Current Climate Change Minister Simon Watts announced today that New Zealand Green Investment Finance (NZGIF) will stop making new investments and will wind down its existing portfolio.
The Government is not sure how much money it will recoup from the sell down. Watts’ office said it was “too early to comment on the amount of money the Crown will recoup from NZGIF”.
However, the fund’s “new mandate is focused on expediting the repurposing of the portfolio in a timely manner that maximises returns”.
Watts said the fund had invested “almost $400 million” with “very limited results”. It is meant to act as a green bank, making targeted investments in firms to help them decarbonise.
“[T]here are more than 20 government funds operating with similar objectives,” he said.
Watts said NZGIF would develop a plan for ministers outlining how changes will be implemented within 90 says.
The move to sell the portfolio comes as global share markets are suffering their biggest sell off since the Covid-19 pandemic, making it a particularly challenging time to sell many assets.
The fund had recently made investments in Far North Solar Farms, Ruminant BioTech, and Sundergise.
Former Climate Change Minister James Shaw got NZGIF funded in the 2019 Budget. Photo / Mark Mitchell
The fund copped criticism last year after it was caught up in the collapse of SolarZero, which was liquidated by its owner, American investment firm BlackRock.
Advances of $115m from the fund were made to install solar panels and batteries in households under lease-type arrangements. These were not caught up in the liquidation, as the loans, securities and monthly payments from households are tied to trusts and companies controlled by Public Trust.
NZGIF chair Cecilia Tarrant resigned in the wake of the scandal.
The fund’s most recent annual report estimated the lifetime emissions reduction its combined investments at June 30, 2024 to be 1.3 million to 1.6 million tonnes of CO2-e.
“This is greater than New Zealand’s entire annual domestic airline emissions in 2022 and will continue to grow as we make further investments,” Tarrant said at the time.
“This Government is serious about climate change, that’s why we have committed to doubling renewable energy, investing in technology to lower emissions while boosting productivity, and cutting barriers to green investment,” Watts said.
“We will prioritise actions that have the greatest impact on emissions and growth and will provide real value for money.
“In the current economic environment New Zealanders want assurance that taxpayer money is being well spent and delivering results. We believe NZGIF is no longer aligned to that vision,” he said.
Thomas Coughlan is deputy political editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
