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Goals of the Wood Processing Growth Fund (WPGF)

The WPGF helps wood processors diversify and increase production by providing investment support for a range of capital and capital-enabling activities. The goal is to increase New Zealand’s onshore wood processing capacity.

By processing more of our logs onshore, we can produce more high-value, 'long-lived' wood products like sawn structural timber and engineered wood. These products store carbon for a long time and delay carbon dioxide being released back to the atmosphere. This helps achieve climate change goals. Onshore processing produces residues that can be made into low-carbon biofuels and bioproducts.

Benefits of processing more wood

By increasing New Zealand's wood processing capacity, we can:

  • support New Zealand's climate change goals
  • provide high-value, high-wage jobs for regional New Zealand
  • increase New Zealand's economic productivity and resilience by shifting from volume to value, and
  • support the construction sector and help reduce its carbon footprint.

When completed, WPGF projects will help achieve the objectives of the Forestry and Wood Processing Industry Transformation Plan.

Read more about the Forestry and Wood Processing Industry Transformation Plan

Why the Wood Processing Growth Fund is needed

Investment in wood processing has declined by 31% (in real terms) from 2010 to 2021. Much of New Zealand’s wood processing infrastructure has aged. As of 2022, 60% of our annual forest harvest is exported, meaning we are not capturing the benefits that onshore processing can provide.

Investors in wood processing often struggle to find suitable finance options, particularly for small and medium-sized enterprises. The WPGF provides funding for worthy activities that enable investment, and capital investment that might not happen without government partnership.

Two funds are available

The WPGF supports wood processors by co-investing in their projects. There are 2 investment allocations – Catalyst and Accelerator.

How Catalyst grants work

Catalyst grants are managed by Te Uru Rākau – New Zealand Forest Service. Catalyst can co-fund:

  • business cases and feasibility studies
  • research and pilots
  • technical assistance
  • entrepreneurial capability building, to help groups and investors develop commercial capability and skills
  • skills development associated with improving productivity
  • market development.

Around $3 million a year is available. Catalyst provides grants for typically up to half the total cost of these activities.

Eligible activities for a Catalyst grant

Catalyst funds investment for projects:

  • focused on a New Zealand-based wood processing opportunity
  • where applicants have, or can procure, the capability to deliver the project
  • that aim to stimulate additional onshore wood processing of long-lived wood products
  • that are supported by co-funding from non-government investors.

Applicants must pass character and due diligence checks.

How Catalyst applications are assessed

Applications are assessed against these criteria: 

  • alignment to the goals of the WPGF
  • potential impact to your region's productivity, resilience, inclusiveness, sustainability, and Māori outcomes. These are elements of a regional economies framework used by Kānoa (MBIE) who manage contracts for the Accelerator fund
  • funding requirements of your proposal
  • why WPGF funding is needed
  • how local factors such as infrastructure, labour, local firms and industries will enable the project
  • future investment prospects.

Note, your project doesn't need to show benefits for each criterion.

Read more about the productive, resilient, inclusive, sustainable and Māori-enabling (PRISM) framework – Kānoa (MBIE)

For each application, provide robust information and as much evidence as possible.

When to apply

Catalyst is open for proposals from 3 July 2023.

We encourage you to discuss your proposal with us as soon as possible so that you are ready to apply from 3 July, if your project is a good fit for the WPGF.

How to apply for Catalyst funding

Read more about Catalyst funding in the WPGF priorities statement, June 2023 [PDF, 175 KB]

How the Accelerator fund works

Accelerator provides debt and equity finance for typically up to half of the total capital costs, with a partner meeting the remainder. It funds activities that increase onshore processing capacity of long-lived wood products.

Accelerator co-funds capital investments, including:

  • equipment and technology
  • buildings and infrastructure.

It does not fund the purchase of land.

$45 million is available in total for capital co-investments, alongside private capital. As the proceeds of investments are returned, they will be available for reinvestment in future investment rounds.

