Crown Irrigation Investments (CIIL) has made a preliminary offer of $6.5m in subordinated debt finance to the Canterbury scheme.
The commitment was based on strong farmer support and related revenue, as well as the expected economic benefits from helping fund excess capacity in the scheme’s early stages, CIIL chief executive Murray Gribben said.
CPW met the Crown’s investment criteria, in that it had maximised the use of private capital, he said. CIIL would partner CPW for five years to help finance stage one of construction.
Total financing of stage one would be provided through a combination of farmer equity (stage one construction shares), bank debt, and CIIL money.
Financing for later stages was yet to be determined, Gribben said.
The scheme would distribute water reliably to about 60,000ha of the Canterbury Plains when completed, he said.
However, it would not go ahead without the Crown’s short-term financial support.
CIIL’s investment was expected to be confirmed before the middle of this year, he said. That would allow for comprehensive due diligence and conditions to be satisfied before a loan was approved.
The impact of Environment Canterbury’s Land and Water Regional Plan on the scheme would form part of the due diligence.
The regional council has been taking submissions on its plan, which regulates nitrate leakage though mechanisms such as a cap on nutrient loadings.
CPW was working with the council on the plan, Gribben said.
