New Zealand said Tuesday it is partnering with BlackRock to create a climate investment fund, aiming to speed the way to 100 percent renewable electricity by 2030.
The fund is to seek NZ$2 billion (US$1.2 billion) from state entities and private-sector investors including pension funds, the government and US-based BlackRock said in separate statements.
The so-called New Zealand net zero Fund will invest in clean energy infrastructure, helping the country to reach its target of producing electricity fully sourced from renewables by 2030, up from 83 percent currently.
It targets sectors including wind, solar, batteries, electricity storage, vehicle charging, and “green” hydrogen projects, which produce the gas by using renewable energy.
“This is a first of its kind fund in the country that demonstrates the huge economic potential of New Zealand being a climate leader and our goal of generating 100 percent renewable electricity,” Prime Minister Chris Hipkins said.
“This investment will be a boon for Kiwi businesses and make New Zealand a hub for renewable tech expertise,” added Hipkins, who faces elections in October during which the climate is expected to be a significant factor for many voters.
Flash flooding in Auckland in January left four dead while Cyclone Gabrielle just weeks later smashed into the North Island, killing 11 people and leaving a repair bill of about NZ$14 billion.
Hipkins said the wild weather was a reminder that New Zealand needed to speed up its climate action.
BlackRock said it would draw on its financial expertise to create the fund, which would serve as a platform for state and private institutions to invest in New Zealand’s transition to a low-carbon economy.
New Zealand has a goal of creating net zero carbon emissions from across the economy by 2050.
“This is the largest single-country low-carbon transition investment initiative BlackRock has created to date,” BlackRock chief executive Larry Fink said in a message on social media.
“It will enable New Zealand companies to access greater pools of capital to build out climate infrastructure across the country’s energy system.”
New Zealand’s transition to renewables-sourced electricity would require NZ$42 billion in investment in power generation, distribution and storage, BlackRock said.
Finance Minister Grant Robertson has earmarked NZ$6 billion in the 2023/2024 budget for a “national resilience plan” to beef up the country’s infrastructure to better cope with climate disasters.