Investment case study: Sydney Desalination Plant
Name: Sydney Desalination Plant
Asset type: Infrastructure, unlisted
Purchased: 2012 (through the Utilities Trust of Australia)
About Sydney Desalination Plant
The Sydney Desalination Plant is a potable drinking water desalination plant located on the Kernel coast in New South Wales.
The plant uses reverse osmosis filtration membranes to remove salt from seawater, turning it into clean drinkable water.
When running at full capacity, the plant can process up to 250 million litres of water per day — enough to supply 15 per cent of Sydney's water needs.
The plant was initially commissioned to address severe water supply issues following the 2000s Australian droughts. During this time, Sydney's water supplies reached their lowest recorded levels, dropping below 34 per cent capacity in February 2009.
The plant was completed in 2010 and continues to assist in maintaining water supplies to the Sydney metropolitan area.
In 2019-20 it produced clean drinking water for over two million Sydney households when dam levels fell to nearly 40 per cent.
Currently, the plant is running at full capacity1 to assist disaster recovery efforts after record rain and flooding in regional NSW washed significant amounts of debris and particles into Sydney's water catchments.
With only 25% of dam water currently available, the plant is providing millions of Australians with clean, safe drinking water and reducing pressure on dam filtration systems.
Sydney Desalination Plant is jointly owned by the Ontario Teachers' Pension Plan Board (60%) and Morrison & Co-managed Utilities Trust of Australia (40%).
Spirit Super invests in the plant through the Utilities Trust of Australia.
Sydney's Desalination Plant plays a vital role in securing Sydney's water supply against the effects of climate change, population growth and drought.
This role was underscored in the NSW Government’s 2022 Greater Sydney Water Strategy2.
As climate changes and population growth continue, access to rainfall-independent water sources is paramount, alongside conservation efforts.
Under the water strategy, the desalination plant’s capacity will be doubled to 500 million litres per day.
This means more water security for Australia's most populous city.
Sydney Desalination Plant is committed to sustainability.
The plant is 100% powered using renewable energy supplied by the Capital Wind Farm located in Bungendore, NSW.
Sydney Desalination Plant was also designed to minimise its impact on the local land and marine environments.
A world-first ecological study by the University of New South Wales found the plant didn't impact seawater quality or aquatic ecology, and a third of the plant's site has been protected as an environmental conservation area for native species of flora and fauna.
Apart from minimising its impact on the local environment, the plant's forward-thinking design will allow it to double capacity in the coming years.
Planning for this expansion is currently underway in partnership with the NSW Government.
The Sydney Desalination Plant operates under a 50-year lease from the NSW Government, backed by a 50-year water supply contract with Sydney Water.
Given Sydney's continued growth and changing weather patterns, the plant will remain a vital infrastructure asset providing strong, predictable long-term returns to members for many years.
For more details, go to sydneydesal.com.au
1Operational Information — Sydney Desalination Plant
2 Greater Sydney Water Strategy — NSW Government
Consider the PDS and TMD at spiritsuper.com.au/pds. Issuer is Motor Trades Association of Australia Superannuation Fund Pty Ltd (ABN 14 008 650 628, AFSL 238718).