Actis launches new Brazilian transmission platform and acquires operational transmission asset totalling 743km
- Actis acquires operational transmission asset from EDP – Energias do Brasil S.A., the fully owned subsidiary of EDP – Energias de Portugal, S.A.
- Investments in transmission lines critical to unlocking renewable energy projects and energy transition according to IEA
LONDON, 21 February 2024: Actis, a global investor in sustainable infrastructure, has launched a new Brazilian transmission platform and acquired 100% of one operational transmission line from EDP Brasil (Energias do Brasil S.A.) the fully-owned subsidiary of EDP (Energias de Portugal, S.A.).
Actis’ acquisition of the transmission line, totalling a length of 743 kilometres, sees the firm deploy capital in the lowest-risk segment of Brazil’s power value chain while helping to support the country’s transition to renewable energy and a decarbonised power system. Brazil is currently revising climate targets to reduce greenhouse gas emissions by 53% from 2005 levels by 2030, to accelerate the drive to net zero.
The power transmission sector is of strategic importance in Brazil, where renewables power almost 45% of the country’s energy demand[i], as it is key to meeting this growing power demand. Most Brazilian energy generation assets, notably renewables, are situated far from the consumer base, making transmission lines essential infrastructure in facilitating access to power. In addition to these factors, the Brazilian transmission sector also makes for an attractive investment due to the country’s transparent auction process and robust and mature regulatory environment.
The transmission line represents the first asset acquired by Actis to create a new transmission platform in Brazil, as part of its approach to investing in long life infrastructure, with further capital allocations into the sector planned for the coming years. The momentum behind Brazil’s transmission market remains positive, with the government pushing ahead with a $10 billion auction agenda.
This investment follows the firm’s previous acquisition in 2021 for 100% of HRZ Transmissoras, another transmission platform in the country, and helps diversify Actis’ long life infrastructure technology mix following the purchase of 11 data centres last year across Latin America and the US, and road assets in India earlier this month.
Adrian Mucalov, Partner, Head of Long Life Infrastructure at Actis, said: “Brazil’s transmission sector represents an excellent investment opportunity: fully operational assets, providing essential service infrastructure, with world class regulation, delivering consistent and competitive cash flows for our investors. The asset Actis is acquiring is net zero aligned and critical to meeting the demand for grid expansion and modernisation required for electrification and renewables deployment as part of the energy transition, as well as the general economic growth of the country. What’s particularly exciting from a value-creation perspective is that we already hold Brazilian transmission assets through HRZ, so we can leverage our existing experience and learnings in this market to deliver value-add on everything from contractor management to community engagement and sustainability.”
Nicolas Escallon, Partner, Energy Infrastructure at Actis, added: “Actis has a very strong track record of investing in the Latin American energy sector, and notably in Brazil, across energy generation, transmission and distribution. This latest investment adds a further string to our bow and perfectly illustrates how we’re using our experience to grow successful energy businesses across the region. Brazil in particular is showing great ambition on the energy transition and we will continue to be on the lookout for further opportunities to invest in the country’s energy sector.”
Actis’ energy and infrastructure teams invest on a global scale in sustainable infrastructure, including power generation, transmission and distribution businesses, supporting the world’s low carbon energy transition and accelerating the journey to net zero. Actis currently has circa 16GW of operational renewable energy capacity, with a further 5GW under construction or contracted.
Actis was advised by Bradesco BBI (financial adviser) and Mattos Filho (legal advisers).