New South Wales approves long-term lease for TransGrid under $7.3bn deal

24 November 2015 (Last Updated November 24th, 2015 18:30)

NSW Electricity Networks (NSWEN) has won a long-term lease of power transmission network operator TransGrid in New South Wales (NSW), Australia, for A$10.258bn ($7.3bn).

transmission

NSW Electricity Networks (NSWEN) has won long-term lease of power transmission network operator TransGrid in New South Wales (NSW), Australia, for A$10.258bn ($7.3bn).

NSWEN represents a consortium of investors, including Caisse de dépôt et placement du Québec (CDPQ), Spark Infrastructure and Hastings Funds Management holding 24.99%, 15.01% and 20.02% stakes respectively.

Tawreed Investments, a wholly-owned subsidiary of Abu Dhabi Investment Authority, and Wren House Infrastructure Management also have a 19.99% stake each in NSWEN.

The long-term lease will extend over a 99-year period and include core network infrastructure assets of TransGrid.

Gross proceeds from the deal are expected be used by the state to fund infrastructure projects under 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."

NSWEN has also signed an electricity price guarantee as a part of the deal, which intends to make sure that total network charges will be lower in 2019 compared to the charges in 2014.

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."

"TransGrid’s regulated revenues will generate stable and predictable returns for our clients over the long term."

NSW Government will continue to operate as the lessor, licensor and as safety and reliability regulator for TransGrid and have control over its planning system.

Australian Energy Regulator will also continue to regulate the network charges to be collected by TransGrid.

The state government intends to raise more than $20bn through the combined sale of three assets on the market, including TransGrid, reports The Sydney Morning Herald.

The other two assets under consideration are Ausgrid and Endeavour Energy.


Image: The lease will extend over a 99-year period and include core network infrastructure assets of TransGrid. Photo: courtesy of duron123/FreeDigitalPhotos.net.