A group of Australian, Canadian and Middle Eastern firms will pay A$10.3 billion ($7.5 billion) for an Australian electricity network as part of the country's biggest privatisation programme, beating a Chinese government bidder.

The group, led by Australia's Hastings Funds Management, paid significantly above the A$8 billion expected by analysts for New South Wales state's TransGrid network, topping three other bidders including State Grid of China Corp.

Owned by Westpac Banking Corp, Hastings had teamed up with Australian electricity firm Spark Infrastructure, sovereign fund Abu Dhabi Investment Authority, Kuwait's Wren House Infrastructure and Canadian pension fund investor Caisse de depot et placement du Quebec (CDPQ) for the deal.

The Australian firms have a combined stake of 35 per cent in the venture.

"This is a stunning result," NSW Premier Mike Baird told reporters, adding the money would help build roads, railways, hospitals and schools.

State Grid had been the favourite but the choice of winner avoids a potential public backlash over the sale of critical assets to Chinese-owned entities. Last month, the sale of Port of Darwin to Chinese interests sparked an outcry from opposition politicians and expressions of concern from the United States.

State Grid teamed with locally-listed Macquarie Group Ltd , had foreign investment clearance and was widely considered the bid favourite despite concerns about the security of a network that carries sensitive government data and powers the national capital Canberra.

The Hastings group won because of a combination of price, risk and sale conditions, Baird said, without disclosing other bid prices or sale conditions. Hastings also edged out an all-Australian bid from pension fund IFM and Queensland state investor QIC.

The only larger sale of a single Australian government-owned asset was the Initial Public Offering of Telstra Corp Ltd in 1996. TransGrid is the biggest Australian privatisation sale into private hands.

The sale underscores soaring global demand for Australian infrastructure, as roiling global equity and commodities markets drive investors to assets with regulated and predictable revenue. TransGrid runs 12,000 kms (7,500 miles) of transmission lines in the state of 7.5 million people.

"It's an economy that has rules that are transparent ... and that we understand well," said Macky Tall, senior vice-president of infrastructure at Canada's CDPQ, the biggest consortium member with 25 percent.

The high price also suggests investors are confident Australia's energy network industry will cope with the emergence of rooftop solar and low-cost batteries.

The deal is the first of three electricity privatisations by the NSW government, with the total sale price expected to top A$20 billion.

Sydney-listed Spark, which is eight percent-owned by Hong Kong's CKI Infrastructure Holdings Ltd, said it planned to fund its 15 percent equity contribution to the deal through a A$405.5 million capital raising plus debt and cash.-Reuters