Climate Action Loans offer Council more opportunities to save

The New Zealand Local Government Funding Agency (LGFA) was established in 2011 as a collective borrowing vehicle for the local government sector and offers guaranteed access to funding at least cost to ratepayers compared to alternate funding sources. Kāpiti Coast District Council is a shareholder borrower and guarantor directly of the agency.

LGFA Sustainable loans

The agency has developed two loan products to finance sustainability projects and encourage emissions management across the local government sector.

• Green, Social and Sustainability Loans offer interest rate discounts to Councils to fund local sustainable infrastructure projects.
• Climate Action Loans offer interest rate discounts to Councils that have adopted an Emission Reduction Plan that sets out specific Emissions Reduction Targets.

Council’s longstanding commitment to climate action meant that we were able to take advantage of the Climate Action Loan rate discounts for our debts.

Council started measuring our organisational emissions in 2010 and were the first local authority in New Zealand to be certified under Enviro-Mark’s Carbon Emissions Measurement and Reduction Scheme in 2012 (now known as Toitū Carbon Reduce). Since 2010, Council has reduced its emissions by 72% and has set an aspirational goal to be ‘net zero’ by 2040.

In 2023, we became the fourth council in New Zealand to be approved for a CAL. The discount is currently offered at 0.02% below standard borrowing costs. These loans can be applied to a range of purposes, including refinancing existing loans. As of June 2024, the agency had issued Climate Action Loans to seven eligible councils.

Council was able to refinance some of its existing debt under the Climate Action Loan, and as of May 2025, the discount is reducing Council’s lending costs by $44,000 a year.

The Climate Action Loan discount currently applies to 60% of Council’s gross debt. To remain eligible for a Climate Action Loan, Council is required to update the Local Government Funding Agency each year with an independently verified emissions inventory and the progress we’ve made towards our emission reduction targets.

As such, maintaining, monitoring and reporting on the emission reduction activities across the organisation not only helps us track our progress toward our ambitious goals, but also means that we can continue to benefit from lower loan costs.

Reducing emissions also brings other financial benefits for Council. Many of our emission reduction efforts, such as phasing in LED streetlights and upgrading our wastewater processing plants, have also improved energy efficiency, which lowers operational expenses.

For more information about the agency’s sustainable lending: Sustainable Lending | New Zealand Local Government Funding Agency