Queenstown Airport Shifts to Sustainable Financing

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by KnowESG
KnowESG_Queenstown Airport's Green Financing Boost
Image courtesy of Queenstown Airport

In a notable stride towards eco-responsibility, Queenstown Airport has transitioned its $100 million bank lending facilities into sustainability-linked loans.

Under this innovative loan structure, the airport's debt becomes intricately tied to the attainment of specific sustainability milestones.

Andrew Williamson, Chief Financial Officer of Queenstown Airport, emphasised, "Our sustainability strategy outlines clear targets, notably prioritising the decarbonisation of ground operations and the terminal. Collaborating with our banking partners, we've set ambitious benchmarks to drive progress along our sustainability path and decarbonisation roadmap."

Four key realms have been pinpointed under the loan terms:

  • Achieving Level 4 Airport Carbon Accreditation, a paramount global recognition for airport carbon management.

  • Curtailing Queenstown Airport's Scope 1 and 2 greenhouse gas emissions to uphold our net-zero commitment.

  • Implementing infrastructure conducive to slashing Queenstown Airport's Scope 3 greenhouse gas emissions, encompassing the facilitation of aircraft electrification, ground service equipment, and electric vehicle charging infrastructure.

  • Minimising waste destined for landfill within the terminal precinct.

The distinctiveness of these loans lies in their synchronisation of interest rates with Queenstown Airport's performance.

Sara Irvine, General Manager of Sustainability and Corporate Affairs, underscored, "We're dedicated to weaving sustainability into the fabric of our company. Aligning our funding strategy with our sustainability aspirations adds an extra layer of motivation to fulfill our promises."

As a council-controlled trading entity, Queenstown Airport is predominantly owned by the Queenstown Lakes District Council. Serving as a pivotal driver of regional GDP and a substantial local employer, the airport interfaces with over 60 businesses, collectively employing around 700 individuals across its premises.

"Our collaboration with businesses operating at ZQN, alongside our airline partners, holds significant strategic weight," Ms. Irvine articulated. "These targeted objectives address the sustainability challenges inherent in the aviation sector, facilitating our role in steering the industry toward a low-emissions future."

The local community's expectations and aspirations have substantially shaped these targets in conjunction with banking partners. Ms. Irvine highlighted, "The loan-associated targets spotlight pivotal actions that we are duty-bound to undertake in fulfilling this responsibility."

Sustainability-linked loans have been brokered with Queenstown Airport's four banking collaborators: Westpac NZ, BNZ, ASB, and Bank of China. BNZ and Westpac NZ have jointly orchestrated the sustainability dimension of the transaction.

Jacqui Macalister, BNZ's Director of Sustainable Finance, applauded the airport's achievement, stating, "Queenstown Airport's commitment to decarbonisation is notably commendable. This accomplishment's strength lies in a regional airport embracing global standards and practices in sustainable finance and airport carbon management."

Joanna Silver, Head of Sustainable Finance at Westpac NZ, noted, "We derive immense satisfaction from assisting Kiwi enterprises in their proactive strides towards fostering a greener, more resilient economy. The airport sector encounters distinct challenges in emissions reduction, yet Queenstown Airport's ambitious benchmarks underscore a resolute dedication to surmounting this challenge."

An external review of sustainability targets was conducted by independent global environmental, social, and governance (ESG) ratings firm Sustainalytics, aligning seamlessly with the Asia Pacific Loan Market Association's Sustainability-Linked Loan Principles (as of February 2023).

To ensure accountability, Queenstown Airport will annually furnish independently verified target accomplishments to its lenders.

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Source: Airports Council International


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