Tauranga-based company Trustpower has announced today it will be withdrawing as an investor in the Hawkes Bay Ruataniwha Water Storage Scheme.
Trustpower said it would not be possible to invest in the Ruataniwha dam within its risk and return framework.
Trustpower had signed the memorandum of understanding with Hawke's Bay Regional Investment Company and Ngai Tahu Capital Limited in November, 2013.
IrrigationNZ cheif executive Andrew Curtis said it was very common for irrigation schemes to have changing investment partners in the development stage and TrustPower had only signed a memorandum of understanding.
"The benefit is that the withdrawal allows more local farmers and businesses to buy into the scheme and we know from history that local people driving local solutions always turn out to be the best for the community in the long run," said Mr Curtis.
He said the announcement was an opportunity for Central Hawkes Bay farmers and businesses to get behind the dam to make it work.
"The Ruataniwha scheme is exactly the sort of irrigation scheme New Zealand needs to bring new life to regions like the Hawkes Bay, allowing many of its rural towns to thrive again," said Mr Curtis.