MPI announced the funding through the irrigation acceleration fund, which was set aside to aid the development of regional approaches to water management, helping small community schemes, and supporting the development of large regionally significant proposals.
The funding will go towards Flaxbourne’s engineering design, securing water, undertaking technical work for consents, and developing a financial proposal, the government agency said in a statement. It had previously put $50,000 towards an earlier form of the proposal.
The Flaxbourne scheme is estimated to cost $28.2 million and already has the backing of the Marlborough District Council and indicative support from Crown Irrigation Investments. An earlier estimate put the cost at as much as $38.8m.
Local landowners have made commitments amounting to 60% of the 2200 hectares service area in the scheme.
The scheme’s next phase is the completion of investigation and early design to identify and price options for delivery.
The council plan includes a proposal to provide finance to the landowners committed to the scheme and will take on debt to fund the scheme. For it to go ahead, it will need between $10m and $12m from the Crown Irrigation Fund to remain within the council’s debt cap.
The storage dam is expected to be able to store up to 7.8 million cubic metres of water, providing 6.8 million cubic metres for irrigation, half of which would go towards viticulture and the other half for arable crops.
