NZGIF has launched a new initiative, the NZGIF Green Finance Accelerator (GFA), to accelerate growth amongst small to medium-sized businesses (SMEs) with a focus on decarbonisation.
SMEs often face capital constraints when seeking to rapidly expand, such as when launching a new or innovative product or business line. GFA is designed to be an important enabler for SMEs in overcoming these hurdles and to accelerate New Zealand’s decarbonisation by providing non-dilutive lending.
NZGIF welcomes SMEs with commercialised low-carbon technology focused on New Zealand decarbonisation, to get in contact for potential risk-priced debt facilities of up to $5m, for up to 5 years.
GFA offers both pipeline and asset finance
Pipeline finance provides debt funding of up to 75% of the cost of goods sold for a growing pipeline of committed customers or projects.
Asset finance provides funding for revenue-generating assets of up to 75% of the value of the asset.
“Small and mid-sized businesses often need some flexibility with their financing. While the GFA will have distinct criteria for any applicant to meet (including typical due diligence), we have identified debt for SMEs as a gap in the market, and we are happy to help address it” says Jason Patrick, Chief Investment Officer at NZGIF.
Thundergrid and Hot Lime Labs
One recent example of this type of lending was a $1m working capital facility NZGIF established for Thundergrid, a supplier of electric vehicle charging stations. NZGIF provided the loan to scale up an existing pipeline of committed customers. The loan allowed Thundergrid to accelerate revenue growth without requiring additional equity.
Upon signing up for the lending arrangement with NZGIF, Jonnny Parker, CEO of Thundergrid, said “That’s why the facility from NZGIF is so important – it allows us to grow significantly faster than otherwise would be the case, and in turn, do a whole lot more to help decarbonise our economy.”
A second example is an asset finance facility (up to $1m) made available to Hot Lime Labs, a producer of sustainably-sourced CO2 used to increase food production in glasshouses.
NZGIF is providing the loan to support the rollout of additional equipment. The machines convert biomass waste to CO2 to be used in horticulture operations, displacing CO2 produced from natural gas and other fossil fuels.
“Securing a facility from NZGIF allows us to reduce the barrier for customers to access our technology, supercharging the pace at which we can make an impact for customers - and the environment," says Tijs Robinson, CEO and Co-founder, Hot Lime Labs.
Read more about the Green Finance Accelerator.
Download a flyer showing how the GFA works.