Northland Power to acquire Colombian regulated utility EBSA for C$1.05bn
Northland Power acquisition of EBSA : Canada-based Northland Power has agreed to acquire a 99.2% stake in Colombian regulated utility Empresa de Energía de Boyacá (EBSA) for C$1.05 billion, as per the latest energy acquisition news.
The acquisition will expand Northland Power’s Latin American energy infrastructure business into Colombia.
The acquisition of EBSA from Fondo de Capital Privado de Infraestructura Brookfield Colombia and BCIF Holdings Colombia II S.A.S. marks Northland Power’s second investment in Latin America — the first being the construction of its 130MW La Lucha solar project in the State of Durango in Mexico.
With its grandfathered status, EBSA will enable Northland Power to participate across the energy infrastructure range in Colombia.
EBSA is the one and only electricity distribution company for the department of Boyacá region. The Colombian regulated utility serves a population of 1.3 million residents across 123 municipalities.
Commenting on Northland Power acquisition of EBSA, Mike Crawley – president and CEO of Northland Power, said: “The Acquisition builds on our presence in Latin America and gives us an entry point into Colombia, a target market with a stable economy, growing middle class, strong rule of law and ease and transparency of doing business.
“We are thrilled to be acquiring this high-quality regulated Colombian utility. EBSA operates in a stable regulatory framework offering an inflation-protected perpetual cash flow profile and serves as a platform for future growth.”
Based on the current tariff application, EBSA’s rate base for 2019 is approximately C$630 million while adjusted EBITDA in 2020 is expected to be approximately C$100 million, based on the submitted tariff.
The transaction will be funded initially with a fully committed 12-month C$1.1 billion bridge facility, C$315 million of gross proceeds in common equity and $450 to $500 million of non-recourse debt financing.
The balance of the acquisition will be funded with cash on hand and borrowings under Northland’s corporate credit facilities.
Northland Power acquisition of EBSA is subject to certain purchase price adjustments following receipt of final approval of the latter’s tariff by the Colombian energy and utility regulator.