Actis in $169m LatAm renewables deal

Since July, the firm has invested a combined $460m in renewable energy businesses in Chile and Brazil.

Emerging markets-focused firm Actis will acquire a 60 percent stake in Brazilian renewable energy company Atlantic Energies Renovaveis for $169 million, according to a statement. 
 
Actis expects to invest an additional $100 million into the business over the next five years, helping Atlantic provide enough wind energy to power 200,000 Brazilian households, the statement said. Actis is investing in Atlantic from its third energy fund, which focuses on power generation and electricity distribution and is reportedly targeting $750 million.

We’re not a renewables-only fund, but there’s just been a trend towards a much greater implementation of renewable capacity right across emerging markets, which have seen a huge need for new capacity

Michael Till, co-head of energy at Actis

“When we invest in generation it can be in renewables, which is becoming an increasingly important theme in emerging markets, but we also invest in thermal generation,” Michael Till, co-head of energy at Actis, told Private Equity International, adding that the power generation market provides opportunity for tremendous scale in emerging markets.

“Brazil probably needs to add six to seven gigawatts of new power plants per year,” he said. “That’s a huge growth requirement.”

The investment in Atlantic marks Actis’ third deal from its most recent energy fund, which started investing this year, and its fifth renewable energy investment in Latin America. In July, the firm invested $290 million in Chile’s largest wind and solar energy company.

Actis also has existing investments in electricity distribution businesses in Morocco, Uganda and Guatemala. The firm typically exits its investments through initial public offerings or sales to strategic buyers, according to Till.

“Our focus is Latin America, Africa and Asia,” he said. “One of the common themes across all these markets – including in Africa where we’re also invested in renewables in South Africa – is the emergence over the last five years of wind technology as a competitive source of power. We’re not a renewables-only fund but there’s just been a trend towards a much greater implementation of renewable capacity right across emerging markets, which have seen a huge need for new capacity.”

Actis’ third energy fund is a pan-regional emerging markets power fund. The fund is managed by a team of 18 investment professionals in India, London, Brazil and Costa Rica.