By a staff reporter
China’s State Grid Corporation is moving on Australia's power sector, signing an agreement to buy a 19.9 per cent stake in Melbourne-based electricity and gas network SP AusNet from Singapore Power International (SPI) for $824 million.
The buy-in by the world's largest utilities player would see SPI keep a 31.1 per cent stake in the network, while taxpayers would own the 49 per cent balance.
The Chinese government-owned State Grid Corporation of China (SGCC) achieved revenues of about US$300 billion in 2012 and ranks No.7 on the Fortune Global 500 list.
The agreement would also see SGCC subsidiary State Grid International Development (SGID) buy a 60 per cent stake in Australian energy infrastructure SPI (Australia) Assets (SPIAA), which is owned by Singapore Power International.
Both purchases would require regulatory approval from the Federal government, Australian Competition Consumer Commission and the National Development and Reform Commission of China.
SP AusNet is the largest diversified energy network business in Victoria, owning and operating $10 billion in electricity and gas distribution assets, including the state-wide electricity transmission network.
Singapore Power said Australia had "a resilient economy with a transparent regulatory and legal framework" and remained a focus of its future plans.
"The transactions demonstrate the confidence Sngapore Power and SGCC have in the future prospects of SP AusNet and SPIAA, as well as the energy infrastructure environment in Australia," Singapore Power said.
Outside China, SGID has invested in Australia, Brazil, Portugal and the Philippines.
SP AusNet said it would review the "number of implications" for the company arising from the deal, including opportunities for collaboration with the state-owned giant.
SP AusNet also has an arm, Select Solutions, that provides energy, water and environmental services to the utilities industry.