Singapore’s Government Investment Corporation taps Citi for Transgrid play

Transgrid controls the electricity transmission network for NSW and was privatised by the state government in 2015. Picture: iStock

Singapore’s Government Investment Corporation has hired investment bank Citi for its pursuit of a possible stake in the $10bn-plus NSW electricity transmission business Transgrid.

DataRoom revealed at the weekend that GIC was circling Transgrid.

Canadian pension fund CDPQ is looking to divest a Transgrid stake, while other shareholders assess their options.

GIC, with $US769bn of assets under management at the end of last year, is one of three Singaporean entities that manage the country’s reserves and most of the government’s financial assets.

Transgrid requires a capital injection to meet the extra costs of the transition to clean energy, with the South Australia interconnectors particularly costly.

There have been questions as to whether Transgrid’s owners have the funding firepower to meet the future capital needs, aside from the Abu Dhabi Investment Authority.

Barrenjoey and Macquarie Capital advised Transgrid.

In 2015 the NSW government sold Transgrid for $10.3bn to a consortium including Spark Infrastructure, Utilities Trust of Australia, Canadian pension fund CDPQ, Wren House and the Abu Dhabi Investment Authority’s Tawreed Investments.

DataRoom understands GIC has been given access to commercial information about the business, with the possibility of a partial selldown if it’s agreed to by the owners.

In 2020, Canadian pension fund OMERS purchased a 19.99 per cent stake from the Kuwait Investment Authority’s Wren House Infrastructure Management for a price thought to be around $2bn.

OMERS is likely to be a seller of some of its stake, say sources, along with UTA, while the Kohlberg Kravis Roberts-backed Spark and PSP may fund the capital requirements with debt.

When the asset was privatised, the then listed Spark committed to owning 15 per cent, the Morrison & Co-advised UTA 20 per cent, CDPQ 25 per cent and Tawreed Investments and Wren House each 20 per cent.