"The kiwifruit industry is looking to expand its planting to exceed 100 hectares per year over the next five to seven years, and an increase in logging is predicted by 2028.
"To support this growth, producers need a reliable roading infrastructure, as well as water, to connect producers to their market.
"Sustainability of freshwater supplies is critical so we're announcing a major PGF investment in water storage with funding for the first step of pre-feasibility work for the development and construction of the Tukituki water project.
"The Tukituki water project will enable the development of an environmentally sustainable and reliable water supply to existing industry and primary sector water users, and provide additional water for further growth opportunities.
"The initiative also has the potential to create jobs in the future and unlock the opportunities to develop unproductive Māori land across the region.
"The upgrade of Route 52 from Waipukurau to Porangahau is part of a wider Hawke's Bay transport package aimed at helping lift the productivity of the region through roading improvements.
"We're providing $400,000 to investigate the impacts of a new rail hub on the local roading network, as well as other wider requirements of freight movement and hubs in Hawke's Bay. If successful, the PGF has earmarked $4 million to contribute to the construction of a Dannevirke rail hub.
"The PGF has also funded the potential development of Ngā Ara Tipuna - Waipukurau Pā Site Interpretation project, which will investigate a tourism attraction involving six pā sites that surround Waipukurau. The concept involves digital storytelling, displays, sculpture and displays that show Central Hawke's Bay landscapes in a fresh light."
Mayor of Central Hawke's Bay, Alex Walker, said, "Investment of this scale, in a small community like ours, is truly transformational.
"From strengthening our transport routes and improving water security, to investing in our cultural heritage and helping us understand more about our economic potential - this funding will help lay the foundations we need to build a proud and prosperous district, promote smart growth, and attract and enable business success."
The $40 million is to support the following initiatives:
Route 52 Waipukurau to Porangahau – $20,100,000
Hawke's Bay Water – Tukituki project $14,700,000
Central Hawke's Bay upgrades to meet High productivity motor vehicles standards – $350,000
Dannevirke Rail Hub evaluation and construction – $4,400,000
Ngā Ara Tipuna - Waipukurau Pā Site interpretation project – $119,764
Exploring Central Hawke's Bay economic development opportunities – $272,640