Round Four Funding Guidelines

WATER

for the

FUTURE

Sustainable Rural Water Use
and Infrastructure Program

ON-FARM IRRIGATION
EFFICIENCY PROGRAM

ROUND FOUR

Funding Guidelines

July 2013

Published by the Department of Sustainability, Environment, Water, Population and Communities.

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Department of Sustainability, Environment, Water, Populations and Communities, Public Affairs, GPO Box 787 Canberra ACT 2601 or email

Disclaimer

This document has been prepared to provide guidance to potential applicants for financial assistance for water saving initiatives under the On-Farm Irrigation Efficiency Program.

The Commonwealth does not take any responsibility for the merits of any application made or project undertaken pursuant to these funding guidelines.

This document should not be construed as financial, taxation, legal or other advice. It is important that you read this document in full before deciding to submit an application. You should seek professional advice from your accountant, lawyer or other professional advisor before deciding to submit an application.

Potential applicants should note that information received in connection with an application may be used and communicated outside the Commonwealth for Due Diligence purposes and may also be provided to the Australian Taxation Office, the Department of Finance and Deregulation, and third parties engaged by the Department of Sustainability, Environment, Water, Population and Communities to assist with the assessment of the applications received.

Purpose of the Funding guidelines 1

Introduction 1

Program Objectives 2

Intergovernmental Agreements 2

Trade Approval of water entitlements transferred to the Australian Government 2

Available Funding 2

Funding Arrangements under the Program 2

Conditions of Funding under the Program 3

Australian Government’s Environmental Priorities 4

Who is Eligible to be a delivery partner? 4

Who is NOT Eligible to be a delivery partner? 5

Consortium members 5

Activities Eligible for Funding 5

Activities NOT Eligible for Funding 6

Application Process Overview 6

Information Required for Applications 7

Merit Criteria for Applications 7

Submitting an Application 9

The Assessment Process 9

Approval of funding 10

Further Information 10

Treatment of Information Provided to the Department 12

Contact Information 12

Glossary 13

ATTACHMENT A: Role and Responsibilities of delivery partners 15

ATTACHMENT B: Proponent Roles
and Responsibilities 17

ATTACHMENT C: Application and Decision Process 18

ATTACHMENT D: Assessment process 19

Purpose of the funding guidelines

These funding guidelines are designed to provide relevant parties with the information they will need to make an informed decision as to whether they should apply for funding. The funding guidelines also outline the requirements and processes to assist applicants prepare their project proposal prior to submission to the Department of Sustainability, Environment, Water, Population and Communities (the department).

These funding guidelines only apply to project proposals submitted under the On-Farm Irrigation Efficiency Program (the Program) Round Four.

Applications are being sought from organisations who wish to undertake the role of delivery partners. The Program is not open to individual irrigators (proponents) who must apply for funding through successful applicants.

Applicants should read these funding guidelines in their entirety, the application form, sample Funding Agreement and other associated documentation, prior to making a decision on whether to submit an application for funding.

The Program supports projects located within the southern connected system of the Murray-Darling Basin. The southern connected system for the program will encompass the New South Wales Murray, Victorian Murray, South Australian Murray, Campaspe, Murrumbidgee, Goulburn, Broken, Loddon and the Lower Darling (i.e., the Darling river catchment south of Menindee Lakes) river catchments.

We strongly recommend that all applicants contact the department to clarify any aspects of the funding guidelines about which they are uncertain noting that the department will not help prepare an application or provide funding for an applicant to prepare an application.

These funding guidelines are not intended to present all the terms and conditions that will govern the provision of funding under the Program. Successful applicants will be required to enter into a legally binding Funding Agreement with the Australian Government (see page 15 of these funding guidelines for further information). A sample Funding Agreement and other associated program documentation can be found at www.environment.gov.au/water/policyprograms/srwui/irrigation-efficiency/index.html.

