Tauranga will receive $158 million of 10-year interest-free loans from the Government to support major infrastructure projects, it was confirmed today.

Minister of Housing and Urban Development Phil Twyford announced the finalised funding and said further announcements on Tauranga infrastructure were expected in the coming months.

The funding had already been announced by the previous Government last year, which allocated $230m for Tauranga as part of the $1 billion Housing Infrastructure Fund.

That allocation was for the greenfield development at Te Tumu in Papamoa East, as well as a capacity upgrade to the Te Maunga Wastewater Treatment Plant and the new Waiāri water treatment plant.

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Twyford said the $158m funding announced today did not include $72m for the Te Tumu project as the business case was still being finalised.

He said the loans to Tauranga City Council would improve resilience and environmental outcomes in drinking water and wastewater.

"The infrastructure that will be built with this funding to support new housing includes capacity upgrades to the Te Maunga Wastewater Treatment Plant and a new Waiāri water treatment plant."

He said more announcements were expected in the coming months once business cases were evaluated and approved, and that included the Te Tumu development.

Twyford said the infrastructure funding would provide water and wastewater capacity for an additional 35,000 houses, which could be either infill or greenfield developments.

"While there has been a big focus on the housing crisis in Auckland, there are also issues needing to be addressed in high growth areas like Tauranga. Its population is expected to continue to grow, and demand for housing is already high," he said.

"Tauranga City Council is keen to accelerate housing developments, and funding towards infrastructure to support such developments will go a long way to ease pressures on councils."

National Party leader and Tauranga MP Simon Bridges reacted to today's announcement by saying the infrastructure funding was not new.

He said the Labour Government had slashed the previous $230m Tauranga allocation to $158m.

"That difference in funding is now up in the air – Tauranga needs the certainty that National gave it a full year ago in order to invest and progress these infrastructure projects."

Twyford disputed that and said there had been no cut to the funding for the Tauranga City Council.

"This funding does not include $72 million for the Te Tumu project as the business case is still being finalised."

He said Bridges' comments were misleading the people of Tauranga.

"The former National Government had only agreed in-principle to consider this funding.

"Our Government has now funded these projects through the Housing Infrastructure Fund which will enable them to go ahead."

Twyford said work on finalising the loans was a great example of how central and local government could work together to address New Zealand's housing crisis.

Tauranga deputy mayor Kelvin Clout said the city needed to provide core infrastructure to cope with the increase in population.

"The Waiāri Water Supply Scheme is an essential project to help meet the future water supply needs of Tauranga."

Clout said the Housing Infrastructure Fund was a fantastic initiative to help support New Zealand's high-growth areas, "allowing us to advance the infrastructure projects we need in order to increase housing supply".

"Local authorities face enormous challenges in being able to fund much-needed infrastructure like the Waiāri Water Supply Scheme within the constraints of our balance sheets.

"This 10-year interest-free loan will make a difference to Tauranga City Council and we're very grateful to the Government."

Twyford also said today that the Housing Infrastructure Fund would enable at least 28,000 new homes to be built in high-growth areas over the next 10 years.

That was at odds with what National announced in July last year.

When announcing the allocations, Bill English said the infrastructure projects would speed up the delivery of 60,000 houses across New Zealand's fastest-growing population centres over the next 10 years.

The Bay of Plenty Times asked Twyford if National's 60,000 target had been moved to 28,000.

Twyford said the 28,000 number was based on actual projects with completed business cases.

"The 60,000 announced by the former Government were based on sketchy details and referred to what might be able to be built over the long term."