AMP Capital has closed on a deal to acquire a 5.2% stake in Australia’s largest desalination project, which cost AUD3.5bn (€2.42bn) to build.

It bought the stake in the Victorian Desalination Project (VDP) for the AMP Capital Community Infrastructure Fund (CommIF), from Pacific Partnership, part of the Spanish construction group ACS.

Its interest in VDP will bulk up the fund’s exposure to the water sector.

CommIF already owns water assets, such as Riverland Water and AquaTower, both also in Victoria.

Described as “a rainfall-independent source of drinking water”, VDP is capable of supplying up to 150bn litres a year, around one-third of Melbourne’s annual water consumption.

The plant was commissioned in 2012 – an AUD$3.5bn capital investment between the Victorian Government and AquaSure, a special vehicle contracted to finance, design, construct, operate and maintain the project for 30 years.

There are 23 years remaining to the end of the concession.

AMP Capital community infrastructure fund manager Andrea McElhinney said: “The asset delivers stable, long-term monthly service payments from the Victorian Government to our investors.” 

The purchase price was not disclosed.

However, company data from CIMIC, now 70% owned by Hochtief, in turn owned by ACS, shows that a CIMIC subsidiary, Thiess, held shares valued at AUD$2.32bn in VDP, as at 30 June 2012.

Since ACS created Pacific Partnerships in 2014 to own stakes in PPPs and build-operate-transfer projects, presumably Thiess, which now focuses solely on mining after a major company restructuring, has transferred its interest to Pacific Partnerships.

CommIF’s net asset value has grown from around AUD$55m in 2010, when AMP Capital acquired the fund from the Royal Bank of Scotland, to more than AUD$500m this month.