Target Information

Actis, a prominent global investor specializing in sustainable infrastructure, has signed an agreement to acquire two transmission projects that will augment its Skyline Brazilian transmission platform. This acquisition will elevate the total operational length of Skyline's transmission lines to 1,404 kilometers. Initially launched in February 2024, Skyline has been managing two transmission line assets covering 857 kilometers.

As part of this latest expansion, Skyline will acquire a 90% stake in a 435-kilometer above-ground transmission line located in Santa Catarina, a region in southern Brazil. This asset has a 30-year concession, with 23 years remaining on the agreement. Additionally, Skyline will fully acquire two assets from Vinci Partners, which comprise a 112-kilometer above-ground transmission line in the southern state of Rio Grande do Sul, along with a substation and its associated equipment in Minas Gerais, both of which have 22 years left on their respective 30-year concessions.

Industry Overview in Brazil

The power transmission sector plays a crucial role in facilitating the global energy transition, especially in Brazil, where renewable energy sources contribute to 89% of the electricity generated. Brazil's renewable energy sources include hydroelectric, wind, solar, and biofuels. These renewable assets are often situated far from consumption centers, which underscores the necessity for robust transmission infrastructure to enable access to clean, decarbonized power.

The Brazilian government has demonstrated a commitment to enhancing the country's climate goals, as announced during COP29 in November 2024. The new targets aim for a 67% reduction in net greenhouse gas emissions by 2035 compared to 2005 levels, increasing the previous goal of 59%. This ambition highlights the importance of continued investments in the power sector to facilitate the transition to a more sustainable energy landscape.

As Brazil continues to invest in its power infrastructure, the market for renewable energy transmission becomes an increasingly vital area for growth. With the government's renewed commitment to climate initiatives, there is an elevated need for investment and development in this sector to meet national goals and align with global sustainability trends.

Rationale Behind the Deal

The acquisition aligns with Actis's strategy to enhance and expand its portfolio in Brazil's dynamic energy market. By integrating these new assets into Skyline's existing operations, Actis aims to strengthen its position in the rapidly evolving sector and leverage opportunities presented by the country's increasing focus on renewable energy transmission.

Moreover, the long-term concession agreements attached to these assets provide stability and predictability in revenue generation, making this investment an attractive addition to Actis's portfolio.

Information About the Investor

Actis is a leading global investor that focuses on sustainable infrastructure opportunities across emerging markets. With a strong track record of investments in renewable energy and infrastructure projects, Actis is well-positioned to navigate the complexities of Brazil's energy sector. The firm prioritizes sustainable practices, ensuring that its investments contribute positively to environmental and social outcomes in the regions where it operates.

The company's robust expertise in managing assets in emerging markets equips it with the knowledge and resources necessary to drive the success of its investments, particularly in sectors that are critical to energy transition efforts.

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This latest acquisition by Actis appears to be a strategically sound investment. The long-term nature of the concession agreements associated with the assets acquired from EDP and Vinci Partners will likely provide Actis with stable cash flows and enhance the overall value of its portfolio in Brazil.

Considering Brazil's ambitious climate goals and its commitment to expanding renewable energy generation, investment in transmission infrastructure is not only timely but also essential. By securing these transmission lines, Actis is positioning itself to play a pivotal role in facilitating access to renewable energy, supporting Brazil's environmental agenda, and fulfilling the growing energy demands of its population.

Furthermore, as the market for renewable energy in Brazil continues to expand, Actis's investment could yield significant returns as the demand for effective transmission solutions grows alongside the increasing generation of renewable power. Overall, this deal represents not only a practical approach to enhancing Skyline’s capacity but also a forward-thinking investment aligned with global trends aimed at a sustainable future.

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