Construction of the second section of the Tesalia - Alférez Project
Construction of the second section of the Tesalia - Alférez Project
I am proud to present for the fourth consecutive year the consolidated report of Grupo Energía Bogotá and its affiliates, in a very complex and challenging year in which the COVID-19 pandemic left serious economic, social and psychological effects and transformed the way we used to live, work and relate with each other.
It was a year of heavy losses for many: losses of loved ones, of jobs and of living conditions. However, it was also a year of major challenges. This year, we made the decision to begin a transformation process of the Group and to move towards a renewed higher purpose: “Improving lives through sustainable and competitive energy”.
For an organization that will soon have 125 years of history and that has contributed to the development of Bogotá and of the country, these trying times drive us to work with even greater commitment. This is demonstrated by our positive financial, operating and sustainability results. The Group’s consolidated revenues increased by 5 % from COP 4.89 trillion in 2019 to COP 5.13 trillion in 2020; net income attributable to GEB increased by 36 % from COP 1.85 trillion to COP 2.51 trillion. Adjusted consolidated EBITDA increased by 17 % to COP 3.66 trillion.
Based on these favorable results, we will submit to the consideration of the General Meeting of Shareholders a distribution of COP 1.63 trillion. The proposed dividend per share is COP 178, up 27 % compared to the COP 140 dividend declared on 2019 profits, equivalent to a dividend yield of 6.7 % based on the share price at December 30, 2020.
The dividend per share includes an ordinary dividend for COP 147, and an extraordinary dividend for COP 31.
But beyond the good financial results, we are filled with satisfaction by having guaranteed the protection of the lives of our employees, in line with one of our main cultural attributes: Life Comes First! For the third year in a row, we have reported no deaths. This was thanks to our Occupational Safety and Health strategies, which we further reinforced during the pandemic.
Thanks to our solid corporate governance, we anticipated the effects and took timely action. We designed the Atención Covid (Covid Assistance) project to protect the health of our employees, suppliers, communities and their families. We also continued to provide our services while applying all the biosafety protocols, and we coordinated the delivery of humanitarian assistance in territories that faced complex challenges in terms of health care and food supplies. In 2020, we experienced an unexpected situation due to the COVID-19 pandemic that kept us in a state of emergency and alert.
During 2020, we developed a temporary arrangement for the assistance, recovery and stabilization that tested our capacity to make timely decisions, adequately assess risks and undertake strategies to minimize the impacts of the pandemic. We created a department to address all aspects related to COVID-19 and to provide timely and coordinated response, as well as to guarantee the continuity of the businesses in Colombia, Peru, Guatemala and Brazil. The above achievements were made possible thanks to the support and commitment of all the organization’s areas. This enabled us to satisfactorily overcome every challenge, demonstrating a high level of resilience as a Group.
With the support of experts in public health and epidemiology, and following the guidelines of the World Health Organization (WHO) and the national government, we put in place a Protocol for the Reactivation of Construction, Operation and Maintenance Projects and Administrative Processes. We also performed constant monitoring of the health conditions of our employees through the CoronApp application, and we developed a new application for the Company (VidaRep).
During the contingency, we assured provision of all our services at 100 % of their availability. Of the 300 positive cases reported among our over 2,300 Group employees, none produced any deaths. An achievement that demonstrates why at GEB Life Comes First.
During the pandemic, we not only cared for our own teams, but also reached out to the regions based on our commitment and we developed an intervention strategy in the territories of our areas of influence to prevent contagion, jointly with local authorities.
In this context, the Group’s Board of Directors approved a voluntary contribution of COP 10 billion to acquire food packages, computers and medical equipment and materials.
Delivery of humanitarian aid in different regions of Colombia
Delivery of humanitarian aid in different regions of Colombia
Delivery of humanitarian aid in different regions of Colombia
Delivery of humanitarian aid in different regions of Colombia
At Grupo Energía Bogotá and its affiliates, we continue to expand our operations in the three Strategic Business Groups (SBG): Transport and Transmission, Distribution and Generation.
One of the main relevant events during 2020 in the Transmission and Transport SBG was the successful completion of the acquisition of Argo Energía, in Brazil, jointly with the Spanish company Red Eléctrica Internacional. Through Argo Energía, we will add 1,470 kilometers of transmission lines in Brazil, where we were already present through our company Gebbras (with 1,094 kilometers, for a new total of 2,564 kilometers of lines) and where we want to continue expanding our electric energy platform.
In Colombia, in Transmission ,we celebrated the virtual inauguration of the La Loma Substation (500 kilovolts), in El Paso (Cesar), which is a key element for the development of renewable energy projects. UPME awarded us the Río Córdoba-Bonda project at 220 kilovolts, which consists of 30 kilometers of transmission lines from the municipality of Ciénaga to Santa Marta (Magdalena).
We contributed to the development of Bogotá, the capital city where we were born 125 years ago, through the creation of the Data Analytics Agency (Ágata, for the Spanish original) project, of which we are founders with a 40 % equity interest, and which will provide better information for decision-making and with greater transparency.
