Key facts
- Engie Brasil raised 8.4 billion reais ($1.66 billion) in a follow-on share offering at 30.50 reais per share.
- The capital raised will be used to fund the acquisition of a 40% stake in the Jirau hydroelectric plant.
- The Jirau plant has an installed capacity of 3,750 megawatts and over 20 years of contracted revenues.
- Engie Brasil is Brazil's largest private electricity producer, focusing on renewable energy generation and transmission.
- The offering marks a significant reopening of Brazil's equity capital markets.
Engie Brasil, the largest private electricity producer in Brazil, has successfully raised approximately $1.7 billion through a follow-on share offering. The company priced the offering at 30.50 reais per share, making it one of the largest of its kind in Brazil this year.
A substantial portion of the capital, around $1.13 billion, is earmarked for the acquisition of a 40% stake in the Jirau hydroelectric plant from its French controlling shareholder. This move will bring the 3,750-megawatt Jirau plant fully under Engie Brasil's operational control, securing predictable, inflation-indexed cash flows for over two decades.
Engie Brasil's operations encompass energy generation, transmission, commercialization, and energy solutions, with a diverse portfolio of power plants totaling over 12,900 MW of installed capacity, emphasizing renewable sources. The company also manages extensive power transmission and natural gas transportation networks across Brazil.
The deal occurs amidst Brazil's efforts to expand its electricity production, driven by economic growth and a desire to diversify beyond hydropower. Wind and solar power now contribute significantly to the country's energy mix, with low-carbon sources accounting for 85% to 90% of total generation.
This offering signals a broader reopening of Brazil's equity capital markets, which have seen subdued activity in recent years. The market has attracted renewed foreign investment, facilitating the return of substantial equity offerings.