The Waitaki District Council will consider an in-principle request to extend its loan with the North Otago Irrigation Company at a meeting next Wednesday.
The request has come on the back of a recently commissioned report showing the social and economic benefits of irrigation in the district.
Under the request, the term, amount, and a number of conditions of the current loan would be changed.
The key requests include a provision for quarterly interest payments to be made, starting on January 1, 2015, through June 30, 2022, extension of the loan repayment date to June 30, 2022, increasing the loan amount by $9.5m from $12.5m to $22m and varying other terms that are no longer applicable or need to be strengthened for council security.
The social and economic benefit report showed there had been a $48m increase in gross domestic product to the local economy, and the creation of 274 jobs since the scheme commenced in late 2006. The report also shows there are more families and a younger demographic in the survey area.
“It is clear from the study and the work being done by NOIC that investment in irrigation is stimulating economic growth and protecting the farming community from the effects of drought,” said council chief financial officer Paul Hope.
“The choice for council is whether it wishes to further invest in the development of the scheme.
“We understand that a stage two prospectus will be released by NOIC later in the year.
“NOIC’s proposal provides an opportunity to achieve a good rate of return on our investment as well as contribute to wider economic and social growth in the district.”
NOIC chief executive Robyn Wells said access to water had had a significant benefit to the Waitaki district over the last eight years.
“We believe stage two of the scheme is consistent with the original goals agreed by Waitaki District Council and NOIC.
“We are confident that an extension of council’s current loan will allow a higher uptake to the scheme and bring further, long-term sustained benefits to the community.”
Ms Wells also added that NOIC recognised they had a corporate responsibility to the community and the environment.