06 Dec 2018
Prime Minister Jacinda Ardern and Climate Minister James Shaw launched a $100 million green investment fund with the purpose of investing with businesses in order to decrease emissions and help them gain profit at the same time.
As the NZ Herald reports, the $100 million devoted to this project had been set aside in the budget, forming part of the Labour/Greens confidence and supply agreement.
Shaw credited the capital injection as an aid towards a growing number of investors who are eager to fund clean and sustainable projects.
"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," Shaw said.
At the fund’s launch, Shaw exemplified the fund’s capabilities by saying it could provide business borrowers with the opportunity to compensate energy augmentation investments straight to their energy bills through savings, adding that potential investors had expressed interest in the fund.
"This fund will bring financial and technical emissions reductions and expertise together with the sole aim of increasing investment in low emissions projects."
Shaw pointed out that the Government’s initial investment is expected to be paid back by returns acquired on funding projects and that the fund is anticipated to eventually stand independently on commercial footing – however, it is probable that not all projects funded will work out successfully.
"The idea is we want to have a portfolio return, but of course this is the nature of the beast in that there is an element of risk at play."
Ardern said, “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,” adding that it formed part of the country’s goal in building a clean, sustainable and low-carbon economy that consists of both lower emissions and profitable enterprises.
The New Zealand Herald reports that Government Superannuation Fund Authority chairwoman Cecilia Tarrant will chair the fund and David Woods and Rob Fenwick will be on its board.