The council has approved a strategy for it to provide capital support for irrigation infrastructure developments in Otago to go out for consultation as part of the draft annual plan in March.
Chairman Stephen Woodhead said at a meeting this week the council had financially assisted communities to assess irrigation development possibilities and this strategy was taking that a step further.
While regional councils were not perceived to be drivers of economic development there were "massive opportunities here if we chose to be involved", he said.
"This shows a real opportunity for the regional council to do more than just put a water plan in place. We can be an enabler and assister," he said.
Chief executive Graeme Martin said the council last year supported a report noting irrigation needed to be developed, modernised and expanded to enhance the regional economy and local communities and effect environmental improvements and safeguards.
"The importance of irrigation to the communities and economy of Otago has been recognised for more than a century."
However, barriers to irrigation infrastructure investment were the high initial capital costs off and on-farm, which would take considerable time to yield a return both on the investment itself and in terms of greater productivity for farmers, and that farmers, as scheme promoters, owners and consumers, simultaneously were facing funding of on and off-farm expenditure, he said.
"Non-farmer scheme ownership can relieve the burden of personal farmer capital raising for off-farm infrastructure, shifting those costs into a consumer fee."
The ways in which the regional council could be involved in scheme capital funding was limited to grants for expenditure which enabled tangible community benefits, equity investment which enabled a scheme to proceed if supply contracts alone were insufficient, equity investment which enabled the wider community vision of the regional water plan to be achieved, and underwriting of defined scheme borrowing.
Any grant for capital works should be capped and a full business plan was needed proving the viability of the scheme, Mr Martin said.
"Any grant for capital works should be capped. A nominal cap is suggested at $2 million per scheme."
Cr Gerry Eckhoff said irrigation had much wider implications for the community than most people thought, so this was a positive move by the council.
Cr Duncan Butcher said it was important the council was able to fund schemes with community benefits. For example, a scheme in the Lindis area could mean more water stayed in the river.
"It's important this is put out there through the annual plan. It's a step in the right direction."
