Enel Americas Annual Report 2019

FY2019 Annual Report · Enel Americas

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Santiago Stock Exchange
ENELAM

New York Stock Exchange
ENIA

Enel Américas was initially established under the name Compañía Chilena Metropolitana de Distribución Eléctrica
S.A. On December 1, 2016 the company changed its name to Enel Américas S.A. The Company’s share capital on
December 31, 2019 reached US$9,783,875 thousand and was represented by 76,096,311,036 shares. These shares
are traded in the Chilean stock exchanges and in the New York Stock Exchange in the form of American Depositary
Receipts (ADR).

The main business of the Company is the operation, development, generation, distribution, transmission, transforma-
tion and/ or sale of energy in any of its forms or nature, directly or through other companies. The Company can also
exercise activities in the telecommunications sector, provide engineering advisory in the country and abroad, and also
can invest and manage its investments in its subsidiaries and associate companies.

Total assets amounted to US$ 29,845,994 thousand on December 31, 2019. Enel Américas controls and manages
a group of companies that operates in the electricity markets in four countries in Latin America (Argentina, Brazil,
Colombia and Peru). In 2019, net income attributable to the controlling company reached $1,685,063 thousand and
operational income was $2,876,484 thousand. By the end of 2019, the Company employed 17,618 people through its
subsidiaries companies in Latin America.

ANNUAL REPORT
ENEL AMÉRICAS 2019

“2020 will have new challenges for

our Company, which we will face

with enthusiasm, responsibility and

transparency”

Letter from the
Chairman

Dear shareholders:

During the 2019 financial year, we acomplished a historic US$

3 billion capital increase, supported by the majority of our in-

You are holding the 2019 Annual Report and Financial State-

vestors permitting us to lay the foundations for future growth

ments of Enel Américas S.A. In this document you will learn

and to continue the work on our strategy based on electrifi-

about the actions the Company has taken to achieve solid re-

cation, digitization and new services in the coming years.

sults.

2019 was a special year as we celebrated the 25th anniversary

of our first listing on the New York Stock Exchange, closing

with the traditional “Ring the bell” on that day. We are proud

to say that we have positioned ourselves as an internationally

relevant player which, year-to-year, is growing in sustainability

promoting a fair energy transition that will help us shape a

better future for the region.

Results of the
period

We are the largest private utility company in Latin America

nomic environment, Enel Américas´ EBITDA increased by

generating and distributing energy to 24.7 million clients and

19% as compared to 2018, reaching US$ 3,994 million, main-

are present in the main cities of the subcontinent.

ly explained by a significant improvement in the results in

During this period, despite the region’s complex macroeco-

Brazil, with the consolidation of Enel Distribución São Paulo

and the completion of Its tariff review. Also because of an ex-

traordinarily positive impact in Argentina stemming from the

agreement signed between Edesur and the National State of

Argentina.

1. Letter from the Chairman

Industrial growth

Looking at our industrial growth we evaluate 2019 positively

with revenues reaching US$ 14,314 million, thanks to higher

operating revenues in Brazil, Peru, and Argentina, which led to

a 10.2% increase as compared to the previous year.

In Brazil, we had a year marked by higher operating revenues

leading to a 37%, increase in EBITDA and we reached US$

1,644 million at the end of 2019. Enel Distribución São Paulo

acomplished the best indices in its history and the best posi-

tion of all Brazilian distributors. Beyond our work, in 2019 we

decided to take a chance opening energy to new uses during

the Innovation and Sustainability Day; we also launched Ur-

ban Futurability, a Smart City’s Future lab project to be im-

plememnted in São Paulo as part of the Company’s commit-

ment that we hope will lead to energy transition. Enel Brasil

received the National Innovation Award from the country’s In-

dustry Confederation, and Economic Value, the most import-

ant business newspaper in Brazil, applauded us for being the

most innovative Company in the electricity sector.

In Argentina, we invested in technology seeking to improve

the supply for all our clients, which led to Edesur improving

its service quality by 40% in summer. Other investments we

made were the reconstruction of the Brown Substation and

Enel X, through agreements signed with different municipali-

ties, installed 8,000 new LED lights. We also promoted elec-

tromobility in the country by inaugurating 60 new charging

stations for electric vehicles, managing to link the whole and

vast Argentine territory. And we added the first company to

distributed generation, by installing 60 panels in EXO, a tech-

nology company.

In Peru, we celebrated the 25th anniversary of Enel Distribu-

ción in a period marked by large investments that will permit

us to improve the electrical service we provide for our clients.

The Izaguirre Electric Transmission Substation, with an invest-

ment of $42 million soles, began to operate and will directly

benefit some 110,000 clients in the San Martín de Porres dis-

trict. We put emphasis on generation reconstucting the Cal-

lahuanca hydroelectric plant (84.1 MW), damaged by the “El

Niño Costero” phenomenon investing US$ 40 million there.

And the first electric public transport bus began to roll along

the streets of Lima.

In Colombia, the most important effort of the last 20 years

took place in Girardot and the Alto Magdalena Province in

Cundinamarca requiring a $20 billion Colombian peso invest-

ment where, seeking to respond to the growth of energy de-

mand in the region, we built a medium tension replacement

substation between the Mangos and Diamante substations.

We invested US$ 6 million in the installation of the country’s

first lithium-ion storage battery facility at the Termozipa plant,

which will improve reliability within the national electrical sys-

tem. LED lights were also installed in different municipalities

and cities, and Enel-Codensa launched Enel X, a new line of

business aimed at offering innovative, sustainable, and digital

products and services.

Our future

We are proud to see the name of Enel Américas amongst

the world’s leading sustainability ratings. We were included

in the RobecoSAM’s Sustainability Yearbook in 2019 as one of

Annual Report Enel Américas 2019 the highest-scoring companies and, highlighting our sustain-

However, the truth is that in this harsh and difficult con-

ability strengths, we received the Industry Mover distinction.

text, without any precedent, Enel Américas has numerous

We were also confirmed in the FTSE4Good Index Series and

strengths that make us confident in the future. The intrinsic

ratified in Vigeo-Eiris’ Best Emerging Markets Performers list,

fundamentals that define our competitive standing not only

a ranking that includes the 800 best performing companies

in our sector put us in an unrivaled position to try to recover

from 31 emerging markets. We received the LatinFinance

what this crisis might harm.

Project Sponsor of the Year becoming the first winner in this

category, a distinction that recognizes our solid work and

I sincerely want to thank everyone who has worked for Enel

leadership in the region. The Company was also recognized

Américas to achieve these results. I am thinking of the Com-

by ALAS20 as the best company in Chile and obtained the

pany´s Directors, Managers, Executives, Professionals, Tech-

first place as a Leading Company in Sustainability in Chile and

nicians and Employees who have done a vital job working to-

as a Leading Company in Corporate Governance, also in Chile.

wards its development.

If 2019 was the consolidation year, in 2020 we will seek to

We are aware of the challenges existing in the region, so I

remain at the forefront, using the best technologies to create

would like to invite all of you to continue along this path, mo-

new opportunities that will help us grow in electricity genera-

tivated and contributing positively to Enel Américas´ future,

tion, distribution and transmission.

focusing our efforts on electrification, digitalization and new

services that contribute to a fair and sustainable energy transi-

As a company, we will facilitate access to progress through

tion, strengthening our role in providing an ever better service

energy in the communities where we are present, as well as

to all the people we serve in the region.

establish long-lasting partnerships with our stakeholders to

achieve our and their goals. Sustainability is the cornerstone

Thank you

of our Company, and we shall continue to work on improving

the lives of those around us.

As I write these words, the world is in the grip of a real,

surprising, and truly global threat: COVID-19. The enormous

health and humanitarian concerns and sacrifice this global

pandemic will cause are long-term. However, the truth is that

humanity has never been better prepared to fight a biological

threat. This war, because that is what it is, is going to be won

by common effort. And like any war, it will have economic

effects, the seriousness of which will depend essentially on

the duration of the containment measures that governments

must necessarily impose, to safeguard the most important

issue: human health.

Borja Acha

Chairman of the Board

Enel Américas

1. Letter from the Chairman

Memoria Anual Enel Américas 2019

CONTENTS

Enel Américas 2019

CHAPTER
01. Letter from the Chairman
02. Open Power
03. 2019 Milestones
04. Main financial indicators
05. Identification of the company and constituent documents
06. Property and control
07. Administration
08. People and organization
09. Stock exchange transactions
10. Dividends
11. 2019 Investment and financing policy
12. Businesses of the company
13. Capital increase
14. Investments and financial activities
15. Risk factors
16. Regulatory framework of the electricity industry
17. Description of the electricity business by country
18. Sustainability
19. Summary of shareholdings
20. Identification of subsidiaries and associate companies
21. Significant events
22. Statement of responsibility

PAGE
2
8
10
15
19
23
29
45
55
61
67
71
79
83
93
117
145
175
183
189
205
243

Enel Américas is Open Power

O p e n Po w e r

P u r p o s e
O p e n p o w e r f o r
a b r i g h t e r f u t u r e .
We e m p o w e r
s u s t a i n a b l e p r o g r e s s .

P V
CPPo s i t i o n i n g
M

V i s i o n

O p e n p o w e r t o t a ck l e

s o m e o f t h e w o rl d ' s

b i g g e s t c h a l l e n g e s .

Va l u e s

Tr u s t

P r o a c t i v i t y

R e s p o n s i b i

I n n o v a t i o n

i t y

P r i n c i p l e s o f C o n d u c t

l y a c t i v i t i e s a n d t a k e

• M a k e d e c i s i o n s i n d a i

i t y f o r t h e m .

r e s p o n s i b i

l a b o r a t e a n d

i n g t o c o l

• F o l

• S h a r e i n f o r m a t i o n , b e i n g w i

o p e n t o t h e c o n t r i b u t i o n o f o t h e r s .

l o w t h r o u g h w i t h c o m m i t m e n t s , p u r s u i n g

a c t i v i t i e s w i t h d e t e r m i n a t i o n a n d p a s s i o n .

• C h a n g e p r i o r i t i e s r a p i d l y i f t h e s i t u a t i o n e v o l v e s .

• G e t r e s u l t s b y a i m i n g f o r e x c e l

• A d o p t a n d p r o m o t e s a f e b e h a v i o r a n d m o v e

p r o - a c t i v e l y t o i m p r o v e c o n d i t i o n s f o r h e a l t h , s a f e t y

l , r e c o g n i z i n g a n d

l - b e i n g .

l e n c e .

a n d w e l

d i s a b i

i t i e s , e t c . ) .

i t i e s , p e r s o n a l

• W o r k f o r t h e i n t e g r a t i o n o f a l

l e v e r a g i n g i n d i v i d u a l d i v e r s i t y ( c u l t u r e , g e n d e r, a g e ,

• W o r k f o c u s i n g o n s a t i s f y i n g c u s t o m e r s a n d / o r

c o - w o r k e r s , a c t i n g e f f e c t i v e l y a n d r a p i d l y.

• P r o p o s e n e w s o l u t i o n s a n d d o n o t g i v e u p w h e n

• R e c o g n i z e m e r i t i n c o - w o r k e r s a n d g i v e f e e d b a ck

f a c e d w i t h o b s t a c l e s o r f a i

t h a t c a n i m p r o v e t h e i r c o n t r i b u t i o n .

l u r e .

• O p e n a c c e s s t o e l e c t r i c i t y f o r m o r e
M i s s i o n
• O p e n t h e w o r l d o f e n e r g y t o n e w
p e o p l e .
• O p e n u p t o n e w u s e s o f e n e r g y.
t e ch n o l o g y.
• O p e n u p t o n e w w a y s o f m a n a g i n g
e n e r g y f o r p e o p l e .
• O p e n u p t o n e w p a r t n e r s h i p s .

Annual Report Enel Américas 2019 V

Va l u e s
Tr u s t
P r o a c t i v i t y
R e s p o n s i b i
I n n o v a t i o n

i t y

V i s i o n
O p e n p o w e r t o t a ck l e
s o m e o f t h e w o rl d ' s
b i g g e s t c h a l l e n g e s .

Enel Américas is Open Power

O p e n Po w e r

P u r p o s e

O p e n p o w e r f o r

a b r i g h t e r f u t u r e .

We e m p o w e r

s u s t a i n a b l e p r o g r e s s .

M i s s i o n

• O p e n a c c e s s t o e l e c t r i c i t y f o r m o r e

• O p e n t h e w o r l d o f e n e r g y t o n e w

t e ch n o l o g y.

• O p e n u p t o n e w u s e s o f e n e r g y.

• O p e n u p t o n e w w a y s o f m a n a g i n g

e n e r g y f o r p e o p l e .

• O p e n u p t o n e w p a r t n e r s h i p s .

p e o p l e .

P V
CPPo s i t i o n i n g

a n d w e l

Open Power

• F o l

l e n c e .

l a b o r a t e a n d

l y a c t i v i t i e s a n d t a k e
i n g t o c o l

P r i n c i p l e s o f C o n d u c t
• M a k e d e c i s i o n s i n d a i
i t y f o r t h e m .
r e s p o n s i b i
• S h a r e i n f o r m a t i o n , b e i n g w i
o p e n t o t h e c o n t r i b u t i o n o f o t h e r s .
l o w t h r o u g h w i t h c o m m i t m e n t s , p u r s u i n g
a c t i v i t i e s w i t h d e t e r m i n a t i o n a n d p a s s i o n .
• C h a n g e p r i o r i t i e s r a p i d l y i f t h e s i t u a t i o n e v o l v e s .
• G e t r e s u l t s b y a i m i n g f o r e x c e l
• A d o p t a n d p r o m o t e s a f e b e h a v i o r a n d m o v e
p r o - a c t i v e l y t o i m p r o v e c o n d i t i o n s f o r h e a l t h , s a f e t y
l , r e c o g n i z i n g a n d
l e v e r a g i n g i n d i v i d u a l d i v e r s i t y ( c u l t u r e , g e n d e r, a g e ,
• W o r k f o r t h e i n t e g r a t i o n o f a l
i t i e s , e t c . ) .
• W o r k f o c u s i n g o n s a t i s f y i n g c u s t o m e r s a n d / o r
i t i e s , p e r s o n a l
c o - w o r k e r s , a c t i n g e f f e c t i v e l y a n d r a p i d l y.
• P r o p o s e n e w s o l u t i o n s a n d d o n o t g i v e u p w h e n
• R e c o g n i z e m e r i t i n c o - w o r k e r s a n d g i v e f e e d b a ck
f a c e d w i t h o b s t a c l e s o r f a i
t h a t c a n i m p r o v e t h e i r c o n t r i b u t i o n .

l - b e i n g .

d i s a b i

l u r e .

3. 2019 Milestones

JANUARY

FEBRUARY

MARCH

Enel Américas becomes the first multinational in

Enel Américas is included for the first time in Robe-

Colombia: greater facilities to pay for SITP ticket

South America certified by ISO37001 Anti-Bribery

Certification
Enel Américas received the ISO 37001 certification,

coSAM’s 2019 Sustainability Yearbook
Enel Américas qualified for inclusion in the 2019

with Easy Codensa Credit Card
The Codensa Easy Credit card permits to use up to

Sustainability Yearbook as one of the best-scoring

4 tickets per day, which are then paid interest-free at

which recognizes the effectiveness of its anti-brib-

companies in the industry and received the Indus-

the end of the month together with the Enel-Coden-

ery management system, thus consolidating our

try Mover Award. Through this recognition, the

sa energy bill. This service, available to Bogotá citi-

leadership in ethics and transparency. In 2018, the

investment firm RobecoSAM seeks to showcase

zens, benefited more than 800,000 people.

Company had already obtained the certification of

companies that have proven their strengths in sus-

its Criminal Risk Prevention Model pursuant to Law

tainability.

20.393.

Colombia: Launch of an initiative to bring clean wa-

ter to Cundinamarca educational institutions
Through an agreement between the Enel Colom-

bia Foundation and the Siemens Foundation, water

treatment filters for human consumption were in-

Colombia: Mayor Peñalosa installed 80,000 LED

lights to modernize Bogotá ‘s public lighting system
Before the end of the Peñalosa administration, Bo-

Enel Américas announces its plan for a US$3.5 bil-

lion capital increase
On February 27, the Company announced its plan

to raise capital for up to US$ 3.5 billion, to repay

stalled in various educational institutions. The ini-

gotá will have 150,000 new LED lights. Through

the 2018 Enel Brazil’s debt to purchase Eletropaulo,

tiative, called VITAL by its Spanish acronym “Life,

Enel-Codensa, its network operator, the municipali-

while also keep enough funds to restructure Elet-

Innovation, Technology and Clean Water” directly

ty invested more than $ 58 billion Colombian pesos

ropaulo’s pension fund liabilities and reduce contin-

benefits 70 students from San Antonio del Tequen-

for the purchase of LED lights.

gency provisions in Brazil.

dama and 360 from Sibaté.

Colombia: Enel Group companies, the country’s

Standard & Poor’s, Fitch Ratings, Moody’s and Fell-

Peru: Recovery of the Callahuanca Hydroelectric

first in anti-bribery certification
Enel-Codensa and Enel-Emgesa were certified

under ISO 37001 recognizing the effectiveness of

er Rate maintain their rating and perspective after

capital increase announcement
Following the February 27announcement, the four

Power Plant commercial operations
After more than two years of continuous efforts

with the insurance company, the reconstruction of

their anti-bribery management system. In 2017, the

rating agencies maintained their rating and perspec-

the Callahuanca hydroelectric plant (84.1 MW) was

companies had already been recognized by the

tive for the Company.

Presidency’s Transparency Secretariat as “Active

Anti-Corruption Enterprise”.

Argentina: Brown Substation reconstructed
The civil works for the reconstruction of the com-

plete Section III of Medium Voltage cells were com-

pleted.

successfully completed. The plant´s infrastructure

was damaged by the “El Niño Costero” phenom-

enon in 2017. The investment involved in the recon-

struction totaled US$ 40 million.

Moody’s confirms Enel Américas´ rating and chang-

es perspective to “Stable”
On March 4, Moody’s confirmed the “Baa3” rating

and changed the perspective from “Negative” to

“Stable”, explained primarily by the expectation of

a decrease in the Company´s indebtedness level

stemming from the capital increase announcement.

Annual Report Enel Américas 2019 APRIL

MAY

JUNE

Enel Américas approves capital increase
The Extraordinary Shareholders’ Meeting approved

Brazil: Enel South America Day and Innovation Day
Enel Brasil organized, for the first time, the South

a US$ 3 billion capital increase whose aims is to

America Enel Day. The event was held in Rio de

Enel Américas confirmed in the FTSE4Good Index

Series
The Company joined this index in September 2017

strengthen the flexibility of the Company’s balance

Janeiro on May 2. In addition, on May 6 the Innova-

in the Emerging Markets and Latin America Index

sheet and to prepare it for new growth.

tion Day, Enel’s global Innovation and Sustainability

category. The index was created in 2001 by FTSE

event was celebrated in the City of São Paulo, also

Russell, the Global Index Company, owned by the

Argentina: Edesur significantly improves service

for the first time in the country.

London Stock Exchange Group, and includes more

quality
In summer 2019, thanks to important investments

Colombia: Enel-Codensa presents Enel X, its new

into three pillars: environmental, social, and corpo-

than 300 indicators on 14 different topics, grouped

in the network, Edesur managed to improve its ser-

line of business offering innovative, sustainable and

rate governance.

vice quality by 40%. This continuous improvement

is due to the Company’s efforts to equip its network

digital products and services
This new line of business offers different energy

Brazil: Enel Brasil received the 2019 National Inno-

with better technology and reliability.

service solutions to clients throughout the country,

vation Award from the Brazilian Confederation of

Colombia: Enel-Emgesa receives energy efficiency

with solar panels, electro-mobility projects, lighting,

including the development of photovoltaic systems

Industry (CNI)
The Annual National Innovation Award offered by

award
The Company received the recognition for promot-

ing a better use of energy resources in different

efficient street lighting and products and services

the Brazilian Confederation of Industry aims to en-

for the home, among others.

courage and recognize companies that contribute

to increase Brazil’s competitiveness, through the

operational processes and for contributing to the

Colombia: Enel-Emgesa to install Colombia’s first

development of innovative methods and practices.

country’s energy transition. The award was present-

ed at the fifth version of the ANDESCO’s National

energy storage battery system
This innovative project, involving a US$ 6 million in-

Enel Brasil was recognized in the 2019 version of

the award as the most innovative company in the

Energy Efficiency Awards ceremony.

vestment, is a 7 MW/3.9 MWh lithium-ion battery

“Innovation in marketing” category among all sec-

storage system installed at the Termozipa Plant per-

tors of the Brazilian economy.

Colombia: LED lights take over the Sibaté and Vil-

mitting to increases its capacity and contributing to

the reliability of the national electricity system.

Colombia: Enel-Codensa is recognized as a sustain-

lapinzón public lighting systems
More than 3,200 lights were equipped with LED

able company
The Company received the 2019 Andesco Grand

technology in Sibaté and an additional 20,000 in

Colombia: Project launched to improve Huila cocoa

Villapinzón, improving the quality of life of the

municipality´s inhabitants. The work was part of

productivity over the next 30 years
The Cocoa Effect is a partnership between the U.S.

Award for Sustainability, within the framework of

the 21st Public Service Congress. The integration of

Enel-Codensa’s public lighting contract with local

Agency for International Development (USAID),

sustainability into business strategy and operational

municipalities.

Luker Chocolate, The Luker Foundation, Enel-Emge-

decisions, creating shared value with its target au-

sa Saldarriaga Concha Foundation and Eafit, which

diences, was one of the factors of the recognition.

Peru: The “Da Vinci Experience” - the immersive

is part of the National Government’s Competitive

Another factor was the implementation and certi-

and digital exhibition comes to Peru
The exhibition explores the work of the creator and

Partnerships for Equity. More than 400 families

fication of the Anti-Bribery Management System,

from the Huila department were direct beneficia-

once again reinforcing the importance of transpar-

visionary artist, Leonardo da Vinci. This exhibition

ries.

ency in business relationships.

employed sensory 4™ technology showing full HD

videos with Da Vinci’s best works on the walls. Af-

ter two months, the exhibition continued its tour of

Latin America.

Peru: Successful bond emission by Enel Distribu-
ción Perú
In May and June, the Company placed local bonds

with the value of US$ 38 million and US$ 27 million,

Colombia: Enel-Emgesa continues to promote pro-

ductive projects in Huila with a $13 billion Colombi-
an peso co-financing
The resources were secured thanks to an agree-

respectively. Both operations set records for the

ment between the Huila Governorate, the mayors

lowest spread in the Peruvian market.

in the El Quimbo area and Enel-Emgesa. The proj-

ect seeks to strengthen production chains such

as coffee, cocoa, and avocado, as well as the im-

provement of rural roads, among others. More than

14,000 families in the region benefitted from the

investments.

3. 2019 Milestones

JULY

AUGUST

Enel Américas celebrates 25th anniversary on the

Enel Américas receives “Business Generation – Di-

Enel Colombia is recognized as the most equitable

NYSE
The Company closed the Wall Street trading day

with the traditional bell-ringing ceremony to cele-

ario Financiero” Award for its commitment to ethics

and transparency
The Group’s companies in Chile, together with Enel

company in the utilities sector
The Company received the recognition in the 2019

Gender Equity in Organizations PAR Ranking de-

brate the 25-year long listing on the New York Stock

Américas, received the award from the Fundación

veloped by Aequales. In four years, Enel Colombia

Exchange. The ceremony also featured Enel Chile,

Generación Empresarial and Diario Financiero for

managed to increase the number of women en-

which was part of Enersis S.A., the company that

the systematic promotion, both internally and exter-

rolled in the ‘Plan Semilla’, a program that trains

originally traded in the NYSE.

nally, of ethics and best corporate compliance prac-

young people in energy-related careers, from 1%

Enel Américas ratified among Best Emerging Mar-

participants. The evaluation included the Company’s

tices, obtaining one of the 3 best ratings among 49

to 38%.

kets Performers by Vigeo-Eiris.
In June 2018, the Company entered the Vigeo-Eiris’

Best Emerging Markets Performers list, which in-

cludes the 800 best performing companies from 31

emerging markets.

formal tools and documents, as well as an assess-

Argentina: Edesur is Argentina’s first Pet Friendly

ment of ethics and transparency culture.

Argentina: Enel X installs LED lights
Enel X installed a total of 8,000 new LED lights

Company
The Company´s commercial office in San José

190 opened its doors to clients’ pets and Edesur

became Argentina’s first pet friendly service com-

thanks to the agreements reached with municipal-

pany. This is a pilot experience that, if evaluated in

Argentina: Regulatory Asset Liability signed
Edesur and the government of Argentina agreed to

ities.

a positive way, will be extended to the rest of the

offices within the concession area.

transfer Edesur’s concession to the jurisdiction of

Colombia: Enel-Codensa recognized as an inspiring

the City and Province of Buenos Aires. The National

State and Edesur signed an Agreement on Liability

Company
The Company was, for the second consecutive

Adjustment to end outstanding reciprocal claims

year, recognized as Inspiring Company 2019, award-

Peru: Enel Distribución celebrated 25th anniversary

with clients and authorities
The event brought together the main players in the

arising from the 2006-2016 period, thus resolving a

ed by the ANDI Foundation, for the “Plan Semilla”

Peruvian energy sector and various business lead-

challenging long-standing situation.

initiative - a program that seeks to create develop-

ers. The positive results of the energy sector privat-

Brazil: Enel Brasil recognized as the most innovative

able populations, providing them with training, in

ny’s commitment to investing in the modernization

company in the Brazilian electricity sector with the

alliance with the SENA.

of the sector was renewed.

ment opportunities for young people from vulner-

ization were shown over the years and the Compa-

Inovação Value Award
Valor Econômico, Brazil´s most important business

newspaper, recognizes, once a year, the main in-

SEPTEMBER

novative companies. Enel Brasil was ranked as the

Fitch Ratings assigns “A-” rating and “Stable” per-

spective to Enel Américas
On September 9, Fitch Ratings upgraded the Com-

most innovative company in the Brazilian electricity

Enel Américas successfully concludes US$ 3 billion

pany´s international ranking from “BBB+” to “A-”,

sector in 2019.

capital increase
This is the largest capital increase in Latin America

maintaining the perspective as “Stable”. The local

classification changed from “AA(cl)” to “AA+(cl)”.

Colombia: Enel-Emgesa invested $6 billion Colom-

in the last five years. Chief Executive Officer, Maur-

Fitch has also confirmed the stock rating as “First

bian pesos to deliver water to La Guajira
The drinking water distribution system will benefit

izio Bezzeccheri thanked investors for their support

Class Level 1 (cl)”.

and explained that the operation would permit to

more than 3,000 people in the Maicao municipality,

strengthen the Company´s capital structure and cre-

in La Guajira. The works model that Enel-Emgesa

ate space for new growth.

OCTOBER

opted for, and which will end in December 2020,

is carried out under the tax incentive mechanism.

Colombia: The DaVinci Experience, an immersive

Brazil: Enel CEO Francesco Starace launches Urban

Colombia: El Quimbo’s discarded wood is used in

Huila brick production
More than 30 micro-enterprises in the Huila depart-

arts exhibition arrives in Bogotá
The Enel Group companies in Colombia commemo-

Futurability project in São Paulo
As part of Enel’s commitment to leading the energy

rated the 500th anniversary of the death of the Ital-

transition, Enel CEO Francesco Starace launched on

ian master Leonardo da Vinci through an immersive

October 9 the Urban Futurability project, a Smart

ment have benefited from wood and biomass deliv-

arts exhibition. The exhibition included large-format

City’s Future laboratory to be installed by Enel São

ered by Enel-Emgesa free of charge. The provided

film projections and the display of 10 full-scale ma-

Paulo in the Vila Olimpia district. Mr. Starace also at-

material was used to produce bricks required for

chines, as well as a virtual reality experience.

tended one of the Brazilian Investment Forum pan-

the construction of 500 average-sized homes.

els organized by the Federal Government. The event

Colombia: Enel-Codensa and National University

is one of the most important in Brazil and highlights

inaugurate the country’s first high-voltage and re-

investment opportunities in strategic sectors.

newable energy innovation laboratory
Thanks to the new building, located at the Nation-

Enel Américas receives LatinFinance ‘Project Spon-

al University of Colombia in Bogotá, a network of

knowledge and a space enabling innovation was

sor of the year’ award
The Company became the first winner under this

consolidated, aimed at addressing the sector´s new

new category. The award recognizes the Compa-

challenges, within the energy transformation frame-

ny´s important work and leadership in the region, in

work. In 2019 Enel-Codensa invested more than $ 2

a year where it has stood out, among other things,

billion Colombian pesos in this laboratory.

for the successful US$ 3 billion capital increase.

Annual Report Enel Américas 2019 Colombia: Enel-Codensa to buy 873 GWh a year

of unconventional renewable energy through long-

term contracts
The purchase took place at a long-term contracts

Brazil: Recognized as a Pro-Ethics Company
The recognition was awarded by the Federal Gov-

ernment and the Ministry of Transparency, this way

Peru: Enel Distribución and Enel Generación recog-

nized by ALAS20 in sustainability
The first obtained the 3rd place and the second

completing 3 consecutive editions for the Company

obtained the 2nd place in Leading Companies in

auction in which the National Government sought

to be identified as one of the firms in Brazil which

Sustainability and were placed within the top 3 of

to promote Non-conventional Renewable Energy

promote and work with high ethical and transpar-

the companies that participated in 2019. Companies

Sources (NCRE). Through the participation in this

ency standards.

auction, Enel-Codensa confirms its support for en-

which truly stand out in this area are awards the

prize for their leadership role in sustainability.

ergy transition and transformation happening in the

Colombia: Enel-Emgesa´s donation to schools

country.

in Baraya and Tello, Huila, under the work for tax

Brazil: Enel Distribución São Paulo achieves the

Colombia: Enel-Codensa modernized the Girardot

and Alto Magdalena power grid
With a $ 20 billion Colombian peso investment,

mechanism
The Company allocated more than $ 612 million Co-

best quality indicators in its history
Enel Distribución São Paulo recorded the best op-

lombian pesos for the project that benefited more

erational indicators in the company’s history. The

than 2,800 children aged 5 to 17. The educational

average system outage frequency (SAIFI) was 3.93

Enel-Codensa concluded the most important works

establishments received some 1,191 elements for

times in October (over a 12-month period), which

in the last 20 years in Girardot and the Alto Magda-

students at preschool, elementary and high school

is the best index among all Brazilian energy distrib-

lena Province in Cundinamarca, in order to respond

levels, as well as material for teachers.

utors, while the average system outage duration

to the growth of the region´s energy demand and

service quality. A medium-voltage underground

substitution was built between the Mango and Dia-

mond substations.

Peru: SET Izaguirre to benefit 110 thousand clients
The

Izaguirre Electric Transmission Substation

(SET), located in the San Martín of Porres district

started to operate. The facility represents an invest-

Peru: Enel Group companies, the country’s first in

ment of $ 42 million Peruvian soles and will improve

(SAIDI) was 6.83 hours, the Company´s best indica-

tor and the fourth best in the country.

Colombia: Enel-Emgesa started repopulating the
Magdalena River with fish
The project, which took more than 10 years of re-

anti-bribery certification in the electricity sector
Enel Generación Peru, Enel Distribución Peru and

Chinango SAC received the ISO 37001 certification

the electrical service of approximately 110 thousand

search, included inserting 200,000 juvenile speci-

clients.

mens of the Capaz species - a milestone for the

country as it is the first time that this species has

for the effectiveness of their anti-bribery manage-

Peru: Ministry of Labor and Employment Promotion

been successfully repopulated in Colombian rivers.

ment system.

recognizes Enel Peru for Good Labor Practices
The recognitions are in the “Work-family balance

The entire process will involve planting some 2 mil-

lion native species in the upper Magdalena River

promotion “ category thanks to the promotion of

basin over a 1-year period.

NOVEMBER

new family life conciliation measures and in the

“Prevention of risks in occupational health and

Colombia: Enel-Codensa modernized the public

Enel Américas participates in the Eighth United Na-

safety, sexual harassment and labor harassment”

tions Forum in Geneva, Switzerland
Enel Américas presented its best practices in the

Business and Human Rights Forum at the “Cor-

rupting the Human Rights Agenda: How Business

category for the policies, procedures and training

programs in this area.

can leverage anti-corruption practices to strengthen

DECEMBER

respect for human rights” session. This speaking

instance was host to more than 2,000 participants

from government agencies, businesses, civil soci-

ety, investors, the United Nations, among others; it

Enel Américas is recognized by ALAS20as the best
company in Chile
The recognition was awarded for the Company´s

lighting systems of the El Colegio and Lenguazaque
municipalities
The Company upgraded more than 2,000 lights

with LED technology in the municipality of El Co-

legio and another 500 in Lenguazaque. This mod-

ernization contributes to the progress and develop-

ment of local municipalities, promotes the rational

and efficient use of energy, and reduces consump-

tion by up to 45%. Lenguazaque and El Colegio

joined five other Cundinamarca municipalities that,

emphasized the importance of anti-corruption expe-

leadership, consistency, and excellence in the pub-

to date, installed LED technology in 100% of their

riences and practices implemented in Enel Améri-

lic disclosure of information related to its investor

street lighting.

cas and its subsidiaries in line with Sustainable

relations practices, sustainable development, and

Development Goal 16 (Peace, Justice and Strong

corporate governance.

Institutions).

Peru: First public electric bus rolls along Lima

streets
The Global Sustainable Electricity Partnership

(GSEP) and member companies, Enel X and Hy-

Enel Américas holds Investor Day
Attended by more than 70 investors, Enel Améri-

Argentina: First company to join the distributed gen-

eration regime
Technology Company EXO installed 60 solar panels

cas held its Investor Day to present the Company’s

dro-Québec, placed the first electric bus into Lima’s

2020-2022 strategic plan. The event, certified as

public transport system with the collaboration of

to generate the energy it consumes and inject the

carbon neutral, presented Enel Américas´ sustain-

Protransporte and the Peruvian Ministries of Energy

surplus into the grid. It is the first industrial client in

able strategy and its commitment to consolidating

and Mines, Transport and Communications, and the

the city with a bidirectional meter.

a zero direct emissions business, which has proven

Environment.

Argentina: New charging stations for electric vehi-

economic spheres, and that will continue to grow

Moody’s maintains rating and changes perspective

cles
Enel X installed 60 charging stations for electric

in a region where efficient solutions in the energy

market are key to improving life quality in large cit-

to “Positive”
On December 19, Moody’s reported it was main-

to be successful in the social, environmental and

vehicles throughout the country, thus managing to

ies.

link the extensive Argentine territory with the most

modern technology in the world.

taining the company´s “Baa3” rating and changed

its perspective from “Stable” to “Positive”, reflect-

ing expectations of better operations and cash

flows leading to continuous deleveraging.

3. 2019 Milestones

Annual Report Enel Américas 2019 04.

MAIN FINANCIAL
INDICATORS

04. Main financial indicators

Main financial
indicators

Total assets

15,921,322

15,449,154

11,281,556

20,168,991

27,396,356

29,776,384

2014

2015

2016

2017

2018

2019

As of December 31, of each year (1)

Total current Liabilities

7,642,104

7,259,346

6,006,307

11,890,484

18,564,456

17,530,198

Operating Revenues

7,253,876

5,301,440

5,197,286

10,438,003

13,184,062

14,314,112

EBITDA

Net income (2)

Liquidity Ratio

Indebtedness ratio (3)

Generation Business

ARGENTINA

Number of employees

Number of generating units

Installed capacity (MW) (4)

Electricity generated (GWh)

Energy sales (GWh)

BRAZIL

Number of employees

Number of generating units

Installed capacity (MW) (4)

Electricity generated (GWh)

Energy sales (GWh)

COLOMBIA

Number of employees

Number of generating units

Installed capacity (MW) (4)

Electricity generated (GWh)

Energy sales (GWh)

PERU

Number of employees

Number of generating units

Installed capacity (MW) (4)

Electricity generated (GWh)

Energy sales (GWh)

2,300,020

1,615,112

1,643,369

2,947,261

3,357,708

3,994,192

610,158

661,587

383,060

709,043

1,201,381

1,614,085

1.23

0.92

1.01

0.65

1.25

1.14

0.92

1.44

0.66

2.10

0.98

1.43

2014

2015

2016

2017

2018

2019

As of December 31, of each year

645

4,522

14,390

15,276

208

987

5,225

7,108

589

3,059

13,559

15,773

324

1,949

9,062

9,916

657

4,522

15,204

15,770

194

987

4,398

6,541

484

3,459

13,705

16,886

292

1,983

8,801

9,283

632

4,419

13,124

13,312

185

974

3,665

9,448

551

3,457

14,952

18,015

310

1,934

8,698

9,800

578

4,419

14,825

14,852

146

1,354

4,034

12,587

604

3,467

14,765

18,156

320

1,979

7,430

10,457

581

4,419

13,949

13,952

158

1,354

3,755

22,236

615

3,499

14,052

18,544

325

1,985

8,106

10,597

532

4,419

12,974

12,976

183

1,354

5,292

30,002

599

3,506

15,250

18,376

315

1,987

8,244

11,199

Annual Report Enel Américas 2019 s
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TOTAL

Number of employees

Number of generating units

Installed capacity (MW) (4)

Electricity generated (GWh)

Energy sales (GWh)

Distribution

ARGENTINA

Energy sales (GWh) (5)

Number of clients (5)

Energy losses

Number of employees

Clients/employees

BRAZIL

Energy sales (GWh) (5)

Number of clients

Energy losses

Number of employees

Clients/employees

COLOMBIA

Energy sales (GWh) (5)

Number of clients

Energy losses

Number of employees

Clients/employees

PERU

Energy sales (GWh) (5)

Number of clients

Energy losses

Number of employees

Clients/employees

Total

Energy sales (GWh) (5)

Number of clients

Average Energy losses

Number of employees

Clients/employees

2014

2015

2016

2017

2018

2019

As of December 31, of each year (1)

1,766

10,517

42,236

48,073

1,627

101

10,951

42,108

48,480

1,678

105

10,784

40,439

50,575

1,648

107

11,219

41,053

56,051

1,679

112

11,257

39,863

65,329

1,629

112

11,267

41,760

72,553

2014

2015

2016

2017

2018

2019

As of December 31, of each year

17,972

18,492

18,493

17,736

17,548

16,798

2,464,117

2,479,559

2,504,558

2,529,307

2,529,953

2,490,449

10.75%

12.30%

12.04%

14.25%

15.50%

3,823

645

4,142

596

4,290

584

4,251

595

3,760

673

3,511

709

22,842

22,776

22,809

34,876

61,310

80,682

6,500,500

6,754,327

6,943,600

9,974,471

17,143,979

17,233,637

16.42%

17.30%

16.10%

15.22%

2,415

2,732

2,348

2,877

2,244

3,237

3,336

2,990

14.00%

10,632

1,612

14.60%

9,832

1,753

13,660

13,946

13,632

13,790

14,024

14,307

2,772,376

2,865,159

3,248,447

3,340,457

3,438,620

3,526,776

7.19%

1,043

2,658

7.30%

947

2,771

7.10%

1,337

2,430

7.84%

1,376

2,428

7.74%

1,529

2,249

7.67%

1,504

2,345

7,338

7,624

7,782

7,934

8,045

8,211

1,293,503

1,336,610

1,367,044

1,396,966

1,422,608

1,433,638

7.95%

619

2,090

8.30%

570

2,191

7.80%

620

2,216

8.24%

588

2,376

8.09%

590

2,411

8.22%

594

2,414

61,812

62,838

62,715

74,337

100,927

119,998

13,030,496

13,435,655

14,063,649

17,241,201

24,535,160

24,684,500

10.58%

11.30%

10.76%

12.30%

7,900

1,649

8,007

1,678

8,491

1,656

9,551

1,805

10.96%

16,511

1,486

11.50%

15,411

1,599

(1) Accounting figures according to instructions and standards issued by the Financial Markets Committee (CMF). Figures in millions of nominal Chilean

pesos for 2014, 2015 and 2016, and figures in thousands of dollars for 2017, 2018 and 2019. Extraordinary Shareholders’ Meeting held on April 27,
2017 approved the change of the Company’s functional currency from the Chilean peso to the US dollar.

