Government to Invest $200m in Genesis to Boost Energy Security

The Government has confirmed it will purchase up to $200 million in new Genesis Energy shares as part of a capital raise aimed at strengthening New Zealand's electricity security and improving long-term system resilience.

The move ensures the Crown maintains its majority 51 per cent ownership in Genesis, one of the country's four major electricity generators and retailers operating under the Mixed Ownership Model.

Finance Minister Nicola Willis said the investment aligns with the Government's commitment to secure and affordable energy for households and businesses.

"Last year we confirmed we would consider requests from all three Mixed Ownership Model energy companies for Crown investment in commercially sound generation capacity," Willis said.

"Genesis' proposed investments will directly contribute to enhancing energy security, including by bringing more flexible capacity into the market to help manage dry-year risk."

Strengthening Dry-Year Resilience

New Zealand's electricity system is heavily dependent on hydro generation, which can be vulnerable during periods of low rainfall. Dry-year shortages have historically placed pressure on wholesale prices and system reliability.

Genesis' capital raise is expected to support investments that improve flexible generation capacity — infrastructure that can be ramped up when hydro lake levels are low or demand spikes. Flexible capacity plays a critical role in stabilising the grid, reducing price volatility, and ensuring continuity of supply during periods of stress.

Energy Minister Simon Watts said the share purchase forms part of a broader energy security programme.

"This decision is part of a wider package of work the Government is undertaking to support energy security and drive down the cost of living for all New Zealanders," Watts said.

The Government has recently signalled a stronger focus on firming capacity, improved market settings, and long-term infrastructure investment to meet growing electricity demand as New Zealand transitions toward greater electrification of transport and industry.

Protecting a Strategic State Asset

State Owned Enterprises Minister Simeon Brown said maintaining majority Crown ownership ensures strategic oversight of one of New Zealand's key energy assets.

"This is about delivering better outcomes for Kiwis and ensuring we have a stronger, more secure, and more reliable energy system," Brown said.

Genesis is a significant player in the national electricity market, supplying hundreds of thousands of residential and commercial customers and operating a diversified generation portfolio that includes hydro, thermal, and renewable assets. Maintaining a 51 per cent shareholding preserves public control while enabling private capital participation.

Supporting Long-Term Energy Transformation

Electricity demand is projected to grow significantly in the coming decades as transport, process heat, and industry shift toward electrification. Investment in generation and system flexibility is widely regarded as critical to avoiding supply shortfalls and price spikes during that transition.

By participating in the capital raise, the Crown is signalling support for commercially viable generation projects that enhance reliability without compromising fiscal discipline.

The Government emphasised that all eligible investors in the Genesis equity raise should undertake their own due diligence and seek independent professional investment advice before making investment decisions.

The capital raise is expected to proceed in accordance with market conditions and standard regulatory requirements.