the banks are not likely to take part in the Direct Action Emissions Reduction Fund due to too-short five-year contracts being offered by the government.
According to the Guardian Australia newspaper, NELA in a submission to the government’s Direct Action policy said the contract length would be a “significant inhibitor” to ERF participation.
Business also is sceptical about participation in the ERF because of the problem with the short –term nature of the contracts.
“In particular, NELA is aware that none of the big four banks are likely to be willing to offer project finance for ERF projects, unless a longer contract term is available,” the association said in its submission, according to Guardian Australia.
That opinion is further supported by the Clean Energy Finance Corporation (CEFC) in its submission.
Meanwhile, the Business Council of Australia has also expressed concern at the five-year contract proposal, saying it was “of concern” as it could make more expensive contracts for five year-plus projects.
The government’s new emissions reduction fund (ERF) is supposed to start buying greenhouse abatement from July through competitive tenders that offer five-year grants to companies and organisations that reduce emissions.
Guardian Australia understands some in the government argued the fund should offer only three-year contracts, as the coalition has announced specific funding for only the first three years.
A green paper, released late last year, said contracts would be for five years.
The government has said the emissions reduction fund will run from 1 July 2014 to 2020, but has specified only the initial allocations for the first three years, of $300m, $500m and $750m.
NELA said if the government insisted on keeping the five-year contract limit it would need to allow businesses other ways of finding funding, for example through the CEFC.
However, the government claims the CEFC is a green slush fund and has been trying to pass legislation to abolish the corporation, but Labor and the Australian Greens Party have blocked the moves in the upper house Se
