Crackdown on the sale of electricity assets to foreign investors – FIRB conditions to be imposed.
On 1 February 2018 the Federal Government announced that all future applications for the purchase of electricity assets by foreign investors will be closely monitored and attract conditions.
Crackdown on Foreign Ownership of Critical Assets
Effective from today (1 February 2018), when processing future applications submitted to the Foreign Investment Review Board (FIRB), the Government will closely monitor the aggregate ownership of critical electricity assets by any one foreign investor as a national security measure.
In addition, the Government has committed to imposing conditions on all foreign purchases of electricity assets which were previously imposed on a case by case basis. Conditions are likely to include the requirement to complete construction within a set time frame (typically around 5 years) to ensure that land is not sitting idle.
Foreign investors looking to purchase electricity assets should ensure that FIRB is being consulted as early in the project as possible to prevent unforeseen “road blocks”.
Whilst there have been no formal changes to the FIRB rules under this initiative, investors should be aware of potential further developments in this area.