The group behind an irrigation scheme in the eastern Bay of Plenty are hoping it will double kiwifruit production on an area of Maori land.
The Maungaroa scheme is one of five projects to receive money for design work in the latest allocation from the Government's community irrigation fund.
It would extract water from the Kereru River and pump it to a reservoir to be gravity fed to the Te Kaha Peninsula.
The irrigation would be used mainly by kiwifruit orchards on the peninsula that have been developed as joint ventures between Maori landowners and investors.
At present, 110 hectares are planted in kiwifruit, but there's the potential to more than double that to 250 hectares.
The microclimate and soils make the Te Kaha peninsula well suited for the production of the gold kiwifruit variety, but a director of the Maungaroa project, Ian Craig, says they're relying on small, unsustainable water sources and that's hampering production.
Design work on a proposed 52-metre high storage dam on the Upper Lee River in Tasman district will be fast-tracked, as the result of a grant from the community irrigation fund.
The project is getting about half of the almost $2 million allocated to a five schemes.
The Lee dam, which would create a 65-hectare lake, would boost the water available to irrigate about 6000 hectares of land on the Waimea Plains for intensive horticulture and pastoral production.
It would also supplement the water supply to the towns of Richmond and Brightwater.
The project's manager, Joseph Thomas, says storing and releasing water when its needed will overcome issues associated with the over-allocation of water supplies on the Waimea Plains.
Mr Thomas says there may also be some potential for hydro power production.