Australia’s National Reconstruction Fund financing vehicle was approved on March 29 th with a A$15 billion Australian dollars (equivalent to $10 billion USD – but figures through the rest of this piece are in Australian dollars for convenience). The A$15 billion of government funding – A$5 billion now and the rest through to 2029 – applied via loans, equity investment and guarantees, is expected to catalyze an additional $30 billion from the private sector. In short this is the Australian response to the US Inflation Reduction Act. The seven ‘priority areas’ covered by the Fund are: renewable and low emission technology medical science transport, covering cars, shipbuilding and trains value-add in the agriculture, forestry and fisheries sectors value-add in resources, especially manufacturing downstream from mining defense capability enabling capabilities in robotics, FinTech, and AI In a separate statement, the government identified up to $3 billion for renewable and low emissions technologies, including manufacturing, The description of advanced manufacturing, which is to receive $1 billion, also mentions renewables and low-emissions technology. This makes renewables by far the largest tranche of this initiative, and that includes manufacturing of solar panels, wind turbines, electrolyzers, and batteries. Australia would need at least a couple of billion dollars in upfront investment to build production capacity to serve its domestic demand for renewable energy equipment, and the Fund does have that scale of funding. Prime Minister Albanese has specifically stated that Australia can and should manufacture such things while speaking about the new Fund. But in the absence of a serious drive to exclude Chinese products, Australian manufacturing would have to be specialized or cover only the furthest downstream elements of the supply chain – for example the country still has one surviving solar module maker, which uses cells from Chinese manufacturers. Further policies on trade and local content requirements would be needed to turn this Inflation Reduction Act-style scheme into a reshoring of the solar, wind or battery supply chains in the manner of India or the US. Considering that, and the absence of transmission from this new Fund, it is project development and electrification which will be the main beneficiaries in the renewable energy sphere. Wind and solar are significantly constrained by space on the grid more than finance, while batteries if anything benefit from the grid’s issues, leaving green hydrogen and ammonia projects as the developments most boosted by government spending, pushing them over the line to commercialization faster. The legislation is modelled on the activities of the government-owned Clean Energy Finance Corporation, which was founded in 2012 towards the tail-end of the previous Labor administration. By the end of 2022, the CEFC had invested $12 billion directly, catalyzing a further $37 billion of private investment, having survived the intervening Liberal governments unscathed. According to the Labor Party, the car industry for one did not escape unscathed, and Australia is now the least self-sufficient OECD country for manufacturing – which sits at below 6% of GDP. The last of the three recent Liberal governments approved a national manufacturing fund of $1.3 billion. Transmission, notably absent from the new National Reconstruction Fund, was already addressed by the $20 billion Rewiring the Nation scheme – which is going to be executed via the CEFC.