Australia will impose restrictions on foreign buyers when electricity networks are bought and sold, Treasurer Scott Morrison announced today.
Any transmission or distribution businesses put up for sale in future will be screened on a case-by-case basis, and limits may apply to the size of shareholdings foreigners are allowed to purchase.
The Foreign Investment Review Board will look at the ownership of other network businesses within a sector, the critical importance of the asset and may impose extra conditions on foreigners.
Electricity networks have been tagged as critical infrastructure and seen as important to Australia’s national security, amid rising influence from China in the nation’s political and business circles.
Morrison said in a statement the new rules will formalise those applying to foreigners when the NSW networks were privatised over the past two years.
“Parties interested in acquiring or selling critical infrastructure assets are encouraged to engage with the Foreign Investment Review Board (FIRB) as early as possible to identify if ownership restrictions or conditions may apply,” the Treasurer said. He did not confirm exactly when in an auction bidders would be told if the rules applied.
“With electricity distribution assets, the stakes are higher, and Australians expect additional foreign investment protections in place,” the Treasurer added.
Foreign bidders for Endeavour Energy and TransGrid in New South Wales faced restrictions on the size of the shareholdings they were allowed to hold and had to have at least one Australian sitting on their boards.
Australian investors had to fund at least 20% of Endeavour Energy bids and no single foreign investor could own half of the 50.4% stake that was sold in 2017.
Buyers of a single nationality were blocked from owning more than 50% of TransGrid when the network was fully sold off in 2015. NSW copped criticism from bidders because they were not told about the rules until right before first round bids were due in.
Foreigners eyeing land and agricultural properties will also face tougher rules, and must advertise locally before inviting foreigners to bid, the Treasurer also said.
FIRB assesses applications together with the Critical Infrastructure Centre, now part of the new Home Affairs department set up in Canberra in December 2017.
Australia’s internal intelligence service, the Australian Security Intelligence Organisation, yesterday told a parliamentary committee the country faced greater espionage threats than during the Cold War.