The fund has $100,000 to allocate each financial year.
Groups or individuals can apply for one project per year for a project cost of up to $20,000.
The council said projects applying for the fund may have the purpose of increasing the uptake of active transport like walking and cycling, increasing the uptake of renewable energy or sequestering carbon with forest or wetland restoration, among other climate-oriented purposes.
"This new fund will give local people the chance to make their climate action ideas a reality – I'm really excited to see the projects that will emerge in our district as a result of having this fund in place," Arrowsmith said.
Funding for this initiative comes from existing funding allocated to climate action in the council's Long-Term Plan 2021-31.
Applications for the fund close on Friday, November 25.
The council's climate change advisory group - made up of tangata whenua and community representatives, subject matter experts and council staff - decide which projects are funded.