Loan support, not cash for cyclone recovery
Photo: Corena Hodgson

The Government has clarified how it will support growers and farmers affected by recent North Island weather events (NIWE). The  bottom line is that no cash grants are involved, only loan support and potentially equity investment. 

Two schemes have been developed. One supports weather-affected businesses that still have access to commercial lending. The other is for farmers and growers who cannot access commercial lending but are nonetheless considered viable businesses.

Clearly the Government has been mindful of the precedents being set by response such weather-driven disasters and the likelihood of these events increasing as a result of climate change.

Finance (and Cyclone Recovery) Minister Grant Robertson noted: “As I’ve said previously, the Government can’t pay the full cost of the recovery and rebuild. This package has been carefully designed to ensure banks continue to play an integral role in the recovery.” And: “As a Government we have to strike a careful fiscal balance between supporting affected communities and not making all tax-payers bear the cost.”

NIWE Loan Guarantee Scheme

This is a loan guarantee scheme that enables commercial lenders to provide loans to highly affected businesses across all sectors with more favourable terms, such as reduced interest rates. 

The scheme is set out to support businesses that are highly impacted by the NIWE but are considered by their lender to be viable. They will be eligible to receive loans supported under the scheme, with the Crown guaranteeing 80% of scheme loans provided by lenders.

The reasoning is that lenders won’t need to hold as much capital to cover the debt and can use their capital elsewhere. This will enable lenders to pass on reduced interest rates to borrowers and may also allow lenders to provide further accommodations relating to interest only periods or lending terms.

Loans of up to $10 million for up to five years will be supported, available until 30 June 2024.

Moat if not all major bank lenders in NZ have agreed to participate in the scheme.

Interested parties first point of contact contact should be their lender. Government contact at

Eligibility criteria include:

  • The business operates in one of the NIWE-impacted regions, and has experienced material losses as a direct result of the NIWE
  • your business has or is forecasting:
    • a 20% reduction in stocking (eg, stock units) or production (eg, fruit-trays or tonnes harvested or kgs of milk solids)
    • a 20% reduction in gross income (net of stock purchases)
    • a 20% reduction in cashflow (net of any direct Government funding received by the customer), or
    • a 20% increase in operating costs.

NIWE Primary Producer Finance Scheme

The intent of this Scheme is to provide access to finance for affected growers and farmers unable to access lending elsewhere without support.

The Scheme enables the Government to provide highly concessionary loans and equity finance for land-based primary sector producers in affected regions. This can include interest-free loans in times of negative cashflow, and concessional rates when positive cashflow is restored.

The Scheme is targeted towards severely impacted businesses that have a likelihood of being commercially viable but cannot currently access finance without government support. It is intended to help the businesses to ‘get back on their feet’ and re-engage fully with lenders.

Eligibility criteria include:

  • the business has incurred losses of 30% or more of its uninsurable productive capacity because of the North Island weather events
  • the business is a producing land-based primary sector entity, located partially or wholly in at least one the following regions: Northland, Auckland, Waikato, Bay of Plenty, Tairāwhiti, Hawke’s Bay, Tararua, Wairarapa
  • the business’s loss of viability was a result of the weather events, and not a pre-existing issue
  • the business has a prospect of returning to viability within the term of the loan (for example, restored positive cash flow)

Most funding approved (whether debt or equity) is expected to range between $500,000 and $4 million. However, there is flexibility to consider loans and equity under $500,000 or above $4 million where there is a compelling reason for doing so. 

The total funding available is $240 million, through to 30 June 2024.

The Ministers of Finance, Agriculture, and Regional Development will jointly make decisions on investments under $20 million; Cabinet will make decisions on applications of $20 million or more.

‘Expressions of Interest’ or applications must be filed by 8 September 2023.

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