PRESENTATION
Larrain Vial 14th Annual Andean Conference
August 31 - September 4, 2020
CORPORATE PRESENTATION Larrain Vial 14 th Annual Andean Conference - - PowerPoint PPT Presentation
CORPORATE PRESENTATION Larrain Vial 14 th Annual Andean Conference August 31 - September 4, 2020 LEADING GENERATION COMPANY IN LATIN AMERICA AES GENER AT A GLANCE 5,295MW 2.3GW 221MW Of installed capacity (1) Of green capacity Added since
PRESENTATION
Larrain Vial 14th Annual Andean Conference
August 31 - September 4, 2020
221MW
Added since launch of Greentegra
2.3GW
Of green capacity to be added by 2024 (2)
5,295MW
Of installed capacity(1) Leading Energy Producer in Chile
~10 years
Average life of PPAs(4) Providing Stable Cash Flows
66.7%
Controlled by
The AES Corporation
Member of Chile and MILA Indices LEADING GENERATION COMPANY IN LATIN AMERICA
AES GENER
AT A GLANCE Baa3/BBB-/BBB-
Stable Outlook (Moody’s/S&P/Fitch)
4.1x (3)
Net Debt/LTM 2Q-20 EBITDA
$827mm
LTM 2Q-20 EBITDA Launched Greentegra Strategy to incorporate Renewables leveraging on existing commercial relationships
(1) Includes 5,233MW of Power plants (including 764MW of Guacolda, which is not consolidated in EBITDA) and 62MW of Battery Energy Storage System as of 19/8/2020. (2)Includes Operational assets, projects under construction, and projects under development. (3) Consolidated metric, including equity credit (4)Average remaining life on PPAs in Chile as of 30/06/2020.
2
LEADING GENERATION COMPANY IN LATIN AMERICA
AES GENER
EXECUTIVE SUMMARY
3
2018 2019 2020-YTD
RECONTRACTING 2.7TWh 3.8TWh 1.8TWh DECARBONIZATION
Agreement Signed for Ventanas 1 & 2
RENEWABLE GROWTH
21MW Solar 110MW Wind 70MW Solar 10MW Energy Storage
ALTO MAIPO
EPC Contract Restucturing
3.1km
To begin operations
FINANCING PLAN
ESSA & CTNG Assets Sale Hybrid Bond Green Hybrid Bond Cochrane PF Restructuring Capital Increase Approved Coal Monetization
LEVERAGE RATIOS
3.0x 4.0x 4.2x 1
Colombian Auctions
C&I Customers
LEADING GENERATION COMPANY IN LATIN AMERICA
AES GENER
KEY INVESTMENT CONSIDERATIONS
1
RESILIENT BUSINESS
2
MARKET LEADER POSITION
3
DIVERSIFIED PORTFOLIO
4
HIGH QUALITY LONG TERM PPAs
5
GREENTEGRA TRANSFORMATIONAL STRATEGY
6
ROBUST CAPITAL STRUCTURE & STRONG FINANCIALS
4
6
BHP SETTLEMENT UPDATE
ANGAMOS
BACKGROUND
2020 2021 2026 2029 2037
PPAs
558MW Coal Plant (2 Units)
340MW - Escondida 90MW - Spence 80MW - TECK
VARIABLE CHARGE
(no margin for Angamos)
FIXED CHARGE
(paid under any circunstancies)
FULLY CONTRACTED ASSET UNDER TOLLING AGREEMENTS
In Operation since 2011
COAL to GREEN → Fixed Charges + Renewable PPA
7
BHP SETTLEMENT UPDATE
ANGAMOS
GREENTEGRA ON-TRACK
558MW Coal Plant (2 Units)
2020 2021 2026 2029 2037
PPAs FULL FLEXIBILITY TO ACCELERATE DECARBONIZATION RENEWABLE TRANSFORMATION PRESERVED VALUE OF LEGACY PPAs
340MW - Escondida 90MW - Spence 80MW - TECK In Operation since 2011
