APUC to acquire Aguas Andinas’ stake in Chilean water utility ESSAL
Algonquin Power & Utilities (APUC) has agreed to acquire the 53.51% direct and indirect stake held by Aguas Andinas in Empresa de Servicios Sanitarios de Los Lagos (ESSAL), a Chilean water utility company, for $92.3 million.
The Canadian utility said that due to local regulation, it will launch a tender offer for acquiring the remainder stake in ESSAL, which is a water and wastewater utility company with nearly 230,000 connections in Southern Chile.
ESSAL operates 48 potable water production systems, 29 sewage plants, and distribution and sewage networks spanning 4,100km that covers 33 municipalities in three regions. Its present majority owner Aguas Andinas is a Chilean water services company.
Arun Banskota – CEO of Algonquin Power & Utilities said: “The acquisition of ESSAL supports APUC’s strategic growth program and broadens our regulated footprint into a historically stable and foreign investment-friendly OECD country with a robust regulatory framework.
“As APUC’s first international water utility, ESSAL will benefit from our core competency of responsible utility ownership, as well as leverage our best practices of safety, operational excellence, and innovation. We are excited with this opportunity to serve the water needs of our Chilean customers.”
Algonquin Power & Utilities said that it plans to have local and experienced management and operational teams that are expected to operate ESSAL upon the closing of the deal. The Canadian utility anticipates continuing to inject capital in the water system to boost operations besides sharing best practices with its other utilities.
Marta Colet – CEO of Aguas Andinas said: “With this transaction, we strengthen our ability to make investments that climate change requires, which will also result in job creation and economic activity when the country needs it most.
“The Algonquin entry to the Chilean water utility market is a sign of how sound and attractive this sector is for international investors, an industry with important growth opportunities in which Aguas Andinas continues to be a major player.”
The deal is expected to close in 2020.