Funding Renewable Energy via Green Banks

In 2019, the government of New Zealand established New Zealand Green Investment Finance (NZGIF) with initial capital of NZD 100 million (USD 68.3 million). This “green bank” is mandated to reduce greenhouse gas emissions by enabling capital flows and increasing direct investment (in the form of equity and debt) in target sectors such as transport, process heat, energy efficiency, agriculture, distributed energy resources, plastics and waste. In 2021, the bank received a further NZD 300 million (USD 205 million) in capital investment, quadrupling its initial pool in only two years, to NZD 400 million (USD 273.3 million). So far, the investments have resulted in lifetime emission reductions of around 250,000 to 300,000 tonnes of CO2.

For example, NZGIF invested in the SolarZero project, which provides households in New Zealand with cleaner and cheaper renewable energy at a flat rate for 20 years. As of early 2022, the project had expanded its distributed energy network to more than 4,800 residential clients and generated a total of 16.9 GWh of solar electricity, with the energy savings averaging 40-50% of a household‘s electricity consumption. In 2021, it equipped 800 customers and installed 500 batteries. Customers can save NZD 230 (USD 157 million) annually and avoid 15 tonnes of CO2 emissions on average during the 20-year period. Since the project's launch, residents have saved around NZD 2.3 million (USD 1.5 million) on their power bills.

As part of the SolarZero project, NZGIF is committed to providing NZD 10 million to NZD 30 million (USD 6.8 million to USD 20.5 million) in debt facilities to corporations to generate large-scale solar power at their facilities. The project also aims to expand renewable energy in schools through an NZD 8 million (USD 5.4 million) debt facility and NZD 10 million (USD 6.8 million) in reserve. In addition, NZGIF has invested in electrifying vehicle fleets through the company Sustainable Fleet Finance, which relies on an NZD 10 million (USD 6.8 million) credit facility as well as an NZD 10 million (USD 6.8 million) facility provided by New Zealand Post.

Source: See endnote 161 in chapter 05.

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