Australia just found out the price of blocking foreign investment.

The NSW state government announced on Thursday it had sold a 50.4 per cent stake in Ausgrid to two local superannuation funds in a deal valuing the entire company, including debt, at about $20.8 billion. Two months earlier, the federal government barred NSW from accepting an offer from State Grid Corp. of China that was said to value the power network at about $25.1 billion, citing national security concerns.

The difference shows the cost to the nation of limiting ownership of sensitive infrastructure to local buyers, amid public opposition to overseas investment, particularly by state-owned Chinese firms. The Ausgrid sale has also raised doubts about Australia's openness to foreign investment and caused confusion about its regulatory regime.

The process "was not run as well as it could have been", said Hans Hendrischke, a professor at the University of Sydney Business School who specialises in Chinese investment in Australia. "It possibly has cost the government a considerable sum of money."