CDB contributes $500 million to $2.45 billion club loan to State Grid Overseas Investment Limited to facilitate its acquisition of 54.64% ownership stake in CPFL Energia S.A. (Brazil)

Project narrative

In January 2017, State Grid Overseas Investment Limited signed a 1-year, $2.45 billion club loan agreement with seven Chinese and non-Chinese lenders to facilitate its acquisition of a 54.64% ownership stake in CPFL Energia S.A. (Brazil) from Camargo Correa S.A. and Brazilian pension funds. The loan was backed by a repayment guarantee from State Grid Corporation of China (SGCC). Participants in the syndicate included China Development Bank ($500 million contribution), Mizuho Bank ($500 million contribution), Citigroup ($400 million contribution), HSBC ($500 million contribution), Mitsubishi UFJ Financial Group, Inc ($400 million contribution), Bank of America ($350 million contribution), Sumitomo Mitsui Banking Corporation ($100 million contribution), and Oversea-Chinese Banking Corporation Limited ($100 million contribution). The acquisition was completed on January 23, 2017. In November 2017, State Grid Overseas Investment Limited purchased an additional interest (taking their ownership stake to 94.75%) for the equivalent of $3.4 billion. In June 2019, State Grid Overseas Investment Limited, through a share offering, reduced its stake to 83.71%. CPFL Energia S.A. (Brazil) (former name: Companhia Paulista de Força e Luz) is the second largest non state-owned group of electric energy generation and distribution in Brazil and the third biggest Brazilian electric utility company, after Eletrobras and Energisa. The corporation is composed by CPFL Brasil, CPFL Piratininga, CPFL Paulista, CPFL Geração, CPFL Renováveis, Rio Grande Energia (RGE) and SEMESA. Each of these companies operates as a holding company that owns dozens of other companies. Its headquarters are located in Campinas, the third-largest city in state of São Paulo.