Banc Sabadell| Iberdrola (IBE) and GIC, Singapore’s sovereign wealth fund, have closed the €465 million (BRL 2.4 billion ) deal to develop new electricity transmission networks that they had announced in April and which has already been approved by the National Electricity Agency (ANEEL) and the Administrative Council for Economic Defence (CADE). Both companies will invest in operational transmission assets in Jalapao, Santa Luzia, Dourados, Atibaia, Biguacu, Sobral, Narandiba and Rio Formoso (1,865 kilometres of transmission lines and an average concession term of 25 years). Iberdrola, through Neoenergia (53.6% IBE), will hold a 50% stake in the company, valued at €228 million (BRL 1.2 billion), and will participate together with GIC in future transmission tenders in Brazil. With the closing of this transaction, Neoenergia will no longer consolidate the debt of the operating assets for accounting purposes.
Assessment: News already known since they signed the agreement in April; although positive, not so much because of the initial amount (which represents <1% capitalisation) but because it will allow Iberdrola to grow Networks in Brazil significantly while maintaining its financial solidity. Thus, the SP 23-25 includes investments of €5,300 million in the country (11% of the total planned).