RIO DE JANEIRO CPFL Energia (CPFE3.SA), one of Brazil's largest non-government electricity generation and distribution utilities, said on Friday it agreed to pay 1.06 billion reais ($620 million) for Bons Ventos Geradora de Energia, a Brazilian wind-power company.
Sao Paulo-based CPFL will pay for the purchase with 600 million reais in cash and the assumption of 462 million reais of debt, CPFL said in a statement on the website of Brazil's securities regulator.
Bons Ventos owns four windfarms with a licensed capacity of 157.5 megawatts (MW): Taiba Albatroz (16.8 MW); Bons Ventos (50.4 MW); Enacel (31.5 MW); and Canoa Quebrada (58.5 MW), the statement said.
The windfarms are located in Brazil's northeastern-coast state of Ceara and have contracts with Eletrobras (ELET6.SA), Brazil's state-controlled electricity utility holding company, to supply power for 20 years.
The concessions are eligible for subsidies under the Brazilian government's Proinfa alternative energy program.
The portfolio of projects under development by Bons Ventos Geradora could see capacity increase to 809.5 MW, CPFL said.
Bons Ventos Geradora will become part of CPFL's Ersa renewable energy unit. CPFL Energia is controlled by VBC
CPFL is controlled by Camargo Correa, one of Brazil's largest construction companies and some Brazilian pension funds.
Completion of the purchase will require approval by Brazil's electrical energy regulator, Aneel, its competition regulator, Cade, and banks that have provided loans to Bons Ventos Geradora.
These banks include Brazilian state development banks BNDES BNDES.ULBNDESP.UL and Banco do Nordeste do Brasil and the Nordic Investment Bank.
(Corrects which companies control CPFL in paragraph 8)
(Reporting By Jeb Blount; Editing by Richard Chang)