Northland Power has signed an agreement to purchase 99.2% interest in the Colombian regulated utility Empresa de Energía de Boyacá (EBSA) for CAD1.05bn (£650m).
The majority stake in EBSA is being acquired from Fondo de Capital Privado de Infraestructura Brookfield Colombia and BCIF Holdings Colombia.
The acquisition is expected to expand Northland’s Latin American energy infrastructure business into the growing Colombian electricity sector.
Northland president and CEO Mike Crawley said: “The Acquisition builds on our presence in Latin America and gives us an entry point into Colombia, a target market with a stable economy, growing middle class, strong rule of law and ease and transparency of doing business.
“We are thrilled to be acquiring this high-quality regulated Colombian utility. EBSA operates in a stable regulatory framework offering an inflation-protected perpetual cash flow profile and serves as a platform for future growth.”
Acquisition expected to strengthen Northland’s business in Colombia
The EBSA’s specific grandfathered regulatory rights are expected to allow Northland to participate or establish a platform for further growth across all electricity segments in Colombia.
EBSA is the only electricity distribution company for the department of Boyacá, a region located near Bogotá which has a population of over 1.3 million residents.
Northland said in a statement: “The Acquisition is expected to generate average mid-single digit accretion to Free Cash Flow per Share during the current regulatory period ending 2023, and increasing accretion over the long-term.”
The firm noted that the acquisition marks an important step in further diversifying its portfolio by adding a perpetual utility infrastructure business in Latin America to its business in North America and Europe.
The deal includes customary closing conditions as well as a closing condition for receipt of final approval of EBSA’s tariff by the Colombian energy and utility regulator Comisión de Regulación de Energía y Gas (CREG).
Northland plans to complete the acquisition in the fourth quarter of 2019 following the receipt of the tariff approval by CREG.
In May 2019, Northland Power took a final investment decision for the 130MW La Lucha solar project to be located in the State of Durango, Mexico.
EBSA is Northland’s second investment in Latin America following the start of the construction of its La Lucha solar project.
