But the strategy appears to have upset the renewable energy industry, which accuses the coalition of raiding existing renewable energy funding for pet projects.

Prime Minister Malcolm Turnbull announced the new Sustainable Cities Investment Fund in Sydney today, redirecting money already within the Clean Energy Finance Corporation for projects in metropolitan areas.

Turnbull argues that cities must be on the "front line" of climate change action, given most Australians live in cities and most of the country's greenhouse gas emissions are produced there.

The new fund will invest in projects such as renewable energy plants and installations, improved transport management systems and the retrofitting of public housing estates to make them more energy efficient.

"These investments will drive new jobs and enterprise, reducing greenhouse emissions while making our cities more resilient, liveable and putting downward pressure on energy bills," the Coalition said in a statement.

The CEFC is a $10 billion investment pool established by the former Labor government to spark investment in renewable energy projects that are expected to deliver a financial return.

Industry and green groups say today’s move constitutes the third such “redirection” of CEFC funding, with $1 billion withdrawn for a loan scheme, and another $1 billion to improve the Great Barrier Reef, announced last week.

Green groups say the coalition has now slashed the CEFC’s budget by taking almost one third to fund “pet projects”

In a statement released this morning, the Australian Solar Council described the policy as yet another “attack” on existing renewables funding, and a continuation of the Coalition’s track record of “contempt” for renewable energy.

“The Turnbull government is again showing utter hypocrisy by raiding the Clean Energy Finance Corporation for its latest election stunt,” ASC CEO John Grimes said.

“This government has twice tried to axe the Clean Energy Finance Corporation. It’s tried to axe the Australian Renewable Energy Agency it’s taken the axe to the Renewable Energy Target and now it plans to slash $1.3 billion from ARENA.

“Today’s announcement is not new money. It is simply using the Clean Energy Finance Corporation as its slush fund.”

He said the ASX was calling on voters to put the Liberal Party last for the first time in its 50-year history.

The Australian Youth Climate Coalition has also criticised the new policy, describing it as “rebranding,” used to cover up a lack of ambition on global warming.

The ALP is going to the election with a pledge to drive investments in renewables, with plans for 50% of energy to come from wind, solar and hydro by 2030.

The election will be held on July 2.