Iwi and infrastructure – a natural partnership

Māori investors, including iwi, are seeking investment in infrastructure projects for long-term sustainable financial returns and improved social outcomes.

“Iwi, by definition, is an intergenerational enterprise – as is infrastructure,” says Helmut Modlik, the chief executive of Te Rūnanga o Toa Rangatira, the iwi authority for Ngāti Toa Rangatira.

“There are so many characteristics of infrastructure that have perfect alignment,” he told ANZ’s 2024 Māori Investor Forum.

From design and build to operation, maintenance, and renewal, “it’s a labour-intensive endeavour that provides mahi and training right across the life cycle, which is meaningful for our people.

“It also provides sustainable returns over the long term, which again is a great fit for us, as a place to put our money, our attention, and resources as iwi.”

Mr Modlik was part of an infrastructure panel at the Forum, an all-day event designed to bring CEOs and directors of leading Māori investment entities together to accelerate investment activity.

Infrastructure NZ’s Nick Leggett, who was also on the panel, said infrastructure offers significant long-term investment opportunities for iwi.

“For us infrastructure is a means to the end, it’s not the end. We have got to get much better at deciding what the end looks like. It’ll be different for many of us, but there are common elements as well.”

He cautioned that there are challenges for the industry, noting that New Zealand ranks at the bottom globally for the value it gets from each dollar spent on infrastructure.

“We build stuff and then we don’t think about it again. Look at our water services in different parts of the country. Look at the condition of our environments and catchments because of that. Even things like our roads and rail. We have got to get better at looking after what we have got.

“We need to decide where we are going, what’s the plan. We can’t swing from rail to roads, we need a bit of everything and common objectives.”

The panel was facilitated by ANZ Director of Loans and Specialised Finance, Hannah Crosby.

She says New Zealand’s crumbling infrastructure is negatively impacting New Zealanders’ quality of life. We need more investment - to raise the standard of our infrastructure, ensure we’re resilient to climate change and to fund the energy transition.

“There are many opportunities, including renewable energy.”

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Gary Holden, a forty-year veteran of the energy sector, and Chief Executive of solar farm company Lodestone Energy, was also on the panel.

The company has five solar farms across the Far North, Coromandel and Bay of Plenty and has plans to build another 20 farms in the next five years, helped by investors (including Māori).

“We like to build things, so we create a structure where people can invest easily.

“Electricity from solar power is the cheapest energy people have ever seen, in a quantity that’s useful. If you take solar energy and put it in an EV, that is the equivalent in terms of cost, to paying for petrol at 15 cents a litre.”

The company’s strategy is to sell its electricity directly to customers, including The Warehouse Group. It also builds its solar farms in a way that allows the land to retain its productive use.

“The panels are 2.3 metres off the ground. We are running sheep under them but have ambitions to try other things - perhaps growing kumara or blueberries”

He says the solar farms can power homes for up to 35 years, while also providing good returns for investors, and replacing fossil fuel generation.

“We are imagining a solar farm in every town. Our Whitianga site is a stone’s throw from the town. The Kaitaia site is a kilometre away.”

Upskilling workers

Mr Holden says the construction of each of their solar farms sees around 200 people on site for six months. Afterwards, they move to the next site to build the next solar farm.

“We are teaching and learning as we go. If we are clever, we can work our way across the country and carry those talented people with us. It’s a great industry for those who want to pick a career in this area, and if you want to move around the country, it’s an excellent opportunity.

“I like the fact we are working in all corners of the country. It’s nice to create that employment opportunity.”

The future

Mr Leggett said one exciting opportunity for Māori is the potential to participate in Public Private Partnerships. The coalition government has indicated increased use of the public private partnership model. While some of these projects will be what he calls “mega” projects, others will involve smaller assets – in the education or health sector.

“Rather than building a hospital on its own, there is an opportunity to build multiple assets in one place. The thinking and the innovation will be around how do we group stuff together; how do we build housing for whānau while also providing good amenities and services. Who can we partner with to do that?”

“The more investment we can get that’s intergenerational the better. It will be invested not just in the assets, but in the taiao and the whenua and the people. Then the more we will have a chance of getting the balance right and doing better for ourselves.”

It’s a shift identified by Mr Modlik, who says in the past few years he has seen his iwi focus on providing housing, but that is now shifting towards infrastructure more broadly, both social and physical.

Te Rūnanga o Toa Rangatira has partnered with an Australian firm to trial a micro, but scalable, wastewater project.

“People are going to have to create regional water plans for the renewal and replacement of assets.

“It’s almost guaranteed there will be a net asset gap and there will be a need to raise equity, rather than relying on local government rates.”

For him, this is a perfect opportunity for iwi to provide that funding and investment.

“There is 30 to 50 years demand for water asset replacement, build and operation in Wellington and elsewhere.

“It’s not very often, whanau, you get to stare at a bubble of demand that specific, that large and go, ‘what can I do about that?’”

“From my perspective money is not the main problem. My whole career I’ve never found it is a problem getting money. If you have the capability and a soundly constructed opportunity, money flows.”

A version of this article was published in the New Zealand Herald on 28/11/24