Canada Pension Plan Investment Board, Toronto, will make its first infrastructure investment in Indonesia in a deal to acquire a minority stake in a private toll road operator in the country, a spokesman for the pension fund said Friday.
Under a partnership investment, CPPIB will acquire a 45% stake in PT Lintas Marga Sedaya, the concession holder and operator of the Cikopo-Palimanan toll road. PT Baskhara Utama Sedaya, an existing owner of LMS, will increase its ownership stake to 55% from 45%, the spokesman confirmed.
PT Baskhara Utama Sedaya is a wholly owned subsidiary of PT Astra Tol Nusantara, an investor and operator in the Indonesian infrastructure sector.
"Cipali toll road provides CPPIB access to a vital infrastructure development supported by rising motorization rates in one of the most densely populated and economically productive regions in Indonesia," said Scott Lawrence, managing director and head of infrastructure, in a news release Thursday.
In its total fund, CPPIB had C$33.1 billion ($25.3 billion) invested in infrastructure assets as of June 30. CPPIB's total fund had C$400.6 billion in assets at that time.
The Cipali toll road investment is expected to be competed in the fourth quarter, the news release said. It is one of the longest operational toll roads in Indonesia and serves as a thoroughfare within West Java, a populous and fast-growing province in Java, an island of Indonesia, according to the news release.
"As CPPIB's first infrastructure investment in Indonesia, this deepens the fund's commitment to the Asia-Pacific region as well as our focus on investments in new markets with attractive return and risk characteristics," said Suyi Kim, senior managing director and head of Asia Pacific, in the news release.