CKI buys into Australian wind power distribution
Under the deal, Power Assets will build, own and operate transmission venture in Victoria
Cheung Kong Infrastructure (CKI) plans to buy a power distribution business in Australia, its fourth in that country and the second overseas investment it has unveiled in just over a month.
CKI, the diversified infrastructure company controlled by Li Ka-shing, has formed a 50-50 joint venture with sister firm and partner Power Assets, called Transmission Operations Australia (TOA), to build, own and operate A$33.6 million (HK$268 million) worth of power transmission infrastructure that transports power generated from turbines at a 130-megawatt Mt Mercer wind farm to a power grid in the state of Victoria.
"We hope that the Mt Mercer wind farm transmission project in Victoria is the first of many transmission projects of our new company, TOA," Power Assets group managing director Tso Kai-sum said.
Power Assets, formerly known as Hongkong Electric, also owns a portfolio of power generation and distribution and gas distribution assets in Britain, New Zealand, Australia, Canada, the mainland and Thailand.
Construction of the infrastructure, comprising a power line, transformers and terminal station linking to the Mt Mercer wind farm, will start next month and completion is expected in November next year. The joint venture has signed a 25-year agreement to buy electricity from the wind farm.
CKI and Power Assets said the Australian government would ensure that at least 20 per cent of Australia's electricity came from renewable sources by the end of this decade, which would result in higher demand for wind power generation and distribution.
The Hong Kong company already owns 23 per cent stakes in three Australia-based power businesses. They are ETSA Utilities, the sole power distributor in South Australia state, CitiPower and Powercor, two of five power distributors in Victoria. Power Assets also holds a 28 per cent stake in each of the three companies.
In late July, a group controlled by Li announced a £645 million (HK$7.93 billion) acquisition of British gas distribution firm Wales & West Utilities.