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NSW to offer interest-free loans in cladding removal project

The NSW government has said that it will provide building owners with “high-risk combustible cladding” with access to interest-free loans solely for the use of rectifying combustible cladding on residential apartment buildings.

A “landmark project” will see high-risk cladding removed from residential apartment buildings across NSW over the next three years.

Funding for the project was announced as part of the 2020-21 NSW state budget, and it will be known as “Project Remediate”.

According to the Minister for Better Regulation and Innovation, Kevin Anderson, Project Remediate will see the state government conduct the program to help remove combustible cladding on hundreds of the most at-risk buildings.

Cladding refers to lightweight panels that have been applied to a building’s external walls or to any other external area of the building. 

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Some types of cladding, made from aluminium composite panels (also called ACPs) and other metal composite materials, have been recognised as posing increased fire safety risk if they are selected or installed incorrectly. 

Commenting on the initiative, Mr Anderson said: “We’re not taking any chances when it comes to the safety of people living in buildings identified as being at high risk from combustible cladding.”

The minister said $139 million had been allocated by the state government for the co-ordination of remediation works for affected buildings, with the priority of “removing unsafe cladding from buildings as soon as possible”.

At the heart of the funding is a government commitment to paying the interest on loans by commercial lenders to building owners and owners corporations to fast-track the removal.

Eligible building owners will therefore be able to gain access interest-free Project Remediate loans solely for the use of rectifying combustible cladding on residential apartment buildings. 

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Eligible owners include those with:

  • a residential apartment building (Class 2) in NSW. These include multi-use buildings e.g. part commercial/part residential  
  • a residential building that has been confirmed by the Cladding Taskforce and consent authority to have a high-risk combustible cladding façade that requires remediation.

According to Mr Anderson, owners have been requesting financial and technical support to help them manage the process, with this package set to “make it happen”.

Owners of affected buildings will be contacted directly and invited to register their interest. The NSW government said it was also considering whether it could provide “retrospective assistance” as part of the loan scheme design for those already undertaking remediation works.

The government also expects the program to support construction activity and generate “thousands” of jobs.

“Not only will this program benefit those living in buildings with unsafe cladding, it will also drive economic recovery with the creation of 3,500 jobs as we begin to recover from the unprecedented impacts of COVID-19,” Mr Anderson added.

“With many buildings now ready to commence removing combustible cladding, now is the right time to provide this support.”

The government said further details on the project will be released in December, with applications expected to open in March 2021.

[Related: NSW grants early relief to SMEs]

NSW to offer interest-free loans in cladding removal project
NSW to offer interest-free loans in cladding removal project
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