Graña y Montero, the largest engineering and construction company in Peru, announced on Monday that it has signed a memorandum of understanding with Canada Pension Plan Investment Board (CPPIB), a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP).

They have agreed to establish the main principles of a non-exclusive, long term partnership to invest in infrastructure in select markets in South America.

This partnership is expected to align Graña y Montero's recognized capabilities for excellence in engineering and construction and CPPIB's global investment expertise, internal capabilities and its long-term investment focus.

Graña y Montero and CPPIB will initially focus on infrastructure assets in the transportation and energy sectors.

The parties announced they expect to enter into more definitive arrangements regarding this partnering effort within the next 60 days.

This agreement is announced days after Graña y Montero said it has signed an agreement to acquire a stake in a Peruvian road concession.

In July 2013, Graña y Montero, raised $413 million through its initial public offering on the New York Stock Exchange in a deal that resulted 18 % larger that anticipated.