Corporate Presentation 3Q-2019 LEADING GENERATION COMPANY IN LATIN - - PowerPoint PPT Presentation

Corporate Presentation

3Q-2019

LEADING GENERATION COMPANY IN LATIN AMERICA

AES GENER AT A GLANCE

2

5,229M 5,229MW

Of installed capacity(1) Leading Energy Producer in Chile

131 131MW

Added since launch of Greentegra

784 784MW

Of fully funded green capacity under construction(2)

Baa3/BBB-/BBB-

Stable Outlook (Moody’s/S&P/Fitch)

3.9x (3)

Net Debt/LTM 3Q’19 EBITDA

~10 years

Average life of PPAs(4) Providing Stable Cash Flows

US$852mm

LTM 3Q’19 EBITDA

Sources: Company, Bloomberg. Note: LTM Figures derive from the addition of 9M’19 and FY’18 figures minus 9M’18 figures. (1) Includes 5,177MW of installed capacity and 52MW of Battery Energy Storage System. (2) Includes 683MW of capacity under construction (531MW Alto Maipo, 80MW Andes Solar IIa, 101MW Los Olmos 62MW Mesamávida, and 10MW Virtual Reservoir Battery) at the end of 2019. (3) Consolidated metric, not including equity credit (4) Average remaining life on PPAs in Chile as of December 2019. (5) Total Shareholder Return from May 7, 2018 to January 9, 2020

WITH DIVERSIFIED OPERA TIONS IN CHILE, COLOMBIA AND ARGENTINA

Launched Greentegra Strategy to incorporate Renewables leveraging on existing commercial relationships

26% TSR

Since Launch of

Greentegra(5)

Member of Chile and MILA Indices

KEY CREDIT CONSIDERATIONS

1

3

LEADING POSITION

2

DIVERSIFIED PORTFOLIO

3

HIGH QUALITY LONG TERM PPAs

4

GREEN TRANSFORMATIONAL STRATEGY

5

ROBUST CAPITAL STRUCTURE

6

STRONG FINANCIAL PERFORMANCE

LEADING POSITION

1

4

Third largest hydro plant

CHILE (3,545MW)(1) COLOMBIA (1,041MW) ARGENTINA (643MW)

Leading Energy Producer Most efficient combined cycle

Only International T-Line connecting

Source: Company. Global Note: Installed Capacity breakdown may not sum the total of 5,229MW due to rounding. (1) Includes 52MW of Battery Energy Storage System in operation.

66% 27% 7% 58% 13% 29% 30% 70%

DIVERSIFIED PORTFOLIO

2

• Adj. EBITDA

5

US$852 mm 27.2 TWh/y 5,229 MW(1)

Argentina Chile Regulated/Unregulated Spot Coal Renewables Diesel/Gas Colombia

CUSTOMERS TECHNOLOGY(2)

Source: Company. Note: Figures as of 3Q’19 LTM.. (1) Includes 5,177MW of installed capacity and 52MW of Battery Energy Storage System. (2) As of December 31, 2019.

Geographical and Technological Diversification Mitigates Risk

Contracted 20% Spot 80% Contracted 59% Spot 41% Unregulated 66% Regulated 22% Spot 12%

STRONG CONTRACTED POSITION

3

6

Argentina Colombia Chile

~10 year average life 2 ➔ 4 year average life 1 year average life

US$564mm US$227mm US$61mm PPA Tenor / Description LTM 3Q’19

• Adj. EBITDA

15.4TWh 7.3TWh 4.4TWh

Energy Sales

Stable Cash Flows Supported by Long Term Contracts

Most long-term contracts include indexation mechanisms that periodically adjust prices based on generation cost structure and, in some cases, pass-through of full fuel and regulatory costs

Source: Company. (1) Note: Energy Sales figures correspond to LTM as of 3Q-2019

FIRM COMMITMENT WITH THE ENVIRONMENT

GREENTEGRA TRANSFORMATIONAL STRATEGY

4

7

Source: Company.

ENERGY Generation Company

ENERGY SOLUTIONS

PROVIDER OF CHOICE IN SOUTH AMERICA

Integrating Renewables Into Our Portfolio, Leveraging On Existing Competitive Advantages FIRM COMMITMENT WITH THE ENVIRONMENT

GREENTEGRA TRANSFORMATIONAL STRATEGY

4

Greentegra

Energy Solutions Transform existing Relationships

~10.5 TWh/year

Add Green⁺ Contracts with new clients

8

Source: Company.

