CEFC – convinced about spending Other People’s Money

Psst – wanna “borrow” a couple of $billion?
I don’t need any security and it’s virtually interest free.
And the best bit is that it belongs to Australian taxpayers.

The Coalition are moving full-steam ahead to scrap one of the saddest subsidy sidelines a Commonwealth Government ever got involved in.

Clean Energy ‘unconvincing’ says Coalition
Australian Financial Review
Phillip Coorey and Angela Macdonald-Smith
6 December 2013

The federal government has rejected arguments by Clean Energy Finance Corporation chairwoman Jillian Broadbent that her organisation is making money, cutting emissions and fulfilling a role that the private sector could not.

Assistant Treasurer Arthur Sinodinos said he was unconvinced the CEFC’s function could not be replicated by the private sector while Environment Minister Greg Hunt disputed the worthiness of its investments.

“Our policy remains unchanged,” he told The Australian Financial Review of the plans to abolish the CEFC along with the carbon tax and other associated measures.

“The CEFC is borrowing $10 billion of taxpayers’ money to spend on speculative ventures and unjustified investments such as a wind farm that has already been built,” he said.

Mr Hunt was alluding to the CEFC contributing $50 million as part of a debt package to refinance a 50 per cent stake in the Macarthur Wind Farm in south-western Victoria, the largest in the southern hemisphere.

The CEFC argued the refinancing prompted six other syndicated owners, all banks, to provide market liquidity for a total of $529 million.

The government’s plans to abolish the CEFC are in trouble as Labor, the Greens and independent senators Nick Xenophon and John Madigan opposed.

The CEFC uses revenue raised by the carbon tax to provide loans for clean energy and energy efficiency projects. Ms Broadbent made a strong case to retain it before a Senate Committee last week, saying it was making a return to taxpayers and funding projects which would account for about half the 2020 emissions reduction target of 5 per cent. Broadbent assures rigour of ventures

On Thursday, she told the ABC the government should rethink its plans to abolish the body because the private sector could not fulfil its role.

“Being a catalyst and a concentrated area of focus in analysing the risk and understanding these projects, you’re able to persuade the banks to join you,” Ms Broadbent said.

“We have a very commercial group of executives and a very commercial board so of the seven people on the board, three of them have been on ­committees of major financial institutions. They’re not investing in speculative ventures here, they’re going through a lot of rigour to ensure the ventures are sound and the investments are performing.”

Senator Sinodinos said while he was prepared to “look again” at the CEFC’s annual report, the government would not change its mind.

Grattan Institute’s energy program director Tony Wood said “if all the CEFC is doing is providing cheaper debt funding for either a new project or a refinancing of an existing project you have to wonder whether that’s a valid expenditure of public funds”.

“The fact you can take effectively cheap debt, lend it and make money is not arguable. The point is, is it ­appropriate for them to be effectively competing in the market?

“The Macarthur wind farm ­refinancing would be one of the ones that would seem to at least question whether or not this is an appropriate use of public funding.”
Australian Financial Review

Buying a wind farm that’s already been built – sure, seems legit!

The CEFC is the ONLY line of credit available to Australian wind weasels now.  Shut it down and the whole scam will die of financial “malnutrition”.

Real banks have stopped lending and STT hears that a number of them are looking to call-in existing loans – Infigen’s financier, among them.

Australian banks have been caught before in great Aussie scams like the Managed Investment Schemes of the 1990s.  Like the current wind power rort, those schemes were the result of a misguided Government policy which was open to rorting and abuse. And just like the great wind power fraud the MIS scam was economically unsustainable from the word go.

When the MIS house of cards collapsed – and the companies that were in on it all went belly up – a lot of “mum and dad” investors lost their shirts and banks took a belting.  You remember – Tasmanian Blue Gum Plantations, Olive Groves and Corporate scale vineyards.

With that in mind, STT readers might raise an eyebrow at the suggestion that John “Marshall” Madigan and SA’s favourite Greek, Nick Xenophon are opposed to scrapping the CEFC.

SA’s favourite Greek is in the one in the mask.

STT hears that Nick and John are looking to extract some major policy concessions from the Coalition and are using their current stance on the CEFC as a way of drawing political “blood”, so to speak. Including getting their way on key pieces of legislation to curb outrageous wind weasel conduct at wind factories all over the Country.

“Macca” has sought to water-down the Draft Excessive Noise Bill promoted by Madigan and Xenophon that would bring some reason and sanity back to controlling noise from giant fans by linking breaches of a 10dB(A) above background limit to suspension of the operator’s entitlement to receive RECs.  Current state noise guidelines set an effective limit of 25dB(A) above background – the limit is 40dB(A) but night-time background levels often fall below 15dB(A). No wonder the neighbours pack up and leave.

And Macca’s also been fluffing around behind the scenes trying to avoid the implementation of the Senate recommendations (from July 2011) requiring a complete and truly independent study into the known and obvious impact that noise from giant fans has on neighbours’ sleep and health.  Just before he retired from office Alby Schultz went ballistic at Macca when he heard how Macca was trying to stymie further amendments that would see that work done at wind weasel expense.  We covered some of Alby’s outrage in this post.

When we talk about “independent” studies we’re not talking about efforts like the rotten little whitewash carried out by SA’s EPA at Waterloo, but one involving competent acoustic engineers (not clowns that stick their microphones under massive gum trees to deliberately “mask” turbine noise) and real health professionals (not tobacco advertising gurus).

In upcoming posts we’ll be looking at how the EPA pulled its punches at Waterloo from the beginning, how it used its equipment in a way designed to miss the problem; and how inconvenient data has just gone “missing”.

SA’s EPA studying the horrors of gum tree noise.