Brookfield purchases Isagen for $2 billion

Brookfield - Jorge Neri Bonilla

The Canadian investment fund Brookfield Colombia Investments purchased on Tuesday 57.61 percent of the Colombian state’s shares in the power generation company Isagen, the country’s government reported.

The price offered by the company that depends on Brookfield Asset Management, 6.49 billion pesos (about $2 billion) was the minimum price set by Colombia, of 4,130 pesos per share (about $1.23), said Mauricio Cardenas, minister of finance, after the sale in the Colombia Stock Exchange (BVC).

“The Government reiterates that the resources will be used to finance infrastructure in the country,” said the minister in order to stress that the money from the sale will be invested in the construction program for roads and highways implemented to get the country out of its backwardness in this sector, EFE reports.

The Canadian fund was the only bidder in this tender, which unions and different political parties opposed for considering Isagen a “strategic” company as it generates 16 percent of the energy required in Colombia.

The other company registered was Chile’s Colbun, but it withdrew on Monday, arguing its incapability to meet bidding conditions due to the increase in the minimum price set for the tender.

Among the arguments of opponents to the sale is the fact that Isagen is a State patrimony and that resources will be used to plug tax loopholes, which has been repeatedly denied by Juan Manuel Santos’ administration.

The minister stressed that the money from Isagen will go to the National Fund for Infrastructure Development (Fondes) “which will be administered by Colombia’s National Financial Development (FDN in Spanish), which is a development bank established to finance large infrastructure projects in the country, with high standards of corporate governance.”

The CEO of Brookfield Colombia, Carlos David Castro, said his company is “very pleased” by this transaction, which enables them to acquire a “high quality hydroelectric portfolio.” “Colombia is an attractive long-term market for us, with a highly skilled workforce and a high growth perspective,” said Castro, who was eager to work with the “experienced human, administrative and operational staff of Isagen,” Efe reported.

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