The New South Wales and Victorian governments have agreed to sell their share in the Snowy Hydro scheme to the Commonwealth, giving it 100% ownership, for more than $6 billion.
Prime Minister Malcolm Turnbull announced the deal this morning, saying NSW will receive $4.154 billion for its 58% share, and Victoria $2.077 billion for its 29%. It clears the way for Turnbull’s Snowy Hydro 2.0 plan to spend $2 billion to increase the capacity of the renewable energy scheme by nearly 50%, increasing the current generation capacity of 5,500 MW by 2000 MW using pumped hydro.
Announcing the acquisition, the Prime Minister said: “The historic agreement will generate more reliable energy, cheaper electricity, better infrastructure and more jobs for NSW and Victoria.”
Negotiations with the Commonwealth have been under way for the last 10 months since the 2017 Federal Budget and the federal government has a commitment from the states that the windfall will be used for infrastructure projects.
The sale includes caveats that there will be no change to current arrangements on water issues and the transaction will not affect allocations of GST for NSW or Victoria. Snowy Hydro Ltd will remain in public ownership, and the federal government says employment levels and existing head office locations will not change for at least two years.
The sale still needs the approval of Victoria’s parliament, as well as the federal parliament signing off on the expenditure.
Victorian Premier Daniel Andrews said: “This is a historic deal that’s good for Victorian households, and good for our economy, as we continue to build the infrastructure and create the jobs our state needs for the future.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.