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udget 2011: Lifting investment in irrigation

Published: Mon 9 May 2011 04:08 PM
Hon David Carter
Minister of Agriculture
9 May 2011 Media Statement
Budget 2011: Lifting investment in irrigation
Agriculture Minister David Carter today announced an expanded irrigation fund to support the development of new water harvesting, storage and distribution infrastructure.
Budget 2011 will allocate $35 million over five years for the Irrigation Acceleration Fund, to support the development of irrigation infrastructure proposals to the ‘investment-ready’ prospectus stage.
The expanded fund is the first stage of the process; for the second stage, the Government will consider in a future Budget investing up to $400 million of equity in the construction of regional-scale schemes to encourage third-party capital investment.
Funding of this Crown investment vehicle is yet to be finalised, but it is expected to be available from 2013/14. The Crown will be a minority partner, investing on commercial terms, to give confidence to capital markets to invest in large scale irrigation schemes.
“Well-designed storage and irrigation infrastructure has the potential to deliver significant, sustainable economic growth,” Mr Carter says.
“The package delivers on a commitment made in the first months of the National-led Government to expand the scope and ambition of support for water storage infrastructure to ensure that suitable schemes can happen.
“Developing irrigation has huge potential to unlock economic growth and prosperity for our primary sectors and, by extension, for all New Zealanders.”
NZIER research suggests the fund could support 340,000ha of new irrigation, which could boost exports by $1.4 billion a year by 2018, rising to $4 billion a year by 2026.
“These initiatives represent a major step in unlocking significant economic potential for New Zealand, having our tradeable sectors growing strongly and delivering on the Government’s economic growth goals,” Mr Carter says.
“From an environmental perspective, more reliable access to water will lead to more efficient use of water, and can provide for the replenishment of aquifers and the restoration of steam and river flows.
“Irrigators will be required to adhere to good industry practice, both in respect of water use efficiency and land management practices arising from land-use intensification, with sanctions for non-performance,” Mr Carter says.
The Irrigation Acceleration Fund and equity investment is part of a package of measures to address the strategic value of water.
The other measures are the Fresh Start for Fresh Water Fund for historical environmental damage to waterways and the National Policy Statement on fresh water management.
ends

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