Iberdrola and a Singapore-based wealth fund have closed an agreement to develop transmission networks in Brazil.
The Spanish renewable energy major and Singapore’s sovereign wealth fund GIC secured approval from both the National Electrical Energy Agency (ANEEL) and the Administrative Council for Economic Defense (CADE) for the collaboration.
Under the agreement, the companies will collaborate by co-investing in operational transmission assets in Brazil, including Jalapão, Santa Luzia, Dourados, Atibaia, Biguaçu, Sobral, Narandiba and Río Formoso, totalling 1,865km of power lines, with an average concession period of 25 years.
The agreement, initially announced in April, involves an investment of €456 million ($482.2 million).
Iberdrola, through its Brazilian subsidiary, Neoenergia, will hold a 50% stake in this venture, valued at approximately €228 million ($241 million).
Iberdrola and GIC have also entered a framework agreement to participate jointly in future tenders for new electricity transmission assets in the country. This arrangement will also relieve Neoenergia from the debt consolidation of the operational assets, as outlined in the terms of the transaction.
This latest transaction is part of Iberdrola’s non-essential asset rotation programme, which has already been fully executed, in support of the company’s extensive investment plan totalling €47 billion ($49.7 billion).
GIC, a global investment firm founded in 1981, has had prior strategic engagements in the country and with Iberdrola. Earlier this year in April, the firm purchased 50% of eight transmission assets from Neoenergia.
Source : SmartEnergy