Investment in Transmission in Australia and the rise of the 'win the project' model

What you need to know

• Contestable “win the project” models in NSW and Victoria are shifting transmission from passive ownership to competitive delivery, front‑loading development risk.
• The 2024 Integrated System Plan envisages thousands of kilometres of new lines; transmission is the key bottleneck determining where value is created.
• Financing is increasingly conditioned on corridor approvals, Indigenous partnerships and biodiversity offsets, with equity staged against development milestones.
• Inflation and supply‑chain constraints are reshaping procurement, pricing and bankability.
• Governance settings matter: FIRB, SOCI and state REZ frameworks are now central to approvals and deal terms.

What you need to do

• Build credible plans from day one for land access, planning and community/Indigenous engagement; treat these as gating items for financing.
• Stress‑test delivery: secure supply chains early, include price‑protection and escalation mechanisms, and hold contingencies.
• Stage capital against corridor and planning milestones; diligence approvals and social licence before committing.
• Hard‑wire risk allocation in contracts for change‑in‑law, cost pass‑throughs and delays; clarify shared‑asset governance in REZs.
• Bring FIRB/SOCI considerations forward and prepare cyber, governance and supply‑chain undertakings.
• Consider where to play: platforms vs REZ‑linked SPVs, with post‑award buy‑downs and refinancings once risks are de‑risked.

Read the full article for a concise overview of current investor approaches and the “win the project” model.

Transmission: the bottleneck and the opportunity

Transmission is the backbone of Australia’s energy transition. The 2024 Integrated System Plan calls for thousands of kilometres of new lines and interconnectors to connect renewable projects and replace retiring coal. Government programs such as Rewiring the Nation and State initiatives are underpinning the investment case, but the deal landscape is changing. Transmission is no longer just about buying into stable regulated assets — it is increasingly about competing to win projects and managing delivery risk.

The “Win the Project” model – reshaping investment

Traditionally, transmission in Australia has followed a regulated utility model: the need is identified, the transmission assets delivered, and investors bought into mature, low-risk platforms. States are now introducing a “win the project” model (notably in NSW and Victoria), where developers and consortia compete for the right to design, finance, build and operate new transmission lines from the earliest stages.

This "win the project" model:

• Front-loads development risk – consortia carry responsibility for land access, planning and social licence, not just construction.
• Drives contestability – opening the door to new entrants into this market in Australia, including global developers and investors, not just incumbents.
• Rewards capability – bidders must demonstrate delivery capacity, stakeholder engagement and financial strength.

For investors, transmission opportunities now arise both pre-award (through consortium participation) and post-award (via buy-downs and refinancings once projects are de-risked).

Themes reshaping M&A and investment deal structures

Social licence and indigenous stakeholders

Community engagement and Indigenous partnerships are no longer “soft risks” — they are gating items for regulatory approvals and financing. Deal documents increasingly include long-stop protections, change-in-law relief for new compensation frameworks, and detailed disclosure on engagement strategies. Ensuring strong community engagement, government support and all regulatory, planning and environmental approvals are in place are essential conditions for any project financing. The complex nature and sheer size of transmission projects means proponents must have these matters front of mind to avoid delays, erosion of investor confidence and bankability issues.

Land access and planning approvals

As with all linear infrastructure, the timing and conditioning of land access and planning approvals remain critical issues particularly with multiple landowners and current delays under State and EPBC approval processes. The timing, cost and social licence of landowner compensation under acquisition laws and strategic benefit payments schemes need to be factored in early. Biodiversity assessment and offset costs are gateway issues. Proponents need to consider all aspects of the transmission projects including supporting infrastructure such as roads, substations, borrow pits and offsite infrastructure to ensure no delays to the transmission project.

Regulatory scrutiny

Investors must price in regulatory scrutiny of cost overruns and scope changes, with investment terms mirroring those risks through price adjustment mechanics, indemnities and equity cure rights. Proactive engagement with regulators and transparent reporting on project progress and risk management are becoming essential for securing approvals and maintaining investor confidence throughout the project lifecycle.

