GLOBAL - The CAD155bn (€118bn) Canada Pension Plan Investment Board (CPPIB) is set to acquire a 49.99% stake in an Italian group operating toll roads in Chile.
Under the agreement signed with Atlantia Group, CPPIB will make an equity commitment of CAD1.14bn (€876.2m) to acquire minority stakes in five Chilean toll roads from the Grupo Costanera, 50.01% owned by Atlantia.
André Bourbonnais, senior vice-president of private investments for CPPIB, said: "The addition of these five major urban toll roads in Chile is an excellent opportunity to expand our infrastructure portfolio in a developing market.
"Chile's strong economic growth prospects and its stable legal and regulatory framework make it an attractive country for investors like CPPIB.
"As a long-term investor, we seek infrastructure assets that will deliver stable returns over a prolonged period."
Grupo Costanera currently owns a portfolio of five toll roads that span a 188-kilometre network in Chile.
Four of the toll roads are located in the Santiago metropolitan region including two major commuter motorways, Costanera Norte and Vespucio Sur. The fifth is located on the central coast of Chile.
In February, CPPIB completed the CAD3.18bn acquisition of a 24.1% stake in the Gassled joint venture alongside its consortium partners Allianz Capital Partners and Infinity Investments, a wholly owned subsidiary of the Abu Dhabi Investment Authority.
The Gassled joint venture owns the majority of the gas transport infrastructure on the Norwegian continental shelf.
As at the end of last year, CPPIB's infrastructure portfolio totalled CAD8.6bn, representing 5.6% of the CPP Fund.
In its annual report, the Canadian pension plan said it was pursuing new opportunities in Asia and Latin America in particular, where it plans to strengthen its "investment footprint".
CPPIB said: "Emerging markets will continue to outperform in calendar 2011, though growth should decelerate.
"There is considerably less spare capacity in these regions than in the developed world, but interest rates were left at accommodative levels even as output gaps closed, in order to offset upward pressure on emerging market currencies.
"Consequently, inflation has accelerated, which has prompted policymakers to begin raising short-term interest rates."