Water entitlement

A water entitlement is a legal right to access and use a specified share of water from a river, groundwater source or irrigation scheme, and in many agricultural regions it is a separately tradeable asset that can be valued, secured and financed independently of the land it is used on. For a rural property, the water entitlements attached to it can represent a very significant share of the property's total value, particularly in irrigation-dependent regions, and a lender assessing rural finance will treat the entitlement as a distinct component of the security rather than assuming it is bundled inextricably with the land. Water entitlements can also be bought, sold or leased separately from land, and a rural borrower may seek finance specifically to acquire additional entitlement to support an expansion of irrigated production. Lenders financing water entitlements, whether as security or as the asset being acquired, look closely at the entitlement's reliability class and the scheme or catchment it belongs to, since allocation reliability varies significantly between entitlement types.

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Rural & agribusiness loans · Rural property