(2) It corresponds to the Net Income attributable to the parent Company.
(3) Total Liabilities/Equity plus Minority Interest.
(4) Unlike in previous years, for 2016, 2017, 2018 and 2019 the net installed capacity was considered, whose difference with gross installed capacity

lies in the self-consumption discount.

(5) Consumption and non-billable clients (CNF) are not included.

04. Main financial indicators

Annual Report Enel Américas 2019 05.

IDENTIFICATION
OF THE COMPANY
AND CONSTITUENT
DOCUMENTS

05. Identification of the company and constituent documents

Identification of the
Company

Name or Company name

Enel Américas S.A.

Domicile

Type of Company

Rut

Address

Postal code

Telephone

PO box

Securities Registration number

External auditors

Subscribed and paid-in capital (US$)

Website

Santiago, Chile, may establish agencies or subsidiaries in other parts of the country or abroad

Publicly Traded Company

94.271.000-3

Santa Rosa Nº 76, Santiago, Chile

833-009 SANTIAGO

(56-2) 2353 4400 - (56-2)2 378 4400

1557, Santiago

Nº 175

EY Audit SpA

9.783.875.314,4

www.enelamericas.com

comunicacion.enelchile@enel.com

Investor Relations phone

(56-2) 2353 4682

Ticker symbol in Chilean stock exchanges

Ticker symbol in NY stock exchanges

ENELAM

ENIA

ADR’s Custodian Bank

ADR’s Depositary Bank

Banco Santander Chile

Citibank N.A.

Local credit rating agencies

Feller Rate Clasificadora de Riesgo Limitada, Fitch Chile Clasificadora de Riesgo Limitada

International credit rating agencies

Fitch Ratings, Moody´s Investor Services and Standard & Poor´s International Rating Services

Constituent
documents

Commerce Registry on page 13,099 No. 7,269 in 1981 and

were published in the Official Journal on July 23, 1981. The

bylaws of Enel Américas S.A. have undergone several modifi-

cations ever since.

On August 1, 1988, the Company’s name was changed to

Enersis S.A.

The Company that gave rise to Enel Américas S.A. was initially

In April 2015, Enersis S.A. began a corporate reorganization

formed under the name of Compañía Chilena Metropolitana

process. As part of this process, on December 18, 2015 at the

de Distribución Eléctrica S.A. by a public deed dated June 19,

Company’s Extraordinary Shareholders´ Meeting shareholders

1981, issued by Patricio Zaldívar Mackenna, Notary Public in

approved the first stage of the reorganization process called

Santiago, and modified by a public deed on July 13 of the

“the Spin-off”. Subsequently, the Company´s Spin-off was ap-

same year and by the same notary public. The Company’s in-

proved, and the entity called “Enersis Chile S.A.” was created,

corporation was authorized, and its bylaws approved by Res-

representing the unique vehicle for the control of generation

olution 409-S of July 17, 1981 of the Securities and Insurance

and distribution assets that the Group owns in Chile. The for-

Commission (SVS). The extract of the incorporation authoriza-

mer Enersis S.A. was renamed as “Enersis Américas S.A.”

tion and approval of the bylaws was registered in the Santiago

to control the businesses in the other countries of the region

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(Argentina, Peru, Brazil, and Colombia). The Spin-off was for-

October 18, 2016, granted by Iván Torrealba Acevedo, Notary

malized in a public deed on January 8, 2016, issued by Iván

Public in Santiago, whose extract was registered on pages

Torrealba Acevedo, Notary Public in Santiago, whose extract

79,974 No. 43,179, of the Commerce Registry in 2016 of the

was registered on pages 4013 No. 2441 of the Commerce

Property Registrar in Santiago and was published in the Offi-

Registry in 2016 of the Property Registrar in Santiago and was

cial Journal on October 29, 2016.

published in the Official Journal on January 22, 2016. A sup-

plementary extract was registered on pages 10.743 No. 6.073

The company’s purpose is to carry out, either in the country or

of the same Registry in 2016 of the Property Registrar and

abroad, the exploration, development, operation, generation,

was published in the Official Journal on February 10, 2016.

distribution, transmission, transformation and/ or sales of en-

ergy in any of form and nature, directly or through intermediar-

The Extraordinary Shareholders´ Meetings of Enersis Améri-

ies, as well as telecommunications activities and engineering

cas S.A. and its subsidiaries Endesa Américas S.A. and Chi-

consultancy services in the country and abroad. It may also

lectra Américas S.A. were held on September 28, 2016. The

invest and manage its subsidiaries and associated companies,

Meetings approved, among other issues, the second stage of

whether generating, transmitting, distributing or trading elec-

the corporate reorganization plan denominated “The Merger”.

tricity or whose business is any of the following: (i) energy, in

Therefore, Enersis Américas S.A., the absorbing entity, ac-

any forms or nature, (ii) the supply of public utilities or whose

quired all the assets and liabilities of Chilectra Américas S.A.

main input is energy, (iii) telecommunications and information

and Endesa Américas S.A., the subsidiaries, succeeding them

technology, and (iv) internet-based intermediation services. To

in every right and obligation and incorporating to Enersis

comply with its corporate purpose, the Company will carry out

Américas S.A. the entirety of shareholders and equity of Chi-

the following functions:

lectra Américas S.A. and Endesa Américas S.A.

a) Promote, organize, build, modify, dissolve, or sell compa-

A Meeting held on December 1, 2016 agreed that, after the

nies of any nature, which have similar corporate purposes.

Merger, Enersis Américas S.A would change its name to “Enel

b) Propose investment, financing, and business policies to

Américas S.A.”. The Meeting was formalized in a public deed

subsidiaries, as well as accounting criteria and systems

dated October 18, 2016, granted by Iván Torrealba Acevedo,

that these should follow.

Notary Public, whose extract was registered on pages 79,974

c) Supervise the management of subsidiaries.

No. 43,179 of the Commerce Registry in 2016 of the Property

d) Provide subsidiaries or affiliates with the necessary fi-

Registrar in Santiago and was published in the Official Journal

nancing so they can carry out their business and provide

on October 29, 2016.

management services; financial, technical, legal, and au-

diting advice; and in general, any type of service deemed

The functional currency of the Company was changed from

necessary for their best performance.

pesos to US dollars at the Extraordinary Shareholders´ Meet-

ing held on April 27, 2017, thus modifying the fifth permanent

Apart from its main corporate purpose and always acting with-

article and the first transitory article of the Company’s bylaws.

in the limits established by the Investment and Financing Pol-

Corporate
purpose

The company’s corporate purpose is indicated in the modifi-

cation approved by the Extraordinary Shareholders´ Meeting

held on September 28, 2016, formalized in a public deed on

icy approved by the Shareholders Meeting, The company may

invest in:

1. - The acquisition, operation, construction, rental, adminis-

tration, intermediation, trading, and transfer of all kinds of

movable and immovable assets, either directly or through

subsidiaries or affiliates.

2. - All kinds of financial assets, including shares, bonds and

debentures, commercial papers and, in general, all kinds

of titles or securities and company contributions, either

directly or through subsidiaries or affiliates.

05. Identification of the company and constituent documents

Annual Report Enel Américas 2019 06.

PROPERTY AND
CONTROL

06. Property and control

Ownership
structure

Controller
identification

Ownership
structure

Pursuant to Title XV of Law No. 18.045, Enel Américas S.A. is

a publicly traded company directly controlled by Enel S.p.A.,

an Italian share Company, holding 57.262213% of the shares

issued by Enel Américas S.A.

Enel S.p.A shareholders

Shareholding

The Company’s capital is divided into 76,086,311,036 shares,

Ministero dell’Economia e delle Finanze de Italia

Capital Research and Management Company

Other investors (Institutional and Retail)

with no nominal value, all the same single series and each

Total

share representing one voting right, with no state-owned pref-

23.6%

5.03%

71.37%

100.0%

erential shares.

Controller’s members do not have a joint action agreement.

As of December 31, 2019, all shares were subscribed and

paid-in, and were distributed as follows:

Shareholders

Enel S.p.A.

Chilean pension funds

Number of
share

43,568,705,287

10,693,407,523

ADR´S (Citibank N.A. according to
circular N°1,375 of the CMF)

Foreign Investment Funds

5,063,569,028

1,440,251,353

Shareholding

57.26%

14.05%

6.66%

1.89%

Custodian banks

11,408,472,227

14.99%

Stockbrokers, insurance
companies, mutual funds

Other shareholders

Total Shares

2,653,045,608

1,258,860,010

3.49%

1.65%

76,086,311,036

100.00%

Annual Report Enel Américas 2019 List of the twelve main shareholders
of the Company

As of December 31, 2019, 22.897 shareholders owned Enel Américas. The twelve main shareholders were:

Name or Company Name

ENEL SPA

CITIBANK N.A. AS PER S.V.S. CIRCULAR 1,375

BANCO ITAU CORPBANCA ON BEHALF OF FOREIGN INVESTORS

BANCO DE CHILE ON BEHALF OF NON-RESIDENT THIRD PARTIES

BANCO SANTANDER ON BEHALF OF FOREIGN INVESTORS

AFP HABITAT S A FOR PENSION FUND C

JP MORGAN SECURITIES INC

AFP PROVIDA S.A. FOR PENSION FUND C

AFP CUPRUM S A FOR PENSION FUND C

AFP CAPITAL S A FOR PENSION FUND C

AFP HABITAT S A FOR PENSION FUND A

BANCO DE CHILE ON BEHALF OF CITI NA NEW YORK CLIE

Subtotal twelve major shareholders

Other 22,885 shareholders

TOTAL 22.897 SHAREHOLDERS

ID number

59243980-8

59135290-3

97023000-9

97004000-5

97036000-K

98000100-8

47009201-7

76265736-8

76240079-0

98000000-1

98000100-8

97004000-5

Number of
Shares

Shareholding

43,568,705,287

57.26%

5,063,569,028

3,826,905,816

3,470,280,340

2,746,735,699

1,636,171,795

1,354,774,697

1,304,096,888

874,378,342

827,524,845

788,829,048

653,683,355

66,115,655,140

9,970,655,896

76,086,311,036

6.66%

5.03%

4.56%

3.61%

2.15%

1.78%

1.71%

1.15%

1.09%

1.04%

0.86%

86.90%

13.10%

100.00%

There are no shareholders representing the founding families of the Company and neither are there people related to the gov-

ernment or state entities owning shares exceeding 5% of the ownership.

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06. Property and control

Most significant changes in
ownership

In 2019, the most important changes in the ownership of Enel Américas are as follows:

Name or Company Name

ENEL SPA

CITIBANK N.A. AS PER SVS CIR- LETTER 1,375

BANCO DE CHILE ON BEHALF OF NON-RESIDENT THIRD PARTIES

ID Number DV

59243980

59135290

97023000

BANCO DE CHILE ON BEHALF OF NON RESIDENT THIRD PARTIES 97004000

AFP HABITAT S A

BANCO SANTANDER ON BEHALF OF FOREIGN INVESTORS

AFP PROVIDA S.A.

AFP CUPRUM S A

AFP CAPITAL S A

JP MORGAN SECURITIES INC

AFP MODELO S.A

BANCO DE CHILE ON BEHALF OF CITI NA NEW YORK CLIE

BANCHILE C DE B S A

AFP PLANVITAL S A

BANCO DE CHILE ON BEHALF OF CITI NA LONDON CLIENT

98000100

97036000

76265736

76240079

98000000

47009201

76762250

97004000

96571220

98001200

97004000

BANCO SANTANDER-HSBC BANK PLC LONDON CLIENT ACCOUN 97036000

SANTANDER CORREDORES DE BOLSA LIMITADA

LARRAIN VIAL S A CORREDORA DE BOLSA

BTG PACTUAL CHILE S A C DE B

CREDICORP CAPITAL SA STOCKBROKER

BANCHILE ADM GENERAL DE FONDOS S A

NEVASA S.A STOCKBROKER

96683200

80537000

84177300

96489000

96767630

96586750

SOC ADM DE FDOS DE CESANTIA DE CHILE II SA FDO CESANTIA

76237243

FONDO MUTUO ETF IT NOW IPSA

VALORES SECURITY S A C DE B

BCI C DE B S A

FONDO MUTUO SECURITY INDEX FUND CHILE

MONEDA RENTA VARIABLE CHILE INVESTMENT FUND

SANTIAGO STOCK EXCHANGE

CHILEAN ELEXTRONIC STOCK EXCHANGE

BICE INVERSIONES CORREDORES DE BOLSA S A

SECURITY SELECTIVE MUTUAL FUND

FONDO MUTUO COMPASS CHILEAN SHARES

FONDO MUTUO BTG PACTUAL CHILEAN SHARES

MBI ARBITRAGE INVESTMENT FUND

96980650

96515580

96519800

76724796

96684990

90249000

96551730

79532990

76724781

96804330

96966250

76023598

Number of
shares on
12/31/2018

Number of
shares on
12/31/2019

29,762,213,531

43,568,705,287

4,384,417,428

5,063,569,028

2,344,499,854

3,826,905,816

3,210,128,764

3,470,280,340

1,671,887,493

3,415,942,773

2,401,980,484

2,746,735,699

2,247,892,567

2,395,480,947

1,633,734,907

2,041,715,525

1,646,207,724

1,775,188,309

761,063,736

1,354,774,697

485,430,607

664,919,210

653,683,355

632,343,103

472,409,018

261,383,565

397,294,871

322,252,105

178,732,113

248,522,220

228,911,532

197,920,567

510,591,005

193,658,585

232,602,612

136,785,866

180,711,143

112,049,449

72,148,160

104,989,910

84,173,496

95,153,974

63,857,081

94,432,227

83,225,232

89,037,332

161,924,711

86,559,401

145,365,493

75,077,782

95,163,598

68,648,776

70,409,000

64,766,350

79,450,154

15,248,732

51,307,517

9,859,722

236,490,136

58,129,734

24,198,984

10,501,887

23,061,699

10,101,922

21,900,728

7,236,515

175,518,448

26,692,310

VARIATION PP

0.1815

0.0089

0.0195

0.0034

0.0229

0.0045

0.0019

0.0054

0.0017

0.0078

0.0024

0.0086

-0.0021

0.0018

0.0042

0.0009

-0.0004

-0.0042

-0.0013

-0.0009

0.0004

0.0001

0.0004

0.0001

-0.0010

-0.0009

-0.0003

-0.0001

-0.0008

-0.0005

-0.0023

-0.0002

-0.0020

Annual Report Enel Américas 2019 Stock Exchange transactions carried
out by related individuals in 2019

Type of
person

Legal
Person

ID number

Name /Comp.
name

Date
transaction

Date trans.
reported to
S.A.

Series

No. shares Unit price

Trans. amount Observations

59,243,980

Enel SpA

28/08/2019

08/28/2019

Single

294,771,295

116.97

34,479,111,564

79,880,230

59,243,980

Inversiones
Santa Veronica
Ltda

24/07/2019

07/24/2019

Single

1,644,618

112.1

184,376,529

Enel SpA

15/07/2019

07/15/2019

Single

10,639,088,791

110.41

1,174,628,769,683

Company related
to director Hernán
Somerville Senn.
These shares
remain in custody of
Credicorp

Summary of Directors’ Committee
and shareholders comments and
proposals

Enel Américas S.A. received no comments or proposals regarding the Company´s business between January 1 and December

31, 2019 made by the Directors´ Committee or shareholders who own or represent 10% or more of the shares issued with

voting rights, pursuant to Article 74 of Law No. 18.046 and 136 of the Regulations of Publicly Traded Companies.

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06. Property and control

Annual Report Enel Américas 2019 07.

ADMINISTRATION

07. Administration

Chairman
Francisco de Borja Acha Besga
Attorney at Law, Universidad Complutense de Madrid
DNI: 05263174-S
From 04.28.2016 (1)

DIRECTOR

José Antonio Vargas Lleras
Attorney at Law
Universidad Colegio Mayor del Rosario, Colombia
DNI: 79,312,642
From 04.28.2016

Livio Gallo
Electronic Engineer
Universidad Politécnica de Milán
DNI: AV 0246369
From 04.28.2016

Enrico Viale
Engineer Degree
Universidad Politécnica de Turín
MBA Business School
Universidad de Santa Clara
DNI: AU 2580379
From 04.28.2016

Hernán Somerville Senn
Lawyer
Universidad de Chile
Master of Comparative Jurisprudence
University of New York
DNI: 4.132.185-7
From 04.28.2016(2)

Domingo Cruzat Amunátegui
Industrial civil engineer
Universidad de Chile
MBA The Wharton School of Pennsylvania
University
ID number: 6,989,304-K
From 04.28.2016

Patricio Gómez Sabaini
Business Administration Degree
George Mason University, Virginia
Master of Business Administration
George Washington University, Washington DC
Passport: 16941675N
From 04.28.2016

(1) He was originally appointed Director of the former Enersis Américas S.A.
on 06.30.2015, currently Enel Américas.

(2) He was originally appointed Director of the former Enersis Américas S.A.
on 07.29.2015, currently Enel Américas

Annual Report Enel Américas 2019
Board of Directors

1. CHAIRMAN
Francisco de Borja Acha Besga
Attorney at Law, Universidad
Complutense de Madrid
DNI: 05263174-S
From 04.28.2016 (1)

2. DIRECTOR
José Antonio Vargas Lleras
Attorney at Law
Universidad Colegio Mayor del
Rosario, Colombia
DNI: 79.312.642
From 04.28.2016

3. DIRECTOR
Enrico Viale
Engineer Degree
Universidad Politécnica de Turín
MBA Business School
Universidad de Santa Clara
DNI: AU 2580379
From 04.28.2016

4. DIRECTOR
Livio Gallo
Electronic Engineer
Universidad Politécnica de Milán
DNI: AV 0246369
From 04.28.2016

5. DIRECTOR
Hernán Somerville Senn
Lawyer
Universidad de Chile
Master of Comparative
Jurisprudence
University of New York
DNI: 4,132,185-7
From 04.28.2016 (2)

6. DIRECTOR
Domingo Cruzat Amunátegui
Industrial civil engineer
Universidad de Chile
MBA The Wharton School of
Pennsylvania University
ID number: 6,989,304-K
From 04.28.2016

7. DIRECTOR
Patricio Gómez Sabaini
Business Administration Degree
George Mason University, Virginia
Master of Business Administration
George Washington University,
Washington DC
Passport: 16941675N
From 04.28.2016

(1) He was originally appointed Director of the former Enersis Américas S.A. on 06.30.2015, currently Enel Américas.
(2) He was originally appointed Director of the former Enersis Américas S.A. on 07.29.2015, currently Enel Américas.

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07. Administration

Enel Américas is managed by a Board of Directors made up by

•

The Board periodically meets with the Internal Audit group

seven members, who remain in office for a three-year period

to analyze the annual audit plan, monitor action plans,

and may be re-elected. The Board was appointed at the Ordi-

review the effectiveness of the crime prevention model

nary Shareholders’ Meeting held on April 30, 2019. According

implemented by the Company, as well as other issues de-

to the Law on Corporations, should there be a Director’s va-

tailed in the Ethics and Transparency section.

cancy, the whole board shall be renewed at the next ordinary

shareholders’ meeting, and, in the meantime, the Board may

•

The Board meets with the Sustainability Management on

name a substitute. The Company does not consider any sub-

a quarterly basis, to discuss, among others, the effective-

stitute members.

ness of the policies adopted by the Company and related

to social responsibility and sustainable development and

•

In 2019, the Director Training Program was implemented to

the existence of goals and development milestones of

contribute to improving our Directors’ knowledge through

sustainability indicators.

training sessions in various subjects. Some of the subjects

covered during the 2019 program are related to “Relevant

•

The Board meets with the External Auditors on a quarterly

Aspects of Sustainability: Analysis of Certification Entities

basis, complying with the voluntary practice contained in

and Monitoring Indicators”, “New Accounting Standards

General Standard No.385 issued by the Financial Markets

Applicable to the Company”, among others.

Committee to review matters related to the audit plan and

•

The Company, in preparation for the Shareholders’ Meet-

others.

ing, publishes on its website the resumes of the candi-

dates for Directors so that the Company´s shareholders

•

The Board has an electronic dispatch system, which allows

can be informed in a timely manner about the candidates´

directors to securely, remotely and permanently access

capabilities, conditions and experience.

documentation related to board sessions, made available

to directors at least 3 days before each session. It also

•

The Company’s Risk Policy was approved at a Board ses-

aims to achieve a fully paperless management of all docu-

sion held on March 23, 2016. The Board meets at least

mentation.

once every quarter with the Risk Management Commit-

tee to analyze the risk matrix, which includes sustainability

•

The Company has set up an Ethics Channel, governed

risks and mitigation measures.

by the whistleblowing policy, which has been duly com-

municated to the Company’s employees. This channel is

•

The Company has established an induction procedure for

available to employees, contractors, suppliers, clients,

new Directors in matters considered necessary for the cor-

communities, and other stakeholders, with access avail-

rect development of their work that would permit them

able via telephone, face-to-face interaction and digital

an effective and informed integration into the Company´s

means through the Company’s website. Complaints are

business. The procedure consists of a dispatch of docu-

subsequently investigated by the Audit Management de-

mentation related to the Company´s mission, vision, prin-

partment and reported to the Directors´ Committee.

ciples and corporate values, its businesses and strategic

objectives, markets in which it operates, economic and

• Since 2017, the Board has implemented at least two annual

financial position, inclusion, diversity and sustainability pol-

visits to some units or facilities of the Enel Group, to learn

icies and risk control, among others.

about the status and operation of these units and facilities

and the main functions and concerns of those who carry

•

The Company has established contingency plans to react

them out.

to critical events or crises, through the formation of ad-hoc

committees, made up of experts who can deal with the

•

The Company’s bylaws do not provide for the appointment

crises or the event in question.

of Alternate Directors.

Annual Report Enel Américas 2019 Compensations of the
Board of Directors
and the Directors’
Committee

Pursuant to Article 33 of Law No. 18,046 on Corporations, the Ordinary Shareholders’ Meeting held on April 30, 2019 approved

the compensations for the Board of Directors and the Directors’ Committee for the 2019 accounting period. The compensation

for the Board of Directors is a fixed monthly payment, part at any event and the other part per event. The compensation con-

sists of 216 UF (development units or Unidades de Fomento) as the fixed monthly remuneration at any event and 79.2 UF as

an attendance fee per Board meeting with a maximum of 16 sessions. The compensation of the Chairman of the Board will be

twice the compensation of a Director.

The compensation of the Directors’ Committee consists of a fixed monthly amount, part at any event and the other part as

per event. This compensation consists of 72 UF (development units or Unidades de Fomento ) at any event and 26.4 UF as an

attendance fee per Board meeting with a maximum of 16 sessions.

All compensation expenses in 2019 reached US$ 621,804 and are shown in the following table. The Board of Directors did not

incur any expenses for external consulting services.

2019

Amounts in US$
Name

Francisco de Borja Acha (1)

José Antonio Vargas Lleras (1)

Livio Gallo (1)

Enrico Viale (1)

Hernán Somerville Senn

Domingo Cruzat Amunátegui

Patricio Gómez Sabaini

Total

Position

Chairman

Director

Ordinary and
extraordinary
sessions of the
Board

Committee
Fixed
compensation

Ordinary and
extraordinary
sessions of the
Board

Board Fixed
compensation

Total
2019

102,832

308,496

56,552

34,277

169,656

102,832

13,607

40,820

207,268

621,804

Total compensation expenses in 2018 reached US$ 642,836 and are shown below. The Board of Directors did not incur any

expenses for external consulting services.

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07. Administration

2018

Amounts in US$
Name

Francisco de Borja Acha (1)

José Antonio Vargas Lleras (1)

Livio Gallo (1)

Enrico Viale (1)

Hernán Somerville Senn

Domingo Cruzat Amunátegui

Patricio Gómez Sabaini

Total

Position

Chairman

Director

Ordinary and
extraordinary
sessions of the
Board

Committee
Fixed
compensation

Ordinary and
extraordinary
sessions of the
Board

Total
2018

Board Fixed
compensation

103,798

311,394

62,032

59,253

34,636

183,318

103,909

14,739

44,216

215,205

212,426

642,836

(1) Messrs. Francisco de Borja A., José Antonio Vargas Ll., Livio Gallo and Enrico Viale, rejected compensation payments.

Social
responsibility
and
sustainable
development

Board diversity

Number of people by gender:

Female

Male

Total

Number of people by nationality:

Chilean

Spanish

Argentinean

Colombian

Italian

Total

Number of people by age range:

Between 41 and 50 years old

Between 51 and 60 years old

Between 61 and 70 years old

Over 70 years old

Total

Number of people by seniority:

Less than 3 years

Between 3 and 6 years

More than 12 years

Total

Review
of the
Board of
Directors´
expenses

In 2019, the Board of Directors did not incur any expenses in

consultation services..

Annual Report Enel Américas 2019

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Property
over Enel
Américas

As of December 31, 2019, according to the Shareholders’

the Company. However, Director Mr. Hernán Somerville is a

controlling shareholder in Inversiones Santa Verónica Limita-

da, an entity that owns 5,044,782 of the Company´s shares.

Directors’
Committee

Committee. At the ordinary session of the Directors’ Com-

mittee held on April 30, 2019, Mr. Hernán Somerville Senn

was appointed Chairman of the Directors’ Committee and Mr.

Domingo Valdés Prieto, Secretary of the Committee.

Directors’
Committee
annual
management
report

The Directors’ Committee held thirteen sessions in 2019.

Pursuant to Article 50 bis of Law No. 18.046 on Corporations,

Enel Américas S.A.´s Directors’ Committee is made up by

three members, with powers and duties as set forth in said ar-

ticle as well as those delegated by the Board and established

in the Director’s Committee´s Regulations.

At the 2019 sessions, the Director’s Committee addressed

subjects within the area of their competence, fully complying

with their obligations pursuant to Article 50 bis of Law 18.046

on Corporations and the Sarbanes Oxley Act of the United

States of America, as well as other applicable regulations.

On June 29, 2005 the Company’s Board of Directors estab-

lished an Audit Committee composed by three Directors who

are also members of the Board, pursuant to the Sarbanes-Ox-

ley Act and corporate governance regulations of the NYSE.

Subsequently, on April 22, 2010, the Company’s bylaws were

amended at the Extraordinary Shareholders´ Meeting, and the

Audit Committee merged with the Directors’ Committee.

As of January 1, 2019, the three members of the Directors’

Committee of Enel Américas S.A. were: Messrs. Hernán

Somerville (independent), Domingo Cruzat Amunátegui (in-

dependent) and Patricio Gómez Sabaini (independent). Mr.

Hernán Somerville Senn was Chairman and Financial Expert

and Mr. Domingo Valdés Prieto was Secretary of the Direc-

tors’ Committee.

At the Board of Directors´ ordinary session held on April 30,

2019 Messrs. Hernán Somerville Senn, Patricio Gómez Sa-

baini and Domingo Cruzat Amunátegui were appointed as

members of the Directors’ Committee. Mr. Hernán Somer-

ville Senn was appointed Financial Expert of the Directors’

1. Consolidated
financial statements

At the ordinary session held on February 27, 2019, the follow-

ing documents were unanimously confirmed as having been

reviewed: the Consolidated Financial Statements as of Decem-

ber 31, 2018, its Notes, the Income Statements and Significant

Events, as well as the External Auditor’s and Account Inspec-

tors´ opinions. At the ordinary session held on April 25, 2019,

the Directors’ Committee unanimously confirmed as having

been reviewed: The Company´s Consolidated Financial State-

ments as of March 31, 2019, its Notes, the Income Statement

and Significant Events.

At the extraordinary session held on April 25, 2019, the Direc-

tors’ Committee unanimously confirmed having reviewed the

Company´s Income Statement pursuant to NIIF as incorporat-

07. Administration

ed into Form 20-F so that it could be filed with the US Securities

During the 2019 financial year, the Directors´ Committee did

and Exchange Commission (SEC) to comply with the regula-

not examine new operations between related parties, notwith-

tions and requirements issued by said public authority.

standing the analysis of the external auditors’ reports on opera-

tions with previously approved related parties.

At the extraordinary session held on July 31, 2019, the Direc-

tors’ Committee unanimously confirmed having reviewed the

Company´s Consolidated Financial Statements as of June 30,

2019, its Notes, Financial Statement Analysis, Income State-

ment and Significant Events, as well as the opinions issued by

external auditors on July 31, 2018, signed by Mr. Gastón Villar-

roel Olivares, partner of EY Audit SpA.

At the ordinary session held on October 28, 2019, the Directors’

Committee unanimously confirmed having reviewed the Com-

pany´s Consolidated Financial Statements as of September 30,

2019; its Notes, the Income Statement, Significant Events and

the report related to the operations between related parties

4. Supervision
and evaluation of
External Auditors

At the ordinary session held on February 27, 2019, the Com-

mittee unanimously evaluated as reasonable the work of EY

Audit SpA, the Company´s external auditors carried out during

prepared by the external auditors.

fiscal year 2018. .

2. Review of
services to be
offered by External
Auditors

5. External Auditors´
report on money
orders and brokerage

At the ordinary session held on February 27, 2019, the Direc-

tors’ Committee unanimously agreed to register that they

The ordinary sessions held on January 23, February 27, March

had formally and expressly received the report on money bro-

27, and November 25, all held in 2019, analyzed the services

kerage and money orders prepared by the external auditors,

provided by the Company´s external auditors but which were

EY Audit SpA issued on February 27, 2019. The Committee

not part of a recurring external audit. The committee unani-

also indicated that even though the described regulation was

mously agreed to declare that they did not compromise the

no longer in place, the legal obligation which indicates that

technical reliability or the independence of judgment of the re-

companies which have not been formally authorized by the

spective external auditing companies, pursuant to Section 202

competent public authority may not carry out private commer-

of the Sarbanes Oxley Act, article 242, final subsection, of Law

cial activity reserved for banks or carry out money brokerage

18.045 of the Securities Market and in the Regulations issued

transactions was still valid.

by the Directors’ Committee.

3. Review of
operations
between related
parties

6. Review of the
internal control
letter - FMC Official
Notification No. 422

Annual Report Enel Américas 2019 s
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The Directors’ Committee discussed this issue during the session

held on February 27, 2019. On December 6, 2007, the National

Stock Market Commission issued Official Notification No. 422,

complementing Notification No. 980 issued on December 24,

1990. The Notification provides specific instructions regarding in-

ternal control procedures, providing an interim report and extend-

ing the period indicated in Notification No. 980 for internal auditors

to submit the final internal control report, indicating that it should

be handed in no later than the date on which the Board of Direc-

tors is informed of the financial statements for the period ending

on December 31 of each year.

Mr. Hernán Somerville Senn, Chairman of the Directors’ Com-

mittee, indicated that these regulations were revoked, however

despite the revocation, article 246 of Law on the Securities Mar-

ket, among other subjects, established that external audit should

inform the Board and the Directors’ Committee of any deficiencies

detected in external audits in order to adopt and maintain standard

accounting practices, system management and internal audits,

identify discrepancies between accounting principles related to

financial statements and relevant criteria generally applied in the

industry where the Company carries out its business, as well

as the compliance with the Company’s and its subsidiaries´ tax

covered in the
NCG No. 385

At the ordinary session held on February 27, 2019, the Com-

mittee unanimously confirmed having reviewed the matters

referred to in paragraph 1 d) of the CMF General Standard

Norm No. 385 as presented by the External Auditors, who

emphasized that none of the hypotheses described in sec-

tions ii, iii and v of the numeral had occurred

8. External
Auditors´ fees for
fiscal year 2018

obligations included in the referred external audit, therefore the

At the ordinary session held on January 23, 2019, the Direc-

necessity to inform internal control situations detected by EY was

tors’ Committee unanimously confirmed having reviewed the

still required.

payments for the external auditors made by the companies of

the Enel Américas Group and to different audit firms in 2018.

He added that the aforementioned revocation when it was issued

did not affect the submission terms mandated by NCG No. 30 for

This way, and as informed in this report, the Directors´ Com-

the provision of Financial Statements and, therefore, it was nec-

mittee fully complied with the obligations pursuant to Article

essary to understand that the internal control report was part of

50 bis of Law No. 18.046 on Corporations.

the information to be provided by external auditors during the first

quarter of each year, together with the review and the approval of

the annual Financial Statements. As such, at the ordinary session

held on February 29, 2019, the Directors’ Committee unanimously

agreed to register and confirm that they had been formally and

expressly informed they had to comply with aforementioned reg-

ulation through the Internal Control Letter issued on February 27,

2019., prepared by EY Audit SpA to comply with said regulation.

7. External
Auditors´ review
of matters

9. External audit
contract between
Enel Américas S.A.
and EY Audit SpA
for fiscal year 2019

At the ordinary session held on April,30 2019, the Directors´

Committee acting unanimously confirmed having examined

the contract to be signed between Enel Américas S.A. and EY

External Auditors.

07. Administration

10. Proposal of
External Auditors

12. Proposal of
private risk rating
agencies

At the ordinary session held on February 27, 2019, the Di-

rectors’ Committee unanimously agreed to ask the Board of

Directors to suggest Feller Rate Clasificadora de Riesgo Lim-

itada and Fitch Chile Clasificadora de Riesgo Limitada as the

national risk classifiers at the respective Shareholders´ Meet-

ing; and the firms Fitch Ratings, Moody’s Investors Services

and Standard & Poor International Ratings Services as private

international risk classifiers, for the 2019 financial year.

13. Analysis of
Complaints Filed
with the Ethics
Channel

At the ordinary session held on January 23, 2019 and at the

ordinary session held on August 29, 2019 the Directors’ Com-

mittee unanimously issued their opinion on each of the pre-

sented complaints, providing the guidelines to be followed for

each one and confirming what has been resolved by this chan-

nel, stating that it is the Chairman of the Directors’ Commit-

tee who must call for an extraordinary meeting of the afore-

mentioned body should, in the opinion of the Chairman of the

Committee, such complain merit a meeting.

At the ordinary session held on March 27, 2019, the Directors’

Committee unanimously agreed to ask the Board to suggest

the following order of precedence for the nomination of the

external auditors´ firms for Enel Américas for 2019 at the Or-

dinary Shareholders´ Meeting: 1st EY; 2nd PKF and 3rd BDO.

The fundamentals considered relevant to propose EY in the

first place as Enel Américas S.A.´s external auditor were as

follows: (i) EY presented the most competitive proposal ac-

cording to the verified technical and economic evaluations

among the proposals received; (ii) It Is highly qualified in

terms of available resource quality and it has an extensive ex-

perience in the electricity sector; (iii) It is one of the four most

important external audit firms both internationally and nation-

ally; (iv) It is the external audit company with the highest level

of synergy with Enel Américas S.A., since EY is also the main

external auditor for Enel S.p.A., Enel Américas S.A.´s control-

ler; and (v) The relationship between the Company and EY has

been evaluated as reasonable by the Directors´ Committee.

11. Form 20-F
presented to the
US Securities
and Exchange
Commission (SEC)

At the ordinary session held on April 25, 2019, the Directors´

Committee unanimously confirmed having reviewed the Finan-

cial Statements under NIIF as incorporated into Form 20-F, so

that it could be presented to the US Securities and Exchange

Commission (SEC) to comply with the regulations and require-

ments issued by said public authority..

Annual Report Enel Américas 2019 16. Expenditure
analysis of 2018
External Audit

At the ordinary session held on January 23, 2019 the pay-

ments made to the external auditors by Enel Américas and

the payments by its subsidiaries to different external audit

firms during the 2018 financial year were declared unanimous-

ly reviewed making a clear distinction between recurrent and

non-recurrent external audit services and services other than

external audit services, concluding that they had not affected

their independence or suitability.

This way, and as informed in this report, the Directors´ Com-

mittee has fully complied with the obligations.

Therefore, and as informed in this report, the Directors´ Com-

mittee has fully complied with the obligations established in

Article 50 bis of Law No. 18.046 on Corporations.

Expenses of
Enel Américas
S.A. Directors’
Committee

The Directors’ Committee did not make use of the expense

budget set aside for the Committee´s ordinary functions as

approved by the Ordinary Shareholders Meeting held on April

30, 2019.

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14. Review of the
compensation
system and
compensation
plans for the
Company´s
managers, senior
executives and
employees

At the ordinary session held on June 26, 2019, the Directors’

Committee unanimously confirmed having reviewed the pay-

ment systems and compensation plans of the Company’s

managers, senior executives, and employees.

15. Directors´
Committee
budget proposal
for 2019

At the ordinary session of February 28, 2018, the Directors’

Committee unanimously approved the Directors’ Committee

budget proposal for 2019 consisting of 10,000 UF or devel-

opment units known as Unidades de Fomento for expenses

related to the operation of the Committee and its advisors.

Similarly, the Directors’ Committee unanimously decided to

submit the proposal to the next Ordinary Shareholders’ Meet-

ing of Enel Américas S.A. to be held in April 2019 for its ap-

proval which will resolve the matter as per the sphere of its

competence.

