Actis, State Power Said to Vie for Brazil Wind Projects

(Bloomberg) -- The U.K. private equity company Actis LLP and China’s State Power Investment Corp. are among suitors bidding for 706 megawatts of wind farms from Brazilian developer Casa dos Ventos Energias Renovaveis SA, according to people with knowledge of the matter.

The companies have already submitted offers and a deal will probably be concluded this month, according to the people, who asked not to be identified because the matter isn’t public. Canada’s Brookfield Asset Management Inc. also submitted a bid, but is seen as less likely to win the portfolio.

Representatives for Casa dos Ventos, Actis and Brookfield declined to comment. Phone calls to the office of a Beijing-based spokesman at State Power weren’t answered.

“The wind sector in Brazil has few opportunities for new investments now as there are uncertainties about new auctions, so a way out to expand is through acquisitions,” said Helena Chung, an analyst with Bloomberg New Energy Finance in Sao Paulo. “For a big company such as Actis, which already has experience in Brazil, this is an interesting move. And these projects have the advantage of being backed by Brazil’s development bank BNDES.”

Brazil’s government has signaled that it’s changing its financing plans and developers will need to find alternative sources of funding, Chung said.

Three Wind Complexes

Casa dos Ventos is Latin America’s largest wind developer, and the effort to sell the wind portfolio comes as the company seeks to reduce the number of assets it owns and operates to focus more on building new ones. The deal may fetch as much as 5 billion reais ($1.56 billion), according to the people. It involves three wind complexes in Brazil’s northeast that are in operation or in final phases of construction.

Ventos de Sao Clemente, in Pernambuco state, has 216 megawatts of capacity and started operating in June. Tiangua, in Ceara state, has 130 megawatts and was connected to the grid in September. Ventos do Araripe III, in Piaui and Pernambuco states, has 360 megawatts and is expected to be fully connected to the grid this month.

The projects represent all of Casa dos Ventos’s projects with power-purchase agreements. It has received offers for all three of the complexes, as well as bids for just the two that are in operation now. Selling only Ventos de Sao Clemente and Tiangua may bring in as much as 2.5 billion reais, the people said.

Casa dos Ventos sold 392 megawatts of wind parks last year in Brazil for 2 billion reais to Banco Santander SA and two Canadian pension funds. The company is sitting on enough land to develop about 15 gigawatts of wind power, according to founder Mario Araripe. That’s more than Brazil’s current installed capacity of 11 gigawatts.

--With assistance from Scott Deveau and Aibing Guo

To contact the reporter on this story: Vanessa Dezem in Sao Paulo at vdezem@bloomberg.net.

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Will Wade, Carlos Caminada