24 Jan 2013

Govt forms irrigation investment company

7:03 am on 24 January 2013

The Government is forming a Crown company to invest in regional irrigation schemes.

Primary Industries Minister David Carter has announced $80 million in initial funding for the company - to allow it to begin its role as a minority investor in irrigation projects around the country.

Mr Carter said the Government has been talking for some time about a $400 million company being available to be a co-investor in some of these larger proposed irrigation schemes.

"The announcement is that in (the) 2013 Budget, $80 million of the $400 million will be appropriated because we're aware of a couple of schemes, two in Canterbury, one in Hawke's Bay, that are making good progress and may be in a position to apply to that company for the Government to be co-investors in their schemes."

Mr Carter said it is hoped the Crown company will encourage third party private investors.

He said investors such as superannuation funds, the banks and iwi are looking at these funds and in many cases it will be a new investment structure for investors.

Mr Carter said that by having the Government there as a co-investor it will give confidence to others who are considering whether to invest in things like major irrigation schemes.

Prime Minister John Key said the development of irrigation infrastructure has the potential to grow the economy and create new jobs.

Mr Key said $80 million will be set aside in the Budget to establish the company and the Government expects to consider at least one proposal for a large scheme in the next 12 months.