Fixed Charge Fixed Charge

Variable Cost passthrough RENEWABLE

PPA

➔

Take or Pay PPA Coal to Green PPA Fixed Price +Coal indexation Fixed Price ↑ Duration ↑ Renewables ↓Price +CPI Indexation Conventional PPA Blextend PPA

Extend existing Relationships

~3.2 TWh/year

➔

Green Tech Portfolio + Tailored Services GenerFlex PPA

Milestones Achieved Since Launch in 2018 FIRM COMMITMENT WITH THE ENVIRONMENT

GREENTEGRA TRANSFORMATIONAL STRATEGY

4

9

Source: Company.

600 MW

WIND

101 MW

SOLAR

#1 Wind Developer IN COLOMBIA

10 MW

STORAGE

+6.4TWh/y

RENEWABLES PPAS

+1.2GW

RENEWABLES CAPACITY

531 MW

HYDRO

4.7GW

RENEWABLES PORTFOLIO

LONG TERM AUCTION

TRANSFORMATIONAL STRATEGY

GREENTEGRA

Reshaping Our Portfolio With Reliable Clean Energy Increasing Green Energy Capacity by 74% Adding +1.2GW of Renewables

4

TODAY+PROJECTS

6.0GW

27%

13% 1% 59%

BEFORE GREENTEGRA

5.1GW

RENEWABLES & ENERGY STORAGE NATURAL GAS DIESEL COAL

INCLUDING

SHUTDOWN WN

63% INCLUDING

PIPELI LINE V1 & V2 V2

43%

11% 1% 45%

10

Milestones Achieved Since Launch of Greentegra in 2018

5

11

ROBUST

CAPITAL STRUCTURE

De-risked

ALTO MAIPO 1st GREEN HYBRID BOND

in the Americas

$531mn

NON-STRATEGIC

ASSET SALES

US$561mn

DEBT PREPAYMENT

~US$1.9bn

DEBT REFINANCING

3,717 1,178

581 864 1,094

LTM 3Q’19 Adj. EBITDA

$852m 52mn $550mn

Net Debt/ LTM 3Q’19 EBITDA

3.9x 1.8x

RECOURSE DEBT CONSOLIDATED DEBT

NON-RECOURSE DEBT

Angamos Cochrane Alto Maipo

Leverage Profile as of September 30, 2019

5

12

ROBUST CAPITAL STRUCTURE &

DEBT PROFILE

STRONG FINANCIAL PERFORMANCE

SOUND FINANCIAL METRICS & STABLE BUSINESS

6

CAPEX Capital Allocation

83 92 83 73 479 405 481 371 562 497 564 444 2016 2017 2018 LTM 3Q-19

Maintenance Growth

53 74 263 48 93 261 184 215 102 471 351 203 248 806 798 466 2016 2017 2018 LTM 3Q-19

Equity Contribution Dividends Paid Debt Payment

581 591 591 564 172 174 241 227 25 29 55 61 778 793 887 852 34% 33% 34% 34% 2016 2017 2018 LTM 3Q-19

Chile Colombia Argentina EBITDA Margin

EBITDA & EBITDA margin

2,198 2,387 2,346 2,540 1,626 1,353 1,179 1,178 3,824 3,741 3,525 3,717 4.3x 4.4x 3.6x 3.9x 2016 2017 2018 LTM 3Q-19

PF/Non-Recourse Corporate Debt Net Debt/EBITDA

Total Debt and Net Debt / EBITDA

13

KEY TAKEAWAYS

1

14

LEADING POSITION

2

DIVERSIFIED PORTFOLIO

3

HIGH QUALITY COMMERCIAL RELATIONSHIPS

4

GREEN TRANSFORMATIONAL STRATEGY

5

ROBUST CAPITAL STRUCTURE

6

STRONG FINANCIAL PERFORMANCE

Leading energy producer in Chile over the last four years 3 countries, 7 technologies, diverse customer base ~10-year remaining average life in Chile Focused on renewables

TARGET(1)

3.5x

Net Debt/Adj. EBITDA

Source: Company. Note: LTM Figures derive from the addition of 9M’19 and FY’18 figures minus 9M’18 figures. . (1) AES Gener targets to be at 3.5x Net Debt / Adj. EBITDA in 2022

Supplementary Information

APPENDIX

16

Source: Company.

