A loan of almost $10 million is needed to replace two of Northland's rescue helicopters.

The Northland Regional Council is considering loaning the Northland Emergency Services Trust the money for two replacement helicopters.

Council chairman Bill Shepherd said the regional council had access to better interest rates through the Local Government Funding Agency than NEST could get through a bank.

The proposal states the council could use just under half of their low-interest borrowing capacity to give NEST a $9.8 million loan, which would save NEST around $200,000 per year.


Mr Shepherd said the proposed loan would have no impact on rates.

"Rescue helicopters are a critical service for the region which, as previous feedback from our community has told us, is really valued by Northlanders," Mr Shepherd said.

NEST would be required to pay back the loan over five years, and the trust would be required to forward any extraordinary charitable donations of more than $100,000 to the council, to be applied to the principal balance of the loan.

The council had supported the rescue helicopter through a targeted rate for the past eight years, but currently provided the trust with $525,000 per year from the emergency services contestable fund.

Mr Shepherd said the loan proposal did not change the funding, but was an additional way of supporting the trust.

Northland Emergency Services Trust chairman Paul Ahlers said the trust had found two Sikorsky S-76C helicopters which are suitable to replace two of their existing ones. He would not reveal where they were or the cost due to commercial sensitivity.

"We're actually buying one machine and leasing one machine with an option to purchase."

Mr Ahlers said the trust is replacing the helicopters for a combination of reasons.

He said the airframes were getting old and the cost of maintenance was starting to climb.

Mr Ahlers said the trust has an annual maintenance budget of $2.3 million. He said the new helicopters would not reduce maintenance costs to zero, but "it will come down slightly".

Mr Ahlers said by purchasing newer helicopters the trust would have access to the latest technology and avionics and the opportunity to get more horsepower, which meant a longer range.

"We had planned to do this in the next three to five years but the opportunity came up now."

He said initially it had looked at commercial bank lending rates, but after informing the trust's main supporters of its plans, the council offered to help.

Mr Ahlers said if the loan proposal went through the trust would carry out a fundraising campaign to repay the council.

"If it doesn't go in our favour we would pursue other options. We sincerely believe this opportunity is too good to miss."

The council is seeking public feedback on the proposal to provide the loan. Feedback closes at 4pm on August 6.

For more information on the proposal and to give feedback go to www.nrc.govt.nz/helicopterloan