Canadian company Northland Power has signed an agreement to acquire a 99.2% stake in Empresa de Energía de Boyacá (EBSA) from Fondo de Capital Privado de Infraestructura Brookfield Colombia and BCIF Holdings Colombia II for C$1.05bn ($796m).

The acquisition of the Colombian-regulated utility EBSA will also include the existing debt.

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Northland initially intends to finance the deal with a fully committed 12-month C$1.1bn ($834m) bridge facility.

EBSA is said to be the only electricity distribution company for the department of Boyacá and serves a population of 1.3 million residents across 123 municipalities.

It operates under a regulatory framework and generates the majority of its revenue through its regulated utility business.

Northland Power president and CEO Mike Crawley said: “The acquisition builds on our presence in Latin America and gives us an entry point into Colombia, a target market with a stable economy, growing middle class, strong rule of law and ease and transparency of doing business.

“EBSA operates in a stable regulatory framework offering an inflation-protected perpetual cash flow profile and serves as a platform for future growth.”

The deal marks the company’s entry into the regulated utility industry and will complement its existing portfolio of contracted power assets.

Northland also intends to expand its Latin American platform into the growing electricity sector in Colombia.

The deal is expected to close in the fourth quarter of this year.

It would be Northland’s second investment in the Latin American region following the beginning of the construction of its 130MW La Lucha solar project in Durango, Mexico, in May.