RENEWABLE

ENERGY SYSTEM

FLEXIBILITY

CO2

Intensity

REDUCTION

Adding 1.2GW of Clean Energy Batteries Flexible Thermal Fleet Interconnection

LOS CURUROS

110 MW

MESAMAVIDA LOS OLMOS CAMPO LINDO

235 MW

CASTILLA

21 MW

ANDES SOLAR IIa

80 MW

ALTO MAIPO

531 MW

Renewable Growth Capacity

COD: 2020/2021 COD: 2020

VIR IRTUAL RESERVOIR

10 MW

COD: 2021 Acquired in 2019 COD: 2019 COD: 2020

FIRM COMMITMENT WITH THE ENVIRONMENT

REDUCING CARBON INTENSITY

CASA ELÉCTRICA APOTOLORRU

255 MW

COD: 2023

Overview of renewable growth capacity FIRM COMMITMENT WITH THE ENVIRONMENT

ACCELERATING A GREENER ENERGY FUTURE

17

Source: Company.

WIND (600 MW) ENERGY STORAGE (10 MW) SOLAR (281 MW) RUN OF RIVER HYDRO (531 MW)

Virtual Reservoir, 10MW 5 Hour Chile

COD:2020

Alto Maipo, 531MW San José de Maipo Chile

COD: 2020

Castilla 21MW Meta Colombia

COD: 2019

Los Olmos, 101MW Mulchén Chile

COD: 2021

Campo Lindo 72MW Los Angeles Chile

COD:2021

Mesamávida, 62MW Los Angeles Chile

COD: 2021

Andes IIa 80MW Atacama Desert Chile

COD: 2020

Casa Electrica & Apotolorru 255MW La Guajira Colombia

COD: 2023

Projects Under Construction Projects Ready to be built Los Cururos 110MW Chile

ACQUIRED IN 4Q-2019

Andes IIb 180MW Atacama Desert Chile

Las Lajas 267 MW

2 1

Hydro Project Construction Update: Largest Renewable Project Under Construction in Chile

Alfalfal II 264 MW Las Lajas & Alfalfal II Tunnels 60km Volcan Tunnel 14km PROJECT

84%

COMPLETION

Las Lajas & Alfalfal ll Tunnels Volcan Tunnel

Tunnel System Excavation Progress

55 km

6 km

5 km

8 km

42% 91%

Change in Risk Profile Project Capitalization Limited Commitments by AES Gener

• Lump sum fixed price contract with

Strabag, including guaranteed completion dates and strong collaterals posted in favor of the project

• US$3,048mm construction cost
• Additional US$392mm payable over 20-

year term after COD

• Up to US$200mm for additional project

cost and debt service as an equity contribution

• No additional debt at AES Gener level

PROJECT UPDATE

ALTO MAIPO

Source: Company. Progress as of Jan1, 2020

18

Wind, solar & storage projects to support commercial agreements FIRM COMMITMENT WITH THE ENVIRONMENT

ACCELERATING A GREENER ENERGY FUTURE

19

Source: Company.

2020 2021 2022 2023 ANDES SOLAR IIa

SOLAR

80 MW VIRTUAL RESERVOIR

ENERGY STORAGE

10 MW – 5 HOUR LOS OLMOS

WIND

101 MW MESAMÁVIDA

WIND

62 MW CAMPO LINDO

WIND

72 MW CASA ELÉCTRICA

WIND 180MW

APOTOLORRU

WIND 75MW

#1 PLAYER WITH

MOST RENEWABLE CAPACITY

UNDER CONSTRUCTION IN CHILE

#1 WIN 1 WIND

DEVELOPER IN C N COL OLOM OMBIA

Growth CAPEX Requirements FIRM COMMITMENT WITH THE ENVIRONMENT

ACCELERATING A GREENER ENERGY FUTURE

20

Projects included: 531MW Alto Maipo, 180MW Casa Eléctrica, 110MW Los Cururos, 101MW Los Olmos, 62MW Mesamávida, 80MW Andes Solar IIa, 75MW Apotolorru, 72MW Campo Lindo, 21MW Castilla and 10MW Virtual Dam, No incremental debt to fund growth apart from committed debt to fund Alto Maipo

Adding +1.2GW, $2bn investment

No incremental debt to fund growth

$574 $490 $290 $586 $65

2019 2020 2021 2022 2023

Hydro Wind Solar Storage

Decarbonization Agreement Dissipates Uncertainty Surrounding Coal-fired Operations in Chile FIRM COMMITMENT WITH THE ENVIRONMENT

ACCELERATING A GREENER ENERGY FUTURE

21

Source: Company.

