The New Zealand Green Investment Fund (NZGIF) has raised $365 million in capital from overseas private investors. This funding will be used to finance the installation of more solar energy systems for households across the country.
Offshore investors, including First Sentier Investors, Natixis Investment Managers, and Societe Generale, have invested in what the fund refers to as a “pool of solar assets.”
NZGIF is collaborating with SolarZero, a provider of more than 15,000 residential solar energy systems, to use this funding for the installation of additional systems.
Jason Patrick, the Chief Investment Officer of NZGIF, remarked that this offering has proven to attract interest from international lenders.
“What we’re issuing debt off of is a pool of installed solar assets on more than 10,000 Kiwi homes, and having a pool of assets like that is new for some investors.
“Frankly, we’ve found that some of the offshore investors, like the ones we’ve been lucky to work with… have project finance teams and asset finance teams that look for things like this from both the commercial lens and their own institutional objectives about decarbonisation finance, and they were really excited to engage with us on this.”
Patrick emphasised that the country must significantly boost its renewable energy production to fulfill its electrification and decarbonisation requirements. However, he noted that solar operators and installers require long-term financing to support their systems, while lenders seek dependable investment opportunities.
“So that’s what we were able to do with the solar program,” he said.
“Private capital provides the scale that’s needed to accelerate investment into decarbonisation.”
Patrick also expressed high hopes for having domestic investors in the future.
“Our sense is that new structures like this—you know, a pool of solar assets and issuing debt off of it, is simply new for a lot of institutional investors and banks in other markets as well, to be fair.
“I think once they see a few successful issuances of debt off of a program like this, then they’re more likely to come in, and we’re really thrilled, as you know, to have had two issuances now from our solar program, and gosh, the next time we go out with another issuance, we’ll be sure to give them another look, and we’re hopeful to get them on board.”
New Zealand Green Investment Finance is a state-owned green investment bank established to accelerate investment that reduces greenhouse gas emissions in New Zealand. It is committed to using its capital to move the country towards a low-carbon future.