The Treasury led the negotiations to purchase 100 per cent of the shares in Snowy Hydro Limited from the New South Wales and Victorian Governments. This required the Treasury to work closely with other Australian Government agencies in undertaking the due diligence and negotiations.
The Treasurer announced at the 2017-18 Budget that the Australian Government was open to purchasing 100 per cent of the shares of Snowy Hydro Limited.
Snowy Hydro Limited is a critical player within the National Electricity Market. The company owns and operates 5,500 megawatts of generation capacity including the Snowy Mountains Scheme.
Snowy Hydro has over 1,700 employees across three states. Snowy 2.0 is a proposed expansion of the Snowy Mountains Scheme which would provide an additional generation capacity of 2,000 megawatts — enough to power around 500,000 homes.
The Treasury Secretary led negotiations with the New South Wales and Victorian Governments. The transaction required a range of legal, financial and governance risks to be considered.
The Treasury worked with the Department of Finance, the Department of Environment and Energy, the Department of the Prime Minister and Cabinet and the Department of Agriculture and Water in a whole-of‑government team to undertake due diligence, the negotiation and complete the transaction. The negotiation process and the work of the whole-of-government team ensured that risks were identified, appropriately allocated and managed.
By forming a ‘virtual team’ across the public service, the Treasury drew on the best expertise in the APS, which enabled advice to be provided quickly on a range of issues and strengthened existing relationships. This model of working across the public service and drawing on key skills is being increasingly adopted for projects undertaken by the Treasury.
The outcome saw the Australian Government successfully acquire 100 per cent of the shares at the end of the financial year. This transaction will enable productivity enhancing investments to be made, while supporting fiscal sustainability and help enable Snowy 2.0 to progress. The New South Wales and Victorian Governments have put the proceeds of the sale towards a range of productive infrastructure projects in their jurisdictions.