IFC injects $40m into Brazilian water company

The IFC and IFC Asset Management have increased their combined stake to 10.3% in Aegea, less than three years since first investing in the Brazilian water company.

The International Finance Corporation and its asset management arm IFC AMC have each invested an additional 62.5 million reais ($19.9 million, €17.9 million) in Aegea Saneamento e Participações, the third-largest water and wastewater company in Brazil in terms of market share.

As a result of the agreement, which was signed on Thursday, IFC’s and IFC AMC’s stakes in the company now stand at 5.49 percent and 4.80 percent respectively. IFC Asset Management is funding its portion of the investment through its Global Infrastructure Fund, a vehicle it closed on $1.2 billion in 2013.

The capital raised “strengthens Aegea’s objective to grow in the water and sanitation sector, as well as the shareholders' support to its business plan,” the São Paulo-based company said in a statement.

IFC initially invested in Aegea through a financing package in 2012. In December 2013, IFC provided a second round of financing in the amount of $5 million.  At the same time, IFC AMC through its infrastructure fund made its initial investment in Aegea totalling $20 million, Suhitha Reddy, investment manager at IFC AMC, explained in an e-mailed response. 

Aegea’s other shareholders include Brazilian private equity firm Equipav, which owns a 71.4 percent interest and Singapore’s sovereign wealth fund GIC, which holds the remaining 18.67 percent stake.

Founded in late 2010, Aegea manages public concessions, handling all of the processes related to the life cycle of water, including storage, collection and wastewater treatment, according to its website. It serves three million people in eight states throughout Brazil.