Actis has announced the sale of its 92 percent stake in Energuate, Guatemala's largest electricity network, to Kenon Holdings subsidiary IC Power for $265 million and the assumption of the company's $289 million gross debt load.
The transaction was enacted through an agreement between IC Power and Actis investment company Deorsa-Deocsa Holdings (DDHL).
Energuate comprises two electricity distribution companies that provide services to roughly 1.6 million Guatemalans across 100,000 square kilometres, representing 60 percent of Guatemala's energy distribution market. The group also owns an electricity trading company (Comercializadora Mayorista de Electricidad) that provides services to corporate clients and a transmission company (Redes Electricas de Centroamerica) that operates 31 kilometres of transmission lines and eight substations. According to IC Power, Energuate assets provided 35 percent of total electricity consumed in Guatemala in 2014.
Actis originally invested in Energuate in May 2011. New services added during Actis' management tenure include payment location upgrades and the introduction of on-site billing. Since 2011, outage frequency and average outage durations have decreased by 50 percent each, according to a company statement, which added that 230,000 new customers now use Energuate's services.
“Guatemala continues to be attractive to Actis as an investment destination,” said Mike Till, a partner at the firm and its co-head of energy Mike Till. “Favourable demographics are driving growth and a positive consumer environment in Guatemala. The country boasts a large and fast-growing population, high GDP per capita growth, rising urbanisation levels, and an expanding middle class.”
Since 2002, Actis has deployed more than $1.7 billion through 30 energy transactions in power generation and electricity distribution assets and serving 65 million customers. The firm currently manages 524 megawatts (MW) of renewable energy generation assets, with plans to expand its wind and solar portfolio to 3.3 gigawatts by the end of 2016.
IC Power is an Israeli power generation developer and operator founded in 2007. According to the company's latest financial results, IC Power was planning to pay $299.5 million for the Energuate transaction along with debt assumption. The Energuate transaction will be financed through cash on hand and a new $120 million loan facility.