Kawerau punches above its weight in climate action
Over four years of extensive groundwork is bringing ground-breaking change to the Eastern Bay – and New Zealand – thanks to a collaborative effort and innovative approach from several leading charitable organisations and a social enterprise.
Kawerau is set to become the home of New Zealand’s first refrigerant destruction facility. The new Kawerau facility uses state-of-the-art Plasma Arc technology to safely and sustainably destroy synthetic refrigerants that are harmful to the atmosphere.
It will play a key role in meeting Cool-Safe’s ambitious target of supporting the refrigerants industry to reduce greenhouse gas emissions by 90% by 2035, through the Trust for the Destruction of Synthetic Refrigerants. This means reducing emissions by 1.5m tonnes per annum – the equivalent impact of taking around 600,000 cars off the roads each year.
The Trust for the Destruction of Synthetic Refrigerants is New Zealand’s only not-for-profit organisation working to reduce the impacts of refrigerant gases on our environment. They do this through their programme, Cool-Safe.
The plant will provide commercial waste destruction services, including to Cool-Safe, New Zealand’s product stewardship scheme for the destruction of refrigerants.
In search of a New Zealand site for its purpose-built plant, The Trust for the Destruction of Synthetic Refrigerants saw the potential in Kawerau’s competitive land prices and unique geothermal conditions. In 2019, the Trust reached out to Kawerau Enterprise Agency (KEA) to begin exploring options.
KEA was established in 1985 to help stimulate local enterprise in Kawerau. The self-financing initiative collaborates with the community, businesses, and other organisations to bring new opportunities to town.
“As far as opportunities go, this project’s potential positive outcomes were huge. There’s not only the possibility of starting a whole new green industry in Kawerau, but also the environmental benefits for New Zealand at large,” says Kevin Power, KEA General Manager. “We began discussing how KEA could help facilitate the move, and those conversations soon evolved into meetings with council, consents, and eventually, the process of securing impact investment.”
The opportunity was for KEA to construct a purpose-built facility to house this innovative technology, then lease that facility to Chemical Destruction Services Limited under a commercial lease. To turn this opportunity into a reality, KEA needed to secure an additional $1.2 million of finance to complete the build.
Efforts to secure this finance first began in 2022. Then, in 2023, KEA connected with Trust Horizon and Community Finance, and the possibility to deliver the finance by unlocking impact investment emerged.
“Trust Horizon is always looking at how we can support green initiatives across the Eastern Bay,” says Trust Horizon Chief Executive, Derek Caudwell. “We saw this project’s huge potential and were pleased to provide sustainable finance that furthers the region’s transition to lower emissions and supports local employment opportunities. Both of which closely align with the Trust’s own vision for the Eastern Bay.”
KEA is no stranger to supporting new business ventures to thrive. However, this facility is so far one of the largest opportunities KEA has helped facilitate.
Investments of this scale require extensive due diligence, along with in-depth technical knowledge to unlock the required investment. For this expertise, Trust Horizon connected KEA with Community Finance – a leading impact investment specialist, which provides the connection between wholesale investors and leading impact investments.
“Trust Horizon and Community Finance had already been in discussions about partnering to bring some of Trust Horizon’s impact investment ideas to fruition,” explains Caudwell. “When this exciting project emerged, we saw the opportunity to work together to make it happen.”
Community Finance provided its specialist expertise to undertake due diligence and establish an investment vehicle which issues Community Bonds to Trust Horizon, as the impact investor, and makes loans to KEA, as the borrower. These loans would support KEA’s construction of the facility, along with its investment into solar equipment to power the KEA Centre.
“Every party involved was driven to bring these positive social and environmental impacts to life,” says James Palmer, Community Finance Chief Executive. “It was through conversation and collaboration that we were able to achieve this great outcome. It’s exciting to now see where we’re at, and to think that this could set an example of what’s possible for future green initiatives.”
After a due diligence process that spanned over a year, $1.2 million of impact investment was secured from Trust Horizon, which unlocked the opportunity for KEA to bring climate action to Kawerau. Construction of the facility has officially begun, with the site breaking ground in mid-July this year.
“It was truly a coalition of the willing,” says Power. “The roadblocks in place were challenging, and could have been seen as insurmountable. But with organisations like Trust Horizon and Community Finance having the belief and fortitude to see it through, Kawerau now stands to become an example of a climate-positive town in the Southern Hemisphere.”
Find out more about Trust Horizon’s community funding here.