Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers’ Pension Plan (OTPP) have extended their Mexican road infrastructure partnership with Impulsora del Desarrollo y el Empleo en América Latina, (IDEAL).

The Canadian pensions institutions, together with IDEAL, have agreed to invest in Pacifico Sur, a 309-kilometre toll road. The trio joined forces in 2016 to buy Arco Norte, a Mexican toll road.

Listed infrastructure firm IDEAL will retain a 51% ownership of the Guadalajara-Tepic highway concession (CAGT), the concessionaire of the Pacifico Sur toll road.

CAGT holds title to Pacifico Sur’s concession. The Pacifico Sur concession agreement has 23 years remaining, with the possibility of an extension of up to 30 additional years.

CPPIB and OTPP together will acquire a 49% minority ownership position for an initial C$314m (€211.5m), with the possibility of a second payment of up to C$218m.

CPPIB will hold a 29% stake and OTPP will hold a 20% stake, same as the ownership structure in Arco Norte.

Scott Lawrence, a managing director and head of infrastructure at CPPIB, said: “Pacifico Sur toll road offers CPPIB a resilient income stream underpinned by a highly diversified traffic base and a strategic location within the country.

“Broadening our partnership with IDEAL and Ontario Teachers’ through our second investment in Mexican infrastructure will allow us to build on our track record of care and good governance.”

Dale Burgess a senior managing director for Ontario Teachers’ infrastructure and natural resources business, said: “The Pacifico Sur toll road represents an important addition to our Latin American portfolio of long-term, inflation-linked infrastructure assets.

“We are excited to be building further on our partnership with IDEAL and CPPIB with this second shared investment in core infrastructure in Mexico.”