Applicants should ensure they are using the latest version of the funding guidelines, application form and sample Funding Agreement, as these may be amended during the course of the Program.

The Parliamentary Secretary for Environment and Urban Water (the Parliamentary Secretary) reserves the right to amend these funding guidelines at any time.

Funding guidelines do not create legally binding rights or obligations.

Nothing in these funding guidelines or the Program application form is intended to create legally binding rights or obligations. The Parliamentary Secretary may vary the processes and/or timing set out in these funding guidelines and is not obliged to accept any application, regardless of whether it complies with these funding guidelines and the assessment process.

During its consideration of project applications, the department may clarify with applicants and/or seek external expert advice on any aspect of an application. To be eligible for consideration for funding, applicants must demonstrate that they meet the eligibility criteria to be a delivery partner (see page 6 of these funding guidelines). However, due to the competitive nature of the Program, the submission of an application by an eligible delivery partner that meets the merit criteria does not guarantee that an offer of funding under the Program will be made. The Parliamentary Secretary reserves the right to approve funding for a project as presented in the application form or parts thereof.

Introduction

Australia faces major challenges in ensuring a sustainable water supply in the face of a drying climate and rising demand for water. In response, the Australian Government’s initiative, Water for the Future, provides national leadership in water reform for all Australians and is an investment program over 10years to prepare Australia for a future with less water.

The Water for the Future initiative is built on four key priorities:

· Taking action on climate change

· Using water wisely

· Securing water supplies

· Supporting healthy rivers

As part of Water for the Future, the Sustainable Rural Water Use and Infrastructure Program invests in key rural water projects that support sustainable irrigation communities and that save water by upgrading out-dated and leaky irrigation systems, and by directing funding towards rural irrigation water projects to improve the efficiency and productivity of water use and management. This will help secure a long term sustainable future for irrigation regions and return water to the environment.

Water for the Future provides a new impetus to the National Water Initiative (NWI) and strengthens its role as the blueprint for continuing water reform. The key objectives of the NWI are to improve the efficiency of water use and establish clear pathways to return all water sources to environmentally sustainable levels of extraction.

The On-Farm Irrigation Efficiency Program (the Program) is aimed at assisting irrigators in the southern connected system of the Murray-Darling Basin to modernise their on-farm irrigation infrastructure while sharing water savings between irrigators and the environment.

Program information is available at:
www.environment.gov.au/water/policyprograms/srwui/irrigation-efficiency/index.html.

Program Objectives

The Program aims to support proponents (via arrangements with delivery partners), in implementing on-farm irrigation infrastructure projects to improve the efficiency and productivity of on-farm water use and management (sub-projects). Water savings generated by these projects will be shared between proponents and the environment with at least 50 per cent of the water savings transferred to the Australian Government. These sub-projects will allow proponents to reduce water losses and manage their water allocations more efficiently and will also assist dependent irrigation communities to adapt to a future of reduced water availability due to climate change.

The water entitlements transferred to the Australian Government under the Program will be used for the purpose of protecting and restoring environmental assets and will be managed by the Commonwealth Environmental Water Holder (CEWH).

Intergovernmental Agreements

In all Murray-Darling Basin states, transfers relating to on-farm water savings from the Program will be exempt from any volumetric limits applicable to water purchase programs as set out in the existing Intergovernmental Agreements between the respective state and Australian governments.

Trade Approval of water entitlements transferred to the Australian Government

Any water entitlements transferred to the Australian Government as part of the Program must be exempt from any trading restrictions which may be applicable at the time of transfer.

Available funding

The Australian Government has allocated up to $100 million for Round Four of the Program.

Funding arrangements under the program

The Program will provide funding to delivery partners who are engaged as project managers for the Australian Government via a Funding Agreement to manage and implement proponent’s sub-projects. Delivery partners will have a critical role in designing and managing a project that brings together a number of proponent sub-projects designed to improve on-farm irrigation efficiency and transfer a share of the water savings generated through these proponent sub-projects to the Australian Government. Delivery partners must also outline how appropriate proponent sub-projects will be identified, evaluated, and managed and must estimate the volume of water entitlements that will be available for transfer to the Australian Government.

