ENGIE ENERGÍA CHILE S.A. Presentation to investors 9M19
SNAPSHOTS 2
Supporting our clients in their zero BUSINESS LINE – CLIENT SOLUTIONS carbon roadmap Focus on 20 countries, 30 urban areas, BUSINESS LINE – RENEWABLES 500 global clients Decentralized organization: BUSINESS LINE – NETWORKS 24 business units; 4 business lines CAPEX 2019-2021: BUSINESS LINE – THERMAL € 12 bn & 9 GW in renewables Capacity breakdown Revenue breakdown EBITDA breakdown 88% low CO 2 0.2 0.2 4.5 5% 7% 7.0 37.1 5.7 1.1 6% € 60.6 bn (3) € 9.2 bn (3) 104 GW (1 ) 4.0 55% 1.8 4.6 27% 3.4 0.2 Natural gas Nuclear Other Europe North America Latin America Europe North America Latin America Renewables (2) Coal Africa & Asia GEM Other Africa & Asia GEM Other (1) At 12/31/2018, at 100% (2) Including pump storage for hydro (3) 2018 Consolidated 3 Engie Energía Chile - Presentation to Investors – 9M 2019 3
Gross installed Generation capacity (MW) 9M-2019 (GWh) Solar Hydro 11% 25% Wind Wind 5% Hydro 8% 27% Solar 7% SEN 57,909 GWh 25,339 MW 3,300 Km Thermal Thermal 62% 54% Clients Market Share (% of sales 9M19) (% installed capacity Sept-19) Enel 25% Regulated Engie 42% 9% Colbún 13% 25,339 MW 10,694 MW AES Gener Tamakaya 13% 2% Unregulated Other 58% 38% Source: CNE 4 Engie Energía Chile - Presentation to Investors – 9M 2019 4
RELEVANT PLAYER IN THE ENERGY CONTRACTED GROWTH UNDERWAY BUSINESS INDUSTRY Leader in northern mining 15-yr regulated PPA Capacity contracted under region, 4 th largest electricity w/distribution companies => long-term sales agreements; generation company in contracted physical sales 12 years remaining average growth in 2018 & 2019 life Chile Strong counterparties ~2.2 GW gross generation 50%-owned TEN ~US$ 0.8 capacity bn transmission project Unregulated: mining and industrial companies; began operations in 4Q17 3 rd largest transmission Regulated: distribution company companies ~US$ 1 bn new power generation capacity + port Seaport infrastructure, gas ( COD: May 16, 2019) Strong sponsorship pipeline Float 24.84% 52.76% Engie Energía Prepared to provide energy Good delivery in growth AFPs (Chilean Chile solutions to its customers strategy implementation pension funds) 22.40% 5 Engie Energía Chile - Presentation to Investors – 9M 2019
Technology Chapiquiña (11MW) Coal Diesel/Fuel oil El Aguila I (2MW) 2,204 MW (*) Natural gas Pampa Camarones (6MW) Renewables Baterías - Arica (2MW) Collahuasi Diesel Arica (14MW) El Abra 2,293 kms HV + MV Chuquicamata TE Tocopilla (708MW) transmission lines. 50% share in TEN Tocopilla port Gaby Mining Operations C. Tamaya (104MW) TE Mejillones (580MW) TEN Escondida CT Andina (177MW) 2 seaports: Tocopilla Gasoducto Norandino CT Hornitos (178MW) Chile - Argentina (Salta) Andino (Mejillones) IEM (377MW) Los Loros (46MW) Gas pipelines & L.T. LNG supply agreements Andacollo (1MW) (*) Units 12 and 13 in Tocopilla (171MW combined gross capacity) were closed on June 7, 2019. The company also announced the closure of Units 14 and 15 in Tocopilla (268MW combined gross capacity) by December 31, 2021. The Los Loros & Andacollo PV plants were acquired in April 2019. Their capacity is shown in MW, which differs from the MW-peak figure reported in other slides of this presentation. 6 Engie Energía Chile - Presentation to Investors – 9M 2019 . 6
NEW PPA: NEW POWER INTERCONNECTION REVENUE & EBITDA SUPPLY GROWTH Contracted revenue growth TEN : 600-km, 500 kV, IEM + Puerto Andino ~US$0.8bn , transmission • ~8,200 GWh p.a. in 2017 ~US$1 bn investment including company • ~11,500 GWh p.a. in 2019 port More balanced portfolio On schedule, within budget, Port: In operations operating since 24-Nov-17 (Unregulated/regulated) IEM: COD: May 16, 2019 • 77%/23% in 2017 IEM: 375 MWe gross capacity Regulated & contracted revenue; • 57%/43% in 2019 ~US$80 million EBITDA p.a. +2 LNG cargoes – 2018 Expected EBITDA growth (>65% +1 LNG cargo – 2019 2019 vs. 2017) TEN: 50/50 Joint Venture Power supply contracts with 85% project financed Clients’ Sales (GWh) generation companies Red EECL 2017 2018 2019 Eléctrica 50% 50% Unregulated Regulated 7 Engie Energía Chile - Presentation to Investors – 9M 2019
