ASX-listed New Zealand power company Mercury is expanding its Kaiwera Downs wind farm near Gore following a deal to supply power to NZ Aluminium Smelters.

With a NZ$486 million ($450.9 million) investment, the project will increase the farm's capacity to 198 MW, making it New Zealand's second-largest.

Construction starts in June, aiming for full generation by late 2026.

The plan hinges on approval from the Electricity Authority for NZAS supply contracts with Meridian Energy and Contact Energy.