Government agency Crown Irrigation Investments confirmed today it would lend Central Plains Water $6.5 million to develop stage one of the irrigation scheme.
Under an agreement with the Canterbury company, the Crown will provide $6.5m of subordinated debt for up to five years. The loan will assist the construction of excess capacity in the headrace to be built as part of stage one.
The transaction has been subject to due diligence by Crown Irrigation, which announced the draft terms of the loan to CPW in April. Stage one of the scheme will irrigate about 20,000 hectares.
The Crown's investment will help expand the scheme to 60,000ha.
The scheme has been touted as the largest irrigation construction project in the South Island.
The Rakaia to Waimakariri river canal scheme will eventually run 56 kilometres, but initially stage one will run from the Rakaia for about 17km.