07. Administration

Chairman
Francisco de Borja Acha Besga
Attorney at Law Universidad Complutense de Madrid
DNI: 05263174-S
From 04.28.2016

MANAGEMENTS

Internal Audit Officer
Raffaele Cutrignelli (1)
International Businesses Degree
Nottingham Trent University (United
Kingdom)
Audit and Internal Control Master’s Degree
Universitá di Pisa (Italy)
Certificate in Strategy, Innovation,
Management and Leadership
Massachusetts Institute of Technology (MIT)
ID number: 25.553.336-3
From 10.01.2016

CEO

Maurizio Bezzeccheri
Doctor Cum Laude degree in Chemical
Engineering
Università degli Studi di Napoli
R+D Development of Steam Generators
Official Professional Qualification for
engineering practice
ID number: 26.490.357-2
From 08.01.2018

Administration, Finance and Control Manager
Aurelio Bustilho de Oliveira
Business Administration
Universidad de Brasilia
MBA de Universidad Federal Rio Janeiro/ COPPEAD
ID number: 26.102.661-9
From 10.01.2018

Legal Counsel and Secretary of the Board
Domingo Valdés Prieto (1)
Lawyer
Universidad de Chile
Master´s Degree in Law of University of Chicago
ID number: 6.973.465-0
From 04.30.1999

Planning and Control Manager
Paolo Pescarmona (2)
Master´s in Economy and Business
Universita degli studi di Torino, Turin
Passport YB3239236
From 11.15.2019

Enel X South America Manager
Simone Tripepi
Engineer
Universita Degli studi di Roma “Tor Vergata”
ID number: 25.067.660-3
From 08.29.2019

(1) They also hold the same positions in Enel Chile.
(2) Paolo Pescarmona took over on November 15, 2019 from Bruno Stella.
Francisco Miqueles took office on February 26, 2020 replacing Paolo Pescarmona

Annual Report Enel Américas 2019 s
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Senior Management

1. CHIEF EXECUTIVE OFFICER
Maurizio Bezzeccheri
Doctor Cum Laude degree in Chemical Engineering
Università degli Studi di Napoli
R+D Development of Steam Generators
Official Professional Qualification for engineering practice
ID number: 26.490.357-2
From 08.01.2018

2. INTERNAL AUDIT OFFICER
Raffaele Cutrignelli (1)
International Businesses Degree
Nottingham Trent University (United Kingdom)
Audit and Internal Control Master’s Degree
Universitá di Pisa (Italy)
Certificate in Strategy, Innovation, Management and Leadership
Massachusetts Institute of Technology (MIT)
ID number: 25.553.336-3
From 10.01.2016

3. CHIEF FINANCIAL OFFICER
Aurelio Bustilho de Oliveira
Business Administration
Universidad de Brasilia
MBA de Universidad Federal Rio Janeiro/ COPPEAD
ID number: 26.102.661-9
From 10.01.2018

4. LEGAL COUNSEL AND SECRETARY OF THE BOARD
Domingo Valdés Prieto (1)
Lawyer
Universidad de Chile
Master´s Degree in Law of University of Chicago
ID number: 6.973.465-0
From 04.30.1999

5. PLANNING AND CONTROL OFFICER
Paolo Pescarmona (2)
Master´s in Economy and Business
Universita degli studi di Torino, Turin
Passport YB3239236
From 11.15.2019

6. HEAD OF ENEL X SOUTH AMERICA
Simone Tripepi
Engineer
Universita Degli studi di Roma “Tor Vergata”
ID number: 25.067.660-3
From 08.29.2019

(1) They also hold the same positions in Enel Chile.
(2) Paolo Pescarmona took over on November 15, 2019 from Bruno
Stella.
Francisco Miqueles took office on February 26, 2020 replacing Paolo
Pescarmona

07. Administration

Remunera-
tions of
managers
and senior
executives

In 2019, the remunerations and benefits received by the Chief

Executive Officer and senior executives totaled US$ 2,586 thou-

sand as fixed remuneration and US$ 21 thousand as benefits.

In 2018, the remunerations and benefits received by the Chief

Executive Officer and senior executives totaled US$ 2,586

thousand as fixed remunerations and US$ 99 thousand as

benefits.

The amounts included compensations for senior managers and

executives in office as of December 31 of each year, as well as

those who left the Company during the respective period.

Benefits for
Managers
and Senior
Executives

The Company provides its main executives and their family

group recognized as dependents with the benefits of supple-

mentary health insurance and a catastrophic insurance. Ad-

ditionally, the Company has purchased life insurance for its

main executives. These benefits are offered according to the

management level corresponding to the employee in any giv-

en moment. In 2019, the amount spent on benefits was US$

5,875, a value that is included in the remunerations received

by senior management

Incentive
plans for
managers
and senior
executives

Enel Américas implemented an annual bonus plan for its ex-

ecutives for meeting objectives and the level of their individ-

ual contribution to the Company´s results. This plan includes

bonuses that range according to the executives´ hierarchical

position. Bonuses offered to executives are established ac-

cording to a specific number of gross monthly salaries.

Severance
payments
for
managers
and senior
executives

There were no severance payments for years of services paid

to managers and senior executives in 2019.

Annual Report Enel Américas 2019
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Property
over Enel
Américas

As of December 31, 2018 the shareholders’ register reflected

that no main executives held any the Company´s ownership.

There are no prohibitions for the Chief Executive Officer and se-

nior executives to hold securities issued by the Company; how-

ever, they must report such securities and their transactions,

both pursuant to the Securities Market Law and the Company’s

Information Management Manual of Market Interest.

Brazil

Enel Brazil
Nicola Cotugno
Mechanical engineer
Università di Roma, La Sapienza

Enel Green Power Cachoeira Dourada
Fabio Destefani
Electrical engineer
Universidad Federal Fluminense

Enel Generación Fortaleza
Raffaele Enrico Grandi
Graduate in economic sciences
Universidad de Génova (Italy)

Enel Cien
Guilherme Gomes Lencastre
Production/Civil engineer
Pontificia Universidad Católica de Río de Janeiro

Enel Distribución Río
Artur Manuel Tavares Resende
Computer Engineer
Universidad Simón Bolívar/Venezuela

Administra-
tion of
main
subsidiaries

Enel Distribución Ceará
Charles de Capdeville
Electrical engineer
Universidad de Santa Úrsula

Enel Distribución Goiás
José Luis Salas Rincon
Electrical engineer
Universidad Rafael Urdaneta

Enel Distribución São Paulo
Max Xavier Lins
Electrical engineer
Universidad Federal de Pernambuco

Argentina

Enel Generación Costanera
Andrea Biasotto
Degree in mechanical - energetic engineering, industrial engineering
Università degli Studi di Padova

Enel Generación El Chocón
Daniel Garrido
Electrical engineer
Universidad Tecnológica Nacional

Edesur
Giuseppe Fanizzi
Electrical engineer
Politecnico di Bari

Central Dock Sud
Juan José Marcet
Electrical engineer
Universidad Tecnológica Nacional
Master’s in business administration
Universidad de Palermo

Colombia

Emgesa
Marco Fragale
Mechanical engineer
Politecnico de Milán

Codensa
Bertoli Francesco
Mechanical engineer
Universidad de Brescia

Peru

Enel Generación Perú
Rigoberto Novoa Velasquez
Mechanical engineer
Universidad Nacional de Ingeniería - Lima

Enel Distribución Perú
Simone Botton
Electrical engineer
Universidad Bologna - Roma

07. Administration

Annual Report Enel Américas 2019 08.

PEOPLE AND
ORGANIZATION

08. People and organization

Human Resources
Distribution

Staff distribution in Enel Américas as of December 31, 2019, including information related to the subsidiaries in the four coun-

tries where the Enel Group operates in Latin America and the joint control entities, was as follows:

Managers and
Senior Executives

Professionals
And Technicians

Employees and
Others

156

923

698

1,008

3,090

1,668

306

582

591

1,473

10,789

181

408

107

3,362

331

1,834

6,334

Total

106

1,113

1,118

1,119

6,467

398

3,519

322

604

606

1,500

17,279

Enel Américas

Enel Brasil

Cachoeira

Fortaleza

Volta Grande

Cien

Rio

Ceará

Goias

Sao Paulo

Costanera

Chocón

Edesur

Enel trading Arg

Dock Sud

CTM y TESA

Gx Perú

Dx Perú

Emgesa

Codensa

Total

(1) Includes senior executives shared with Enel Chile.
(2) Includes Enel X.
(3) Includes Enel Generación Piura.

Annual Report Enel Américas 2019
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Social responsibility and
sustainable development

Diversity
among Enel
Américas´ senior
management

Diversity in
the rest of Enel
Américas

Number of people by gender:

Female

Male

Total

Number of people by nationality:

Chilean

Brazilian

Italian

Total

Number of people by age:

Less than 30 years old

Between 30 and 40 years old

Between 41 and 50 years old

Between 51 and 60 years old

Between 61 and 70 years old

Total

Number of people by seniority:

Less than 3 years

Between 3 and 6 years

More than 6 and less than 9 years

Between 9 and 12 years

More than 12 years

Total

Number of people by gender:

Female

Male

Total

Number of people by nationality:

Brazilian

Chilean

Spanish

Peruvian

Romanian

Total

Number of people by age:

Less than 30 years old

Between 30 and 40 years old

Between 41 and 50 years old

Between 51 and 60 years old

Between 61 and 70 years old

Total

Number of people by seniority:

Less than 3 years

Between 3 and 6 years

More than 6 and less than 9 years

Between 9 and 12 years

More than 12 years

Total

08. People and organization

Women´s average
fixed salary in
relation to men
according to their
professional level

Human
Resources
Activities

Labor Relations

Contents:

Senior Management

Middle Management - Level 1

Middle Management - Level 2

Middle Management - Level 3

Professionals - Level 1

Professionals - Level 2

Administrative

Average

72%

128%

67%

91%

97%

143%

91%

In 2019 the Company engaged in collective negotiations with

two unions, the first one with the Professionals´ Union held

in July to conclude the negotiations related to the Collective

Contract in a regulated negotiation, and subsequently in No-

vember, in an early negotiation with the Administrative Staff

Union. Both processes were concluded successfully and to

the satisfaction of the involved parties, in a peaceful atmo-

sphere with collective agreements in place for the next three

years.

In 2019, the Company continued holding regular meetings

with the unions, leading to an open dialogue with the employ-

ees’ representatives and improving work conditions and the

environment at the workplace.

Safety and
occupational
health

For Enel Américas, protecting our employees´ health and safe-

ty conditions are fundamental elements that respond to our

organization’s concern to keep our employees healthy and fit

for the work they carry out, as well as to prevent and control

accidents and/or work-related diseases.

Enel Américas has implemented the following preventive and

informative health initiatives:

Annual Report Enel Américas 2019
Health Program Dissemination
and Promotion

The company has organized several activities (posters, mail-

ing, graphics, competitions among others) aimed at training,

educating, and improving our employees´ life quality.

> March: Anti-stress campaign: including practical recommen-
dations on how to face the causes of work-related stress.

> April: Immunization campaign, a massive invitation to get

immunized against influenza.

> May: Anti-tobacco campaign, including advice on how to

give up smoking.

> June: Colon and gastric cancer prevention campaign: rec-
ommendations for the timely detection of these diseases

through preventive examination.

Immunization program

The immunization of Enel Américas’ employees is a measure

aimed at preventing diseases and a potential mass contagion.

The Company provides each employee with vaccines to coun-

teract seasonal influenza outbreaks. The Company also plays

an active role throughout the year in the Traveler Medicine

Program (preventive vaccines for employees who must work

abroad).

•

The influenza prevention campaign takes place during

the first quarter of the year, targeting the outbreak that

usually starts in early June.

Preventive exams program

> July: Viral contagion and respiratory diseases prevention:
practical recommendations on how to prevent infections.

Its purpose is for employees´ to undergo periodic medical

evaluations for an early detection of alterations or pathologies

> August: Heart disease prevention campaign: practical rec-
ommendations on heart disease prevention and self-care

which potentially might harm their health. This initiative is ad-

dressed to all employees of the Company and is carried out

> September: Prostate and cervical cancer prevention cam-

through a specific gender and age-appropriate protocol.

paign, an invitation to preventive examinations.

> October: Breast cancer prevention campaign: an invitation
to participate in disease prevention through its early detec-

tion and self-examination.

> November: Healthy eating campaign: practical recommen-
dations on how to improve nutrition, for a healthier lifestyle.

> December: Skin cancer prevention campaign: recommen-
dations on skin care to protect it from ultraviolet radiation

and other agents.

Cardiovascular risk preven-
tion program

It is a preventive program that seeks to create changes in peo-

ple´s behaviors and habits through nutritional evaluations and

directed fitness exercises, improving altered medical param-

eters. This program is aimed at all workers who, according to

preventive examination evaluation, have two or more Cardio-

vascular Risk factors.

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08. People and organization

People
management

Work environment manage-
ment

Work environment management and commitment are funda-

mental cornerstones of Enel América’s strategy. Every two

years the Company implements the Environment and Safety

Survey. In 2018, 93% of the employees in Chile took part In

the survey.

Enjoyable work environment is the Company´s priority and

aimed at achieving friendly relations with our staff members

who are part of the Company´s valuable human resources.

Therefore, we have continued implementing several initiatives

to maintain our employees’ motivation, satisfaction and com-

mitment, in the areas of leadership, communication, meritoc-

racy and development, conciliation measures and good labor

practices.

tives under the People & Organization heading, every day in-

forming and explaining topics of interest focused on people man-

agement. The program even has a radio show, a website, best

practice manuals for managers and employees, among others.

In 2019, a new and revamped Recognition Program was es-

tablished, called Protagonistas Enel. The program focuses

on the actions that drive meritocracy and recognition, and it

seeks to enhance a culture of recognition within the Com-

pany and create formal instances where colleagues promote

the achievements of other colleagues, and where the orga-

nization identifies high value initiatives for the Company. The

tradition of ceremonies organized by the Company was also

maintained where, among other initiatives, outstanding em-

ployees and their careers were recognized.

At Enel Américas, feedback opportunities offered by manager

to employees are instances that permit to forge closer rela-

tionships, to improve transparency, clarify expectations and

support employees´ professional development. Through the

Open Feedback program, the continuous feedback culture is

encouraged along the entire network, throughout the year,

guiding employee development as well as the formation of

high-performance teams.

In 2019, 82 initiatives were carried out in different manage-

ment areas of the Enel Group companies in Chile. They in-

cluded setting up labor environment committees aimed at

improving working environment with a cross-sectional repre-

sentation from different teams.

The Company also carried out work aimed at flexible work-

ing practices such as remote work and deferred income, as

well as a number of collaborative work and companionship-fo-

cused activities whose main aim was to develop relational and

contributive skills in work teams, to strengthen trust and align

common objectives.

Enel Américas has implemented a program to promote and

strengthen the role of leaders in creating corporate environ-

Diversity

ments that lead to our employees´ increased satisfaction and

development. The “Leader to Coach” program has been de-

signed to leverage leadership and the role of Manager in our

“Open Power” culture promoting an active and strategic role

focusing on enlisting their teams and promoting employee

learning. It is a comprehensive program to foster accompa-

nied training and education that involves the development

of an individual itinerary tailor made for each employee. The

activities included in this program are: 360 evaluation, work-

shops for skills development, creation of a management net-

work based on good practices.

To establish a permanent and close contact with employees,

Enel Américas has implemented several communication initia-

For Enel Américas, diverse work team and inclusive work en-

vironments are fundamental to create an innovative culture

that makes it possible to hold diverging points of view that

improve and enrich workplace dynamics and constantly add

value to the company and its employees.

Under the Diversity Dimension and Inclusion Policy, Enel Améri-

cas has developed, as part of its strategy, a series of practices

related to gender, age, nationality, disability and transversality.

The policy promotes the principles of no discrimination, equal-

ity of opportunities, inclusion, and balance between personal

and professional lives, as well as the incorporation of funda-

mental values in the activities of the Group´s companies.

Annual Report Enel Américas 2019
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The Policy has established three general principles:

established by law and accredit them with State entities as

1. Reject any form of arbitrary discrimination, guarantee and

tain structural and necessary adjustments (dining room, bath-

promote diversity, inclusion and equality of opportunities.

rooms, ramps, marked parking lots, access to the auditorium,

2. Promote and maintain a climate of respect for people´s

elevators marked with the braille system, etc.) all around the

people with special needs. We also continued to work on cer-

dignity, honor and identity.

Company’s facilities.

3. Guarantee the highest standards of confidentiality in rela-

tion to any information related to employees´ private lives

In relation to transversality, the Company promoted awareness

that the Company might have access to.

workshops and courses about values related to diversity and

inclusion and flexible working arrangements. As part of the

In relation to gender, the Company is seeking to achieve a

R&D Week, we organized four interesting workshops: “Labor

balance in the initial stages of the recruitment and selection

Inclusion and People with Disabilities”, Gender Equity”, “Sexual

processes, and to build relationships with universities and pro-

harassment” and “Labor Harassment”.

fessional institutes to promote the participation and inclusion

of female students, especially in technical areas. We have also

In relation to awareness actions, the Enel Group in Chile partic-

implemented a Parental Program (for men and women), aimed

ipated in the Diversity and Inclusion week, with a play entitled

at balancing the needs of parents with their professional de-

“With Open Arms”, where different issues related to diversity

velopment. The program involves conversations during the pre

and inclusion were addressed in a fun way. And the activity

and postnatal periods, nutritional support, sports activities for

called “In Your Shoes for One Day” let employees experience

pregnant women, talks about what it means to be a parent cov-

the obstacles disabled people face every day.

ering topics such as bullying and cyberbullying, the effects of

the use of electronic devices, alcohol and drug use prevention,

The Company also signed an alliance with the Inclusive Com-

among others, all dictated by specialists.

panies Network ran by Sofofa and called ReIN, where some

In relation to age, and in the context of the Company´s digi-

the Teleton event was suspended until April 2020, a group of

tal transformation, this year the Company implemented a new

volunteers kept supporting the cause.

30 companies share their best practices every- Even though

On-Boarding platform, where each employee who joins the

ranks of Enel Américas has a chance to get to know the Com-

pany beforehand, get prepared for his/ her duties and acquire

all the necessary cultural adjustments. This personal and pro-

fessional support for new employees shows what his/her daily

work routine will be. It also involves knowledge transfer from

older to newer employees.

Conciliation measures and
labor flexibility

As part of the conciliation and labor flexibility measures in 2019

the company consolidated the telework program called “Smart

In relation to nationality, a tutor is assigned to foreign workers

Working” - one of the most appreciated work options in the

who will assist and support them during the expatriation peri-

Company, providing more flexibility to working away from the

od in order to acknowledge, respect and manage the contrasts

office. Currently there are 492 employees in Enel in Chile who

between people from different nationalities and to help their

are part of the program, 9 of them from Enel Américas. One day

integration. This year the Company implemented the celebra-

per week, chosen by each one between either Tuesday or Thurs-

tion and commemoration of certain festivities of our foreign

day, the employees work from their homes or another place they

employees and residents of Chile, through a special greeting

choose and must comply with the health and safety measures

and lunch in the dining room.

established by current regulations. This initiative contributes to

balancing professional and personal lives as well as improving

In relation to disability, to acknowledge, respect and man-

employees´ life quality.

age employees´ different skills within the Company, this year

Enel Américas addresses the issues related to the needs of

Additionally, in 2019, the Company undertook the following initia-

colleagues’ with disabilities’, helping them get the credential

tives to Improve our employees´ quality of life:

08. People and organization

Sports and Culture Extension Program: a traditional program of

In 2019, there were 9 vacant positions in Enel Américas, of

sports activities held in the Company´s venues with workshops

which 56% were filled internally. Of the work force that joined

and different sports, such as football, baby football, basketball,

the Company in 2019 (44% of all vacancies were in Enel Améri-

volleyball, among others. Additionally, the Company offers arts

cas), 44% were women.

workshops, exhibitions, tours, family trips and other extension

initiatives for employees and their families to enjoy. There are

several initiatives for our employees’ children, both recreational

and educational, among which the most popular ones are the

summer and winter camps. The camps consist of recreational

Internships and Attracting
Young Talent

trips for our employees’ children aged 4 to 15. They take place

In this area, an important project in terms of new recruitment

during the first month of the year and during the winter vacation

sources included the incorporation of young professionals

period.

from the country´s top universities as interns and undergrad-

uate thesis students. They are offered an opportunity to con-

During the year, the Company also organizes various events that

solidate theoretical learning in the context of Enel Américas’

help reconcile work and family duties. One of the most import-

business, thus getting trained by professionals with an exten-

ant is the “Come to my Birthday” celebration held each month at

sive knowledge of labor reality and team challenges and they

the Company’s stadium for children under 12. The first school day

also become an important source of recruitment.

activity permits parents to accompany their children on the first

day of classes and retake their professional activities later on.

This internship program is carried out on a permanent basis

The End-of-the-Year Party is a corporate event for all employees,

during the whole year. 3 new participants were enrolled in 2019.

consisting of a celebration dinner and a party with contests and

dancing. The “Work Trajectory Award” is a corporate celebration

At a transversal level and considering Enel Américas diverse

that each year gives recognition to long-standing employees with

lines of business, 67% is concentrated in AFC and the remain-

over twenty years of service in the Company.

ing 33% in Enel X.

Recruit-
ment and
selection

Recruitment and
selection

Diversity and inclusion

For Enel Américas, to provide employees with an inclusive work

environment is essential to create and promote an innovation cul-

ture and respect for diversity. Diversity offers people the possibility

to visualize different points of view and opinions that enrich the

work environment, add value to the business, provide new oppor-

tunities and facilitate collaboration and team integration.

The Company values differences and turn them into compet-

itive advantages – it is they only way we can make improve-

ments in processes, products and services, through boosting

creativity, learning, flexibility and respect. All the above values

also reinforce our brand and make us more attractive to the

talents available in the market.

We accompany new employees via the On-Boarding program

in which we offer informative talks about the Company´s strat-

The main objective of Enel Américas is to incorporate the best

egy and also nominate a tutor who teaches new employees

professionals into the Company´s ranks. They must also have all

about our Open Power culture and guides them towards their

the skills relevant to the cultural changes related to the Compa-

integration into the Company. In 2019 the On-Boarding plat-

ny´s digital transformation and Open Power.

form was used to offer a more friendly and easygoing expe-

rience to new arrivals and streamline the process for users.

Annual Report Enel Américas 2019 Education

Training

during the year. Among these, English and Italian were estab-

lished as a priority for employees to communicate effectively

with their colleagues from other countries. At the same time,

the training program provided technical knowledge of the

electrical business through courses and especially the Electric

Markets internal diploma, provided by Universidad de Chile,

under a model specially developed for our needs.

Enel América’s training program for 2019 was built and im-

plemented on three management principles: the first was

We would like to highlight the” Enel Manager “ leadership

language training, the second was technical business training

program that seeks to develop coaching and leadership skills

and the third area was the Company’s leadership training. To

in our managers, necessary to guide teams into and along

implement the three, we identified, together with the training

new challenges of growth and strategic consolidation that

area, the Business Partner, the employee and his/her man-

drive the Company today.

ager, the knowledge gaps and skills necessary to improve

productivity in the workplace, as well as develop new skills

Finally, approaches such as digital transformation and people’s

aligned to the Company’s strategic plan.

safety have been some of the areas of special interest that

have been part of the training program implemented during

In terms of languages, English, Italian and Portuguese were

the year.

the main language requirements detected and addressed

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08. People and organization

Annual Report Enel Américas 2019 09.

STOCK EXCHANGE
TRANSACTIONS

09. Stock exchange transactions

Stock Exchange
transactions

Below we list the quarterly transactions in the last three years carried out in the stock exchanges where the Enel Américas’

shares are traded: in Chile through the Santiago Stock Exchange, the Electronic Stock Exchange of Chile and the Valparaíso

Stock Exchange, and in the United States through the New York Stock Exchange (NYSE).

Santiago Stock Exchange

In 2019, 23,299 million Enel Américas shares were traded at the Santiago Stock Exchange, equivalent to CLP$ 2,994,363 mil-

lion. The closing price of the share in December 2019 was CLP$ 167.

Units

Amounts (Chilean Pesos)

Average Price

2,229,781,463

2,009,919,858

2,356,887,602

2,796,096,892

9,392,685,815

2,771,570,034

3,290,495,998

3,404,682,608

4,862,216,660

273,721,586,257

261,422,184,124

309,180,255,882

366,879,556,230

1,211,203,582,493

383,425,705,091

427,006,940,711

364,271,802,874

541,717,097,465

14,328,965,300

1,716,421,546,141

4,825,385,785

5,267,937,965

6,199,801,001

7,005,472,367

23,298,597,118

612,155,765,545

605,331,164,210

741,799,163,682

1,035,076,977,567

2,994,363,071,004

122.90

130.71

131.24

131.46

129.08

138.45

130.51

107.10

111.99

122.01

126.65

114.48

119.68

149.30

127.53

Period

1st quarter 2017

2nd quarter 2017

3rd quarter 2017

4th quarter 2017

Total 2017

1st quarter 2018

2nd quarter 2018

3rd quarter 2018

4th quarter 2018

Total 2018

1st quarter 2019

2nd quarter 2019

3rd quarter 2019

4th quarter 2019

Total 2019

Annual Report Enel Américas 2019 Chilean Electronic Stock Exchange

In 2019, Enel Américas traded a total of 718 million shares in the Electronic Stock Exchange equivalent to CLP$ 90,852 million.

The closing price of the share in December was CLP$ 164.52

Period

1st quarter 2017

2nd quarter 2017

3rd quarter 2017

4th quarter 2017

Total 2017

1st quarter 2018

2nd quarter 2018

3rd quarter 2018

4th quarter 2018

Total 2018

1st quarter 2019

2nd quarter 2019

3rd quarter 2019

4th quarter 2019

Total 2019

Units

Amounts (Chilean Pesos)

Average Price

78,056,955

253,547,191

367,188,645

272,011,584

970,804,375

265,640,945

315,617,793

206,898,749

134,618,362

922,775,849

96,739,255

112,668,680

321,016,940

187,247,739

717,672,614

9,660,465,656

32,973,128,058

48,153,275,546

35,937,385,836

126,724,255,096

37,149,674,644

40,051,124,833

21,982,108,385

14,791,542,973

113,974,450,835

12,233,577,575

13,216,085,533

37,641,372,132

27,761,301,991

90,852,337,231

121.16

130.37

130.87

132.97

128.84

139.09

130.94

106.26

110.56

121.71

128.50

114.92

119.55

149.58

128.14

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09. Stock exchange transactions

New York Stock Exchange (NYSE)

The Enel Américas shares began to trade in the New York Stock Exchange (NYSE) on October 20, 1993. At that time, the name

of the Company was Enersis and the ticker symbol was ENI. One ADS (American Depositary Share) of Enel Américas rep-

resents 50 shares and its current ticker symbol is ENIA. Citibank N.A. acts as the depositary bank and Banco Santander Chile

is the custodian in Chile.

In 2019, 323 million ADS were traded in the United States, equivalent to US$ 2,962 million. The closing price of an ADS in

December was US$ 10.98.

Units

Amounts (Chilean Pesos)

Average Price

55,867,021

66,972,268

59,641,261

54,800,714

237,281,264

47,259,808

65,764,152

61,238,283

97,296,394

271,558,637

93,356,577

50,723,996

84,411,906

94,253,155

322,745,634

532,101,627

653,636,388

603,478,379

564,766,815

2,353,983,209

540,952,152

687,363,196

488,063,068

799,163,804

2,515,542,219

888,587,040

428,879,782

716,122,405

928,306,385

2,961,895,611

9.45

9.81

10.14

10.34

9.94

11.44

10.50

8.08

8.12

9.53

9.67

8.42

8.43

9.92

9.11

Period

1st quarter 2017

2nd quarter 2017

3rd quarter 2017

4th quarter 2017

Total 2017

1st quarter 2018

2nd quarter 2018

3rd quarter 2018

4th quarter 2018

Total 2018

1st quarter 2019

2nd quarter 2019

3rd quarter 2019

4th quarter 2019

Total 2019

Annual Report Enel Américas 2019 s
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Market
information

In 2019, the tendency of the Chilean stock market prices was

downward and the S&P/CLX IPSA index fell by 8.5 %.

This performance was misaligned with global markets, which

mostly performed well. The US Dow Jones Industrial and FTSE

100 in London registered 22.3% and 12.1% increases, respec-

tively. Similarly, the stock exchanges of the countries in which

Enel Américas operates also showed positive returns: Argenti-

na (Merval; +37.6%), Brazil (Bovespa; +31.6%), Colombia (Col-

cap; +25.4%) Peru (SPBLPGPT; +6.1%) carried out strongly in

2019.

Santiago Stock
Exchange

The performance of Enel Américas’ shares in the local market

during the last two years compared to the Selective Stock

Prices Index (S&P/CLX IPSA) (1) is as follows:

Variation

Enel Américas

S&P/CLX IPSA

2018

-10.6%

-8.3%

2019

36.3%

-8.5%

New York Stock
Exchange (NYSE)

The performance of Enel Américas’ ADRs listed in the NYSE

(ENIA) compared to the Dow Jones Industrial Index and the

Dow Jones Utilities Index during the last two years is shown

below:

Variation

ENIA

Dow Jones Industrial

Dow Jones Utilities

2018

-20.1%

-5.6%

-1.4%

2019

23.1%

22.3%

23.3%

Investor
relations

The Company has an Investor Relations department in charge

of providing transparent, timely and quality information to the

market on the Company’s main financial, strategic, and oper-

ational issues.

The main communication channels with the market include

our website, the Investor Relations app, conference calls,

emails, face-to-face meetings, and participation in local and

international conferences.

Regarding the documentation available to investors, It in-

cludes presentations of quarterly results, annual reports, an-

nual sustainability reports, 20-F reports, Press Releases and

quarterly financial tables, as well as corporate presentations.

Furthermore, as of 2016, each year the Company presents its

strategic plan for the next three years showing the main stra-

tegic guidelines and financial and business projections.

As to the meetings, Enel Américas participated in 10 confer-

ences in 2019 in which our IR team participated in more than

100 meetings with investors. In addition, around 50 meetings

were held locally and 7 roadshows, both local and internation-

al, were organized with visits to 6 countries where 88 meet-

ings were held.

Our Investor Relations department is always on hand to ad-

dress any concerns about the Company, whether in Spanish

or in English, through the mail ir.enelamericas@enel.com .

09. Stock exchange transactions

Annual Report Enel Américas 2019 10.

DIVIDENDS

10. Dividends

Pursuant to General Norm N°283, Number 5, the dividend

four months of 2021. The compliance of said dividend program

policies of the Company for the periods 2020 and 2019 are

is subject to the results obtained by the Company aiming, at

shown below.

the same time, to maintain the Company´s financial balance.

Dividend
Policy for
period
2020

General Aspects

The Company´s Board of Directors, at the session held on

February 27, 2019, approved the following Dividend Policy and

Enel Américas
S.A.´s dividend
payment
procedure

For dividend payments, whether interim or final, and to avoid in-

correct collection, Enel Américas S.A. put in place the following

payment methods: 1. Deposit in the shareholder´s current ac-

count. 2. Deposit in the shareholder´s savings account. 3. Nom-

inative check or bank draft sent by mail to the residence of the

shareholders, and 4. Withdrawal of nominative check or bank

draft in the offices of DCV Registros S.A., the administrator of

Enel Américas S.A’ shareholders, or in a bank or its branches

established for such purpose and as informed in a notification

to be published about the payment of dividends.

the corresponding Procedure for Enel Américas S.A. dividend

payments for the 2020 period.

2020 Dividend
Policy

The Board of Directors is planning to distribute an interim

dividend, charged to the 2020 income of up to 15% of the

net income as of September 30, 2020 as shown in the Enel

Américas S.A.’s financial statements until such date, to be

paid in January 2021.

The Board of Directors is planning to propose to the Ordinary

Shareholders Meeting to be held during the first four months

of 2021, to distribute, as a final dividend, an amount equal to

50% of the 2020 net income. The final dividend will be set by

the Ordinary Shareholders’ Meeting to be held during the first

For the above-mentioned purposes, current or savings ac-

counts can be held at any branch in the country. The payment

method chosen by each shareholder will be used by DCV Reg-

istros S.A. for all dividend payments, while the shareholder

does not express in writing his intention to choose a different

payment method. Shareholders who have not registered a pay-

ment method will be paid according to point 4 above.

Should checks or bank drafts be returned by mail to DCV Reg-

istros S.A., these will remain in their custody until the share-

holders collect or request them. In the case of bank current

accounts, Enel Américas S.A. and/or DCV Registros S.A. may

request, for security reasons, that they be verified by the corre-

sponding banks. If the accounts indicated by the shareholders

are rejected, whether during said verification process or for any

other reason, the dividend will be paid according to method

4 above. The Company has also adopted and will continue to

do so in the future all the necessary security measures estab-

lished in the dividend payment procedure, to protect both our

shareholders and Enel Américas S.A.

Annual Report Enel Américas 2019 Dividend
policy for
period 2019

General aspects

Dividend Payment
Procedure

For dividend payments, whether interim or final, and to avoid

wrong collection, Enel Américas S.A. considers the following

payment methods:

1. Deposit in the shareholder´s current account.

2. Deposit in the shareholder´s savings account.

3. Nominative check or bank draft sent by mail to the resi-

dence of the shareholders, and

4. Withdrawal of nominative check or bank draft in the offices

At the session held on February 27, 2019, the Company´s

of DCV Registros S.A., the administrator of Enel Améri-

Board of Directors approved the following Dividend Policy and

cas S.A’ shareholders, or in a bank or its branches estab-

the payment procedures of Enel Américas S.A. dividends for

lished for such purpose and as informed in a notification

2019.

to be published about the payment of dividends.

Dividend policy

The Board of Directors intends to distribute an interim divi-

dend, charged to the 2019 income of up to 15% of net income

as of September 30, 2019 as shown in the Enel Américas

S.A.’s financial statements until such date, to be paid in Jan-

uary 2020.

The Board of Directors is planning to propose to the Ordinary

Shareholders Meeting to be held during the first four months

of 2020, to distribute, as a final dividend, an amount equal to

50% of the 2019 net income. The final dividend will be es-

tablished by the Ordinary Shareholders’ Meeting to be held

during the first four months of 2020. The compliance of said

dividend program is subject to the results obtained by the

Company aiming, at the same time, to maintain the Compa-

ny´s financial balance.

For the above-mentioned purposes, current or savings ac-

counts can be held at any branch in the country. The payment

method chosen by each shareholder will be used by DCV Reg-

istros S.A. for all dividend payments, while the shareholder

does not express in writing his intention to choose a different

payment method. Shareholders who have not registered a

payment method will be paid according to point 4 above.

Should checks or bank drafts be returned by mail to DCV Reg-

istros S.A., these will remain in their custody until the share-

holders collect or request them. In the case of bank current

accounts, Enel Américas S.A. and/or DCV Registros S.A. may

request, for security reasons, that they be verified by the

corresponding banks. If the accounts indicated by the share-

holders are rejected, whether during said verification process

or for any other reason, the dividend will be paid according

to method 4 above. The Company has also adopted and will

continue to do so in the future all the necessary security mea-

sures established in the dividend payment procedure, to pro-

tect both our shareholders and Enel Américas S.A.

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10. Dividends

Distributable income of 2019

The distributable income in 2019 is shown below:

Income *

Distributable Income

* Attributable to the controlling shareholder.

Distributed dividends

The following table shows dividends per share paid in the last 7 years:

Dividend no.

Type of dividend

Closing Date

Payment Date

Pesos/ Dollars per
share (1)

96 (1)

100

Interim

Final

Interim

Final

Interim

Final

Interim

Final

Interim

Final

Interim

Final

Interim

Final

Interim

01.19.2013

05.04.2013

01.25.2014

05.10.2014

01.24.2015

05.18.2015

01.23.2016

05.17.2016

01.21./2017

05.202017

01.202018

05.18.2018

01.19/2019

05.11./2019

01.18./2020

01.25.2013

05.10.2013

01.31.2014

05.16.2014

01.31.2015

05.25.2015

01.29.2016

05.24.2016

01.27.2017

05.26.2017

01.26.2018

05.25.2018

01.25.2019

05.17.2019

01.24.2020

1.21538

3.03489

1.42964

5.27719

0.83148

5.38285

1.23875

3.40599

0.94664

2.38705

0.001

0.00517

0.00134

0.00703

0.00162

Thousand US$

1,614,085

807,043

Year

2012

2013

2014

2015

2016

2017

2018

2019

(1) The Extraordinary Shareholders’ Meeting held on April 27, 2017 approved the change of the Company´s functional currency from Chilean Pesos to
US Dollars. Therefore, as of 2017 onwards, dividends are shown in dollars per share.

Annual Report Enel Américas 2019 s
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10. Dividends

Annual Report Enel Américas 2019 11.

2019 INVESTMENT AND
FINANCING POLICY

11. 2019 Investment and financing policy

The Ordinary Shareholders’ Meeting held on April 30, 2019

approved the Investment and Financing Policy detailed below.

Investments

Maximum
investment limits

Investment areas

Enel Américas shall invest, as authorized by its bylaws, in the

following areas: i) contributions for investment in or for the

creation of subsidiaries or related companies whose activity

is aligned with, related or linked to any form or type of energy

or the supply of public utilities, or whose main input is ener-

gy; ii) investments consisting of the acquisition, exploitation,

construction, rental, management, trading and transfer of any

class of fixed assets, whether directly or through subsidiaries;

and iii) other investments in all kinds of financial assets, titles

or securities.

The maximum investment limits for each investment area shall

be as follows: i) investments in subsidiaries in the electricity

sector, those required by the subsidiaries to meet their re-

spective corporate purposes, with a maximum amount equal

to 50% of Net Equity in Enel Américas S.A.´s consolidated

balance sheet of as of December 31, 2018, ii) investments in

other companies outside the electricity sector, as long as at

least 50.1% of Enel Américas consolidated assets are part of

the electricity sector.

Participation in
the control of
investment areas

To control the investment areas and pursuant to Enel Améri-

cas S.A.’ corporate purpose, the following procedure will

be followed whenever possible: i) it will be proposed at the

Ordinary Shareholders Meetings of the subsidiaries or relat-

ed companies which are publicly traded companies that the

Directors of Enel Américas S.A. should be chosen in propor-

tion of at least the stake in those companies, and preferably

they should be chosen among directors or executives of Enel

Américas S.A. or its subsidiaries; ii) investment, financial and

commercial policies as well as accounting criteria and system

to be followed shall be proposed to the subsidiaries and relat-

ed companies; iii) the management of subsidiaries and related

companies will be supervised, and iv) the company will per-

manently control debt.