Through our company TGI, the leader in gas transportation, we built the remaining loops of the Cusiana Phase IV Project: Porvenir-Miraflores and Puente Guillermo-La Belleza. The latter began to operate in December 2020, which increased the capacity of the National Transport System by 10 Mcfd. Operations were also started up at the branches Zona Industrial-Cantagallo, Cantagallo-San Pablo and Galán-Yondó, thereby completing the planned replacement of five branches.
In Guatemala, our subsidiary Transportadora de Energía de Centroamérica (Trecsa) reported a completion rate of 86.6 % in construction of the Energy Transmission System Expansion Plan (PET), the most important energy project in Central America, which involves the construction of 593 kilometers. Eebis obtained toll payments for the South Pacific Ring, the first project undertaken by private initiative to be 100 % completed in that country, which consists of 96 kilometers of transmission lines and 7 substations that connect the sugar mills.
In distribution, we reached 7.6 million customers, including 4.2 million electricity and 3.4 million natural gas customers. Our subsidiary Cálidda, the largest natural gas distributor in Peru, made 93,385 new connections in 2020, a milestone for the company in its 16 years in operation, through which it now has over 1 million customers. Contugas continued to connect new clients and now reaches 61,801 homes.
In Peru, through Grupo Dunas (the holding company of three companies: Electro Dunas, Cantalloc and Peru Power Company) we are positioned as the only distributor with a system for reading, recording and publishing energy bills on the company’s website, which facilitates billing for more than 250,000 customers.
And in Generation, Emgesa continues to be the second-largest generation company in Colombia, with a 20 % share of the National Interconnected System and net installed capacity of 3,506 megawatts (MW), of which 3,097 MW (88 %) are generated by its hydroelectric plants and 409 MW (12 %) by thermoelectric plants.
In order to continue moving forward in these and other projects, we must achieve greater expediency in the environmental licensing and community prior consultation processes. Our Colectora Project in La Guajira represents a major challenge for the company and for Colombia, because it involves the largest prior consultation process in the country, with 224 certified ethnic communities.
The commitment of bringing progress and well-being to the regions where we are present through our transmission and natural gas projects is part of our DNA. We know that a company’s success and profitability are linked to the prosperity of the territory and the well-being of its inhabitants. This has been demonstrated during the difficult times we are living, when solidarity and empathy are key factors.
Social awareness is another of our cultural attributes that has enabled us to promote programs for the creation of shared value that have benefited the communities in the areas of influence of our projects, and which are aligned with the Sustainable Development Goals (SDGs) and the respect for human rights.
One of these programs is Energía para la Paz (Energy for Peace), which is associated to our 200-kilometer transmission project at Tesalia- Alférez and includes military and humanitarian demining and initiatives that contribute to building peace in the territories. Our work focuses on empowering the communities to become leaders of their own development, on recovering their social fabric and capital, strengthening institutional management, building capacity and facilitating the recovery of the territories. Thanks to this program, Grupo Energía Bogotá was ranked in 12th place of 53 in Fortune magazine’s Change the World list, which recognizes the companies that have the greatest social impact through initiatives that are aligned with their business strategy. We received the Corporate Social Responsibility Award during the Global Energy Awards, organized by Standard & Poor’s Global Platts.
Another initiative that addresses the needs of the territories is the Aulas Solares Interactivas (Solar Energy Interactive Classrooms) program which, in partnership with the Ministry of Education and TGI, seeks to improve the quality of education. In 2020, we delivered six solar classrooms in the departments of Cesar, La Guajira and Risaralda.
Additionally, during the development of our electric energy and natural gas projects, we have made important archaeological findings, which we protect, recover and preserve. In Peru, our subsidiary Cálidda is a leader in archaeological conservation and is the first private company to become part of the Ministry of Culture’s program Lima, Ciudad de las Huacas (City of Huacas). The company was also the first company from the hydrocarbons sector to be recognized by the Ministry of the Environment for its carbon footprint report in Peru.
We also work on the empowerment of women. We are convinced of the importance of offering women equitable and fair opportunities for their development. To this end, for example, in Colombia we initiated an agreement with the Women Together Foundation to support 30 women from ethnic communities in Mocoa (Putumayo) who work on handicrafts, in the area of influence of the Renacer Project. In Guatemala, we support women who knit typical dresses (huipiles) and with Cálidda and Contugas we have a program to support popular soup kitchens, which are mainly led by women heads of household. We have provided free gas connections to over 850 soup kitchens, which enables them to obtain cheaper, clean and safe fuel, to benefit close of 70,000 low-income Peruvians.
Through these projects, we go beyond providing electricity and gas services: we are transforming the lives of women who no longer have to cook with wood, and at the same time creating job opportunities.
For these and other initiatives, we received the 2020 Andesco Great Award for Sustainability, in recognition of our outstanding efforts and practices in recent years.
