ENGIE Brasil Energia (EGIE3), the largest 100% renewable energy company in Brazil, and CDPQ, a global investment group, both already partners in Transportadora Associada de Gás S.A. (TAG), today announced an agreement to sell 15% of ENGIE Brasil Energia’s stake to CDPQ. The main goal is to promote EGIE3’s asset rotation and focus attention on the Company’s investment plan in the electric power generation and transmission.

As a result, ENGIE S.A. will maintain its 32.5% capital and ENGIE Brasil Energia will reduce its participation from 32.5% to 17.5%, remaining linked to the TAG shareholders’ agreement, bringing ENGIE’s total equity holdings in TAG to 50%, while CDPQ will hold the other 50%. The transaction is valued at BRL 3,1 billion, subject to usual price adjustments.

“The partial sale of ENGIE Brasil Energia’s stake in TAG is in line with our investment plan in new renewables power plants, as well as transmission lines, enabling the best allocation of capital in these two segments that are at the center of our growth strategy”, said Eduardo Sattamini, CEO of ENGIE Brasil Energia.

“TAG has delivered strong performance since our initial investment about five years ago. Today’s announcement is consistent with our infrastructure strategy: in this instance, reinvesting in a portfolio company with well-contracted assets, led by a seasoned management team, and in Brazil, a country where we intend to keep growing our portfolio in the next few years”, said Emmanuel Jaclot, Executive Vice President and Head of Infrastructure at CDPQ.

Completion of the financial operation is expected by the end of January 2024, subject to the conditions defined by the Purchase and Sale Agreement.

This announcement follows the prior acquisition of a 90% shareholding in TAG by ENGIE and CDPQ, in June 2019. In 2020, ENGIE and CDPQ completed the acquisition of the remaining shares.

ENGIE Brasil Energia’s Growth in Renewables & Transmission Lines

The investment plan in new renewable power plants and transmission lines is part of the ENGIE Group’s strategic objectives in the country. “Since 2016, ENGIE Brasil Energia has invested more than BRL 20 billion in renewable energy assets and transmission lines. For the coming years, the Company foresees more than BRL 13 billion in investments”, said Maurício Bahr, Chairman of the Board of Directors of ENGIE Brasil Energia.

The Company will add 2 GW of installed capacity in renewable generation over the next two years: the Santo Agostinho Wind Complex, is already in an advanced phase of implementation and will have a total installed capacity of 434 MW when completed; the Assuruá Wind Complex, which will total 846 MW of installed capacity, starting its commercial operation gradually in the second half of 2024; and the Assu Sol Photovoltaic Complex, which will reach 752 MW of installed capacity, with full commercial operation scheduled for the second half of 2025.

Furthermore, in 2023 the Company began mobilizing teams to implement the Asa Branca project, with 1,000 km of transmission lines connecting the States of Bahia, Minas Gerais and Espírito Santo.

Recently, ENGIE Brasil Energia signed a contract for the acquisition of five solar photovoltaic (PV) plants in the Northeast (Bahia and Ceará) and the Southeast (Minas Gerais), with a total capacity of 545 MWac in operation, from Atlas Energia Renovável do Brasil S.A. The transaction is currently ongoing, depending on the conditions set out in the Purchase and Sale Agreement for its closing.

About TAG:
TAG owns and manages an important portion of Brazil’s natural gas transportation assets, spanning over 4,500 kilometers and 10 states in the North, Northeast and Southeast regions, with a fully contracted natural gas handling capacity.

About CDPQ:
At CDPQ, we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public pension and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2023, CDPQ’s net assets totalled CAD 424 billion. For more information, visit cdpq.com, consult our LinkedIn or Instagram pages, or follow us on X.
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