At least 65,000 hectares of potential irrigation are covered by projects threatened by funding issues as backers struggle to fill the gap.
The $115 million Hunter Downs project in Canterbury got only $4m over four years from the fund and is now scrambling to secure more money from farmer shareholders.
The project has already been scaled down from 21,000ha to 12,000ha and still failed to reach the point where all shares are farmer owned. A deal with businessman Gary Rooney secured $18.5m and farmers are being asked to reassess their commitment. .
Its disclosure document said the company can’t attract enough farmer support to secure funding. It outlines how the project has decided to restructure, with the company becoming an investor alongside Rooney Holdings, in a new Hunter Downs Water Scheme Company.
Hunter Downs chairman Andrew Fraser was reluctant to comment on the latest fundraising round, wanting to give farmers some time to consider the offer before it closes in four weeks.
Further north the Hurunui Water Project received about $3m from the Crown before the scheme dried up post-election and earlier this year 194 farmers were asked to put $63m towards the $230m scheme.
But the mid July deadline fount the scheme short, with enough raised to cover only 5200ha of the proposed 21,000ha.
Project chief executive Chris Pile said that was below the threshold but the commitment remained to continue the scheme.
Other funders for the scheme include the Rooney Group, which invested several million into the scheme’s original design. The Hurunui District Council proposed investing $500,000 but that has proved controversial.
Pile is also cautious of speaking on possible funding sources.
“But the scheme is not dead and the need for it certainly has not changed.
“The region will be impacted by climate change and even now we are coming into an El Nino period which will bring water issues.”
Investment efforts will include making another approach to farmers but he doubts that will get the project over the line.
“There is no silver bullet for this. It will be a combination of funding from a number of different sources.”
The ability to prove irrigation is an enabler for downstream industry and community water use is critical and the project hopes to have funding options scoped out in less than a year.
Pile lamented the loss of Crown funding. He had hoped the Government would see some sense around the value of such schemes but that does not appear to be the case.
Wairarapa Water project director Michael Bassett-Foss believes the region’s 30,000ha project is in the best heart it has ever been in his five-year involvement.
The $200m project received $3.5m of Crown money.
It has been less vulnerable than some of the southern projects to losing Crown funding because of the scheme’s timing, he said.
“Perhaps if we had been a bit further down the process in terms of sourcing funding it may have been an impact.
“But we are only now in what will be a 12-month phase of validating and quantifying all the benefits of the project, not just irrigation, in order to align our funding sources, whether they be councils, farmers, banks or other interests.”
The scheme is also blessed by not having to be created in one single 30,000ha play, instead rolling out in 8000ha lots or even less if necessary.
“We are also now in an environment where we have a much clearer idea about the implications of the regional water plan.
“This requires river flows to be maintained and water storage will help achieve that, benefitting both the environment and recreational users.”
Greater understanding of climate change impact is also pushing community and council awareness about the need to have storage facilities for communities as much as for farming, he said.
