Two of Canada’s largest pension funds — the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan — are partnering with an infrastructure company in Mexico to invest in the country’s largest toll road.

The CPPIB and Ontario Teachers’ will jointly invest $1.35 billion dollars in exchange for the CPPIB gaining a 29 per cent ownership interest and Ontario Teachers’ a 20 per cent stake. The remaining 51 per cent will go to  the infrastructure company IDEAL.

Read: CPPIB to invest $570M in oil and gas company

Arco Norte, the 223-kilometre toll road bypass, acts as a major corridor for trade by connecting various states of Mexico and surrounds a large perimeter of Mexico City’s northern border.

“Arco Norte represents our first infrastructure investment in Mexico and enables us to invest in an established, modern ‎toll road of significant size,” said Cressida Hogg, managing director and head of infrastructure at CPPIB, in a news release.

“This investment fits well with CPPIB’s strategy to invest in core infrastructure assets with long-term, stable cash flows in key global markets.”

Read: CPPIB, OMERS and Teachers’ buy Chicago toll road

“This investment provides a strong foundation for continued growth of our infrastructure portfolio in Mexico and the rest of Latin America,” said Andrew Claerhout, senior vice-president, infrastructure and natural resources at Ontario Teachers’.

“Arco Norte is an attractive asset with long-term growth potential that will provide income to pay pensions.”

Read: CPPIB’s fiscal report reflects long-term challenges for pension funds

Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com

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