In October 2018, National Infrastructure Funding and Financing facilitated the provision of $48.9m for transport and water infrastructure enabling ~4,000 houses in the Milldale development in Wainui, north of Auckland. This transaction used an encumbrance model to secure infrastructure payments, a precursor to the broader Infrastructure Funding and Financing Act 2020 (IFF Act) framework. This innovative structure allowed for the early delivery of essential infrastructure without impacting the local authority’s balance sheet or debt limits.
| Project Owners | Fulton Hogan Land Development and Auckland Council Group |
| Infrastructure Type | Transport and Water |
| Levy Payers | Milldale Property Owners |
| IFF Funding Provided | $48.9m |
| Debt Raised | $91.3m |
| Lenders | Accident Compensation Corporation (ACC) |
| Debt Term | 35-year fixed rate debt |
| Forecast Levy Amounts in First Levy Year Approximately $1,000 per year, escalating by 2.5% annually | |
Debt Financing Structure
The Milldale deal introduced several innovative elements:
- Encumbrance Model: Secured by a future annual levy revenue stream, reducing risks for lenders.
- Long-Term Debt: 35-year fixed-rate debt facility by ACC, eliminating refinancing risks and improving affordability.
- Collaboration: Demonstrated successful combination of Crown and private sector investments, accelerating housing development.
Due to the success of the Milldale transaction, National Infrastructure and its advisers Macquarie Capital (NZ) and KPMG won the EY Debt Deal of the Year at the annual Institute of Finance Professionals NZ Awards in May 2019.
Infrastructure Funded: Milldale Development
The infrastructure works include:
- Weiti Stream to Silverdale Interchange: New two-lane arterial road and bridge connecting the development to the State Highway and Silverdale Interchange. Completion forecast for late 2025.
- Wainui Road Argent Lane Intersection Upgrade: Large upgrade to intersection for two arterial roads. Completion forecast for late 2025.
- Milldale to Millwater Wastewater Tunnel (Stage 1): Wastewater tunnel and pumping equipment to service a total catchment of 9,000 dwellings. Completed in 2019.
- Milldale to Millwater Wastewater Tunnel (Stage 2): Stage 2 connection to Milldale Development through private land. Completed in 2021.
- Highgate Bridge across State Highway: Connects Milldale Development via a new bridge. Completed early 2025.
Impact on Housing Supply
National Infrastructure’s involvement accelerated the development of approximately 4,000 houses in Milldale and supported infrastructure for an additional 5,000 houses in surrounding areas. This infrastructure would likely have been delivered in a piecemeal fashion over a much longer period if traditional funding models had been used.