While other bodies may be involved in or make a contribution to an overall delivery partner project (e.g. as a member of a consortium with one or more organisations identified above), the Australian Government will only engage with the eligible delivery partner as detailed in the Program application form.

Funding is not available to assist with the preparation of applications for Stage One. However, successful delivery partner applicants can include costs associated with the preparation of their Stage Two application as part of (but not in addition to) their claim for administration and project management costs.

Once a Funding Agreement is signed with a delivery partner, an initial payment of up to 8percent of the Funding Agreement project value for the sub-project works can be made to the delivery partner for administration and project management costs.

Australian Government funding cannot be used by delivery partners or proponents to purchase water entitlements.

Further information on the role and responsibilities of delivery partners is provided at AttachmentA and at Attachment B for proponents.

Conditions of funding under the program

Applicants must ensure that for each proponent sub-project funded as part of their overall project:

· the selection of sub-projects must be undertaken in a transparent way, for example, through a ranking system based on technical merit and value for money

· the sub-projects each generate a minimum water saving volume of 20 megalitres (ML) of which at least 50% must be returned to the Australian Government in the form of unencumbered permanent water entitlements. A minimum of 10ML must be transferred from any one water entitlement

· the proponent:

o is the registered owner of a water entitlement within the catchments identified in these funding guidelines and can discharge any encumbrances that may be held over this entitlement(s) at the time of the Stage Two application. Details of this entitlement must be entered into the Stage Two application form

o if the water entitlement is not legally owned and registered to be used by the proponent when the Stage Two application form is submitted, that sub-project will be ineligible under the Program

· the unencumbered permanent water entitlements must be transferred to the Australian Government prior to project funding being provided to the proponent involved in the sub-project

· a technically valid farm irrigation plan must exist for each proponent sub-project proposed for funding through the delivery partner project. Such a plan will assist in ensuring the proposed infrastructure sub-project is suitable to the farm layout, systems and water supply to achieve the water savings. It is the delivery partner’s responsibility to ensure that the farm irrigation plans used are technically sound. The provision of a farm irrigation plan will be required for the Stage Two assessment

· each property, where irrigation efficiency improvement works are conducted, either has or will have before the irrigation sub-project is completed, a water metering system for the property’s irrigation works that is compliant with the National Framework for Non-urban Water Metering and that metering data will be made freely available to the Bureau of Meteorology. Further information on Australian Government requirements in regard to metering can be found at the department’s website at www.environment.gov.au/water/topics/metering.html

· only sub-projects that require new or upgraded meter/s installed to meet the National Framework for Non-urban Water Metering as part of their infrastructure upgrade can include these costs in their project funding. If a project proponent is to receive a new meter as part of another meter upgrade program, then that too would be sufficient to meet the Program requirements.

· each property, where irrigation efficiency improvement works are conducted, has a connection to an irrigation supply system and/or an approval and capacity to take water for irrigation purposes directly from a river. Properties located in areas undergoing rationalisation e.g. Stage Two of the Northern Victorian Irrigation Renewal Project, must provide evidence of reconnection to the supply network. .

Delivery partner projects, including all proponent sub-projects, must be completed within a maximum of 36 months of a Funding Agreement being signed with the Australian Government. For auditing and/or review purposes, in regard to water savings, access (including site visits) to sub-projects will be required up to 24 months following the completion of the delivery partner project.
Australian Government’s environmental priorities

The Australian Government’s environmental priorities for water-related programs in the Murray-Darling Basin include, but are not limited to:

· protection and restoration of wetlands and other environmental assets of the Murray-Darling Basin

· protection of biodiversity dependent on the Murray-Darling Basin water resources