New rules for foreign sale of Australian electricity assets

The Australian Government has announced new conditions on the sale of Australian electricity assets to foreign investors.

All future applications for the sale of electricity transmission and distribution assets, and some generation assets, will attract ownership restrictions or conditions for foreign buyers.

“These conditions codify those already applied, on a case-by-case basis, to previous transactions,” a joint statement from Treasurer Scott Morrison and Minister for Immigration and Border Protection Peter Dutton said.

“Electricity distribution and transmission infrastructure are critical national assets and a key national security safeguard is the diversity of ownership of these assets.

“This approach will allow the government to actively manage the level of ownership and control from investors in a single asset or within a sector.

“Each case will be assessed on a case-by-case basis, taking into account a range of factors such as the cumulative level of ownership within a sector, the need for diversity of ownership and the asset’s critical importance.”

Parties interested in acquiring or selling critical infrastructure assets are encouraged to engage with the Foreign Investment Review Board as early as possible to identify if ownership restrictions or conditions may apply.

Where required, ownership restrictions will be flagged to the market as early as possible in the sale process.

“The government is committed to an open foreign investment regime that strikes the right balance in managing national security risks, while promoting job opportunities and enabling economic growth,” the statement said.

“With electricity distribution assets, the stakes are higher, and Australians expect additional foreign investment protections in place.

“Today’s announcement gives clarity to potential investors and avoids surprises for state governments and private sellers of electricity transmission, distribution, and generation assets.”