About $8 billion will be poured into NSW infrastructure projects including the Sydney Metro from the state government's privatisation of high-voltage electricity company Transgrid for $10.26 billion.
The 99-year lease was signed with NSW Electricity Networks, a consortium of two local infrastructure funds, a Canadian pension fund, the Abu Dhabi Investment Authority and the Kuwait Investment Authority.
On Wednesday, Premier Mike Baird said more than $3 billion in debt attached to the Transgrid would be paid off, delivering a net return to NSW of about $7 billion.
But the transaction also triggers a payment of about $1 billion to the NSW government from the Commonwealth under a national partnership agreement to encourage asset sales.
The result puts the government on track to easily exceed the $13.1 billion it had anticipated from its electricity privatisation program, which includes the forthcoming leases of 50.4 per cent each of distributors Ausgrid and Endeavour Energy.
"This result is a stunning result for the people of NSW," Mr Baird said. "It means there is, for the people of NSW, better transport, roads, schools and hospitals."
The Transgrid deal removes much of the politics from the transaction, which had focused on the national security implications of Transgrid being bought by the Chinese government-owned State Grid Corporation of China.
The security concerns focused on Transgrid's role in supplying power to Canberra and its extensive fibre optic cable network that carries sensitive data for government departments.
Mr Baird said all four bidders for Transgrid had been cleared by "all authorities and all agencies", including the Foreign Investment Review Board.
FIRB's licence conditions included that Transgrid's operation and control be undertaken solely from Australia and that foreign consortium members retain an interest of no more than 50 per cent.
As well, half of Transgrid's board – including an independent chairman and director – must be Australian citizens and residents.
Mr Baird said the winning consortium had lodged "clearly the strongest bid" in terms of price, risk and terms and conditions.
The consortium members are Hastings Funds Management, the ASX-listed Spark Infrastructure, the Abu Dhabi Investment Authority, Canada's Caisse de Depot et Placement du Quebec (CDPQ), and Wren House, part of the Kuwait Investment Authority.
The foreign companies comprise 65 per cent ownership.
Spark Infrastructure chief executive Rick Francis said there would be no change to network reliability under the new owners.
However, he believed Transgrid could be run more efficiently by getting greater mileage out of its assets via switching to condition-based monitoring as opposed to replacing them purely on the basis of their age.
Five-year job guarantees for workers were a condition of the electricity privatisation legislation passing the NSW Parliament and will apply to about 1000 Transgrid employees.
Opposition Leader Luke Foley said the net proceeds were less than half the cost of the $16.8 billion WestConnex road project and barely covered its $6.8 billion cost blowout.
