Canberra loans California’s PsiQuantum at least $200m

PsiQuantum has been loaned at least $200 million by the Albanese government to stage its attempts to build the world’s first commercial quantum computer in Brisbane, Budget documents reveal.

Tuesday’s Budget also show the government has set aside an additional $28 million to supervise its part of the $940 million joint investment in the Californian-based firm founded by two Australians over the next 11 years.

It contains no other new funding for the local quantum sector, despite calls from Australian quantum companies for the government to back a national testbed like the United Kingdom, France and Germany have done.

Image: PsiQuantum

New details of the composition of the financing package come two weeks after the federal and Queensland governments announced the investment to secure the location of PsiQuantum’s Asia-Pacific headquarters.

PsiQuantum, which says it will add more than 400 local employees as a result of the investment, plans to deliver its first commercial quantum computer in less than six years using a photonics-based approach.

But both the federal and Queensland governments have declined to provide further details of the commercial agreement with the company since the investment, which followed a secret expressions of interest process that insider claim was structured in a way that favoured PsiQuantum.

It has also since emerged that the Queensland government engaged Deloitte as part of its due diligence on the company six months before the federal EoI process took place, and that expert advisors were sidelined.

Budget documents show that $466.4 million financial package of equity and loans will be provided to PsiQuantum through Export Finance Australia, with no mention of any grant funding within the financing package.

The National Interest Account – the scope of which will also be expanded as a result of the Future Made in Australia program to “provide additional avenues for financial projects in the national interest” – has been used to deliver the funding.

The loan component is “estimated to exceed $200 million at 30 June 2024”, although the full amount is commercial-in-confidence, making it the only federal government loan to be listed this way.

Other details of the loan, including the interest rate and term, are also commercial-in-confidence. Other loans have also had this information redacted, according to Budget documents.

In addition to the $466.4 million in equity and grants for PsiQuantum, the federal government will also spend $27.7 million over 11 years to manage and oversee the investment from 2023-24.

The funding will be split between the Department of Finance, the Department of Foreign Affairs and Trade, which houses Export Finance Australia, and the Department of Industry, Science and Resources.

The Future Made in Australia National Interest Framework, released alongside the Budget on Tuesday, indicates the government applied an “integrated national interest model” to evaluate its investment in PsiQuantum.

“The government applies an integrated national interest model to evaluate economic security, national security and social cohesion implication and makes targeted interventions when required,” the document states.

“This ensure that Australia’s development of, access to and choice in technologies are secure, reliable and cost effective. The government’s recent investment in quantum computing are an example of this approach in action.”

Do you know more? Contact James Riley via Email.

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