A group of Australian super funds has taken a 50.4% interest in a 99-year lease of Ausgrid, Australia’s largest electricity-generating asset, for AUD16.2bn (€11.3bn).

The NSW Government accepted the group’s bid for the asset, which delivers power to around 1.7m homes and businesses in NSW.

The group is jointly owned by IFM Investors, which manages capital for Australian super funds, including Australia’s largest super fund AustralianSuper.

It made the unsolicited bid last month after Australian treasurer Scott Morrison controversially blocked the sale in August of Ausgrid to two potential buyers – State Grid from China and Cheung Kong Infrastructure from Hong Kong – on security grounds.

AustralianSuper chief executive Ian Silk said: “This all-Australian partnership between millions of members of our two organisations and the NSW government will maintain and enhance the Ausgrid network vital to so many NSW communities.”

Silk said the investment would provide returns that would contribute to the long-term retirement savings of workers.

The super funds involved in the transaction represent 6m Australians.

IFM Investors chief executive Brett Himbury said: “This is a new kind of ‘PPP’ – a true Pension Public Partnership. This PPP makes Australian superannuation money available to build new infrastructure, improving standards of living and productivity.”

The consortium aspires for Ausgrid to be a world-class operator of electricity network services, he said.

“As active asset managers,” he added, “IFM Investors and AustralianSuper will build on Ausgrid’s strengths as a reliable and safe electricity network operator.”

The new owners said enhancing Ausgrid’s efficiency would result in lower bills to households and businesses by 2019. 

The NSW government will retain 49.6% of Ausgrid.

NSW state premier Mike Baird said AUD10bn of the proceeds would be used to repay state debt.

The balance will help fund AUD20bn of new infrastructure projects.

“Our poles and wires transactions are unlocking billions of dollars to fund new schools, hospitals, public transport and roads that will make a real difference to peoples’ lives,” said Baird.