In 2020, we reaffirmed our commitment to the protection of the environment, the conservation of biodiversity and the fight against climate change. During the year, we managed to decrease our greenhouse gas emissions compared to 2019. We additionally offset 11.5 % of the emissions of GEB and its affiliates in 2019. This was achieved through the acquisition of carbon credits for the conservation of native forests, for a total of 21,242 tons of CO2 equivalent.
However, not all were good news. Even though we had been included in the Dow Jones Sustainability Index for eight consecutive years, we were not included this time. This encourages us to work even harder on strengthening our sustainability management and on contributing to the progress of communities and construction of the country.
Coexistence with our infrastructure in Guavio, Cundinamarca
Coexistence with our infrastructure in Guavio, Cundinamarca
In the middle of the difficult circumstances due to the pandemic, which changed the way we work and relate to each other, the Group companies quickly adapted to the sudden changes brought about by this new reality and virtuality. At GEB and its affiliates, we promoted internal communication channels to report on the Company’s strategy and transmit messages to assist the employees.
One of the first decisions we made as a Company was to prioritize work at home for close to 85 % of employees. We implemented biosafety protocols that led to the Safe Guard Seal certification being awarded to GEB and TGI for our assistance during the pandemic and for full compliance with the requirements of the Safe Guard biosafety system, which is recognized worldwide. The certification was issued by Bureau Veritas Quality, following audits at our administrative offices in Bogotá and Pereira.
As part of this process, we made adaptations to work-at-home workstations. We provided psycho-social assistance and held conferences and lectures with experts on health topics to maintain our employees informed on the required biosafety measures. At the same time, we maintained well-being activities through virtual channels, which enabled the participation of families and to maintain our employees motivated despite the distance.
In 2020, we were certified by the firm Great Place to Work for having achieved a very outstanding level compared to other companies in the industry. As a Group, we have the challenge, in the short term, of becoming one of the 10 best companies to work for in Colombia, and in the future we wish to be within the top five
In terms of diversity and inclusion, one of our achievements was the Equipares Silver Seal for our Gender Equality Management System, awarded to Grupo Energía Bogotá. This certification by the Labor Ministry and the High Presidential Counselor for Women’s Equality, with technical support from the United Nations Development Program (UNDP), encourages companies and organizations to work on gender equality and closing gaps through the implementation of specific measures and actions. Additionally, Icontec recommended the Labor Ministry and UNDP to grant the Silver Seal to our subsidiary TGI. This distinction fills us with satisfaction and encourages us to continue implementing, developing and driving initiatives that will ensure that Grupo Energía Bogotá will become a role model in social and gender inclusion. We will lead the search and selection process of women to be included in the initiative of the 30 % Club, the purpose of which is to include a minimum of 30 % of women in all boards.
For GEB and its affiliates, diversity, inclusion and gender equality are indispensable to achieve a country’s sustainable development and progress, the well-being of society and the growth of companies. Our Diversity and Inclusion Policy establishes principles and guidelines to promote and maintain a work environment and corporate culture with equal opportunity, rights and responsibilities, free of any type of discrimination guaranteeing equality between men and women. This is demonstrated by the fact that the salary gap in our over 2,300 employees is practically non-existent.
TGI employees at the Miraflores station (Boyacá)
Our 2021-2030 Corporate Strategic Plan is the roadmap for GEB to be the orchestrator and catalyst of the modernization and transformation of the energy industry in the countries where we are present. As a Group, we are aware of our co-responsibility for reducing greenhouse gas emissions for a positive impact on the health of our communities and customers. We are committed to creating opportunities to accelerate sustainable and clear mobility models for our cities and roads, in order to contribute to the de-carbonization of our economies.
We know that energy generates development and social equity, that it enables new opportunities for communities and transforms their living conditions. Energy drives local economies and can make a significant contribution to the adaptation and mitigation of climate change. The Group cares for the environment, the living beings that inhabit them and the traditions of our communities.
At our companies, we are committed to the creation of efficiencies through digitalization, innovation and the transformation of our businesses. This will enable us to continue offering competitive costs for our stakeholders and contribute to the development and competitiveness of Latin America.
The energy sector is at an unprecedented crossroad of transition and evolution that represents a major opportunity for growth and development for Latin America. At the Group, we are visualizing new business opportunities derived from emerging global trends. For this reason, we have been evaluating opportunities such as green hydrogen, non-conventional renewable energy sources, optimization of energy consumption in large cities such as Bogotá and Lima, the transformation of heavy and light vehicle fleets to low or zero-emission technologies, and the use of technologies such as smart homes and distributed generation.
We know that challenging times lie ahead, not only because of the social and economic setbacks that this pandemic has left behind, but also due to the enormous transformations the energy sector will undergo in the coming years. We are preparing to face these challenges and to turn them into opportunities to the benefit of the communities in the countries where we are present, of our shareholders and investors, of our suppliers and stakeholders, and of our over 2,300 employees, who are committed to the upcoming transformations.
Juan Ricardo Ortega López
CEO of Grupo Energía Bogotá
Electric power plant in Ica, Peru