Financial close on Central Plains Water irrigation scheme
Crown Irrigation Investments Limited reaches financial close on the Central Plains Water irrigation scheme
Crown Irrigation Investments Limited (Crown Irrigation) today announced it has reached financial close on its first investment with Central Plains Water Limited.
Under the agreement, Crown Irrigation will provide $6.5 million of subordinated debt finance for a period of up to five years, to support the construction of excess capacity in the headrace to be built during Stage 1 that is needed for later stages of the irrigation scheme.
Following the agreement of a terms sheet in March 2014, the transaction has been subject to comprehensive due diligence by Crown Irrigation and all conditions precedent have been satisfied.
Central Plains Water scheme will deliver a more reliable
water supply, which
is important to supporting sustainable growth and improved environmental outcomes in the Canterbury region. Stage 1 of the scheme will distribute new alpine water to approximately 20,000 hectares of land on the Canterbury Plains.
Crown Irrigation’s investment will contribute to the further expansion of the scheme to 60,000 hectares. This can be expected to relieve pressure on ground water and springs in the catchment area and contribute to the economic growth of the Canterbury region through a boost in direct and indirect agricultural output.
“We are very happy to announce financial close on this deal,” says Murray Gribben, Crown Irrigation’s Chief Executive Officer. “We are supporting this project with a tailored financial package that will enable the scheme to be developed to the scale required for the long-term. We will also consider the potential to fund overcapacity in Stages 2 and 3 of the scheme when the time comes.”
Crown Irrigation’s Board Chair, Dame Alison Paterson, said that she is pleased with Crown Irrigation’s involvement in the delivery of a significant piece of the South Island’s irrigation infrastructure. “Irrigation has the potential to improve the efficiency of water use for the benefit of our environment and support the sustainable growth of New Zealand’s primary industries. Crown Irrigation can bring a lot of value to schemes by offering financial solutions and a sound understanding of irrigation development opportunities and risks.”
Construction of Stage 1 infrastructure for the Central Plains Water scheme has begun and is expected to be completed in September 2015.