AMP Capital acquires stake in the Victorian Desalination PPP Project

By AMP Capital media team

Not for release or distribution in the US

AMP Capital has reached financial close on a deal to acquire a 5.2 per cent stake in the Victorian Desalination Project (VDP) from Pacific Partnerships.

The acquisition is funded by the AMP Capital Community Infrastructure Fund (CommIF).

VDP was delivered as a public private partnership (PPP) and is the largest desalination plant in the Southern Hemisphere. It is a rainfall-independent source of drinking water and capable of supplying up to 150 billion litres a year. This is approximately one third of Melbourne's annual water consumption.

The project is a $3.5 billion capital investment between the Victorian Government and AquaSure, the company contracted to finance, design, construct, operate and maintain the project for 30 years. There are 23 years remaining to the end of the concession.

The scope of the project includes the construction and operation of the desalination plant, the 84-kilometre transfer pipeline to connect the plant to Melbourne’s existing water supplies, delivery of power supply for the project, operations and maintenance, and the purchase of renewable energy credits. The plant was successfully commissioned in December 2012.

AMP Capital Community Infrastructure Fund Manager Andrea McElhinney said: “We are delighted to invest in one of Australia’s largest PPPs with a world-class design that provides high-quality water to the Melbourne network. The asset also delivers stable, long-term monthly service payments from the Victorian Government to our investors. This latest acquisition will increase CommIF’s exposure to the water sector as it will sit alongside existing water assets such as Riverland Water and AquaTower.

“CommIF has experienced significant growth since AMP Capital acquired the fund in 2010 from the Royal Bank of Scotland, with the net asset value growing from approximately $55 million in September 2010 to more than $500 million in October 2016. We are extremely proud of CommIF’s achievements and success in the secondary social infrastructure market, providing investors with a diversified portfolio of existing operational assets that deliver immediate yield. We look forward to continuing this momentum by working with state governments and key stakeholders to deliver value-for-money projects that benefit the community.”

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Important notes

This article has been prepared to provide general information and does not constitute 'financial advice' for the purposes of the Financial Advisors Act 2008 (Act). An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.

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