Green loan certification

KiwiRail’s NZ$350m loan facility to finance the purchase of two new Interislander ferries has become the first shipping loan in the world to be certified by the Climate Bond Initiative (CBI).

The Climate Bonds Standard and Certification Scheme is used globally by bond issuers, governments, investors and financial markets to prioritise investments which genuinely contribute to addressing climate change. The scheme uses rigorous scientific criteria to label bonds, loans and other debt instruments to ensure they are consistent with the goals of the Paris Climate Agreement.

To gain CBI certification, KiwiRail demonstrated a clear path for fuel and propulsion systems achieving zero carbon emissions by 2050, which supports KiwiRail and the New Zealand Government’s objectives. Through smart design of the hull and machinery space, the new ferries have been future-proofed to allow us to increase battery use over time so we can run entirely on battery and shore power, or to use other low-carbon fuel sources as they become commercially available and have a reliable supply line.

Once Interislander’s three old ferries are phased out, the new ferries will achieve a 40 per cent reduction in Interislander’s carbon emissions by operating on a combination of diesel, battery and shore power. From the start, 30 per cent of each crossing, including port time, will be battery and shore powered.

The new ferries are being built by Korean shipyard Hyundai Mipo Dockyard. The first arrives in 2025 and the second in 2026, to allow for a smooth transition. The purchase of the ferries is part of a $1.45 billion investment programme which will also see redevelopment at the port in Wellington and Waitohi Picton.