The Government believes there is a significant opportunity
to generate economic wealth for New Zealand through more
and better water storage and distribution infrastructure.
The Government's establishment of a company to act as a
bridging investor for regional water infrastructure development
has been welcomed by the rural sector.
In 2011, the Government had signalled plans to invest up to
$400 million in regional-scale schemes to encourage
third-party capital investment.
The Cabinet has now directed that $80 million for the initial
stages of the company's operation be set aside in this year's
The development of a well-designed storage and irrigation
infrastructure had the potential to deliver significant
economic growth for the country's primary industries and
support new jobs, outgoing Primary Industries Minister David
As the opportunity to take a stake in developing
regional-scale water infrastructure was new for private
investors, it was appropriate for the Government to take a
bridging investment role to ensure the right projects could
start, Mr Carter said.
The company would be a minority investor in any development
project and it would also plan to be a relatively short-term
''A number of groups are developing proposals for these
larger, regional-level schemes, and the Government expects to
consider at least one proposal in the next 12 months,'' he
Irrigation NZ chairman John Donkers said farmers had for many
years personally covered the cost of setting up water
infrastructure, which could ''run into the millions of
dollars'', yet these schemes benefited regional economies
Having a Government-owned company invest in the initial
stages would take the pressure off small communities to find
that kind of capital, he said.
Mr Donkers believed water projects in Hawkes Bay, Tasman,
Canterbury and Otago were likely to be considered this year.
Fonterra's managing director, co-operative affairs, Todd
Muller, said the investment announcement, coupled with the
establishment of a Crown vehicle to co-invest with water
schemes, was an important step towards boosting agricultural
productivity and exports.
''Water is fundamental to dairying and agricultural
productivity. Enabling a mix of public and private funding
will give investors the necessary confidence to push ahead
with schemes at the regional level.
''We will see benefits flow through in increased production
and export earnings and we will also see the environmental
benefits which will come from improved water flows,'' Mr