print :

2016-11-25

NBN debt

Government to fund NBN debt

The federal government will provide nbn with $19.5 billion in debt funding to meet the remaining costs of the network roll-out. 

On coming into government, the Coalition said it would cap its equity funding of the NBN project at $29.5 billion – just slightly more than Labor’s equity commitment of $27.5 billion back in 2009. Any remaining costs would have to be met through private debt. 

With nbn expected to exhaust its $29.5 billion in government equity by mid-2017, the question hanging over the project has been whether capital markets would come to the funding party – and if so, at what price. 

By putting up the money itself, the government can at least establish borrowing rates on reasonable commercial terms while sparing nbn the difficulties of the capital raising exercise. 

Any awkward questions about the project’s finances that might emerge during a capital raising will now be put off until the build is complete, at which time the government says it will expect nbn to refinance the debt on private markets.

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