It was hailed as ‘a game changer for the clean tech sector’ and a model for the world; less than three years later, BlackRock is walking away from its NZ climate fund
by Sam Sachdeva - Caption: BlackRock says "client feedback" and a new acquisition has led to it shutting down a dedicated climate investment fund in New Zealand. File photo: Getty Images
American multinational asset manager BlackRock is closing down a $2 billion climate infrastructure fund in New Zealand intended to fund renewable energy projects.
BlackRock says "client feedback" and a new acquisition has led to it shutting down a dedicated climate investment fund in New Zealand. File photo: Getty Images
The world’s largest asset management firm has quietly abandoned plans for a multibillion-dollar climate fund to help New Zealand reach 100 percent renewable energy, just years after saying the initiative could serve as a global model.
However, American multinational BlackRock insists it remains committed to its operations in the country, given its “appeal as a global investment destination”.
In August 2023, the then-Labour government trumpeted BlackRock’s involvement in a “first of its kind” climate infrastructure fund, with the company attracting an initial $2 billion of investment for renewable energy projects like battery storage, wind and solar generation, and electric vehicle charging.
“This is a game changer for the clean tech sector and another example of the pragmatic and practical steps the Government is taking to accelerate climate action while growing our economy,” then-Prime Minister Chris Hipkins said at the time, highlighting his government’s target of reaching 100 percent renewable energy by 2030.
When the plans were first announced, BlackRock co-founder and chief executive Larry Fink (whose company has almost $22 trillion in assets under management worldwide) said the initiative would be the company’s “largest single-country low-carbon transition investment” to date.
“It will enable New Zealand companies to access greater pools of capital to build out climate infrastructure across the country’s energy system including in wind power, solar power, battery storage, electric vehicle charging, and natural capital projects.”
Praising the then-government’s ambition to build a more resilient energy system and become a global leader in decarbonisation, Fink said the fund could act as a model for cooperation between the private and public sectors “to ensure an orderly, just, and fair energy transition”.
But the National-led coalition government rolled back a number of Labour’s climate commitments after taking office at the 2023 election, with Prime Minister Christopher Luxon saying the renewables target had put the country’s energy security at risk and would increase electricity prices while reducing reliability.
In May 2024, BusinessDesk reported that BlackRock was yet to make any investments via the fund, although the company said it “firmly believes in the significant potential for deploying climate infrastructure and related enabling technologies … irrespective of changing policy settings”.
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But in November last year, the firm asked the Companies Office to deregister the limited partnership connected to the initiative (New Zealand Climate Infrastructure Fund LP) on the grounds it had “ceased to carry on business”.
In a written statement sent to Newsroom, a BlackRock spokesperson confirmed the fund was being scrapped, saying: “Following our acquisition of Global Infrastructure Partners and in response to client feedback, BlackRock will no longer proceed with a standalone New Zealand Climate Infrastructure Fund.
“We continue to offer clients access to a suite of global infrastructure strategies that can invest into New Zealand, supported by our growing local presence.”
The company remained committed to supporting New Zealand’s economic growth and infrastructure projects, having doubled its Auckland-based team to six people (including three infrastructure investors) in the last year.
“BlackRock currently invests close to NZ$30 billion in New Zealand across public and private markets on behalf of clients, with approximately 75 percent sourced from offshore investors – underscoring the country’s appeal as a global investment destination.”
What investments (if any) the firm made via the climate fund remains unclear, with Newsroom’s questions on the matter going unanswered.
A mixed record
BlackRock has in recent years ramped up its presence in the New Zealand market, with mixed results.
The company placed local solar installation firm SolarZero into liquidation in 2024, two years after acquiring the business, with 160 staff losing their jobs. The American firm copped criticism for its failure to pay out employees’ entitlements, with one former staffer telling Newsroom the case showed the dangers of foreign investment; the ex-staff did eventually receive outstanding pay as part of the liquidation process, although contractors were reportedly left out in the cold.
At the time, BlackRock said it had explored several options to keep SolarZero operating but was unable to find a suitable solution, requesting the appointment of a liquidator “to ensure an orderly transition of the business in the interests of related stakeholders, including SolarZero’s customers, employees, creditors, and others”.
Luxon’s Government has nonetheless continued to woo BlackRock, inviting the company to take part in last year’s high-profile Infrastructure Investment Summit to the consternation of former SolarZero staff.
The Prime Minister had earlier met Fink during a 2024 trip to the United States, saying the pair had discussed “how New Zealand can attract more investment to strengthen our economy at home”.
Climate Change and Energy Minister Simon Watts told Newsroom neither he nor officials had been contacted by BlackRock regarding its decision. Asked whether he had any concerns about what the move said about levels of appetite for foreign investment into climate infrastructure, Watts responded: “This is a commercial decision made by BlackRock. I expect no impact.”
Sam Sachdeva
Sam Sachdeva is Newsroom's national affairs editor, covering foreign affairs and trade, housing, and other issues of national significance. More by Sam Sachdeva