SÃO PAULO, April 30, 2021 /CNW/ – Iguá Saneamento S.A. (“Iguá”) has won the auction for the concession of Block 2 in the privatization of water and sewage services from CEDAE, Rio de Janeiro’s water and sewage company, for a fixed grant fee of R$7.286 billion (C$1.7 billion). The new concession will be funded with additional capital invested into Iguá from among its current shareholders, as well as debt financing.
Iguá is a water and sewage service holding company currently operating 18 concessions and contracts across five Brazilian states, and providing sanitation services for more than six million people. This new transaction will expand its operations to the Greater Rio de Janeiro area and add one million people to its client base.
“Iguá prepared itself for this moment. We have been investing resources and energy to improve our processes, transform and innovate within the sanitation chain and delight our customers. We are ready to be leaders in the sector, promoting a better quality of life for the people we serve. Winning this auction amplifies Iguá’s ESG strategy, leveraging the company’s approach to value creation and reinforcing our vision of being a leader in this theme in Latin America, as well as setting an international benchmark in sustainability. Winning the contract for one of the CEDAE blocks is also an important milestone for Iguá’s expansion plans, and it further reinforces the company’s long-term strategy,” said Carlos Brandão, Chief Executive Officer of Iguá.
The new concession will have a length of 35 years. CEDAE, as a state-owned company, will remain responsible for supplying clean and treated water to the Metropolitan Region of Rio de Janeiro. Iguá will be responsible for water distribution, collection, treatment and sewage services in its designated concession area.
Existing Iguá shareholder Canada Pension Plan Investment Board (“CPP Investments”) will make a capital investment of up to R$1.7 billion (C$385 million) into Iguá, including the acquisition of both equity and convertible debentures, to fund the new concession. CPP Investments will continue to hold a 46.7% aggregate equity stake in Iguá, as announced in March, 2021.
“This additional investment to support Iguá’s expansion into Rio de