The AES Corporation announced that it has signed agreements to sell its electric generation and distribution businesses in Cameroon to Actis, a global pan-emerging market investor, for $220 million of net equity proceeds.
AES Société Nationale d’Electricité (AES-SONEL), an affiliate of AES, entered the Sub-Saharan country of Cameroon in 2001 and began investing in the country’s electricity sector. AES has also signed agreements to sell its wind generation assets in India and its wind development pipeline in Poland. Total net equity proceeds from the three sales are expected to be $236 million. Subject to customary regulatory, lender and other local approvals, these transactions are expected to close by the first quarter of 2014.
AES-SONEL received the electric power industry’s most prestigious honor, the Edison Electric Institute’s (EEI) 2013 International Edison Award for its program to renew and expand Cameroon’s electricity infrastructure. AES’ efforts enabled a near doubling of the number of Cameroonian families with access to electricity. AES also constructed two independent power plants (IPP) to provide thermal generation to supplement SONEL’s hydroelectric generation: Dibamba, which was Cameroon’s first IPP, an 86 MW heavy fuel oil-fired plant designed to provide peaking power; and Kribi, a 216 MW gas-fired plant that was put into service in May 2013.
AES is selling 100 percent of its equity interest in SONEL, Dibamba and Kribi to Actis, a United Kingdom-based private equity fund that has invested over $1.5 billion in generation and distribution of electricity in emerging markets. “We are confident that Actis, with their long-term and sustainable vision, will continue to invest in Cameroon’s electricity infrastructure and will empower local management teams to further improve their business,” said Gluski.
Of the $220 million in proceeds from the sale of the Cameroonian businesses, $180 million will be paid at closing, with the remaining non-contingent $40 million backed by a letter of credit and payable after 24 months.
In October 2013, AES agreed to sell 100 percent of AES Saurashtra Windfarms Pvt Ltd (ASW), a wholly-owned subsidiary of AES, to Tata Power Renewable Energy Limited, a wholly-owned subsidiary of Tata Power. ASW is a 39.2 MW wind farm in Gujarat, India and commenced operations in 2012. AES also signed an agreement in November to sell its wind development pipeline in Poland.
The businesses in Cameroon, India and Poland are expected to generate approximately $26 million of net income in 2013. Use of proceeds from asset sales will be evaluated in accordance with AES’ capital allocation policy, to maximize total shareholder return by paying down debt, investing in new businesses and/or repurchasing shares.
Source: Press Release.
