New Zealand Green Investment Finance (NZGIF) has led a NZ$170 million (US$100.67 million) capital raise, attracting international investors First Sentier Investors and Natixis Investment Managers, to launch its solar finance programme.
The fund will initially finance New Zealand’s largest residential power purchase agreement (PPA) portfolio, which is managed by solarZero. BlackRock, via its Climate Infrastructure franchise, is the majority owner of solarZero.
NZGIF, a Crown-owned green investment bank established to accelerate investment in the reduction of the country's greenhouse gas emissions, contributed NZ$80 million to the fund, and attracted NZ$90 million of private capital from First Sentier Investors and Natixis Investment Managers.
The fund will provide long-term, fixed-rate debt that is required to accelerate distributed solar projects in New Zealand.
The NZGIF solar finance programme is the first issuance by a New Zealand-based financial institution to secure Climate Bonds Initiative certification. The certification, awarded after a science-based assessment of the programme’s sustainability attributes, is used globally by bond issuers, governments, and investors to prioritize investments that contribute to addressing climate change.
Solar energy is rapidly transforming New Zealand’s energy landscape, both through new grid-connected solar farms and through distributed solar installations on homes, schools, farms, and businesses.
The NZGIF solar finance programme will work with developers across New Zealand to finance and grow their portfolio. Once the portfolio matures, the fund will filter and organize 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 to fund the portfolio.
Société Générale acted as arranger and green loan coordinator for structuring the NZGIF solar finance issuance and NZGIF corporate green financing framework.
“We believe that NZGIF's programme is an excellent platform for connecting global capital with distributed solar generation to accelerate the shift to renewable energy in New Zealand," says Arkady Lippa, co-head of asset-backed products for Asia-Pacific at Société Générale.
"Replacing short-term floating rate debt with longer-term fixed-rate options will allow New Zealand solar providers to accelerate solar energy access to New Zealanders," says NZGIF chief investment officer Jason Patrick.