CPP Investments and I Squared Capital Each Take 50% of Inkia Energy in $3.4bn Peru Power Deal

Why It Matters

The deal expands long‑duration, sustainable power assets in a high‑growth market, bolstering CPP Investments' exposure to Latin America while supporting Peru’s shift to cleaner energy sources.

Key Takeaways

• CPP Investments acquires 50% of Inkia for $3.4bn.
• Inkia's portfolio now 2.6 GW, 4 GW pipeline.
• Deal deepens Canadian capital in Peru's power sector.
• Continuation fund gives I Squared investors liquidity.
• Supports Peru's mining‑driven economy and energy transition.

Pulse Analysis

Peru’s power landscape is rapidly evolving, driven by surging demand from its mining sector and a national push toward cleaner energy. CPP Investments’ entry via Inkia Energy marks one of the largest foreign infrastructure commitments in the country, providing the pension fund with a stable, inflation‑linked cash flow stream. By securing half of Inkia’s 2.6 GW operating assets and tapping a 4 GW development pipeline, CPP positions itself to benefit from both immediate generation revenues and long‑term renewable growth.

The partnership with I Squared Capital adds strategic depth. I Squared’s continuation fund structure allows original investors to exit while retaining a foothold in Inkia’s expansion, a model gaining traction as higher interest rates temper traditional private‑equity exits. This arrangement not only offers liquidity but also aligns incentives for continued operational scaling, ensuring that Inkia can accelerate its wind, solar, gas and battery projects without diluting ownership control.

From a geopolitical perspective, the transaction reflects broader trends of North American capital flowing into Latin America’s critical infrastructure, counterbalancing Chinese influence in the region. Peru’s recent designation as a Major Non‑NATO Ally further cements its strategic importance to U.S. policy goals. For CPP Investments, the move diversifies its global portfolio, reinforces its ESG credentials, and taps a market where energy demand is set to outpace supply, promising robust returns for pension beneficiaries.

Deal Summary

Canada Pension Plan Investment Board’s investment arm, CPP Investments, agreed to acquire a 50% stake in Peruvian power producer Inkia Energy, valuing the company at $3.4bn including debt. The acquisition is partnered with I Squared Capital, which will hold the remaining 50% through a continuation vehicle. The deal aims to expand Inkia’s 2.6GW generation portfolio and support Peru’s energy transition.