BHP Early Termination FULL PPA VALUE recognition
2042
8
BHP SETTLEMENT UPDATE
ANGAMOS
KEY FOR SYSTEM RELIABILITY
50 100 150 200 250 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
Daily Average Capacity (MW)
LOW COST OF OPERATION 14% OF SYSTEM COAL GENERATION CRITICAL LOCATION ON THE GRID
June 30th Gross Demand
9
RESOLUTION OF ALL
LEGAL DISP DISPUTES UTES
REMAIN IN PLACE UNTIL
AUGUST 2021
PAYMENT
ACCELERATED TO 2020
BHP SETTLEMENT UPDATE
BHP AGREEMENT
TERMINATION PAYMENT ACCELERATED
10
BHP SETTLEMENT UPDATE
USE OF PROCEEDS
FURTHERING GREENTEGRA OBJECTIVES
DEBT REDUCTION
ON TOP OF THE
$29mn SCHEDULED
AMORTIZATION
TAX PAYMENT
GROWTH FUNDING
BHP SETTLEMENT UPDATE
USE OF PROCEEDS
GREEN GROWTH FUNDING
$486
AVAILABLE CASH
$392
STRABAG
$500
CAPITAL INCREASE 1Q-2021
$750
THIRD PARTY CAPITAL ALTO MAIPO $72
$200
GROWTH FUNDING
$153
TAX PAYMENT
$367
DEBT REDUCTION
GREENTEGRA
GROWTH FUNDING TO GO
12
BHP SETTLEMENT UPDATE
STRENGTHENING INVESTMENT GRADE
ACCELERATING DEBT REDUCTION
$4.2bn $3.8bn
$367mn
Debt Prepayment
4.1x 3.7x
June 2020 After Debt Prepayment
EBITDA
380 460
840
PRE-TAX INCOME
260 460
720
NET INCOME
189 336
526
BHP SETTLEMENT UPDATE
ESTIMATED FINANCIAL IMPACT
EBITDA & NET INCOME
(US$mn)
2020 2020 2021 2021 TOTAL AL
After MONETIZATION
14
BHP SETTLEMENT UPDATE
ASSET RECOVERABILITY
ASSESSMENT TO BE CONDUCTED IN 3Q-2020
(US$mn)
EARLY TERMINATION TRIGGERS EVALUATION OF ASSET RECOVERABILITY
ANGAMOS PP&E BOOK VALUE SUBJECT TO IMPAIRMENT TEST
16
LEADING power producer in Chile + HEALTH & WELLNESS programs Accelerating SUSTAINABLE RECOVERY
SAFETY
OF OUR PEOPLE
RELIABLE
ENERGY SUPPLY WORK ALL
TOGETHER
COVID-19 UPDATE
AES GENER
GUIDING PRINCIPLES
17
100%
OPERATING NORMALLY
+30 days
ASSURED
ESSENTIAL
Personnel WORKING ON SITE
COVID-19 UPDATE
OUR OPERATIONS
CONTINUE PROVIDING RELIABLE ENERGY
18
ALTO MAIPO
HYDRO
Progress continuing on all fronts
ENERGY
STORAGE
Virtual Reservoir completed
SOLAR & WIND
PROJECTS
Andes Solar II 70MW already operational Los Olmos and Mesamávida COD expected in 2H-2021
COVID-19 UPDATE
OUR PROJECTS
LIMITED IMPACTS
19
Accounts Receivables ($mn) Days Sales Outstanding (days)
31-Dec-2019 31-Mar-2020 30-Jun-2020 58 8 10 86 5 20 91 9 12 58 8 13 9 14 36 14 11 57 14 12 51 8 9 53 COVID-19 UPDATE
OUR COLLECTIONS
NO MATERIAL DISRUPTIONS IN WORKING CAPITAL
31-Jul-2020
20
CASH & CASH EQUIVALENT
54%
UNDRAWN COMMITTED CREDIT FACILITIES
46%
COVID-19 UPDATE
OUR LIQUIDITY
STRONG POSITION TO OVERCOME POTENTIAL DISRUPTIONS
As of 30/06/2020
REVENUE
BY MARKET
21
76%
A+/A1
20%
BBB-/Baa2
4%
SD/Ca
96% INVESTMENT GRADE Markets Investment grade profile customers
89%
CHILE
42%
COLOMBIA
2Q-2020
Chile
Vulnerable Household Relief
NO IMPACT
Argentina
Local CPI Indexation
COVID-19 UPDATE
OUR MARKETS
COUNTRY AND COUNTERPARTY RISK EBITDA IMPACT
Regulatory Changes
Based on 2019 Revenues
22
89%
CONTRACTED
