australia power grid leased to local-foreign consortium

Home »
Articles »
Economics »
News

Australia power grid leased to local-foreign consortium

A major Australian power grid operator was Thursday partially leased to a local-foreign consortium in a multi-billion-dollar deal

Share |

By AFP | 11.05.2017

A major Australian power grid operator was Thursday partially leased to a local-foreign consortium in a multi-billion-dollar deal, ending an international chase for electricity assets being privatised to raise funds for infrastructure projects.

Australia's largest state New South Wales has sought to privatise three large power assets -- TransGrid, Ausgrid and Endeavour Energy -- but faced roadblocks when a Chinese bid was axed by the federal government last year on national security grounds.

Canberra has become increasingly concerned about Chinese investment in local infrastructure and land, introducing tougher rules after the United States reportedly criticised the leasing of a northern port to a firm from China in 2015.

"This is another outstanding outcome for NSW," state Premier Gladys Berejiklian said about leasing 50.4 percent of power distributor Endeavour Energy to the consortium from Australia, Canada and Qatar.

The deal was approved by federal Treasurer Scott Morrison following advice from the Foreign Investment Review Board, the NSW government added.

It raised $7.62 billion (US$5.60 billion) for the nation's most populous state, which has embarked on numerous infrastructure projects in recent years including large road and rail developments.

Electricity transmission network TransGrid was in 2015 sold to a Canadian, Middle Eastern and Australian consortium for Aus$10.25 billion, beating a Chinese challenger.

And half of the nation's largest electricity network, Ausgrid, was leased to two local firms for Aus$16.18 billion last year after Canberra blocked its sale to foreigners as "contrary to the national interest".

The government had earlier knocked back a bid by China's State Grid Corp and Hong Kong's Cheung Kong Infrastructure Holdings for Ausgrid citing national security.

Canberra last year also rejected the sale of the country's biggest private landowner, cattle firm S. Kidman and Co., to a Chinese-led consortium, for the same national interest reasons.

Kidman, which holds around 1.3 percent of Australia's total land area and 2.5 percent of the country's agricultural land, was later sold to a joint bid by Australian mining magnate Gina Rinehart and a Chinese consortium.