Hastings Group Wins Australia State Power Bid for A$10.3 Billion

A group of Australian, Canadian and Middle Eastern firms will pay A$10.3 billion ($7.5 billion) for an Australian electricity network as part of the country’s biggest privatisation programme, beating a Chinese government bidder.

State Grid of China, which was considered a favourite, failed in its bid.

The NSW Electricity Networks group, which will be led by Australian infrastructure fund Hastings, secured the 99-year TransGrid lease for $10.258 billion, the NSW government announced on Wednesday.

Premier Mike Baird said the record windfall was a “stunning result” for the state, with proceeds going towards infrastructure promised at the March election.

The consortium, “NSW Electricity Networks”, also includes a Canadian pension fund, Tawreed Investments Limited, which is the global direct infrastructure investment vehicle of the Abu Dhabi Investment Authority, Wren House Infrastructure, a subsidiary of the Kuwait Investment Authority, and Australian infrastructure manager Spark Infrastructure.

“We welcome foreign investment… what this bid represents is the United Nations”, he said.

There were several contenders for TransGrid with a consortium of State Grid, owned by the Chinese Government, and Australian owned Macquarie Infrastructure seen as strong bidders.

The consortium is led by Hastings Funds Management – as manager of Utilities Trust of Australia, while locally listed Spark Infrastructure, which owns and manages energy assets, is also part of the group.

TransGrid power lines in western Sydney.

“We’ve taken a giant step in spending taxpayers’ money more wisely on things that make a difference to their daily lives like better schools, hospitals, public transport and roads”.

The government expects to complete the transaction by mid-2016.

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”.

He added that factors such as the stable regulated operating environment, the buyer’s ability to run the network more efficiently and the quality of the TransGrid network made the deal compelling.

The government will now move to offer the partial lease of power distributor Ausgrid.