RESPONSIBLE &

GRADUAL PHASEOUT

ENSURES

SYSTEM RELIABILITY

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Ventanas I

114MW

Business as Usual Operating as Strategic Backup

Ventanas II

208MW

Business as Usual Operating as Strategic Backup

LEADING ENERGY PRODUCER IN CHILE (3,494MW) MAJOR PLAYER IN COLOMBIA (1,041 MW) EFFICIENT OPERATION IN ARGENTINA (643 MW) HIGH-QUALITY ASSET PORTFOLIO

LEADING POSITION

Diversified By Technology And Geography

22

Guacolda, 764MW 5 coal units Huasco

COD:1995/1996/2009 2010/2015

Hydro Plants 271MW 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, 22MW PV Solar Atacama Desert

COD: 2016

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 (52 MW)

Energy Storage Systems Norgener 12MW Angamos 20MW Cochrane 20MW Other Plants, 186MW : Los Cururos 110MW Wind Laguna Verde 63MW Diesel Laja 13MW Biomass Norgener, 277MW 2 coal units Tocopilla

COD:1995/1997

Ventanas, 866MW 4 coal units Valparaiso

COD:1964/1977/2010/2013

Source: Company. Note: Figures may not add up to total capacity due to rounding.

Castilla, 21MW PV Solar Meta

COD: 2019

DIVERSIFIED ASSET BASE

OUR MARKETS

RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE

S&P A+

25,008 MW

Installed Capacity

+2.5%

Energy Sales Growth (CAGR 2007-2017)

Moody’s A1

76,880 GWh

Generation Fitch A

Chile

~19M

inhabitants

~$298B

GDP as of 2018

Regulated 42% Unregulated 58% Thermal 55% Hydro 29% NCRE 16%

Source: Company. As of December 2018 (1) Central Interconnected System (Sistema Interconectado Central). (2) Great North Interconnected system (Sistema Interconectado del Norte Grande). (3) Non-conventional Renewable Energy including Wind, Solar, Geothermal and Biomass (4) National Electrical System (Sistema Eléctrico Nacional).

(3)

The SING(2) and the SIC(1) 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

71,491 GWh 76,880 GWh

23

Based On High Quality , Long-term Customer Relationships CHILE

COMMERCIAL STRATEGY

24

Distribution 25% Non Regulated 75%

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 life of outstanding contracts

• 5,000

10,000 15,000 20,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

GWh/year

Non Regulated Distribution

DIVERSIFIED ASSET BASE

OUR MARKETS

S&P BBB- Moody’s Baa2 Fitch BBB

17,413 MW

Installed Capacity

Energy Demand Growth (CAGR 2014-2018)

67,718 GWh

LTM Generation S&P CCC- Moody’s CAA2 Fitch CC

39,268 MW

Installed Capacity

Energy Demand Growth (CAGR 2013-2018)

131,154 GWh

LTM Generation

Thermal 62% Hydro 29% Nuclear 5% NCRE 4%

+2.2% +1.2%

Residential 43% Industrial 29% Comercial 28% Regulated 68% Unregulated 32% Thermal 20% Hydro 79% NCRE 1%

Colombia

~50M

inhabitants

~$330B

GDP as of 2018

Argentina

~45M

inhabitants

~$539B

GDP as of 2018

69,528 GWh 128,059 GWh 131,154 GWh 67,718 GWh RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE RATINGS SYSTEM DATA ENERGY DEMAND GENERATION BY FUEL TYPE

(1)

Source: Company. As of December 2018 (1) Non-conventional Renewable Energy including Wind, Solar and Biomass

25

Based On High Quality , Long-term Customer Relationships COLOMBIA AND ARGENTINA

COMMERCIAL STRATEGY

~59% of Current Generation Long Term Contracts

(4-15 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 Energía Base Spot Sales to ISO(2)

26

Colombia Argentina

Source: Company. (1) Up to 306MW. (2) ISO stands for “Independent system operator.

59% 41%

ENERGY SALES Contract Spot

20% 80%

ENERGY SALES Contract Spot

7,249

GWh

4,358

GWh

Corporate Presentation

3Q-2019