New Zealand plans to invest $20.5 million into a new, large-scale, renewable energy project in Niue, reducing the island nation's reliance on diesel.
The project will bring Niue's renewable generation to 80 percent.
New Zealand will also commit $2 million to the Niue Ocean Wide Trust, which aims to develop a blue economy and ensure long-term ocean conservation and climate resilience.
It comes alongside the announcement of an agreement to enhance the relationship between the two countries, and in recognition of the 50 years of Niue's self-government in free association with New Zealand.
The funding for the initiatives comes from New Zealand's International Development Cooperation programme.
Christopher Luxon made the announcements on the first leg of his first trip to the Pacific as New Zealand's prime minister, in a joint media statement alongside Niue's Premier Dalton Tagelagi.
Christopher Luxon and Dalton Tagelagi . Photo: RNZ/Giles Dexter
He said the energy project would begin in the first quarter of next year and aim to be commissioned by the end of the year.
He highlighted more formal visits from New Zealand to Niue since the coalition took office, saying they had "upped the intensity".
"I wish I could spend many many more nights here, I feel like I'm leaving without fully having explored everything and seen everything but it's a good reason to come back."
Tagelagi said they also discussed that when New Zealand prospers, Niue prospers as well.
"We're difficult, where we are. We're isolated in the big blue ocean but we do our very best in our own unique way in order to help ourselves," he said.
Asked about the growing influence of China in the region, Tagelagi said New Zealand was Niue's traditional partner. China was a friend like many other countries in the region, he said, but could not come between the relationship with New Zealand.
"We can't keep relying on our great partner New Zealand to do everything for us, so that is how all these other partnerships have then been developed," he said.
Tagelagi intends to change his title from Premier to Prime Minister, and has already begun the process to do so.
He said the new title was more in line with other countries in the region, and would ensure he was seen as the leader of a country rather than the leader of a territory.
Luxon said Tagelagi had consulted with him on the change but "ultimately that's a decision for the people of Niue".
Tagelagi said they were also working hard on labour mobility to ensure the workforce was in place to continue maintaining and building the infrastructure Niue needed.
He said he was pleased to see in particular "our own people starting to return", and that "they see home now as a place to live and work but also as a way to contribute to their own country".
Niue's population was growing again, he said, which was great to see.
Luxon said the airport runway was a good example, and it had been excellent to see local staff and employees gaining the skills to support their country.
Tagelagi, when questioned about whether the country would consider passport-free travel from New Zealanders to visit, said it was something they could consider looking at to continue building Niue's tourism sector.
In a statement, Luxon said the two countries shared a close bond.
"It's been great to sit down with Premier Tagelagi to discuss areas of cooperation and our mutual priorities," he said. "Our work with Niue extends across sectors including health, education, and infrastructure resilience."
The pair held formal talks earlier in the morning.
Luxon said they spoke about the importance of a resilient energy system that could reduce the cost of living for Niueans and bring down greenhouse gas emissions.
"This project will achieve that and ensure better energy security in the face of more destructive weather events," Luxon said.