Canadian pension giant joins I Squared to scale Peru’s grid and advance its energy transition
Peru’s rising power needs and energy transition are drawing fresh Canadian pension capital into a US$3.4bn infrastructure bet.
Canada Pension Plan Investment Board’s investment arm has agreed to acquire a 50 percent stake in Inkia Energy, a private Peruvian power producer based in Lima, alongside I Squared Capital, in a deal that values the company at US$3.4bn including debt.
CPP Investments said it will take half of Inkia at an enterprise value of US$3.4bn, with an I Squared–led continuation vehicle holding the other 50 percent.
Inkia operates a 2.6GW generation portfolio through Kallpa Generación S.A. and Orazul Energy Peru S.A. and plays a key role in supplying electricity to Peru’s mining-driven economy.
The company also has a development pipeline of more than 4GW of wind, solar, gas and battery storage projects, positioning it to support Peru’s evolving energy mix.
Bill Rogers, managing director and head of Sustainable Energies at CPP Investments, said Inkia “operates a … power generation platform that aligns well with our long-term approach to investing.”
He added that the deal “reflects CPP Investments' continued focus on long-duration power generation assets with … governance and sustainability practices, alongside our experienced partner I Squared.”
I Squared, a Miami-based infrastructure manager, has invested in Inkia since 2017 and has supported its transformation into a scaled, diversified and strategically important generation platform.
Under I Squared’s leadership, Inkia sold non-core assets across 10 Latin American jurisdictions and expanded its core Peruvian generation business from 1.6GW to 2.6GW.
The Wall Street Journal reported that I Squared plans to bring its ownership to 50 percent through a continuation fund it leads, giving investors in the original fund a chance to cash out while the firm remains invested.
The paper noted that such continuation funds have become more common as higher interest rates make some private equity managers less willing to sell companies or pursue listings.
“Inkia is a developer at its core and represents exactly the kind of essential infrastructure platform we seek to build and grow over the long term,” said Gautam Bhandari, Global Chief Investment Officer and Managing Partner at I Squared.
He said the partnership with CPP Investments reflects a shared belief in the long-term fundamentals of Peru’s power market and Inkia’s ability to help meet the country’s changing energy needs, while supporting Peru’s energy transition.
The Wall Street Journal reported that investment firms have been targeting infrastructure deals outside the US that align with US policy goals, and described Peru as a battleground where the US and China compete for influence through infrastructure and strategic ties.
The paper also noted that the US recently designated Peru a “Major Non-NATO Ally.”
CPP Investments has been investing in Latin America since 2006 with a disciplined approach across asset classes, according to the fund.
I Squared specialises in infrastructure and has long-standing experience in Latin American energy, utilities and transportation, according to the firm.
CPP Investments said the Inkia transaction remains subject to closing conditions and government approvals.
