Northland Power has shortlisted several bidders to advance to the second round of its sale process for Colombian regional electricity distribution company Empresa de Energía de Boyacá (EBSA), according to five sources familiar with the situation.

Chinese state-owned power company China Three Gorges (CTG) is among the companies that made it to the second round, the sources said.

Macquarie Asset Management (MAM) and Italy-based energy group Enel have also advanced to the next round of bidding, three of the sources said.

TSX-listed Canadian power producer Northland Power is once again working with financial advisor Morgan Stanley to sell the distribution utility, four of the sources said. Morgan Stanley was mandated for a previous attempt to sell EBSA that Northland launched in early 2024 and ended without a deal, the sources confirmed.

There is no firm date yet for the presentation of second-round bids, the sources said.

The auction reportedly attracted interest from at least one Canadian pension fund and at least one other infrastructure investor, but the sources could not confirm those parties had passed to the second round of bidding.

CTG and Northland Power did not respond to requests for comment. MAM, Morgan Stanley and Enel declined to comment.

Tensions among bidders

CTG participated in the last sale process and their participation in the auction caused some consternation among rival bidders then, as it has now, two of the sources said.

In the latest auction, several bidders balked at the inclusion of Chinese bidders, citing their typically high offers and the need for sellers to adjust auction timetables to lengthy Chinese approval processes, one of the sources said.

Another source said that at least one of the bidders indicated a strong preference to do a bilateral deal with Northland Power for the company rather than compete with a Chinese investor.

EBSA background

Northland Power originally acquired EBSA from Brookfield Colombia Infrastructure Fund (BCIF) in a COP 2.41tn (USD 734.68m) deal that closed in January 2020.

Brookfield originally took control of the business in a Colombian government auction in 2011.

In 2023, Northland restructured EBSA’s long-term loan resulting in an extension of the maturity date to March 2026 from the previous maturity date of December 2024, the company said in its 2023 financial report. On 18 December 2023, Northland undertook a restructuring and upsizing of the EBSA-related credit facility, increasing it by an additional CAD 190m (USD 142m at the exchange rate at the time of the transaction), net of transaction cost to a total of CAD 711m and extended the facility’s maturity date to 18 December 2026.

Bidders existing presence in LatAm

In Colombia, CTG owns solar projects across several departments with a potential installed capacity of 510.4 MWp, according to the company’s LatAm website.

The company’s 19.9 MW Nisperos solar park, located in Baranoa, entered commercial operation on 10 April .

Elsewhere in Latin America, CTG owns the Luz del Sur electric utility in Peru and a fleet of renewable assets in Brazil, Chile and Mexico, according to Infralogic data.

Enel owns the Eletropaulo distribution company in São Paulo, Brazil, but sold its Peruvian, Guatemalan, and Chilean electricity assets in recent years.

The Italy-based company still holds numerous renewable generation assets across the continent through Enel Green Power, as well as streetlighting concessions, electric buses, and a stake in the Ufinet telecommunications company, according to Infralogic data.

In Colombia, MAM owns and operates transportation assets through Odinsa, a partnership with local industrial conglomerate Grupo Argos.

MAM has been a longtime investor in Latin America, including in pipelines, renewables, telecommunications, and transportation assets in Brazil and Mexico.

[Editor’s note: The article has been updated post-publication to note that Enel declined to comment.]