Central Hawke's Bay District Council ratepayers could become part-owners of the Ruataniwha dam under a council proposal to invest up to $5 million in the local irrigation scheme.
At a council meeting tomorrow, councillors are expected to vote in favour of consulting the public over the proposed investment.
The council discussed the investment option informally at a workshop last month, concluding it would be beneficial for it as an investment, and also for the wider district, according to a paper prepared for tomorrow's meeting.
The investment would show the council "whole-heartedly supports" the scheme and the dividend returns from it would be "similar if not better" than from some of its other investments.
The value of the council's shares in the scheme could also grow, based on share price growth seen from two South Island irrigation schemes, the report said.
The council's investment in the dam would be made through the Tukituki Investments Limited Partnership, a structure set up by Hawke's Bay Regional Investment Company (HBRIC) which is working to secure funding for the $275 million project.
HBRIC is the Hawke's Bay Regional Council's investment arm.
Regional councillors are to vote next month on whether to invest up to $80 million in the scheme.
HBRIC is also seeking money from corporates, the Government, banks and local investors.
HBRIC has said it hopes to raise at least $10 million through the Tukituki Investments Limited Partnership, set up to attract "qualified Hawke's Bay investors" - including CHB land owners - willing to invest at least $50,000 each.
CHB Mayor Peter Butler said his council's investment "might just help kick the project along for Hawke's Bay, especially Central Hawke's Bay".
Mr Butler said the council first discussed the potential investment at a committee meeting about three weeks ago, following an email he sent to councillors suggesting they look at investing $500,000 in the scheme.
"By the end of the meeting it had been brought up that we should be looking at $5 million," he said.
He raised the issue publicly at a meeting to discuss the council's annual plan, attended by about 60 people: "I didn't get one dissenting voice and when I sat down I got a clap."
The project faces a number of demanding hurdles. As well as the required funding and getting the go-ahead from regional councillors, HBRIC has said it will not go ahead if it does not secure contracts with irrigators to sell 40 million cubic metres of water a year - about 40 per cent of capacity - within five months.