The Government will potentially garner up to $2.3 billion from the sale but won't get all of the money until May 2015.
Investors will be asked to come up with 60 per cent of the share price upfront with the remaining 40 per cent due 18 months after its November listing.
The deal gives investors the full benefit of the dividend payment and voting rights while essentially providing them with an interest-free loan until the remainder of the money is due.
Retail investors will also have the share price capped.
John Hawkins, chairman of the Shareholders Association, said the cap would go a long way towards giving retail investors more confidence.
"I think the capping of the retail price will be the single biggest factor that will engender some confidence."
Hawkins said the association had been lobbying the Government strongly about a set price for the float.
But Hawkins admitted the two-step payment process would probably require some public education.
William Curtayne, an analyst with Milford Asset Management, said the poor performance of Mighty River Power had left a bad taste in investors' mouths and the payment programme would help get the deal away.
Curtayne said the instalment system had been used successfully to help float Telstra in Australia.
But he warned it would also make the share price more volatile.
"Investors have to be wary - they might be attracted by the higher yield but being a leveraged investment will also make it more volatile."
The payment period also stretches over next year's general election. If Labour and the Green Party are elected they have promised to shake up the electricity sector and form a single regulator which could hit the value of Meridian.
Curtayne said investors could sell their shares before the election but that could also see a glut of shares available and bring the price down.
