Russell McVeagh is pleased to have assisted NZ Post, who together with New Zealand Green Investment Finance (NZGIF), have signed a $20 million financing agreement to accelerate the transition of the NZ Post fleet and its delivery contractors’ vehicles to electric vans or low emissions vehicles (LEVs).
Partner Tom Hunt, together with Special Counsel Bevan Peachey, are advising NZ Post on all aspects of the transaction, which involves NZ Post providing $10 million of financing through NZGIF majority owned subsidiary Sustainable Fleet Finance (SFF), while NZGIF is also contributing $10 million of financing to the partnership. The investment will allow the organisations to offer competitive financing to improve access to E-Vans/LEVs, and contractors will also be able to access grant funding from NZ Post’s EV Incentive Scheme.
The $20 million investment will initially be used to finance an order for 60 E-Vans (Mercedes Benz eVitos) for the NZ Post fleet. Arriving in the country in the second half of next year, the vans will begin a cascade lease plan where a vehicle leased by NZ Post can then be offered, by SFF, to contractors as second and third owners. The model helps to make a vehicle more affordable for each subsequent owner. While electric vehicles cost less to run, it is the initial purchase cost that can be a barrier.
"This innovative financing solution opens up more possibilities to make the switch to low emissions vehicles an easier option. NZ Post's approach to electrifying their fleet and assisting in launching the second-hand commercial EV market is to be applauded, and continues its work in the areas of climate action and leadership," said Hunt.
Up to half a million dollars will be made available annually by NZ Post to help its delivery contractors invest in the eco-friendly vans, supporting the company's decarbonisation goals. NZ Post has committed to being carbon neutral from 2030, and aims to have 100% of its own fleet and 25% of its contractor fleet electric by 2025, with the balance of the contractor fleet electric by 2030. Transport contributes to about a fifth of New Zealand’s carbon footprint, most of which comes from the light vehicle fleet made up of cars, vans and utes.
Advising on this partnership continues Russell McVeagh's leading role in the development of the New Zealand sustainable finance market, with the firm having advised on the recent Summerset and Kathmandu syndicated Sustainability Linked Loans (SLL) transactions, which have been the largest in the New Zealand market, as well as on Spark's SLL, The Warehouse Group's SLL, Genesis on its Sustainable Finance Programme which had a SLL component, and KiwiRail's world-first green loan certification.
NZGIF were advised by MinterEllisonRuddWatts on the partnership. You can read more on this here.