Annual Report Enel Américas 2019 Financing
Maximum
Indebtedness
level

Enel Américas S.A.´s maximum debt level is defined as the

relation between the Total Financial Debt (measured as other

Current Financial Liabilities and Other Non-Current Financial

Liabilities) less or equal to 2.2 times Total Equity, based on

Enel Américas S.A.´s Consolidated Statements of Financial

Position as of December 31, 2018.

Management
attributions
for agreeing
Enel Américas’
dividend payment
restriction with
lenders

Limitations on dividend distribution may be agreed with credi-

tors only if such restrictions have previously been approved At

A Shareholders’ Meeting (Ordinary or Extraordinary).

Management
attributions for
granting liens to
lenders

The Extraordinary Shareholders´ Meeting must approves the

granting of liens or warranties for third-party obligations, relat-

ed to essential assets described below.

Assets that are
essential for
the Company´s
normal operations

An asset essential for the operation of Enel Américas is the

direct and/or indirect participation that permits to control Enel

Brasil and Emgesa, by way of holding the majority of shares,

agreements or shareholder agreements,

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11. 2019 Investment and financing policy

Annual Report Enel Américas 2019 12.

BUSINESSES
OF THE COMPANY

12. Businesses of the company

Business Structure

GENERATION

DISTRIBUTION

Enel Generación Costanera

Edesur

Enel Generación El Chocón

Enel Distribución Rio

Central Dock Sud

Enel Distribución Ceará

Enel Generación Fortaleza

Enel Distribución Goiás

EGP Cachoeira Dourada

Enel Distribución São Paulo

EGP Volta Grande

Enel Codensa

Enel Distribución Perú

Enel Cien*

Enel Emgesa

Enel Generación Perú

Enel Generación Piura

* Transmission

ENEL X

Enel X Argentina

Enel X Brasil

Enel X Colombia

Enel X Perú

Annual Report Enel Américas 2019 s
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Historical
background

eration and distribution activities carried out in Chile, from

those carried out in the rest of the countries. As such, former

Enersis S.A. was divided into the following companies: a) Enel

Américas S.A., the continuing Company of Enersis with activ-

ities in Argentina, Brazil, Colombia and Peru, and b) Enel Chile

S.A. which owns the assets related to the activities in Chile.

On June 19, 1981, the Compañía Chilena de Electricidad S.A.

electricity companies in Latin America, both in terms of con-

created a new corporate structure, which gave rise to a parent

solidated assets and also in terms of operating revenues,

Company and three subsidiaries. One of these was Compañía

achieved through steady and balanced growth in the electrici-

Chilena Metropolitana de Distribución Eléctrica S.A. In 1985,

ty businesses: generation, transmission and distribution.

Currently Enel Américas S.A. is one of the largest private

under the Chilean government’s privatization program, the

company began the process of transferring the share capital

of Compañía Chilena Metropolitana de Distribución Eléctrica

S.A. to the private sector, ending on August 10, 1987. As part

of the process, pension fund management companies (AFPs

as per Spanish acronym), the company´s employees, institu-

tional investors and thousands of small shareholders joined

the Company. Its organizational structure was based on ac-

tivities or operative functions whose results were evaluated

functionally and their profitability was limited by a tariff struc-

ture because of the Company’s exclusive dedication to the

electricity distribution business.

In 1987, the Company’s Board of Directors proposed to divide

the Company’s different activities. The four subsidiaries creat-

ed as a result of the division were to operate as business units

with their own objectives, thus expanding the Company’s ac-

tivities towards other non-regulated activities but linked to the

core business. This division was approved at the Extraordinary

Shareholders’ Meeting held on November 25, 1987 thus es-

tablishing the Company´s new corporate purpose. As a result,

Compañía Chilena Metropolitana de Distribución Eléctrica

S.A. became an Investment company.

On August 1, 1988, as approved by the Extraordinary Share-

holders’ Meeting held on April 12, 1988, one of the companies

that arose from the division changed its name to Enersis S.A.

At the Extraordinary Shareholders’ Meeting held on April 11,

2002, the Company’s corporate purpose was modified, intro-

ducing telecommunications activities and investment in and

management of companies whose business was telecommu-

nications and information technology through the Internet.

The Company underwent a corporate restructuring process

which started in April 2015 and was completed in December

2016. The process consisted of separating the electricity gen-

Expansion
and
Development

Enel Américas began its international expansion in 1992

through different privatization processes in Latin America,

thus developing a significant presence in the electricity sec-

tors in Argentina, Brazil, Colombia and Peru.

1992
> On May 15, Enel Américas, (Enersis at that time) acquired a
60% shareholding and control of Central Costanera, a gen-

eration Company, currently Enel Generación Costanera,

located in Buenos Aires, Argentina.

> On July 30, the Company was awarded 51% of Empresa
Distribuidora Sur S.A., Edesur, a company that distributes

electricity in the city of Buenos Aires, Argentina.

1993
> In July, the Company acquired Hidroeléctrica El Chocón,
today Enel Generación El Chocón, located in the Neuquén

and Río Negro provinces, Argentina.

12. Businesses of the company

1994
> In July, Enel Américas acquired for US$176 million, 60%
shareholding of Empresa de Distribución Eléctrica de Lima

Norte S.A., Edelnor (currently Enel Distribución Perú) in

Peru. The Company also acquired Edechancay, another

electricity distribution Company in that country, which was

later absorbed by the former.

1998
> On April 3, Enersis (currently Enel Américas) invested in
the Brazilian market once again, this time acquiring 89%

and the control of Companhia Energética de Ceará S.A.,

Coelce (currently Enel Distribución Ceará), a company that

distributes electricity in the northeast region of the country,

in the Ceará state. The transaction totaled US$ 868 million.

1995
> On December 12, Enel Américas acquired an additional

39% shareholding of Edesur.

> The Company also acquired the Peruvian generation Com-

pany Edegel (currently Enel Generación Perú).

1996
> On December 20, Enel Américas entered the Brazilian mar-
ket with the acquisition of a large portion of shares of the

former Companhia de Eletricidade do Río de Janeiro S.A.,

Cerj, an electricity distribution Company in the cities of Río

de Janeiro and Niteroi, Brazil, whose business name was

changed to Ampla Energía e Serviços S.A. and currently is

called Enel Distribución Río.

> On December 20, the Company acquired 99.9% share-
holding of Central Hidroeléctrica de Betania S.A. E.S.P, in

Colombia.

1997
> On September 5, the Company acquired a 78.9% share-
holding of the Brazilian company Centrais Elétricas Cachoe-

ira Dourada (currently Enel Green Power Cachoeira Doura-

da) for US$ 715 million.

> On September 15, Enel Américas (at the time Enersis)
successfully participated in the capitalization of Codensa

S.A. E.S.P., a company that distributes electricity in the city

of Bogotá and the Cundinamarca department in Colombia

acquiring a 48.5% shareholding for US$ 1,226 million. The

Company also acquired 5.5% of Empresa Eléctrica de Bo-

gotá.

> On September 15, investing US$ 951 million, the Compa-
ny acquired a 75% shareholding of Emgesa, a Colombian

generation Company, and an additional 5.5% of Empresa

Eléctrica de Bogotá S.A.

> Endesa, S.A. (Spain) acquired 32% of Enersis (currently

Enel Américas).

1999
> Endesa, S.A. (Spain), took control of Enersis (today Enel
Américas). Through a Public Tender Offer, Endesa acquired

an additional 32% of Enersis, which, together with the

32% already acquired in August 1997, totaled 64%. This

transaction was completed on April 7, 1999 and involved

a US$ 1,450 million investment. As a result of the subse-

quent capital increase by Enersis in 2003, the shareholding

decreased to the current 60.62%.

> On May 11, Enersis (currently Enel Américas) acquired 35%
of Endesa Chile (today Enel Generación Chile), in addition

to the 25% already held, thus reaching 60% of the Compa-

ny´s shareholding. The Company therefore consolidated its

position as one of the main private electricity companies in

Latin America.

2000
> As part of the Genesis Plan strategy, the subsidiaries
Transelec, Esval, Aguas Cordillera and real estate assets

were sold for US$ 1,400 million.

2001
> The Company carried out large investments: US$364 mil-
lion to increase its shareholding in Chilectra (today Enel Dis-

tribución Chile), US$150 million for the acquisition of 10%

shareholding of Edesur, in Argentina, a stake that was held

by the Company’s employees; US$ 132 million to increase

its shareholding in the Brazilian distribution Company Am-

pla; US$ 23 million to increase by 15% its shareholding in

Río Maipo, in Chile, and US$ 1.6 million to increase by 1.7%

its shareholding in Distrilima, in Peru.

2002
> In Brazil, the Company acquired Central Termoeléctrica For-
taleza, located in the state of Ceará. Additionally, the Com-

pany began the second phase of the commercial operation

of the electricity interconnection between Argentina and

Annual Report Enel Américas 2019 s
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Brazil, CIEN, completing a 2,100 MW transmission capaci-

ing of its Peruvian subsidiary Enel Generación Perú (for-

ty between both countries.

2005
> The subsidiary Endesa Brasil S.A. (currently Enel Brasil)
was formed with all the assets held in Brazil by the Enersis

Group and Endesa Internacional Cien, Fortaleza, Cachoeira

Dourada, Enel Distribución Río, Investluz and Enel Distri-

bución Ceará.

2006
> In February, Enersis acquired, for approximately US$17
million, Termocartagena (142 MW) a Colombian combined

merly Edegel), 2.72 soles per share. This was purchased

from Generalima S.A.C., a Peruvian subsidiary of Enel Lati-

noamérica S.A., the parent Company of Enersis. With this

transaction, the direct and indirect shareholding of Enersis

S.A. in Edelnor rose from 33.53% to 57.53%.

2010
> Enersis (currently Enel Américas) accepted the offer of
Graña y Montero S.A.A., to acquire its entire direct and in-

direct shareholding in its subsidiary Compañía Americana

de Multiservicios Limitada, CAM; and similarly, accepted

the offer presented by Riverwood Capital L.P to acquire

the entire direct and indirect shareholding in its subsidiary

cycle power plant which operates either with fuel oil or gas.

Synapsis Soluciones y Servicios IT Ltda. The price offered

> In June, Edegel (currently Enel Generación Perú) and Ete-
vensa merged, the latter a subsidiary of Endesa Internacio-

for CAM and its subsidiaries in Argentina, Brazil, Colombia

and Peru reached US$ 20 million. In the case of Synapsis,

nal in Peru.

the price offered for the Company and its subsidiaries in Ar-

gentina, Brazil, Colombia and Peru reached US$ 52 million.

2007
> In September, the merger of Colombian generation compa-

nies Emgesa and Betania was completed.

> On October 11, Enel S.p.A. and Acciona, S.A. took control
of Enersis, through Endesa, S.A., and of Endesa Internacio-

2011
> In August, Endesa, S.A. informed through a Significant
Event, that it signed a purchase agreement for which

Endesa Latinoamérica S.A. (wholly owned by Endesa, S.A.)

nal, S.A. (currently absorbed by Enel SpA.).

acquired 7.70% stake owned by EDP Energias de Portu-

2009
> Acciona, S.A. and Enel S.p.A. announced an agreement
whereby Acciona, S.A. would directly and indirectly trans-

fer to Enel Energy Europe S.L. its 25.01% shareholding in

Endesa, S.A. As such, Enel Energy Europe S.L., wholly con-

trolled by Enel S.p.A., would hold 92.06% of Endesa, S.A.´s

shareholding as of June 25.

> On October 9, Endesa Chile (currently Enel Generación
Chile) acquired 29.3974% of the Peruvian generation sub-

gal S.A. in Endesa’s Brazilian subsidiaries Ampla Energia

e Serviços S.A. and Ampla Investimentos e Serviços S.A.

for 76 million euros and 9 million euros, respectively. After

these acquisitions, Endesa S.A. controlled 99.64% share-

holding of both companies.

2012
> The Extraordinary Shareholders´ Meeting held on De-
cember 20 approved a capital increase with the vote of

81.94% of the Company´s shareholders with voting rights

sidiary Edegel (currently Enel Generación Perú). The shares

with the following characteristics: 1) maximum amount of

were acquired at market price from Generalima S.A.C., a

the capital increase: Ch$ 2,844,397,889,381, divided into

company which, in turn, is a subsidiary of Endesa Latino-

16,441,606,297 ordinary nominative payment shares of

américa S.A. Endesa Chile thus held directly and indirectly

the same series, with no preferences and no par value,

62.46% of the Edegel shares.

> On October 15, Enersis S.A. (currently Enel Américas) ac-
quired 153,255,366 shares, representing 24% sharehold-

2) value of other than money contributions to be capital-

ized: The total issued capital of Cono Sur, Company that

would concentrate the activities that were identified in the

reports that had been made available to the shareholders

12. Businesses of the company

and that would be contributed by Endesa (currently Enel

Generación Chile) to Enersis (currently Enel Américas),

would reach Ch$ 1,724,400,000,034 corresponding to

9,967,630,058 shares of Enersis S.A. (today Enel Américas)

at a price of Ch$ 173 per share, 3) placement share price: a

fixed price of Ch$173 for every payment share to be issued

as a result of the capital increase.

2013
> Capital increase: With a record result for this type of opera-
tion in the local market, shareholders of Enersis (today Enel

Américas) subscribed a total of US$ 6,022 million, placing

100% of the shares available for the capital increase.

2014
> Public Tender Offer for the acquisition of shares of Coelce
(Enel Distribución Ceará). On January 14, Enersis (currently

Enel Américas), which until then controlled 58.87% of its

subsidiary Coelce, launched a voluntary Public Tender offer

to acquire all the shares issued by Coelce at a price of $49

real per share. With this, Enersis acquired 3,002,812 com-

mon shares, 8,818,006 preferred shares type A and 424

preferred shares type B, equivalent to a total investment

of approximately US$ 243 million. After the operation, the

Company obtained a 74.05% direct and indirect sharehold-

ing of Coelce.

> In April, Enersis (currently Enel Américas) signed an
agreement to purchase all the shares that Inkia Americas

Holdings Limited indirectly held in Generandes Perú S.A.,

equivalent to a 39.01% stake, with an investment of US$

413 million. The transaction ended in September and, as a

result, Enersis (currently Enel Américas) reached a 58.60%

shareholding of Edegel (today Enel Generación Perú).

> On July 31, 2014, Enel Energy Europe S.R.L., currently
Enel Iberoamérica SRL, controller of Endesa S.A. (92.06%

shareholding) proposed the acquisition of 100% of Ende-

sa Latinoamérica S.A. ´s share capital. The transaction was

completed in October 2014 and, as a result, Enel S.A. di-

rectly controls Enersis (today Enel Américas) with 60.62%.

2015
> On November 16, 2015, El Quimbo power plant, a 400 MW
hydro facility in Colombiaenteres came into operation after

five years of construction.

> On December 18, 2015, the Company´s Extraordinary
Shareholders´ Meeting approved the corporate restructur-

ing of Enersis and its subsidiaries Endesa Chile and Chilec-

tra (currently Enel Américas). This operation consisted of

dividing the generation and distribution activities in Chile

from those carried out in the rest of the countries in Latin

America both for Enersis and for its subsidiaries Endesa

Chile and Chilectra.

2016
> On March 1, the non-material Division of the former En-
ersis, Endesa and Chilectra was carried out as a result of

which Enel Chile, Endesa Américas and Chilectra Américas

were formed.

> On April 21, 2016, the division Enersis, Endesa and Chilec-
tra share was completed, and the resulting companies -

Enersis Américas, Enersis Chile, Endesa Américas, Endesa

Chile, Chilectra Américas and Chilectra Chile – began trad-

ing on the Santiago Stock Exchange. Similarly, ENIA, ENIC,

EOCA and EOCC ADR´s began trading on April 27, 2016 on

the New York Stock Exchange. (NSYE).

> On September 28, the Extraordinary Shareholders´ Meet-
ing approved the Merger of Enersis Américas, Endesa

Américas and Chilectra Américas where Enersis Américas

absorbed Endesa Américas and Chilectra Américas.

> On December 1, the name of Enersis Américas was
changed to Enel Américas after the intangible merger with

the companies Endesa Américas and Chilectra Américas.

> On November 30, the Company announced it had present-
ed the best offer for the acquisition of the electricity dis-

tribution Company CELG-D (now Enel Distribución Goiás)

through a tender process called for by the Brazilian Gov-

ernment through Banco Nacional do Desenvolvimento. The

offer presented by our subsidiary Enel totaled 2,187 million

reais.

> On December 29, Endesa Américas and Chilectra Améri-
cas ceased trading on the Santiago Stock Exchange and

the New York Stock Exchange, in the ADR form. As such,

the Company exchanged its shares and the Merger was

achieved.

Annual Report Enel Américas 2019 2017
> On February 1, the National Electricity Regulatory Entity
in Argentina (ENRE) approved the Integral Tariff Review –

2019
> On April 30, the Extraordinary Shareholders’ Meeting ap-
proved a US$ 3 billion capital increase. The aim of the cap-

known as RTI - defining a structural change in the country´s

ital increase was to provide Enel Brasil with funds to pay

energy distribution. This new regulation was the result of

the debt incurred to acquire Enel Distribución São Paulo

extensive work between the government and the distribu-

and to restructure Enel Brasil’s pension fund liabilities.

tion companies involved in the tariff review process, con-

sisting of a gradual tariff increase to make the effect on the

> On September 2, the capital increase was successfully
concluded with a subscription of approximately 99.49% of

end consumer less impactful.

the shares and a gross amount of US$ 3.021 billion.

> On February 14, Enel Américas completed the acquisition
of Celg Distribuição S.A. (currently Enel Distribución Goiás)

> On November 21, Enel Brasil acquired 1.48% of Enel São
Paulo ‘s shares for 49.39 reais per share, becoming the

through its subsidiary Enel Brasil acquiring nearly 94.8% of

owner of 95.9% of the shares. On the November 27, the

its share capital. This distribution Company has more than

Enel São Paulo Shareholders’ Meeting approved the re-

2.9 million clients and operates in the Brazilian region of

demption of all shares issued in circulation, equivalent to

Goiás. The investment totaled 2,187 million reais (approx-

2.58%, at a price of 49.46 reais per share.

imately US$ 640 million). The transaction was financed

from the Enel Américas (former Enersis) capital increase

approved by the end of 2012.

> On October 4, Enel Perú (wholly owned by Enel Américas
S.A.) acquired 47,686,651 shares issued by the subsidiary

Enel Distribución Perú. The transaction closed at the price

of 262,276,580 soles (equivalent to approximately US$ 80

million) and was carried out on the Lima Stock Exchange.

> September 27, Enel Brasil was awarded the concession to
operate the 380 MW Volta Grande power plant. The total

investment was 1,420 million reais (US$ 445 million ap-

proximately). The concession is for 30 years.

2018
> On June 4, Enel Américas successfully completed the
voluntary offer for the acquisition of Eletropaulo (currently

Enel Distribución São Paulo), the principal distribution com-

pany in São Paulo, Brazil. The offer was made the same day

and the Company acquired 73.4% of the shares. The fol-

lowing month, shareholders of Eletropaulo Metropolitana

Eletricidade de São Paulo SA were permitted to sell ad-

ditional Eletropaulo shares and, on July 4, the transaction

was completed with the acquisition of 93.3% of the share-

holding of Enel Distribución São Paulo. Later, in Septem-

ber, Enel Américas completed a capital increase leading to

the final shareholding of 95.88%.

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12. Businesses of the company

Annual Report Enel Américas 2019 13.

CAPITAL
INCREASE

13. Capital increase

Capital increase

On February 27, the Company announced its plan to raise US$

the operation and receive feedback from investors. After more

3.5 billion via a capital increase. The destination of the raised

than 200 meetings held by the CEO, CFO and the Investor

funds was as follows:

Relations managers and considering market opinion, it was

decided to reduce the capital increase to US$ 3 billion.

> US$ 2,650 million to provide Enel Brasil with funds to pay off the
debt incurred because of the purchase of Enel Distribution São

This new proposal was approved by the Company’s share-

Paulo (at that time Eletropaulo).

holders at the extraordinary shareholders´ meeting held on

> US$ 850 million to restructure Enel Distribution São Paulo ´s
pension fund liabilities and the reduction of contingent funds or

April 30, 2019.

litigation provisions in Brazil.

This permitted the Company to issue 18,729,788,686 new

shares, which after two preemptive subscription periods were

Following the announcement, the Company conducted an in-

subscribed in 99.49%, concluding the operation on Septem-

tense financial marketing activity to explain the purpose of

ber 2.

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13. Capital increase

Annual Report Enel Américas 2019 14.

INVESTMENTS
AND FINANCIAL
ACTIVITIES

14. Investments and financial activities

Material investments
related to the
Company’s investment
plan

The global financing strategy of the Group’s subsidiaries and

Our investment plan is flexible enough to adapt to changing

intercompany loans is coordinated in such a way so as to opti-

circumstances by assigning different priorities to each project

mize debt management, in addition to the Company´s funding

according to its profitability and strategic consistency. Invest-

terms and conditions.

ment priorities are currently focused on developing the works

plan in Brazil, Colombia and Argentina.

The Group’s subsidiaries develop independent capital invest-

ment plans that are covered by funds generated internally or

For the 2020 - 2022 period, on a consolidated basis, the Com-

by direct funding. One of our goals is to focus on those invest-

pany expects to spend US$ 5,347 million in investments in di-

ments that will yield long-term benefits, such as projects that

rectly controlled subsidiaries, in the investments currently be-

would permit to reduce energy losses. Additionally, focusing

ing implemented, the maintenance of distribution networks,

on Enel Group and seeking to provide services to every com-

maintenance of the existing generation plants, and studies

pany in the group, our goal is to reduce investment at the

required to develop other potential generation projects.

individual subsidiary level in elements such as procurement

systems, telecommunications, and information systems.

The table below shows the expected capital expenditure from

While we have studied how to finance these investments as

2020 to 2022 and the capital expenditure incurred by our sub-

part of the Company´s budget process, no particular financ-

sidiaries in 2019, 2018 and 2017.

ing structure has been committed and our investments will

depend on market conditions at the time they need to secure

Investment (1) (million US$)

the cash flow.

2020-2022

5,347

2019

1,659

2018

1,541

2017

1,371

(1) Capex figures represent the effective payments for each year, except
for forecasts.

Annual Report Enel Américas 2019
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Investments in 2019,
2018, and 2017

In the distribution business, these were the investments: (i) expanding our distribution service to meet the growing energy de-

mand, (ii) improving our service quality, (iii) improving safety, and (iv) reducing energy losses, particularly in Brazil.

Generation

Capital expenditure reached US$ 250 million in 2019, while in

2018 it was US$ 292 million.

In Peru, total investments in maintenance reached US$ 54

million in 2019. The main projects are the reconstruction of

the Callahuanca power plant, automation and tele-controls

In Argentina, maintenance investments focused on the in-

spection of TG10 in Dock Sud, and in Costanera improve-

ments were made in both the combined cycles with a stop-

page of gas Turbine No. 9 of the Combined Cycle II (CCGTII)

together with works in the other facilities of the plant, among

which one of the most important was the Water Treatment

Plant Project and finally, in 2019 all the tasks of the Scheduled

Maintenance Plan were concluded as defined, registering a

major maintenance in the ARR2 unit of Arroyito; together with

the increased maintenance of the T5CH transformer bank and

the increased maintenance of the T1CH transformer at the

of hydraulic plants, cable replacement in the Huinco cavern,

Chocon plant.

several maintenance activities and the modernization of civ-

il works and hydraulic units, the acquisition of contingency

parts for thermal units, major maintenance and inspection

of the Ventanilla power plant, environmental projects to re-

duce harmful emissions in TG4 in Malacas, digital projects

and various maintenance activities in thermal units. In growth

investments, the BESS Ventanilla project and the E4E project

received an investment of US$ 7 million

In Colombia, maintenance investment focused on projects re-

lated to the improvement of generation plants, for example

the installation of the DeNOX system as part of the environ-

mental improvement plan for Termozipa, the maintenance of

Unit 2 in the Betania plant (the most complex maintenance in

the 32 years of the plant´s existence) and the automation of

In Brazil, total investments reached US$ 27 million. Enel Gen-

eración Fortaleza carried out a US$ 20 million Investment

mainly related to the continuous maintenance of the power

plant and the purchase of materials and services for the gas

and steam turbines. In the case of Volta Grande and Cachoeira

Dourada, investments totaled US$ 7 million, mainly for the

repair of the UG1 and UG2 generation turbines repair works

and the acquisition of two Stoplogs.

Distribution

the plants of the Rio Bogota chain leading to the implementa-

In 2019, the Company made US$1, 386 million investments

tion of a full remote control for the Dario Valencia, Laguneta

mainly to meet consumption needs, as a result of the growth

and Salto plants from the Guaca Plant. In relation to the ex-

of population and the increase in the number of new clients,

pansion capex, work was carried out at the El Quimbo Hydro-

through investments not only related with the above, but also

electric Project, in Termozipa the installation of the first Energy

in capacity increases and strengthening the Company´s facil-

Storage System (BESS) was initiated and the Life Extension

ities in the area of AT, MT and BT. At the same time, in 2018,

project as planned.

investments reached US$1,432 million.

14. Investments and financial activities

In 2018, Edesur in Argentina made investments totaling

ects and to improve distribution network quality. The Compa-

US$144 million to meet demand growth and to improve ser-

ny invested 26% of the total in new connections and 31% in

vice quality. These investments made it possible to start op-

the maintenance of distribution networks.

erating the Glew substation extension incorporating 800 MVA

of new AT/MT transformation and where 16 13.2 KV cells

Enel Distribución São Paulo invested US$ 218 million of which

were added, with a new total of 32 available MT outputs. The

42% was allocated to the maintenance of networks, 35% in

last stage of the Sarandi substation was completed, consist-

quality projects and 22% in new connections.

ing of the installation of two new 13.2kV cell sections, thus

incorporating 16 new MT outputs. Additionally, the 104 triple

In Colombia, Codensa investments in 2019 reached US$ 256

cabling system is being renovated, power lines currently in op-

million, and were mainly focused on service quality and effi-

eration, between the Reconquista and Nuevo Puerto substa-

ciency (US$ 76 million) to continue maintaining quality indi-

tions, the repair of the triple cabling system 103/104/105 in the

cators; connections and public lightning (US$ 73 million) and

Reconquista Substation and the reconstruction of the Brown

capacity expansion (US$ 6 million) to meet new demand; loss

substation that permitted to activate all the MT outputs.

control (US$ 6 million) and reconnection requirements (US$

33 million) and normalization (US$ 13 million) in electricity in-

Investments in Enel Distribución Perú reached US$ 131 mil-

frastructure.

lion. Energy demand is related to new requirements from cli-

ents, which has led to investments in distribution networks

totaling US$ 79 million, US$ 31 million of which were used

to extend and reinforce networks to meet the requirements

of residential, commercial and industrial clients, US$ 3 million

for the electrification of human settlements, US$ 3 million in

public lightning and US$ 40 million to guarantee supply quality

and safety. With regards to sub transmission, US$ 31 million

were invested in capacity expansion and network and in the

safety of transmission lines. An additional US$ 7 million was

assigned to Energy Loss Control and US$ 14 million to IT ser-

vices and infrastructure.

In Brazil, total investments reached US$ 760 million. Enel Dis-

tribución Río made investments for a total of US$ 178 million.

Of this amount, 39% was used to implement new connec-

tions, 35% for projects in energy loss reduction, improve-

ments in distribution networks quality with a positive impact

on the services offered to clients and remote-control systems

using technology. The remaining amount was used for the

maintenance of distribution networks.

Enel Distribución Ceará Investments reached US$ 168 million,

64% of which was allocated to meet the increase in network

demand and clients’ connections and support the sustained

growth of demand in the State of Ceará, 22% was invested

in the maintenance of distribution networks projects and 14%

in projects aimed at service quality improvement and loss re-

duction.

Enel Distribución Goiás carried out investments for a total of

US$ 195 million. Of this, 43% was used for energy loss proj-

Financial
Activities

I. Macro-context

The international macroeconomic scenario in 2019 was

marked by the U.S.-China trade war. The U.S. growth during

the year fell below forecasts to only 2.3%, the lowest since

2016 because of the manufacturing crisis. The U.S. Federal

Reserve System (EDF) lowered interest rate three times, clos-

ing the year at 1.5%.

In 2019, South America´s economy was stagnant, with

growth barely close to 1%. Among the countries in which

Enel Américas operates, one of the best returns in the area

was in Colombia with a 3.3% growth, 6 points more than in

2018, marked mainly by higher consumption in households

and an increased private investment.

Brazil grew by a meagre 1.2% in 2019, less than the previous

year with 1.3%. However, the year closed well in terms of

expectations, with a significant increase in consumption, a

decline in unemployment, recorded at 11.6%, a 4% inflation

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and under control and the interest rate at its historical low

In March, Enel Distribución Ceará issued Promissory Notes in

with 4.5%.

the local market for $ 200 million reais (US$ 49 million). Addi-

tionally, during the year it placed local bonds for $ 650 million

Peru’s performance caused an impact in the area given that

reais (US$ 159 million) and obtained bank financing of $ 379

it reduced its growth rate from 4% in 2018 to 2.2%, initial-

million reais (US$ 93 million). In December, Enel Distribución

ly recovered mainly because of the increase in domestic de-

Ceará paid off its intercompany loan obtained in December

mand, private investment, and consumption. Peru is one of

2018 with Enel Finance International (EFI) for $ 300 million

the Region´s main victims of the U.S.-China trade war, mainly

reais (US$ 73 million).

because of the steep decrease in commodity prices.

Finally, the Argentinean economy again experienced a slow-

lion reais (US$ 173 million) bank loan. In April, the Company

down with a -3.1% of GDP. It was a year marked by the

issued Promissory Notes in the local market for $1,080 million

During the year, Enel Distribución Goiás obtained a $ 706 mil-

change of government, where President-elect Alberto Fernán-

reais (US$ 264 million).

dez turned to the IMF to request the regularization of the

country´s domestic debt which is close to 70%, in addition

During the year, Enel Distribución Río issued Promissory

the high inflation rate of 49.3% and the reference interest rate

Notes in the local market for $ 1 billion reais (US$ 245 million)

which stood at 58.8%.

and obtained a $600 million reais (US$ 147 million) bank loan.

II. Principal
completed
financial
operations

Enel Américas

In March, Enel Distribución São Paulo issued Promissory

Notes in the local market for $ 500 million reais (US$ 122 mil-

lion), as well as $ 215 million reais (US$ 53 million) in Septem-

ber. The Company also Issued local bonds for $ 1.5 billion reais

(US$ 367 million). In December, the Company paid off the

intercompany loan with Enel Finance International (EFI) ob-

tained the year before for $ 420 million reais (US$ 103 million).

Colombia

Enel Codensa issued local bonds for $480,000 million Colom-

bian pesos (equivalent to US$ 146 million) and obtained a $

267,043 million Colombian peso (US$ 81 million). bank loan.

Enel Américas successfully concluded the US$ 3 billion cap-

Peru

Enel Distribución Perú issued local bonds for $ 220 million

soles (US$ 67 million) and Enel Generación Perú and Enel Pi-

ura signed leasing contracts for US$ 5.1 million and US$ 1.1

million, respectively.

ital increase.

Brazil

On August 2, 2019, using the funds raised by Enel Américas

through the capital increase, Enel Brasil paid off the debt it

issued in July through Promissory Notes for $ 9.3 billion reais

(approximately US$ 2.5 billion) to repay the intercompany loan

it obtained with Enel Finance International (EFI) for $ 9.4 bil-

lion reais (US$ 2.5 billion) in October 2018. These operations

were carried out in the context of the acquisition of Enel Dis-

tribución São Paulo.

14. Investments and financial activities

III. Hedging Policy

Below we present a summary of the main rating events that

took place in 2019:

Exchange Rate

On July 3, 2019, Feller Rate reviewed and ratified Enel Améri-

cas ´ corporate rating assigning it an “AA-” rating and a stable

perspective nationwide.

The Group´s exchange rate hedging policy is based on cash

Similarly, on July 25, 2019, S&P classified Enel Américas in-

flows and seeks to maintain a balance between flows indexed

ternationally by ratifying the “BBB” rating and a stable per-

to a foreign currency, and the levels of assets and liabilities de-

spective.

nominated in that currency. The aim is to minimize the risk of

exposure of exchange rate variations. As part of this policy, at

On September 9, 2019, Fitch Ratings reviewed and increased

an individual level, Enel Américas incurred forwards totaling US$

the Company’s rating from “BBB+” to “A-” with a stable inter-

366 million to hedge the flows in the different foreign currencies

national perspective. Nationally, Fitch Rating ratified its “AA+”

coming from subsidiaries.

rating with a stable perspective.

Interest rate

Interest rates variations change the fair value of those assets and

liabilities that accrue variable interest rates, as well as the future

flows of asset and liabilities referenced to variable interest rates.

Risk management aims to achieve a debt structure balance to

minimize the debt costs with a reduced volatility in the income

statement. Depending on the Group’s estimates and debt struc-

ture objectives, hedging transactions are carried out through

derivatives contracts that mitigate those risks. The instruments

currently used are interest rate swaps which convert variable

rates into a fixed one.

On December 19, 2019 Moody’s ratified the “Baa3” rating and

changed the perspective from “Stable” to “Positive”, due to

expectations of improved operations and cash flow genera-

tion leading to continuous deleveraging.

Finally, on March 27, 2020, Standard and Poor’s confirmed

a BBB rating and decreased perspective from “Stable” to

“Negative” due to the macroeconomic situation in Colombia,

where the Company has operations.

The Company’s ratings are based on the Company’s diversi-

fied portfolio of assets, strong credit parameters, adequate

debt composition and ample liquidity.

At year-end in 2019, the comparative structure of Enel Améri-

cas Group´s financial debt according to fixed interest rates and/

or protected interest rates versus gross total debt, after the in-

International Rating

curred derivatives was 39% of the fixed rate debt.

Enel Américas

S&P

Moody’s

Fitch Ratings

Corporate

BBB / Negative

Baa3 / Positive

A- / Stable

Risk rating

Local Rating

On November 9, 1994, Standard and Poor’s and Duff & Phelps

rated Enersis (currently Enel Américas) for the first time as

Enel Américas

Feller Rate

Fitch Ratings

BBB+, that is, as an investment grade Company. Later, in

1st class, Level 2

1st class, Level 1

1996, Moody’s rated the Company’s foreign currency long-

Bonds

AA- / Stable

AA+(cl) / Stable

term debt as Baa1.

Since then, most credit ratings have varied. Currently, they are

all “investment grade”, which is based on the diversified port-

folio of assets, liquidity and adequate policies of debt hedging

service.

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Properties
and
facilities

The Company established that its main suppliers, clients, and

competitors are as follows:

Argentina:

Clients: AYSA S.A, Telefónica Argentina S.A., Metrovías S.A.

y COTO C.I.C. S.A.

As a “holding” entity, Enel Américas, does not directly own

properties or facilities to develop its business.

Competitors: AES, Pampa Energia, YPFENERG, Duke Ener-

gy, Petrobras Argentina, SADESA, Albanesi

Brands

The Company has registered the “Enersis Américas” brand in

services, products, industrial and commercial facilities. In July

2016, the Board of Directors of Enel Américas S.A. was notified

Suppliers: Argencobra S.A., Rowing S.A., Sistem Melesur

Energía Arg. S.A.U., Prysmian Energia Cables y Sistemas,

EMA Servicios S.A.

Brazil:

that Enel S.p.A authorized the free use of the “Enel” brand by

Clients: Volkswagen Do Brasil, Grupo Multiplan, FERBASA,

Enel Américas S.A., permitting it to be included in its business

Rima Industrial – Bocaiúva, Vicunha IV, Cagece, Companhia

name, its logo and other forms of use.

De Integracao Portuario Do Ce, Ascenty Data Centers e Tele-

comunicaoes, Farmace Ind Quim Farmac C Ltda., Fabrical

The Enel Américas brand is a registered.

Fabrica de Cal S.A., Saneamiento de Goias S.A., Secretaria

Municipal De Infraestructura E Servicos Publicos – Goiania,

Savoy Industria de Cosmeticos S.A., Granol Industria Comer-

cio e Exportacao S.A., OI S.A., Cedae – Estacion de Tratamien-

to de Agua, Cedae Estacion de Captacion de Agua Imunana,

Base Naval Do Rio De Janeiro, Industrias Nucleares Do Brasil,

Prolagos S/A ETA JUTURNAIBA, Universidade de São Paulo,

Hospital Clinica Facultad de Medicina USP, Montecchio do

Brasil Empreendimentos IMO, Ascenty Data Centers e Tele-

comunicacoes, Secretaria de Estado da Saude.

Competitors: CHESF, Eletronorte, Furnas, CGTEE, ELETRO-

SUL, ELETROBRAS, Norte Energia S/A, Engie Brasil Energia

S.A., Petroleo Brasileiro S A, PETROBRAS, Engie Brasil En-

ergia Comercializadora Ltda, CEMIG Geracao e Transmissao

S.A, EDP, NEOENERGIA, CPFL Energia, Equatorial Energia,

and LIGHT, ENERGISA.

Suppliers,
clients and
main com-
petitors

Enel Américas S.A. as a “holding” Company that mainly oper-

ates in electricity generation and distribution in Latin América,

considers the following suppliers, clients and competitors as

the most relevant ones for its main subsidiaries.

14. Investments and financial activities

Colombia:

Chile:

Clients: Petromil, Carbones San Fernando, Minas y Minerales

Suppliers: Travel Security S.A., Ernst & Young Servicios

S.A.-Minminer-.

Profesionales y Asesorías Limitada y Team Work Recursos

Humanos Limitada, Konecta Chile Limitada, Compañia de

Competitors: Grupo EPM, Grupo CELSIA, AES, ISAGEN- BRE

Leasing Tattersall S A., Accenture Chile Asesorías y Servicios,

Colombia, Electricaribe, Emcali: Consorcio M&M, Amec Fos-

Ltda., Constructora R2 S.P.A., Sodexo Chile S.A., Carat Chile

ter Wheeler Energía, S.L.U.

S.A., Sociedad de Tercerización de Servicios Provider Latín

América Limitada, Marketing Relacional Upcom Limitada y

Suppliers: Andritz Hydro Ltda., CAM Colombia Multiservicios

DCV Registros S A.

S.A.S., Quanta Colombia Services Colombia S.A.S y Deltec

S.A.

