The expansion of a solar farm at a remote Aboriginal community is in line to receive funding from a federal agency on the government chopping block.

A solar energy project in a remote Aboriginal community is the latest recipient of commonwealth funds from an agency which is on the federal government’s hit list.

The Australian Renewable Energy Agency (ARENA) will on Friday announce $4.6 million for the expansion of the Doomadgee solar farm in northwest Queensland.

The upgrade has the potential to generate enough energy to cover local needs, ARENA boss Ivor Frischknecht said.

“This ambitious project in the Gulf of Carpentaria will drastically reduce the Doomadgee community’s reliance on expensive diesel fuel and secure its future power production with renewable, reliable solar.”

The government announced in the May budget its intention to save $1.3 billion over five years by axing ARENA, which was created to fund renewable projects and drive relevant research and investment.

But the Senate has twice rejected a coalition attempt to repeal the legislation.