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Australia’s government-run Clean Energy Finance Corporation (CEFC) is to lead the funding for the country’s largest integrated off-grid solar system.

In a week in which the CEFC has been controversially ordered not to finance wind farms or small solar projects, in favour of large-scale solar operations by Tony Abbott’s Liberal government, the organisation will provide A$15mn in debt financing for the system, which will power a copper mine in Western Australia.

The remainder of the A$40mn will come in equity financing from the Australian Renewable Energy Agency (Arena) and a further equity injection by the solar facility’s owner Neoen, a French company. The 10.6MW plant will cover 20 hectares and comprise some 34,080 panels, with all the power going towards the Degrussa Copper mine, owned by Sandfire Resources, an Australian copper producer.

This is a government which supports renewables, but obviously we want to support renewables at the same time as reducing the upward pressure on power prices. Tony Abbott

Earlier this week the Australian government was accused of “revenge politics” by the head of the Australian Solar Council John Grimes, after he annulled CEFC’s mandate to finance small-scale solar projects generating less than 100KW of power. This would rule out funding for most domestic solar panels, or most rooftop panels.

The Australian Prime Minister has spoken of his desire to “abolish the CEFC” because its projects don’t “stack up economically”. Abbott said: “This is a government which supports renewables, but obviously we want to support renewables at the same time as reducing the upward pressure on power prices. We want to keep power prices as low as possible, consistent with a strong renewables sector.”

The move to scrap funding for small-scale solar projects followed Abbott’s move to scrap all funding for wind power last week, in a pair of moves widely perceived as being intended to gradually do away with the A$10bn organisation.

The Sandfire project will begin construction in late-July and will be located 900km away from Perth in one of Australia’s most remote areas. It will be one of the largest such facilities of its kind in the world. The company itself will contribute less than A$1mn of its own capital to the project, a statement on its website says.

However, Sandfire will purchase the solar power at a fixed rate which is lower than the historical average for diesel-generated power, reducing the mine’s CO2 emissions by around 12,000 tonnes per year.

The company’s managing director Karl Simich said: “We identified some time ago that solar power presented an exciting opportunity for us to participate in a low-risk renewable energy initiative at DeGrussa and we have no doubt that this project has the potential to be an Australian and possibly a world first – establishing DeGrussa as a reference site for the use of off-grid solar and battery storage technology in the mining industry.

“I would like to take this opportunity to acknowledge the hard work that has been put into this project over the past few months by all of the consortium members and, on our side, by our operations and commercial teams. We are very much looking forward to this exciting new addition to our mine site as it is progressively constructed over the second half of this year.”