HIGHLY CONTRACTED
business with Robust Take or Pay PPAs & Limited Volume Risk
AES Gener Contract Level Contracts with NO volumetric risk
Chile
100% 65%
Colombia
80% 90%
Argentina
23% 0%
DEMAND
Exposure
Regulated System Unregulated System Total System EBITDA Impact ($mn)
4.3%
10.4%
2Q-2020
REVENUE
BY SOURCE
COVID-19 UPDATE
OUR CONTRACTS
DEMAND RISK
Based on 2019 Revenues
23
79%
DOLLAR denominated FULLY DOLLARIZED Revenues in Chile ACTIVE HEDGE STRATEGY in Colombia
FX Δ QoQ CF Impact
Chile
$0mn
Colombia
+$3mn
Argentina
CASH FLOW
FX Variation
FIXED COSTS
Local currencies help to offset devaluation
REVENUE
BY CURRENCY
COVID-19 UPDATE
OUR CURRENCIES
FX RISK
Based on 2019 Revenues
24
ACHIEVED so far
Non-Essential COST MANAGEMENT
COVID-19 UPDATE
OUR DISCRETIONARY COSTS
HELPING MITIGATE POTENTIAL COVID-19 IMPACTS
(*) Preliminary data Source: Coordinador Eléctrico Nacional, XM, CAMMESA. In Argentina Discos considers Residential Demand and Free Customers considers Commercial and Industrial Demand
25
Total System Regulated Customers Unregulated Customers
2.2%
1.5% 5.1%
4.6% 11.1% 6.9% 5.2% 1.3% Jan Feb Mar Apr May Jun
6.6%
4.9%
8.7%
2.8% 6.6% 10.4%
5.4% 9.8%
Jan Feb Mar Apr May Jun 2.5% 1.2%
10.0%
5.8% 2.3% 25.1% 4.9% 6.8%
0.4% 0.2%
Jan Feb Mar Apr May
(*)
Jun 0.9% 17.8%
CHILE – COLOMBIA - ARGENTINA
SYSTEM DEMAND EVOLUTION
2020 vs 2019
GREEN OUR CUSTOMERS REDUCE CARBON INTENSITY STRENGTHEN INVESTMENT GRADE
27
STRATEGY EXECUTION UPDATE
GREENTEGRA
ULTIMATE OBJECTIVES
28
$1.0BN
EBITDA
RENEWABLES NON-RENEWABLES RENEWABLES NON-RENEWABLES NON-RECOURSE DEBT RECOURSE DEBT
52% 66% 69%
GREEN OUR CUSTOMERS REDUCE CARBON INTENSITY STRENGTHEN INVESTMENT GRADE
7.1GW
Installed Capacity
3.4X
Net Debt/ EBITDA
STRATEGY EXECUTION UPDATE
GREENTEGRA
2024 PROFORMA BASED ON CURRENT ACHIEVEMENTS
RENEWABLES
2017
2024
CO2 Intensity
+169%
Renewable Capacity 24%
52%
NON RENEWABLES
29
STRATEGY EXECUTION UPDATE
REDUCING CARBON INTENSITY
SUSTAINABLE PORTFOLIO
30
STRATEGY EXECUTION UPDATE
GREENING OUR CUSTOMERS
SUSTAINABLE EBITDA GROWTH
2017
2024
33%
66%
RENEWABLES NON RENEWABLES
($0.2bn)
+Wind, Solar & Batteries +Alto Maipo +Greentegra PPAs
+$0.4bn
ENSURING SUSTAINABLE
EARNINGS & DIVIDENDS
NON-RECOURSE DEBT RECOURSE DEBT
2017
2024 69%
Renewable
EBITDA
Debt
Amortization
64%
36% 31%
Net Debt¹ / EBITDA
31
(1) Includes Hybrid Debt Equity Credit
STRATEGY EXECUTION UPDATE
STRENGTHEN INVESTMENT GRADE
SUSTAINABLE LEVERAGE
PROTECT EXISTING VALUE ENABLE GREEN GROWTH
Delink existing PPAs from coal physical assets New long-term renewable PPAs to support green capacity expansion
32
ALLOW FOR EARLIER COAL PHASE OUT
Coal plants merchant providing reliability to the system
STRATEGY EXECUTION UPDATE
RENEWABLE TRANSFORMATION
ENABLED BY OUR BUSINESS SOLUTIONS
531
MW Alto Maipo
110
MW Los Cururos
178
MW Los Olmos Mesamávida
73
MW Campo Lindo
522
MW Rinconada Casa Eléctrica Apotolorru
