A powerful alliance

Celebrating Fonterra’s recent announcement of its plans to build a wood-fuelled biomass boiler at...
Celebrating Fonterra’s recent announcement of its plans to build a wood-fuelled biomass boiler at its Stirling cheese factory are Ingrid Leary and Bryan Cadogan (centre front) and (from left) Austrian company Polytechnik's Christian Jirkowsky, Pioneer Energy's Fraser Jonker, Pioneer Energy's Richard Ireland, Fonterra employees Todd Downie and Ian Hall, Fonterra's Richard Gray, Fonterra employee Craig Fonterra employee Craig Seddon and Fonterra Stirling senior environmental manage Hannah Furze.
The Cromwell-based charity Central Lakes Trust (CLT) came of age this year, and since its inception in 2000, has distributed more than $100 million in grants to a wide range of community projects and services throughout the central lakes area. It has $388 million in investment assets and owns a power company, Pioneer Energy, which is involved in revolutionary projects around New Zealand, from converting food waste to bioenergy, to processing forest slash for biomass fuel. It is a powerful alliance in more ways than one, as Mary-Jo Tohill reports.

Back in July, Pioneer Energy chief executive Fraser Jonker stood under the Fonterra Stirling dairy plant’s landmark chimney — all 44m of it — and the massive coal hoppers that will soon be a thing of the past.

From August next year, the South Otago cheese factory will be fired by wood biomass fuel with a much smaller chimney. The supplier: Pioneer Energy, owned by the Central Lakes Trust.

From Central Otago to the central North Island; almost a year earlier, Mr Jonker attended a Ngati Whaoa blessing at Reporoa, where Alexandra-based Pioneer Energy has partnered with Ecostock Supplies Ltd to construct New Zealand’s first large-scale food waste-to bioenergy facility, Ecogas. Work has begun on the $30million plant, which was due to be operational in February but will be delayed because of Covid-19 and a few international supply chain challenges.

The Pioneer Energy-Ecostock Supplies Ltd bio-energy facility under construction at Reporoa in the...
The Pioneer Energy-Ecostock Supplies Ltd bio-energy facility under construction at Reporoa in the central North Island. PHOTOS: SUPPLIED
It will turn 75,000 tonnes of organic waste from businesses and kerbside food scrap collections throughout the North Island into sustainable renewable clean energy.

Not only that, but it promises to reduce emissions and produce gas, electricity and digestate used as fertiliser and soil enhancer.

‘‘To have the opportunity to be involved in something new that not only will make a difference to the New Zealand environment, but also to make that venture successful financially to further support the CLT work, is making everyone at Pioneer feel proud,’’ Mr Jonker said.

The project also shows a degree of faith in the power company.

Cromwell is home to Pioneer’s owner, the largest philanthropic trust per capita in the southern hemisphere, the Central Lakes Trust (CLT).

Since its inception 21 years ago the trust has distributed more than $100million in grants into a wide range of community projects and services throughout the central lakes area. It has $388million in investment assets, and the jewel in its crown is Pioneer Energy.

The energy company and a charitable trust’s fortunes were founded in a power station at Roxburgh that was essentially set up to irrigate Roxburgh East and power the town. This was the George Power Station, which was established at Roxburgh in 1924.

Out of it, the Otago Central Electric Power Board (OCEPB) was born. When the power board became incorporated through government reforms in 1999, proceeds from the sale of its lines were bestowed on the trust ($155million in assets), and the electricity generation business became what is now known as Pioneer Energy.

In the past 20 years, while CLT and Pioneer have been quietly building their profiles, so, too, have their chief executives.

Fraser Jonker
Fraser Jonker
Fraser Jonker

He calls Central Otago home, but Pioneer’s chief executive Fraser Jonker is originally from central South Africa.

He grew up on a farm ‘‘the furthest point away from the coast, similar to Central’’.

He has a degree in electrical engineering and an honours degree in commerce.

Before coming to New Zealand 17 years ago, Mr Jonker had set up his own engineering consultancy business, developed a diverse farming business and established a 30ha pecan nut orchard. He also grew vegetables, maize, wheat and beans on 40 ha of pivot irrigation.

Since his move here in 2004, he has been building his management career. He was general manager at Northpower in Auckland and works manager at Unison Networks, in Hawke’s Bay

His career highlight has been the appointment at Pioneer in 2010 where he was doing ‘‘a lot of exciting things’’.

‘‘The best thing is having the ability to do a lot of new exciting projects helping New Zealand in our quest to have more sustainable energy solutions but best of all, it’s great to see the returns we make from Pioneer put back into our community through the CLT.’’

His greatest aspiration was to see Pioneer successfully deliver the Reporoa food waste to energy facility project and help the Pioneer management team become leaders of this exciting business in the future ‘‘enabling me to focus on the next stage of my career doing some governance roles’’.

Susan Finlay
Susan Finlay
Susan Finlay

From both a corporate and local government background, Susan Finlay, of Cromwell was the Central Otago District Council corporate services manager for six years before taking up the role as CLT chief executive in 2015.

She has 25 years of experience in top executive roles throughout New Zealand, including the energy sector for The Power Company and PowerNet.

Energy is commodity. The trust is a charity. The two make strange bedfellows.One makes money, the other gives it out. Without each other they would not be as strong.

But Mrs Finlay is under no illusions — there is a bottom line.

‘‘Pioneer is a significant part of our portfolio. It works because it aligns with our strategic values and it is profitable.’’

It paid a dividend of $12million in the past financial year.

What kept the marriage interesting and exciting was the fact that Pioneer kept pushing the boundaries and kept diversifying in the energy business.

She cited the Stirling and Reporoa projects as highlighting what an exciting time it was to be in the sustainability field.

If the trust chose to dump Pioneer from its portfolio, the community would have to be consulted, she said.

‘‘I wouldn’t suggest it [would] happen but if Pioneer was to leave the frame or do something left of field, there would have to be a discussion ... if there too many risks, say, or if we started to have conflicts.

‘‘But Pioneer is a good partner because our values align, because of its sustainability values, but it those were to change, yes there would be a discussion.‘‘

It was a fairly robust relationship, she said.

‘‘Pioneer has to perform and show a return. We make sure things don’t get too cosy ... but we do have strong governance, strong structures, and because we are aligned in our interests it is a good relationship.’’

Although she does work in a distinctive contemporary schist-clad building in central Cromwell, for all its apparent wealth, Mrs Finlay and the CLT keep a low profile.

The building was an asset and there for the community’s benefit, and the trust was not particularly into flashy branding either, she said.

‘‘I think we’re quite deliberately not flashy. We would rather have the revenue available to be held for fund raising.

‘‘It’s more important that the community gets the benefit, that the community has sustainable funding.’’

 

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