$18M loan unlocks next phase of Tukituki Water Security Project

The Tukituki Water Security Project (TWSP) has today taken another important step forward, with Hon Mark Patterson, Associate Minister for Regional Development, announcing an $18 million loan from the Government's Regional Infrastructure Fund (RIF) to support the project's progression through its next phase.

The loan will enable the TWSP to advance beyond its current pre-construction feasibility phase and undertake the detailed engineering, environmental and commercial work needed to determine the full viability of a water storage facility on the Makaroro River. If constructed, it would be the largest capital project ever undertaken in Hawke’s Bay, and the largest water storage project built in New Zealand since Clyde was completed by the Government in 1993.

TWSP Chair, Mike Petersen, welcomed the announcement on behalf of the project’s partners.

"We are deeply grateful for the Government's continued confidence in this project and in our region. We are equally grateful to Mana Whenua, iwi and to the more than 60 visionary local businesses and water users who have backed this project, demonstrating clearly that Hawke's Bay wants to secure its own future."

Petersen says the case for water storage in Hawke’s Bay is both urgent and well-evidenced.

“This announcement moves us from asking whether this project is feasible, to answering whether it is viable.

“The Hawke’s Bay Regional Water Assessment report concluded that even with significant improvements in water use, efficiency and conservation, by 2040 the region could experience a shortfall between demand and supply of freshwater of nearly 25 million cubic metres.

“Water scarcity is already preventing businesses from investing and growing in our region. At the same time, recent climate projections point to reduced river flows and worsening droughts, particularly in spring and El Niño summers.

“Water storage is not a silver bullet when it comes to solving water security, however it must be part of the solution alongside other water efficiency measures. Without improved resilience, our environment, our communities and our economy will all suffer.”

The project is designed to deliver benefits across three areas. Up to 20 percent of stored water would be directed to improving and restoring the health of the Tukituki River and other degraded waterways with higher low flows. Communities would benefit from additional urban water supply and new recreational facilities at and around the reservoir.

Economically, new NZIER modelling shows the project would make a real difference to Hawke's Bay communities, with annual regional GDP increasing by up to $693 million, and up to $452 million a year in additional household spending across the region. Once fully operational, the project would support more than 1,800 new permanent jobs – equivalent to lifting total regional employment by more than two percent. During the construction phase alone, the project would support 200 – 300 jobs and generate significant activity across the region. Over the project's lifetime, the total economic benefit ranges from $1 billion to $5 billion depending on the extent of land-use change, with up to $195 million a year in additional government revenue.

“This is an intergenerational, region-wide project," said Petersen. "In the past 30 years, only one water storage facility has been built in New Zealand, and during this time New Zealand's population has grown by 50 percent, the climate has warmed, and we continue to let our precious water flow directly to the sea without storage in periods of high flows. That tells you something about how hard these projects are and why getting this one right matters so much."

The TWSP expects to complete the current feasibility stage of work by the end of 2026.

“We are making solid progress on the engineering and planning work needed to confirm the project’s viability. We expect to lodge our Fast Track application in mid-2026, which will include a land exchange with the Department of Conservation that will both enlarge the area of conservation land and improve ecological values,” said Petersen.

With the new loan from the Government's Regional Infrastructure Fund, the next phase of work running through 2027 will include detailed engineering and design, financing and commercial work, in preparation for procurement and a final investment decision in 2028.

"We are under no illusions about the significance of what we are proposing," said Petersen. "Water storage is not new to New Zealand, but it is new to Hawke’s Bay. This will be a game changer for our region, improving water security and the environment, supporting livelihoods, creating jobs and acting as a catalyst for long-term prosperity in Hawke's Bay. With that much at stake, we are committed to doing this work carefully, honestly, and in partnership."

TWSP will continue to engage closely with Mana Whenua and the wider community as the project progresses.

MINISTERIAL ANNOUNCEMENT

Read the Minister’s announcement here and below.

Hawkes Bay water project to boost food production

Pre-construction work will commence at the Tukituki Water Security Project in Hawkes Bay with the help of a Regional Infrastructure Fund loan of up to $18.13 million, Associate Regional Development Minister Mark Patterson says. The Minister was at an event in Ongaonga today to announce the funding.

“The water storage project would help unlock economic potential – boost food production and create jobs.”

“As a key food producing region, Hawkes Bay has the potential for expansion with reliable long-term water supplies. This project will support land uses such as horticulture, seed production and high-value pastoral farming,” Mr Patterson says.

The work will include completion of detailed design, engineering and confirm construction costs and overall commercial viability.

If the project progresses to the construction phase, it is expected to enable the future irrigation of up to 22,000 hectares, create up to 300 jobs during construction and add up to $693 million to annual GDP for the region.

The finished water storage facility and distribution pipework network would be capable of storing 104 million cubic metres of water, the equivalent of 41,600 Olympic-sized swimming pools.

“Securing more water has been identified as a top priority for the Hawke’s Bay region,” Mr Patterson says.

“Hawkes Bay is one of our driest regions, and pressure on freshwater resources is increasing. New water storage will help address these challenges by improving water security and supporting the region’s long‑term resilience,” Mr Patterson says.

Tukituki Water Limited Partnership, which is developing the project, will receive the loan. A grant of up to $3 million was allocated in December 2024 for early development of the project.

“This water security project has the potential to transform Hawkes Bay by enabling higher value food and fibre production, and processing,” Mr Patterson says.“The project represents an important investment in Hawkes Bay’s future, helping protect water security while enabling economic development and long‑term regional resilience. I look forward to seeing continued progress,” Mr Patterson says.

Hon Mark Patterson, Associate Minister for Regional Development, and Catherine Wedd, MP for Tukituki (both centre), with TWSP Chair, Mike Petersen, TWSP directors and management, and regional elected members and leaders at this morning’s announcement.