Finance Minister Nicola Willis seeking urgent advice on $115m loan to SolarZero

Thursday, 28 November 2024

NZGIF has yet to ascertain its financial exposure to SolarZero’s failure, saying that depends on a range of scenarios.

SolarZero had drawn down about $115 million of the $145m in loans a Crown-owned investment fund had committed to by the time the solar installer went into liquidation on Tuesday, a fund spokesperson says.

However, NZ Green Investment Finance (NZGIF) said it was still working through its actual financial exposure to the business failure, along with other lenders.

That depended on a range of scenarios including decisions by other parties, she said.

NZGIF and other lenders had sought external advice, she said.

A spokesperson for Finance Minister Nicola Willis, who is a shareholding minister for NZGIF, said she had sought urgent advice from the Treasury.

However, a spokesperson for NZGIF’s other shareholding minister, Climate Change Minister Simon Watts, said it was an operational issue for the Crown-owned fund.

SolarZero announced to customers on Tuesday that “due to unsustainable operating losses and liquidity constraints” the business was unable to continue trading in its current form and had been put into liquidation.

But it said SolarZero customers would not be affected by the company’s demise.

NZGIF was established as a Crown-owned entity by the former government in 2019.

Shareholding minister Simon Watts says NZGIF’s exposure to SolarZero’s liquidation is an operational matter for the fund, despite Finance Minister seeking “urgent advice”.

As of the end of June it had committed $474m of public money to investments, with its lending to SolarZero believed to be by far its largest single bet.

SolarZero is owned by a fund managed by giant US investment firm BlackRock and employed about 160 people across offices in Auckland, Christchurch, and Wānaka.

Liquidator Grant Thornton is required to publish its first report into the company’s affairs by Tuesday.

A spokesperson for BlackRock said it had provided significant funding to SolarZero over the past two years.

“When the board of SolarZero formed a view that the SolarZero business was not sustainable in the long term without significant restructuring, extensive discussions were held with multiple parties to identify options that could support the business,” she said.

“Regrettably, these efforts could not be brought to fruition.”

BlackRock announced in August last year that it intended to establish a new $2 billion fund to invest in New Zealand renewable energy projects.

It has yet to confirm whether it has since raised any of those funds or identified any investments.

Its spokesperson said it was still committed to the New Zealand market, noting it had established an office in Auckland earlier this year that now employed four staff.

The first report from liquidators Russell Moore and Stephen Keen of Grant Thornton is expected next week.