New South Wales (NSW) Government in Australia has awarded the long term lease of electricity transmission network TransGrid to a consortium called NSW Electricity Networks (NSWEN) for A$10.258bn ($7.3bn).
Under the terms of the deal, NSWEN will acquire the 99-year lease of core network infrastructure assets of TransGrid.
NSWEN is a consortium of investors including Caisse de dépôt et placement du Québec (CDPQ) with 24.99 % stake as well as Spark Infrastructure and Hastings Funds Management holding 15.01% and 20.02% stakes respectively.
Other consortium partners include Abu Dhabi Investment Authority wholly-owned subsidiary Tawreed Investments and Wren House Infrastructure Management each with 19.99% stakes.
NSW Premier Mike Baird and Treasurer Gladys Berejiklian said in a joint statement that the gross proceeds from the transaction will be used to help fund the development of infrastructure projects as part of the government’s Rebuilding NSW plan.
CDPQ infrastructure senior vice-president Macky Tall said: "TransGrid’s regulated revenues will generate stable and predictable returns for our clients over the long term."
The consortium has also signed the electricity price guarantee, which ensures that the total network charges will be lower in 2019 when compared to the 2014 level.
NSWEN acting chair Rick Francis said: "The consortium will rely on the extensive experience of its members, whose common goal is to make long-term investments in high-quality infrastructure assets."
Upon completion of the deal, the NSW Government will remain as lessor, licensor, as safety and reliability regulator and through the planning system for TransGrid while the Australian Energy Regulator will continue to regulate TransGrid’s network charges.
The NSW Government is planning to raise more than $20bn by selling all three assets on the market which includes TransGrid, reported The Sydney Morning Herald?.
The government now considering divesting 50% lease in Ausgrid, a electricity distributor in Sydney, Central Coast, Hunter Region and Newcastle areas as well as in Endeavour Energy, an operator of electrical distribution networks for western Sydney and the Illawarra region,
The Ausgrid partial lease is expected to be completed by mid-2016.
Image: The NSW Government plans to privatize all three assets on the market. Photo: courtesy of duron123/FreeDigitalPhotos.net.