Inflation and supply chain pressures

Inflationary trends and ongoing supply chain disruptions are exerting significant pressure on transmission project delivery in Australia. Rising costs for materials, labour, and logistics are impacting project budgets and timelines, requiring developers and investors to adopt robust risk management strategies. Contractual frameworks are increasingly incorporating cost escalation clauses, price adjustment mechanisms, and contingency allowances to address these uncertainties. In addition, supply chain bottlenecks - particularly for critical components such as conductors, transformers, and steel - necessitate early procurement planning and diversified sourcing strategies. These factors are not only influencing the financial modelling and bankability of projects but are also shaping the competitive dynamics of the “win the project” model, where the ability to manage and mitigate inflation and supply chain risks can be a key differentiator for successful bidders.

New structures under the “win the project” model

Equity commitments are staged, with drawdowns linked to corridor approvals, planning milestones and financial close. Investors are negotiating equity commitment deeds, completion guarantees, and bespoke step-in rights. For those acquiring post-award, due diligence must probe the maturity of development workstreams — approvals, community licence and regulatory cost recovery — as conditions precedent to closing.

Deal and investment activity – where the opportunities are

• Platform investments in existing regulated incumbents remain attractive.
• Project-specific SPVs are proliferating, particularly for contestable lines, with ring-fenced development risk and tailored equity drawdowns.
• REZ-linked projects in NSW and Victoria are driving new investment activity, where investors must diligence queue positions, curtailment allocation and shared asset governance.
• WA’s Pilbara corridors illustrate another variation — common-use models where multiple users share transmission, raising novel access and interface issues.

Regulatory and approvals watchpoints

• FIRB and critical infrastructure – Transmission is a “national security business” under Australia's foreign investment regime, meaning foreign investors will likely require FIRB approval to invest. Investors must prepare for undertakings on cyber, governance and supply chain risk under the Security of Critical Infrastructure (SOCI) regime.
• REZ regulatory framework – The development, access and economic regulation of renewable energy zone projects is governed by State based regulatory frameworks. In each jurisdiction, the Energy Minister has the core decision making and oversight role, and there is a strategic network planner is appointed with responsibility for developing high level design of the renewable energy zone network infrastructure (e.g. EnergyCo in New South Wales and VicGrid in Victoria) and an economic regulator is appointed to implement economic regulation (e.g. AER in New South Wales and VicGrid in Victoria). There are other renewable energy zone entity roles which differ in each State, depending on the specifics of the framework.
• Planning and social licence – Increasingly, corridor approvals and engagement milestones are being treated as completion conditions in investment documents.

Practical tips

• Pick consortium partners carefully – delivery and engagement capability matter as much as capital.
• Model timing risk – completion accounts and ticking fees should reflect planning and land access delays.
• Build flexible risk allocation – contracts must address social licence setbacks, cost pass-throughs, and inflation shocks.
• Govern shared assets clearly – for REZ or common-use corridors, access pricing, curtailment rules and governance need to be hard-wired.
• Bring your FIRB application forward – align national security risk mitigations with transaction structures early.

Outlook: contestability and execution premiums

The scale of the transmission buildout remains immense — Australia cannot achieve its energy transition without it. But the investment model is shifting. Under the “win the project” framework, returns are available not just for buying regulated assets, but for those who can credibly deliver new projects.

The winners will be those investors who underwrite execution risk — people, permits and supply chains — as confidently as they underwrite regulation. Transmission investment in Australia is no longer about passive ownership. It’s about competing to win, structuring risk creatively, and building delivery partnerships that can carry projects from concept to commissioning.

Want to know more?

https://www.ashurst.com/en/insights/nsw-government-publishes-final-report-on-nsw-transmission-planning-review/

NSW Government publishes final report on NSW transmission planning review. Oct 2025