Listed electricity generator and retailer TrustPower and Ngai Tahu Holdings want to invest up to $106 million in the Ruataniwha water storage scheme in Hawke's Bay.
The investment would give the investment partners up to 40% of the scheme, which is expected to cost $265 million.
They have signed a Memorandum of Understanding with the Hawke's Bay Regional Investment Company, the investment arm of the local regional council, which is leading the scheme.
If the scheme is approved, it could irrigate up to 30,000 hectares with water from the Tukituki River.
TrustPower commercial operations general manager Chris O'Hara says his company already has experience in combined electricity and irrigation schemes and the company is keen to be involved in further such projects.
He says it's a long-term infrastructural asset investment based on a large civil project that involves a dam, which is a core part of TrustPower's business.
Mr O'Hara says TrustPower is an owner and developer of long-term water storage infrastructural assets.
He says TrustPower is also very interested in irrigation, which it signalled by developing the Lake Coleridge scheme as a multi-use generation/irrigation scheme.
"It ticks both of those boxes for us in terms of being aligned with our core expertise, our core investment activity and strategically in a business area that we want to develop further as a key part of what we do."
Mr O'Hara says there will be a small electricity generation aspect as part of the scheme.
He says any large projects that involve rivers will always be controversial and the Ruataniwha water storage scheme is no different.
Mr O'Hara says his company would be interested in increasing its investment in the Ruataniwha scheme after it is built.
