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A vital piece of infrastructure for Sydney's drinking water has undergone a change of ownership after the Utilities Trust of Australia (UTA) acquired the Ontario Teachers’ Pension Plan's 60 per cent majority stake in the Sydney Desalination Plant (SDP) for an undisclosed sum.
Built between 2007 and 2010 in response to the Millennium Drought, the plant has been co-owned by the Canadian investor and the UTA since 2012 through a transition from government to private ownership.
The partners completed a rebuild of the plant following a 2015 tornado, re-commissioning and restarting of the plant in 2019 following a prolonged period of no production, and transitioned the plant to flexible full-time operations.
It now operates year-round with the capacity to produce up to approximately 250 million litres of water per day, or around 15 per cent of Sydney's daily drinking water needs, and was a key source of supply when bushfires in 2020 and floods in 2022 triggered dam storage water quality challenges.
The UTA is managed by Morrison, a leading global infrastructure investor headquartered in New Zealand, and before this transaction held a 40 per cent stake in the business.
"SDP is an important asset for Sydney, delivering vital water security in a changing climate," says Morrison partner Gordon Hay.
"Having been invested in the plant since 2012, UTA is well positioned to continue supporting Sydney's evolving water security needs. This transaction reinforces UTA's long-term commitment, backed by strong liquidity and supportive investors."
SDP CEO Philip Narezzi says the plant will operate as usual after the transaction.
"UTA has been a significant investor in SDP for many years, and we are pleased this acquisition will provide continuity for our people and customers," he says.
"With ongoing support from a foundation owner, we are well placed to continue providing high quality drinking water, enhancing Greater Sydney's system resilience."
The Ontario Teachers' Pension Plan managing director for infrastructure and natural resources, Jan Brand, says the Sydney Desalination Plant has been a great investment, with a decade-long ownership reflecting a commitment to being "responsible, long-term stewards of essential infrastructure".
"We have worked closely with our partners to support the success and resilience of the asset, ensuring it continues to deliver reliable water security for the community it serves," Brand says.
"We are proud of what has been achieved and wish the SDP and UTA teams continued success in this next chapter."
This transaction follows partial divestments of UTA's stakes in Transgrid and Perth Airport to rebalance its portfolio.
A spokesperson for Morrisson declined to reveal the transaction price, or confirm whether it was in the $2.5-3 billion price range as reported in the AFR when the sale process began.
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