Prime Minister Anthony Albanese has labelled a multi-billion renewable energy initiative as a “nation-building project”, promising it would help to lower power prices.

The government announced $1.5 billion would go towards Marinus Link, a power project linking Tasmania and Victoria, as well as other renewable initiatives such as offshore wind.

Funding for the Marinus Link will include money from the federal, Victorian and Tasmanian governments, with the prime minister saying it will lead to 1400 construction jobs as well as 1120 other jobs associated with the project.

Prime Minister Albanese said the projects would be the biggest energy investment since the Snowy Hydro scheme was unveiled.

“(It’s) a good idea which has been through all of the business cases (and) will now become a reality,” he told ABC Radio on Wednesday.

“It’s a very exciting announcement for Tasmania, but indeed it’s a nation-building project as well.”

Marinus Link is expected to cost $3.8 billion and the prime minister said any budget blowouts were unlikely.

“This project has been studied to death,” Prime Minister Albanese said.

“($3.8 billion) is the estimated cost, but this is an investment, it’s important that this project will be owned by the three governments of the Commonwealth, of Tasmania and Victoria – they should remain an asset.”

The governments are expected to contribute equally to the project, making up 20 per cent of the equity investment.

The remainder of the funding will come from a concessional loan through the Clean Energy Finance Corporation.

Government funding has also been secured for the Victoria-New South Wales interconnector project, which will get a $750 million concessional loan to make sure it is completed by 2028.

State and federal regulatory processes will also be coordinated to help get the offshore wind industry off the ground faster in Victoria.

Energy Minister Chris Bowen said increased action on renewables through large projects such as Marinus Link was essential.

“We have 86 months to 2030 to reduce our emissions … we are dealing with the implications of having four gigawatts of power leave our system in the last decade and only have one gigawatt come in,” Minister Bowen told ABC Radio on Wednesday.

“We’ve got to fix that, working in partnership with the states and territories and the private sector, and that’s exactly what we’re doing.”

Minister Bowen said the project, in planning for six years, would also allow for a boost to renewable energy in the jurisdictions.

“It means that Tasmania, which is currently 100 per cent renewable, will now have the opportunity to get to 200 per cent renewables,” he said.

“This is the equivalent of 140 million tonnes of CO2 coming out of the atmosphere by 2050, or … taking a million cars off the road.”

– AAP