The first payout from the $100 million New Zealand Green Investment Finance fund will help Wellington’s port decarbonise, Marc Daalder reports
Wellington’s Centreport will receive a $15 million grant to purchase electric vehicles, construct on-site renewable energy generation and improve energy efficiency.
The payout is the first grant from the $100 million New Zealand Green Investment Finance (NZGIF) fund, set up in 2018 as a sustainable investment tool to stimulate private sector action on decarbonisation.
“The change this investment will bring about at CentrePort is exactly the type of innovative approach we need in order to meet our climate targets and leave behind a safer planet for our children and grandchildren,” Climate Change Minister James Shaw said in a statement.
According to a press release from Shaw’s office, “the investment will be used exclusively to fund low carbon projects, such as the introduction of electric vehicles, on-site renewable energy generation and energy efficiency upgrades”. The first spend of the grant will be on electric vehicles, expected to deploy later this year.
The investment fund was a longstanding Green Party policy and a key component of the Labour-Greens confidence and supply agreement. Unlike its big brother, the $3 billion Provincial Growth Fund (PGF), the NZGIF has two mandates: Funding green projects that reduce emissions and, crucially, turning a profit.
That profit requirement is intended to show that sustainable development is profitable, inspiring further private sector investment. But it also means the NZGIF has to be much pickier about what it puts money into than the non-profit PGF.
The returns that the NZGIF earns can also be recycled into future investments. That’s why the Labour-Greens confidence and supply agreement notes the fund should ultimately “kickstart” $1 billion in “new investment in low carbon industries by 2020”.
It is unclear why it has taken the NZGIF more than two years since being funded in the 2018 Budget to make its first investment. It was meant to make at least one grant by December 2019.
“There’s a saying on the mainland: Good things take time,” Shaw said.
“If you look at the international comparisons in Australia and North America, it takes two to three years to develop a market. We’ve actually done it in less time than that. We only actually incorporated the company early last year.:
This first investment is meant to be the first in a series of payouts through the rest of 2020, Shaw said.