Sustainable Business and Finance: An enduring local partnership
Sustainable Business and Finance: An enduring local partnership
ICBC NZ acted as lead arranger and joint sustainability co-ordinator for Wellington City Council’s new facility at Moa Point.
ICBC NZ is deeply focused on long-term growth through infrastructure development and committed to being a cornerstone partner in New Zealand’s progress towards its emission reduction targets.
Kevin Xu, deputy head of corporate & institutional banking of ICBC NZ, says that by providing funding in utilities, ports, highways, airports and the energy sector, the bank envisions an enduring relationship with the local economy, firmly grounded in sustainable financial practices.
This aligns with the bank’s commitment to environmental sustainability and the pivotal role of infrastructure in shaping a greener, more efficient world.
This year marks the 10th anniversary of ICBC operating in New Zealand as a fully owned subsidiary of the Industrial and Commercial Bank of China, the world’s largest bank by total assets.
Since its establishment in 2013, ICBC NZ has been involved in several major infrastructure projects, including the Hobsonville Point Schools public-private partnership, supporting Tainui Group Holdings (the commercial arm of the Waikato-Tainui iwi) through a banking syndication to support the development of the Ruakura Superhub, and participating in Napier Port’s capital investment programme.
ICBC NZ also acted as mandated lead arranger and joint sustainability co-ordinator for the $400m funding package for Wellington City Council’s new sludge minimisation facility.
The facility will be adjacent to the existing wastewater treatment plant at Moa Point and will use chemical and mechanical processes to handle and dispose of wastewater sludge. It is expected to provide significant environmental benefits through an 80 per cent reduction in the volumes of solid waste sent to landfill by 2026 and up to 60 per cent reduction in emissions.
The transaction, supporting the sponsor, Crown Infrastructure Partners, is the second application of the funding tools created under the Infrastructure Funding and Financing Act 2020 and the first to utilise a contractual structure that efficiently accommodates both fixed rate and floating rate lenders.
ICBC NZ recognises that funding sustainable projects like these require a long-term commitment and innovative funding models, and it is keen to see more opportunities arise in New Zealand it can be part of.
“As part of our efforts to be a long-term bank here, we are continuing to build our capacity, our team, and our infrastructure here,” says Xu.
“We want to be involved in more opportunities — areas like renewable energy, including solar farms, offer exciting potential.”
Due to its significant international operations, the bank can leverage its global network and share relevant expertise and funding models that have been successful in China and elsewhere around the world to make projects financially viable and appealing for investors in the long run.
“Building sustainable infrastructure typically necessitates both additional operational expenditure [Opex] and substantial capital expenditure [Capex],” says Xu.
ICBC NZ is committed to providing the financial backing necessary to support this critical investment.”
Xu emphasises ICBC NZ’s commitment to encouraging sustainability within its clientele, pointing to the bank’s support in helping corporates transition their conventional loans into sustainability-linked loans with science-based, ambitious targets.
He says for ICBC NZ, sustainable finance extends beyond financial transactions.
It encompasses a commitment to encourage corporate clients to develop their own sustainability operating frameworks. This approach not only ensures sustainable business practices, but also allows clients to pass on the benefits of sustainability to their own stakeholders.
Looking beyond direct environmental sustainability, ICBC NZ is also keen to support people-related businesses, such as schools and aged care facilities.
“These are all areas of infrastructure that will provide fundamental support to New Zealand and ultimately help its economy,” says Xu.
A decade on from its establishment in NZ, ICBC says it will continue to be a bridge that facilitates trade and investment between NZ and China.
“By supporting local businesses exporting to China and aiding Chinese businesses and investors interested in New Zealand, ICBC is able to accelerate international partnerships that contribute to sustainable economic growth and cultural exchange, while providing the much-needed impetus to deliver a greener future,” says Xu.
