TORONTO — The Canada Pension Plan Investment Board has signed a joint venture to invest in Brazil's power generation sector.
The agreement is with Votorantim Energia, the energy arm of Brazil’s Votorantim Group, and will initially involve the purchase of two wind parks in northeastern Brazil with combined generation capacity of 565 megawatts.
As part of the deal, CPPIB will put up about C$272 million in equity and says the joint venture expects to increase its investment over time.
The acquisitions of the wind parks are subject to customary regulatory approvals.
"This transaction enables CPPIB to establish a footprint in the attractive Brazilian power generation market, which fits well with our overall power and renewables strategy and further diversifies the CPP Fund," said Bruce Hogg, the managing director of power renewables at CPPIB.
"Brazil is considered among the top renewable energy markets in the world, and as demand in the country grows, wind energy is expected to be one of the largest contributors to this new supply."
CPPIB invests funds for the Canada Pension Plan. As of Sept. 30, the CPP Fund had $328.2 billion under management.