Cedae is just the beginning: the CPP is worth more than 10 billion reais for Iguá

Canada Pension Plan Investments (CPPI) arrived to stay in the sanitation sector and carry out the Igua sanitation to grow. The former CAB Ambiental was chosen to be the only investment vehicle in this segment in Brazil. The entry into the company was consolidated last week, with a check for nearly 1.2 billion reais, of which around 515 million reais was in new money – and the rest in the purchase of other minority interests. And that’s just the beginning.

The pocket available, both for projects with adequate returns, is much larger. “We can double and even triple the investment in sanitation, with a certain peace of mind,” explains Rodolfo Spielmann, manager responsible for Latin America. This means taking the total allocated to the business to numbers like $ 2 billion or even $ 2.5 billion Canadian. In reality? Over R $ 10 billion!

“This sector is very capital intensive, but at the same time it offers the prospect of constant and stable returns in the long term”, underlines Ricardo Szleijf, director of infrastructures of CPPI, also for the Latin America region. “It’s perfectly compatible with our interest as long-term investors, whether we spend 30 or 50 years in the business,” adds Spielmann. “We are very aligned with Igua, IG4 and AimCo.”

Carlos Brandão, chairman of the sanitation company, said the plan was to triple the business in about three years. With Cedae, the company will double in size after full network integration, which should take two to three years. In conversation with the EXAMINATION after last week’s auction, Brandão said Igua will continue to participate in bids that make sense.

Fast pace

Hardly has it arrived, and the CPPI has already approved an additional 2.3 billion reais for Iguá, on top of what was entered last week, this time entirely intended for the acquisition of block 2 of Cedae, when of the privatization auction held on Friday Thursday. – the winning bid for the prize was 7.3 billion reais. Taking into account this contribution and the first contribution, it amounts to approximately 3.5 billion reais or 800 million Canadian dollars. This is the total already achieved and already planned and approved by the committee. The capitalization linked to the Rio auction includes the subscription of new shares and convertible bonds.

ICPP’s investments in Brazil totaled C $ 8 billion before Igua and were already quite diversified. The company managed by IG4, owned by Paulo Mattos, is a new sector in the portfolio applied in the country. And that brings the total to nearly 9 billion Canadian dollars, a first that occupies nearly 10% of the local portfolio.

The fund, which represents the retirement of 20 million Canadians, participates in large infrastructure companies, such as These P, in partnership with the Votorantim group, but there are several other chosen ones, such as the network of academies smart fit, the startup for buying and selling real estate Attic, and the network of shopping centers Alliance Sonae, among others.

Szleijf points out that there are at least three other infrastructure sectors in which CPP Investments would like to have a stake in Brazil: power transmission, telecommunications infrastructure and highways. The fund was one of those who evaluated the investment in Oi’s fiber company.

The appetite is to bring the Latin America region to around 8% of all CPPI assets. Today, this share is 3.7%, with Brazil alone representing 1.8% of the global fund. It is nothing new that Spielmann has pointed out that it is possible to double the region’s stake in the portfolio, which would also mean increasing confidence in the country.

The CPP has established itself as a major investor in the country, which is quite emblematic given the time when the disinterest of foreign investors prevails. Spielmann always emphasizes that the fact that the house has “unpaid liabilities” means that it can invest according to its long-term prospects.