Oliver Yates, the new chief executive of the government's Clean Energy Finance Corporation, may not have an office yet, but he's already receiving informal proposals for his green fund's $10 billion.

"There are a lot of people who are keen to see the CEFC up and running, and are putting proposals forward in potential areas where we could participate and help them," the former Macquarie banker said.

Now in his second week at the helm, Mr Yates will use the next few months to land more permanent "digs" and build a team that can start selecting recipients of the fund's first loan tranche of $2 billion for the year beginning July 1, 2013.

"Prior to that date, we'd be hoping to create a solid pipeline of transactions," Mr Yates said.

Just what constitutes "solid" is likely to be closely scrutinised by the fund's opponents and supporters alike.

The CEFC's mandate is to operate at no cost to the taxpayer by generating a return that matches or exceeds the government's annual cost of funds of about 3.5 per cent.

"We have a clear obligation here to act commercially," he said. "There's no free money in this game."

Its funds – which fall outside the federal budget – are earmarked to support renewable energy technologies and projects that are close to commercial viability, but have been unable to secure longer-term private finance.

The global financial crisis "has caused issues for funding at long duration", he said. While banks are willing to back renewable energy projects that they are familiar with, such as some wind farms, less-established technologies such as tidal, wave and some forms of solar energy miss out.

Other projects, meanwhile, struggle to get long-term contracts to sell the power they produce, he said.

Renewable energy may receive about half the CEFC's finance, but energy-efficiency projects are likely to get the bulk of the remainder.

"It's the cheapest thing for people to do," Mr Yates said of energy efficiency.

One example is the difficultly local councils have switching to less energy-sapping street lighting. Councils pay the bills, but often don't control the lights, he said.

Matthew Macdougall, chief executive of Global Rental & Leasing, said his firm is "thrilled" by the existence of a much larger government agency to back energy productivity efforts.

"We think it's got enormous promise," he said. His firm today launched a Global Clean Energy Finance unit, backed in part by funds from Low Carbon Australia, a government body that will be rolled into the CEFC. The unit will provide finance for energy efficient equipment upgrades, such as for lighting and air-conditioning, costing $100,000 or more.

'Motivated lender'

Geoff Ward, chief executive of Geodynamics, a company seeking to tap geothermal power from hot rocks kilometres below the surface in South Australia's Cooper Basin, said the CEFC would be a "motivated lender" in providing funds and encouraging others to invest in renewable energy.

Mr Ward said his company, which has won $90 million in government grants, would expect to meet tough demands if it ever sought CEFC finance.

"We've got to demonstrate that we have a project that's been appropriately investigated and appraised, with the risk-management metrics and approaches you'd expect for any large resource and power development," he said.

Developers of nuclear energy or carbon capture and storage technologies need not apply - both were omitted from the CEFC's mandate.

The federal opposition, however, has dubbed the entire CEFC "a giant slush fund" has and vowed to scrap it along with the carbon tax should it win government.

"By its very nature (the fund) will be high-risk, irrespective of what systems are put in place," said Greg Hunt, the opposition's environment spokesman. "If the risk was low, they would be able to attract private finance."

Mr Hunt said he had "strong personal respect" for Mr Yates but the CEFC was basically flawed: "The Renewable Energy Target is already operating as a market mechanism to encourage investment in renewables and that should be allowed to operate without another $10 billion distorting that scheme."

Mr Yates hopes critics relent once they see the fund in action.

"I'm not expecting to go anywhere, and I'm not expecting anything to happen except for us to become an integral part of the industry."