Canadian pension fund Ontario Municipal Employees’ Retirement System (OMERS) has acquired a 19.9 per cent stake in Australian electricity transmission company TransGrid from Kuwait’s Wren House Infrastructure Management, according to an announcement.
OMERS and TransGrid did not disclose financial terms of the deal. According to an Australian Financial Review report, OMERS picked up a A$2-billion ($1.4 billion) plus stake that valued TransGrid at nearly $12 billion ($8.4 billion), including debt.
Christopher Curtain, OMERS Infrastructure Managing Director for Australia, said TransGrid marks the pension fund’s second infrastructure investment in Australia after the Port of Melbourne.
Established in 1950, TransGrid, which is owned by a consortium comprised of Spark Infrastructure, Utilities Trust of Australia, CDPQ, Tawreed Investments Limited, and now OMERS, manages and operates high voltage electricity transmission network in New South Wales and the Australian Capital Territory.
The company’s high voltage transmission network connects around 8 million to electricity supply and the business offers investors like OMERS “regulated revenue that is a strong match for its pension obligations to its members,” TransGrid said.
“By investing in TransGrid, OMERS is supporting our delivery of safe, reliable, and affordable electricity to customers and assisting to progress the critical infrastructure projects being planned and delivered by TransGrid as we lead the energy transition which is underway in Australia,” said TransGrid CEO Paul Italiano.
The transmission company also said that its capital investment would play an important role in Australia’s economic recovery following the COVID-19 pandemic as its new electricity transmission infrastructure and associated support activities are expected to create about 7,000 direct jobs.
“TransGrid is poised to both continue making a crucial contribution to Australia’s electricity needs, while also playing a key role in helping reduce carbon emissions from the country’s electricity grid,” said OMERS Global Head of Infrastructure, Ralph Berg.
Wren House Infrastructure Management, which sold the 19.99 per cent stake to OMERS, invested in TransGrid in 2015 through a consortium of investors, which included Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Morrison & Co, Tawreed Investments Ltd, and ASX-listed utility infrastructure investor Spark.
Founded in 1962, OMERS is one of Canada’s largest defined benefit pension plans, with more than 500,000 members and $109 billion in assets under management. It manages a diversified portfolio of investments in public markets, private equity, infrastructure, and real estate.