Peru:

Clients: Hipermercados Tottus S.A., Gym Ferrovias S.A., Pes-

quera Diamante S.A., Pontificia Universidad Católica del Perú,

Cerámica Lima S A, Corporacion Lindley S.A., Centro Comer-

cial Plaza Norte S.A.C., Lima Airport Partners S.R.L., AGP Perú

S.A.C., Planta de Tratamiento de Aguas, Redondos S A, In-

muebles Panamericana S.A, Alicorp SAA, Tiendas por Depar-

tamento Ripley S.A., Saga Falabella S A., Minera Las Bambas

S.A., Minera Chinalco Perú S.A., Hudbay Perú S.A.C., Shou-

gang Hierro Perú S.A.A., Productos Tissue del Perú S.A., Min-

era Shouxin Perú S.A., Empresa Siderúrgica del Perú S.A.A.

(SIDERPERÚ) Cía. Minera Casapalca S.A., Cía. Minera Ares

S.A.C., Open Plaza S.A., Pesquera Exalmar S.A.A.y Creditex

S.A.A.

Competitors: Engie, Kallpa, Statkraft, Atria Energía, Elec-

troperú.

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14. Investments and financial activities

Annual Report Enel Américas 2019 15.

RISK FACTORS

15. Risk factors

Risk
management
policy

identify, analyze and evaluate risks (endogenous and exoge-

nous), in such a way so as to quantify their probability and

impact, within the risk assessment phase , as well as their

treatment, through establishing mitigation actions with their

respective action plans in joint action with the areas and Risk

Owners responsible for the different risks, also working in

conjunction with the Risk Management area. In the risk-treat-

ment phase, the necessary actions, placed within internal

policies and procedures, as well as the strict observation of

international standards (ISO and OSHAS) and government

provisions requiring evidenced and sustained risk manage-

Enel Américas follows Risk Management Control System

ment, are considered to guarantee correct governance prac-

(SCGR) procedures defined at holding level (Enel SpA), which

tices and business continuity.

establish the guidelines for risk management through the re-

spective standards, procedures, systems, etc., to be applied

Each month, the Risk Management area makes a presenta-

at the Company´s different levels in the processes of risk iden-

tion to the Board to inform them of the Company´s risk man-

tification, analysis, evaluation, treatment and communication

agement through a risk map (Risk LandScape) clearly showing

that the business must continuously face. They are approved

all the risks in their respective taxonomies, complying with

by the Board of Directors of Enel SpA, via its Control and

the calendar defined by the Board for the monthly monitor-

Risk Committee, which supports the Board’s evaluation and

ing process, within each fiscal year. The calendar consists of

decisions regarding internal controls and risk management

presenting each quarter all the risks within the risk map with

system, as well as those related to the approval of periodic

their respective analyses, complying with the Risk Policies,

financial documents.

ISO31000:2018, internal procedures and regulations that

are external to the Group, such as General Standard No. 30,

To comply with said guidelines, there is a specific Risk Man-

which governs the Annual Reports of companies established

agement policy in place within each company, which the Board

in Chile, and the Financial Market Commission´s General

reviews and approves at the beginning of each year, observing

Standard No. 385 to guarantee business continuity in compli-

and applying local requirements in terms of risk culture.

ance with correct corporate governance practices. In addition

to this process, the Risk Management area has implemented

Enel Group’s risk management system considers three lines

a continuous monitoring process of the main political, eco-

of action (defense) to obtain effective and efficient risk and

nomic, social, climate, etc. risks, which occur globally and can

control management, where business unit control is the first

positively or negatively affect the Company’s objectives, each

line of defense in risk management; the second line of de-

week informing Senior Management of such events.

fense is activated by various functions of the internal controls

developed to guarantee optimal risk management and moni-

The Internal Control management aims to guarantee that re-

toring of established compliance and, finally, the third line is

lated business activities permit to mitigate the risks related

independent assessment. . Each of these three “lines” plays

to the compliance with and strict application of all procedures

a different role within the organization’s broader governance

and standards in force pursuant to the COSO methodology

structure. Each line of defense must inform and keep senior

(Committee of Sponsoring Organizations of the Treadway

management and Directors informed about risk management,

Commission). This area meets all the requirements for the Sar-

with Senior Management being informed by the first and sec-

banes Oxley Act periodic monitoring, including the six-month-

ond line of defense and the Board of Directors, in turn, by the

ly certification of these controls by an External Audit. It also

second and third line of defense.

esablishes, in conjunction with Process Owners and Control

The Risk Management area is internationally certified under

targeted by Independent External Auditors and continuously

ISO 31000:2018 (G31000) and acts in accordance with the

improve the processes, monitor their impact and communi-

current guidelines of this international standard to manage the

cate the status to the Board of Directors.

Owners, remediation actions to mitigate control deficiencies

companies´ risks, where the main objective is to preventively

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The Company’s governing bodies and senior management

Sustainability: includes environmental, social, and gover-

are the main stakeholders served by the “lines” and are best

nance risks implicit in the Company’s business, including:

placed to make sure that the Three Lines of Defense mod-

el applies to the organization’s risk management and control

•

Environmental risks: caused by the impact of the Com-

processes.

pany’s operations on the environment, including biodiver-

sity and the use of resources, as well as those arising

The Enel Group´s risk management system is subject to reg-

from climate change.

ular testing and audit checks, taking into account corporate

•

Social risks: mainly social conflicts or community de-

operations and the situation in question, as well as best prac-

mands whose intensity may jeopardize the continuity of

tices and guidelines issued by internal norms and regulations

operations, as well as those related to own and third-par-

such as ISO 31000: 2018 (G31000), COSO (Committee of

ty employees.

Sponsoring Organizations of the Treadway Commission), etc.

• Governance risks: which could originate from unlawful

The Company has set up a Crisis Committee to guarantee a

by own staff members or contractors or anti-competitive

conduct, including corruption, lobbying activities, etc.,

clear, fast and efficient decision-making process and internal/

practices.

external communication to manage any event that may com-

promise people’s safety, continuity of public and business

Reputation/Image: risk of image loss or damage.

services, the environment, asset protection, the Company´s

image, reputation and management, as well as to minimize

Legal: risks related to civil, strategic, consumer, environmen-

impacts on stakeholders and guarantee rapid restoration of

tal, as well as contractual, labor and tax terminations.

normal operating conditions.

Cybersecurity: risks related to information security and cy-

The Company seeks to hedge all the risks that may affect the

berattacks.

Company’s objectives, which, among others, are detailed be-

low:

Emerging risks related to the personal data protection: risk

of non-compliance with applicable privacy and data protection

Financial: covers market risks (related to changes in the mac-

laws or breach of contractual requirements with respect to

roeconomic scenario, caused by changes in interest rates, ex-

the products and services delivered.

change rates and inflation expectations) and credit risks (pos-

sibility that counterparts may not meet their commitments).

Emerging risks related to digitization, IT efficiency, and

service continuity: risks arising from system failures or

Regulatory: risks arising from changes promoted by the most

weaknesses, as well as cyberattacks.

diverse regulators.

Business (Market / Commodity): covers risks related to the

plete risk assessment process (identification, analysis and

uncertainty about the performance of key variables inherent

valuation) under ISO31000:2018, clearly reflecting the risks

in the business, such as demand characteristics and those of

assessed, showing the probabilities and impacts thereof,

The risk taxonomy and its management includes the com-

the sector in which it operates.

quantified before and after mitigation actions are taken. Once

the risk assessment process is completed, each responsible

Operational: risks stemming from inadequate internal pro-

area, in conjunction with the risk management department,

cesses or external events.

continues to work within the treatment to reduce risk levels

through preventive management, always seeking to reduce

Strategic: risks related to innovation, investment plans, new

the probability and impact of each one, the results of which

clients, new players, cybersecurity, staff retention, business

are then presented to the Board and the Company´s senior

continuity.

management every month. The following are the risk groups

and how they are treated:

15. Risk factors

Financial: The Company follows the Enel Group’s Global Fi-

managed by Enel Chile´s Risk Control area through the “Risk

nancial Risk Management Policy, which sets parameters to

Matrix” that contains strategic, scenario, operational, legal,

protect the Company from possible financial operation losses,

fiscal, regulatory, cybersecurity, sustainability and reputation

as well as failures in the registration, monitoring and evaluation

risks.

processes. The provisions of the Sarbanes-Oxley Act guide

internal controls and the process of preparing and dissemi-

Sustainability: Enel Group and Enel Américas are committed

nating financial information. Internal controls are monitored

to making specific contributions to six of the 17 Sustainable

and evaluated every six months through the GRC corporate

Development Goals (SDGs): education and quality (SDG 4),

system. The Company has set up the South American Risk

accessible and clean energy (SDG 7), decent work and eco-

Control area, which is responsible for calculating the credit

nomic growth (SDG 8), industry, innovation and infrastructure

rating of its counterparts in all South American countries (Bra-

(SDG 9), sustainable cities and communities (SDG 11) and

zil, Argentina, Peru and Colombia), before signing contracts,

Climate Action (SDG 13). This commitment was the product

using criteria that classify counterparts by risk level and limit

of establishing the sustainable business model and is, there-

their level of exposure to each counterpart (define the type of

fore, incorporated into Enel Américas´ strategic plan. Failure

guarantee required for each counterpart according to liquidi-

to comply with these commitments is a risk. In addition, the

ty level). Furthermore, this exposure is measured every day

Company contributes to other sustainable development goals.

through daily and projected cash flows, permitting to plan the

Within the sustainability risks, those related to climate change

correct allocation of available resources. The Company also

are particularly relevant because of their environmental, social

uses derivative instruments for the sole purpose of protecting

and economic impacts. Two types can be distinguished:

its financial positions subject to exchange rate and interest

rate changes.

•

Physical risks associated with climate change: related

to extreme weather conditions or to gradual but structural

Regulatory: To manage these risks, the Company controls

changes in climate conditions. Extreme events could ex-

parameters that influence the rate in different scenarios, con-

pose Enel to more or less prolonged unavailability of as-

sidering even the estimated hydrological conditions.

sets and infrastructure, delayed recovery costs, inconve-

niences to clients, etc. Recurring changes that affect the

Business (Market / Commodity): The energy price fluctua-

resources needed for electricity generation or demand are,

tion risks are managed by specialized teams in the energy

for example, drought and temperature increases.

market, responsible for assessing demand development and

the hydrological scenario over a five-year horizon, using sta-

The geographical diversity and technologies used in genera-

tistical models. The Company then defines its participation in

tion and a good predictive measurement of climate phenom-

auctions for energy purchase. Long-term contracts contain

ena permit us to mitigate and manage the changes linked to

guarantees of compliance with industry regulation, with the

climate patterns.

lowest sanctions.

Operational: Represents operation risks in which the quality

network to make us more resilient when faced with these cli-

of the energy supply and the rate of loss are the main iden-

mate events. All areas of the Group are subject to ISO 14001

tified aspects. These risks are managed through formal, op-

certification and, through the application of the internationally

erational and execution business standards and procedures.

recognized Environmental Management Systems (EMS), po-

Additionally, the Company has several operating systems in

tential risk sources are monitored so that any critical points

Added to this are the large investments in the distribution

place that are also used as tools to prevent these risks, as well

can be detected promptly.

as to guarantee the availability and efficiency of distribution

and transmission networks, through our substations to avoid

• Risks of transitioning to a low-carbon economy may in-

regulatory sanctions in terms of non-compliance with the lim-

volve risks related to regulatory, political, legal, techno-

its imposed in terms of quality and losses.

logical and market changes with short-, medium- and

Strategic: Represents the risks that affect an organization’s

in managing these risks is that it belongs to a group that

business strategy or strategic objectives. These risks are

operates in a more mature market that can share correct

long-term effects. Enel Américas´ competitive advantage

regulatory, technological practices, market, etc.

Annual Report Enel Américas 2019 In relation to the management of social risks it is important to

well as losses stemming from an unfavorable decision in judi-

highlight the following:

cial or administrative proceedings (civil, strategic, consumer,

contractual terminations, labor and tax procedures).

•

Social conflicts in countries whose intensity may

jeopardize continuity of operations. To address these

Cybersecurity: Digitization is a fundamental element in the

potential impacts, Enel has put in place contingency plans

Enel Group´s growth and development, exposing it increas-

and processes. Aware of the strategic role that electrici-

ingly to the cyberspace risks and threats. As it is a cross-cut-

ty plays for countries, these plans prioritize the system´s

ting risk and with the same forms and impacts around the

continuity of generation, the supply of electricity to our

world, the Company has a specialized area, a unique, central-

clients, and the safety of our workers and collaborators.

ized and highly prepared area called the Computer Emergency

•

Conflicts arising from the demands of communities

Response Team (CERT), which monitors and supports all the

surrounding our plants. Enel maintains an ongoing

Group´s companies. Cert is part of the Cybersecurity area,

relationship with local communities, through dedicated

made up by the Technical Office, which continuously monitors

teams at regional level. With its social investment in the

and protects (24x7x365) the facilities to prevent the multiple

areas in which we operate, the Company aims to cre-

attacks to which we are exposed and also a data collection

ate the conditions for the socio-economic development

area, SOC (Software Operation Center), which analyzes and

of communities by co-designing common prospects for

studies the different problems that occur in the systems, in

long-term growth with them.

search of continuous protection improvements throughout

•

Risks caused by accidents of both our own staff mem-

the organization. The Cert is mainly based in Italy and Spain

bers and contractors are the risks that Enel mitigates by

but it also has a local manager, a focal point in each South

promoting the culture of safety, setting up policies, safety

American country, which is part of the CERT and is responsi-

integration into processes and training, among others.

ble for reporting potential local risks and taking the necessary

•

Related to employee attraction and retention in the

measures to guarantee operational continuity.

context of energy transition. To meet these challeng-

es Enel has diversity policies, along with those of talent

Furthermore, the risk matrix includes emerging cross-cutting

management and promotion. The Company carries out

risks related with:

different initiatives to reconcile professional and personal

life and also promotes staff members´ education and of-

•

Personal data protection: The collection and processing

fering scholarships and courses.

of personal data is one of the biggest challenges in the

digitization era and market globalization. Enel Américas

In relation to risk management governance, it is important to

has taken on this challenge by accelerating the digital

highlight the following:

transformation processes while increasing the number of

clients in the different countries where it operates. This

•

Those stemming from unlawful conduct, including cor-

involves a natural exposure to the risks related to per-

ruption, lobbying activities, etc., by our own staff or con-

sonal data processing and to the ever-increasing privacy

tractors or anti-competitive practices. Enel has put in

legislation, whose incorrect implementation may cause

place an Internal Control and Risk Management System

economic, financial, and reputational loss and damage to

based on commercial rules and procedures.

both our Group and the holders of such data. To manage

• Human Rights violations, risks that are addressed through

and mitigate these risks, Enel has adopted a framework

due diligence from which action plans are derived to ad-

to guarantee that personal data protection of all the peo-

dress the gaps.

ple with whom we interact, is fully respected. Enel Améri-

cas complies with the current legislation on the subject in

Reputation and image: risk of negatively affecting the Com-

Chile, mainly Law 19.628 on Private Life Protection and is

pany’s public image and damaging its relationship of trust with

gradually implementing actions consistent with the Euro-

shareholders.

pean Personal Data Protection Regulation (GDPR), which

although not a law in Chile, the Enel Group is complying

Legal: These are risks that can be defined as a possibility of

as it wants to raise its standards of protection to the re-

loss stemming from fines, penalties or compensations arising

quirements of this regulation. Therefore, the appointment

from actions imposed by supervisory and control bodies, as

of the Personal Data Protection Officer (“OPD”) who will

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15. Risk factors

be responsible for supporting the different areas of the

ing out the Company´s business activities and the Company’s

business, to make personal data protection a key ele-

employees´ corporate actions, whether they are senior man-

ment in the various activities of the business is currently

agement executives, employees or partners in any way linked

in the process.

to the Company.

• Digitalization, IT efficiency and service continuity: Enel

is digitally transforming its entire value chain by develop-

ing new business models and digitizing its processes. As

a result, it is increasingly exposed to risks related to infor-

mation technology (IT) operating systems, implemented

throughout the Company, which could lead to data dis-

ruptions or loss. To mitigate these risks, the responsible

unit, Global Digital Solutions (GDS), has established an

Interest Rate Risk

Interest rate variations modify the fair value of those assets

and liabilities that bear a fixed interest rate, and also the afore-

mentioned future asset and liabilities flows at a variable inter-

internal control system, which includes checkpoints along

est rate.

the whole value chain. Enel is also promoting the dissem-

ination of digital culture to successfully drive digital trans-

formation and minimize the associated risks.

The aim of interest rate risk management is to reach a debt

structure balance that allows to minimize debt costs due to

reduced volatility in the income statement.

The Enel Group´s organizational risk management structure

has put in place a global risk management committee with the

following functions: approving the risk policies proposed by

the Holding Risk Controller; approve the proposed exposure

limits; authorize breaking the limits; define risk strategies by

Depending on the Group´s estimations and debt structure ob-

jectives, the Company carries out hedging operations through

derivative contracts to mitigate these risks. The instruments

currently used are interest rate swaps that set variable rates

identifying action plans and tools to mitigate risks and overall

to fixed rates.

risk management and control monitoring.

The risk management process is decentralized within each

Company in the group. Each manager responsible for the op-

The comparative structure of the Enel Américas Group´s fi-

nancial debt according to the fixed interest rate and/or pro-

tected over the total gross debt, after incurred derivatives, is

erational process in which the risk originates is also responsi-

as follows:

ble for the treatment and adoption of risk control and mitiga-

tion measures.

To monitor compliance with the internal policies, including

risk-related policies, the Company has established an Inter-

nal Audit team, responsible for regularly auditing and verifying

that established policies and controls are in operation.

In compliance with the global commitments in terms of Sus-

tainability (ESG, SDG), the Risk Management Area together

with the Sustainability area, developed the methodological

foundations to define the process to identify the risks affect-

ing compliance with the Company’s commitments and related

to this issue, directly involving all responsible units , raising

awareness of the relevance of this issue to the Company and

the world at large, leading to the sustainability risk matrix.

Gross Position

Fixed interest rate

12-31-2019
%

12-31-2018
%

39 %

59 %

Exchange Rate
Risk

Exchange rate risks fundamentally correspond to the follow-

ing transactions:

The Enel Group has implemented a Code of Ethics, which ex-

presses ethics commitments and responsibilities while carry-

• Debt incurred by the Group’s companies denominated in a

different currency from the one the flows are indexed to.

Annual Report Enel Américas 2019
•

Payments related to the acquisition of materials lined to

Considering the operational conditions of electricity genera-

projects and corporate insurance policy payments and

tion, hydrology, and commodity price volatility in international

made in a different currency from the one the flows are

markets, the Company permanently reviews if it is convenient

indexed to, among others.

to hedge positions to reduce the impacts of price variations in

• Revenues of the Group´s companies that are directly

the Company´s income.

linked with the development of currencies not related to

the companies’ flows.

On December 31, 2018, the Company signed purchase opera-

•

Flows from foreign subsidiaries abroad to the parent

tions of future energy contracts of 5.28 GWh. These purchas-

company in Chile, exposed to exchange rate variations.

es support energy sale contracts in the wholesale market. On

To mitigate exchange rate risks, Enel Américas’ hedging policy

sale of 10.92 GWh and 7.2 GWh for the purchase of future

December 31, 2018, the Company settled contracts for the

for exchange rates is based on cash flows and contemplates

energy.

maintaining a balance between the flows indexed in US dol-

lars or local currencies and the levels of assets and liabilities

On December 31, 2018, future contracts for the purchase of

denominated in that currency. The aim is to minimize cash

energy totaled 5.28 GWh. These purchases supported con-

flows exposure to exchange rate variations.

tracts for the sale of energy in the wholesale market. As of

December 31, 2018, the Company settled 10.92 GWh of sale

The instruments currently used to comply with the policy are

contracts and 7.2 GWh future energy purchase contacts.

currency swaps and exchange rate forwards. Likewise, the

policy seeks to refinance debt in the functional currency of

each Company.

Commodities Risk

Liquidity Risk

The Group maintains a liquidity policy consisting of incurring

committed long-term credit facilities and temporary financial

Enel Américas Group is exposed to commodity price variation

investments, in sufficient amounts to support the forecast

risks, mainly through the following:

needs for a period of time related to debt and capital markets

•

Fuel purchases for electricity generation.

•

Energy purchase-sale operations that take place in the

maturities, after financial derivatives. For further details re-

The aforementioned forecast needs include net financial debt

local markets.

garding the characteristics and conditions of financial debt and

financial derivatives see Notes 20 and 22 of Enel Américas´

context and expectations.

To reduce risks in severe droughts, the Group has designed

Financial Statements.

a commercial policy that defines the level of commitment of

energy sales according to the generation capacity of power

As of December 31, 2019, Enel Américas Group´s liquidity

plants in a dry year, including risk mitigation clauses in some

stood at US$ 1,939 million in cash and cash equivalents and

contracts with free clients. In the case of regulated clients

US$ 706 million in available non-committed long-term credit

subject to long-term tender processes, indexing polynomials

facilities. As of December 31, 2018 Enel Américas Group´s

are established that permit to reduce commodity exposure.

liquidity stood at US$1,904 million in cash and cash equiva-

lents, and US$ 1,269 million in available non-committed long-

term credit facilities.

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15. Risk factors

Credit Risk

Enel Américas constantly monitors its credit risk in detail.

Receivable Commercial
Accounts

With regards to credit risk related to receivable accounts from

commercial activity, this risk is historically very limited given that

payments from clients are very short-term so they do not individ-

ually accumulate a significant amount. This is applicable to both

our electricity generation and distribution businesses.

In some countries, in our line of electricity generation, clients in

arrears may face energy cuts and also in almost every contract

non-payment is a cause for contract termination. That is why

credit risk is constantly monitored and the maximum amounts

exposed to such risk are measured.

In the case of our electricity distribution companies, energy cuts

are the Company’s prerogative in case of non-payment by cli-

ents. This is implemented according to the existing regulation in

each country, which makes the evaluation process and credit risk

control easier, which is also limited.

Financial Assets

Measuring
Risk

Enel Américas Group develops a Value at Risk measurement

for its debt positions and financial derivatives, to monitor the

risk taken on by the Company, limiting the volatility of the in-

come statement.

The portfolio of included positions to calculate the Value at

Risk is composed by:

•

Financial debt

• Derivatives to hedge debts

The calculated Value at Risk represents the possible variation

of the previously described portfolio’s value during one quar-

ter with a 95% reliability. To achieve that, the Company carries

out a volatility study of the risk variables that affect the posi-

tion portfolio’s value, including:

• US dollar Libor rate.

•

The different currencies in which our Company operates,

the regular local indices for banking transactions.

• Exchange rates of the different currencies considered in

Cash surplus investments are made in first-rate national and

the calculations.

international financial entities, according to limits established

by each institution.

The Value at Risk calculation is based on the extrapolation of

future scenarios (in one quarter) of market values of the risk

The Company selects banks with an investment grade cred-

variables in terms of the scenarios based on real observations

it risk rating, considering the recommendations of the three

for the same period (quarter) for five years.

main international rating agencies (Moody’s, S&P and Fitch).

Placements can be backed up by treasury bonds of the coun-

lated as the percentile of the most adverse 5 % of the possi-

The Value at Risk of one quarter with a 95% reliability is calcu-

try where the operation takes place and/or bank securities

ble quarterly variations.

issued by first-rate banks, privileging the latter because they

offer greater returns (always following the existing placement

Considering the hypothesis described above, the Value at Risk

policies).

in a quarter of the described positions corresponds to US$

361 million.

This value represents the potential increase in the debt and

derivatives portfolio, therefore this value at risk is directly re-

lated, among other factors, to the value of the portfolio at the

end of each quarter.

100

Annual Report Enel Américas 2019 Other Risk
Factors

In 2019 approximately 55% of the consolidated installed gen-

eration capacity was hydroelectric. Therefore, extremely dry

hydrological conditions can adversely affect the Company’s

business, the operating results and its financial position. The

hydrological conditions in the region have been frequently

affected by two weather phenomena — the “El Niño” and

“La Niña”— which affect rainfall and have caused droughts

or flooding, depending on the affected region. Drought could

Some South American economies have historically been

influence the Company’s ability to distribute energy from its

characterized by frequent and, occasionally drastic, inter-

hydroelectric facilities.

ventionist economic measures imposed by their govern-

ments including expropriations, which may adversely af-

The “El Niño” phenomenon has affected hydrological con-

fect Enel Américas´ business and financial results.

ditions in Colombia in the past, where 88% of the installed

Governments have modified monetary, credit, tariff, fiscal and

capacity is hydroelectric, leading to a fall in precipitations and

other policies to occasionally steer the direction of the econ-

high temperatures during the period, and, consequently, to an

omies of Argentina, Brazil, Colombia and Peru according to

increase in energy prices. In March 2017, the “El Niño Coste-

their needs. Although Enel Américas has no assets in Chile,

ro” phenomenon in Peru caused unusually heavy rainfall that

it is a company incorporated under the laws of the Republic

flooded the Santa Eulalia River, led to countless landslides

of Chile. Therefore, it is subject to changes in fiscal, labor, and

and avalanches in the coastal basins, and caused disruptions

monetary laws, among others. Other government actions car-

in several of the hydroelectric plants, mainly Callahuanca (83

ried out in these South American countries have also included

MW) and Moyopampa (69 MW). Each “El Niño” event is dif-

wage, process and tariff controls, and other interventionist

ferent and, depending on its intensity and duration, the mag-

measures such as expropriation and nationalization.

nitude of its social and economic effects could be devastating.

In the distribution business, if certain service and technical

The distribution business is also affected by harsh weather condi-

standards are not met, there might exist a risk of losing con-

tions, mainly in Argentina. With extreme temperatures, demand

cessions. In some concessions, such as the ones in Buenos

can increase significantly over a short period of time, which could

Aires and Rio de Janeiro, it may be especially difficult to meet

affect the service and cause interruptions that could lead to fines.

some of the minimum standards required. Should it not be

Depending on the weather conditions, the results obtained by

possible to comply with these regulatory standards, the local

our distribution business may vary from year to year.

power regulator might revoke the concession and reallocate

it to a competitor. For example, the loss of a concession by

Operational expenses tend to increase considerably during

a major subsidiary could lead to the loss of a debt liability by

drought periods when thermoelectric power plants dispatch

that subsidiary, which could trigger a cross-noncompliance,

more frequently. Depending on our commercial commit-

bankruptcy, or insolvency proceedings. Such events could

ments, we may have to purchase electricity from the spot

have a significant adverse effect on contractual obligations un-

market to comply with all our contractual supply obligations

der Enel Américas´ debt covenants.

and the cost of these energy purchases may exceed the price

at which we must sell the energy we buy, thus leading to

For 2020 we expect there will be fiscal reforms and amend-

losses under such contacts.

ments to tax laws in Chile, Colombia, Brazil, and Peru. The

changes in government and monetary policies in relation to

Droughts also affect the operations of thermoelectric power

duties, exchange controls, regulations and taxation may re-

plants, including facilities that use natural gas, diesel, or coal

duce the Company’s profitability. Inflation, devaluation, social

as fuels, in the flowing ways:

instability, and other political, economic, or diplomatic events,

including the response to these circumstances by regional

•

Thermoelectric plants require water for cooling and

governments, may also reduce the Company’s profitability.

droughts reduce the availability of water. As a result,

The Company’s businesses depend, to a large extent, on

which are also experiencing water shortages. These wa-

hydrological conditions, storms, ocean currents, flooding,

ter purchases can increase operational costs and lead to

and other weather conditions.

negotiations with local communities.

water may need to be purchased from agricultural areas,

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15. Risk factors

101

•

Thermoelectric power plants that burn natural gas gener-

in December 2019, the Argentine Congress declared a public

ate emissions such as nitrogen oxide (NO), carbon diox-

emergency that would last until 31 December 2020 and ap-

ide (CO2), carbon monoxide (CO) gases, Sulphur dioxide

proved emergency economic measures to stabilize the econ-

(SO9) and release particulate material into the atmo-

omy and to resolve the increasing social crisis. These mea-

sphere. Therefore, greater use of thermal plants during

sures included tax increases on certain U.S. dollar exports and

drought periods generally increases the risk of producing

purchases, subsidies for retirees, and more executive powers

higher levels of greenhouse emissions.

over finance, taxes, administration, pensions, tariffs, energy,

The recovery from droughts that affect the regions where

electricity and natural gas tariffs for 180 days and announced

most of the hydroelectric power plants of the Company are

a new distribution tariff scheme that should be in effect by the

health, and social affairs. The Argentine government also froze

located can last for a long time and new episodes of drought

second half of 2020.

may occur in the future. A prolonged drought may exacerbate

the risks described above and have an adverse effect on Enel

Argentina’s annualized inflation rate has risen significantly

Américas business, operating results, and financial position.

over the past three years, from 24.8% in 2017, 47.6% in 2018

and 53.8% in 2019, while the Argentine peso has depreciated

We are subject to potential financial risks arising from cli-

by almost 73.5% against the US dollar over the same peri-

mate change legislation and regulation to limit greenhouse

od. To combat inflation, the Central Bank of Argentina raised

gas (GHG) emissions.

the floor of its benchmark interest rate to 78% in Septem-

Future climate change legislation and regulation that restricts

ber 2019, but subsequently lowered it to 58% in December.

or regulates GHG emissions could lead to increased operating

Some economists are concerned that the government owes

costs and have a significant adverse effect on our business,

a substantial amount of short-term debt at high interest rates

operating results and financial position. The implementation

in both U.S. dollars and Argentine pesos. In December 2019,

of any international treaty or any legislation or regulation that

the Argentine government postponed payments of US$ 9.1

imposes new or additional reporting obligations, or limits GHG

billion in Argentine Treasury bills until August 31, 2020, which

emissions from our operations, may mean that we must incur

led rating agencies to reassess the credit quality of the Argen-

additional costs to meet such requirements and may also re-

tine government.

quire the reduction or limitation of GHG emissions associated

with our operations. These additional compliance costs may

In January 2020, S&P Global evaluated Argentina’s credit rat-

include additional costs to operate and maintain our equip-

ing as “speculative grade”, with a negative perspective, from

ment and facilities, install emissions controls, or pay taxes

“CCC-”. In August 2019, Moody’s lowered its rating from “B2”

and rates related to GHG emissions, which could have a sig-

to “Caa2”. Moody’s perspective is still under review as of the

nificant adverse effect on our business, operating results, and

date of this report.

financial position.

An economic downturn in Argentina or a sharp depre-

Because of the above, as of July 2018, Argentina has been

ciation of the Argentine peso would adversely affect the

considered a hyperinflationary economy according to the NIIF

Company’s businesses.

accounting standards. The general price index was used ret-

The Argentine peso was one of the world currencies which

rospectively in order to present the amounts related to the

experienced one of the steepest devaluations against the US

Argentine subsidiaries in Enel Américas´ consolidated finan-

dollar in 2019 equal to an annual depreciation of 37.1%. On Au-

cial statements so as to reflect the purchasing power of the

gust 12, 2019, the Argentine peso depreciated 18.6% against

Argentine peso according to the provisions described in the

the US dollar in a single day, after Alberto Fernandez defeated

NIC 29, “Financial Information in Hyperinflationary Econo-

President Mauricio Macri in a presidential primary election.

mies”. Non-monetary assets and liabilities were restated since

On 10 December 2019, Mr. Fernández took up Presidency in

February 2003, the most recent date on which inflation adjust-

the midst of a two-year economic recession. The country’s

ments were applied for accounting effects in the Argentine

macroeconomic outlook for 2020 remains risky because of

subsidiaries. Our consolidated financial statements have not

high interest rates, the threat of government default on ex-

been restated to reflect the indexation gain of non-monetary

ternal and local debt, rising poverty and unemployment, and

assets and liabilities of our Argentine subsidiaries prior to Jan-

a high inflationary environment. In response to the situation,

uary 1, 2018.

102

Annual Report Enel Américas 2019 A further deterioration of the Argentine economy, a continued

The delays or modifications of any proposed project, and the

devaluation of the Argentine peso against the US dollar driven

laws or rules may change or be interpreted in a way that can

by hyperinflation, or the initial freeze and subsequent reduc-

adversely affect the operations or plans for the companies in

tion in electricity distribution rates may adversely affect the

which the Company has investments, which can adversely af-

Company´s operating results and financial position. For fur-

fect its business, operating results and the financial position.

ther information, see the Notes to our Consolidated Financial

Statements.

Regulatory authorities may impose fines on the Company’s

subsidiaries because of operational failures or non-compli-

Government regulations may adversely affect the Compa-

ance with regulations.

ny’s businesses, cause delays, hinder the development of

Electricity businesses may be subject to regulatory fines for

new projects or increase operating costs and capital expen-

any breach of current regulations, including power outages,

ditures.

in the four countries in which the Company operates. The

The Enel Américas´ subsidiaries are subject to extensive regu-

Group´s generation subsidiaries are supervised by local reg-

lations on tariffs that apply to their clients and other aspects of

ulators and may be affected by these fines in cases where, in

the business, and these rules may negatively affect profitability.

the opinion of the regulator, operational failures that affect the

For example, the different governments in the countries where

regular supply of energy to the system are the responsibility

the Company operates may implement rationing policies during

of the Company. Additionally, subsidiaries may be required to

droughts or prolonged failures in rationing services, which

pay fines or compensate clients if subsidiaries cannot provide

could adversely affect the Company’s business, operating re-

electricity, even if such non-compliance is due to forces be-

sults, and financial position.

yond the subsidiaries’ control, or if they do not comply with

environmental or other regulations.

Electricity regulations issued by governments in the countries

where the Company operates may affect the capacity of gen-

In 2019, ANEEL imposed $ 13.6 million reais fines on Enel

eration companies to raise sufficient revenue to offset their op-

Distribución São Paulo because of errors in commercial proce-

erating costs, which could adversely affect business, operating

dures related to the interruption of the electricity supply, Enel

results and financial position. Governments may also delay the

Distribución Rio was fined $ 7.4 million reais for a partial viola-

distribution tariff review process, or the rate adjustments de-

tion of the quality of service indicators, and Enel Distribución

fined by regulatory authorities may be insufficient to transfer

Ceará was fined with $ 5.2 million reais for technical problems

our costs to clients.

with the process of maintaining call center data.

Our operating subsidiaries are also subject to environmental

Enel Américas depends on payments from its subsidiaries

regulations that, among other things, require environmental

and affiliate companies to meet its payment obligations.

impact studies for future projects and they must also obtain

To meet its obligations, the Company depends in part on the

building and operating permits from local and national regula-

cash received from dividends, loans, interest payments, cap-

tors. Authorities may withhold or delay the approval of these

ital reductions and other payments from its subsidiaries. The

permits until the completion of environmental impact studies.

ability of the subsidiaries to meet dividend, interest and credit

Therefore, the processing time may be longer than expected.

payments, and deliver other distributions is subject to legal

Environmental regulations for existing and future generation

limitations, such as dividend restrictions, fiduciary duties, con-

capacity have become stricter and require greater capital in-

tractual restrictions that may be imposed by local authorities.

vestment. Any delay in compliance with the required emission

standards may be a violation of environmental regulations. If

Historically, the Company has not always been able to access

the original implementation and standard ongoing emissions

Its subsidiaries´ cash flows at all times because of certain gov-

requirements of monitoring systems are not certified, sanc-

ernment regulations, strategic and economic considerations,

tions, claims, or legal claims for damages may take place. We

and credit restrictions. In the future, it is likely it will not be

expect more restrictive emission limits to be set in the future.

able to rely on cash flows from the operations of those enti-

ties to pay off the Company’s debts.

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15. Risk factors

103

Limits on dividends and other legal restrictions. Some sub-

Enel Américas controls Emgesa and Codensa in Colombia

sidiaries are subject to legal reserve requirements and other

through a shareholder’s agreement with Grupo Energía Bo-

restrictions on dividends payment. Other legal restrictions,

gotá S.A. ESP (“GEB” for the Spanish abbreviation). In De-

such as currency controls, may limit the ability of subsidiaries

cember 2017, the Company was informed that GEB submitted

and associates to pay Enel Américas dividends, and amortize

to arbitration the differences between the parties related to

credits, pay dividends or make other payments. Furthermore,

the distribution of new revenues of 2016 of these two Colom-

the ability of any of the subsidiaries that are not wholly owned

bian subsidiaries. GEB claims that Enel Américas breached

by Enel Américas to pay in cash may be limited by the fidu-

the requirements of the shareholders agreements that reg-

ciary duties of the directors of such subsidiaries to minority

ulated the method of income distribution, forcing parties to

shareholders. Moreover, some of the subsidiaries may be re-

vote in favor of distributing 100% of the benefits that can po-

quired by local authorities, pursuant to applicable regulations,

tentially be distributed in each period, distributing only 70%

to reduce or eliminate dividend payments. As a result of such

of the 2016 net income. The claims seek a 100% distribution

restrictions, any subsidiary may, under certain circumstances,

of the net income obtained in 2016 for each Company. The

not be able to deliver cash to Enel Américas.

amount in dispute is US$ 21 million for Codensa and US$ 27

Contractual Obligations. The restrictions for dividend distri-

that might force Enel Américas to always vote for the distri-

bution included in some credit agreements of the subsidiary

bution of 100% of net income every year, which would not be

Enel Generación Piura and several subsidiaries in Brazil may

financially viable for our subsidiaries and our Company.

million for Emgesa. An adverse ruling would bring a precedent

prevent dividend payments and other distributions to share-

holders if they are non-compliant with certain financial ratios.

The financial position or the operating results might be affect-

In general, credit agreements ban any type of distribution in

ed if the defense of this litigation is not successful or other

the event of any current non-compliance.

claims taken against the Company might arise. For further in-

formation regarding lawsuits, see note 34.3 of the Enel Améri-

Operating Results of subsidiaries. The capacity of subsidiar-

cas’ consolidated Financial Statements.

ies and affiliates to pay dividends, credit amortizations or to

deliver other distributions to Enel Américas is limited by their

Political developments or financial crises or any other crises

operating results. If the cash requirements of any subsidiary

anywhere in the world may substantially affect the countries

are higher than their available cash flow, said subsidiary will

where Enel Américas operates and, therefore, might nega-

not have cash available to hand over to the Company.

tively Impact operations and liquidity.

The currency of any dividend paid by our subsidiaries is sub-

to external impacts that could cause significant economic dif-

ject to depreciation in relation to our functional currency,

ficulties and affect growth. If any of these countries should

which will have a negative impact on our capacity to pay divi-

experience lower-than-expected economic growth or reces-

The countries where Enel Américas operates are vulnerable

dends to shareholders.

sion, consumer demand is likely to decline and some of our

clients might find it difficult to pay their electricity bills, possi-

Any situation described above could adversely affect the busi-

bly increasing the uncollectable bills. Any of these situations

ness, the operating results, and the financial position.

could adversely affect the Company´s operating results and

Enel Américas is involved in litigations.

the financial position.