21
MW Castilla
80
MW Andes Solar IIa
239
MW Andes Solar IIb San Fernando
320
MW Andes Solar III Andes Solar IV
10
MW Virtual Reservoir 113 MW Andes Solar IIb
106
MW Andes Solar IV
33
131MW 90MW 1,061MW 499MW 522MW
2019 2020 2021 2022 2023
$550mn $570mn $1,175mn $410mn $340mn
CAPEX by year
Executed To Go HYDRO WIND SOLAR BATTERY
STRATEGY EXECUTION UPDATE
2.3GW RENEWABLE CAPACITY
CAPEX & COD TIMELINE
34 34
AVAILABLE CASH
STRABAG
Supplier Finance
CAPITAL INCREASE
1Q-2021
THIRD PARTY CAPITAL
(US$mn)
ALTO MAIPO
Project Finance
uses
ALTO MAIPO
Project uses
NCRE GROWTH
STRATEGY EXECUTION UPDATE
GROWTH FUNDING TO GO
SOURCES & USES
CAPITAL INCREASE
APPROVED
66.7% 16.2% 17.1%
35
STRATEGY EXECUTION UPDATE
RENEWABLE TRANSFORMATION
SUPPORTED BY OUR SHAREHOLDERS
37
HIBERNATION OF ADDITIONAL UNITS
UNDER EVALUATION BASED ON:
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Ventanas I
114MW
Operational Strategic Backup Ventanas II
208MW
Operational Strategic Backup ECONOMIC
MERIT & BENEFITS
POWER
SYSTEM STABILITY
COMMERCIAL
AGREEMENT EXECUTION
STRATEGY EXECUTION UPDATE
COAL RETIREMENT
POTENTIAL ACCELERATION OF DECARBONIZATION DATES
Hydro Wind Solar Batteries
531 MW 10 MW 10 MW 595 MW 2,352 MW 240 MW 500 MW
UNDER CONSTRUCTION
719MW
CONTRACTED UNDER DEVELOPMENT
1,373MW
UNCONTRACTED UNDER DEVELOPMENT
3,092MW
178 MW 559 MW
IN OPERATION SINCE GREENTEGRA
211MW
91 MW 110 MW
PIPELINE
39 39
219 MW
GROWTH PROJECT UPDATE
5,395 MW RENEWABLE PIPELINE
TO SUPPORT COMMERCIAL AGREEMENTS
POWER HOUSES
INSTALLATION UNDERWAY
531MW
INSTALLED CAPACITY
LARGEST RENEWABLE PROJECT
UNDER CONSTRUCTION IN CHILE
40
COD
2H-2021
40
COMPLETE Project
GROWTH PROJECT UPDATE
ALTO MAIPO
RUN-OF-RIVER HYDRO
TO BEGIN GENERATING
1 2
Las Lajas & Alfalfal II
Systems 61km
Volcan
System 14km
41
FOR ADDITIONAL WATER
GROWTH PROJECT UPDATE
ALTO MAIPO
RUN-OF-RIVER HYDRO - EXCAVATION PROGRESS
INSTALLED CAPACITY
COD
MAY
2020
COMPLETE
PROJECT
FULLY
OPERATIONAL
42
INNOVATIVE USE OF BATTERY & HYDRO TECHNOLOGY
GROWTH PROJECT STATUS UPDATE
VIRTUAL RESERVOIR
ENERGY STORAGE
43
21MW
INSTALLED CAPACITY
COLOMBIA’S LARGEST SOLAR SELF-GENERATION PLANT
COD
SEPTEMBER
2019
FULLY
OPERATIONAL
Project Status as of 30/06/2020
COMPLETE
PROJECT
GROWTH PROJECT STATUS UPDATE
CASTILLA
SOLAR
44
59MW
INSTALLED CAPACITY
TO BECOME COLOMBIA’S MOST EFFICIENT SOLAR SELF-GENERATION PLANT
COD
MID
2021
BOT CONTRACT
AWARDED
UNDER
DEVELOPMENT
PROJECT
GROWTH PROJECT STATUS UPDATE
SAN FERNANDO
SOLAR
45
80MW
INSTALLED CAPACITY
BIFACIAL PANELS, CLIMATE CONDITIONS AND GRID PROXIMITY
ENHANCE RECORD CAPACITY FACTOR
COD
STAGED THROUGHOUT
2020
70MW
ALREADY IN OPERATION
FINAL STAGES OF
COMMISSIONING UNDERWAY
GROWTH PROJECT UPDATE
ANDES IIa
SOLAR COMPLETE Project
46
180MW +113MW
SOLAR + BATTERY CAPACITY
BIFACIAL PANELS, BATTERIES, CLIMATE CONDITIONS AND GRID PROXIMITY
ENHANCE PROJECT ECONOMICS
COD
