Infrastructure for the future - time to power up

It is my view that, more than ever, infrastructure is the foundation of a prosperous New Zealand.

Our ability to work, educate, innovate, build communities and raise our whānau rests on well-functioning infrastructure – from technology and energy networks to roads, pipes, and public buildings.

Climate change and the increase in extreme weather events have created new threats, and challenges, for infrastructure development.

Cyclone Gabrielle, Cyclone Hale and the Auckland Anniversary floods last year caused damage to roads, housing and water infrastructure as well as widespread disruption to power and mobile networks.

The storms had a devastating effect on lives and livelihoods. They also exposed vulnerabilities in our infrastructure and the need to make our transport, water and communication networks more resilient.

We are seeing the effects of the climate, too, when the weather isn’t stormy. Low levels in hydro storage lakes this year have driven up wholesale power prices and put the spotlight on the performance of the electricity market.

So as our climate changes, the make-up of our infrastructure - and our approach to funding it - needs to change as well.

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This year ANZ released our first voluntary climate report, to provide a picture of our climate-related risks and opportunities.

We assessed the coastal and inland flood risk to residential properties with an ANZ mortgage. Our analysis shows that about 2 per cent of residential properties in our mortgage portfolio are at risk of coastal flooding by 2030.

We recognise ANZ can help drive New Zealand towards a low-emissions future.

In the infrastructure space, we’re working with one of the cornerstones of New Zealand’s climate response: Powering up renewable energy.

New Zealand solar company Lodestone Energy is building five solar farms in the North Island: In Kaitaia, Dargaville, Whitianga, Edgecumbe and Waiotahe.

When completed, the solar farms will generate enough to power a city the size of Hamilton – that’s about 50,000 homes.

Lodestone is a great example of a company that is leading the way for New Zealand to move to a low-emissions future.

ANZ is working with Lodestone on funding new solar farms beyond those first five sites. This will power up more Kiwi homes with renewable energy.

In Northland, there’s another great solar project underway that we’re thrilled to be a part of.

Northpower, a New Zealand-owned electricity infrastructure company based in Whangārei, is building a grid-scale solar farm in Ruawai called Te Puna Mauri ō Omaru.

The 18 megawatt farm is being built by Northpower’s Future Energy division, which specialises in the design and construction of renewable energy.

It’s a true community project. Northpower is partnering with local firms for machinery, equipment and construction. It is employing members of the community and hapū Te Uri o Hau.

Te Puna Mauri ō Omaru aims to give Northpower’s customers a stake in renewable generation, support economic development in Northland and help improve energy supply and resilience.

As a long-term partner of Northpower, ANZ is providing funding for the solar power project under Northpower’s new green loan framework.

Northpower aims to develop a pipeline of up to 100 megawatts of renewable generation over the next 10 years to power over 25,000 homes.

It’s not just the larger companies that we’re partnering with to deliver infrastructure and lower emissions.

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We recognise ANZ can help drive New Zealand towards a low-emissions future. In the infrastructure space, we’re working with one of the cornerstones of New Zealand’s climate response: Powering up renewable energy.

Last month, I had the pleasure of visiting Hautapu Pine near Taihape.

Hautapu Pine makes fence posts, poles and house piles. As part of the production process, the wood needs to be treated with steam.

Previously Hautapu Pine used two coal-fired boilers for this process, burning 110 tonnes of coal a month, about $50,000 worth of coal – all of which was trucked up from the West Coast.

But the company had piles and piles of leftover wood peelings, which were essentially going to waste.

Hautapu Pine used a consultant to get quotes from around the world, settling on a high-tech Danish boiler, which it could power using wet wood waste.

With the help of the Government’s Investment in Decarbonising Industry (or GIDI) Fund and a Business Green Loan from ANZ, Hautapu Pine purchased the new boiler.

Now it is using its leftover wood to fuel its production process – and it has reduced its carbon emissions by more than 90 per cent.

This is a fantastic example of a Kiwi company investing for the future.

It also shows how we can team up on smaller projects using a flexible approach.

Our experience with Northpower, Lodestone and Hautapu Pine show us that powerful things can happen when business, community and private lending come together.

External partnerships and improved use of private capital is a major theme of this week’s conference.

Refining the public private partnership model will be key to achieving this.

Infrastructure NZ’s recent report on developing and refining the PPP model shows how the Public Private Partnership model can be tweaked, depending on the size of the project, to produce a great outcome.

We applaud Infrastructure New Zealand’s thinking in this space.

We are also keen to share insights from our experience in PPPs.

Since 2011, ANZ has banked six of the eight major PPPs - from the Pūhoi to Warkworth motorway to Waikeria Prison and new schools. We believe that having a strong pipeline of projects can help us develop a best-practice approach - a template that can be used from one project to the next.

This avoids the stop-start style of development which can drive up costs and extend timeframes as we basically start from scratch on every major infrastructure project.

ANZ welcomes the Government’s openness to private investment in infrastructure.

Private capital has been under-utilised over the past few years. There is an opportunity now to harness this for the fundamental goal of infrastructure development - improving Kiwis’ quality of life.

Our infrastructure solutions cannot be the same in the future as they have been in the past.

They will need to be climate resilient, they will need to serve the changing lifestyles of Kiwis who will likely rely more on technology and public transport.

Our infrastructure solutions will need to support the changing shape of the country as cities intensify from within and expand their reach with the building of new communities.

My hope is that together we can lay the foundation for co-operative, innovative and strategic solutions to our infrastructure challenges.

It’s time to power up.