Brookfield, Teachers part of consortium in US$10 billion Abu Dhabi pipeline deal

Two large Canadian institutional investors, Brookfield Asset Management and the Ontario Teachers’ Pension Plan, are part of a consortium paying US$10.1 billion for a 49 per cent stake in a pipeline subsidiary of the Abu Dhabi National Oil Company in the largest infrastructure deal in the world this year.

The newly created subsidiary will have lease rights to 38 pipelines covering a total of 982.3 kilometres for 20 years, in return for a volume-based tariff. ADNOC will hold the remaining 51 per cent of the subsidiary, and will be responsible for management of pipeline operations and for all associated operational and capital expenditures.

“This strategic transaction is attractive to Ontario Teachers’ as it provides us with a stake in a high-quality infrastructure asset with stable long-term cash flows,” said Ziad Hindo, chief investment officer at Teachers.

“This new partnership with ADNOC and a group of world-class institutional and infrastructure investors expands our global presence and provides further geographic diversification to our portfolio,” he added.

Bruce Flatt, chief executive of Brookfield, said the pipeline system was an attractive investment for the Toronto-based asset manager because it provides a “critical link” between the United Arab Emirates’ low-cost natural gas supply and “robust in-country” demand.

He added that ADNOC has established an exemplary operational record. 

“We look forward to partnering with them in support of this critical asset and sector,” Flatt said in a statement.

The investing consortium includes Global Infrastructure Partners (GIP), Singapore’s sovereign wealth fund GIC, NH Investment & Securities, and Italian energy infrastructure operator Snam SpA.

Additional investors were interested in the assets, according to media reports, but some, such as an Australian fund manager, dropped out earlier in the process, Bloomberg News reported in April.

The Adnoc transaction values the pipelines at US$20.7 billion.

Reuters/Christopher Pike/File Photo

Dr. Sultan Al Jaber, the Minister of State for the UAE and chief executive of ADNOC Group, said in a statement that Tuesday’s transaction unlocks significant value from the pipeline portfolio.

He called it a “milestone” transaction and said it demonstrates trust and confidence in Abu Dhabi’s national oil company by the global investment community.

“Today’s landmark investment signals continued strong interest in ADNOC’s low-risk, income-generating assets, and sets another benchmark for large-scale energy infrastructure investments in the UAE and the wider region,” he said, adding that it “reinforces the UAE’s track record as the region’s go-to foreign direct investment destination, even during the current unprecedented circumstances.”

Such large deals stand out on a mergers and acquisitions landscape where activity has been lacklustre due to the COVID-19 pandemic and economic lockdowns around the world.

A veteran Bay Street lawyer said infrastructure has proven “resilient” because the asset class is compatible with the long-term investment theses of pension and sovereign wealth funds. 

“Very big deals of this nature attract consortiums to pool capital and share risk,” said the Toronto-based dealmaker.

But the Ontario Teachers’ Pension Plan drew criticism from a group called Shift Action for Pension Wealth and Planet Health.

“OTPP is putting the hard-earned retirement savings of thousands of working and retired teachers at risk by investing in a massive piece of fossil fuel infrastructure in the midst of a worsening climate crisis and a volatile disruption to global energy markets,” the group said in a statement.

Shift Action, a climate group, added that the teachers’ pension plan excludes investments in tobacco companies, guns and arms manufacturers, and weapons producers from its portfolio, but “has not yet disclosed exclusions on investments in fossil fuels.”

A spokesperson for Teachers’ said the news release announcing the transaction would be the only statement from pension officials on the matter.

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Consortium launched amid coronavirus to make Aussies eat their fruit and vegetables

For many Australians, eating fruit and vegetables is a tough sell.

Government data shows only 7 per cent of adults and 5 per cent of children eat sufficient serves of vegetables, while half of adults and two-thirds of children eat enough fruit.

A new national body has been established to change our consumption habits and help the farmers who grow fresh produce.

The Fruit and Vegetable Consortium is made up of 11 members including Nutrition Australia, AUSVEG, the Cancer Council of Victoria and various government bodies.

Its chair, Lucinda Hancock, said there was a need for a consolidated national approach.

“There’s been a number of peak bodies in their own rights, however what hasn’t happened is a collaboration between health research and also the vegetable industry and market authority,” she said.

“Really, that’s been the missing piece which I think is absolutely vital.

“If we don’t pull together, I think the success of a campaign is minimal, hence why we really need the group.”

The new body aims to bring stakeholders together to improve fruit and veg demand.(Supplied)

Ms Hancock said she believed Australians were confused over what to do with vegetables.

“I think that for a lot of people, cooking skills are lacking and in the era of Uber Eats, a lot more people are eating takeaway, so they don’t know how to prepare, store or what to do with leftovers,” she said.

James Whiteside, chief executive of AUSVEG, agreed there was an issue with getting Australians to eat fruit and veg.

“Our fruit consumption is a lot better than our vegetable consumption,” he said.

“We don’t appreciate the nutritional value enough, even though we’re told that they’re good for us.

“In some cases, there’s a perception they’re labour-intensive and require some effort to cook, which is not necessarily the case.”

Veggie box containing tomatoes, zucchini and other produce
The consortium hopes to increase our fruit and vegetable consumption.(Flickr: WordRidden)

Trying to emulate Slip, Slop, Slap success

The consortium hopes to address other factors affecting consumer habits, including cost, availability and supply.

“Our plan would be to ensure that vegetables are available, and if we’re in a really good position with the campaign with increased demand, hopefully we can also advocate to government to subsidise the cost of more expensive vegetables,” Ms Hancock said.

The campaign, while still in the works, hopes to have similar success to the Life Be In It and Slip, Slop, Slap commercials, and the more recent Eat Australian Lamb ads by the Meat and Livestock Australia.

“These campaigns have perennially changed how we we behave — that’s the sort of investment that you need to make,” Mr Whiteside said.

“It’s probably going to take a period of five to seven years.”

Pandemic sparks organic demand

In recent months, producers have reported an increase in demand for home-delivered fruit and vegetable boxes, particularly organic produce.

Kristen Ottaway wears a black t-shirt and crystal necklace, smiling at the camera.
Kristen Ottaway has seen a sudden uptick in demand for her organic produce.(Landline: Halina Baczkowski)

Although Australia doesn’t have a clear definition to certify organic produce, organic farming is known to use no man-made fertilisers, pesticides, growth regulators or livestock feed additives.

Kristen Ottaway, who runs an organic online supermarket, said her business gathered produce from 22 farmers and delivered it throughout Brisbane.

“We were sitting at around about 300 to 350 boxes a week before COVID hit, and then we skyrocketed to about 800 boxes a week overnight,” Ms Ottaway said.

While the surge was encouraging, farmers have seen demand steady as the pandemic goes on.

Anthony Bauer, one of the country’s largest suppliers of organic vegetables, said he recorded a large increase in demand in March.

“We’re maintaining now 30 per cent growth.”

Rows of carrots planted in a field with mountains in the background.
Anthony Bauer is pleased to see growth in demand for his vegetables, like these carrots.(Landline: Halina Baczkowski)

Mr Bauer said he welcomed the introduction of the consortium.

“We definitely need it. We need consumers to be putting more focus, more value, on fruit and veg,” he said.

“It’s an important part of everyone’s life and everyone’s diet.”

Watch this story on ABC TV’s Landline at 12:30pm or on iview.

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