Brazilian power transmission network will be integrated into CDPQ’s Latin American power transmission platform
Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ) has signed a deal to acquire Integracao Transmissora de Energia SA (Intesa), a 695-kilometre power transmission network in central Brazil.
Intesa’s power transmission network extends across central Brazil and has two substations in the Tocantins and Goiás states.
With the transaction worth up to $108.5 million, Intesa will be integrated into CDPQ’s Latin American power transmission platform, Verene Energia.
CDPQ has been planning to increase the size of its power transmission business over the next five years, says Eduardo Farhat, managing director, infrastructure, Latin America at CDPQ, in an article by Valor International.
“The acquisition of Intesa was a natural step, for operational synergies and to give Verene scale. The transmission sector in Brazil is part of our energy transition and decarbonization strategy, as it connects renewable sources to consumption centres,” he says.
Second power transmission investment
The deal marked the second power transmission investment by CDPQ in Latin America within the past 18 months. The first was its acquisition of Terna Group’s portfolio of power transmission assets in Brazil, Peru, and Uruguay in April 2022, which had nearly 1,100 kilometers of power lines and an equity value worth over €265 million.
The pension fund expects to complete the transaction by December as closing the deal will still depend on the approval of Conselho Administrativo de Defesa Econômica (CADE), Brazil’s antitrust watchdog, and Agência Nacional de Energia Elétrica (ANEEL), Brazil’s energy regulator.
“CDPQ really likes the transmission sector in the country. We like the regulation; it’s a proven sector that requires new investments. In other words, we are ambitious with Verene,” says Farhat.
“In the next five years, we want to make it one of the top 10 companies in the sector in Brazil. Whether this happens or not will depend on our ability to make the right transactions, both in terms of buying operating assets and assets to be developed.”
CDPQ has been investing globally in private equities, private debt, infrastructure, and real estate markets. It began its investments in Brazil’s infrastructure in 2019 with its purchase of Transportadora Associada de Gás (TAG), a provider of natural gas transport and storage services, in partnership with ENGIE, a private power producer.
The fund’s net assets have totaled to $424 billion as of the end of June 2023.
