Target Information

Actis has successfully acquired a fully operational transmission line from EDP – Energias do Brasil S.A., a subsidiary of EDP – Energias de Portugal, S.A. This transmission line spans 743 kilometers, marking a significant addition to Actis' investments in Brazilian infrastructure. With this acquisition, Actis establishes a new Brazilian transmission platform aimed at enhancing energy connectivity and sustainability within the region.

The operational transmission asset plays a crucial role in Brazil's evolving energy landscape. The country's shift towards renewable energy necessitates reliable infrastructure to transport electricity from generation sites, often located far from consumer demand centers. Actis’ entry into the transmission sector underlines its commitment to supporting Brazil's energy transition.

Industry Overview in Brazil

The power transmission sector in Brazil is vital for accommodating an energy mix that is heavily reliant on renewables, which currently account for nearly 45% of the country’s energy demand. This dynamic is spurred by the ongoing pursuit of climate targets, as the Brazilian government aims to reduce greenhouse gas emissions by 53% from 2005 levels by the year 2030.

Brazil's geographical and infrastructural challenges require efficient transmission networks to enable the delivery of clean energy sources to urban centers. The country’s infrastructure not only supports renewable energy but also aligns with the global trend towards lower carbon emissions, making investment opportunities in the sector both timely and strategic.

Moreover, the Brazilian power transmission sector benefits from a transparent auction process and a well-established regulatory framework, which attracts foreign and domestic investment. Recent government initiatives—including a planned $10 billion auction for transmission infrastructure—signal a robust commitment to modernizing and expanding the country’s energy grid.

As Brazil continues to transition towards renewable sources, the importance of efficient power transmission will only increase. This situation presents a unique opportunity for investors to engage in a growing market that is foundational to achieving national energy goals.

Rationale Behind the Deal

Actis' acquisition is strategically aligned with the growing demand for infrastructure that supports renewable energy. By entering the low-risk segment of Brazil’s power value chain and investing in transmission lines, Actis can play a pivotal role in facilitating the transition to a decarbonized energy system in Brazil.

This investment not only aligns with international climate goals but also positions Actis to benefit from a sector poised for growth. As the demand for renewable energy continues to rise, the need for enhanced transmission capacity will become increasingly critical.

Information About the Investor

Actis is a prominent global investor specializing in sustainable infrastructure. With a robust portfolio across various sectors, the firm focuses on long-term investments that promote environmental sustainability and economic growth.

The acquisition of EDP Brasil's transmission line represents Actis’ ongoing strategy to diversify its infrastructure investments. This move follows previous investments in Brazil and Latin America, showcasing the firm's commitment to enhancing clean energy access and promoting sustainable growth within emerging markets.

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The acquisition of the operational transmission asset from EDP Brasil is a strategic investment for Actis, laying the groundwork for a robust transmission platform in Brazil. Given the increasing emphasis on renewable energy and the urgent need for efficient power delivery systems, this transaction appears to be a wise choice.

By capitalizing on Brazil's transparent regulatory framework and growing demand for energy infrastructure, Actis is well-positioned to achieve favorable returns on its investment. The positive momentum in the Brazilian transmission market also enhances the deal's attractiveness, suggesting that further investments in this sector may yield tangible benefits.

Additionally, considering the environmental impact of the deal aligns with global sustainability goals, this acquisition is not only a sound financial decision but also a socially responsible initiative. It supports Brazil's broader objectives for climate action and renewable energy deployment.

Overall, Actis' strategic positioning in Brazil’s transmission sector reflects both an understanding of the market dynamics and a commitment to fostering sustainable energy solutions. This investment could potentially yield long-term advantages, both financially and environmentally.

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