WELLINGTON, New Zealand--An upgrade to New Zealand's power grid is suffering delays because of the coronavirus pandemic and funding constraints.

Transpower, which manages New Zealand's electricity grid, faces pandemic issues including in its international supply chain, according to one of its partners in the work, hydro-power company Meridian Energy Ltd.

Meridian is also unwilling to make a further funding commitment for the 110 million New Zealand dollar ($66.6 million) upgrade, it said on Monday. The targeted completion date of June 2022 "may no longer be achievable," Meridian said.

The Clutha-Upper Waitaki upgrade was restarted in December, part of an effort to guard against disruption from the possible closure of New Zealand's only aluminum smelter.

It would strengthen the power grid to move more hydroelectric generation in the lower South Island to the North Island if the Tiwai Point smelter closes or curtails its operations. The smelter's owner Rio Tinto is reviewing its future.

Meridian and Contact Energy Ltd. in December said they would jointly contribute NZ$10 million to the work.


Write to Stephen Wright at stephen.wright@wsj.com


(END) Dow Jones Newswires

May 03, 2020 17:29 ET (21:29 GMT)

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