CDPQ, the CAD $424bn (USD $317.4bn) investment group for Canadian pension funds and insurers, has acquired a CAD $848m stake in the Brazilian natural gas firm TAG from renewables firm Engie.
The transaction will see Engie, the largest renewable energy company in Brazil, selling 15% of its shares in the natural gas firm to the Canadian investor. Engie will reduce its participation from 32.5% to 17.5%, remaining linked to the TAG shareholders' agreement.
Emmanuel Jaclot, executive vice president and head of Infrastructure at CDPQ, argues that the recent transaction is part of a wider bid to increase CDPQ’s stake in the Brazilian economy: “TAG has delivered strong performance since our initial investment about five years ago. Today’s announcement is consistent with our infrastructure strategy: in this instance, reinvesting in a portfolio company with well-contracted assets, led by a seasoned management team, and in Brazil, a country where we intend to keep growing our portfolio in the next few years.”
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TAG owns and manages a significant share of Brazil’s natural gas transportation assets spanning over 4,500 kilometres and 10 states in the North, Northeast and Southeast regions, with a fully contracted natural gas handling capacity.
CDPQ has a net zero by 2050 target in place. In an interview with Net Zero Investor, Bertrand Millot, CDPQ's sustainable investment lead, explained that this strategy includes a CAD $10bn transition envelope to proactively invest in the decarbonation of four major carbon-emitting sectors: power generation, materials, agriculture and transport.
