Wellington councils draw down first green loans from Local Government Funding Agency

Wellington City Council and Greater Wellington have become the first local authorities in New Zealand to draw down green loans from the Local Government Funding Agency (LGFA).

Delivering finance to local government since 2011, LGFA is delighted the two Wellington councils are the inaugural recipients of its Green, Social and Sustainability Lending Programme (GSS), which extends finance at a lower margin than LGFA’s standard loan rates.

LGFA Chief Executive Mark Butcher said his agency recognised the risks posed by climate change to councils and wanted to support their shift to a low-carbon economy.

“We also recognise that we have a role to play in helping member councils build a stronger and more resilient society through ambitious environmental and social projects.

“This lending will facilitate the local government sector to drive green and sustainable outcomes.”

Under LGFA’s Green Buildings category, Wellington City Council will borrow up to $180 million for the construction of Tākina, the Wellington Convention and Exhibition Centre.

Due to open in 2023, Tākina has been awarded a 5-star design rating by the New Zealand Green Building Council for a design that reduces energy use by 60% and carbon emissions by 66% when benchmarked against comparable new builds.

Wellington City Mayor Andy Foster said features like the rainwater harvesting system, smart air conditioning and enhanced thermal insulation would minimise Tākina’s environmental impact as well as operational costs.

“The GSS loan could save ratepayers up to $7.2m of interest over the 80 plus year lifetime of the building, adding to Tākina’s green credentials that are already attracting conference bookings.

“Built to the highest levels of seismic resilience using environmentally preferable materials, Tākina will have display screens to show visitors real-time sustainability metrics, such as water and energy consumption, as well as carbon emissions.”

Borrowing under LGFA’s Climate Change Adaptation category, Greater Wellington’s $227 million GSS loan will fund its flood protection work on the RiverLink project.

This involves upgrading the stopbanks on either side of Te Awa Kairangi/Hutt River, and deepening and widening the river channel to protect Lower Hutt city centre from a one in 440-year flood.

Greater Wellington Chair Daran Ponter said as well as shielding the city, the flood protection work would enhance the ecological health of the waterway.

“By making more space for the river we can create more fish habitats, including pools and undercut banks – places where trout, native eels and whitebait will thrive.

“Ratepayers will also be pleased with the reduced cost of borrowing on the GSS loan, which could amount to savings of up to $113,000 each year over the 100-year life of the asset.”