New Zealand unveils $1.2 billion gas transition loan scheme

New Zealand’s government has announced a new initiative aimed at helping businesses reduce reliance on natural gas, protect jobs, and manage declining domestic gas supplies.

Finance Minister Nicola Willis, Energy Minister Simeon Brown, and Associate Energy Minister Shane Jones outlined the Gas Transition Loan Guarantee Scheme as part of Budget 2026 measures, Caliber.Az reports per New Zealand's government. 

“The Gas Transition Loan Guarantee Scheme is a practical, helpful Budget 2026 initiative which is expected to make up to $1.2 billion of bank loans available to businesses to eliminate or reduce their dependency on gas,” Finance Minister Nicola Willis said.

Under the scheme, the government will guarantee 80 per cent of eligible loans, with banks expected to pass on lower interest rates to businesses transitioning to alternative energy sources.

Budget 2026 also allocates $48 million to cover potential losses associated with the programme.

Officials said the policy is designed to help gas-dependent industries transition to alternative energy sources while maintaining production and employment.

Energy Minister Simeon Brown said $5.9 million would also be provided to the Energy Efficiency and Conservation Authority (EECA) to support businesses in developing transition strategies.

The scheme targets firms using more than 1,000 gigajoules of gas annually, including manufacturers, food processors, breweries, hotels, aged care facilities, and commercial greenhouse operators.

Officials warned that New Zealand’s gas supply is tightening, with 12 of the country’s 17 operational gas fields expected to cease production within a decade.

Gas contracts are increasingly short term, while demand pressures continue to rise.

Shane Jones said the government will also introduce legislation requiring greater transparency in gas market data.

The most recent figures show a 23 per cent decline in New Zealand’s gas reserves in the past year and production this year is now expected to be 15 per cent lower than expected at the beginning of the year.

“Fragmented and incomplete information on supply and demand is weakening market confidence and contributing to upward pressure on prices,” Shane Jones says.

The government also said it is exploring LNG import options and accelerating clean energy projects to ensure long-term energy security.

By Sabina Mammadli