First investment by Darby's Brazil Mezzanine Infrastructure Fund
Sao Paulo, Brazil and Washington, DC, July 16, 2009 - Darby Overseas Investments, Ltd. ("Darby"), the private equity arm of Franklin Templeton Investments, announced that the Brazil Mezzanine Infrastructure Fund (BMIF), managed by Darby's joint venture with the Stratus Group, has invested R$58 million (US$30 million) in GEA, holding company of Eletrogóes. Transaction details were not disclosed. This transaction is the first investment for BMIF.
Eletrogóes owns a 73.5MW hydro plant and 24MW biomass-fired thermal power plant in northern Brazil. Both plants are in the final stage of construction and are expected to be commissioned in September 2009. Once in operation, these plants will enhance access to clean energy in the region, improving substantially the availability of electricity and replacing energy from diesel and heavy oil-fired sources.
David Hudson, Darby's Senior Managing Director - Asia and Global Infrastructure, commented, "We are pleased to add Eletrogóes to our BMIF portfolio. The company fits perfectly with our strategy of investing in medium-sized companies with strong growth prospects, high caliber management and excellent product quality. It also reinforces our commitment to Brazil, which is a core market for Darby."
Clean energy has been an important focus for several Darby initiatives. Recently, Darby acquired the largest equity holding in a South Korea wind farm that is now the largest in the country and among the largest in Asia. Darby also invested in a wind- and hydro-power plant developer in India, which is a core holding in Darby's infrastructure portfolio and India's first independent power producer. In 2007, Darby invested in a rape-seed crushing plant in Poland that supplies rapeseed oil to the bio-diesel industry. Clean and renewable energy projects constitute a large number of potential infrastructure investments under consideration by Darby's investment teams in Latin America, Asia and Central and Eastern Europe.
BMIF closed to new investors in 2008 at a total of R$387.5 million (US$236 million) in committed capital. BMIF makes investments in Brazilian infrastructure projects that are either new or expansions of existing, medium-sized infrastructure assets.
Stratus Group is a leading Brazilian private equity manager and provider of financial advisory services. The Group was founded in 1999 as a private partnership and has a series of private equity funds positioned in the middle market. (www.stratusbr.com)
Darby Overseas Investments was founded in 1994 by The Honorable Nicholas F. Brady, who served as U.S. Secretary of the Treasury between 1988 and 1993. In 2003 Darby became a fully owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Institutional, part of Franklin Templeton Investments, provides global and domestic investment management solutions managed by the Franklin Global Advisers, Templeton, Franklin Templeton Fixed Income, Franklin Templeton Real Estate Advisors, Darby and Mutual Series investment management teams. Franklin Templeton Investments, based in San Mateo, California, has over 60 years of investment experience and more than US$ 404 billion in assets under management as of November 30, 2008.