Enel Américas is currently involved in several litigations that

Political or financial developments in other places in the world

may lead to unfavorable outcomes or financial fines for the

may also adversely affect the Company’s business. For ex-

Company. Enel Distribución Goiás has been involved in a tax

ample, since 2018, the United States and China have been

litigation for claims that date back to a period prior to its pri-

involved in a trade war that involves protectionists measures,

vatization, and the claim may not only have an adverse effect

thus increasing the volatility of global financial markets be-

on the Group, but also exhaust resources and attention for

cause of the uncertainties that come from certain political

many years.

decisions. Instability in the Middle East or in any other import-

104

Annual Report Enel Américas 2019 ant oil-producing region may also increase oil prices therefore

economic and market conditions in other countries which, in

affecting operating costs of thermal generation power plants

turn, might seriously affect the Company´s securities.

which, in turn, would have an adverse impact on operating

results and the Company´s financial position.

Changes in social, political, regulatory and economic condi-

tions or in the laws and policies governing foreign trade, man-

The US federal government experienced some temporary

ufacturing, development and investment, and political crises

shutdowns, such as the most recent in 2018-2019 involving

and uncertainties in the countries in which we operate and

the SEC among many other federal agencies, which was the

other South American countries could negatively affect econ-

longest in the country’s history and which lasted 35 days.

omies in those countries and negatively impact our business,

Even the temporary or predicted US government shutdowns

operating results and financial position. For example, in De-

may have an adverse effect on the implementation and lead

cember 2019, Argentina’s new government declared a public

to higher costs related to our main international financing ac-

state of emergency and established several economic mea-

tivities as well as our mergers and acquisitions.

sures to stabilize the economy and resolve the social crisis. In

Peru, there has been a constitutional crisis since September

Additionally, an international financial crisis and its negative

2019 when President Vizcarra dissolved the Peruvian Con-

effect on the financial industry may have an adverse impact on

gress. The institution initially refused to recognize the action

the Company’s capacity to obtain new bank loans according

and declared the vice president as interim president, who re-

to past terms and conditions. An international public health

signed the next day. In Colombia, there were large anti-gov-

crisis, such as the one attributable to the COVID-19 virus,

ernment protests in November and December 2019. Initially,

which became a global health concern in December 2019,

the protests were organized by students, trade unions and

could seriously affect the countries in which we operate and

indigenous groups opposed to the changes proposed for the

our trading partners, and these effects could lead to higher

Colombian labor and pension laws and grew rapidly to focus

costs of goods also in terms of recessions affecting the elec-

on economic inequality, corruption and possible austerity

tricity demand.

measures, as well as increased violence in the countryside. In

Chile, widespread protests began in October 2019, leading to

Political developments or financial crises or of any other kind

a brief declaration of the state of emergency, the introduction

may also decrease our capacity to access capital markets in

of several social and economic reforms and an agreement to

the countries where the Company operates, as well as inter-

hold a referendum in April 2020 on the possible replacement

national capital markets for other liquidity sources, or lead to

of the Chilean Constitution. Although we do not have opera-

increases in interest rates offered to the Company. Reduced

tions in Chile, our administration and headquarters are located

liquidity may affect capital expenses, long-term investments

there, and our common shares are listed on the Chilean stock

and acquisitions, growth perspectives and dividend policy.

exchanges. Demonstrations and civil unrest in these coun-

Economic fluctuations in South America may affect the oper-

their and negatively affect our business, operating results, fi-

ations and the financial position of the Company as well as

nancial position, and the value of our stock.

tries may continue or worsen, which could negatively affect

the value of our securities.

All Enel Américas´s operations are located in South Ameri-

Insufficient cash flows of our subsidiaries located in the

ca. Therefore, consolidated revenues may be affected by the

countries with volatile economies have led, in some cases,

performance of the South American economies as a whole.

to their inability to comply with financial obligations and the

If local, regional, or global economic trends adversely affect

need to request exemptions to comply with certain financial

the economy in any of the four countries where the Company

covenants, or at some point, to request collaterals or other

has investments or operations, the financial position and op-

emergency measures from Enel Américas as shareholder, es-

erating results may be negatively affected. Enel Américas has

pecially in Brazil and Argentina.

investments in Argentina, Brazil, Colombia and Peru, all un-

stable economies that have occasionally experienced political

Should any future adverse events occur in these economies it

instability because of corruption and other scandals involving

may hinder our possibility to carry out strategic plans, which

high-ranking government officials, among other situations. The

eventually would affect adversely operating results and our

South American financial and insurance market is affected by

financial position.

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15. Risk factors

105

The construction of power plants may suffer significant de-

Reputational damage can exert significant pressures on reg-

lays, works stoppages and significant cost over-runs, as well

ulators, creditors and other interested parties, and ultimately

as the opposition of stakeholders, which can damage the

lead to projects and operations that are eventually abandoned,

Company’s reputation and potentially deteriorate its good-

which may trigger a stock price decrease and also hinder our

will.

capacity to attract and retain competent employees which

Power plants projects can be delayed because of problems

could deteriorate our stakeholders’ goodwill.

stemming from obtaining regulatory approvals or may face

equipment or workforce shortages and may be subject to

construction delays, strikes, adverse weather conditions, nat-

The Company might not be able to make the appropriate ac-

ural disasters, social conflicts, accidents, or human errors.

quisitions or successfully incorporate the acquired businesses.

Any event of this kind may negatively affect the Company’s

The Company always verifies acquisition prospect to increase

operating results and our financial position.

market coverage or complement existing businesses, al-

though it cannot guarantee that appropriate procurement

Existing markets conditions in the initial phases of a project’s

transactions can be identified and specified in the future. The

approval might be totally different to the existing ones when

acquisition and integration of independent companies that

the project is completed, therefore, in some cases, these

are not controlled by Enel Américas is generally a complex,

projects might be commercially unviable. Deviation from

time-consuming, and expensive process that requires an im-

these assumptions, including the forecast of deadlines and

portant effort and even greater costs. If an additional acquisi-

the estimation of expenses related to such projects, might

tion is made, such as the one carried out in Enel Distribución

lead to cost overruns and implementation periods which are

São Paulo in 2018, the Company might incur important debts

longer than the initial estimations, which in turn, could have a

and take on unknown liabilities, suffer a potential loss of key

negative impact on the business, operating results and finan-

employees, incur amortization costs related to tangible as-

cial position.

sets and the distraction of management from other business

concerns. Because of the acquisition of Enel Distribución São

The land to develop new projects is sometimes located in ar-

Paulo, the Company´s liabilities increased significantly, due to

eas that present important challenges in terms of geograph-

the new debt needed for the acquisition and the consolidation

ical topography (mainly in Colombia and Peru), and, in some

of the debt for the purchase of distribution Company.

cases, on mountain slopes or in jungles with a very limited

access. Moreover, in some cases the geographic location of

The integration of the acquired businesses may be hard, slow

some of the projects may also represent risks in terms of ar-

and expensive, and become a burden on the resources and

chaeological heritage. These factors also can lead to signifi-

relations with employees and clients. The acquisition might

cant delays and excessive costs.

not even be successful or might not bring the expected ben-

efits. Any delay or difficult related to the acquisition and inte-

The operation of Enel Américas´ thermal power plants, espe-

gration of its operations might lead to a material effect on the

cially those that use coal for generation, may affect the stake-

business, the operating results and financial position.

holders’ goodwill, because of greenhouse gas emissions,

which may negatively affect the environment and the commu-

Enel Américas´ business and profitability may be adverse-

nity. Additionally, communities might have their own interests

ly affected if water rights are rejected or if water conces-

and different perceptions than the Company and might be in-

sions are granted for a limited time or should their cost

fluenced by other interested parties or motivations unrelated

increase.

with the project. Therefore, if the Company does not commit

The Company owns water rights in rivers and lakes located

to the relevant stakeholders, it may face opposition that might

near its generation facilities, granted by the authorities of the

finally negatively affect its reputation, paralyze operations,

respective countries. In Colombia, the water rights or water

or lead to litigation. The reputation of Enel Américas is the

concessions are granted for different periods of time for each

foundation of its relationships with the main stakeholders and

of our electricity generation plants, in some cases for up to for

other groups of interest. If the Company does not effective-

50-year periods. However, these concessions can be revoked,

ly manage the real or perceived problems, these might lead

for example, when there is a progressive water decrease or

to negative consequences and, therefore, cause a negative

depletion. In Colombia, access to water for human consump-

impact on the business, operating results, and our financial

tion is the first priority before any other use. In Peru, water

position.

106

Annual Report Enel Américas 2019 concessions are granted for indefinite periods, and can be re-

We are subject to incremental risks in increasingly liberalized

voked due to scarcity or a decrease in service quality.

distribution markets.

Any limitation to current water rights, the requirement to ob-

requirements of maximum and minimum demand, may freely

tain additional water rights, or if the current unlimited water

choose non-regulated tariffs. This choice may harm our oper-

concessions are shortened might have a material adverse ef-

ating revenues. In some cases, clients may choose an alter-

fect on our hydroelectric development projects and their prof-

native energy supplier which would negatively affect our busi-

itability.

ness, operating results, and our financial position.

In some countries, distribution clients who comply with the

The controlling shareholder may have a substantial influ-

Exchange risks could adversely affect the results and the val-

ence on Enel Américas and may have a different strategic

ue of dividends in dollars payable to ADS holders.

vision from the minority shareholders when it comes to the

Even though the Company’s functional currency is the US

Company´s development.

dollar, our subsidiaries generate revenues in Argentine Pesos,

Enel SpA (Enel) is Enel Américas´ controlling shareholder

Nuevos Soles, Brazilian Reais and Colombian Pesos. In gener-

with 58.26% of its shareholding as of the date of this report

al, Enel Américas has been and shall be exposed in the future

and has declared its intention to increase its participation to

to the variations of local currencies in relation to the US dollar,

65% via swap agreements that involve ordinary shares and

due to temporary differences and other limitations to adjust

ADS.

tariff rates to the dollar. This exposure might substantially de-

crease the cash value generated by the subsidiaries and the

Pursuant to Chilean law, Enel SpA may establish the results

value of our dividends when indexed to the US dollar if the

of almost every important issue that requires the simple

local currencies experience a strong devaluation in relation to

majority of shareholding vote, such as the appointment of

the US currency. For example, the Chilean pesos devalued

the majority of the Board of Directors members and, subject

by 7.2% in relation to the US dollar in 2019 and continues do-

to contract and legal restrictions, also the dividend policy.

ing so rather strongly as of the date of this report. The future

Enel can also influence in an important way commercial op-

exchange rates volatility in currencies in which the Company

erations and strategy. However, its interests may, in some

receives revenues or in which it incurs expenses, can affect

cases, differ from those of the minority shareholders. For

the business, operating results and our financial position, es-

example, Enel carries out its commercial renewable ener-

pecially when expressed in US dollars, the currency that af-

gy operations through Enel Green Power S.p.A., where Enel

fects ADS holders.

Américas has no shareholding participation. Certain conflicts

of interest that may affect Enel in these matters could be

Long-term energy supply contracts are subject to market

solved against Enel Américas or its minority shareholders’

price fluctuations of certain commodities, energy, and other

interests.

factors.

Enel Américas is economically exposed to market price fluctua-

The electricity business is exposed to risks arising from

tions of certain commodities due to long-term energy sale con-

natural disasters and extreme weather phenomena in the

tracts.

current climate scenario, catastrophic accidents, and acts of

terrorism, which could adversely affect our operations, reve-

They expose subsidiaries, as selling parties, to material obliga-

nues and cash flows.

tions and contain indexed prices for different products, exchange

The Company’s main facilities include power plants and trans-

rates, inflation, and electricity market prices. Adverse changes

mission and distribution assets The Company’s facilities might

in these indices would reduce the tariffs charged under these

be damaged by earthquakes and physical risks that stem from

contracts, which could, in turn, adversely affect our business,

events such as floods. A catastrophic event could lead to a

operating results and our financial position. In the distribution

prolonged unavailability of assets, an extended business dis-

business, there also exists economic exposure to fluctuations

ruption, significant reductions in revenues due to lower de-

in energy prices.

mand or significant additional costs not covered by insurance

clauses for business interruptions and loss of profit. There

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15. Risk factors

107

may be delays between a significant accident or a catastroph-

A significant portion of financial debts is subject to cross-com-

ic event and the final reimbursement under Enel Américas´

pliance provisions, which have different definitions, criteria,

insurance policies, which normally involve a deductible and

materiality thresholds and applicability with respect to sub-

are subject to maximum limits per claim.

sidiaries that could lead to cross noncompliance. Debts may

also be due and payable immediately in cases of bankruptcy

In mid-October 2019, widespread street demonstrations and

or insolvency proceedings of a major or material subsidiary.

protests erupted in Santiago and spread rapidly throughout

Similarly, some debt holders may decide to accelerate debt in

the rest of Chile. Since then, the protests have become com-

the event of cross noncompliance with significant or import-

monplace and have sometimes been accompanied by looting,

ant subsidiaries, among other potential pact breaches.

arson, and vandalism. Violent clashes between protesters and

the police and the armed forces have resulted in significant

Enel Américas may not be able to refinance its debts or obtain

loss of human life and serious injury. The accumulated dam-

such refinancing in terms acceptable to the Company. In the

age to public and private property is evaluated at billions of

absence of such refinancing, the Company might have to set-

dollars. The impact on the country’s economy, growth pros-

tle assets at unfavorable conditions to meet due payments. In

pects, risk perception and immediate impact in terms of un-

addition, it may not be able to sell its assets at the right times

employment and loss of productivity is also significant. Our

or at the correct prices to obtain income that would permit It

corporate headquarters in Santiago suffered an arson attack

to make such payments.

on October 18, 2019, leading to the transfer of management

and employees to a different place for an extended period. It

The company may also not be able to raise the funds required

is not possible to estimate when such violence will end or the

to complete projects under development or construction.

final effects on business, but there may be long-term materi-

Market conditions or unforeseen project costs that prevail

al adverse effects because of this social crisis. Violence has

when funds are required could compromise the ability to fi-

accompanied these spontaneous acts of civil unrest in many

nance these projects and expenses.

regions in 2019. In a globalized world connected through the

Internet and the media, all the countries where we operate

The inability to finance new projects or capital expenditures,

are subject to this risk. Any natural or human catastrophic dis-

refinancing existing debt, or complying with agreements

ruption to our electricity assets in the countries in which we

could adversely affect operating results and the Company’s

operate could cause significant adverse effects on our operat-

financial position.

ing results and financial position.

If third-party electricity transmission facilities, pipeline infra-

The Company is subject to financing risks, such as those re-

structure, or fuel supply contracts do not provide adequate

lated with the financing of new projects and capital expendi-

service, The company may not be able to deliver the electric-

tures, and the risks related to refinancing maturities.

ity it sells to its end clients.

As of December 31, 2019, Enel Américas held US$ 601 mil-

To deliver the electricity it sells, the Company depends on

lion in SEC-registered bonds issued in the United States and

transmission installations that belong to other companies that

bank loans under a US$ 350 million senior unsecured revolv-

are not related and are operated independently. This depen-

ing credit agreement, all governed by the laws of the State of

dency exposes the Company to severe risks. If transmission

New York. As of the date of this report, Brazil is the country

is interrupted or the transmission capacity is inadequate, it can

with the highest refinancing risk. On December 31, 2019, the

prevent the sale and the delivery of electricity. If the energy

debt of our Brazilian subsidiaries totaled US$ 11.45 billion.

transmission infrastructure is inadequate in a region, sale cost

recovery and profits might not be sufficient. If restrictive regula-

Some of the debt contracts are subject to the following provi-

tory transmission prices are imposed, transmission companies

sions which include: (1) financial covenants, (2) affirmative and

that the entity relies on, may not have sufficient incentives to

negative covenants, (3) default events, (4) mandatory prepay-

invest in infrastructure transmission expansions, which could

ment for breach of contracts, and (5) certain control change

adversely affect operations and financial position or affect our

clauses for significant mergers or divestments, and (6) bank-

capacity to develop our whole project portfolio.

ruptcy covenants and insolvency procedures , among others.

108

Annual Report Enel Américas 2019 The construction of new transmission lines may take longer

Enel Américas might not reach satisfactory agreements in

than it did in the past, mainly because of new social and en-

the collective negotiation contracts with the unionized work-

vironmental demands that are creating uncertainty about the

ers and retain key employees should a labor conflict take

possibility of completing the projects. As a result, in some of

place.

the countries in which we operate, renewable energy projects

A large percentage of our employees are members of a union

are being completed faster than new transmission projects

and have collective negotiation contracts that must be regu-

creating energy backlogs that can be transmitted through the

larly renegotiated. Enel Américas´ business, financial position,

current transmission systems. In Argentina, for example, the

and operating results could be adversely affected should an

lack of investment in transmission lines will reduce incentives

agreement not be reached with any of the unions, or if an

for the development of renewable energy projects.

agreement with the trade unions is reached that contains con-

ditions that Enel Américas finds unfavorable. The laws in many

The Company also depends on pipelines to obtain natural gas,

of the countries where the Company operates establish legal

mainly in Peru, where more than 50% of the installed genera-

mechanisms for legal authorities to impose collective negotia-

tion capacity is thermal. The Peruvian system has occasional-

tion contracts if the parties cannot reach an agreement, which

ly faced gas and energy shortages due to the lack of installed

could lead to a significant cost increase.

capacity of gas pipelines and transmission lines, which led to

higher spot prices. Depending on the type of facility, our ther-

Enel Américas employs people who are highly specialized and

moelectric generation plants purchase gas, coal, diesel, and

certain actions such as strikes, walk-outs or work stoppages

other fuels to generate electricity. Any breach of contract or

by those employees could adversely affect our business, op-

supply shortage may stop the facilities from producing electric-

erating results, financial position, as well as the Company’s

ity in a timely manner.

reputation.

Enel Generación Fortaleza owns and operates a 327 MW nat-

The relative lack of liquidity and volatility in the Chilean secu-

ural gas combined cycle power plant. Fortaleza maintains a

rities market might negatively affect the Company’s ordinary

contract with Petrobras, the Brazilian Company that guarantees

stock prices and ADS.

Fortaleza the supply of natural gas at a fixed price until 2023.

Even though Enel Américas does not own assets in Chile, its

The main purpose of the contract is to avoid a short-term en-

stocks are listed in the Chilean Stock Market, as the Company

ergy crisis by guaranteeing thermoelectric generation because,

is regulated under the laws of the Republic of Chile as it is lo-

as we could see in 2018, hydroelectric plants are vulnerable to

cated in that country. The Chilean stock markets are substan-

adverse hydrological conditions.

tially smaller and less liquid that the main stock markets in the

United States or other developed countries. The low liquidity

From 2001 to 2017, the Brazilian government provided Fortaleza

in the Chilean market can make it harder for shareholders to

with all the fuel it needed to operate the plant. However, in

sell their ordinary stocks or the ADS holders to sell common

September 2017, Petrobras announced a unilateral termination

stocks withdrawn from the ADS program, in the quantity, at

of the gas supply contract because of an alleged economic im-

the price and at moment they choose to do so.

balance and excessive burdens, but never formally terminated

the contract. Since then, Petrobras has sporadically supplied

Lawsuits filed against Enel Américas in the other countries

natural gas to Fortaleza under the terms of the agreement, but

outside the South American countries where it operates, or

the situation is very unstable. In case of interruptions in the

the claims against the Company based on foreign legal con-

supply of natural gas, Fortaleza was in the past and might be in

cepts may not be successful.

the future forced to buy electricity at spot market prices, which

All of the Company’s operations are located outside of the

could be higher than the fixed sale price hired for Clients, such

United States. All the directors and all senior executives are

as Enel Distribución Ceará, which has entered into a contract to

domiciled outside the United States and most of their assets

purchase of the entire generation of Fortaleza until 2023. This

are also located outside that country. If any investor were to

scenario could negatively affect our business, operating results,

file a lawsuit in the United States against any of the Com-

and the financial position.

pany´s directors or senior executives, it might be difficult for

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15. Risk factors

109

such an investor to inform such people of a legal process valid

sophistication of cybersecurity incidents by international activ-

within the United States and might be difficult for them to en-

ist organizations, States, and individuals, and are among the

force, in the courts of the United States or Chile, a judgment

emerging risks identified in the planning process. Cybersecu-

rendered in the United States based on the civil liability pro-

rity incidents could damage our business by limiting our gen-

visions of the United States federal securities laws. It is also

eration, transmission, and distribution capabilities, delaying

doubtful whether a successful action could be filed in Chile

the development and construction of new facilities or capital

regarding the liability based solely under the guidance of the

improvement projects to existing facilities, disrupting clients’

United States federal securities laws.

operations, or exposing the Company to liability. Commercial

Interruption or failure of information technology and com-

outage caused by the impact of a cybersecurity incident on

munications systems or external cyber-attacks or cybersecu-

the power transmission network, network infrastructure, fuel

rity breaches of these systems could have an adverse effect

sources, or operations of third-party service suppliers could

systems are part of an interconnected system. Therefore, an

on our business, operating results and financial position.

also adversely affect our business.

Enel América operates in an industry that requires the con-

tinued operation of sophisticated information, control, and

Moreover, our business requires the collection and storage of

communications technology systems (IT systems) and net-

personal identification data on clients, employees, and share-

work infrastructure. The Company uses its IT systems and

holders, who expects it to be properly protected. Cybersecu-

infrastructure to create, collect, use, disclose, store, dispose

rity breaches may put the Company at risk or might lead to

of and process confidential information, including the Compa-

the loss or misuse of confidential or protected information. A

ny’s and clients’ data, personal information on clients, employ-

significant theft, the loss or fraudulent use of information re-

ees and their families, contractors and shareholders, among

garding personal identification may lead to high costs involved

others. In the generation business, IT systems are important

in notifying and protecting the affected individuals and/or may

to monitor the operations of power plants, maintain power

lead to lawsuits, costs, liabilities, fines or important penalties

generation and network performance, adequately generate

for Enel Américas, which may have a material and adverse

clients´ bills, achieve operational efficiency, and meet service

impact on operating results as well as the reputation of the

goals and standards. The distribution business increasingly

group with clients, shareholders and regulators, among oth-

depends on IT systems to monitor smart grids, billing pro-

ers. Additionally, the Company might be required to incur sig-

cesses for millions of clients, and client service platforms. The

nificant costs related to government actions, as a response to

operation of the generation, transmission and distribution sys-

those intrusions or to strengthen information protection and

tems not only depends on the physical interconnection of the

the electronic control systems.

facilities with the electricity grid infrastructure, but also on the

communications between the different components of the

The cybersecurity threat is dynamic and evolving, and its so-

grid. The reliance on IT systems to manage information and

phistication, magnitude and frequency are increasing. There

communication between these parties has greatly increased

is no guarantee that the Company will be able to implement

since the deployment of smart meters and smart grids, for

adequate preventive measures or accurately assess the like-

example in Brazil and Colombia, where the Company has in-

lihood of a cybersecurity incident. We cannot quantify the po-

stalled a significant number of smart meters.

tential impact of cybersecurity incidents on our business and

The generation, transmission and distribution facilities, IT

ed regulatory action could lead to in a substantial decrease in

systems and other infrastructure, as well as the information

revenue and high additional costs, including fines, third-party

processed by the Company´s IT systems could be affected

claims, repair costs, higher insurance costs, litigation costs,

by cybersecurity incidents, including those caused by human

reporting and remediation costs, security costs, and compli-

error. The industry has begun to see a greater volume and

ance costs.

reputation. These potential cybersecurity incidents and relat-

110

Annual Report Enel Américas 2019 Ethics and
transparen-
cy

Internal control
system

The Internal Control and Risk Management System (SCIGR

by its Spanish acronym) consists of a set of rules, procedures

and organizational structures that allow to identify the main

corporate risks existing in the Company and then to measure,

manage and monitor them. Specifically, the system takes into

account the recommendations of the Integrated Framework for

Internal Control, a model set up by the Committee of Sponsor-

ing Organizations of the Treadway Commission (“COSO”).

The system also guarantees the traceability of risk identifica-

tion, assessment, management and monitoring activities, con-

sidering three different types of activities:

• First level of control: consisting of all the control activities

that the Company’s operating units implement in their

processes to guarantee that operations are carried out

correctly.

• Second level of control: assigned to specific corporate func-

tions and they are supposed to manage and monitor cer-

tain risk types.

• Third level of control: internal audit activities aimed at verify-

ing the structure and operation of the internal control and

risk management system, including monitoring of first

and second level controls.

Internal Audit

The Internal Control and Risk Control System, and its alignment

with the business model, is one of the main success factors of

Enel Américas and its subsidiaries.

Internal Audit Management is responsible for objectively and

independently guaranteeing the efficiency and effectiveness of

the internal control and risk management system. Because of

its nature, the Internal Audit Management reports directly to

the Board at least once every quarter, including any serious de-

ficiencies that have been detected or possible irregularities that

must be reported to the auditing bodies or other competent

entities, or that affect the Company´s legal situation.

The Internal Audit Management department carries out audits

to periodically evaluate – under the risk based perspective – the

performance of the Company’s operations, identifying the ar-

eas of improvement and facilitating – together with the process

owners – action plans that would reinforce our Internal Control

System, minimize irregularities or cases of potential fraud that

may affect the Company. The results of each audit and the mon-

itoring of the implementation of the action plans are periodically

reported to the Board that directly monitors the proper imple-

mentation of the identified improvement actions.

Each audit includes control activities linked to the Criminal Risk

Prevention Model (MPRP), which contains the requirements

of the Crime Prevention Model of Law 20.393, which governs

Enel Américas as a Chilean-based Company and that encour-

ages the implementation of international best practices to

prevent and detect potential risks of illegal, fraudulent and in

general any other action that may be in conflict with the ethical

principles of the Enel Group.

This work methodology is also applied by Enel Américas sub-

sidiaries considering the local particularities in terms of ap-

plicable regulations and the specific context of each country

where the Company operates. In 2019. the Audit Manager and

Compliance Officer had access to the Board in the sessions

held in January, February, March, July, August and September

to report all the issues indicated above, in addition to the man-

agement of the Ethics Channel.

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15. Risk factors

111

Ethical conduct
and criminal risk
prevention model

approves the documents that are part of the compliance sys-

tem, including the Criminal Risk Prevention Model, for whose

implementation it gets the necessary support from the Crime

Prevention Officer.

The Crime Prevention Officer has sufficient organizational auton-

omy, authority and resources to carry out his functions in the

correct manner. Periodically, the Board evaluates and monitors

program implementation and improvement at the level of the

Enel Américas is fully committed to complying with the Compa-

Company’s processes, in sessions where the Crime Prevention

ny’s ethics standards and conduct, and the legislation in force in

Officer reports the main activities related to the programs´ imple-

each of the businesses where it operates, both in the internal

mentation and functioning.

and external relations with other stakeholders. Transparency and

ethical actions are an integral part of the values that lead to trust

Enel Américas´ Criminal Risk Prevention Model was officially cer-

and responsibility with stakeholders.

tified in 2018, where an external entity accredited and objectively

The Company and its subsidiaries have implemented a Code of

the Company pursuant to the requirements of Law 20.393. The

Ethics, approved by their Boards, through which they direct the

certification was granted for two years (until mid-2020), during

actions of directors, executives, employees and contractors. The

which period the company shall be constantly evaluated.

document sets out the principles, guidelines, commitments,

and ethical responsibilities in business and commercial activities

In 2019, the Board approved the upgrade of the Criminal Risk Pre-

evaluated the prevention system adopted and implemented by

management.

vention Model´s contents considering the amendments made

to Chilean Law 20.393 at the end of 2018 and the beginning of

The Code of Ethics and the main documents that are the frame-

2019, which, in its scope, incorporated the criminal responsibility

work for Enel Américas´ ethical culture are available to all employ-

of legal persons for crimes of corruption between individuals, un-

ees, Directors, suppliers and contractors and area also published

fair administration, incompatible negotiation, misappropriation,

internally and on the website, so that all stakeholders can easily

illegal fishing, pollution, activities related to protected products

access their contents.

and activities related to the scarcity of fishing resources without

the correct accreditation of their legal origin. These offences are

The Company strictly adheres to the Law on Publicly Traded

additional to the crimes of money laundering, terrorism financing

Companies which, within its criteria, establishes the indepen-

activities, receiving and handling stolen goods, and bribery, the

dence from and inexistence of conflicts of interest. At the same

latter being an extraterritorial crime.

time, the Board has adopted the voluntary observance of Gen-

eral Standard 385. Internal Audit reports the main information on

Furthermore, our Crime Prevention Officer coordinated the up-

the compliance with this Standard to the Board within its area of

grade of specific risks and controls within the scope of the Crim-

competence.

inal Risk Prevention Model with all of the Company´s areas and

processes constantly receiving the support of experts.

Enel Américas has implemented a Criminal Risk Prevention

Model (MPRP Spanish acronym) based on the Code of Ethics

All of Enel Américas subsidiaries have also put in place a com-

and the Zero Tolerance with Corruption Plan. Its objective is to

pliance program in line with the Company’s practices, including

control and prevent crimes within the organization, guaranteeing

country-specific regulatory requirements. In the not directly con-

compliance with the regulations, and the transparency of actions

trolled companies, or which are joint ventures, or related com-

in all the companies where Enel Américas holds a majority share-

panies or suppliers and contractors, the company encourages

holding, exercises control or is responsible for management. This

them to develop their own codes that are aligned with local leg-

model covers all the requirements of the Crime Prevention Mod-

islation and Enel Américas´ standards.

el defined in Law 20.393 and its amendments.

The Board is the body responsible for overseeing compliance

iaries, were recognized by the Fundación Generación Empresar-

with ethical standards and the prevention of criminal risks in the

ial and El Diario Financiero and awarded the “Generación Em-

Company, a task whose monitoring and management is dele-

presarial – Diario Financiero” prize for their commitment to the

gated to the internal audit management. This way, the Board

systematic promotion of ethics and corporate compliance with

In 2019, Enel Américas, together with Enel Chile and its subsid-

112

Annual Report Enel Américas 2019 best practices both internally and externally, obtaining one of the

three best evaluations among 49 participating companies.

In 2019, Enel Américas and its subsidiaries also maintained and

operated their communications and training plans, whose aim is

to disseminate the main aspects of the compliance program and

strengthen employees´ and suppliers´ ethics culture. These plans

considered internal and external activities, including inductions

for the Company’s new arrivals in which they receive specific

training related to Enel Américas ‘ compliance system.

ISO37001
anti-bribery
management
system

The same year Enel Américas and its subsidiaries held 145 train-

ing courses involving more than 6,000 people, focused on cor-

ruption prevention and unethical conduct, the use of the Ethics

Channel, the ISO37001 Anti-Bribery Management System and,

in general, on knowledge related to the Company’s compliance

To comply with the tenth principle of the Global Pact under which

companies are committed to combating corruption in all its

forms, including extortion and bribery, Enel Américas contributes

to meeting this commitment by implementing and maintaining

the pillars of the Anti-Bribery Management System, according

system.

to ISO37001.

Another important activity was Enel Américas´ participation at

the Eighth United Nations Forum in Geneva, Switzerland on

Business and Human Rights in the session entitled “Corrupting

the Human Rights Agenda: How Business can leverage anti-cor-

ruption practices to strengthen respect for human rights”. The

conference was attended by some 2,000 participants from gov-

ernments, businesses, civil society, investors, United Nations

agencies, among others; Enel Américas presented its anti-cor-

ruption experiences and practices implemented in South Ameri-

ca in line with Sustainable Development Goal 16 (Peace, Justice

The ISO 37001 standard specifies several measures and best

practices to help organizations prevent, detect and deal with brib-

ery, along with complying with voluntary commitments made

by Enel. At Enel Américas , this system focuses on identifying

risks, and designing, putting into practice and improving controls

and behavioral standards in operations considered risky, such

as negotiations and contract implementation with third parties,

participation in public and private tenders, financial resource

management, gift and hospitality management, personnel selec-

tion processes, incentive mechanisms for senior management,

and Strong Institutions), which are finally related and integrated

among others.

into the Enel Group´s sustainability and human rights vision and

strategy.

Some of the highlighted practices were: Due Diligence of Hu-

man Rights applied annually in all countries; initiatives imple-

mented with the collaboration of our suppliers and value chain to

promote universal respect for human rights; as well as the work

we have been doing with Multilateral Organizations, NGOs and

government entities from different countries (such as UNODC,

Transparency International, Transparency Secretariats) to make

important inroads into achieving the Sustainable Development

Goals (SDGs).

Finally, in 2019, Enel Américas participated and collaborated in

other instances with stakeholders and civil society such as Chile

Transparente, Fundación Generación Empresarial, the Argentine

Association of Ethics and Compliance, among other organiza-

tions, to share experiences and promote best practices applied

This Anti-Bribery Management System is part of Enel Américas

‘ compliance program where the Board is its highest governing

body, and which, together with the Company’s Senior Manage-

ment, promote the prevention of any type of bribery in daily ac-

tivities and operations. The ISO37001 certification strengthens

stakeholder confidence in Enel Américas, which in 2018 became

the first South American multinational company listed on the

New York Stock Exchange to obtain such certification.

As part of Enel Américas ‘ commitment to implementing global

best practices, in 2019 Enel Américas , together with its sub-

sidiaries Edesur (Argentina), Enel Codensa and Enel Emgesa

(Colombia), maintained their Certification of the Anti-bribery

Management System under the international ISO 37001:2016

standard. During the same period subsidiaries Enel Distribución

Perú, Enel Generación Perú and Chinango S.A.C (Peru) obtained,

for the first time, the ISO 37001 Anti-bribery Management Sys-

in the Company and outside, in terms of probity, organizational

tem certification.

culture , and ethical and transparency practices.

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15. Risk factors

113

Enel Américas has participated in various national activities shar-

This complaints channel is available to employees, contrac-

ing the Company´s experience in the implementation of this rel-

tors, suppliers, clients, communities, and other stakeholders,

evant certification, as well as its deployment in the subsidiaries.

with access available via telephone, face-to-face and digital

means through the intranet and the Company’s website. The

complainant can access the channel to provide more infor-

mation related to the reported situation, as well as receive

feedback and inquiries from those responsible for the man-

agement of the case.

In 2019, part of the communications management and train-

ing focused on improving the use of the Ethics Channel

through publications and training, showcasing its usefulness

and teaching employees how to use it. The company tried to

raise suppliers´ awareness of the channel at events through

promotional deliverables and talks.

In 2019, the Ethics Channel received a total of 110 complaints

in all of Enel Américas and its subsidiaries related to the Code

of Ethics. Of these, 23 were insignificant infringements – all

duly managed according to the Company’s Code of Ethics, in

matters related to contract management, conflicts of interest

and work environment.

Management of
the complaints
channel

The complaints channel, managed by the Internal Audit de-

partment, but run externally, permits anonymous reporting of

irregular behavior, contrary to the principles of the Criminal

Risk Prevention Model, the Code of Ethics or other issues

related to accounting, control, internal audit, or crimes such

as money laundering, terrorist financing, bribery, corruption

between individuals, reception of stolen goods, misappropria-

tion , incompatible negotiation, environmental crimes, among

others. This channel is governed by Whistleblowing global pol-

icy No. 107, which guarantees the whistleblower´s anonymity

and protection in case of retaliation and protection against al-

legations of bad faith.

¿Where to report?

Web corporativa

www.enelamericas.com

Right menu/Ethics channel

Internet

Direct ethics channel

https://secure.ethicspoint.eu/domain/media/es/gui/102504/index.html

Enel Américas

Internal Audit management, Santiago, Santa Rosa N°76, Piso 9.

In person or in writing

114

Annual Report Enel Américas 2019
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The Enel Group has a
whistleblowing policy to
organize the reception,
analysis and management of
reports concerning suspected
violations to Enel Compliance
Programs.

Channels ensure

• Anonymity

• Confidentiality

• Safety

• Protection against retaliation

Whistleblowing
Policy 107

Report a Concern

External Company
sends concerns
to Internal Audit

Internal Audit Response

Receipt notice and further
i n f o r m a t i o n r e q u e s t a n d
evidence of concern

Internal Audit performs
preliminary analysis

• What is your concern?
• Who is being reported?
• Which principle or ethical
behavior is being violated?

Internal Audit performs preliminary analysis

Internal Audit analysis
Relevant violation to
Compliance Program

Operational concern

Concern is sent to the
unit for resolution

Closure form of
concern reported

Investigation and
review of concern
reported

Unsubstantiated
concern

Concern
is filed

Disciplinary system,
implementation of
improvement and report to
Board of Directors

Ethics Channel

The Company has put in place an Ethics Channel, governed by the whistleblowing policy and duly communicated to the Compa-

ny’s employees. This channel is available to workers, contractors, suppliers, clients, communities, and other stakeholders, with

access available via telephone, face-to-face and digital means through the Company’s website. Complaints are subsequently

investigated by the Audit Management department and reported to the Directors´ Committee.

15. Risk factors

115

116

Annual Report Enel Américas 2019 16.

REGULATORY
FRAMEWORK OF THE
ELECTRICITY INDUSTRY

16. Regulatory framework of the electricity industry

117

Description
of the
industrial
sector

changed substantially in March 2013, when the Ministry of

Electricity approved Resolution S.E No. 95/2013, establishing

a payment system for generation based on average costs,

with companies delivering all generated energy to CAMME-

SA. This new compensation model became valid in February

of 2013 and was updated through Resolutions SE No. 529,

No. 482, No. 22 in 2014, 2015, and 2016, respectively. On Feb-

ruary 2, 2017, the Ministry of Electricity published Resolution

SEE No. 19/2017 replacing Resolution SEE No. 22/2016 and

established new payment guidelines for existing generation

power plants, focusing on the power availability of the units.

The transmission industry operates under monopoly condi-

tions and is composed by several companies which receive

Enel Américas and its subsidiaries and jointly controlled com-

concessions from the Federal Government.

panies participate in electricity generation, transportation,

distribution and sale in four countries. Each one has different

The distribution sector also operates under monopoly condi-

regulatory frameworks, energy matrices, participating com-

tions and is operated by companies that have also been grant-

panies, and different growth and consumption patterns. The

ed concessions. Distribution companies have the exclusive

following is a summary of the main legal bodies that regulate

responsibility for electricity to be available to end clients with-

the activity, the market structure, and the most relevant as-

in a specific concession area, without considering if the client

pects regarding the agents of each of the countries where the

has a contract with the distributor or with a generator.

Company operates.

Argentina

The Argentine electricity sector is governed by, among other

regulations, Law No. 15.336/1960, and Law No. 24.065/1992.

The Wholesale Electricity Market (MEM by its Spanish acro-

nym) has four local agent categories (generators, transmis-

sion companies, distributors and large clients) and foreign

agents (generation trading companies and demand trading

companies), companies that are authorized to buy and sell

electricity and related products.

