Meridian Energy is the next state owned asset to go up for partial sale later this year.

Finance Minister Bill English and State Owned Enterprises Minister Tony Ryall made the announcement today as part of the 2013 Budget.

It follows the successful listing of Mighty River Power on the New Zealand Stock Exchange last week.

'The Mighty River Power offer demonstrated that the Government's share offer programme works.

'It raised $1.7billion, which will be used to invest in hospitals, schools and other assets our communities want and need.”

The listing now means Mighty River Power has the benefits of greater access to capital, monitoring and market discipline after 113,000 New Zealanders invested.

He says Meridian will benefit from the same process, and New Zealanders will once again have the opportunity to invest in the Initial Public Offering of a large New Zealand company.

Following the announcement, ministers have instructed Treasury to ready Meridian for a share offer of up to 49 per cent of the company, in the second half of this year, depending on market conditions.

'A key first step in the offer process is for the half-year financial results of Meridian to be independently audited, and this will commence as soon as the results are confirmed after 30 June,” says Tony.

Meanwhile, Treasury will proceed with appointing key advisers, drawing from the panels established at the start of the Government's share offer programme with legal and capital market advisers due to be contracted by June.

Proceeds from the share offers go to the Future Investment Fund, which is expected to receive between $5 billion and $7 billion from the programme. The money is being used to pay for priority public assets, with $1 billion from the fund earmarked for each of health and education.

'These proceeds are only a small percentage of the Government's overall spending,” says Bill.

'But without them, we would either have to borrow more money overseas, or go without some of the new or upgraded hospitals, schools and other infrastructure and investment that our communities require.”

Bill says the share proceeds will provide another avenue to pay for these assets on top of the $569 million allocated in last year's Budget, bringing the total allocated so far to $2.1 billion.

But because most of these projects will involve commercial negotiations, the exact breakdown of figures remains confidential.

Tony says the Government has also agreed that over the life of the Future Investment Fund $1 billion will be allocated to hospitals and other health projects.

This includes $426 million for the Christchurch and Burwood hospitals' redevelopment.

The Government has previously said $1 billion of the fund will be ring-fenced for modernising and transforming schools as part of the 21^st Century Schools Programme. In total, $219 million of that amount has so far been allocated.

'The Government has also said it would support the rebuilding of Christchurch, and that is exactly what we are doing,” says Tony.

'Now estimated to cost $40 billion, it is the biggest building project in New Zealand's history. This Budget allocates more than $900 million from the Future Investment Fund to support the rebuilding of Christchurch.

'It's appropriate that some of the proceeds from the share offer programme are put towards building new assets that only the Government can pay for.”

Future Investment Fund commitments confirmed in Budget 2013 include:

· $426 million for the redevelopment of Christchurch and Burwood hospitals. As announced previously, this will be the single biggest building project in the history of New Zealand's public health system.

· $50 million to speed up the School Network Upgrade Project which enhances the technological capability of schools.

· $94 million for the fourth year of KiwiRail's Turnaround Plan.

· $80 million for irrigation projects, as announced previously.