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Northland Power makes 1st foray into South America with C$1.05B utility purchase

Northland Power Inc signed an agreement to acquire a 99.2% stake in Colombian utility Empresa de Energía de Boyacá ESP from Fondo de Capital Privado de Infraestructura Brookfield Colombia and BCIF Holdings Colombia II SAS for approximately C$1.05 billion.

The acquisition, announced Sept. 9, marks the Canada-headquartered utility company's first investment in South America and its second in Latin America, following its investment in May in a solar facility in Mexico.

"EBSA operates in a stable regulatory framework offering an inflation-protected perpetual cash flow profile and serves as a platform for future growth," Northland Power President and CEO Mike Crawley said in a news release.

The transaction is expected to be completed in the fourth quarter, subject to the utility's tariff approval from the Comisión de Regulación de Energía y Gas, the Colombian energy and utility regulator.

Initially, Northland Power will fund the acquisition with a fully committed 12-month C$1.1 billion bridge facility. The company intends to permanently finance the acquisition with C$315 million of gross proceeds in common equity via a concurrent bought deal public offering of subscription receipts, C$450 million to C$500 million of nonrecourse debt financing and cash on hand, it said.

The utility serves a population of 1.3 million residents across 123 municipalities in the department of Boyacá, near Colombia's capital, Bogotá, is expected to contribute adjusted EBITDA in 2020 of approximately C$100 million.

Fondo de Capital Privado de Infraestructura and BCIF Holdings Colombia are Brookfield Asset Management Inc. companies through Brookfield Infrastructure Partners LP.