October 30, 2008
Conduit Capital Acquires 50 Percent Ownership of Hydroelectric Developer GLEP in Brazil
Conduit Capital Partners LLC, a private equity investment firm focused on infrastructure investment and development in Latin America and the Caribbean, today announced that it has acquired a 50 percent ownership stake in Brazil's GLEP Energias Renovaveis e Participacoes S/A (GLEP), a privately-owned company that develops and holds interests in small hydroelectric projects. Terms were not disclosed.
GLEP currently has two hydroelectric plants under construction and an additional 22 projects in various stages of development. Combined, the 24 projects will comprise 411 MW of installed capacity. The company's plants will sell a mix of energy to the regulated and free markets.
The funds provided by Conduit will be used to complete existing projects, fund future capital needs and enable the company to focus on developing its pipeline, which will continue to add projects.
"GLEP is a highly professional group with a strong management team and an impressive local reputation, built on a proven track record in construction and development," said J. Scott Swensen, Chairman of Conduit. "We are pleased to partner with the company, and we look forward to completing a variety of projects together."
"We are excited about the future of the renewable energy sector in Brazil, which is very active," said George Osorio, Managing Partner at Conduit. "Small hydroelectric plants receive favorable treatment because they have strong social benefits with minimal environmental impact. With the construction and development experience of the Gomes Lourenco group, we have formed a powerful investment partnership that stands to gain substantially from our and their respective deal flows in a market where capital is scarce today. The GLEP partnership will also be looking for opportunities outside the current GLEP pipeline of renewable projects."
Hydroelectric power represents approximately 70 percent of Brazil's installed power generation capacity.
The two projects under construction, PCH Piedade and PCH Santa Luzia Alto, are expected to be completed in mid 2009. PCH Piedade already has a 30-year power purchase agreement (PPA) in place, and PCH Santa Luzia Alto has a 34-year PPA in place, and both have 11-year and 12-year PPAs with private industrial clients. PCH Piedade is located in the state of Minas Gerais and PCH Santa Luzia Alto is located in Santa Catarina. Other projects in the existing portfolio are expected to come to capacity starting 2010 through 2012.
Brothers Carlos and Guilherme Lourenco will stay on as the CEO and COO, respectively, of GLEP. Conduit has appointed a new CFO, Marcelo Vandelli, who has represented Conduit in another Brazilian investment in its Latin Power II fund.
Conduit made the investment out of its Latin Power III fund which is now 50% committed. Conduit continues to see exceptional opportunities in the region.
About Conduit Capital Partners www.conduitcap.com
Based in New York City, Conduit Capital Partners, LLC is a private investment firm focused exclusively on infrastructure investment and development in Latin America and the Caribbean. Through its management of the Latin Power Funds, Conduit has made investments in Mexico, Chile, Peru, Brazil, Argentina, Colombia, Jamaica, Honduras and Guatemala. Founded in 1993, Latin Power I was the first private equity fund exclusively dedicated to infrastructure investments. Conduit is presently investing its $393 million Latin Power III fund.