By Bernard Hickey
A Green Government would spend NZ$120 million over three years to establish a state-owned Green Investment Bank to lend to and invest in renewable energy and clean technology projects.
Co-leader Russel Norman said the capital injection would be paid for with the revenues from lifting oil mining royalties to those levels charged internationally and the bank could have investments of NZ$1 billion by 2020 that acted as a catalyst for a further NZ$3 billion of private investment.
“Like Kiwibank before it, the Green Investment Bank will combine the best of the public and private sectors to accelerate New Zealand’s transition to a smarter, greener economy,” said Norman.
“The Bank will act as an independent and expert facilitator of private sector capital to secure billions of dollars of new investment into smart green innovation," he said.
“The Green Bank will act as a catalyst for investment in the green economy. It will be a central instrument in transitioning investment away from polluting industries and into the clean and profitable investments of tomorrow."
PricewaterhouseCoopers had estimated that clean technology sector could be worth between NZ$7.5 billion and NZ$22 billion to the New Zealand economy by 2015, Norman said.
“Considerable new investment opportunities lie in renewable energy plants, solar panel installations, energy efficiency retrofits, the development and production of significant volumes of biofuels, and new clean technologies. The Bank will mirror the success of green banks overseas. There are successful precedents throughout Europe, Japan, and the USA with two of the newest green banks started in the UK and Australia," Norman said.
Later in a news conference announcing the policy, Norman said a Green Investment Bank would be one of the priorities it included in any coalition negotiations.
An independent working group would be set up in the first year to recommend the size, shape and institutional form of the Green Investment Bank, including whether or not it was a registered bank or an investment fund.
The bank or fund itself would be set up in the second year with the bulk of the funding (NZ$100 million) being spent in the third year, Norman said.
The bank would not invest in the venture capital stage and would instead invest in projects at the latter stage of their development. It would be independent of government and partner with private sector lenders and investors to 'crowd in' capital rather than crowd it out.
It may issue its own bonds and would be a for-profit bank that reinvested its profits initially, although it may eventually pay dividends to the Government. It may both lend and invest in projects, he said.
Norman estimated the bank could have investments totalling NZ$1 billion by 2020 and attract a further NZ$3 billion in private sector funding for NZ$4 billion worth of clean technology investments.
He compared the bank to the Green Investment Bank set up in Britain by the David Cameron-led Conversative/Liberal Democrat coalition Government and the Clean Energy Finance Corporation set up by the previous Labor Government.
(Updated with more detail and video of Norman question to Finance Minister Bill English in Parliament on Green technlogy investment)