Planning Minister Nick Champion today announced the creation of the “Combustible Aluminium Composite Panel Cladding – Limited Loan Scheme”, which will offer eligible owner-corporations loans of up to $15 million to do cladding remediation and removal works on their apartment buildings.

Buildings with an “extreme” or “high” South Australian Life Safety Assessment risk rating will be eligible for the scheme, while “moderate” risk buildings will be assessed on a case-by-case basis for eligibility.

The scheme – to be administered by the South Australian Government Financing Authority and commencing in 2023 – will offer owner-corporations fixed interest rate loans at 4.93 per cent over a repayment period of 10 years.

The government says that loan repayments will only begin when cladding replacement works are complete.

The issue of flammable cladding came back into the spotlight last month after residents of the Air Apartments on Greenhill Road realised they were facing bills upwards of $100,000 to replace dangerous cladding on their building.

Champion said the state government was “committed to reducing the risk of potentially combustible cladding on private buildings”.

“We recognise the challenges faced by apartment building owners to address combustible cladding without assistance, which is why we are providing a concessional loan scheme to assist with rectification works,” he said.

“The concessional loans will bring support to residents in owners corporations’ buildings through remediating identified extreme or high-risk cladding – we are making it much safer for South Australian residents affected.”

Champion said that 100 per cent of people within an owner corporation would have to agree to receive the loan.

In 2017, the state government launched a statewide audit of potentially flammable cladding on high-rise residential and assembly buildings in the aftermath of the London’s Grenfell Tower disaster, in which 72 people died after a fire spread rapidly up the building’s external cladding.

The findings of the report, released in October 2019, found seven private Adelaide buildings were at “extreme risk” of fire from flammable cladding, with a further 21 buildings classified as being at “high risk”.

Champion said there were now only six buildings in the extreme or high risk category, with “most of the buildings” transitioning into the moderate risk category.

Government relations consultant Wendy Campana has been appointed “independent cladding coordinator” to help building owner’s acess the scheme.

Campana was previously appoint by the former Marshall Government to oversee the government’s response to the 2019 cladding report.