AMP Capital takes full control of South Australian water plants

CIF makes it second acquisition of 2018 to take its stake in Riverland Water Holdings to 100 percent.

AMP Capital has purchased the 50 percent equity stake in Riverland Water Holdings it did not already own from Trility, a water utility service provider.

The investment has been made on behalf of the Community Infrastructure Fund, which owned the other 50 percent of Riverland Water. Trility will remain operator of the asset.

The fund manager did not disclose financial details of the deal and Community Infrastructure Fund manager Charles Savage declined to comment on the purchase price.

Located in South Australia, Riverland Water comprises 10 water treatment plants that use sedimentation and filtration technology. The plants provide drinking water to approximately 150,000 people, including communities in the Adelaide Hills, Barossa Valley, Mid North and River Murray regions.

AMP Capital first invested in the A$115 million ($86.5 million; €72.0 million) Riverland Water project, alongside United Utilities Australia (now Trility) and Bechtel, in 1996 under a build-own-operate-transfer model with the South Australian Water Corporation. Riverland Water began operating three years later.

“The change in ownership of Trility gave rise to a pre-emptive opportunity, which we took,” AMP Capital’s Savage told Infrastructure Investor, referring to Beijing Enterprises Water Group’s acquisition of the water utility, which closed last month. “The enterprise value is circa A$115 million, so it’s one of the smaller assets in the CIF, but it’s a key asset in water for us.”

On further acquisitions for the CIF, Savage added: “Our whole pitch is that assets must have some sort of positive social or community impact, with sustainable institutional-level returns. We’re actively looking at a pipeline of opportunities, and it’s fair to say we’ve got a number of health, water, transport and possibly justice opportunities.

“We raised A$150 million in Q4 2017 and a similar amount in Q1 2018, so we’ve got A$200 million to A$300 million to deploy. But we’re continually raising money and investing in funds.”

Riverland Water is the second acquisition for the CIF in 2018, following the purchase of a 21 percent stake in the Victorian Comprehensive Cancer Centre in January. The CIF owns 13 assets with an enterprise value of more than A$8 billion.

Launched in December 2006, CIF focuses on social infrastructure PPP assets in Australia and New Zealand, aiming to provide total annual returns (primarily income) of between 7 percent and 9 percent before costs and taxes over the long term, AMP Capital states on its website.