Peru’s push to modernize its power system is pulling in fresh Canadian pension money, with CPP Investments backing a US$3.4bn infrastructure bet tied directly to the country’s energy transition and mining economy.

Canada Pension Plan Investment Board’s investment arm has agreed to acquire a 50 percent stake in Lima-based Inkia Energy alongside Miami-based infrastructure manager I Squared Capital, in a deal that values the company at US$3.4bn including debt.

Inkia operates a 2.6GW generation portfolio through Kallpa Generación S.A. and Orazul Energy Peru S.A., supplying power to Peru’s mining-driven economy and positioning the platform as a core piece of the country’s electricity system.

The company also has a development pipeline of more than 4GW of wind, solar, gas and battery storage projects, giving it leverage to support Peru’s shifting energy mix over the long term.

CPP Investments said it will acquire its 50 percent interest at an enterprise value of US$3.4bn, while an I Squared–led continuation vehicle will hold the remaining 50 percent.

The Wall Street Journal reported that I Squared plans to move its ownership into this continuation fund, giving investors in the original fund the option to cash out while the firm stays invested.

The paper also noted that continuation vehicles have become more common as higher interest rates make private equity managers less inclined to sell portfolio companies or pursue listings.

I Squared has owned Inkia since 2017 and, according to the firm, has repositioned it into a scaled, Peruvian-focused platform by selling non-core assets across 10 Latin American jurisdictions and growing its core generation business from 1.6GW to 2.6GW.

I Squared’s global chief investment officer and managing partner Gautam Bhandari said Inkia “is a developer at its core and represents exactly the kind of essential infrastructure platform we seek to build and grow over the long term.”

He said the partnership with CPP Investments reflects their shared view of the long‑term fundamentals of Peru’s power market and its energy transition.

CPP Investments’ managing director and head of Sustainable Energies, Bill Rogers, said Inkia “operates a … power generation platform that aligns well with our long-term approach to investing.”

He said the deal “reflects CPP Investments’ continued focus on long-duration power generation assets with … governance and sustainability practices,” alongside partner I Squared.

The Wall Street Journal reported that global investment firms have been targeting infrastructure deals outside the US that align with US policy priorities, and described Peru as a battleground where the US and China vie for influence through infrastructure and strategic ties.