MEDIA RELEASE – 20 July 2016

Crucial milestone for Hurunui Water Project

The Hurunui Water Project (HWP) has reached a crucial stage in its goal of developing a sustainable irrigation scheme for the Hurunui District that will ‘drought proof’ the district’s farm businesses, boost regional production, increase farm incomes and jobs, and work within today’s strict environmental protection rules.

Chief Executive Alex Adams today said that the $180 million project is now seeking investment for the next development stage.

“We’ve got all of our water and land use consents in place and the appeals process is behind us, Adams said. “We now need to fund feasibility investigations that are needed to then confidently commence with the actual construction.”

Hurunui Water Project has been a project hallmarked by shareholder and community engagement. Working through the consents process has been an exemplar of how the collaborative approach has worked.

The Hurunui scheme is the first in New Zealand to achieve its consents in the new and far more demanding consents environment operating within the nationally agreed Water Accord and heightened regional council sensitivity to downstream environmental issues.

The proposal for a piped scheme means that the environmental impact is minimalised and piping encourages economic use of water in terms of delivery.

To begin investment efforts, the HWP Board has called a special meeting of shareholders on 27 July to obtain shareholder approval for the board to seek investment funding for the feasibility work required to take the scheme to farmer sign up and construction stage.

“This will be a crucial meeting,’ Adams said, “the outcome of which will determine the future of the scheme and ensure that the investment in time and money so far will bear fruit and set shareholders up for a sustainable future.”

To raise investment funding HWP is taking proposals to potential investors such as large agribusinesses, and construction companies. The company will, in August, also look to shareholders to raise around $900,000 in loans.

“These loans will accumulate interest at competitive rates and are intended to be repaid when the Water User Agreements are concluded with the shareholders fortunate enough to be in the initial part of the distribution area,” Adams said.

If the targeted level of debt funding from shareholders and the other providers is achieved, the government will release the $3.3million in funding that is ring-fenced by Crown Irrigation Investments Ltd (CIIL) for the project.

“The board believes that shareholder debt funding of the next stage of the project is the most efficient way of proceeding,” Adams said. “It is more cost effective, sources money from people who already have an investment in the success of the scheme, and will provide the assurances to contractors and government that we are determined to see the scheme completed for the benefit of our shareholders and our community.”

Adams said a recent survey of shareholders showed that almost all of them are planning to stay with similar land use, about 50% sheep and beef and a further 30% in arable, and some deer farming.

“Most survey respondents said they intend to irrigate only a proportion of the farm,” Adams said, “adding value by doing more of their own finishing of stock rather than sending them away, and taking options in specialised crops and the like.”

“It is clear that for our shareholders the most important aspect of the scheme is that it will drought proof their farms, a crucial consideration in North Canterbury which has been severely impacted by drought over the years.”

Adams noted that shareholders’ proposals for land use once they get irrigation, with quite modest intensification, lets the scheme meet the environmental conditions in its consents, while still providing what farmers need.

“This goes right back to the early intention of HWP, to be very conscious of achieving a sound balance between production and environmental outcomes.

“The potential for farmers, local and national agribusinesses and the Hurunui District generally is enormous and I am confident that we will attract the funding we need to proceed.”

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