Minister for state and regional development John Brumby said the hydroelectric power station could potentially provide extensive investment opportunities for local businesses.

“The 130MW station is expected to generate enough power to supply electricity to more than 18,000 homes,” said Brumby.

“It will also provide a significant boost to Victoria’s peaking capacity, enhancing the security of the state’s electricity supply.”

The funding comes from the Regional Investment Initiative and will cover half of the costs of an Investment Opportunities Study to be managed by Alpine Shire Council, the remaining half covered by the shire and Southern Hydro.

“The Regional Investment Initiative is a key part of the Bracks Government’s agenda to drive prosperity and growth across rural and regional Victoria,” said Brumby.

“The study will help to develop strategies to capitalise on the new opportunities created in the region with a particular emphasis on creating new jobs.”