$120m 'Green Investment Bank' plan for clean tech projects

Russel Norman. File photo / Getty Images

The Green Party says it would set up a $120 million "Green Investment Bank" to fund green tech projects, with the money to come from hiking oil and gas royalties.

"The Green Investment Bank will be an enduring, government-owned, for-profit bank partnering with private sector to fund new projects ranging from renewable energy and biofuel production to new clean technologies", Greens Co-leader Russel Norman said.

"Considerable new investment opportunities lie in renewable energy plants, solar panel installations, energy efficient retrofits, the development and production of significant volumes of biofuels, and new clean technologies."

The party pointed to PricewaterhouseCoopers estimates that clean technology could be worth between $7.5 billion and $22 billion to the New Zealand economy by next year.

"We want to ensure it's on the higher end of those forecasts", said Dr Norman.

Dr Norman said the bank would cost about $120 million over the next three years, "and
will be paid for by raising oil mining royalty rates to those charged internationally".

"By ending fossil fuel subsidies and raising the overall tax take from oil companies from 46 per cent to the global average of 70 per cent, we'll have more than enough to cover this initial outlay of capital" the party said in supporting material released this morning.

Dr Norman said the bank would act as a catalyst for private sector investment into the green economy rather than competing with it.

It would seek private sector capital for clean-tech investments "until a time when these investments become mainstream commercial".

The bank would apply a "commercial filter to investment decisions" but that filter would be "more flexible that the private sector equivalent, as the bank has a public policy purpose".

It would target a rate of return at or above the government's bond rate and would be run independently from the Government like the Superannuation Fund.

Building a Green Bank:

# Year One: An independent working group appointed to determine the final details of the venture.

# Year Two: The bank is set up, and with indicative costs from similar projects in Australia suggesting a cost of $15m to $20m.

# Year Three: The bank opens a "government line of credit" of up to $100 million, initially in the "priority area" of carbon reduction and energy and resource efficiency.