Waitaki Mayor Gary Kircher stands behind the $17million loan the Waitaki District Council granted the North Otago Irrigation Company in June for its expansion.
While some ratepayers might be concerned about the drop in dairy payout - the majority of farmers in the initial stage of the irrigation scheme have invested in dairy operations - he called the loan ''very secure''.
''We've done a lot of work on their due diligence and ability to pay,'' Mr Kircher said.
''There's a whole lot of protections there.''
To sign up for the scheme, farmers must produce an encumbrance on their land from their bank - 1ha for every share they bought - the irrigation company's chief executive, Robyn Wells, said.
''That actually ranks in front of the bank.''
It ensured the company got paid before banks.
''This was a way that everybody took on responsibility and accountability for continuing to pay their water charges - and that protects everybody.''
Mr Kircher said the loan was not new. Rather, it was an extension of a $10million loan dating back to the initial build of the irrigation scheme that helped to get the scheme off the ground in 2006.
Mrs Wells said: ''We moved from a loan that was going to be due next January to a larger loan - almost rolled it into a larger loan - with an extended date, but we moved from . . . not paying [interest until] the end, to one that we are now paying interest every month.''
