Stuart McKinnon at the Ngāwhā geothermal energy site. Photo / Supplied
If there was a reminder, the Covid-19 pandemic has clearly placed emphasis on the vital role that infrastructure plays in our modern world.
There’s no way many of us could have continued working remotely during the lockdown without the super-fast broadband network, a $ 1.7 billion investment launched by the government in 2008.
While some industries have been hit harder than others by the lockdowns, our ability to operate online has been a saving grace, keeping many businesses alive and many Kiwis in their jobs.
At a time when we need it most, the pandemic has also brought to light the state of our health system and what can be described as an underinvestment in both rural and urban critical infrastructure in New Brunswick. -Zeeland.
The government has committed $ 57 billion over the next four years to modernize roads and railroads, schools and hospitals, housing and power generation.
While this is a good start, the need for further investment is clear, especially as our cities move towards more intense life, our water supply network needs to be modernized and we are moving to a low emission economy. of carbon and the changes that come from a warmer world.
But lessons from the past tell us that there is a need to explore new ways to get that investment that allows us to move beyond catch-up, provide certainty for decades of planning to come, and minimize the burden on people. taxpayers and taxpayers.
This will require new thinking on the part of the public and private sectors.
A project I recently visited in Northland shows what can be done when the door is open to tailor-made, community-driven funding arrangements.
After three years of construction, community-owned power company Top Energy commissioned a new geothermal power plant, the result of a major expansion funded by ANZ.
The expansion of its geothermal power generation in Ngāwhā now makes the Far North District self-sufficient in electricity, and all of this now comes from a renewable source.
Prior to the station’s commissioning, most of the region’s power supply was imported from the North Island, resulting in higher costs for consumers.
Now, with all of its electricity produced locally, Top Energy is able to export it to the rest of the country, generating savings and value for the local community.
ANZ played a pivotal role in funding the project in a way that meant the company did not need to raise additional capital, ensuring that it remained 100% owned by the Top Energy Consumer Trust, which represents consumers. of Northland electricity.
In an area where electricity prices are among the highest in the country, the project is a key part of the Trust’s goal of supporting economic growth and, over time, enabling consumers to realize benefits. savings through reduced wholesale electricity prices.
It already makes the difference. Top Energy was able to reduce its line prices by 15 percent and was able to increase the discount to consumers by 25 percent directly from the new power plant.
This project is a prime example of how smart investments can be mobilized to build and secure the future of key infrastructure that brings tangible long-term benefits to New Zealand communities.
Even from ANZ’s initial involvement in the project, we could see that it was something special.
Top Energy was focused on establishing energy independence from the rest of the North Island, but only if it could be done without having to sell a stock to investors.
This meant that ANZ had to think a little differently about financing the project to maintain full ownership of consumers.
We were able to bring together years of experience in funding similar projects and find a way to structure a solution to meet the needs of ANZ and Top Energy.
The result was a huge success – with the new station commissioned six months earlier, producing more electricity than expected and exceeding the company’s financial forecast.
The other great thing is how a project like this contributes to the country’s climate change goals and the government’s goal of having all of our electricity produced from renewable sources here. 2030.
This closely aligns with ANZ Group’s commitment to a sustainable future and our commitment to fund and facilitate at least $ 50 billion in loans to sustainable solutions for customers by 2025.
In addition to creating jobs and stimulating economic activity, new and improved technological infrastructure has the potential to further reduce future costs.
As the world takes steps to rebuild after the Covid-19 disruption, infrastructure is also at the heart of many leaders’ economic recovery plans – and New Zealand should be no exception.
Money for infrastructure investment will always be limited, and governments and private companies will continue the difficult balance between the future and immediate spending priorities.
The Ngāwhā Power Plant expansion shows what is possible when infrastructure companies and financial institutions work closely together to complete a project that meets our growing demand for electricity while meeting the needs of future generations.
• Stuart McKinnon is Managing Director – Institutional, ANZ NZ. ANZ is a sponsor of the Herald Infrastructure Report.