Early steps OUR PERFORMANCE • Development of TEN project => procurement of low-carbon energy sources • Decision not to build any new coal plants PPA renegotiation with mining companies RENEGOTIATED PPAs • New tariff scheme: price reduction ~3 TWh • Decarbonization (tariff indexed to CPI rather than to coal prices starting 2021) • Contract life extension (10+ years) COAL CAPACITY DISCONNECTED IN 2019 Asset rotation plan 171 MW • U12+U13 coal plants closed in 2Q19; U14+U15 to be closed by YE 2021 • Plan to develop 1GW / USD1bn in renewable assets COAL CAPACITY TO BE • Long-term power supply agreement to reduce volatility during transition DISCONNECTED YE 2021 268 MW Government-private agreement to phase-out coal generation • Gradual process concerning 28 coal units/5.5 GW installed capacity: ASSET ROTATION PLAN • Binding commitment by Engie, Enel & AES to close 8 units/1GW by 2024 1GW $1bn • Engie to close 4 units/439MW by 2021 & assess potential for further closures • Chile’s challenge: To become carbon-neutral by 2050 8 Engie Energía Chile - Presentation to Investors – 9M 2019
RECENT EVENTS 9
October 7, 2019: Launching the first 3 renewable June 4, 2019: Agreement with government to projects out of 1GW/US$1bn investment plan phase-out coal-based generation • Calama windfarm: construction started • Binding commitment by Engie, Enel & AES to close • Capricornio solar PV plant: construction started 8 units/1GW by 2024 • Commitment to reassess feasibility of further closures • Tamaya solar PV plant: construction scheduled to every five years begin 1Q20 • Chile seeking to become carbon-neutral by 2050 OUT 439MW COAL IN 417 MW RENEWABLES & MORE TO COME U12 U13 U14 U15 LOS LOROS CALAMA CAPRICORNIO TAMAYA 171 MW 268 MW 55 MWp 151 MW 97 MWp 114 MWp 2019 2020 2021 2022 2019 2020 2021 2022 2023 2024 AFTER-TAX IMPAIRMENTS: ACQUISITIONS + FIRST 3 PROJECTS 2018: US$52 MILLION 2019: US$64 MILLION 2019-2021: US$325 MILLION 10 Engie Energía Chile - Presentation to Investors – 9M 2019
• Interchile’s Cardones-Polpaico transmission Project: COD = May 29, 2019: Together with increased gas supply, full interconnection contributed to SING SEN • reduced marginal cost volatility “Sistema • lower average marginal costs Eléctrico Nacional” • EECL contracted up to 3.9 TBtu of gas imports from Argentina for the SIC Oct-19 - Apr-20 period Chile Argentina GNA TGN YPF/Tecpetrol/Winter EECL: up to 0.5 Mm3/day (no ToP / no DoP) ECS (Related) shall/Pluspetrol U16/CTM3 Gas imports will enhance dispatch of CCGTs => lower and more stable marginal cost throughout the day 11 Engie Energía Chile - Presentation to Investors – 9M 2019
OUR CLIENTS OUR ASSETS • 55MWp Solar PV acquisition 17-Apr-19 • PPA renegotiations & new contracts Los Loros & Andacollo @ US$35 million Antucoya, Molycop & others ~778 GWh p.a. • 248MWp Wind +Solar PV in construction Calama wind farm and Capricornio solar PV plant • 15-yr. PPA w/distribution companies • IEM commercial operation 16-May-19 88% demand increase in 9M19 Cost efficient 377 MW gross capacity OUR RATINGS OUR SHAREHOLDERS • Fitch: BBB Positive Outlook • Final dividend 2018 June 2019 US$ 22 million paid in May . • Feller AA-(cl) Stable outlook • 1st Provisional dividend 2019 January 2019 US$ 50 million paid in June 12 Engie Energía Chile - Presentation to Investors – 9M 2019
KEY MESSAGES 13
Results in line with guidance Mastering the growth achieved Building our future together with our clients PPA renegotiation, decarbonization & life extension Paving the way for our energy transformation plan Development focused on replacing coal with renewable capacity Robust and flexible capital structure Ample room to finance energy transformation plan 14 Engie Energía Chile - Presentation to Investors – 9M 2019
PROFITABLE LONG-TERM GROWTH; IMPROVED RISK PROFILE OUR 9M PERFORMANCE New PPAs w/distribution companies and Free Clients • Growth in contracted portfolio reaching >11 TWh of contracted demand 9M19 9M17 9M18 • Portfolio diversification (regulated vs. unregulated) ENERGY SALES (TWh) Operation in an interconnected market. SIC + SING = SEN 8.28 6.51 7.31 • 50%-owned TEN company • ISA’s Interchile Project completed in May 2019 ENERGY SALES REGULATED PPA • Up to 1,300MW of power transported (SIC) • Trapped solar PV production released 2.39 1.27 • Lower and less volatile marginal costs EBITDA New power supply sources => risk control 429 201 279 • New gas supply to run our CCGTs or to sell to other producers • IEM project in operation since May 2019. Puerto Andino port servicing NET RECURRING INCOME Mejillones complex since late 2017 207 61 124 • PPAs signed with other generation companies to reduce our exposure to the spot market in south-central Chile 15 Engie Energía Chile - Presentation to Investors – 9M 2019 15
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