The Government has commissioned a study to consider setting up a bond bank to help councils pay for investments in roads and sewage and water systems over the next decade.
It was one of the ideas to come out of the Job Summit in February and could help lower interest rates and transaction costs for local authorities. Up to $30 billion could be needed.
Under the proposal, councils would combine their borrowing needs rather than individually trying to raise money to pay for investment in infrastructure.
Finance Minister Bill English says the study is expected to report back to a joint steering group of central and local Government in about a month.
He says a decision would then be made whether it was feasible to set it up and, if so, how it would operate.
The study will be conducted by advisers Cameron Partners and Asia-Pacific Risk Management.