The Gas Transition Loan Guarantee Scheme has opened to businesses making investments to reduce their reliance on gas.
Finance Minister Nicola Willis said that businesses across New Zealand have been facing higher gas prices and greater uncertainty about future supply. The Government will support businesses in lowering energy costs and staying competitive by switching from gas to other energy sources and improving energy efficiency.
From today, businesses seeking new financing for gas transition projects can express their interest with participating banks, who will work with them to assess applications under the Scheme.
Under the Gas Transition Loan Guarantee Scheme, the Crown will guarantee 80 percent of the default risk for eligible loans. This frees up banks to pass on lower interest rates to businesses and to offer better lending terms.
The Scheme is expected to unlock up to NZD 1.2 billion of lending to help businesses eliminate or reduce reliance on gas while strengthening New Zealand's long-term economic resilience.
Associate Energy Minister Shane Jones said the scheme will help ensure regional industries remain productive, competitive and resilient as they adapt to changing energy markets.
“Many of our regional economies are built on energy-intensive industries such as food processing, wood processing, manufacturing and horticulture. These businesses create jobs, support local communities and generate export earnings, so it is important they have practical options to manage higher gas costs and maintain their competitiveness,” said Jones.
“Alongside the Government's work to encourage new gas investment and improve security of supply, this scheme gives businesses greater flexibility to invest in the technologies and energy sources that best suit their operations. This scheme is about backing New Zealand industry and ensuring our regional economies remain strong, productive and prosperous well into the future.”
Energy Minister Simeon Brown added that the scheme was intended to protect New Zealanders’ jobs. Since the last government banned oil and gas exploration, natural gas supplies have fallen by 23 percent in the last year alone. This left businesses increasingly unable to secure long-term, affordable gas contracts.
“New Zealand wants to export our goods, not our jobs and this loan scheme is a practical way to help businesses meet the cost of reducing their reliance on gas,” said Brown.
This also saw the launch of a suite of Energy Efficiency and Conservation Authority-led support for businesses.
“The support is independent and designed to help businesses understand their energy options and identify a practical pathway to give confidence before making significant investment decisions,” he said.
“Businesses have different energy needs, technical capabilities and levels of information available. Some may need help understanding where their gas is being used and identifying immediate improvements. Others may already have a potential project and need more detailed technical options or fuel feasibility analysis.”
Brown encouraged businesses to explore EECA’s tools and support, register interest in a regional workshop, or speak with a participating bank about the best next step.
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