I Squared II invests in LatAm clean energy portfolio

I Squared Capital has purchased a portfolio of Latin American and Caribbean clean energy assets, investing from its second infrastructure that’s due to reach a final close of up to $6.5 billion next year.

Inkia Energy, a power plant developer based in Peru, agreed to sell its 3.4GW portfolio of hydroelectric, wind and thermal generation assets throughout Latin America to New York-based I Squared. The companies did not disclose a deal value for the transaction.

Inkia is a subsidiary of IC Power, which also has full ownership of a 440MW combined-cycle plant and a 18MW steam turbine in Israel.

“This transaction reinforces I Squared Capital’s commitment to infrastructure in Latin America. The Inkia portfolio comes with a highly seasoned and successful development team as well as a robust pipeline of renewable and natural-gas generation projects,” Adil Rahmathulla, a partner at I Squared, stated.

Credit Suisse and Norton Rose Fulbright acted as advisors to I Squared. This is the firm’s third deal for ISQ Global Infrastructure Fund II after it acquired Hong Kong fixed-line business Hutchinson Global Communications for $1.9 billion and a Houston-based midstream company called Pinnacle Midstream.

The fundraise is set to reach a final close of up to $6.5 billion during the first quarter of 2018, which would surpass its $5 billion target and the $3 billion its debut vehicle closed on in 2015. Fund II could exceed its $5 billion target with a December close, following a $4.05 billion first close in late October.

I Squared’s first vehicle is generating a 15 percent net internal rate of return, according to documents published from an August meeting of The Rhode Island Investment council.

Rahmathulla, along with Sadek Wahba and Gautam Bhandari, former Morgan Stanley Infrastructure Partner executives, founded I Squared in 2012.