Eligible activities

Accelerator funds investment for:

  • New Zealand-based capital projects
  • projects where applicants have, or can procure, the capability to deliver the project
  • projects that aim to stimulate additional onshore wood processing of long-lived wood products
  • projects that are supported by co-funding from non-government investors.

Applicants must pass character and due diligence checks.

How Accelerator applications are assessed

Applications must show benefits from each of these criteria:

  • alignment to the goals of the WPGF
  • potential impact on your region's productivity, resilience, inclusiveness, sustainability, and Māori outcomes. These are elements of a regional economies framework used by Kānoa (MBIE) who manage contracts for the Accelerator fund
  • certainty of supply chain (for example, log supply)
  • how local factors such as infrastructure, labour, local firms and industries will enable the project
  • certainty of market opportunity.

Read more about the productive, resilient, inclusive, sustainable and Māori-enabling (PRISM) framework – Kānoa (MBIE)

The strongest applications in each investment round will receive funding.

For each application, provide robust information and as much as evidence possible.

Investors may first apply for a Catalyst grant to give confidence in their investment proposal, before applying for capital funding through Accelerator.

When to apply

Accelerator is open for proposals during 3 rounds of investment over 18 months. Exact dates will be announced when available:

  • Round 1: 3 to 17 July 2023
  • Rounds 2 and 3: 2024 (dates will be listed here when confirmed)

There is $10 million available for Round 1. We will focus on investments that are:

  • ready for investment now
  • over $2 million in total project cost, and
  • matched with co-investment. 

To apply during round 1 you must discuss your proposal with us before 16 June 2023. 

We invite you to get in touch if you:

  • have already conducted your investment due diligence
  • know that your investment is both technically and commercially feasible
  • have the necessary documentation, including a detailed business case.

See below for details on how to apply.

Read more about Accelerator funding in the WPGF priorities statement, June 2023 [PDF, 175 KB]

How Accelerator funding is managed

We are working in partnership with Kānoa – Regional Economic Development & Investment Unit to deliver the Accelerator fund. Kānoa is part of the Ministry of Business, Innovation and Employment (MBIE). Accelerator contracts for projects that are awarded funding are held by Crown Regional Holdings Limited. These contracts are managed on behalf of Te Uru Rākau – New Zealand Forest Service by Kānoa.

Although we partner with Kānoa, you must contact Te Uru Rākau – New Zealand Forest Service to start your Accelerator application.

Kānoa manages contracts on a commercial basis through loan or equity arrangements. It will guide successful applicants in structuring the investment. This includes the terms of debt and equity arrangements. These are managed in the same way as the Regional Strategic Partnership Fund (although the WPGF is a separate fund). Find out more below:

Read more about debt and equity instruments managed by Kānoa (MBIE)

How to apply for Catalyst or Accelerator funding

Step 1: Check your project is eligible

Refer to the lists of eligible activities for Catalyst and Accelerator funding on this web page.

Step 2: Check your proposal against our assessment criteria

Refer to the Catalyst and Accelerator funding assessment criteria listed on this page. Your application will be assessed on how well it fits with those criteria, along with:

Step 3: Get in touch with us

If you think your project meets our eligibility and assessment criteria, get in touch to discuss your project and find out more. We’ll help you work out whether your project is a good fit for the WPGF and, if it is, we’ll invite you to submit an application.

We encourage you to discuss your proposal with us as soon as possible so that you are ready to apply in July (if you are invited to apply).

We'll need as much information and evidence as you can provide to support your application.

To contact us:

After we get your application

We assess proposals against the criteria to decide:

  • whether applications qualify for funding
  • how much funding they should receive.

When deciding the final co-funding amounts, we will take into account factors such as:

  • the applicant and their resources
  • the size of the project
  • the potential for benefits to their community.

Your application is confidential. However, as part of the evaluation process, we may share your application with:

  • technical experts contracted by MPI
  • other government departments.

Who to contact

If you have any questions:

Or write to:

Wood Processing Growth Fund Team
Te Uru Rākau – New Zealand Forest Service
PO Box 2526
Wellington 6140.

MPI business units