Fonterra capital return could boost GDP – ANZ Report
The Fonterra divestment capital return should provide “a tailwind to GDP growth” next year, according to a new ANZ NZ report, but it’s not “manna from heaven” for the economy.
Its Business Green Loan will be offered to eligible customers at a floating rate of 3.85% per annum, a 1.5% discount on the current floating base rate. The loan can be used to fund initiatives that support sustainable land and water use, energy efficiency, and renewable energy, with customers able to borrow up to $3 million.
For agribusiness customers, those initiatives could include planting projects, reforestation, preserving natural landscapes and the installation of products that improve water quality. It also includes effluent ponds, the installation of solar panels and biomass boilers.
However, there is a condition: Planting projects cannot change the property’s land use by more than 15%.
ANZ New Zealand business banking managing director Lorraine Mapu says it’s important to remove the cost barrier that has prevented some New Zealand businesses from investing in their sustainability.
“It’s about supporting New Zealand businesses and their sustainability ambitions… the key for us is that it goes right across our business customer base, so no matter how big or small they are,” Mapu told Rural News.
“We’re now at a point in time where there’s a lot more governance over sustainability, both in New Zealand but also globally,” Mapu says.
“As the borders have reopened and the need to actually have products that support our customers to work to compete in a global market, the timing felt right for us at the moment.”
She says sustainability will be integral to how businesses operate in the future.
The loan is built on the Loan Market Association’s Green Loan Principles.
The principles set out what the loan can be used for, the process for project evaluation, the management of the loan, and the reporting required by the bank, she says.
“So, what it does is it supports our customer base, especially as they compete globally and import products across the globe. It’s a recognised standard worldwide that will help our customers to support our customers to grow their businesses.”
The loan became available to customers on 2 September 2022.
The announcement comes a month after Westpac announced it would pilot a sustainable agribusiness loan, and three months after Bank of New Zealand announced an agribusiness sustainability-linked loan.
