Brookfield sells Chile transmission stake to Chinese SOE for $1.3bn

The firm’s BIP vehicle exited its 27.8 percent stake in Transelec, offloading the holding to China Southern Power Grid International.

Brookfield Infrastructure Partners has sold its interest in a Chilean transmission company to China Southern Power Grid International, a Chinese state-owned utility, for $1.3 billion.

BIP, a listed vehicle that is part of Brookfield Asset Management, said it has closed the sale of its 27.8 percent stake in ETC Transmission Holdings, the parent company of Transelec, which operates 10,000 kilometres of power lines in Chilean cities, industrial and mining sites.

BIP declined to comment for this story. The asset manager, the parent company of which raised $14 billion for Brookfield Infrastructure Fund III, is one of the largest private investors in Latin American infrastructure. BIP has interests in power and transportation assets in Brazil, Chile and Peru.

In 2017, BIF III acquired a 90 percent stake in Brazilian gas transmission company Nova Transportadora do Sudeste in April for $1.3 billion, and in November BIP agreed to buy a 53 percent interest in Colombian gas distributor Gas Natural.

BIP’s one-year annualised return on the New York Stock Exchange was 40 percent and 31 percent on the Toronto Stock Exchange, according to a letter chief executive Sam Pollock sent to unitholders last month. Ten-year annualised returns were 20 percent and 27 percent on the NYSE and TSX respectively.

The deal highlights growing investment in Latin American infrastructure from Chinese state-owned enterprises. In recent years, SOEs have completed several big deals, including last year when China Merchant Port Holdings acquired a 90 percent stake in Brazilian Port Operator TCP Participacoes and in 2015, when China Three Gorges acquired two hydropower plants in Brazil for $3.66 billion.