A new infrastructure funding model has been launched by the New Zealand government with the help of a top-tier firm.
MinterEllisonRuddWatts advised the ACC, which is the debt provider on the new model developed by Crown Infrastructure Partners.
A special-purpose vehicle will be launched to tap debt from financiers, who will finance roads and water infrastructure that will lay the groundwork for expanding usable land for development in Milldale, north of Auckland. Fulton Hogan Land Development has been chosen as the developer.
"The project is an important milestone in funding and delivering much-needed infrastructure across New Zealand," said Tom Fail, finance and infrastructure partner at MinterEllisonRuddWatts. "With the use of third-party financing, bulk infrastructure development can be accelerated, providing much-needed houses and an answer to New Zealand’s supply-and-demand challenge created by strong growth."
Homeowners of the new subdivision will eventually fund the infrastructure through annual payments.
"If councils and developers can access third-party finance, backed by long-term and certain funding streams, infrastructure investment can be brought forward at scale and pace, which is critical to delivering enough homes to meet growth," Fail said. "The financing model – or variants of it – could also be applied more widely to address New Zealand’s broader infrastructure needs."