New Zealand government lends $18 million for Hawke's Bay water storage feasibility

The New Zealand government has provided an $18 million loan from its Regional Infrastructure Fund to advance the Tukituki Water Security Project in Hawke's Bay. The funding will support detailed engineering and commercial work for a proposed storage facility on the Makaroro River, which would be the region's largest capital project since 1993.

The New Zealand government has announced an $18 million loan from the Regional Infrastructure Fund to support the Tukituki Water Security Project's next phase, according to an official announcement. The funding will enable the project to move beyond pre-construction feasibility into detailed engineering, environmental, and commercial work to determine viability of a water storage facility on the Makaroro River in Hawke's Bay. The proposed facility would be the largest capital project ever undertaken in Hawke's Bay and the largest water storage project built in New Zealand since the Clyde Dam was completed in 1993. The project is backed by more than 60 local businesses and water users, alongside Mana Whenua and iwi partners.

According to the Hawke's Bay Regional Water Assessment, the region could face a freshwater shortfall of nearly 25 million cubic metres by 2040 even with significant efficiency improvements. The project would allocate up to 20% of stored water to restoring the Tukituki River's health through higher low flows, provide additional urban water supply, and create recreational facilities.

This development matters for New Zealand's water infrastructure sector, where storage projects are critical for addressing climate-driven drought risks and reduced river flows. NZIER modelling indicates the project could increase annual regional GDP by up to $693 million, support more than 1,800 permanent jobs, and generate total economic benefits ranging from $1 billion to $5 billion over its lifetime.

For the construction and engineering industry, the project represents a multi-year pipeline of work, with final investment decision expected in 2028. Stakeholders including farmers, businesses, and regional communities stand to benefit from improved water security and drought resilience.