The New Zealand Government and U.S. investment firm BlackRock has announced the largest single-country, low-carbon transition investment fund that BlackRock has created to date.

BlackRock will raise a $2 billion fund aimed at making New Zealand the first country in the world to achieve 100% renewable energy, and positioning New Zealand as a global climate leader. The net zero fund aims to accelerate the development of solar, wind, green hydrogen, battery storage and EV charging projects by raising investment capital from Crown entities, including superannuation funds, and private sector funds. Clean technologies are also expected to be super-charged by the new fund’s investment capital pools. 

New Zealand has globally ambitious domestic and international climate change targets, including its international commitment under the Paris Agreement to reduce net emissions by 50 percent below 2005 gross emissions for the period to 2030. Domestically, New Zealand has been a global leader in implementing climate legislation, publishing its first Emissions Reduction Plan in 2023. The key domestic climate goals are an aspirational target of 100% renewable electricity by 2030, a commitment to net zero emissions by 2050, and a target of 50% of total energy consumption to come from renewable sources by 2035.

BlackRock is not new to the renewable energy sector in New Zealand, as it already owns solar energy business, SolarZero.

What does this mean for renewable energy developments?

The net zero fund is a unique opportunity to accelerate the development of green energy capacity in New Zealand through the availability of much needed investment capital. It has the potential to give renewable energy developers a much smoother path for financing large-scale renewable projects across New Zealand, which may also unlock debt financing for new entrants that may not otherwise have had sufficient equity capital to succeed. In combination with the Government extending the fast-track consenting process for renewable energy projects, a number of hurdles are being removed, and we expect to see further acceleration in this sector. 

BlackRock has not yet announced details of the fund’s investment criteria or mandate, but we anticipate significant interest once these are known.

If you would like to discuss renewable energy opportunities and challenges, including project financing, please contact one of our experts.