Announced February 2016
In February 2016 Murray Irrigation announced an agreement with Snowy Hydro Limited to make up to 200GL water available as an advance for the 2016/17 irrigation season.
Murray Irrigation announced in February 2016 that it had entered into an agreement with Snowy Hydro Limited to make up to 200GL water available as an advance for the 2016/17 irrigation season.
The advance was an option and exercise product. The exercised volume was delivered from Murray Development ‘above target water’ to protect other water holders and was repaid in increments when allocations reached a target percentage. There was no roll-over fee or fixed repayment date.
Murray Irrigation customers and corporate partners exercised almost 30 percent of the available Snowy Advance volume, providing early season certainty for those participating.
Feedback about the project itself was overwhelmingly positive. The company will certainly be exploring options to run similar projects in future years.
Facts about the Snowy Advance project
- The advance was offered to Murray Irrigation shareholders and invited industry partners
- Shareholders could apply for up to 25 percent of their Water or Delivery Entitlements
- There was no minimum volume, however, priority was given to shareholders applying for more than 50 megalitres
- The company negotiated an ‘option price’ of $8 per megalitre and an ‘exercise price’ of $39 per megalitre
- By purchasing an option in May 2016, customers had the right, but not the obligation, to exercise their option in August 2016
- The exercised volume was credited to customer allocation accounts mid-August 2016
- A condition of shareholders participating in the advance is that the exercised volume was used on-farm and was not to be traded
- Payback of the exercised volume commenced when the NSW Murray general security availability announcement exceeded 40 percent