Water August2023

Buddle Findlay is pleased to have advised the finance parties, on raising up to $400m of funding for the construction of the Wellington Sludge Minimisation Facility, utilising the tools made available by the Infrastructure Funding and Finance Act 2020.  The finance parties consisted of ANZ Bank New Zealand, Accident Compensation Corporation, China Construction Bank Corporation (New Zealand Branch), Commonwealth Bank of Australia, and Industrial and Commercial Bank of China (Auckland Branch).

The $400m project is a critical piece of infrastructure that will help Wellington City Council achieve its goal of becoming a net zero carbon capital by 2050.  The funding of this project allows for a new solution for the minimisation and management of sludge (a term used for the solids produced from the wastewater treatment process), which will reduce the amount of waste going to landfill by 80 percent, reduce carbon emissions from the treatment process by 60 percent, and create a process which better aligns with mana whenua values.  This infrastructure project is a significant milestone for all those involved and the first processing facility of its type in New Zealand.

The transaction has cemented the importance of the IFF model in supporting New Zealand infrastructure, and has enabled first in market achievements including:

  • Bifurcated contractual structure that efficiently accommodates fixed and floating rate lenders in the same vehicle
  • 20 year and 30 year fixed rate facilities from China Construction Bank (CCB)
  • Establishing a new market precedent for IRS tenor, creating additional liquidity at the long end of the curve.

The Buddle Findlay team was led by partners Peter Owles and Daniel Collins.  Bell Gully advised Crown Infrastructure Partners, together with the team at Mafic.

Peter Owles and Daniel Collins commented:  "We are delighted to have partnered with the finance parties in providing this innovative transaction for Crown Infrastructure Partners.  This will be critical piece of infrastructure for the Wellington region and will provide greater resilience of the Wellington infrastructure network, as well as having a hugely beneficial effect on the environment.  Crown Infrastructure Partners, the finance parties and their advisory teams were great to work alongside, particularly given the complexity of the transaction".