The new facilities and refurbishments were made possible by the $298,000 in funding the Showground received through the Department of Planning, Industry and Environment's Showground Stimulus Funding Program.

"The funding received was used for the restoration of stables, development of the dressage arena and drainage and resurfacing of the covered arena," Kempsey Showground Coordinator Lisa Powlesland said.

"With these facilities we aim to restore Kempsey Showground as a permanent feature on the equine competition circuit and increase local participation in equine sports.

"It's fantastic that we can provide Valley Eqestrian Club, Riding for the Disabled and Macleay District Pony Club an arena for dressage.

"With the opening of these facilities it will give our current equine user groups, all future groups and the community additional opportunities to think local and run events and hire the grounds."

The upgrades also meant the maintenance team at Kempsey Showground remained employed during COVID-19 restrictions.

"During the tough COVID year this funding has enabled us to keep our maintenance team employed and helped to engage local trades to complete the valuable works. I would like to acknowledge John Poole, Jason Edwards and Barry Johnston who worked on the upgrades and thank them for their ongoing hard work at the Showground," Lisa said.

President of the Valley Equestrian Club, Ruth Allsopp, said this has been a long-term goal for the club.

"With the opening of the new permanent dressage arena brings to a close what has been in discussion with the previous Trusts since 2016," she said.

Valley Equestrian Club hold around four dressage events a year, including the Kempsey Show Dressage.

"The benefits of having a permanent area means less setup and pack up times, the opportunity to hold more events and bring in specialised instructors, a warm up area and the ability to hold higher level events," Ruth said.

The dressage arena was officially opened by Member for Oxley Melinda Pavey on Wednesday.

"The funding was designed to keep people employed and we can see that this is the case for the Kempsey Showground upgrades," she said.

"The way that showgrounds responded during the bushfires was also at the heart of this funding decision. They are the heart of the community."

The upgrades to the stables has also allowed for 29 horses to be housed at the Showground, with a further 30 additional stalls, including eight stallion boxes, to be added during phase two of the upgrades.

"After phase two of the upgrades we will have 59 safe stalls for horses at the showground," Lisa said.

Also included in phase two of the upgrades, which are currently underway, is the refurbishment of the amenities block including disabled access.