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The Government has bankrolled a $100 million green investment fund which aims to invest with businesses to reduce emissions while also helping them make a profit.
Climate Minister James Shaw said an increasing number of investors were looking to fund clean, sustainable ventures. The Government’s $100 million start-up capital injection will help achieve this, he said.
“New Zealand faces a big job in upgrading our economy and infrastructure. New Zealand Green Investment Finance will help deliver financial backing to help ensure that the upgrade is fit for purpose,” Mr Shaw said.
The fund was one of the conditions of the Labour/Greens confidence and supply agreement and $100 million was set aside for the project in the budget.
“This fund means the Government is bringing cash and know-how to the table to partner with business to deliver a clean, green future for everyone,” Prime Minister Jacinda Ardern said.
She added that is an important component of New Zealand’s plan to build a clean, sustainable, low-carbon economy that has both lower emissions and profitable enterprises.
The $100 million start-up capital will act as a bridge between investors and key industries and sectors, as well as identifying low emission projects ready for upscaling, commercialisation and use.
Shaw said returns on the funding projects over the coming years are expected to pay back the Government’s initial investment.
It is expected the fund would stand on its own commercial footing in subsequent years.
The fund was established because new investment markets take time to develop and investors rely on good information to assess viability and risk, Shaw said.
They also need financial products which are structured in a way that fits the market.
As a result, there is limited activity initiating and funding low emissions or ‘green’ investment deals in New Zealand.
Shaw said the Green Investment Fund would help fill this gap.
Fletchers, Seeka and NZ Superfund board member Cecilia Tarrant will chair the fund and David Woods and Rob Fenwick will be on its board.