The Green Party wants to establish a government-owned Green Infrastructure Fund to attract private finance for low carbon, climate-resilient projects.
But it will come at the cost to oil companies who would be looking at an almost 25% hike on royalty rates.
The Green’s co-leader James Shaw made that policy announcement today at the party’s annual meeting.
Establishing the fund would cost $10 million, plus an additional $100 million line of credit over three years that would be paid for by raising royalty rates on oil drilling from 46% to 70%.
Mr Shaw says New Zealand has one of the lowest oil royalty rates in the world and, by bringing it up to 70%, would align the country with most other countries which have an oil industry.
“In time, the fund will invest billions of dollars of (mainly) private sector finance into funding new renewable energy plans, solar panel installations, energy efficiency retrofits, biofuels and other clean technology projects,” the policy says.
Mr Shaw says it’s an “arm’s length fund” and although it will be owned by the government, it will operate according to commercial disciplines.
“It has to have a profit margin and will have a minimum rate of return,” which the policy states is 5%.
In fact, the party has even gone as far as saying it will become the “Kiwibank’ of the green economy.”
The Greens are confident this initiative will work, citing examples of other countries that have established similar funds, including Australia, Japan, Malaysia, the United Arab Emirates and some US states.
“The experience from overseas suggests that every $1 of government finance can attract up to $10 of private finance,” the party's policy document says.
Although the fund directors will be “completely independent of government,” they are likely to put funds into investments like renewable energy projects (wind and solar), smart LED street lights and innovations in waste and resource recovery.
In terms of getting the fund off the ground, Mr Shaw says it’s the party’s intention to get the fund up and operating within 12 months of taking office in a coalition government.
He says his party’s ambition is for New Zealand’s economy to be carbon-neutral by 2050 and this fund will help begin that transition.
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