IFM Investors and AustralianSuper acquire 50.4% interest in a 99-year lease of Ausgrid

The consortium comprising equal representation of IFM Investors and AustralianSuper has acquired a 50.4% interest in a 99-year lease of Ausgrid releasing AUD16.2 billion (US$12.3 billion) in gross proceeds to the New South Wales Government.

As we reported in late September, the New South Wales government, which owns the electricity distributor Ausgrid, received an unsolicited bid from pension fund AustralianSuper and IFM Investors, Australia’s largest infrastructure fund.

Ausgrid owns, maintains and operates the electrical distribution networks to 1.6 million customers in Sydney, Central Coast, Hunter Region and Newcastle areas of New South Wales. It was formed in 2011 from the previously state owned energy retailer/distributor, EnergyAustralia, when the retail division of the company, along with the EnergyAustralia brand, was sold by the NSW State Government.

AustralianSuper Chief Executive Ian Silk said:

“This all-Australian partnership between the millions of members of our two organisations and the NSW Government will maintain and enhance the Ausgrid network vital to so many NSW communities while providing returns that will contribute to the long term retirement savings of the nation’s workers.”

“Ausgrid is a high-quality electricity transmission and distribution business that has been in operation for over 100 years and is vitally important to the NSW economy. We commend the NSW Government for its willingness to harness superannuation money to drive positive outcomes for the State.”

IFM Investors Chief Executive Brett Himbury said:

“This is a tremendous outcome for over 6 million hardworking Australians who, through their superannuation fund, will partner with the NSW Government in operating an essential component of NSW’s energy infrastructure.

“This is a new kind of ‘PPP’ - a true Pension Public Partnership. This Pension Public Partnership makes Australian superannuation money available to build new infrastructure, improving standards of living and productivity. At the same time, the investment in Ausgrid will add to the superannuation accounts of over 6 million Australians."