Latin America has gone through its fair share of political and economic turmoil over the past couple of years, but that has not prevented Global Infrastructure Partners (GIP), New York-based private equity firm, from expanding its presence in the region.
GIP, which wins the award for Project Sponsor of the Year, made new investments in Chile, Peru and Mexico over the past year.
“The infrastructure sector within Latin America continues to be something of great interest, particularly as it connects to wider global themes,†says Ronnie Hawkins, a partner at GIP.
The firm focuses on themes that have far-reaching drivers that can have an impact in domestic markets. One such example is the energy transition. Indeed, most of GIP's investments in the region are closely related to renewable energy and energy transition themes, while ESG considerations drive deal origination, analysis and diligence as a “fundamental pillar†of its investments.
“We are one of the largest private equity investors in renewables at a global level. In Latin America, with the quality of the solar and wind resources for renewable energy, as well as the underlying demand, we see a very interesting potential for growth,†Hawkins says. “Renewables are not really subsidized in the region, as opposed to some other places, so it makes economic sense.â€
With this idea in mind, GIP in October 2022 acquired Miami-headquartered Atlas Renewables, the second largest independent renewables developer in Latin America, with a $525 million green loan financing the deal. The following month, GIP-owned Saavi EnergÃa purchased Tierra Mojada, a combined cycle power plant in Mexico’s Jalisco state.
“With Tierra Mojada, we increased the size of our Saavi platform by nearly one third. We were also able to reduce the average age of the generation fleet and extend the contracted life of the platform,†Hawkins says. “With the acquisition, Saavi became the second largest private sector platform in the country and added an important industrial region to its business. It now has generation plants in all of Mexico’s key industrial hubs.â€
The Tierra Mojada acquisition blends two global trends: nearshoring and the energy transition. Following similar reasoning, in March this year GIP bought 50% of Peruvian port infrastructure platform Tramarsa, in a joint venture with Grupo Romero, a local business group.
“We have a regionwide joint venture around ports and the infrastructure related to mining in the Andean region, and we are looking for opportunities throughout Latin America,†Hawkins says. “The Andean region answers for 40% to 50% of the world's copper production. It is a strategic area that we believe is positioned for additional growth.â€
GIP is not likely to stop at that, according Hawkins.
“Fundamentals are quite strong in Latin America and we look for appropriate investment opportunities throughout the region,†he says.
