24301 (2026). Hon Kieran McAnulty to the Minister of Finance

24301 (2026). Hon Kieran McAnulty to the Minister of Finance: How will the Gas Transition Loan Guarantee Scheme funded in Budget 2026 (which provides operating funding to establish a loan guarantee scheme to lower financing barriers for qualifying firms during the gas transition) operate, what is the Crown's maximum contingent liability under the scheme, what firms are expected to qualify, and what fiscal risk, if any, does the guarantee create, broken down by agency, department, Crown entity, company, or other organisation for which the Minister is responsible?

Hon Nicola Willis: The Gas Transition Loan Guarantee Scheme is expected to support up to $1.2 billion of new bank lending to help businesses eliminate or reduce their dependency on natural gas. The guarantee applies to bank lending, lowering lenders’ cost of capital, with this benefit required to be passed on to borrowers. The maximum contingent liability to the Crown is 80 percent of total lending (up to $960 million), with $48 million set aside to cover expected credit losses. The losses and contingent liability will be monitored and administered by the Treasury. The Scheme is targeted at businesses operating in New Zealand that are current users of reticulated natural gas, with annual consumption of at least 1,000 GJ. Borrowers must be undertaking, or intending to undertake, eligible investments to reduce gas consumption or transition away from gas. Supported projects must deliver at least a 15 percent reduction in gas use, achieved through genuine efficiency improvements or fuel switching, rather than reduced production. Participating lenders will apply their own supported loan policies, practices, and processes when assessing borrower eligibility and creditworthiness.