ENGIE makes a pioneering issue of infrastructure debentures for a public lighting PPP
ENGIE, the largest private sector energy company in Brazil, has raised a pioneering new line of credit worth R$ 65 million for the Uberlândia (state of Minas Gerais) public lighting PPP (Public-Private Partnership), to be managed by the Company, through the medium of incentivized debentures.
The issue was the first in the country which involved a project in the Public Lighting segment with ENGIE being pioneer in successfully classifying the operation among the Ministry of Regional Development’s qualifying infrastructure projects – a necessary stage for issuing this type of security in the market.
“We are very satisfied to announce that our issue of the Uberlândia PPP was the first in the sector in Brazil. The conditions for the transaction are expected to serve as a benchmark for future emissions in this market. They open up a new source of financing for projects which are very important to Brazilian cities whether from the aspect of expanding the lighting networks through digitalization or through the creation of a base for installation of Smart City networks”, remarked Maurício Bähr, CEO of ENGIE Brasil.
The Public Lighting systems may also embrace other services such as surveillance cameras and high speed internet, among others. Consequently, such projects are important drivers of solutions for Smart Cities.
INVESTMENT
Resources raised from the debenture issue will be used to underscore the investment plan for the Uberlândia PPP – worth a total of R$ 90 million. As a result, some 70% of the amount to be injected in the project up to the middle of 2023 will be covered by this debenture issue.
Fitch Ratings, one of the most highly regarded credit rating agencies in the world, has assigned Long-Term ‘AAA (bra)’ rating on the national scale with a stable outlook. The transaction, in a single series, matures in January 2034 and was managed by XP.
The final rate determined via bookbuilding was the Extended National Consumer Price Index (IPCA) plus 6.45%.
“The rating reflects the current investment phase of ENGIE’s Uberlândia concession, the risk of cost overruns and delays being mitigated by the corporate guarantee of ENGIE. It is also a reflection of the stable and predictable profile of the revenues [from the PPP]”, Fitch pointed out in an announcement.
Uberlândia PPP
The PPP agreed between ENGIE and the Uberlândia city government covers the concession for the modernization, efficiency upgrading, expansion, operation and maintenance of the municipal public lighting complex. The long-term partnership also provides for the remote management of the lighting of the city’s principal streets (tele-management); flood lighting of 12 public spaces; and the expansion in the number of light poles and lamps for meeting the organic growth of the urban area. ENGIE, which enjoys wide experience in the segment internationally, won the bidding for the concession at the end of 2019.
ABOUT ENGIE
ENGIE is a global reference in low-carbon energy and services. With its 97,000 employees, its customers, partners and stakeholders, the Group is committed to accelerate the transition towards a carbon-neutral world, through reduced energy consumption and more environmentally-friendly solutions. Inspired by its purpose (“raison d’être”), ENGIE reconciles economic performance with a positive impact on people and the planet, building on its key businesses (gas, renewable energy, services) to offer competitive solutions to its customers. Turnover in 2022: 82.6 billion Euros.
In Brazil, ENGIE, leader in 100% renewable power generation in the country, operates in generation, commercialization and transmission of electric power, gas transport and energy solutions. The Company
has in the country an installed capacity of 12,5 GW, originated from renewable sources and with low GHG emissions, such as hydro, solar and biomass power plants, and windfarms.
With the acquisition of Transportadora Associada de Gás – TAG, ENGIE now also owns the largest natural gas transportation network in the country, at 4,500 km and transecting 10 states and 191 cities.
The Group has a complete portfolio of integrated solutions focused on reducing costs and improving the infrastructure for companies and cities, such as energy efficiency, public lighting, energy monitoring and management.
With 2,800 employees, ENGIE’s turnover in Brazil in 2023 was of R$ 11.7 billion. ENGIE trades on the B3 through its energy generation and trading company, ENGIE Brasil Energia, under the ticker EGIE3. In addition to being a B3 Novo Mercado component, the Company is one of the very few companies that have been listed in the Business Sustainability Index since its creation in 2005. In 2021, ENGIE Brasil Energia was included in the Carbon-Efficient Index (ICO2), made up of IBrX 100 companies that are most transparent in terms of GHG emissions reporting and how they are preparing for a low-carbon economy.
The company also received in May 2024 the certification Great Place to Work, a recognition which validates the continuous commitment of the company to create a positive and inclusive work environment for all.
The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, Euronext 100, FTSE Euro 100, MSCI Europe) and non-financial indices (DJSI World, Euronext Vigeo Eiris – Europe 120/France 20, MSCI EMU ESG screened, MSCI EUROPE ESG Universal Select, Stoxx Europe 600 ESG-X).