Actis sells Energuate for $265 mln

Actis has sold Guatemala-based electricity network Energuate to IC Power. The price of the transaction was $265 million.

PRESS RELEASE

London, 25 January 2016: Actis, a leading growth market investor, has sold its 92% stake in Energuate, Guatemala’s largest electricity network, to IC Power, a wholly-owned subsidiary of New York Stock Exchange-listed Kenon Holdings. IC Power paid US$265 million for the purchase of Actis’ stake, and will assume gross debt of the Energuate business of approximately US$289 million.

Energuate includes two electricity distribution companies in Guatemala that provide services to c. 1.6 million customers across c. 100,000 km2 covering c. 10 million people, representing c. 60% of Guatemala’s energy distribution market. The Energuate group also includes two smaller businesses; an electricity trading company that provides services to corporate clients and a transmission company that operates 31 km of transmission lines and eight sub-stations.

The transaction reflects the success of Actis’ proven, replicable strategy of acquiring and enhancing energy distribution businesses in high growth markets. Under Actis’ management, Energuate added over 230,000 customers from May 2011 to date.

Since first investing in Energuate, Actis has worked closely with the management team to enhance customer service through investing and upgrading payment locations and introducing on-site billing. It has also worked with local communities on social programmes and improving safety and customer tariffs related to usage. From 2011 to date, the main quality indicators measuring average outage frequency and average outage duration have decreased, each, by c. 50% boosting the Customer Satisfaction Index as measured by the Commission for Regional Electricity Integration (CIER) by 32.2% between 2012 and 2014.

Mike Till, partner and co-head of energy at Actis, said: “We are delighted with what we have achieved over the last four years, growing the business and supporting Guatemala’s economic growth by providing much needed energy infrastructure. The sale reflects the confidence in the potential of the energy sector in Central America. We wish the business well in its next stage with IC Power. Guatemala continues to be attractive to Actis as an investment destination. Favourable demographics are driving growth and a positive consumer environment in Guatemala — the country boasts a large and fast-growing population, high GDP per capita growth, rising urbanisation levels, and an expanding middle class.”

The investment in Energuate builds on Actis’ expertise in the electricity and distribution sector. The firm previously backed Umeme, a leading power provider in Uganda where it remains a 14% shareholder following the company’s successful IPO in 2012. It also holds a 51% stake in Cameroon’s national integrated utility, ENEO.

About Actis
Actis is a leading investor in growth markets, delivering consistent competitive returns, responsibly. It has a growing portfolio of investments across Asia, Africa and Latin America and US$7bn* funds under management today.

The firm invests through insights gained from trusted relationships and local knowledge, deep sector expertise and an unparalleled heritage, set within a culture of active ownership.

Applying developed market disciplines to growth markets, an established team of c. 90 investment professionals in ten countries identify investment opportunities in response to two trends: rising domestic consumption and the need for sustained investment in infrastructure across private equity, energy and real estate asset classes.

Since 2002 Actis has deployed in excess of US$1.7 billion in 30 energy transactions in power generation and electricity distribution assets, providing 65 million people with access to electricity. In the renewable sector, Actis, through its investee companies, currently owns 524MW of renewable energy generation assets in operation across seven countries; with 1.1 GW in construction. By the end of 2016, Actis’ wind and solar platform is expected to reach 3.3GW across nine countries and the team will have built five new long term and sustainable renewable energy businesses that will each be leaders in their respective regional markets. www.act.is