AES Andes Reported a Solid Financial Performance and Consolidated its Transformation in the First Quarter of 2021

May 5, 2021

During the first quarter of 2021, AES Andes has achieved a strong financial performance, made considerable progress in the execution of its Greentegra transformational strategy and continues to be the main generating company in Chile, contributing 25% of the total generation of the system.

The company recorded an EBITDA of US$340 million, US$178 million higher than the same period in 2020. Meanwhile, the net income was US$176 million, an increase of US$100 million compared to the same period last year.

The figures show the positive variation of AES Colombia, as a result of the normalization of the operations of the Chivor hydroelectric power plant after having successfully completed the project to extend the useful life of the reservoir by more than 50 years. The best performance of AES Chile is mainly related to the recognition of proceeds from the early termination of contracts of the Angamos subsidiary.

These results show the resilience of the company’s business model, operations and employees to the complex global scenario brought about by the COVID-19 health crisis. The CEO of AES Andes, Ricardo Falú, stressed that “the Company is still on track to achieve its goals, that is to say, more than half of the installed capacity and two thirds of the EBITDA coming from renewable energy generation by 2024, while strengthening its investment grade.”

Regarding the decarbonization process, Falú highlighted that “thanks to the progress made in the implementation of our strategy, by the end of 2024, 72% of our coal-fired capacity will be out of service, sold to third parties, or disassociated from commercial or financial commitments, providing us with the flexibility to proceed with its withdrawal as soon as the system allows.”

The executive reported that AES Andes will increase its renewable capacity by 165% over the next three years, from the onset of Greentegra, to supply the 10.5 TWh per year contracts they have executed since May 2018.

Finally, Falú referred to the change in the corporate name of the company, from AES Gener to AES Andes, as approved at the last Special Shareholders’ Meeting held on 23 April. “It reflects our sustainable transformation and reaffirms our commitment to accelerate the future of energy to fulfill the society's mandate to contribute with concrete solutions and actions to address climate change, the most important challenge of our generation. Beyond a particular name or image, what we are today reflects years of work to bring reliable energy and sustainable, innovative and competitive solutions to our customers, communities and the energy sector.”

Relevant facts of the first quarter

Decarbonization

During the first quarter of the year, the Company continued to make progress in its decarbonization process. In late February, AES Andes entered into an agreement for the sale its ownership in Guacolda Energía S.A. With this transaction, AES Andes will dispose of the ownership of 764 MW in Huasco, which represents 26% of the coal-fired operating installed capacity.

In April of this year, the Company also announced the final closure of Laguna Verde Thermal Power Plant, with 58 MW of installed capacity, located in the town of the same name in the commune of Valparaíso. The Company formally requested the National Energy Commission (CNE) to definitively disconnect the units – two steam turbines and one gas turbine – that make up this plant.

This is in addition to the announcement made late last year, with the closure of Ventanas 1 and 2 for 322 MW. With this withdrawal, approximately 2,000,000 million tons of CO2 will be reduced, which is equivalent to taking over 800 thousand private vehicles off the streets of Chile.

Projects under Construction

The Company continues to develop its strategy of integrating renewable energy and batteries into its portfolio, backed by long-term relationships with our customers in the markets where we operate.

The Alto Maipo project has achieved 97% progress and has advanced as scheduled to start generation at its two plants, Alfalfal II and Las Lajas, during the second half of 2021. In addition, in Chile, the Company is advancing in the construction of Los Olmos, Mesamávida and Campo Lindo wind projects in the Eighth Region for a total of 251 MW.

In Antofagasta, the construction of the first “Enhanced Solar” project was started: Andes Solar 2b with 180 MW of solar power and 560 MWh of battery storage, the largest in Latin America.

In Colombia, the construction of San Fernando, the largest solar plant in the country, continues as scheduled to supply energy to Ecopetrol’s operations in the second half of this year.

Projects under Development

The Company continues to accelerate the development of renewable projects in Colombia and Chile for a total of 4684 MW.

Capital Structure and Financing

Through different initiatives, the Company has raised funds to conduct its transformation process. These funds have been entirely allocated to strengthen its capital structure, prepay debt and accelerate its ongoing renewable growth plan.

As evidence of the shareholders’ confidence in the Greentegra strategy, it should be noted that the Company made a capital increase of US$306 million in February of this year. The AES Corporation participated in the transaction and increased its shareholding interest. By 2024, the Company will have strengthened its investment grade rating by achieving sustained leverage of less than 3.5 times the net debt-to-EBITDA ratio.

Green Hydrogen

AES Andes has signed a memorandum of understanding with a major international hydrogen producer to conduct a feasibility study for a large green hydrogen-based ammonia production project in Chile that may require over 800 MW of new renewable energy supply.

Great Place to Work

AES Andes was recognized by Great Place to Work as one of the best companies to work in Chile, Argentina and Colombia. In the case of Chile, it achieved the tenth place in the best companies to work in the category of businesses with more than 1000 employees.