US-based global investment management firm BlackRock is partnering with the New Zealand government to set up a $NZ2 billion fund to support the country’s efforts to become one of the first nations to reach 100% renewable energy.
The New Zealand Net Zero Fund will finance businesses investing in green technologies and green energy.
Prime minister Chris Hipkins said the fund would be the first of its kind for New Zealand and illustrated the huge economic potential for the country to become a climate leader.
New Zealand has set a goal of reaching 100% renewable energy by 2030.
“We can grow our economy while we lower emissions,” Hipkins said. “This fund is a massive opportunity for New Zealand innovators to develop and grow companies. I’m absolutely stoked about what this means for Kiwi ingenuity in renewable energy; it shows that our ambitious climate targets have the world’s attention, and that they are good for the climate, good for the economy, and will help create highly skilled jobs. “
BlackRock chief executive Larry Fink said, in a statement, that the fund would be the largest single-country low-carbon transition investment initiative his firm had created.
“It will enable New Zealand companies to access greater pools of capital to build out climate infrastructure across the country’s energy system including in wind power, solar power, battery storage, electric vehicle charging, and natural capital projects,” he said.
In New Zealand, he said, creating a more resilient power system was not just an ambition, the country was already working on making the change.
He believed New Zealand’s strategy could be a model for how to scale and implement a vision of private and public sectors working together to ensure a fair energy transition.
BlackRock’s head of Australia and New Zealand, Andrew Landman, said: “In New Zealand there is a clear preference to invest in a range of energy transition opportunities while facilitating delivery of the long-term private capital required to create a more secure, efficient and greener energy future for all New Zealanders.”
Hipkins said recent events, including Cyclone Gabrielle and the Auckland floods, were reminders that climate action needed accelerating.
“The fund will supercharge investments in clean technology that might otherwise not have happened,” he said. “This is a game changer for the cleantech sector and another example of the pragmatic and practical steps the government is taking to accelerate climate action while growing our economy.”
Energy and resources minister Megan Woods said the fund would accelerate New Zealand’s emissions reductions with a focus on reaching the 100% renewable energy goal.
“With record levels of renewable electricity generation in recent years, New Zealand is well-positioned to be one of the first countries in the world to deliver a fully renewable electricity system,” she said.
Investors in the green economy could see New Zealand’s potential and recognised the country’s commitments and goals, such as banning further offshore oil and gas exploration.
She said the government had already made major moves to support decarbonisation, such as a project at NZ Steel’s Glenbrook, Auckland, plant to introduce a $NZ300 million electric arc furnace to process recycled steel. The project is expected to reduce coal use at Glenbrook by half.
The New Zealand Net Zero Fund will seek investment from government instrumentalities, superannuation funds and private sector investment funds.
“This arrangement means we will get there faster, with opportunities for local investment in a low emissions economy,” Woods said. “That will be a significant selling point for New Zealand businesses as consumers demand more sustainable products and services.”