2H-2021
INCORPORATING
ENERGY STORAGE & MAVERICK TECHNOLOGY
GROWTH PROJECT UPDATE
ANDES IIb
SOLAR
DEVELOPMENT
Project
REVOLUTIONARY TECHNOLOGY
SIMPLER
Minimal site preparation required
FASTER
3x Faster Deployment 2x Less Land required
SMARTER
Streamlined logistics and high shipping density
10MW
AT ANDES SOLAR HUB
BHP SETTLEMENT UPDATE
INNOVATIVE SOLAR
PILOT PROJECT
47
STRATEGIC
LOCATION TO MEET DEMAND
INSTALLED CAPACITY
ACQUISITION FUNDED WITH GREEN HYBRID BOND
48
ACQUIRED
NOVEMBER 2019
48
$136mn
2019
ACQUIRED OPERATIONAL
Project Status as of 30/06/2020
GROWTH PROJECT UPDATE
LOS CURUROS
WIND
EPC CONTRACT
EXECUTED WITH NORDEX
ATTRACTIVE CAPACITY FACTOR WITH RECORD LEVEL HUB HEIGHT
FOR CHILE WIND FARMS
49
COD
2H-2021
49
COMPLETE Projects
GROWTH PROJECT UPDATE
LOS OLMOS & MESAMÁVIDA
WIND
178MW
INSTALLED CAPACITY
LOCATED NEAR
MESAMÁVIDA & LOS OLMOS ENHANCE ECONOMIES OF SCALE
INSTALLED CAPACITY
DEVELOPMENT
PROJECT
COD
2H-2022
50
ATTRACTIVE CAPACITY FACTOR WITH RECORD LEVEL HUB HEIGHT FOR CHILE WIND FARMS
GROWTH PROJECT UPDATE
CAMPO LINDO
WIND
LOCATED IN LA GUAJIRA
KNOWN FOR WORLD CLASS WIND RESOURCE
INSTALLED CAPACITY
DEVELOPMENT
PROJECTS
COD
2023
51
WIND PROJECTS AWARDED LONG-TERM CONTRACTS IN COLOMBIA’S 2019 AUCTIONS
GROWTH PROJECT UPDATE
CASA ELÉCTRICA & APOTOLORRU
WIND
AES GENER
EBITDA GENERATION
SUPPORTED BY UNIQUE LONG-TERM CONTRACTS
$200mn
CONVENTIONAL PPAs
Energy and Capacity
$410mn
TOLLING AGREEMENTS
Energy and Capacity
2Q-2020 LTM EBITDA 6% 69%
20%
Argentina
Colombia
Chile
53
12-year
7-year
74% 20% 6% 57% 13% 30% 21% 79%
DIVIERSIFIED
PORTFOLIO
BY GEOGRAPHY, CUSTOMER TYPE AND TECHNOLOGY
EBITDA
$827 mm 27.2 TWh/y 5,295 MW
Argentina Chile Contract Sales Coal Renewables Natural Gas Colombia
CUSTOMERS TECHNOLOGY(1)
Spot LTM 2Q-2020 Figures (1) Includes Battery Energy Storage System (BESS)
54
1,463 1,000 2,759 523 857 1,379 463
NON-RECOURSE DEBT
Hybrid Debt
55
ANGAMOS COCHRANE ALTO MAIPO
4,222 1,463
Consolidated Debt Recourse Debt
AES GENER
DEBT PROFILE
AS OF JUNE 30, 2020
(US$mn)
827 4.1x 497 1.6x
LTM EBITDA Net Debt¹/ EBITDA
184 149 2.7x 5.4x
Not in Operation
(1) Includes Hybrid Debt $500mn Equity Credit
140 42 23 27 32 137 19 1,043 53 105 114 149 134 152 162 1,890
193 147 137 176 166 289 181 2,933 2020 2021 2022 2023 2024 2025 2026 2027/2079
AVERAGE COST AVERAGE LIFE RATE
6.0%
Rate
21
Years
88%
Fixed Rate
56
AES GENER
MATURITY PROFILE
BALANCED AND EXTENDED AMORTIZATION SCHEDULE
(US$mn)
Recourse Non-Recourse
57
De-risked
ALTO MAIPO 1st GREEN HYBRID BOND
in the Americas
$531mn
NON-STRATEGIC
ASSET SALES
$561mn ~$1.9bn
CAPITAL INCREASE
APPROVED
BHP SETTLEMENT
REACHED
+
DEBT PREPAYMENT DEBT REFINANCING
CAPITAL STRUCTURE
MILESTONES
ACHIEVED SINCE LAUNCH OF GREENTEGRA IN 2018
CHILE COLOMBIA ARGENTINA
Energy Sales 16,349
GWh
6,520
GWh
4,366
GWh
PPA Tennor
Remaining Average Life
10-year 2 → 5-year 1-year
EBITDA
