Company: BIP-PB
Filing Date: 2025-03-24
Form Type: 20-F
Source: 0001628280-25-014380
Chunk: 184

Company: Brookfield Infrastructure Partners L.P.
Filing Date: 2025-03-24
Form: 20-F
Item: Item 4
Chunk 184
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”) bid by the market. RAP is adjusted for inflation annually and updated every five years, over the first 15 years of the concession, to reflect changes in third-party cost of capital.

The natural gas transmission industry in Brazil is regulated by the Brazilian National Agency of Petroleum, Natural Gas, and Biofuels. Each GTA provides owners with a return on regulatory asset base and tariffs calculated on an inflation adjusted regulatory weighted average cost of capital (“ WACC”) fixed for the term of the agreement. These assets operated under contracts expiring between 2039 and 2041 until the approval of new legislation in April 2021 (the “ Brazil Gas Law”), which changed the contracts from finite to perpetual. The new Brazil Gas Law also allows an ‘entry-exit’ model to be adopted for the gas transportation systems, which is expected to foster growth of the market and our regulated gas transmission operation in Brazil.

74 Brookfield Infrastructure

Our North American regulated gas transmission business is located in Mexico and is regulated by Mexico’s Energy Regulatory Commission, which is responsible for approving long-term levelized take-or-pay tariffs, subject to reviews every five years. Levelized tariffs are calculated on the approved asset base, which is equal to the historic cost of the system’s assets, using an inflation adjusted regulatory WACC, including a fixed return on equity, and allowance for operating costs. The Energy Regulatory Commission’s next tariff review is expected to occur in 2026. Under this regulation, our operating revenues do not fluctuate due to variability in usage of our system. Our gas transmission operations in India are regulated by the Petroleum and Natural Gas Regulatory Board, which is also responsible for determining tariffs charged to users of the pipeline. Our revenues are protected through “ship-or-pay” contracts with a high-quality counterparty and therefore are generally subject to limited volume risks.

Growth Opportunities

We believe that attractive growth opportunities exist for our transmission operations. Our electricity transmission concessions in Brazil are required for the expansion of the region’s transmission system grid to connect new electricity generation resources, including wind located in the northeast and hydro in the north to satisfy growing demand. We believe that due to the geographic location of our concessions, there are opportunities to secure system reinforcements which will generate incremental RAP, as well as secure new concessions at upcoming auctions.

Our natural gas transmission operation in Brazil is strategically located in the region where the majority of Brazilian economic activity and pre-salt offshore oil production occurs. We believe this operation is well positioned to absorb increasing demand as natural gas is used as an efficient and