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AMP increases stake in Victorian Desalination Plant

The water treatment project recently completed a $587m refinancing, supported by two major Japanese insurers, Nippon Life and Dai-ichi Life, among others.

AMP Capital has bought a 4.55 percent stake in the Victorian Desalination Plant through its Community Infrastructure Fund, boosting its shareholding in the PPP project to 9.75 percent.

The Australian fund manager acquired the stake from Suez, one of the three current project sponsors – the other two being UniSuper and Itochu Corporation. Further transaction details were not disclosed.

Commissioned in December 2012, the A$3.5 billion ($2.68 billion; €2.28 billion) seawater treatment facility was delivered under a PPP scheme to provide as much as 150 billion litres a year – about one-third of Melbourne’s annual water consumption – as a rainfall-independent source of drinking water. It is now the largest desalination plant in the Southern Hemisphere, with a remaining concession period of 22 years.

It recently secured a A$766 million refinancing package, featuring two loans of A$176 million and A$51 million from Japan’s Nippon Life Insurance and Dai-ichi Life Insurance, respectively.

The AMP CommIF, which invests in high-yielding, brownfield, social infrastructure assets in Australia and New Zealand, acquired a 5.2 percent stake in the desalination project in September 2016 from Pacific Partnerships, the project finance arm of CIMIC Group.

“It is a high-quality asset and an excellent investment for our portfolio. Following the acquisition, the fund now has 12 assets in total, worth more than A$590 million,” said Julie-Anne Mizzi, head of social infrastructure and aged care at AMP, adding that demand for social infrastructure “continues to go from strength to strength”.