The Government of New Zealand (NZ) is set to provide a loan to Hawke’s Bay Airport to support the business amid the Covid-19 pandemic.

The loan amount of NZD9m ($5.9m) is expected to help the airport overcome the economic impact of the pandemic, support the recovery of the region and safeguard around 200 jobs.

Hawke’s Bay Airport is 50% owned by the government. Napier City Council holds 26% while the remaining 24% is held by Hastings District Council.

The airport needed financial support due to the decrease in passenger numbers and revenue caused by the Covid-19 crisis.

The government will provide around a NZD4.5m loan on commercial terms while the councils will provide another NZD4.5m.

Hawke’s Bay Airport will have to repay the loan in two years and is said to be fiscally neutral.

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By GlobalData

NZ Deputy Prime Minister Winston Peters said: “It’s important that we retain an important regional asset which will enable the Hawke’s Bay to stay connected and support the recovery of the domestic tourism and aviation sectors.

“Hawke’s Bay Airport experienced a significant drop in revenue due to Covid-19. The request was made to shareholders to provide financial support to ensure the airport remained viable and to allow completion of the terminal redevelopment, an important part of the airport expansion project, which was started before the onset of Covid-19.”

Last month, the airport signed a joint venture agreement with Centralines to explore the possibility for a commercial solar farm on-site. This move is expected to help it transform into the first carbon-neutral airport in the country.