Originally, the generation sector was organized on a compet-

itive basis (marginalism), with independent generators that

sold their energy in the MEM spot market or through private

contracts to clients in the MEM contract market, or “Com-

pañía Administradora del Mercado Eléctrico Mayorista S.A

(CAMMESA by the Spanish acronym) through special trans-

actions such as contracts under Resolution S.E. No. 220/2007

and Resolution S.E. No. 724/2008. However, this regime

Because of the economic downturn affecting the country in

2002, the government issued an emergency Law No. 25,561.

The Law eliminated the American dollar parity and imposed

the conversion of liabilities and rights previously acquired in

the American currency to the Argentine peso. This obligatory

nominal conversion from dollars to pesos seriously affected

the whole Argentinian electricity industry. Additionally, the

Government approved several regulatory measures that slow-

ly interrupted the development of the industry. The Emergen-

cy Law has been subject to successive extensions and with

regards to the last one, approved through Law No. 26,896,

was to be valid until December 31, 2015. The conversion into

Argentine pesos and the devaluation of the economy made

the renegotiation of all concession contracts necessary. In par-

ticular, the distribution sector where “Empresa Distribuidora

de Energía del Sur, S.A.” (Edesur) signed in 2006 a Contractual

Renegotiation Agreement with the government that subse-

quently was ratified through Decree PEN No. 1959/2006. This

gradually has permitted them to adapt their tariff revenues in

such a way so as to guarantee business sustainability. The im-

plementation of this agreement has been stopped since 2008

and until this year, as explained below.

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No generator, distributor, large user, or any other company

was created. If the seasonal price is lower than the genera-

controlled by any of the latter or under its own control, can be

tion, money is withdrawn from the fund to compensate gen-

the owner or controlling shareholder of a transportation com-

eration; otherwise money is added to the fund in the contrary

pany or its controlling companies. At the same time, transmis-

situation. Since 2002, the Ministry of Electricity has main-

sion companies may not engage in energy generation, distri-

tained the average seasonal price without major variations.

bution, purchase and/or sale activities. Distribution companies

It led to an important deficit in the stabilization fund, which

are not allowed to own generation units.

has been covered by the Argentinean state through increasing

Regulated Clients are supplied by distributors at regulated

subsidies.

rates unless they have a minimum capacity demand of 30 kW.

The resolutions approved and created because of the emer-

In such case they are considered “large clients” and can free-

gency Law had a significant impact on energy prices. One

ly negotiate their prices with generation companies.

of the most important implemented measures was Resolu-

tion SE 240/2003, which modified the way spot prices are

On December 16, 2015, through Decree 134/2015, a national

set by separating the calculation of marginal operating costs.

state of energy emergency was declared until December 31,

The main objective of Resolution SE No. 240/2003 is to avoid

2017, where the Ministry of Energy was instructed to set up

price indexation linked to dollar, and despite the fact that the

and apply actions in the generation, distribution and transmis-

dispatch is still based on the real fuels used, the spot price cal-

sion segments in order to adapt service quality and supply

culation is based on absolute gas availability to meet demand.

security; it also instructed the National Public Administration

This occurs even in circumstances where many generators

to carry out consumer rationalization programs in the respec-

used alternative fuels, such as diesel, because it is difficult to

tive entities.

obtain natural gas.

Regulation of generation
companies

In December 2004, the Ministry of Electricity via Resolution

1427/2004 approved the Adherence Law for the Rehabilita-

tion of the Wholesale Electricity Market. It was signed by the

majority of the generators, including the generation compa-

The regulation of generation companies has experienced im-

nies owned by Enel Américas (former Enersis). Through this

portant changes since the introduction of Law No. 24.065 un-

Resolution, the Ministry created a fiduciary fund known as

til the publication of Resolution S.E.E No. 22/2017. Pursuant to

FONINVEMEM, where private generators provided part of the

the aforementioned Law, all generation agents of the MEM

energy sold from 2004 to 2007 for the construction of two

must be connected to the SIN (National Interconnected Sys-

new combined cycles. In 2010, apart from this new capacity,

tem) and must comply with the dispatch order to generate

the generation companies owned by Enel Américas (former

and deliver electricity to be sold in the spot market and in the

Enersis), together with other companies participated in the

forward market (MAT). The distribution and trading companies

creation of a trust for the construction of another combined

and large clients that have signed private supply contracts

cycle, expecting the closure as a combined cycle in October

with generating companies, pay the contract price directly to

2016. Part of the credits for the energy sold between 2008

the generator, and also pay a toll to the transmission and dis-

and 2011 was also allocated to this new project.

tribution companies for the use of their systems.

As part of the agreement reached with the Government to

To stabilize generation prices when faced with the tariffs re-

develop the operations of our subsidiaries in Argentina, on Oc-

ceived by clients, the market established a seasonal value

tober 12, 2012 Costanera signed an agreement to implement

which is the price of energy that distributors pay for their

an investment plan for the generation units in the Costanera

energy purchases traded in the spot market. This amount is

power plant. Its purpose was to optimize equipment reliability

adjusted by the Ministry of Electricity every six months, after

and availability for a total amount of US$ 304 million within a

CAMMESA carries out their spot price projections for the pe-

7-year period. The agreement also contemplated the payment

riod in question. To adjust the differences between this price

of contractual maintenance obligations (Long-Term Service

and the real cost of original generation, a stabilization fund

Agreement -LTSA-) of the combined cycle of the power plant.

16. Regulatory framework of the electricity industry

119

Subsequently, Resolution S.E. No. 95/2013 abandoned the

In February 2019, Resolution SEES No. 19/2017 was replaced

marginal price system and set up an average cost recognition

by Resolution SRR and ME No. 1/19 establishing guidelines

mechanism. The resolution recognized the payment of fixed,

for payments to existing generation plants.

variable costs and additional payments. Fixed costs (in ARS$/

MW-hrp) are paid based on technology, scale, and available

The new Resolution kept the current payment structure of the

power. They are also subject to reaching an established avail-

previous resolution with some amendments.

ability objective. As for variable costs, operating and mainte-

nance costs are paid based on the generated energy (in ARS$/

MWh), the fuel and technology used (generators have no fuel

cost as it is provided by CAMMESA). Finally, the additional

payment is calculated based on the total energy generated

(in ARS$/MWh), considering the technology and the scale of

the generator. A part of this payment is deposited in a fund

that is used to finance new infrastructure investments in the

electricity sector.

The resolution covers generators, co-generators, and self-gen-

erators except for power plants that became operational as

of 2005, nuclear power plants and the generation of bina-

tional hydroelectric plants. It reserves for and centralizes in

CAMMESA commercial management and dispatch of fuels

and suspends bilateral energy contracts between generators

and MEM agents. The latter must meet their electricity de-

mand with CAMMESA.

Resolution SE No. 529/2014 mainly adjusted the values set

up by Resolution SE No. 95 and incorporated non-recurring

maintenance payments for thermal power plants.

Resolution SE No. 482 issued in 2015 adjusted the payment

for generators, in force since February 2014. According to

Resolution 529/2014, a new charge was created to finance

investments but which has not been used and which ex-

empts hydroelectric plants from the payment of variable

energy collection and established payments for wind, solar

photovoltaic, biomass/biogas, and internal combustion engine

power plants. On 30 March 2016, the Ministry of Electricity,

under the Ministry of Energy and Mining, via Resolution No.

22/2016, adjusted the payments values of Resolution SE No.

482/2015, replacing Annexes I, II, III, IV, V, VI and VII of that

resolution.

Subsequently, Resolution SE No. 22/2016 was replaced by

Resolution Se No. 19/2017, defining a minimum power pay-

ment according to technology and scale. In addition, for ther-

mal units, the possibility of offering availability commitments

with differential foreign currency payments for all thermal

technologies was established.

120

Payment for thermal power plant
capacity

Minimum price (from February 2019)
•

Large cycles: U$S 3,050 /MW-month

•

Large TV: U$S 4,350 /MW-month

Large TG: U$S 3,550 /MW-month

Base Price for Committed
Remunerations
• Dec - Feb: U$S 7,000 /MW-month

•

Jun - Aug: U$S 7,000 /MW-month

• Mar - May: U$S 5,500 /MW-month

• Sep - Nov: U$S 5,500 /MW-month

Payment for energy

Generated energy:
• Engines

Gas: U$S 4 /MWh

Liquid: U$S 7 /MWh

• Hydroelectric: U$S 3.5 /MWh

Operated Energy (linked to rotating power): Thermal and Hy-

dro: U$S 1.4 /MWh. Energy values are defined in the Node.

First, adjustments were made for the payment decrease for

availability and energy of the thermal units. In the case of

power availability, the decrease was nearly 10% and for ener-

gy it was 20% in relation to the prior resolution.

A formula for adjusting availability revenues was also estab-

lished based on the historical dispatch of the generating unit.

Therefore, units with a dispatch factor in the last mobile year

of less than 30%, will be reduced by 30%, if the factor is

>70%, there is no effect and if it is between 30% and 70%,

the reduction is linear.

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As far as hydroelectric plants are concerned, the base prices

In December 2019, through Resolution 12/2019, the Govern-

of the power and energy generated and operated as stipulat-

ment decided to repeal Resolution No. 70/2018 of the former

ed in Resolution ex SEE No. 19/2017 are maintained, but the

Energy Secretariat of the former Ministry of Finance that al-

new regulations establish that the hours during which the hy-

lowed companies to manage their own fuel supplies, leaving

droelectric generator is unavailable for scheduled and agreed

Mercado Mayorista Eléctrico Sociedad Anónima (CAMMESA)

maintenance shall not be considered for the calculation of en-

again in charge.

ergy payments. Despite the introduced changes, hydroelec-

tric power plants did not suffer a significant reduction in their

revenue.

Continuing with the guidelines established by the SE for

CAMMESA in previous years, to bring down gas costs re-

Regulation of distribution
companies

quired for generation, MEGSA held two auctions to purchase

The distribution activity is carried out by companies that ob-

gas for generation in thermal plants, with satisfactory results.

tain concessions. Distribution companies must supply all the

The first was held on December 27, 2018. The supplies offered

electricity demand in their concession areas according to pric-

were interruptible for the period from January to December

es (tariffs) and conditions established in the regulation. The

2019. The minimum PIST prices obtained were US$ 2.2107/

concession agreements include penalties for failure to provide

MMBTU (summer), US$ 3.2235/MMBTU (winter) and weight-

electricity services. The concessions were granted for the

ed average prices of US$ 3.0953/MMBTU (summer) and US$

sale of distribution and for retail sales. The concession periods

4.3446/MMBTU (winter). The second auction took place on

are divided into “management periods” that permit conces-

May 23, 2019. Unlike the previous auction, supply on this oc-

sionaires to drop the concession at certain times.

casion was strong, with a term ranging from June 2019 to

May 2020, inclusive. PIST prices were US$ 2.207/MMBTU

Since 2011, there have been two electricity distribution areas

and US$ 3.2446/MMBTU for summer and winter respectively,

subject to federal concessions. These concessionaires are

with a clear gas price decrease in the wellhead from the first

Edesur and Edenor, both located in the city of Buenos Aires

auction to date.

and Greater Buenos Aires. Until 2011, Edelap was also under

With regard to the resolution, the contingent liabilities stem-

federal jurisdiction.

ming from the availability contracts of Enel Costanera´s TV

Most of the distribution companies renegotiated their con-

units and Combined Cycles that were signed in 2012, Enel

tracts in 2005 and 2006, although the tariffs were partially and

finally signed an agreement on September 12 with CAMME-

temporarily increased until the Integral Tariff Review (RTI) for

SA, which essentially confirms Enel’s position, indicating that

distribution companies under national jurisdiction was to come

there are no outstanding claims and providing the group´s

into force. This tariff review process was not accomplished,

companies with the benefit of eliminating the risk of fines to

and the term for contracts renegotiation was postponed sev-

waive part of the future fee for Enel Costanera.

eral times through laws enacted by the National Congress,

thus postponing the duration of the Economic Emergency.

In September 2019, about 50 of the 88 projects approved

during the second round of the RenovAr program were vir-

The new National Administration changed the paradigm on

tually paralyzed mainly because of difficulties on part of the

December 16, 2015, when the National Executive Power is-

successful bidders to guarantee adequate financing and

sued Decree No. 134/2015 declaring the emergency for the

warranties. Therefore, on September 11, Sebastián Kind, the

National Electricity Sector until December 31, 2017. It also

Undersecretary of Renewable Energy and Energy Efficiency,

ordered the recently created Ministry of Energy and Mining

sent a note to CAMMESA to instruct them to temporarily

to develop, release and implement the national program of

suspend non-compliance summons with the scheduled dates

activities required for the energy generation, transport, and

and work progress pursuant to the renewable electricity sup-

distribution sectors under national jurisdiction. The purpose of

ply contracts. For various reasons, the undersecretary, after

these measures was to adjust electricity supply quality and

just under 30 days, sent a note fully repealing everything in-

security and guarantee that energy utilities services were pro-

structed in the first place.

vided under adequate technical and economic conditions.

16. Regulatory framework of the electricity industry

121

On September 28, 2016, through Resolution ENRE 0522/2016,

category of users for Edenor y Edesur. Similarly, on Septem-

the regulator called for a Public Consultation to inform about

ber 25, the Ministry of Health through Resolution 1538-E cre-

and hear the views on the Tariff Proposals submitted by the

ated the “Registry of Electro-dependent patients for Health

distribution companies for the next five-year period. This falls

Reasons”. Currently, the regulations for operational issues to

within the Comprehensive Tariff Review Process (RTI) and pri-

guarantee the continuity of supply, and for the compensa-

or to defining the rates to be applied by the said concession-

tion to distribution companies (Law 27,351 Article 11) are still

aires in that five-year period.

pending. The Executive Authority will appoint the authority to

act upon this law and will assign the budget allocations re-

The regulations also set out how to update the distributor’s

quired to meet the objectives and liability limits of each of the

revenues because of the effect of price variations in the econ-

involved parties.

omy and all other issues related to service provision quality

and the regulation of supply.

On November 1, 2017, ENRE published Resolution 525 par-

tially establishing the Reconsideration Resource filed by EDE-

Once these distribution tariff tables were established, includ-

SUR against Resolution ENRE 64/2017, accepting its mea-

ing the instruction issued by the MEyM and the provisions of

sures regarding the treatment of easements and requesting

SEE Resolution No. 20/2017, on seasonal prices effective as of

that the company should present, within 60 days, an annual

the billing period for February 1, 2017, Edesur’s tariff transition

plan for the regularization of easements to be carried out in

stage was over.

the 2017/2021 period. Additionally, it requested the recogni-

tion of CAMMESA expenses, rates and others that might be

Pursuant to Article No. 29 of ENRE Resolution No. 64/17

present in the future retroactive adjustments

a n d

(Physical Follow-up of the Works Plan) on March 20, 2017 Ede-

minor modifications to the quality regime and other recogni-

sur sent a note ratifying the Investment Plan, informed in a

tions.

timely manner to be taken into consideration in the RTI (in

physical terms).

On December 1, through Resolution 602, ENRE approved the

new values of Edesur´s Own Cost of Distribution through the

On July 26, 2017 ENRE issued Resolution No. 329/2017, de-

application of the mechanisms considered in the RTI. Con-

fining the procedure for the billing of deferred revenue estab-

currently, it issued the tariff structure that reflects seasonal

lished by Resolution ENRE No. 64/2017 (Article 4°). It indicates

prices (generation and transport) included in the resolution of

that “…receivables corresponding to each tariff category, will

the Ministry of Electricity 1091/ 2017. It also approved the new

be the sum of the monthly accrued revenues, recognized by

structure to subsidize social tariffs and the bonus system for

tariff category …”; establishing the certainty of payment by

consumption savings for residential users.

recalculating each year the revenues not recovered deduct-

ing the payments from initial credits, and recalculating the

Finally, the return to normal conditions in relation to economic

remaining installments to cover the balance; and the mecha-

emergency and energy emergency situations was declared

nism to update the latter “…These charges calculated in such

through the decision of the Argentine National Government of

way shall be adjusted pursuant to the components of the

not to extending the effect of the Electricity Emergency Law

CPD, according to the “trigger clause” and in the “Adjustment

(in effect until December 31, 2017) and the Economic Emer-

Mechanism” …”.

gency Law (in effect until January 6, 2018).

On May 17, 2017 Law 27.351 on Electro dependent Patients

was issued guaranteeing free and continuous electricity sup-

On January 31, 2018, ENRE approved the new values effec-

ply together with service priority for those clients who, for

tive as of February 1, 2018. These tables include a new reduc-

health reasons require constant electricity supply and with

tion of wholesale price subsidies, lowering them to 90% of

adequate tension levels in order to feed the equipment pre-

the value of the seasonal price valid in 2017. Moreover, social

scribed by a licensed physician and needed to avoid health or

tariff subsidies remained unchanged as well as the allowance

life risks. On July 26, 2017 through Resolution ENRE 292, this

of the stimulation plan stemming from electricity consump-

entity established free service and connection cost for this

tion reduction.

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Regarding the Distribution Added Value, several things were

tablish the standards for the technical and safety evaluations

Incorporated Into the tariff table including: the third install-

that the distributor must make in the distribution network, the

ment of the increase of Own Distribution Cost corresponding

distributed generation equipment and associated elements.

to the RTI , the proportional share of deferred revenue gen-

erated by the tranches, the Cost Monitoring Mechanism for

On December 4, 2018, Budget Law 27.467 for 2019 was ap-

the period and the application of the Efficiency Factor. The last

proved. Article No. 124, as part of the approval negotiations,

reflected Edesur´s compliance with the Investment Plan com-

included the administrative transfer of control and payments

mitted in the RTI, each time the forecast value was reached.

regarding social tariff subsidies from the National State to

On May 31, 2018, the supervisory agency issued Resolution

transfer is part of the commitment taken on by the Republic

ENRE 0170, approving the sanctioning regime for the separa-

of Argentina to reach a balanced budget before debt interests

the City of Buenos Aires, effective as of January 1, 2019. This

tion of the Investment Plan presented by distribution compa-

in 2019.

nies at the time of the RTI.

In December, several meetings were held to make the trans-

On July 19, 2018, the supervisory agency issued Resolution

fer of jurisdiction feasible. The meetings involved all the inter-

ENRE 0199, increasing the quality control of the current Sec-

ested parties: The Ministry of Energy, Edenor, Edesur, CABA

tor /Party to the MT Feeder. It penalizes diversions of 2, 3 or

and the Province of Buenos Aires. The company also received

more times, over the theoretical indicators corresponding to

from the authorities the first draft of the transfer. For the trans-

each feeder to comply with quality level targets of the RTI. It

fer to be valid, the final document must have the consent of all

applies when it affects 100 or more Clients, by values of 300

parties involved and must expressly indicate it.

kWh and 600 kWh per user. The measure is effective as of se-

mester 45 (September 2018-February 2019). Both resolutions

In relation with the above, as of January 1, 2019, the authori-

led to an increase in quality requirements, forecast at the time

ties of the Province of Buenos Aires and the Autonomous City

of completing the Comprehensive Tariff Review.

of Buenos Aires, accepted to keep the current conditions, for

the payments s associated with the Social Tariffs.

On July 30, 2018, as part of the Ministry of Energy´s plan to

make the tariff increases more gradual, an agreement was

The Resolution of the Ministry of Electricity No. 366, published

signed between MINE and Edesur where Edesur would re-

on December 27, 2018, informed companies of a new supply

ceive 50% of the increase of the tariff adjustment mechanism

cost. The future Seasonal Prices to be transferred to the tariffs

as of August 1, and the remaining 50% in 6 installments as

of end users, as part of the changes promoted by the author-

of February 1, 2018 while maintaining the Investment Plan

ities to reduce subsidies, decreased from approximately 30%

agreed in the RTI. Edenor simultaneously signed the same

of the subsidy in February to 15% in August 2019. However,

commitment.

said prices when converted to the local currency, meant an ini-

tial 26% increase in February and subsequently a 6% increase

As agreed, on August 1, 2018 EMRE applied the first 50%

in May and August 2019.

(7.925%) of the increase corresponding to the application of

the MMC of August 2018 of the Distribution Value Added. To-

On February 1, 2019, ENRE resolutions No. 24/2019 and

gether with this increase, the entity reinitiated the elimination

26/2019 were published in the Official Journal. The first ap-

of the subsidies to wholesale energy prices. The elimination

proved the values in the tariff table effective for the billing

process had been delayed because of the almost 50% deval-

corresponding to meter readings after 00:00 hours of Febru-

uation of the Argentine peso.

ary 1, 2019, according to the increases in the seasonal price

of energy and the reference price of power, established by

On November 1, the National Executive Authority issued De-

Resolution SGE 366/2019. They also included the increase of

cree 986/2018, seeking to reach a total of 1,000 MW of in-

the National Electricity Fund (FNEE) from $15.5 Argentinean

stalled capacity within a 12-year period. To be authorized for a

pesos /MWh to $80 Argentinean pesos /MWh, while the cost

connection, the user must comply with several requirements

of high-voltage transport (AT) was unchanged. The second

established by the Application Authority which would also es-

resolution established the new values of the Distribution Add-

16. Regulatory framework of the electricity industry

123

ed Value (VAD), effective as of the same date as the first one,

it. On July 7, 2019, the latter approved the agreement issuing

establishing that they would apply from March 1, 2019. The

Law 6.180, and on July 26, 2019 it was promulgated by the

March 2019 VAD increase included the 23.57%, variation of

Executive Branch via Decree 263. On October 2, 2019, De-

the Cost Variation Monitoring Mechanism (CMM) for the Au-

cree No. 1289/2019 was published in the Official Journal of

gust 2018 – February 2019 period and the implementation of

the Province of Buenos Aires approving the agreement of the

the stimulus factor, which reflects an over-consideration of the

jurisdiction transfer and other related agreements, as men-

investment plan with respect to the pattern that was estab-

tioned above.

lished in the RTI. Furthermore, it established the recovery of

50% of the VAD increase that was due to have been applied in

On 2 May 2019, the new tariff table was published. It con-

August 2018 (7.925%), as well as a one-month deferral of this

tained the seasonal price adjustment for the May - July 2019

last increase (February to March 2019). The increases granted

period established by Resolution No. 14 of the Ministry of

as of March 2019 followed the VAD standardization process

Renewable Resources and the Electricity Market on April

defined by the RTI and published in February 2017.

29, 2019. The resolution set a new differential price for the

residential segment to avoid increases. However, to maintain

With regard to social tariffs, which ceased to be financed by

the schedule of subsidy withdrawals, reported by the National

the National State as of January 1, 2019, both the Autono-

Government in December 2018, the price of the rest of the

mous City of Buenos Aires and the Province of Buenos Aires

segments was increased, leading to an average total increase

made a commitment to maintaining in force the guidelines

of 2%, in addition to a 4% increase in the commercial and

of the social tariff regime, also establishing the origin of the

industrial segments. Its application is effective for consump-

funds. ENRE also instructed Edesur to maintain the social tar-

tions as of 00:00 hours of May 1, 2019.

iff structure guidelines that were in force until December 31,

2018.

On May 10, 2019, the Company signed an Agreement on the

Adjustment of Obligations with the Ministry of Energy, acting

At the same time, on February 28, 2019 the National State,

on behalf of the National State, according to which outstand-

the Province of Buenos Aires (the “Province”) and the Auton-

ing reciprocal claims arising during the 2006 / January 2017

omous City of Buenos Aires (“CABA”), signed an agreement

transition period were terminated. On the one hand, Edesur

to start transferring the public electricity distribution service

undertakes to: (i) pay penalties to clients within a 3-year pe-

granted by the National State in favor of Edesur to the juris-

riod adjusted according to active BNA rate; (ii) pay the fines

diction of the Province of Buenos Aires and the Autonomous

contained in Annex VIII to the 2006 Agreement Law, up to 14

City of Buenos Aires. Edesur has not been party to that agree-

six-monthly installments, recalculated up to the date of their

ment.

cash payment for the average increase registered by the cost

of distribution; (iii) in the context of clause 5.4 of the afore-

As part of the transfer of the public electricity distribution

mentioned Agreement Law, allocate the penalties for periodic

service, on May 9, 2019, the National State, CABA and the

quality measurements of the transition period, to implement

Province signed an Agreement implementing the transfer, no-

investments additional to those established in the RTI and

tifying Edesur of the agreement which the last signed. The

whose aim would be to improve service reliability and safety.

Agreement states that the Province and CABA jointly hold the

New terms related to the mutual debt with CAMMESA were

status of the granting authority of the public service provided

also agreed upon, as detailed in footnote 16. On the other

by the Company, and that the Company will continue to be

hand, the National State promised to compensate the Compa-

governed by its concession contract and by the national legal

ny´s commercial debts with CAMMESA for energy purchases

and regulatory regulations as may apply.

in the MEM and incurred before the entry into force of ENRE

Furthermore, this agreement created a new regulator: the

tination was social spending incurred in 2017 and 2018 and

“Ente Metropolitano Regulador del Servicio Eléctrico” (EMSE

related to the consumption of settlements with community

by its Spanish acronym), a bipartite entity made up by the

meters and generated from July 2017 to December, 31 2018,

Province and CABA. The agreement became valid after the

in the proportion provided for in the New Framework Agree-

Provincial Executive Branch and the CABA Legislature ratified

ment and its successive extensions, and to the differences

resolution No. 1/2016, and National State debts whose des-

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stemming from capping invoices of users who benefitted

No. 263 and the Supplementary Resolution No. 161 of June

by social tariffs. Additionally, the National State would waive

30, 2019 by the Autonomous City of Buenos Aires ratified, on

sanctions whose destination is Public Administration. The ef-

part of both Provinces, what was established in the so-called

fects of this agreement are set out in the “Other net operating

“Fiscal Consensus 2018” and Article 124 of Law No. 27.469.

income (outgoings)” line of the company´s income statement

The above-mentioned agreements finalize the transfer of the

of 12,183, with its corresponding impact in the “Income Tax”

service by this Company from the National State jurisdiction

line of approximately 3,200.

to the jurisdictions of the Province of Buenos Aires and the

Autonomous City of Buenos Aires.

On 19 September 2019 Edesur signed a Tariff Agreement with

the National State where the latter instructs ENRE to, during

On December 10, 2019, Dr. Alberto Fernández took over as

the six-month period starting on August 1, 2019, maintain in

the new President of the Republic of Argentina and Dr. Cris-

force the tariff tables prior to the beginning of that period for

tina Fernández de Kirchner as Vice-President. On December

all tariff categories, which means that EDESUR will continue

12, the ordinary assembly of CAMMESA appointed Esteban

to receive the compensation included therein due from prior

Kiper as its new general manager. Mr. Kiper had previously

recoveries and disputes (ENRE resolution No. 26/19). The dif-

been vice-president of CAMMESA between 2014 and 2015,

ference in the VAD and the difference in seasonal prices, the

during the government of Cristina Kirchner and under the eco-

increase of which was ratified by the Resolution of the Minis-

nomic management of the then Minister Axel Kicillof (recently

try of Renewable Resources and the Electricity Market No. 26

nominated as Governor of the Province of Buenos Aires). And

issued on September 3, 2019, for the period from the August

by Decree No. 19 of December 19, 2019, the administrative

1, 2019 to December 31, 2019, will be recovered in 7 monthly

structures of the National State were modified, nominating

installments as of January 1, 2020. Additionally, Edesur un-

Sergio Lanziani as the new Minister of Electricity under the

dertakes to maintain the quality of service and agrees to post-

Ministry of Productive Development led by Matías Kulfas. and

pone the payments of any sanctions until March 1, 2020 at

Osvaldo Arrúa as Undersecretary of Electricity.

their original value plus the adjustments corresponding to the

time of payment, in 6 monthly installments.

Finally, on Friday, December 20, 2019, the National Congress

approved Law No. 27.541 denominated the Law on SOCIAL

On September 20, 2019, the National State, as a signatory

SOLIDARITY AND PRODUCTIVE REACTIVATION WITHIN

on the one hand, and Edesur and Edenor, on the other hand,

THE PUBLIC EMERGENCY FRAMEWORK declaring a state

subscribed the Extension Agreement of the New Framework

of public emergency in economic, financial, fiscal, administra-

Agreement, extending it from January 1, 2019 until May 31,

tive, planning, tariff, energy, health and social matters until De-

2019. Under this agreement, the National State undertakes

cember 31, 2020. The law authorizes the National Executive

to pay the corresponding amounts and the percentage of the

Branch in article 5 to maintain the electricity and gas rates of

economic contribution for the supply of electricity to settle-

the federal jurisdiction and to initiate a renegotiation process

ments in the Province of Buenos Aires. Additionally, Edenor

of the still valid Comprehensive Tariff Review in an extraordi-

assigns and Edesur accepts the claims recognized by this

nary capacity and for a maximum period of 180 days tend-

agreement, and the National State undertakes to instruct

ing to a reduction of the current household, commercial and

CAMMESA to compensate for the aforementioned amounts

industrial tariffs for 2020. And authorizes ENRE to intervene

due for Edesur´s mutual debts with CAMMESA. The effects

(Article 6) as it will maintain its scope of competence for the

of this agreement are set out in the “Service Revenue” line

duration of the emergency by suspending the validity of the

of the income statement of 209. As of the date of these con-

second paragraph of Article 124 of Law No. 27.467 (Article 7).

densed interim financial statements, the transfer of Edenor’s

debts to Edesur, as well as the CAMMESA compensation are

On December 27, 2019, ENRE, under Article 7 of Law No.

still pending.

27.541, instructed EDESUR not to amend the current Tariff

Table even though it no longer belongs to federal jurisdiction.

Furthermore, Regulatory Decree No. 1289 issued on Octo-

ber 1, 2019 by the Province of Buenos Aires and the previ-

ous sanctions and the publication of Law No. 6180, Decree

16. Regulatory framework of the electricity industry

125

Regulation of Transmission

Transmission was designed according to the principles estab-

lished by Law 24.065, adapting the activities to the gener-

al criteria contained in the concession awarded to Transener

S.A., in Decree 2.473/92. For technological reasons, the trans-

mission business is related to economies of scale that do not

permit competition, therefore it is a monopoly and is subject

to a considerable regulation.

Just like it did in the distribution segment, in 2016 ENRE car-

ried out the Integral Tariff Reviews for transmission compa-

nies under the national jurisdiction (Transener S.A., Distrocuyo

S.A., Transco S.A., el Ente Provincial de Energía de Neuquén,

Transba S.A., Transnea S.A., Transnoa S.A., Transpa S.A.) for

the period comprised between 2017 and December 31, 2021

which came into force in 2017.

In 2018, ENRE implemented the following tariff reviews:

Remuneration of Independent
Transporters:

• On July 3, 2018 ENRE asked Yacylec to provide informa-

tion related to its facilities to carry out the Integral Tariff

Review (RTI). Subsequently, an extension was granted

until mid-October.

•

In line with the last tariff review carried out for the Trans-

port sector:

> The regulator´s technical bodies would carry out the

•

In September 2019, a letter of complaint was sent to the

ENRE to complete the tariff review procedure and estab-

lish, as soon as possible, the company’s remuneration for

the operation and maintenance of the facilities they over-

see.

Remuneration of International
Transporters:

•

In a NOTE issued on August 24, 2018, the Undersecre-

tary of Electricity instructed CAMMESA to acknowledge,

based on the August Economic Transactions TRANSITO-

RIA, equal to 70% of the part corresponding to TRAN-

SENER, under the concept of Transport Capacity of its

facilities (operation and maintenance)

• Beginning of RTI – Procedure to Define the Remunera-

tion of International Carrier. Through NOTE issued on Au-

gust 22, 2018, ENRE requested the information required

to establish the remuneration, starting from January 1,

2019.

• Reports were sent for the process to establish the remu-

neration of International Carriers.

•

In September 2019, a letter of complaint was sent to

the ENRE to complete the tariff review procedure and es-

tablish as soon as possible the company’s remuneration

for the operation and maintenance of the facilities they

oversee.

Environmental Regulation

tasks.

Electricity installations are subject to federal and local environ-

> The methodology used was to be cash flows,

mental laws and regulations, including Law No. 24.051, or the

> The real profitability rate after taxes was 7.7%,

Hazardous Waste Law, and other regulations.

> The tariff period was from February 1, 2017 to Janu-

ary 31, 2021.

The electricity sector must inform and monitor certain emis-

> The proposal of monetary values as of December 31,

sion standards. If companies do not comply with these re-

2016.

quirements the government may set penalties, such as the

•

The presentation must be accompanied by the opinion of

suspension of operations which, in the case of public ser-

the National Carrier. Reports were sent to establish the

vices, might lead to the cancellation of concessions.

payment for Independent Carriers.

•

In May 2019, a request was received for information ex-

Law No. 26.190, approved in 2007, declared a matter of na-

tension regarding the ENRE investment plan presented

tional interest the use of renewable energy sources to pro-

by Yacylec in the RTI

duce electricity and set the target of market participation for

•

To respond, the fundamentals of investments were add-

renewable energies in a 10-year period at 8%.

•

In August 2019, information additional to the investment

On October 21, 2015, Law 27.191 on Renewable Energies in

plan presented in the RTI was requested.

Argentina was published in the Official Journal, modifying Law

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No. 26.190 in force at the time. The new regulation postponed

Transmission works under monopoly conditions. Tariffs are

till December 31, 2017, the 8% renewable energies market

based on a tender process promoted by the Government with

participation target in the national demand establishing, as a

the participation of transmission agents, who offer the best

second stage objective, a 20% participation by 2025, setting

bids at specific auctions for transmission services and whose

halfway goals of 12%, 16%, and 18% for the end of 2019,

companies sign transmission concession contracts to imple-

2021, and 2023. The Law creates a Fiduciary Fund (FODER)

ment the lines with a guaranteed annual income. The trans-

to finance projects, grant tax benefits to renewable energy

mission charge is fixed, and the transmission revenue does

projects, and establish the non-application of specific levies,

not depend on the amount of electricity transmitted.

national, regional and municipal royalties, until December 31,

2025. Clients categorized as Large Users (>300 Kw) should

Distribution is a public service that also works under monop-

individually meet the renewables participation targets estab-

oly conditions and is provided by companies that have been

lishing that the price of these contracts cannot exceed 113

awarded concessions. Distribution companies in the Brazilian

US$/ MWh and setting penalties for those who do not meet

system may not: (i) develop activities related to electricity

these objectives. The law is still pending.

generation or transmission; (ii) sell electricity to unregulated

Brazil

Industry Structure

clients, except to those within their concession area and un-

der the same conditions and tariffs applicable to their clients

from the Regulated Market; (iii) keep, directly or indirectly, eq-

uity interest in any other company, corporation or partnership;

or (iv) develop activities that are not related to their respective

concessions, except those permitted by law or in the rele-

vant concession agreement. Generation companies are not

authorized to have equity interests above 10% in distribution

The Brazilian electricity industry is organized as part of a large

companies.

interconnected system, the SIN (Sistema Interligado Nacional

in Portuguese) which includes most of the Brazilian regions

and several other smaller isolated systems. Energy genera-

tion, transmission, distribution, and commercialization are ac-

tivities legally separated in Brazil.

The industry is regulated by the Federal Government through

the Ministry of Mines and Energy (MME) and by the National

Electric Energy Agency (ANEEL).

The regulated price of energy is based on average tender pric-

es, with independent tender processes for “existing” ener-

gy and “new” energy. The latter include long-term contracts

where new generation projects must cover the growth of

demand planned by distributors. The “existing” energy ten-

ders consider shorter contracting periods and seek to meet

the contractual requirements of distributors that arise from

the expiration of previous contracts. Each tender process is

centrally coordinated, the authority defines maximum prices

and, as a result, contracts are signed where all the distributors

participating in the process buy in proportion of each of the

generation offers. The price at which spot market transactions

are settled is called the Difference Settlement Price (PLD), a

mathematical calculation model limited on both side by the

highest and lowest values.

The unregulated market includes the sale of electricity be-

tween generation concessionaires, independent producers,

self-producers, electricity traders, electricity importers, un-

regulated consumers, and special clients. It also includes

contracts between generators and distributors existing un-

der the old regulatory framework, until their expiration. New

contracts must be adjusted to the new regulatory framework.

According to the specifications established by Law 9.427/96,

unregulated consumers in Brazil are those who: (i) require a

capacity of at least 3,000 kW and choose to hire the supply

of energy directly with generators or energy traders; or (ii) re-

quire a capacity of at least 500 kW and choose to the supply

of energy directly with generators or renewable sources of up

to 50MW of installed capacity.

According to norm No. 514/2018 issued by the Ministry of

Mines and Energy, the limit for energy purchases from con-

ventional sources will change to 2,500 kW as of July 1, 2019,

and to 2,000 kW as of January 1, 2020.

On 16 December 2019, the MME published Norm No.

465/2019 which modified Norm No. 514/2018 by changing the

limits for: 1500 kW, as of 1 January 2021; 1000 kW, as of 1

January 2022; 500 kW, as of January 1, 2023.

16. Regulatory framework of the electricity industry

127

The Brazilian system is coordinated by the Brazilian Electrical

maximum PLD considers variable operation costs of thermo-

System Operator (ONS) and is divided into four sub-systems:

electric plants. To calculate the minimum PLD, the operation

Southeast/Center-West, South, Northeast and North. In ad-

and maintenance costs of hydroelectric power plants are con-

dition to the Brazilian system there are also some isolated

sidered.

systems, in other words, systems that are not part of the Bra-

zilian system and are generally located in the northern and

In relation to market regulation, 100% of the energy demand-

northeastern regions of Brazil, and have coal or oil fired ther-

ed by distribution companies must be covered through reg-

mal power plants as their unique source of energy.

ulated contract in the current fully regulated scenario. This

Sector modernization

The Government is carrying out a sector reform and modern-

ization currently in progress under Draft Law No. 232/2016

and 1.917/2015, proposing: (i) end of subsidies for consumers

that use renewable energy and the development of the car-

bon market; (ii) improvement of the short-term pricing mech-

anism, instead of a simple mathematical model; (iii) allocation

of system expansion costs to all consumers, both free and

captive; (iv) guarantee the liberalization of the electricity mar-

ket by removing barriers to free market access; others.

Regulation of Generation
Companies

Generation Agents, who can be public generation concession-

aires, IPPs or self-producers, as well as Trading Agents, can sell

electricity in two contract environments. First, the Regulated

Contract Environment (ACR in Portuguese), where distribu-

tion companies operate, in which energy is purchased within

the framework of the tender process coordinated by ANEEL;

and the other known as the Free Contract Environment (ACL

in Portuguese) in which energy is purchased directly between

suppliers and their clients. Regardless of whether it is the

ACR or ACL, the generators´ sales contracts are registered

in the Câmara de Comercialização de Energia Elétrica (CCEE)

and form part of the base to quantify and establish difference

adjustments in the short-term market. This way, generation

companies may sell energy through regulated contracts or

in the free market and trade their surplus/ deficit in the spot

market, at Price Differences Settlement (PLD in Portuguese).

