NBN Will Receive $19.5 Billion Loan From Government To Complete Rollout
The federal government will loan NBN Co $19.5 billion to ensure the network is rolled out across the country by 2020.
NBN Co had expected it would secure additional funding from the private sector to complete the rollout, after the initial $29.5 billion funding cap from the government was due to run out during this financial year. The additional funding brings the total government spend to $49 billion.
According to this year’s budget, the government had not planned to provide any additional funding, but it noted the NBN would need between $16.5 billion and $26.5 billion to finalise the rollout.
The additional funding will allow NBN to “fully focus” on providing fast internet to all Australians, said NBN CEO Bill Morrow.
“NBN welcomes the decision which is in the best interest of the Australian taxpayer. With security of funding in place, we are focused on the job at hand of building the network and providing fast broadband access and universal connectivity to all Australians by 2020.”
As part of the process of seeking private loans, NBN Co earlier reported it had received strong credit ratings from Standard and Poor’s and Moody’s that had “pleasantly surprised” Mr Morrow.
In a joint media release, Communications Minister Senator Mitch Fifield and Finance Minister Senator Mathias Cormann said the loan was the most “cost effective” solution, and that the government expected the loan to be re-financed by NBN Co on external markets by 2020-21.
“To help ensure that nbn can fully focus on the remaining rollout as it significantly ramps up, the Government has decided to provide the remaining funding required to complete that rollout through a Government loan to NBN Co Ltd on commercial terms,” the ministers said.
The media release also stated that the NBN rollout is “on schedule, ahead of its revenue forecasts and has met or exceeded its key rollout targets across two financial years.”