Preface
This Paper is one of a series of jointly funded reports commissioned to investigate impediments and opportunities for the development of large-scale water enhancement projects in New Zealand, with a primary focus of providing water for community irrigation schemes. Other reports cover the areas of: international models and experiences, the role of central government, the role of local government, and economic and social assessment parameters. An overview and commentary document summarises the key issues raised in the reports.
The future use of water, in the South Island especially, is a critical issue for regional and central government and private investors. As water is a finite resource that has multiple uses and development requires significant, long-term, investment flows.
These reports, which consider the use of water for irrigation, arose from feasibility studies by a number of farmer groups (many of whom have contributed to funding of these reports) into large community-wide irrigation projects. The feasibility studies highlighted the need for information to assist co-operative action for the financing, building and running of irrigation schemes.
This Paper reports that the greatest barrier to funding large-scale water enhancement development is the ability to access the finance needed for the feasibility, resource consent and construction phases of irrigation scheme development. The risks of financial loss are high during these phases.
The researcher identifies a range of feasible funding options and key risks for potential investors. Funding structures for these developments and possible risk management strategies are suggested. The author concludes that seed capital funding for the feasibility and resource consent phases of the development is needed and providers should expect to recover the investment through either debt or equity arrangements. Funding options for these phases include government and parties with interest in the benefits. The design and construction phases would be best funded through project finance arrangements that would be secured through long term customer contracts.
The selection of the corporate structure for the project will largely be determined by the requirements of the prospective debt and equity investors.
I would like to acknowledge the experts who wrote these reports, the reviewers who made their contribution, and the many people in the farming community and local government who have made their views known. This report reflects their views and will be a useful contribution to government policy analysis.
Alan Walker
Director, Policy Information and Regions
MAFPolicy
Acknowledgements
The Ministry of Agriculture and Forestry would like to
acknowledge the assistance of:
Dr Terry Heiler for helping to shape the original concept of this project and
for his comments throughout the project;
The principal authors of the reports: Dr Terry Heiler; Brett Gamble, Bruce
Irvine, Geoff Butcher, Stuart Ford and Wayne McClintock;
Dr Nick Brown for peer review of the draft reports for the studies and
preparation of the overview report;
Eddie Thomas, Central Plains Water, for his administrative support.
The following organisations for grants for the research of the study briefs and the preparation of the reports and the final commentary:
Agricultural and Marketing Research and Development Trust (AGMARDT)*
Ashburton Water Trust
Central Plains Water Enhancement Committee
Clutha Development Board
Farmers Irrigation Group, South Canterbury
Hawkes Bay Regional Council
Marlborough District Council
Masterton Business Enterprise Board
Tasman District Council
Waimate District Council
Ministry of Economic Development
Ministry of Agriculture and Forestry
* The Agricultural and Marketing Research and Development Trust (AGMARDT), earns income from funds invested from a share of the monies arising from the winding up of the Phosphate Commission in 1987. This income is used for promoting and encouraging excellence in New Zealand's land-based industries. Grants are made for farmer projects involving grass-roots problem solving and opportunity development, industry support, conference sponsorship, doctoral scholarships and postdoctoral fellowships. Farmer groups are encouraged to seek details on AGMARDT's applications process by accessing the website on www.agmardt.org.nz or contacting the Secretary Manager, P.O. Box 399, Shortland St, Auckland, Tel. (09) 373 3370, Fax (09) 373 3488.
Contact for Enquiries
MAF Information Services
Pastoral House
25 The Terrace
PO Box 2526
Wellington, NEW ZEALAND
Fax: +64 4 894 0721
Contact this person
