Access to debt finance that meets operators’ needs has been a major barrier to developing solar generation projects in New Zealand, he said.
“Replacing short-term floating debt with longer-term fixed rate debt will allow providers to accelerate solar energy access to New Zealanders.”
Essentially, the programme is a repeatable financing solution for the solar sector which has the potential to transform New Zealand’s energy landscape through grid-connected solar farms and distributed installations on homes, schools, farms and businesses.
The NZGIF programme is also the first issuance by a New Zealand-based financial institution to secure Climate Bonds Initiative certification, the global standard. The Climate Bonds Standard and Certification Scheme has rigorous scientific criteria to ensure bonds and loans are consistent with the 1.5 degrees Celsius warming limit in the Paris Agreement.
Patrick said NZGIF Solar Finance will work with developers across New Zealand to finance and grow their portfolio.
Once the portfolio matures, NZGIF will filter and organise loans by eligibility criteria, wrap the loan in a credit-enhanced financing structure, secure Climate Bonds Initiative certification and then place the portfolio with institutional investors to provide attractively priced long-term debt.
New Zealand’s largest residential power purchase agreement portfolio, managed by Auckland-based solarZero, will be the first partner in the finance programme.
solarZero, incorporated in 2008 with offices in Christchurch, Nelson and Auckland, is in the top five fastest-growing green companies in New Zealand. solarZero has distributed its systems to more than 9000 customers, generating 98.4GWH of solar energy and preventing 12,107 tonnes of carbon from entering the atmosphere.
Matt Ward, solarZero chief executive, said the financing is long-term, matching the duration of the company’s underlying customer contracts and is a rarity in the New Zealand market.
“It provides greater financing certainty and improved operational cash flow which will allow us to accelerate the roll-out of residential solar and battery solutions across the country,” said Ward. The new programme will also help develop solarZero’s virtual power plant technology seen as a critical ingredient in New Zealand’s transition to 100 per cent renewable energy by 2030.
Patrick said solarZero is the first cornerstone partner of NZGIF Solar Finance and “we expect other New Zealand-based providers to be able to access the programme soon”.
solarZero is majority-owned by the world’s largest asset manager BlackRock through its Climate Infrastructure franchise. Charlie Reid, APAC co-head of BlackRock Climate Infrastructure, said the finance programme was a great example of collaboration to mobilise capital at scale to support an orderly energy transition.
The investment by Sydney-based First Sentier Investors and Natixis Investment Managers, with headquarters in Paris and Boston, adds further international credibility to the programme. First Sentier, owned by Mitsubishi UFJ Trust and Banking Corporation, has about US$150 billion (NZ$258b) in assets under management and Natixis US$1230b, making it the second biggest French manager by market share.
Craig Morabito, First Sentier senior portfolio manager of global credit, said the structure of this transaction was innovative and “we liked that this initiative took a whole-of-country approach to reducing emissions associated with electricity usage”.
Angus Davidson, Natixis Asia Pacific head of private debt real assets, said “Our focus remains on arranging and investing in attractive infrastructure debt assets with strong underlying trends. Distributed renewables and storage are compelling markets, particularly in New Zealand”.
In other solar investments, NZGIF has provided a $10m debt facility for Christchurch-based Solagri Energy to finance some 120 solar arrays on dairy farms across the country over the next three years.
NZGIF has also provided a $15m working capital facility to Lodestone Energy to support the building of five solar farms in Northland, Coromandel and Bay of Plenty, generating 199MW of renewable energy.
