* Western Power not to be foreign owned or controlled-state treasurer
* Govt to sell 30 pct to nation’s pension funds, 20 pct to public
* Proceeds to be used to cut state debt by A$8 bln, create A$3 bln fund (Adds political opposition and state budget detail)
By Tom Westbrook and Jonathan Barrett
SYDNEY, Nov 30 (Reuters) - Western Australia plans to sell a majority stake in its A$15 billion ($11.2 billion) electricity grid via a public float to cut debt but will offer the bulk of the shares to Australian pension funds to allay any concerns over foreign investment.
The proposed public offering of Western Power, the state’s electricity network, follows the A$16.2 billion sale of Ausgrid, a power network owned by New South Wales state, last month to a consortium of Australian pension funds.
That deal was agreed at a price lower than bids made by Chinese and Hong Kong suitors after Australia’s treasurer Scott Morrison blocked the foreign bids, frustrating the bidders and spooking foreign investors.
“Western Power will not be foreign owned or controlled,” said state treasurer Mike Nahan, from the ruling conservative party.
He said the government would retain 49 percent of the company, and aims to sell roughly 30 percent of the shares to Australian pension funds and 20 percent to retail investors. “This model will address any national security concerns about foreign ownership,” Nahan said.
However, the proposed sale relies on the Liberal state government winning the next election, scheduled for March 2017.
Opposition treasurer Ben Wyatt, of the Labor party, told Reuters the asset was a “solid revenue generator” and would not be sold should Labor form government.
Western Australia was the country’s best performing state before a dramatic fall in the price of its main export, iron ore, decimated the economy.
It has forecast a record budget deficit of A$3.9 billion this financial year, with changes to the iron ore price having a dramatic impact on income earned through royalties paid to the state from miners.
The state government said on Wednesday proceeds of the sale of 51 percent of Western Power would be used to reduce state debt by A$8 billion and create an infrastructure fund worth A$3 billion.
Lobbying group Infrastructure Partnerships Australia has previously valued Western Power at A$15 billion.
The proposed float is scheduled for 2018 or 2019. ($1 = 1.3362 Australian dollars) (Reporting by Tom Westbrook.; Editing by Muralikumar Anantharaman)