Algonquin Power Agrees to Sell Chilean Water Utility Stake to Toesca Fund

TORONTO/CHILE — Algonquin Power & Utilities Corp. has agreed to sell its approximately 64% interest in the Chilean water utility Suralis S.A. to a fund managed by Toesca S.A. Administradora General de Fondos. The transaction, announced on Thursday, marks a significant step in the Canadian energy company's strategic reset aimed at simplifying its portfolio and reducing debt levels.

The deal involves the divestiture of Algonquin's majority stake in Suralis, a regulated water utility operating in Chile. By transferring ownership to the Toesca-managed fund, Algonquin intends to recycle capital into its regulated capital plan, which prioritizes stable, long-term cash flows from core utility assets. The move aligns with the company's broader objective to streamline operations by exiting non-core or complex international ventures in favor of a more focused regulated utility structure.

Toesca S.A., a prominent asset manager based in Chile, will assume control of the majority position through its investment fund. The acquisition expands Toesca's footprint in the essential services sector, adding a major water infrastructure asset to its portfolio. While specific financial terms of the transaction were not disclosed in the initial announcement, the sale is expected to provide Algonquin with immediate liquidity to support debt reduction efforts.

Algonquin Power has faced pressure from investors and analysts to restructure its balance sheet following years of aggressive expansion that included significant exposure to renewable energy projects outside North America. The company has recently shifted its strategy away from high-growth, unregulated assets toward a model centered on predictable returns from regulated utilities in the United States and Canada. The sale of Suralis represents one of the largest components of this pivot.

Suralis operates critical water infrastructure serving communities across Chile, providing drinking water and wastewater treatment services. The utility has been a part of Algonquin's international division since the company acquired the stake several years ago as part of its global growth strategy. Under the new ownership structure, Toesca will manage the asset's operations and future development plans.

The transaction is subject to regulatory approvals in Chile and other customary closing conditions. Industry observers note that the sale could set a precedent for further divestitures by international energy firms looking to exit emerging market water utilities amid shifting global investment priorities. However, details regarding the timeline for the transfer of operations and any potential changes to Suralis's workforce or service contracts remain unclear.

As Algonquin moves forward with the strategic reset, questions remain regarding how the company will deploy the proceeds from the sale beyond debt reduction. Investors are also watching to see if this transaction signals a complete exit from Latin American water assets or if other holdings in the region may face similar fates in the coming quarters. The closing of the deal is expected to take place within the next few months, pending final regulatory sign-offs.