A first-of-its-kind transaction structure is a focal point of this complex deal
In-house legal teams at New Zealand Green Investment Finance (NZGIF) and Transpower have advised on the signing of a $78m transaction that is set to speed up the development of solar farms by Far North Solar Farm Limited (FNSF).
The deal features what Transpower head of legal Chris Birkinshaw described as “a first of its kind tripartite agreement between Transpower, NZGIF, and FNSF” in which NZGIF will fund connection assets to be constructed by Transpower. These assets will link five FNSF solar farms to the national grid.
These five farms are expected to produce approximately 1.13GW of new clean electricity – adequate for about 178,000 homes annually.
“This was a complex transaction to design from scratch. Nothing like this funding structure has been tried in New Zealand before and that required flexible and open-minded thinking. Chris at Transpower saw the opportunity straight away and he and his team really put in the work to get to the fantastic outcome that we have achieved – a very scalable financing solution that will help accelerate the development of renewable energy generation in this country”, NZGIF head of legal Ian MacKenzie said.
Birkinshaw highlighted the complicated hurdles the teams faced while working on the transaction.
“We started discussing this transaction with the NZGIF team well over a year before we signed it. It took a couple of goes to get a structure that worked, and Ian and the NZGIF team were instrumental in adapting so we could make it work. It required us to work through some complicated regulatory and practical challenges over an extended period, culminating with some fast-paced work towards the end of the transaction to meet unmovable deadlines”, Birkinshaw explained.
The novel agreement was “an excellent example of the collaboration inside the Crown ecosystem to drive impressive results for the country”, he said. The transaction was signed at parliament at the close of last month – “a special way to finish the transaction”, he added.
Chapman Tripp’s Tim Sherman and Bell Gully’s Sarah Anderson-Butler advised NZGIF in relation to the FNSF deal. Tom Fail represented FNSF.
