Bloomberg News

CPFL Buys Wind Farms as It Looks to Double Renewable Capacity

February 27, 2012

CPFL Energias Renovaveis SA (CPFE3), the renewable-energy venture of CPFL Energia SA and ERSA-Energias Renovaveis SA (ERSA3), agreed to buy four wind farms in Brazil as part of a plan to more than double its renewable energy generation.

CPFL Energias Renovaveis agreed to pay 600 million reais ($351 million) for all shares in BVP SA, which is indirectly controlled by a private equity fund managed by Banco BTG Pactual SA, the Sao Paulo-based company said in a Feb. 24 statement. It will also assume 462 million reais in debt.

The four wind farms have a generating capacity of 157.5 megawatts, raising CPFL Energias Renovaveis’s total capacity from hydroelectric, biomass and wind parks to 809.5 megawatts.

The company, led by Chief Executive Officer Miguel Saad, was created last year and plans to increase output to 1,563 megawatts by 2015, according to an April presentation on its website. CPFL Energia, Brazil’s largest non-government power distributor, holds 63.6 percent in the renewable-energy unit while Ersa has the remaining 36.4 percent.

The agreement is CPFL’s second acquisition in less than three months. Last December, the company concluded the purchase of Jantus SL, owner of four wind farms in Brazil, for 823.3 million reais, assuming another 675.4 million reais in debt.

CPFL declined 0.6 percent to 27.31 reais as of 12:46 p.m. in Sao Paulo. The stock declined 5.7 percent this year, compared with a 13 percent gain for Brazil’s Bovespa Index.

CPFL Energias Renovaveis has plans to sell shares by 2013 to finance future projects, Saad said Aug. 24.

CPFL shares rose 1 percent to close at 27.48 reais in Sao Paulo on Feb. 24, the last trading day. The stock has gained 5.6 percent this year, whereas the Bovespa index has soared 16 percent in the same period.

The purchase of BVP must be approved by Brazil’s energy and antitrust regulators. Banco Itau BBA SA was a financial adviser to CPFL and Goldman Sachs Group Inc. (GS) advised BVP.

To contact the reporter on this story: Lucia Kassai in Sao Paulo at lkassai@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.


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