$610mn $167mn $50mn
HIGHLY CONTRACTED
COMMERCIAL STRATEGY
STABLE CASH FLOWS SUPPORTED BY LONG-TERM CONTRACTS
59 59
Contract Sales Spot Sales
100%
Contracted¹
LTM 2Q-20 Figures (1) Includes Rerouted Energy.
70%
Contracted
18%
Contracted
30%
Spot
82%
Spot
Third largest hydro plant
CHILE (3,611MW)(1) COLOMBIA (1,041MW) ARGENTINA (643MW)
Leading Energy Producer Most efficient combined cycle
+Only International T-Line connecting
HIGH-QUALITY ASSET PORTFOLIO
LEADING POSITION
IN ATTRACTIVE MARKETS
(1) Includes 62MW of Battery Energy Storage System in operation.
61
74% 20% 6% 57% 13% 30% 21% 79%
DIVIERSIFIED
PORTFOLIO
BY GEOGRAPHY, CUSTOMER TYPE AND TECHNOLOGY
EBITDA
$827 mm 27.2 TWh/y 5,295 MW
Argentina Chile Contract Sales Coal Renewables Natural Gas Colombia
CUSTOMERS TECHNOLOGY(1)
Spot LTM 2Q-2020 Figures (1) Includes Battery Energy Storage System (BESS)
64
HIGH-QUALITY ASSET PORTFOLIO
LEADING POSITION
DIVERSIFIED BY TECHNOLOGY AND GEOGRAPHY
Capacity as of 19/8/2020 Note: Figures may not add up to total capacity due to rounding
LEADING ENERGY PRODUCER IN CHILE (3,549MW) MAJOR PLAYER IN COLOMBIA (1,041 MW) EFFICIENT OPERATION IN ARGENTINA (643 MW)
Guacolda, 764MW 5 coal units Huasco
COD:1995/1996/2009 2010/2015
Hydro Plants 267MW 4 run of river hydro units Cajon del Maipo
COD:1923/1928/1944/1991
Angamos, 558MW 2 coal units
Mejillones
COD: 2011
Cochrane, 550MW 2 coal units Mejillones
COD: 2016
Andes Solar, 92MW PV Solar Atacama Desert
COD: 2016 / 2020
Chivor, 1,000MW 8 hydro units Bocaya
COD: 1977/1982
Tunjita, 20MW 1 hydro unit Bocaya
COD: 2016
Termoandes, 643MW Combined Cycle Turbines: 2 gas, 1 steam Salta
COD: 1999
ENERGY STORAGE (62 MW)
Spinning Reserve Systems Norgener 12MW Angamos 20MW Cochrane 20MW Other Plants, 181MW : Los Cururos 110MW Wind Laguna Verde 58MW Gas/Diesel Laja 13MW Biomass Norgener, 276MW 2 coal units Tocopilla
COD:1995/1997
Ventanas, 861MW 4 coal units Valparaiso
COD:1964/1977/2010/2013
Castilla, 21MW PV Solar Meta
COD: 2019
Virtual Reservoir System Alfalfal I Pilot 10MW
65
FIRM COMMITMENT WITH THE ENVIRONMENT
ACCELERATING A GREENER FUTURE
OVERVIEW OF RENEWABLE GROWTH CAPACITY
WIND (773 MW) SOLAR (639 MW + 219 MW Batteries) RUN OF RIVER HYDRO (531 MW)
Alto Maipo, 531MW San José de Maipo Chile
COD: 2021
Los Olmos, 110MW Mulchén Chile
COD: 2021
Campo Lindo 73MW Los Angeles Chile
COD:2022
Mesamávida, 68MW Los Angeles Chile
COD: 2021
Andes IIa 80MW Atacama Desert Chile
COD: 2020 – 70MW already in operation
Casa Electrica & Apotolorru 264MW La Guajira Colombia
COD: 2023
Projects Under Construction Projects Ready to be built Rinconada 258MW Chile
COD 2023
Andes IIb 180MW + 113MW Battery Atacama Desert Chile COD: 2021 Andes IV 170MW + 106MW Battery Atacama Desert Chile COD 2023
66
Capacity as of 30/6/2020
Andes III 150MW
Atacama Desert Chile COD 2023
San Fernando 59MW Municipality of Castilla La Nueva Colombia COD 2023
