Information on the Target

Actis has initiated its energy platform, Orygen, in Peru following the acquisition of a 92.35% stake in Enel Generación Perú S.A.A. and full ownership of Compania Energetica Veracruz. Orygen is positioned as an independent power producer, equipped with a substantial 2.2 GW diversified energy generation capacity, which includes the country's largest renewable energy portfolio. The company aims to expand this already impressive asset base by leveraging a 12 GW development pipeline.

Under the leadership of Marco Fragale, newly appointed Chief Executive Officer, Orygen is set to utilize four different energy generation technologies: solar, wind, hydroelectric, and thermal gas. Marco Fragale brings 25 years of extensive experience in the energy sector, having previously held various roles at Enel across Latin America, including in-depth knowledge of the Peruvian energy market.

Industry Overview in Peru

The energy sector in Peru is undergoing significant transformations as the country strives to enhance its renewable energy capabilities. Government incentives and regulatory frameworks are increasingly supportive of renewables, reflecting the global shift toward decarbonization. This transition is further fueled by a growing demand for sustainable energy sources from both residential and industrial consumers.

Peru has abundant natural resources, particularly solar and wind energy, which the government is keen to exploit to reduce dependence on fossil fuels. As investments in renewable energy infrastructure rise, projects that harness these resources are gaining traction in the national grid. The growing emphasis on energy security and sustainability poses both challenges and opportunities for new entrants in the energy market.

In conjunction with this shift, the private sector is becoming more involved in developing renewable energy projects, evident from partnerships and investments made by international firms like Actis. The market landscape is characterized by the emergence of independent power producers who offer innovative solutions and competitive pricing for energy supply.

The Rationale Behind the Deal

The acquisition of Enel Generación Perú and Compania Energetica Veracruz serves as a strategic move to establish Orygen as a dominant force in the Peruvian energy market. The decision aligns with Actis’ commitment to sustainability and bolstering renewable energy assets in Latin America. Orygen aims to tap into the growing demand for clean energy and leverage its diverse generation capacity to cater to both commercial and industrial consumers.

Additionally, the substantial development portfolio of 12 GW positions Orygen to further enhance its renewable offering, ensuring that it remains competitive and capable of addressing both energy security and affordability in the region.

Information About the Investor

Actis is a renowned global investor specializing in sustainable infrastructure, with a distinct emphasis on energy projects. The firm has a proven track record of developing and managing energy generation platforms globally, amounting to an installed capacity of approximately 35 GW across 28 businesses. Actis is guided by a commitment to advancing sustainable energy solutions and improving energy access in emerging markets.

Within Latin America, Actis has made substantial investments, establishing platforms such as Serena Energy and Valia Energia in addition to Orygen. These efforts reflect the firm's strategy to build a diversified energy portfolio that not only meets the needs of local markets but also contributes to the overall energy transition by facilitating a shift towards lower carbon alternatives.

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From a professional standpoint, the launch of Orygen represents a significant opportunity in the Peruvian energy landscape. The combination of an experienced management team and a robust energy portfolio situated in a market primed for renewable expansion marks it as a potentially lucrative investment. The strong demand for renewable energy aligns well with Orygen's capabilities and strategic intentions.

Moreover, Actis's established track record in energy investments, combined with Orygen's ambitious goals regarding renewables, suggests that this venture could not only enhance energy security in Peru but also facilitate economic growth through sustainable practices. The firm’s focus on reducing carbon emissions further positions Orygen to become a leader in the renewable sector.

While challenges in navigating regulatory frameworks and competition exist, Orygen’s proactive approach to market entry and its commitment to sustainability may mitigate these risks. Thus, this investment could be classified as a positive step forward for both Actis and the Peruvian energy market.

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