Work on a multimillion-dollar project to modernise the Kurow-Duntroon Irrigation Company's scheme is on track to be completed early next year.

The about $45million project, which started in late January, found favour with the Waitaki District Council which approved a loan of up to $3million to the company in September, as councillors praised the environmental benefits of the modernisation.

The scheme serves a mix of dairy, sheep and beef farmers, viticulture and other sectors and the upgrade includes replacing about 44km of existing ageing open canal with 37km of piped irrigation infrastructure, and the scheme modernisation included doubling the irrigated area from about 2000ha to more than 4000ha.

Kurow-Duntroon Irrigation Company project manager Marcus Brown said a "very benign season'' had allowed contractors to make solid progress.

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"There are presently five pipe installation crews at work. On the 1st of April we closed off the race from the (Waitaki) dam to the scheme, so that's now got to be replaced by a pipe that runs to a temporary race turnout at Kurow Racecourse by mid-September. So, the race is on.

"Intake works will start in June, so obviously these are all very, very critical elements to ensure that we can supply our existing customers this year.''

The scheme has 59 shareholders at present with a command area - the total area of land irrigated - of 1983ha.

Brown said when the scheme was fully operational, expected to be in February or March next year, that area would grow to about 4100ha and serve up to 70 shareholders.

"There will be a few more customers, but a lot of existing shareholders are taking more water. That's where the bulk of the progression is.''

When the Government began winding down public subsidies for large-scale irrigation projects last year, the North Otago company did not lose its funding because Crown Irrigation Investments had signed a construction funding term sheet with the scheme.