Quebec pension fund invests further in renewable energy
ENGIE Brasil Energia has agreed to sell a 15% stake in Transportadora Associada de Gás S.A. (TAG) to Caisse de dépôt et placement du Québec (CDPQ). ENGIE is the largest 100% renewable energy company in Brazil.
The announcement follows the prior acquisition of a 90% shareholding in TAG by ENGIE and CDPQ in June 2019, which marked CDPQ’s first infrastructure investment in Brazil. In 2020, ENGIE and CDPQ completed the acquisition of the remaining shares.
The deal implies an enterprise value of 37.5 billion reais for TAG, compared with 35.1 billion reais in 2019, according to Engie.
“The partial sale of ENGIE Brasil Energia's stake in TAG is in line with our investment plan in new renewables power plants, as well as transmission lines, enabling the best allocation of capital in these two segments that are at the center of our growth strategy”, said Eduardo Sattamini, CEO of ENGIE Brasil Energia.
The transaction, values at BRL 3.1 billion, approximately CAD 848 million, subject to usual price adjustments, will bring ENGIE’s total equity holdings in TAG to 50%, while CDPQ will hold the other 50%.
As a result, ENGIE S.A. will maintain its 32.5% capital and ENGIE Brasil Energia will reduce its participation from 32.5% to 17.5%, remaining linked to the TAG shareholders' agreement.
Following this investment, CDPQ will have increased governance rights, similar to those of ENGIE, with respect to TAG. Financial close is expected by the end of January 2024, subject to closing conditions and approvals.
“TAG has delivered strong performance since our initial investment about five years ago. Today’s announcement is consistent with our infrastructure strategy: in this instance, reinvesting in a portfolio company with well-contracted assets, led by a seasoned management team, and in Brazil, a country where we intend to keep growing our portfolio in the next few years”, said Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ.
