$2m Govt Loan to Support Replacement Planning for Central Otago’s Falls Dam

Falls Dam, now more than 90 years old, is a cornerstone of Central Otago’s agricultural economy, supporting irrigation across approximately 8,000 hectares of productive land.

The Government is investing in the long-term resilience of Central Otago’s primary industries with a $2 million Regional Infrastructure Fund (RIF) loan to support pre-construction work on the proposed replacement of Falls Dam near St Bathans.

Associate Regional Development Minister Mark Patterson said the funding will help secure the future of one of the region’s most important irrigation assets, as climate pressures and ageing infrastructure place increasing strain on rural water systems.

Falls Dam Key to Central Otago’s Productive Heartland

Falls Dam, now more than 90 years old, is a cornerstone of Central Otago’s agricultural economy, supporting irrigation across approximately 8,000 hectares of productive land.

The water supply underpins a mix of high-value and traditional land uses, including:

• Horticulture

• Viticulture

• Sheep and beef farming

“Falls Dam is a critical piece of regional water infrastructure,” Mr Patterson said.

“The dam is nearing the end of its life and is already failing to deliver enough irrigation during dry years.”

With drought conditions becoming more frequent and severe, ensuring reliable water access is increasingly essential for sustaining farm productivity and regional growth.

Funding to Unlock Options for a New, Climate-Resilient Dam

The $2 million loan will enable Manuherikia River Limited (MRL) to undertake a detailed pre-construction programme to assess options for replacing the ageing structure.

“This pre-construction programme will ensure the region has the information it needs to plan for a secure and sustainable water future,” Mr Patterson said.

The programme will cover critical groundwork, including:

• Regulatory and consenting requirements

• Engineering investigations and detailed design

• Procurement planning

• Construction cost estimates

• Long-term financing options

MRL will also contribute $2 million in co-funding, bringing the total pre-construction investment to $4 million.

Strengthening Economic and Climate Resilience

A replacement Falls Dam would deliver far-reaching benefits for Central Otago’s rural economy by improving water reliability and supporting adaptation to climate change.

“A reliable water supply is fundamental to Central Otago’s economic resilience,” Mr Patterson said.

A modern dam would help store winter and spring flows, ensuring water is available during increasingly dry summers. It could also enable more farmers to transition toward higher-value land uses, such as horticulture and viticulture, boosting regional export potential and job creation.

Two-Year Pre-Construction Phase Underway

The pre-construction phase is expected to take around two years, after which the region will be better positioned to make informed decisions about replacing Falls Dam and securing long-term irrigation infrastructure.

“I look forward to seeing the outcome of this programme, which all going to plan will set the region on a strong path for the future,” Mr Patterson said.