Irrigation loan decision due

The Waitaki District Council will decide tomorrow whether to extend its $17million loan to the North Otago Irrigation Company (NOIC) by eight years.

In return, NOIC is proposing to make an immediate repayment of $2million and will also change to a purely commercial interest rate.

At present, the loan is due to be repaid by 2022, but the proposal is for guaranteed principal payments each year for the next 10 years.

"It’s part and parcel of the overall restructuring of our capital arrangements, including our debt," NOIC chief executive Andrew Rodwell said.

"The arrangements we are proposing with the council are absolutely win-win.

"The commercial interest rates are going to be slightly better compared to the one that was established as part of a development assistance arrangement."

Mr Rodwell hoped the council would approve the change.

"I think they understand the value of North Otago Irrigation Company and what it does for farms.

"They know that if the tap got turned off and there was no irrigation and high productivity farming, Oamaru would revert back to where it was 25 years ago.

"At the same time council have got various demands on their capital and they need to properly evaluate where their priorities are.

"We are hopeful they will regard the benefits as being attractive to the region but also commercially attractive."

Waitaki Mayor Gary Kircher said the extra risk versus the extra margin on the proposed loan would be one of the main talking points when council made its decision.

‘‘The other is about supporting a local business," Mr Kircher said.

"It’s good infrastructure, it increases productivity significantly."

If the loan was to be extended, the council had other avenues of funding in the medium term such as the Local Government Funding Agency, he said.

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