Canada Pension Plan expands renewables portfolio with Brazilian joint venture

Canada Pension Plan Investment Board (CPPIB) and Votorantim Energia have partnered to invest in Brazil’s power generation sector.

CPPIB and Votorantim Energia, the energy arm of the Brazil’s industrial conglomerate Votorantim Group, have formed a new joint venture focusing on investments and developments in the country’s power generation sector.

The joint venture is acquiring two operational wind parks in Northeastern Brazil: Ventos do Araripe III from Brazilian developer Casa dos Ventos, and Ventos do Piauí I, contributed by Votorantim Energia to the joint venture.

As part of the transaction, CPPIB is initially contributing around BRL690m (€175m) in equity. The joint venture expects to eventually invest more than BRL3bn in operational and development assets.

Ventos do Piauí I has a generating capacity of around 206 megawatts of power with committed investments of BRL1.2bn. Ventos III has an installed capacity of around 359 megawatts with committed investments of BRL1.8bn.

Bruce Hogg, managing director and head of power and renewables at CPPIB, said: “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.

“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.”

Hogg added that, as power demand grows worldwide and there is a focus on accelerating the energy transition, CPPIB will continue to seek opportunities to expand its power and renewables portfolio globally.

João Miranda, CEO of Votorantim, said: “This reinforces our commitment to the power sector in Brazil, where we have been investors for almost 100 years.”

The renewable energy sector is an attractive, expanding market that will require major investments from the private sector now and in the coming decades, Fabio Zanfelice, president of Votorantim Energia said.

“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,” he said.

The acquisitions are subject to customary closing conditions and regulatory approvals.