UniSuper has boosted its investment in Sydney’s Prospect Water Filtration Plant, extending its partnership with Sydney Water Corporation and French owned waste management and water treatment company SUEZ for a further 14 years from 2021 to 2035.

UniSuper first invested in the infrastructure asset, one of the world’s largest water filtration plants, in 2001 and acquired a 49 per cent equity interest, partnering in a joint venture with SUEZ, which owns the remaining 51 per cent.

Commissioned in 1996, the plant has the capacity to provide drinking water for up to 85 per cent of Sydney’s population. It was built under a 25-year build, own, operate and transfer agreement that was originally due to expire in 2021.

UniSuper’s Head of Property and Private Markets, Kent Robbins said UniSuper embraced the opportunity to continue its long term commitment to this quality investment.

“The agreement provided UniSuper with an opportunity to extend the investment life and enhance its position in a quality asset, Mr Robbins said.

“It also provided an opportunity to invest additional capital with attractive returns.”

Under the agreement the Prospect Water joint venture will continue to operate the plant 24-hours a day, seven days a week, filtering up to three billion litres of water per day.

Investing in fortress assets

UniSuper has a long history of investing in infrastructure assets with over $9 billion currently invested in major assets such as Sydney, Adelaide and Brisbane Airports, Transurban Group, APA Group, Victoria’s Desalination Plant, Axicom (telecommunications towers) and the recently opened Victorian Comprehensive Cancer Centre.

“UniSuper is attracted to the quality investment characteristics displayed by infrastructure Mr Robbins said.

“Large scale infrastructure assets have what we term ‘fortress-like’ characteristics, with their strong market positions supporting the generation of stable, long-term cash flows, making it a natural fit for superannuation funds with long-dated liabilities.”

“The long term agreements also tend to provide inflation protection, offering investors predictable, stable, long-term returns,” he said.