Duxton Water sells 30,614ML to federal government in $121.3m deal

Duxton Water have sold 30,614ML of water entitlements in a nine-figure deal with the the federal government. See the details.

Duxton Water’s sale takes 30,614ML out of the southern basin, prompting irrigator concerns over market impacts.

Duxton Water has sold 30,614 megalitres of its Murray Darling Basin high and general security water entitlements to the federal government for $121.3m.

The portfolio sold includes:

13,114ML Victorian high reliability entitlements;

3010ML of NSW high security permanent water entitlements; and

14,491ML of NSW general security entitlements.

The deal comes less than a week after the federal government announced it would be running a 100,000ML tender to purchase parcels of 20,000ML or more off larger irrigators and corporate water investors.

Opposition water spokeswoman Perin Davey said the speed of the deal was “astounding”.

“A cynic may think they really are just pursuing water entitlement transfers in the fastest and easiest way possible,” she said.

“Or are they racing against the clock of a federal election, trying to get as many contracts signed as possible before entering caretaker mode?”

In its market announcement on the deal Duxton stated “proceeds from the sale of these water entitlements will be used to settle permanent water entitlement acquisitions totalling $19m, which are contracted but not yet settled, as well as to reduce the company’s debt facility”.

“This disposal provides D2O with the flexibility to rebalance its portfolio and unlock value for its shareholders.

“The board believes this transaction is likely to have a positive impact on the Company’s

future profitibility.”

Once the federal deal and new acquisitions are completed, Duxton estimates its entitlement portfolio will be 60,900ML, worth $294.4m, based on January 31, 2025 valuations.

National Irrigators’ Council chief executive officer Zara Lowien said: “There’s the potential for concentrated impacts (from the sale) within communities, without any targeted support.

“It’s a problem when the government hasn’t even agreed to a support package for Victoria.”

The NIC has also raised concerns on the market impacts of such a large parcel of entitlements, which could inflate prices for irrigators, who use it to grow food, fibre and employ people in their communities.

Senator Davey questioned how the federal government could have completed all the analysis of value for money from the deal and assessed the social and economic impacts, as well as environmental outcomes.

“The government needs to release their analysis of this sale, given the large volume and the potential impacts on the market and communities,” Senator Davey said.