The Government has confirmed it is setting up a company to invest in irrigation schemes.
It signalled plans to act as a bridging investor for regional water infrastructure development in the lead-up to the 2011 general election.
Prime Minister John Key said on Wednesday that $80 million would be set aside in this year's Budget to establish the company.
Mr Key said the development of storage and irrigation infrastructure has the potential to grow the New Zealand economy and create new jobs.
The Government expects to consider at least one proposal for a large, regional-level scheme in the next 12 months, he said.