Canadian Pension Plan Invests in Brazilian Power

Investment manager forms joint venture with Votorantim Energia.

The Canada Pension Plan Investment Board (CPPIB), which invests the assets of the C$328.2 billion ($255.1 billion) Canada Pension Plan, has formed a joint venture with Brazil’s Votorantim Energia to invest in the Brazilian power generation sector.

“This transaction enables CPPIB to establish a footprint in the attractive Brazilian power generation market, which fits well with our overall power and renewables strategy and further diversifies the CPP Fund,” Bruce Hogg, CPPIB’s head of power and renewables, said in a statement.

The joint venture’s first acquisitions are two operational wind parks in Northeastern Brazil: Ventos do Araripe III from Brazilian project developer Casa dos Ventos, and Ventos do Piauí I, which was contributed by Votorantim Energia into the joint venture. CPPIB is initially contributing approximately R$690 million ($209.4 million) in equity, and the joint venture expects to invest more than R$3 billion in operational and development assets in the sector.

“The renewable energy sector is an attractive, expanding market that will require major investments from the private sector now and in the coming decades,” said Fabio Zanfelice, president of Votorantim Energia. “By joining with a strong partner such as CPPIB, we have expanded our capacity and accelerated our growth plan in this segment with an investor that shares our vision for the business,”

The wind parks will have 565 megawatts of installed capacity combined, with almost all of their entire production contracted in the regulated market. The joint venture will actively pursue power generation investments and acquisitions across Brazil.

“Brazil is considered among the top renewable energy markets in the world, and as demand in the country grows, wind energy is expected to be one of the largest contributors to this new supply,” said Hogg. “As power demand grows worldwide, and with a focus on accelerating the energy transition, CPPIB will continue to seek opportunities to expand our power and renewables portfolio globally.”

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