Infrastructure Funding and Financing

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Along with Treasury and the Ministry of Housing and Urban Development, the Department of Internal Affairs has been responsible for delivery of the Infrastructure Funding and Financing (IFF) work programme.

The most significant workstream of the IFF programme was the development and enactment of the IFF Act in August 2020. Other workstreams focussed on the debt constraints faced by Councils including the LGFA covenants and better utilisation of existing funding tools.  These have resulted in a temporary loosening of the net debt/revenue ratio by LGFA from 250 percent to 300 percent and the publication of guidance material for local councils on using the development contribution regime - Local Government Policy - dia.govt.nz.

Through the development of the Special Purpose Vehicle (SPV) model that is the feature of the IFF Act 2020, it became apparent that there was significant potential for SPV type thinking to be applied wider and to a range of projects and programmes in local government that would not meet the threshold for a full SPV model.

DIA worked with PWC (commercial advisers to the IFF programme) and two clusters of Councils to explore this thinking further and apply it to major infrastructure projects or programmes through a case study approach. The two clusters were the Hamilton to Auckland corridor (the Future Proof Urban Growth Partnership) and the Eastern Bay of Plenty.

• For the Hamilton to Auckland corridor four projects/programmes were explored: Southern Metro Wastewater treatment plant; enhanced Hamilton to Auckland passenger rail; a sub-regional solid waste facility; and the Central/Lower Waikato catchment river restoration.
• For the Eastern Bay of Plenty five projects/programmes were explored: Wastewater integration projects; Flood protection projects across the Bay of Plenty; Housing development in Rotorua; Industrial development in Kawerau; and commercial and tourism development with iwi in Rotorua.

The nine case studies or projects/programmes were carefully selected to be as transferrable as possible and to assist as many other Councils across Aotearoa in their thinking.

The funding, financing, structuring and delivery options explored in the reports have common themes of collective capacity, expertise and utilising resources from local and central government, iwi and other local stakeholders.

These learnings have been captured in two reports, one for each cluster, and are linked below.

For more information on the Infrastructure Funding and Financing Act 2020 visit the Ministry of Housing and Development website at: Infrastructure Funding and Financing Act 2020 | Te Tūāpapa Kura Kāinga - Ministry of Housing and Urban Development (hud.govt.nz)

Read the reports:

IFF Implementation Pilots - Hamilton to Auckland Corridor (PDF, 3.3MB)

IFF Implementation Pilots - Eastern Bay of Plenty (PDF, 3.9MB)

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