The Caisse de dépôt et placement du Québec is providing a $313-million loan to Colombia-based energy company Empresas Publicas de Medellin.
It’s the pension fund’s second investment in South America in less than four months, following a loan to a toll highway in October 2017. In this deal, the Caisse is teaming up with other lenders led by IDB Invest, a member of the Inter-American Development Bank Group.
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According to a news release from the Caisse, hydroelectricity is the source of 80 per cent of the energy supply in the region, and Colombia, like other Latin American countries, has faced electricity shortages in densely-populated areas due to the fast pace of urbanization.
“We were highly motivated to participate in the financing of EPM, a leader in the markets it serves with an excellent reputation and extensive experience,” said Marc Cormier, executive vice-president of fixed income at the Caisse, in a news release. “To benefit from the potential that exists in growing markets, CDPQ is looking for companies with attractive prospects and assets that contribute to local growth.”
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The loan will aid the overall growth of Empresas Publicas de Medellin, and specifically Colombia’s largest renewable energy project, the Ituango hydroelectric project.
“Financing a company such as EPM, that supports sustainable energy solutions, made this opportunity attractive to CDPQ,” said Anita George, executive vice-president of growth markets at the Caisse. “This transaction demonstrates CDPQ’s approach of working with high quality partners such as IDB Invest and EPM to enter new markets. As we expand our global presence, CDPQ will continue to seek partners who share our long-term vision and are looking to build sound businesses in growth markets.”