TRANSFORMATIONAL STRATEGY
COAL TO GREEN
BUSINESS SOLUTION EXAMPLE
Tolling Agreements Coal to Green
Fixed Charge 50 Fixed Charge 50 Variable Charge 40 Green PPA 40 Green Tax Passthrough 5 Green Tax Passthrough Revenues 95 Revenues 90 Variable Cost 40 Variable Cost Green Tax Cost 5 Green Tax Cost Costs 45 Costs Margin 50 Margin 90
Figures for example purposes only, not meant to be a representation of individual contract details.
68
CHILE
COMMERCIAL STRATEGY
STRATEGY BASED ON HIGH QUALITY, LONG-TERM CUSTOMER RELATIONSHIPS
Distribution 26% Non Regulated 74%
10 year Avg. Contract Life
Commercial strategy aims to maximize cash flow while minimizing volatility Optimal contracted position seeks to match contracted energy with long term efficient generation Contract customers include regulated customers (distribution companies) and non regulated customers (mining, commercial and industrial)
Contracts include Price indexation mechanisms (coal and US CPI) and pass-through provisions (regulatory risks)
~10 years average remaining life of contracts
10,000 15,000 20,000
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
GWh/year
70
Figures do not include the early-termination of BHP contracts
COLOMBIA & ARGENTINA
COMMERCIAL
STRATEGY
LTM 2Q-20 Figures (1) Up to 306MW of 643MW. ~80% of Expected Generation Short & Long Term Contracts
(1-15 Years)
Remaining Generation Spot and Frequency Regulation Sales Firm Energy (~3,000 GWh) Reliability Charge Revenue Contract Energy Energía Plus Contracts(1) (1-2 years) Remaining Generation Regulated Energía Base Sales
Colombia Argentina
6,520
GWh
4,366
GWh
71
70%
Contracted
18%
Contracted
30%
Spot
82%
Spot
CHILE – COLOMBIA - ARGENTINA
SYSTEM DEMAND EVOLUTION
2020 vs 2019
(*) Preliminary data Source: Coordinador Eléctrico Nacional, XM, CAMMESA. In Argentina Discos considers Residential Demand and Free Customers considers Commercial and Industrial Demand
72
Total System Regulated Customers Unregulated Customers
2.2%
1.5% 5.1%
4.6% 11.1% 6.9% 5.2% 1.3% Jan Feb Mar Apr May Jun
6.6%
4.9%
8.7%
2.8% 6.6% 10.4%
5.4% 9.8%
Jan Feb Mar Apr May Jun 2.5% 1.2%
10.0%
5.8% 2.3% 25.1% 4.9% 6.8%
0.4% 0.2%
Jan Feb Mar Apr May
(*)
Jun 0.9% 17.8%
DIVERSIFIED ASSET BASE
OUR MARKETS
OVERVIEW
73
RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE
S&P A+
25,206 MW
Installed Capacity
Energy Sales Growth (CAGR 2009-2019)
Moody’s A1
77,353 GWh
Generation Fitch A
Chile
~19.1M
inhabitants
~$282B
GDP as of 2019
Regulated 41% Unregulated 59% Thermal 56% Hydro 27% NCRE 17% As of December 2019 (1) Great North Interconnected system (Sistema Interconectado del Norte Grande). (2) Central Interconnected System (Sistema Interconectado Central). (3) Non-conventional Renewable Energy including Wind, Solar, Geothermal and Biomass (4) National Electrical System (Sistema Eléctrico Nacional).
