Ausgrid is an electricity distribution company and the largest on Australia’s east coast. The distributor provides power to 1.8 million customers throughout New South Wales, primarily localised to Sydney, the Central Coast and Hunter Valley. In 2011 the NSW government sold the formerly state-owned energy retailer and distributor, EnergyAustralia’s, retail division and the EnergyAustralia brand itself. The remaining divisions of the business were renamed to Ausgrid.
After its formation in 2011 through to 2016 Ausgrid was also entirely owned by the NSW government. In 2015 the state government announced plans to sell the state’s electricity transmission and distribution network which included Ausgrid as well as Endeavour Energy and Essential Energy.
In 2016 the government offered the effective sale of 50.4% of Ausgrid via a 99-year lease, with investors from China and Hong Kong being initial bidders until such a sale was blocked by then-Prime Minister, Scott Morrison. A coalition of local, Canadian and Middle Eastern investors had already won a 99-year lease in a similar fashion for Transgrid at a cost of $10.3 billion.
The distributor was eventually sold for roughly $16 billion to the Australian IFM INvestors and Australian Super, with $10 billion of this going towards paying for state debts. Ausgrid was not put out to tender with then-NSW Treasurer, Gladys Berejiklian, stating that this was the only bid coming from Australian-only investors.
Then-Premier Mike Baird was happy with the outcome of the negotiation:
"We know the market better than anyone on the planet in terms of what these assets are worth…We've obviously relied on expert advice but importantly an independent transactions committee oversees this and determines 'is this market value?' The view is this is an outstanding bid for the people of this state."
Then Opposition Leader, Luke Foley, was critical of the deal:
"This is like selling your house to the first person who knocks on your door and makes a bid…The Premier tells us this is what he's good at — selling things — yet the market's been gagged here."
In 2018 it was revealed that the sale of Ausgrid was undermined by failures during the negotiation process, notably the government revealing a price early during talks. The NSW Auditor-General, Margaret Crawford, also stated that she had found zero evidence that the NSW government even had a negotiation strategy or had set a reserve price. Furthermore it was revealed that the enterprise’s value was actually above $20 billion.
As of November 2023 49.6% of Ausgrid is still owned by the New South Wales government, with the remaining ownership split across multiple other entities:
Australian Super: 8.4%
IFM Investors 25.2%
APG Asset Management Group 16.8%