* Injects $2.3 billion cash for wind, hydro, district heat
* Will free $13.4 billion for investments -Norway government
* State-owned Statkraft seen as "engine" for energy future
(Adds CEO quotes, background, detail)
By Camilla Knudsen
OSLO, Nov 26 (Reuters) - Norway's government agreed on Friday to a big injection of funds into Statkraft so the state-owned electricity champion can invest some $13.4 billion in renewable energy projects.
The government said it planned to give Statkraft 14 billion Norwegian crowns ($2.3 billion) in new equity that will allow Europe's largest hydropower producer to invest more than five times that in new hydro capability, wind power and district heating projects.
"We've used a lot of time to make sure this (equity expansion) is safe and profitable," Trond Giske, Norway's minister of trade and industry, told a news conference.
"This is not spending -- it's an investment and we expect to make money."
He added that he saw Statkraft, which is fully owned by the Norwegian state, as an engine for promoting clean-energy alternatives in today's petroleum-based economy.
The capital expansion, which Statkraft will be able to leverage through bond issuances or other borrowing, will be subject to parliamentary approval in December.
"What Statkraft is doing by investing in renewable energy will be a contribution toward solving climate challenges," said Statkraft CEO Christian Rynning-Toennesen.
He told Reuters that in addition to updating hydropower infrastructure and embarking on wind projects in Norway, Statkraft will spread the benefits internationally.
"We will go forward with other projects in Sweden, Germany, England, Turkey and Albania," he said, "and in South America we have plans in Peru, Chile and possibly Brazil. In Asia we have plans in India, Nepal, Indonesia."
"This is financing for a focused strategy that includes all these elements. We will go forward with all this in parallel," he added.
Friday's decision concludes a process dating back to February 2009, when Statkraft's board of directors requested a strengthening of its equity.
In its announcement of the subsidy, the government said Statkraft has put aside previous ambitions to purchase additional regional power companies in Norway.
With more than 100 power plants in Norway, Sweden and Finland, Statkraft and its subsidiaries deliver electricity and heating to about 600,000 customers, generating sales of 26 billion Norwegian crowns ($4.24 billion) in 2009. (Writing by Walter Gibbs; Editing by Sue Thomas and Anthony Barker)