Government Allocates $50M for New Geothermal Projects to Boost Regional Growth

The Government has ringfenced $50 million from the Regional Infrastructure Fund for the development of geothermal projects, Regional Development and Resources Minister Shane Jones says.

Early-stage geothermal exploration involves high upfront costs. Targeted government investment will help de-risk exploration and get more projects off the ground, Mr Jones says.

Given the scale of opportunity, it makes sense to ringfence $50m to help de-risk and ensure geothermal projects are well-positioned to lift productivity and strengthen regional resilience, Mr Jones says.

In New Zealand, geothermal energy accounts for about 20 percent of our electricity supply. Geothermal heat can also have direct industrial and commercial uses such as in timber or milk drying, heating glasshouses for horticulture, or water for prawn farms. It’s also used to heat buildings and water in hospitals, homes and tourist spas.

Three projects have so far been successful in seeking funding, totalling $23m, from the Regional Infrastructure Fund (RIF).

Through this ringfenced funding, two $10m loans have been granted to two projects - the Taumanu and Kopura geothermal projects near Rotomā and Kawerau, Mr Jones says.

The projects involve early work needed to potentially unlock two new geothermal power stations for electricity generation. It includes underground surveys and the exploration well-drilling and testing necessary to confirm the geothermal resource.

The funding for the Taumanu and Kopura Projects will be delivered through joint ventures between renewable energy company Eastland Generation and local Māori land trusts.

These are early-stage projects that, if successful, have the potential to develop additional renewable, reliable, low-emissions, home‑grown energy, while helping boost Māori economic development, jobs, and long‑term regional growth and resilience, Mr Jones says.

Around 140 jobs are expected during construction, with up to 20 permanent roles once the power stations are operating and opportunities for local suppliers.

A third project, in the Bay of Plenty, has received a $3m grant. The Whakatāne Geothermal Temperature Gradient Well Programme is a project run by the University of Auckland through the Geothermal Institute. It plans to drill three exploratory wells in Whakatāne to provide data that will reduce geological uncertainty and enable future development of renewable heat supply for industrial and community users in the eastern Bay of Plenty.

Relevant projects which meet the criteria and have already applied to the RIF will be considered for the ring-fenced funding. Applications for new projects will also be accepted for consideration.

Successful projects will be announced when they have been evaluated and ministers have made decisions.

Today’s funding announcements follow on from the $60m ringfenced for supercritical geothermal announced in November 2024.