(3)The SING(1) and the SIC(2) were interconnected in November 2017 to comprise the SEN(4) The SEN became fully operational in May 2019, once the last segment of the Cardones-Polpaico transmission line was completed
71,670 GWh 77,353 GWh
DIVERSIFIED ASSET BASE
OUR MARKETS
OVERVIEW
74
S&P BBB- Moody’s Baa2 Fitch BBB-
17,538 MW
Installed Capacity
Energy Demand Growth (CAGR 2009-2019)
70,115 GWh
Generation S&P CCC+ Moody’s Ca Fitch CC
39,704 MW
Installed Capacity
Energy Demand Growth (CAGR 2014-2019)
131,254 GWh
Generation
Thermal 61% Hydro 27% Nuclear 6% NCRE 6%
+2.1% +0.2%
Residential 43% Industrial 28% Comercial 29% Regulated 69% Unregulated 31% Thermal 78% Hydro 21% NCRE 1%
Colombia
~50.4M
inhabitants
~$324B
GDP as of 2019
Argentina
~45.1M
inhabitants
~$436B
GDP as of 2019
70,438 GWh 128,059 GWh 131,254 GWh 70,115 GWh RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE
(1)As of December 2019 (1) Non-conventional Renewable Energy including Wind, Solar and Biomass
DISCLAIMER
buy or sell any securities and should not be treated as giving investment advice nor as an estimation that the scenarios or assumptions will occur. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information, assumptions or examples that may be contained herein. Any
information contained herein. The information contained herein is meant only and example of a potential scenario that is based on assumptions that may or may not occur, and does not purport to be complete and is subject to qualifications and assumptions, and neither the Company nor any agent can give any representations as to the accuracy
use of all or any part of this material.
future events and trends that may affect the Company’s business but that are not . Investors are cautioned that any such forward looking statements are not guarantees of future
Regarding the impact of COVID-19, the information used for preparing this presentation is solely based on what is publicly available as of March 31, 2020 and the company cannot make any representation with respect to the real impacts as they are unforeseeable. The successful execution and commencement of operation of the investment projects that we are developing or constructing depends on numerous external factors, including (i) delays in obtaining regulatory approvals, including environmental permits; (ii) court rulings against governmental approvals already granted, such as environmental permits; (iii) shortages or increases in the price of equipment reflected through change
international political, environmental and ethnic groups; (vi) strikes; (vii) adverse changes in the political and regulatory environment in Chile or other countries from which our
unforeseen or catastrophic or exceptional events.
may result in a violation of applicable laws in Chile or in other jurisdiction.
accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material.
Shares of our common stock are traded on the Bolsa de Comercio de Santiago—Bolsa de Valores, or the Santiago Stock Exchange, and the Bolsa Electrónica de Chile—Bolsa de Valores, or Electronic Stock Exchange, which we jointly refer to as the “Chilean Stock Exchanges,” under the symbol “AESGENER.” Accordingly, we are currently required to file quarterly and annual reports in Spanish and issue hechos esenciales o relevantes (notices of essential or material events) to the CMF, and provide copies of such reports and notices to the Chilean Stock Exchanges. All such reports are available at www.cmfchile.cl and www.aesgener.com.
77
PRESENTATION
Larrain Vial 14th Annual Andean Conference
September, 2020