Mighty River Power is likely to be the first state asset to be partially sold off as the Government looks to reap between $5 billion and $7 billion from putting some companies up for sale.

Finance Minister Bill English outlined in his Budget speech yesterday the anticipated proceeds from the Government's "mixed ownership model" policy for Mighty River, Meridian, Genesis and Solid Energy plus reducing its 75 per cent holding in Air New Zealand.

The Herald understands that Mighty River Power, which owns nine power stations on the Waikato River and various geothermal plants in the North Island, could be the first to face a sell-down of as much as 49 per cent, with the sale of a portion.

The sales would happen over three to five years, starting next year depending on market conditions. Conditions for sales included the Government maintaining majority control in the companies, New Zealand investors having the first opportunity to buy the shares, sales creating good investment opportunities, and consumers being adequately protected.

"As we promised, we are now clearly setting out our policy to New Zealanders well before the election in November," Mr English said.

"The Treasury estimates that extending the mixed ownership model to the four energy SOEs and reducing the Government's majority shareholding in Air New Zealand are likely to free up between $5 billion and $7 billion of capital - depending on the final structure of the programme."

The move would help the Government reduce debt while also providing investment opportunities, he said. The Government expected to have to spend $21 billion acquiring assets by 2015.

"Rather than simply borrow this amount, the Government will use proceeds from the mixed ownership model to recycle existing capital towards high-priority future investment in assets like schools, hospitals and broadband."

Labour finance spokesman David Cunliffe said in the long-run asset sales would cost more in lost dividends than from the sales proceeds.

The Shareholders' Association has welcomed the partial sell down of state assets - but wants a shake-up at board level to improve returns to investors.

Association spokesman Des Hunt said mum and dad investors must be given a fair crack under National's plans to sell shares in four energy companies and reducing the Government's 75 per cent stake in Air New Zealand. KiwiSaver and pension funds should also be given priority.

SOEs were notorious for swallowing up capital and making appalling returns and some boards needed rejuvenating to provide better returns.

The Government's mixed ownership model for state-owned assets is one of several investment opportunities for New Zealanders following the collapse of finance companies and dearth of new listings on the New Zealand Stock Exchange.

New Zealanders will also be able to help fund the recovery in Christchurch and make some money in the process under a earthquake kiwi bond announced in the Budget.

The Government plans to put New Zealanders "at the front of the queue" for shares and offer a 4 per cent, four-year earthquake kiwi bond to help meet the projected $5.5 billion cost of the two Canterbury earthquakes.

Philip Combes, who heads Treasury's debt management office, said the bonds would be targeted as a conservative investment to New Zealanders. A Local Government Bond Bank is also being set up as a one-stop borrowing source for councils.