The Infrastructure Funding and Financing (Wellington Sludge Minimisation Facility Levy) Order 2023 was published in the New Zealand Gazette on 10 August 2023. This Order in Council enables a Special Purpose Vehicle (SPV) owned by CIP to provide up to $400 million of funding towards the construction costs of Wellington City Council’s Sludge Minimisation Facility (SMF).
To provide the funding to Wellington City Council, CIP implemented an innovative and market leading debt financing structure involving a combination of thirty-year fixed rate debt and a medium-term floating rate bank debt supported by a thirty-year full tenor hedge. CIP also invested in the SPV by providing equity funding of approximately $8.6m.
It will reduce the volume of sludge produced by Wellington city by up to 80 percent per year, cater for population growth and development, and allow Wellington City Council to dramatically reduce waste to landfill and the associated greenhouse gas emissions.
Sludge is the solid waste produced from the wastewater treatment process. It contains microbiological contaminants that need to be disposed of carefully. Its high moisture content means it is difficult and expensive to transport and dispose of.
The finance raised by the SPV will sit off Wellington City Council’s balance sheet and will be repaid over 33 years by an annual levy charged to the people of Wellington who benefit from the infrastructure.
The SPV has raised its finance from the following five institutions: The Accident Compensation Corporation (ACC), China Construction Bank (CCB), ANZ Bank New Zealand Limited (ANZ), Commonwealth Bank of Australia (CBA), Industrial and Commercial Bank of China Limited (ICBC).
CIP’S PARTNER FOR THE SMF TRANSACTION IS:
Transport System Plan (TSP) – Tauranga
This is the first general ratepayer levy to be applied under the Infrastructure Funding and Financing (IFF) Act, and allows Tauranga City Council to raise approximately $175 million towards the construction costs of 13 transport projects across the region.
The transport projects are part of a wider Tauranga City Transport System Plan designed to better connect the region and enable Tauranga City to become a more liveable and carbon-efficient city (for example, advancing projects designed to increase use of public transport and/or cycling lanes).
|Hewletts Road sub access area||Transport infrastructure works in the Hewletts Road project area to improve access to the Port of Tauranga and Mount Maunganui.|
|Connecting the People Fifteenth Avenue to Welcome Bay Transport||Infrastructure works on the route between City Centre fringe and Fifteenth Avenue, Turret Road and Welcome Bay to improve access to and from Te Papa Peninsula and City Centre.|
|Tauriko West enabling works package||Transport infrastructure works to support new urban development and housing in Tauriko West, while also supporting the inter-regional freight movement function of SH29.|
|Cameron Road multi-modal upgrade stage 1||Transport works (including public transport, cycling and walking) on Cameron Road between Harington Street and Tauranga Hospital.|
|Cameron Road multi-modal upgrade Stage 2||Transport infrastructure works (including public transport, cycling and walking) on Cameron Road between 15th Avenue Tauranga Hospital area and through Barkes Corner to integrate with Pyes Pa Road.|
|Cameron Road corridor connections||Transport infrastructure works to improve access to Cameron Road to support the use of bus, walking and cycling facilities delivered in the stage 1 and 2 upgrade works.|
|Primary cycle route facilities (Accessible Streets Area A)||Improvements to walking, cycling and public transport facilities in Mount Maunganui, Papamoa and the CBD.|
|Primary cycle route facilities (Accessible Streets Area B)||Improvements to walking, cycling and public transport facilities in Otumoetai, Bellevue, and Brookfield.|
|Tauranga Crossing bus facility improvements||Transport infrastructure, including a public transport hub, to support multi-modal access to and from the Tauriko commercial area in and around Tauranga Crossing.|
|City Centre transport hub||Transport infrastructure, including a public transport hub and support for active transport modes, to support multi-modal access to and from the city centre.|
|Barkes Corner to Tauranga Crossing multi-modal (local road component)||Transport infrastructure works to improve public transport connections between 3 some local roads and SH36 on the corridor between Cameron Road and the Tauriko commercial centre in and around Tauranga crossing.|
|SH2 revocation (Cameron Road to Bethlehem)||Transport infrastructure works to support improvements to local roading networks to integrate with the revocation of the existing SH2.|
|Maunganui road future proofing||Infrastructure upgrades to roading, cycling and pedestrian facilities to improve safety and speed management. Enables improved connections and parking amenities to Blake Park & Mt Maunganui College.|
CIP’S PARTNER FOR THE TSP TRANSACTION IS:
MILLDALE – Auckland
Major infrastructure partnership for North Auckland
CIP’s first infrastructure financing transaction was the Milldale development in Wainui, north of Auckland, in partnership with Auckland Council Group, Fulton Hogan Land Development and ACC, which was executed in October 2018. Milldale continues to proceed at a steady pace.
The project to build the Weiti bridge and road connecting Milldale to Old Pine Valley Road is now complete and open to traffic. The local pre-school is open, and plans for construction of the local school are underway with the Ministry of Education.
|Weiti Stream to Silverdale Interchange||Two lane arterial road and bridge connecting the development to the Dairy Flat Highway and Silverdale interchange||Construction in progress, bridge and arterial road complete.|
|Walnut Road Argent lane Intersection Upgrade||Upgrade of intersection for two Arterial Roads||Design and planning in progress|
|Milidale to Millwater Wastewater Tunnel||Wastewater tunnel and pumping equipment to service a total catchment of 9,000 dwellings||COMPLETE|
|Milldale to Millwater Wastewater Tunnel stage 2||Stage 2 connection to Milldale Development through private land||COMPLETE|
|Bridge to Highgate Parkway||Connects Milldate Development via a new bridge over the motorway to Highgate Parkway on the east side of the motorway||Design and planning in progress|
CIP’S PARTNERS FOR THE MILLDALE TRANSACTION ARE:
The Auckland Council Group (which includes council-controlled organisations) worked closely with CIP to establish and implement an alternative financing model in Milldale. Auckland Council contributed to the bulk housing infrastructure that will be met by future developer contributions charged on the future urban-zoned land that surrounds Milldale. Once the construction of these assets in Milldale is complete, they will vest to the Council. The Council also acts as the Milldale infrastructure payment-collection agent through its Council rates invoicing process.
Fulton Hogan Land Development Limited is an experienced developer that is completing residential sections in New Zealand as well as sites for pre-schools, schools, neighbourhood centres and other amenities typically found in largescale greenfield developments. Fulton Hogan Land Development is developing the Milldale area and is constructing the bulk housing infrastructure financed through CIP’s Special Purpose Vehicle.
ACC’s investment portfolio exists to support the administration of the country’s universal no-fault accidental insurance scheme. ACC contributed to the fixed-rate, long-term debt towards the infrastructure required to unlock the Milldale development (financed by CIP’s Special Purpose Vehicle).