Government teams up with US investment giant BlackRock to deliver new climate fund
It's meant to help the climate and business. Credits: Video - Newshub; Image - Getty Images. The Government and US investment giant BlackRock are launching a $2 billion fund to support New Zealand to become one of the first countries to reach 100 percent renewable energy. The fund is intended to give New Zealand businesses access to greater pools of capital to invest in green technology and energy options. It's being described as "first of its kind fund" for New Zealand by Prime Minister Chris Hipkins, who believes it shows the "huge economic potential" the country has to be a climate leader. New Zealand has an aspirational goal of having 100 percent renewable electricity by 2030. "It proves again that we can grow our economy while we lower emissions. This fund is a massive opportunity for New Zealand innovators to develop and grow companies," Hipkins said. "I'm absolutely stoked about what this means for Kiwi ingenuity in renewable energy; it shows that our ambitious climate targets have the world’s attention, and that they are good for the climate, good for the economy, and will help create highly skilled jobs." BlackRock chief executive Larry Fink said in a statement that it is the largest single-country low-carbon transition investment initiative the company has created. "It will enable New Zealand companies to access greater pools of capital to build out climate infrastructure across the country’s energy system including in wind power, solar power, battery storage, electric vehicle charging, and natural capital projects." Fink said New Zealand "doesn't just have the ambition" to create a more resilient system, but it "is already doing that". He said he believed New Zealand's strategy "can be a model for how to scale and implement" a vision of private and public sectors working together to ensure a fair energy transition. BlackRock has been a champion of moving towards environmental, social and governance (ESG) investments recently , but at the same time has continued to work with fossil-fuel companies. In a statement last year, BlackRock said its role was as a "fiduciary to our clients" . "Our role is to help them navigate investment risks and opportunities, not to engineer a specific decarbonization outcome in the real economy." Fink said in June the 'ESG' term had become weaponised due to political attacks . According to Reuters, BlackRock is under investigation from a US congressional committee on China for facilitating investments into blacklisted Chinese companies, including companies found to be fueling China's military advancements and human rights abuses. Blackrock said last week: "With all investments in China and markets around the world, BlackRock complies with all applicable U.S. government laws". Andrew Landman, Head of New Zealand and Australia, BlackRock said on Tuesday: "BlackRock’s role as a fiduciary is to help clients reach their investment goals". "In New Zealand, there is a clear preference to invest in a range of energy transition opportunities while facilitating delivery of the long-term private capital required to create a more secure, efficient, and greener energy future for all New Zealanders." In his statement on Tuesday, Hipkins said recent events - including Cyclone Gabrielle and the Auckland floods - were a reminder that climate action must be sped up. "The fund will super charge investments in clean technology that might otherwise not have happened. This is a game changer for the clean tech sector and another example of the pragmatic and practical steps the Government is taking to accelerate climate action while growing our economy." Energy and Resources Minister Megan Woods said the fund would accelerate New Zealand's emissions reductions with a particular focus on the 100 percent renewable energy goal. "With record levels of renewable electricity generation in recent years, New Zealand is well-positioned to be one of the first countries in the world to deliver a fully renewable electricity system," she said. "Investors in the green economy can see our potential and recognise our commitment to climate commitments and goals, such as our banning of further offshore oil and gas exploration." Woods said the Government had already made some major moves supporting decarbonisation, such as through the project at NZ Steel . That was intended to see half of the coal being used at the New Zealand Steel site in Glenbrook, Auckland, replaced with a $300 million electric arc furnace to recycle scrap steel. "The New Zealand net zero Fund will look to crowd in investment from Crown companies and entities, including superannuation funds, and private sector funds to accelerate New Zealand’s transition to 100% renewable electricity. "This arrangement means we will get there faster, with opportunities for local investment in a low emissions economy. That will be a significant selling point for New Zealand businesses as consumers demand more sustainable products and services."