Brazilian water and sanitation company Iguá Saneamento has received a pat on the back from its biggest shareholder, Canada Pension Plan Investment Board, in the form of a cash injection of up to BRL2.2 billion ($390 million).
CPP Investments, as the Canadian institutional investor is known, said the move follows Iguá’s triumph at last week’s bidding for water and sanitation concession in the northeastern Brazilian state of Sergipe.
The cash “will fund Iguá’s purchase [and] support capital expenditures,” it said Tuesday in a release.
Iguá bid BRL4.5 billion for the concession fee, 122% more than the minimum price and pledged to invest BRL6.3 billion during the concession period, including BRL4.7 billion during the first 10 years.
The Brazilian firm’s CEO Roberto Barbuti told LatinFinance last week that financing details have already been ironed out, including a contribution from shareholders and a bridge loan from banks.
Iguá already holds a large water concession in Rio de Janeiro and the latest concession expands its operations to a seventh Brazilian state, providing potable water and sewage treatment services to approximately five million customers.
“This sector has significant room for growth while also providing opportunities to invest in long-term, stable assets at scale,” said James Bryce, global head of infrastructure at CPP Investments, in the release.
Iguá said in a separate filing that it will provide financial details of the equity injection at a later date.