The Government announced the expanded irrigation funding in May, saying $35 million over five years was meant to support the development of proposals to the "investment-ready" stage.
Applications opened yesterday and Central Otago mayor Tony Lepper said the fund was good news for the district.
"It's exciting for us and there's two or three irrigation projects here that may be in line for this money."
An umbrella organisation, the Manuherikia Catchment Water Strategy Group, has been formed to represent the interests of the eight irrigation organisations within the Manuherikia and Ida valleys. An independent chairman from outside the area, Allan Kane, of Wanaka, has been appointed to head the group.
Three catchment-wide studies are planned.
The first will involve identifying the land area which could be irrigated, and how much water would be needed. The second would focus on how much water was available, allowing for minimum flows.
"From those two studies, we expect to identify what gap there is between what's needed and what's available. The third study will then look at ways of meeting that need and making better use of what's available," Mr Kane said.
The group had sought estimates on the cost of each study. As soon as that information was available, it would apply to the fund for a grant for those studies, he said.
"It's a totally fresh look at water in the whole catchment and how it can best be utilised.
That may involve new infrastructure, upgrading existing schemes, and pumping water out of the Clutha [river]," Mr Kane said.
"I expect a range of options to be proposed ... Which ones proceed will be up to individual irrigation schemes and their communities."
Staff from the Ministry of Agriculture and Forestry will meet the Central Otago District Council and irrigation scheme officials in Alexandra next week to discuss the fund. Council business development manager Jonno Gadd said the council would take a "facilitative and administrative role".
"Central Otago is the driest district in the country and water is so important to our current and future wellbeing," he said.
