Merger to create major new renewables player in Brazil

Brazilian industrial conglomerate Votorantim and Canada’s Pension Plan Investment Board (CPP Investments) are to merge their renewable energy assets in Brazil to create a new energy firm that will list on the country’s stock exchange.

The existing VTRM joint venture between Votorantim Energia and CPP Investments will acquire and consolidate several assets, including its 40% stake in power firm Companhia Energética de São Paulo (CESP), Votorantim Energia’s shares in hydro power assets and trading arm Votorantim Comercializadora de Energia, as well as several projects VTRM is currently developing.

CPP investments will invest an additional BRL 1.5 billion (€232 million) into VTRM while CESP will merge its remaining shares into the joint venture, subject to shareholder approval.

Upon completion, the combined company will have net revenues of BRL 5.8 billion (€897 million). Its renewable assets will include 1GW of wind power — 600MW in operation and 400MW under construction (due to come online by October 2022), plus 86MW wind-solar hybrid capacity — as well as 1.7GW under-construction solar and 2.3GW of operational hydropower assets.

The new firm will seek opportunities to grow in Brazil’s renewables sector, “potentially acquiring other operational assets as well as assets in development and under construction”, the companies said.