Westpac NZ and Te Pūkenga have signed Australasia’s first ever Social Loan in alignment with international sustainable finance principles.
The $125m Social Loan will enable Te Pūkenga to offer better learning and employment opportunities to thousands of New Zealanders. Te Pūkenga – NZ Institute of Skills and Technology, was formed in 2020 when the government brought together New Zealand’s 16 Institutes of Technology and Polytechnics into one organisation.
The Social Loan is the largest new sustainable finance loan in New Zealand to date, and one of the first loans globally to comply with the newly released Social Loan Principles.
Te Pūkenga campuses can use funding to develop tertiary education projects and activities that align with the United Nations Sustainable Development Goals and the newly released sustainable finance principles for Social Loans. These include improving the quality of education, reducing inequality, and creating work opportunities and economic growth.
Westpac NZ Head of Sustainable Finance Joanna Silver says this lending will enable Te Pūkenga to build new educational facilities and invest in training programmes that provide better access to job opportunities.
“We know COVID-19 has caused huge disruptions to the workforce. With our support, Te Pūkenga is striving to offer equal access to education and vocational training that could benefit those whose livelihoods were affected by the pandemic,” Ms Silver says.
Under the terms of the loan, Te Pūkenga will be independently assessed by EY, a recognised third-party assurance provider in sustainable finance, to assess whether the funds are being used for the agreed social projects and activities.
Te Pūkenga will report back to Westpac on the social benefits of the loan, including numbers of student enrolments and qualifications achieved as well as numbers of jobs created and the percentage of students gaining employment post qualification.
“Social Loans are a great way for organisations to show their stakeholders and the broader public that they’re committed to addressing major social challenges, like inequality and lack of access to good education and jobs. We expect this type of lending to increase in popularity both here and abroad,” Ms Silver says.
Te Pūkenga’s newly published Social Finance Framework will help ensure the loan is being used for the agreed social purposes.
“By aligning our financing to local societal needs in our communities and broader international social goals, Te Pūkenga is taking the steps required to claim its place as an internationally significant educational institute,” Te Pūkenga Chief Executive Stephen Town says.
“The introduction of a new Social Financial Framework and this Social Loan are important steps in that direction.
“The Social Loan will help Te Pūkenga and its subsidiaries improve access to learning, advance equity for Māori and generate employment opportunities.”