Elecnor and APG close Latin American power transmission joint venture

A subsidiary of Spanish infrastructure and energy developer Elecnor and Netherlands-based APG Asset Management have closed a transaction to jointly own and develop power transmission projects in Latin America.

In mid July we reported that the transaction documents were signed on 10 July 2014 and the required regulatory approval has now been obtained.

Elecnor was advised by Voltiq B.V. (financial) and Cuatrecasas, Gonçalves Pereira (legal). Santander (financial) and Uría Menéndez S.L.P (legal) acted as advisors to APG.

APG has become a 49% shareholder in Celeo Redes with Celeo Concesiones e Inversiones, a wholly owned subsidiary of Elecnor, retaining a 51% shareholding.

Through the transaction, for which APG is due to commit €237 million, the pension fund has agreed to jointly invest €372 million with Elecnor in Latin American transmission projects over the next five years.

Celeo Redes currently owns 16 concession companies in Brazil and Chile with 3,013 km of lines in operation and 1,283 km of lines under construction. All are 30-year Brazilian contracts put out to tender by Agencia Nacional de Energía Eléctrica, the country’s energy regulator.

José Ángel Lostao, CEO of Celeo Concesiones e Inversiones stated:

We are very pleased by the creation of this dedicated power transmission partnership with a leading international financial investor such as APG. This agreement will put Celeo Redes in a stronger position to undertake future projects in the power transmission markets in Latin America. We also see this transaction as recognition of Elecnor's unique position in the Latin American power transmission market.

Patrick Kanters, managing director Global Real Estate and Infrastructure of APG Asset Management commented:

We are delighted to partner with Elecnor which has a strong foothold in the Latin American power transmission sector. This is a direct investment in tangible assets that provide predictable and long-term cash yield. Investments in a regulated sector like this one are at the core of our infrastructure investment strategy. This transaction highlights our focus on entering into strategic partnerships and on making direct investments on a global basis.

It is not the first time Elecnor has partnered with institutional investors. In late June its wind subsidiary sold 49% of the 100MW L’Érable Wind Farm to a consortium comprising Canadian insurer Industrialist Alliance Insurance and Financial Services, Ontario fund manager Fiera Axium and Quebec-based renewables developer Eolectric.