Each year ANEEL validates, by resolution, the minimum and

maximum values of the PLD, so that the maximum and min-

imum PLD values for 2019 are set at $559.75 reais per MWh

and $39.68 reais per MWh, respectively. The calculation of the

coverage may have physical guarantees of generation power

plants or any other power plant, through an energy or capac-

ity purchase contract. The current regulation, among other is-

sues, specifies that when these limits are not met, agents are

subject to financial penalties.

The regulated purchase price for the end-user tariffs setting

process is based on the average tender prices, with indepen-

dent tendering processes of “new” energy and “existing”

energy, carried out to meet the distributors´ market demand.

There are also specific tenders for “reserve energy”, which

do not make up the average energy price in the ACR, as they

are intended to raise the security of energy supply in the SIN,

with costs transferred to all consumers, of the ACR and ACL.

Additionally, in 2015 and 2017, pursuant to Law No. 12.783/2013,

new tender offers for the hydroelectric power plants that have

not increased their concession contracts took place. The ten-

ders permit part of the energy to be sold through the install-

ments model (with a minimum of 70%) and the other part in

the market. In the 2015 tender, the winner was the company

that offered the lowest tariff for the operation of the power

plant, while in the 2017 tender, the winning company was one

that paid the highest price for the concession.

In the energy tenders that provide for long-term contracts (15-

20-25 years for thermal plants, 30 for hydroelectric plants, 20

for solar and wind) generation projects must cover the de-

mand growths expected by distributors. There are also energy

tenders that consider shorter contract deadlines and seek to

meet the procurement needs of distributors arising from the

expiration of previous contracts, so that energy can be sold

at lower prices, depending on market conditions. Each tender

process is centrally coordinated, the MME defines maximum

prices and, as a result, contracts are signed where all distribu-

tors involved in the process purchase in proportion from each

of the generation bidders.

128

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Regarding the energy auctions under the regulated regime,

Asset through the extent of their current concession contracts

to recompose the energy offer, the following tenders were

in their balance sheets. The Regulatory Asset should equal the

held until December 2019, with energy and price allocated as

effects related to the risks transferred to the MRE from 2013

follows:

to 2018. As a counterpart, they waive legal proceedings and

debt payment in the short-term market.

On June 28, 2019, there was an A-4 auction for wind, solar,

hydroelectric, PCH, CGH and Biomass sources, with the fol-

This agreement is fundamental for the development of the

lowing result: 81.10 MW-medium, allocated to Hydro (20.2%),

Brazilian energy sector, mainly because it would return liquid-

Biomass 5.3%), Wind (23.7%) Solar (50.7%) and average

ity to the spot market. It will also be important to discuss

price of $ 137.50 /140.82 reais MWh.

structural solutions for the “MRE” thus guaranteeing its sus-

tainability in the future. In December 2019 ANEEL approved

On October 18, 2019, there was a new auction (A-6): for the

a Public Consultation to improve the mechanism and agents

same sources as the A-4 auction, with the addition of coal

may submit contributions until February 17, 2020. ANEEL also

and gas-powered thermoelectric plants, where projects with

approved the Regulatory Agenda for 2020/2021 period which

more than 71GW of power (about 80% of the total registered

contains improvements in the regulation of the MRE as a pri-

projects) were technically enabled, with the following result:

ority activity. It is crucial to guarantee that the risks involved

1155.20 MW-medium, allocated to Hydro (14.94%), Thermo

in the mechanism are strictly related to hydrology, preserving

32.35%), Wind (34.92%) Solar (17.79%) and average price

its initial objective.

$171.84 reais MWh.

The Government is carrying out the sector´s reform and mod-

ernization currently in progress under Draft Law No. 232/2016

and 1.917/2015, proposing: (i) end of subsidies for consum-

Regulation of Distribution
Companies

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ers that use renewable energy and the development of the

In the regulated market, distribution companies purchase

carbon market; (ii) improvement of the short-term pricing

electricity through tenders supervised by ANEEL and orga-

mechanism, instead of a simple mathematical model; (iii) allo-

nized by CCEE. Distributors must purchase electricity in public

cation of system expansion costs to all consumers, both free

tenders. The Government may also call for special tenders for

and captive; (iv) guarantee the liberalization of the electricity

renewable sources of energy (biomass, mini hydro, solar and

market by removing barriers to free market access; others.

wind power plants). ANEEL and CCEE hold annual tenders.

For the reform to succeed, it is essential to reestablish spot

The recruitment system is multilateral, with generating com-

market liquidity which has been damaged because of legal

panies that sign contracts with all the distributors that attend

disputes, and the hydrological risk.

the tenders.

Over the years, an important mechanism for managing hy-

The Concessions Law establishes three types of tariff reviews

drological risks (“MRE”) was distorted because of several

or adjustments for end consumers: The Tariff Repositioning In-

government measures, which transferred risks to generation

dex (IRT), which involves an annual tariff adjustment because

companies. Because of the lack of regulatory solutions, gen-

of inflation; The Ordinary Tariff Review (RTO) to be carried out

erators had to take the issue to courts thus avoiding large

every four or five years according to each concession con-

payments in the short-term market. In 2015, ANEEL offered

tract, and the Extraordinary Tariff Review (RTE), carried out

a solution to generators with contracts in the captive market.

when a relevant event occurs in the sector that significantly

However, the proposed solution was not viable for generators

affects the value of the tariff. This way, the Law guarantees an

with contracts in the free market, so the dispute continued in

economic and financial balance for companies should a sub-

courts, which damaged the spot market liquidity by approxi-

stantial change in their operating costs take place. Should the

mately $ 7 billion reais.

cost of components for Parcel A, such as energy purchases or

taxes, increase significantly within the period of two annual

The previous government designed an agreement (including a

tariff adjustments, the concessionaire may submit a formal

draft bill which is currently in the House of Representatives),

request to ANEEL for these costs to be transferred to the end

according to which generators would recognize a Regulatory

consumer.

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16. Regulatory framework of the electricity industry

129

All tariff reviews and repositioning processes are approved by

concessionaire so as not to allow tariff gains/losses due to

ANEEL.

the variation of Parcel A costs.

ANEEL evaluates the tariffs in response to changes in energy

The Securities Compensation Account (“CVA” a Portuguese

costs and market conditions in the tariff reviews (RTO and

acronym) helps to maintain market stability and permits to

RTE). When adjusting distribution tariffs, ANEEL divides the

create deferred costs, which is compensated by tariff adjust-

Annual Reference Value, that is to say, the costs of the distri-

ments based on the necessary rates to compensate for the

bution companies into: (i) costs that cannot be managed by

deficits from the previous year.

the distributor, also called “Parcel A”, and (ii) costs that can

be managed by the distributor or “Parcel B”, the latter corre-

In December 2014, the Brazilian distributors, including the

sponding to what we know as Distribution Added Value (VAD).

Enel Américas group, signed an addendum to the concession

The ordinary tariff review considers the entire tariff setting

ers) to be part of the compensable assets at the end of the

structure of the company, including the service provision

concession, should it not be possible to compensate through

costs, energy purchase costs as well as the return for the

tariffs for the rest of the duration of the contract. This way, in

investor. Under its concession contracts, Enel Distribución

accordance with the NIIF rules, the accounting of these regu-

contract that allows these regulatory assets (CVA’s and oth-

Ceará and Enel Distribución São Paulo are subject to tariff re-

latory assets/ liabilities is permitted.

views every four years, and Enel Distribución Río and Enel

Distribución Goiás every five years. The basis of the assets

To cover the energy surcharge caused by the 2014 drought,

to calculate the return allowed to the investor is the replace-

the Government created the ACR account through bank loans

ment market value, depreciated over its useful life from an

for the tariff to be paid within two years. In 2014, the distrib-

accounting standpoint, and the rate of return on the distribu-

utors used an approximate amount of $ 18 billion reais from

tion asset is based on the Weighted Average Capital Cost, or

the CR account, however, it was not enough to cover the en-

WACC for a model company. The WACC is reviewed in each

tire deficit. A new loan for the ACR account was approved in

tariff cycle. The WACC value for distribution currently in effect

March 2015 to cover the deficits corresponding to November

is at 12.26% real pre-tax rate.

and December of 2014. An extension of the repayment term

for all loans was also approved, which should now be paid

The current regulatory framework allows a direct return on

in 54 months as of November 2015. The payments from the

investments via the Remuneration Base, under the criteria for

ACR account finished in September 2019 and the balance was

monitoring quality indices and investment prudence, through

accredited to distributors in October 2019.

control in each tariff cycle following the criteria of Regulatory

Compliance of Assets. In this area, Enel Distribución São Pau-

Due to the mismatches between the costs recognized in the

lo is a benchmarking company in the Electricity Sector - recog-

tariffs and the real costs outside the management of the dis-

nized by the industry and by the Brazilian regulator. Throughout

tributor, and intensified by the implicit costs related to the

2019, Enel Brasil led, through a project that accommodated

drought, in January 2015, ANEEL began to implement a sys-

114 collaborators specialized in assets, the integration of best

tem (known as Tariff Banners) of additional monthly charges

practices in asset management with a regulatory approach.

over the consumer rate provided that the marginal cost of the

The regulatory mechanisms guarantee the creation of regu-

ulator aims to give the consumer an economic signal of gen-

latory assets or liabilities, whose tariff recompositing takes

eration costs in the following month, providing the distributor

place in subsequent tariff adjustments (March 15 for Enel Dis-

with an advance payment (by law) that the distributor would

system reaches levels above the regulatory standard. The reg-

tribución Río, April 22 for Enel Distribución Ceará, July 4 for

only collect it in next tariff event.

Enel Distribucion São Paulo and October 22 for Enel Distri-

bución Goiás). This mechanism has existed since 2001 and is

This mechanism, as described below, consists of four banner

called the Parcel A Securities Compensation Account (CVA).

levels: green, yellow, red level 1 and red level 2.

Its objective is to keep constant operating margins for the

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Values Applied to the 2019
Tariffs

Public Water Sanitation Service and Public Irrigation Service,

to be reduced from January 2019, at an annual rate of 20% in

relation to the initial value, until the installment is zero. Addi-

tionally, the Decree forbids the cumulative application of dis-

Until May 2019, the tariff banners were:

counts included by the CDE (sector charge), prevailing the one

> Green tariff (Favorable conditions for energy generation):

that offers the greater benefit to the consumer.

Without tariff surcharge.

> Yellow tariff (Less favorable generation conditions): $1.00

For the Enel Group the impact of Decree 9.642/18 tends to

reais per 100 (kWh)

be neutral. Therefore, the elimination of the aforementioned

> Red Tariff - level 1 (More expensive generation condi-

discounts granted to consumers, will compensate the percep-

tions): $3.00 reais per 100 (kWh)

tion of higher tariffs each year until the end of the discount

> Red Tariff - level 2 (More expensive generation condi-

periods.

tions): $ 5.00 reais per100 (kWh)

From June to October 2018, the tariff values were:

sumers, will also be reduced each year due to subsidy reduc-

Additionally, the CDE, collected and transferred to end con-

> Green tariff (Favorable conditions for energy generation):

the weight of the charges in the tariffs for end consumers. The

Without tariff surcharge.

publication of the decree will not affect the subsidies granted

> Yellow tariff (Less favorable generation conditions): $1.5

for renewable sources.

tion. This is positive news for the sector because it will reduce

reais per 100 (kWh)

> Red Tariff - level 1 (More expensive generation condi-

Finally, in December 2019, ANEEL called for a Public Consul-

tions): $ 4.00 reais per 100 (kWh)

tation to discuss the application of the binomial tariff for ev-

> Red Tariff - level 2 (More expensive generation condi-

ery low voltage client. This is a disruptive regulatory decision,

tions): $ 6.00 reais per100 (kWh)

because it may change the Brazilian tariff framework for low

Since November 2019, the tariff values are:

tion of distribution businesses but protects the revenues of

voltage clients. This tariff modality would affect the genera-

the distribution business. The Public Consultation will be open

> Green tariff (Favorable conditions for energy generation):

until March 18, 2019.

Without tariff surcharge.

> Yellow tariff (Less favorable generation conditions):

$1.343 reais per 100 (kWh)

> Red Tariff - level 1 (More expensive generation condi-

tions): $ 4.169 reais per 100 (kWh)

> Red Tariff - level 2 (More expensive generation condi-

tions): $ 6.242 reais per100 (kWh)

In summary, with this mechanism the generation cost that

is currently transferred to the client only once a year (when

the annual tariff rate adjusted) will have a monthly variation,

therefore the client will be able to manage better his electric-

ity consumption. In other words, consumers will be aware

of a lower tariff readjustment since they are already paying a

higher value during the month.

Regulation in Transmission

Any electricity market agent that produces or consumes en-

ergy is authorized to use the Basic Network. Free market con-

sumers also have this right, subject to compliance with certain

technical and legal requirements. Free access is guaranteed by

law and supervised by ANEEL.

The operation and management of the Basic Network is the

responsibility of the ONS, which is also responsible for man-

aging energy dispatch from the plants in optimum conditions,

involving the use of the interconnected system, reservoirs and

thermal plants.

On December 27, 2018 Decree 9,642 was issued defining the

discounts granted to consumers from rural areas, as well as

the following subclasses Rural Electrification Cooperative,

On April 5, 2011, Portuarias Ministeriales 210/2011 and 211/2011

were published in the Official Journal, which equate the two in-

terconnecting lines of the Compañía de Interconexión Energéti-

16. Regulatory framework of the electricity industry

131

ca, S.A. (CIEN) with public service concessions, with payments

On 20 March 2019, the regulator applied an extraordinary re-

according to regulated tolls. The Annual Permitted Payment

view for Enel Rio, due to the ANEEL board decision which

(hereinafter “RAP” in its Spanish acronym) is adjusted annually

authorized the Electric Power Marketing Chamber (CCEE)

in June, by the National Broad Consumer Price Index (herein-

to conclude the agreement with the group of eight banks to

after “IPCA” in its Spanish acronym) with tariff reviews every

anticipate the payment of the so-called Conta-ACR CDE for

four years. A Gross Payment Base of $ $1,760 million reais was

September 2019.

established (US $885 million) and a Net Base of $ 1,160 million

reais (US$ 585 million). In 2012 ANEEL authorized to imple-

This decision was reflected in Enel Distribution Rio’s tariffs,

ment reinforcements in the transmission facilities, recognizing

whose average effect was 7.59% (before it was 9.70%), while

an additional investment of $47 million reais (US$ 23 million),

for low-voltage consumers it was 7.49% (before it was 9.72%)

in the Payment Base. The applicable payment rate was defined

and for High Voltage Clients the approved index was 7.89%

pursuant to the current regulation at 7.24% (real after tax).

(before it was 9.65%)

The 6.81% tariff review was put forward to a Public Consulta-

tion which is still open. The authorization period is until June

Enel Distribución Ceará

2020, for Line 1, and for Line 2, until July 2022, with compen-

sation for unpaid investments. Enel CIEN is still talking to the

On 18 April 2019, ANEEL approved the result of Enel Distribu-

Federal Government about the direction to be given to the

ción Ceará’s fifth periodic tariff review, effective as of April 22,

concession after its expiry. Line 1 will most likely run until July

2019, consolidated through contributions made at the Public

2022 and, after a tender process (likely to be held on July 21 or

Consultation No. 004/19.

December 21) the awardee will start operating the assets as of

July 2022 (Compensation of non-depreciated assets to Enel is

The result led to an 8.22% average effect perceived by con-

guaranteed). However, the Government’s final decision is un-

sumers, with 97.87% for consumers connected with High

resolved and the subject matter of the point above is only one

Voltage - HV and 8.35% for those connected with Low Volt-

possibility to be concluded at different meetings with MME and

age– LV.

ANEEL.

2019 Adjustments

Enel Distribución Río

On March 13, 2019, ANEEL standardized the provisional result

of the Fourth Regular Tariff review for Enel Distribución Río,

from March 15, 2019.

The result led to a 9.7% average effect perceived by consum-

ers, with 9.65% for consumers connected with High Voltage

- HV and 9.72% for those connected with Low Voltage– LV.

ANEEL approved the provisional points of the 2018 Review in

the adjustment: there was a final approval of (i) the Payment

Base and (ii) the limits of Regulatory Losses and collectability.

The process established the Gross Payment Base at $ 10,022

million reais and the Net Payment Base at $ 6,164 million

The process established the Gross Payment Base at $ 7,023

million reais and the Net Payment Base at $ 4,242 million

reais.

Enel Distribución São Paulo

On July 2, 2019, ANEEL approved the result of Enel Distri-

bución São Paulo´s fifth periodic tariff review, effective as of

July 4, 2019, consolidated through contributions made at the

Public Consultation No. 011/19.

The result led to a 7.03% average effect perceived by consum-

ers, with 8.46% for consumers connected with High Voltage

- HV and 6.48% for those connected with Low Voltage– LV.

The process established the Gross Payment Base at $ 15,854

million reais and the Net Payment Base at $ 8,574 million reais.

reais.

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Enel Distribución Goiás

On October 22, 2019, ANEEL standardized the result of the

annual Tariff Review for Enel Distribución Goiás, valid as of

October 22, 2019.

The result led to an average effect of -3.90% perceived by

consumers and -2.89% for consumers connected with High

Voltage - HV and -4.32% for those connected with Low Volt-

Transmission and distribution companies must obtain envi-

ronmental approval from environmental regulatory authori-

ties. Thermal generation plants, in addition to environmental

permits, also require a water use concession. Solar and wind

power projects have specific licensing rules and licensing

competition in Brazil is decentralized, where the responsibility

for the license can be assigned to the Union, state, or mu-

nicipality according to the licensing criterion. License types

are granted according to location, installation, extension, and

age– BT.

operation.

Note: In 2018, during the Tariff Review process, ANEEL ap-

proved the Gross Payment Base at $5.6 billion reais and the

Net Payment Base at $2.961 billion.

Colombia

Enel CIEN

Industry structure

Resolution No. 2408 of June 26, 2018, established the annual

permitted payment (RAP) for public service concessionaires in

Colombia’s electricity sector was structurally reformed by

electricity transmission, in relation to the availability of trans-

Home Public Services Law 142 and Electricity Law 143, both

mission facilities under their responsibility.

of 1994. According to the latter, different economic operators,

The Enel Cien values are: Garabi I (RAP: 1780,711,108.53 reais

sector and are free to carry out their functions in the context

and PA adjusted: 6,391,867.71 reais) and Garabi II (RAP: $

of free market competition. To operate or initiate projects, en-

187,722,462.73 reais and PA adjusted: $ - 6,662,275.47).

vironmental, health and water rights permits, as well as those

public, private, or mixed, may participate in the activities of the

of a municipal nature, must be obtained from the competent

The above results are provisional given that ANEEL postponed

authorities.

the tender of the tariff review till next year as the methodolo-

gy has not been defined yet. Therefore, any difference shall be

The Ministry of Mines and Energy (MME) defines the Govern-

compensated kin the next tariff process.

ment’s policies for the energy sector. Other government enti-

Environmental regulation

The Brazilian Constitution permits both the Federal Govern-

ment and the state and local governments to issue laws

aimed at protecting the environment. Most environmental

regulations in Brazil are issued at the federal and state level.

As for environmental permits, these are administrative proce-

dures by which the Government, through the competent envi-

ronmental agency, grants licenses to companies and activities

that use natural resources that might be potentially polluting

and/or harmful to the environment.

ties that play an important role in the electricity industry include:

Superintendence of Home Public Services (SSPD), an entity

that monitors and audits all the public services companies; the

Energy and Gas Regulation Commission (CREG), which regu-

lates electricity, natural gas, liquefied petroleum gas (LPG), and

liquid fuels; the Energy Mining Planning Unit (UPME), which is

responsible for the planning and expansion of the network and

the Superintendence of Industry and Commerce (SIC) which is

the national authority for competition protection issues.

The CREG can issue regulations that govern technical and com-

mercial operations as well as tariffs for regulated activities. The

main CERG functions are to establish the conditions for the

progressive liberalization of the electricity sector towards an

open and competitive market, approve charges for networks

16. Regulatory framework of the electricity industry

133

and transmission and distribution costs for the supply of regu-

Distribution is defined as the operation of local distribution net-

lated clients, establish methodologies to calculate and set max-

works and regional transmission. Any client can have access

imum tariffs for the supply of the regulated market, establish

to a distribution network in which he pays a connection fee.

standards for the planning and coordination of the system´s op-

Distribution companies, or network operators, are responsible

erations, establish technical requirements for quality, reliability

for planning, investing in, operating, and maintaining electricity

and security of supply, and to protect clients´ rights.

grids with voltages below 220 KV.

The Colombian Wholesale Energy Market is based on a com-

petitive market model and operates under open access prin-

ciples. The operation and administration of the MEM is cen-

tralized in a Market Operator made up of the Administrator of

the Trade Exchange System (ASIC) and the National Dispatch

Center (CND).

Regulation of generation
companies

The Colombian State can participate in the development and

implementation of generation projects on the same footing as

The generation sector is organized on a competitive basis.

the private sector. Law 142 of 1994 established that the public

The electricity transactions in the MEM are carried out under

services legal regime and Law 143 of 1994 focused, partic-

the modalities of the energy spot market (short term or dai-

ularly, on the electric power service, established the types

ly market); bilateral contracts (long term market) and reliability

of entities authorized to provide residential public services

charge. Generation companies must participate in the central

through the creation of the “Public Service Company” as the

dispatch with all their generation plants or units connected to

fundamental driver of this provision.

the Colombian system whose capacities are equal to 20 MW or

higher (plants with capacities between 10 and 20 MW can par-

In the short-term energy market, the CND receives every day

ticipate optionally). The generation companies that participate

the price offers and the declaration of commercial availability

in the central dispatch must declare the commercial availability

for each hour of the following day, of all the generators partici-

of their generation resources and offer the price at which they

pating in the wholesale market. Based on this information, the

wish to sell it. The National Dispatch Center (CND) centralizes

CND carries out an economic dispatch through an optimized

all the energy dispatch pursuant to economic optimization cri-

procedure for the next 24-hour period of the following day,

teria and respecting the electrical and operational restrictions

taking into account the electrical and operation restrictions of

of the system.

the system, as well as other conditions necessary to meet the

expected energy demand for the next day in a safe, reliable

The sale of energy consists of intermediating between the play-

and economic manner from the cost point of view. Unlike the

ers that provide electricity generation, transmission and distri-

rest of the countries where dispatch is centralized based on

bution services, and the users of these services. Commercial-

variable production costs, in Colombia, dispatch is based on

ization can be carried out with or without other generation or

prices offered by the agents.

distribution activities.

The energy exchange is an adjustment market where the ex-

Transmission operates under monopoly conditions with a guar-

cess energy is sold or bought against generators´ and retail-

anteed fixed annual income, which is established by the new

ers´ real energy demand. The energy exchange, the ASIC, es-

replacement value of networks and equipment and by the val-

tablishes a spot price for energy on the energy exchange after

ue resulting from the bidding processes that add new projects

the day of the operation via an optimized procedure for the 24-

for the expansion of the National Transmission System (STN).

hour period called the ideal dispatch, which implies an infinite

This value is proportionately divided among all the retailers in

transmission capacity in the network and takes into account

the market according to their energy demands. The National

the initial conditions of the operation, thus establishing which

Interconnected System (SIN) supplies 98% of the national de-

generators had to be dispatched to satisfy the real demand.

mand. Non-interconnected systems serve isolated areas of the

The price paid to all generators that are dispatched according

country.

134

to price merit is the price of the most expensive generator

dispatched every hour under the ideal dispatch.

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Cost differences between the ‘economic dispatch’ and the

voirs, thus permitting to use thermal resources necessary to

‘ideal dispatch’ are called ‘restriction costs’. To start with, the

secure the reliability of the system.

cost of each restriction is allocated to the agent responsible

for the restriction and when it is not possible to identify an

In 2019, regulatory management related to the electricity

agent it is distributed proportionally to all Colombian system

market and natural gas evolved around some institutional and

traders according to their energy demand, and these costs are

market facts, such as the incorporation of unconventional en-

transferred to end clients.

ergy sources into the energy matrix, the development of the

Electricaribe sales process, the legislative agenda with the

Generators connected to the Colombian system can also par-

analysis, discussion and approval of the 2018-2022National

ticipate in the “Reliability charge”, which is a mechanism that

Development Plan, progress of the Electricity Sector Transfor-

aims to encourage investment in the generating park to guar-

mation Mission pushed forward by the Ministry of Mines and

antee that the country’s demand is met in the long term. The

Energy and, in general , progress of the agendas proposed in

charge consists of assigning Firm Energy Obligations (OEF)

early 2019. The following 2019 issues are worth highlighting:

through a descending auction for new agents interested in

developing generation projects, who must guarantee the sys-

The Ministry of Mines and Energy through the Energy and

tem that amount of energy for a given period. The allocation

Mining Planning Unit – UPME moved forward the second auc-

for existing generators is made annually and for new projects

tion of long-term contracts to October 2019, after the first auc-

for up to 20 years. The OEF is a commitment on part of the

tion was declared unsold in February. The auction, exclusive

generating Company, backed by its physical resources, which

to unconventional renewable energy sources, permitted the

provide support to that firm energy production. The generator

allocation of long-term contracts for 7 generating companies

that acquires an OEF will receive fixed compensation during

and 22 traders. The auction closed with a weighted average

the commitment period, whether or not the obligation is re-

allocation price of $95.65 Colombian pesos kilowatt per hour.

quired.

The price of each KWh hour of the OEF corresponds to

for the expansion auction of the Reliability Charge, to allo-

the closing value in the auction for firm energy or reliability

cate electricity generation projects that may begin in the

charge. When this firm energy is required, which occurs when

2022-2023 period. The process highlighted the definition of a

the spot price is higher than the shortage price, an agent ful-

“closed envelope” auction (with a ticking clock). Here are the

Furthermore, the CREG defined the conditions for the call

fillment balance is carried out, where the ideal dispatch is ver-

main results:

ified to see if the agent covered its OEF with its own resourc-

es and delivered surplus or another agent covered the OEF, in

• Closing price: US$ 15.1/ MWh.

which case the differences valued at spot prices are balanced.

• Energy allocated in the auction: the total Firm Energy Ob-

ligations for the auctioned term was 250.55 GWh/day, of

In 2014, the CREG issued the Statute of Shortage Risk - a last

which 164.33 GWh/day were allocated in this auction and

resort mechanism which enters into action when the hydrol-

the remaining 86.22 GWh/day correspond to previous al-

ogy conditions are critical, and the market principles do not

locations.

behave as expected. In general, it consists of implementing

•

The system´s final additional net effective capacity in the

certain market monitoring indicators helping to establish if

2022-2023 period when validating compliance with the

the price signals (energy exchange) are coherent with future

requirements will be 3,710 MW, distributed as follows:

energy estimates and the system´s current hydrological con-

940 MW thermal, 1,372 MW hydraulic, 1,160 MW wind

ditions.

and 238 MW solar.

If monitoring market parameters capture any alert and/or risk

In July 2019, the CREG published Resolution 060/ 2019, es-

signals, a shortage risk period is declared basically consisting

tablishing the following: “implement transitional amendments

of energy sale and water storage models that guarantee that

and additions to the Operating Regulations to permit the con-

the system should have the necessary reserves to meet the

nection and operation of photovoltaic and wind solar plants

demand. Water storage is achieved through supply price inter-

into the SIN and other provisions are issued”. This Resolution

vention of hydraulic agents who can store water in their reser-

defines the operational requirements and commercial aspects

16. Regulatory framework of the electricity industry

135

for the treatment of unconventional sources in the operational

The CREG also issued Resolution 132 on October 15, 2019,

dispatch.

defining the Reliability Charge taker mechanism for Firm En-

ergy Obligations allocations for new plants. Only new plants

In July 2019, the Commission issued Resolution 080/2019,

which have not been allocated OEF can participate in any al-

setting forth general rules of market behavior for agents that

location mechanism and their estimated variable fuel costs,

carry out activities in home utilities in the electricity and fuel

CVCE, must not exceed the current Fuel Part Shortage Price.

gas sectors. The CREG considers it necessary to establish a

The plants shall be allocated for a period of 10 years and shall

regulatory framework that, in addition to the specific market

be remunerated at US$ 9/MWh.

rules and obligations, should define the general rules of be-

havior that promote: free access to networks and facilities

that, by their nature, are monopolies; free choice of service

providers and the possibility of user migration, transparency,

neutrality , economic efficiency; free competition and the pro-

hibition to misuse dominant positions.

Regulation of distribution
companies

Distribution charges are set by the CREG based on the new

In September 2019, the Commission issued Resolution 096

replacement value of existing distribution assets, capital cost,

extending the option of access to the central dispatch system

non-electric assets as well as operational and maintenance

to plants smaller than 20 MW connected to the National In-

costs for each Company. These are defined for four different

terconnected System. The Resolution emphasized that plants

voltage levels, as follows: level 1, less than 1 kV; level 2, more

with less than 1 MW and distributed generators will not be

than or equal to 1 kV and less than 30kV; level 3, more than or

able to participate in the central dispatch and may sell their

equal to 30 kV and less than 57.5 kV and level 4, more than or

energy to traders serving the regulated and unregulated mar-

equal to 57.5 kV and less than 220 kV. Voltage levels 1, 2 and

kets. At the same time, plants between 1 MW and 20 MW

3 are called Local Distribution Systems (SDL) and Level 4 is

may opt to participate in the central dispatch. If they choose

called the Regional Transmission System (STR by its Spanish

not to benefit from the central dispatch, they may sell their

acronym).

energy to traders serving the regulated and unregulated mar-

kets.

In 2009, after auditing the information reported by the com-

panies, the CREG established the applicable distribution

The CREG also published Resolution 098 defining the mech-

charges, which are set for a 5-year period and updated each

anisms for the incorporation of storage systems to mitigate

month according to the producer price index. The method-

inconveniences stemming from the lack or the inadequacy

ology to calculate distribution charges includes an incentive

of energy transport networks in the National Interconnected

scheme to manage, operate and maintain the costs based on

System. This Resolution was issued given the urgency re-

service quality. For energy losses, the regulation establishes

quired for Battery Electric Energy Storage Systems (SAEB)

recognized loss indices to be included in the tariff.

to become operational, with the sole purpose of mitigating

existing problems due to the lack or the inadequacy of electric

The review of distribution charges began in 2013 with the pub-

power transmission networks and will be effective until 31

lication of the payment methodology proposed by Resolution

December 2022.

CREG No. 043/2013. These articles were complemented by

Resolution CREG No. 079/ 2014, which contains the purposes

In October 2019, the Commission issued Resolution 117,

and guidelines for distribution remuneration and Resolution

which called for a Purchase Reconfiguration Auction for the

CREGs No. 179/ 2014, 024 and 176 of 2016 and 019/ 2017,

2020-2021 and 2021-2022 periods; the mechanism carried out

which contain the methodology proposals.

in December 2019 by XM S.A. E.S.P. allocated the amounts per

4,278,410 kWh-day for the 2020-2021period, and 2,152,383

Finally, after four Resolutions which were all put forward for

kWh-day for the 2021-2022period. The awarded price for both

consultation, on February 2, 2018 the final CREG Resolution

amounts is US$ 16.6/ MWh of firm energy.

015 was issued. This norm defines the beginning of a new

regulatory period where the regulator incorporated replace-

ment incentives, including depreciation as part of the tariff

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calculation formula, incentives for service quality that should

The revision of regulated transmission charges began in 2013

improve by at least 8% per year and defined the management

with the publication of the pay rate methodology proposed by

of regulatory adjustments for remunerations, through tariffs,

Resolution CREG 042/2013. These pay rate is complemented

for investment plans and the operations related to advanced

by the development of the purposes and guidelines for the

measurement.

transmission remuneration for the 2015-2019period, present-

ed in Resolution CREG No. 078/2014 and draft Resolutions

Furthermore, on February 5, 2018 the Regulation Commission

that have been submitted for consultation, Resolution CREG

issued Resolution 016/2018, which defines the return rate

No. 178/2014, Resolution CREG No. 023/2016 and Resolution

(WACC) for electricity distribution activities within the nation-

CREG No. 177/2016 define a remuneration methodology pro-

al interconnected system and the maximum revenue model

posal.

for the new tariff setting process. The tariff value is the result

of the application of the methodology approved in Resolution

CREG 095/ 2015.

Trading regulation

The WACC value for 2019 was set at 11.79% real before taxes

with a path that incorporates a reduction in income tax for the

tariff period.

Subsequently, Resolution CREG 085/2018

,151/2018,

036/2019 and 199/2019 were issued, clarifying and correcting

some provisions of Resolution CREG 015, including the ad-

justment factor, the revision of the investment plan and the

application of the quality scheme. Finally, in December 2019,

the Commission published Resolution CREG 189/2019 which

approves the variables necessary to calculate the revenues

and charges associated with the electricity distribution activ-

ity for the commercialization market served by CODENSA,

where the Company subsequently submitted a replenishment

appeal.

Regulation in transmission

In Colombia, traders, including those integrated with distribu-

tion, are free to acquire their supply. They can define the con-

ditions of public tendering processes to acquire the energy

they require for the regulated market; they can use market

mechanisms approved by the regulator and they can also go

to the spot market to buy energy. The price paid by the end

user reflects an average purchase price.

The trading market is divided into regulated and unregulated

clients. Clients in the free or unregulated market can freely

hire their electrical supply directly from a generator or a dis-

tributor acting as traders, or from a pure trader. The market

for non-regulated clients consists of clients with a maximum

demand of more than 0.1 MW or a minimum monthly con-

sumption of 55 MWh.

Generators, distributors, or independent agents that meet

certain requirements can commercialize or trade energy. The

parties freely agree on transaction prices for unregulated cli-

Transmission networks operating at 220 kV or above are part

ents.

of the National Transmission System (STN). The transmission

fee includes a charge that covers the operating costs of the

The energy trader is responsible for billing electricity costs to

facilities, and a charge for use applied only to traders who

end consumers and transferring payments to different agents

transfer it directly to end users.

in the industry. Regulated client trading is subject to the “Reg-

ulated Freedom Regime” where tariffs are set by each trader

The CREG guarantees transmission companies a fixed annual

using a combination of the general cost formulas established

income. This income is established by the reposition value of

by the CREG and the individual trading costs approved by the

networks and equipment, and by the resulting value of the

CREG for each trader. The rates include, but are not limited

tender process that have been awarded new projects for the

to, costs of energy supply, transmission charges, distribution

expansion of STN. This value is attributed STN traders propor-

charges and a commercialization margin. Additionally, the final

tionately to their energy demand.

costs of the service are affected by subsidies or contributions

The construction, operation and maintenance of new projects

is awarded to the company that offers the lowest present val-

Trading charges for regulated clients are established under

ue of cash flows necessary to carry it out.

Resolution CREG no. 180/2014. The main changes were the

applied according to the socioeconomic level of each user.

16. Regulatory framework of the electricity industry

137

creation of a monthly fixed charge that covers operating costs

functions of the Ministry of Housing). The same year, Decree

plus an income for traders covering credit risk, working capital

3,573 created the National Environmental Licensing Authority

subsidies and other trading costs.

as the entity responsible for granting and monitoring environ-

In January 2017, CREG, the Regulation Commission, approved

the Environment and Sustainable Development.

the merger of the Codensa and EEC markets. Therefor a

unique regulated tariff has been applied as of that date for

In 2015, due to an OCDE recommendation, the environmental

market users currently served by Codensa.

sector regulation was consolidated in Decree 1076/2015.

mental licenses, permits and procedures of the Ministry of

In 2019, the first long-term contracts auction was convened,

During COP21 in Paris in 2015, Colombia made a commitment

seeking to diversify, complement and boost the energy matrix

to reducing 20% of emissions as of 2030 in relation to the ref-

competitiveness and make it more resilient to climate chang-

erence baseline. In 2018, Law 1931 was issued establishing

es, contribute to the reduction of carbon dioxide emissions

the guidelines for Climate Change management in Colombia.

and guarantee the country’s energy security.

Environmental regulation

The framework for environmental regulation in Colombia was

established by Law 99/1993, which also created the Ministry

of the Environment as the authority that would set up environ-

mental policies. The Ministry defines, issues and implements

policies and regulations focused on the recovery, conserva-

tion, protection, organization, administration and use of re-

newable resources.

Any entity contemplating projects or activities related to en-

ergy generation, interconnection, transmission or distribution

which may have an impact, deteriorate and/or introduce signif-

icant or notorious changes to the environment, must apply for

an environmental license prior to commencing their activities.

Law No. 99 established that the generation power plants that

were already operating when the law was issued, with a total

installed capacity of more than 10 MW, should contribute to

the conservation of the environment, transferring a percent-

age of their profits linked to energy generation (electricity sec-

tor transfers) to municipalities and environmental corporations

in the area where the power plants are located. Hydroelectric

power plants and thermal power plants should pay, respec-

tively, 6% and 4 % of their gross energy sales from their own

generation, and according to tariffs set for energy sale blocks

as established by the Energy Regulation Commission.

In 2011, Decree 3,570 established the new environmental

sector structure thus creating the Ministry of the Environment

and Sustainable Development (previously, the functions of the

Ministry of the Environment were established along with the

In 2019, the environmental regulation management of the En-

vironment Division focused on participating in joint construc-

tion with the different environmental national, departmental

and local authorities in setting the regulation for Enel-Emgesa

strategic issues for different areas guiding its efforts in incor-

porating the proposals to respond to the Company´s interests

and needs. An analysis of the most critical aspects of environ-

mental regulations issued in 2019 and related to Enel-Emge-

sa’s own activities was carried out. It was linked mainly to

the following issues: environmental project licensing, environ-

mental compensation, conservation incentives, environmen-

tal benefits, dam structuring, air quality, archaeology, Territori-

al Management Plans, Watershed Management Plans, Water

Resource Management Plan , guidelines for the development

of pre-consultation processes, waste management (ordinary,

electronic and hazardous), electricity sector transfers and cli-

mate change; of which the following administrative norms are

particularly important.

With regard to the licensing processes and environmental im-

pacts, Resolution 1107 amending Resolution 1402/2018 was

issued in relation to the General Methodology for the Prepara-

tion and Presentation of Environmental Studies, establishing

that environmental studies prepared pursuant to the method-

ology adopted by Resolution 1503/2010 and which have not

been submitted , shall not be governed by this administrative

act provided that these studies were submitted before Au-

gust 2, 2020. Resolution 077 set dates for the submission of

Environmental Compliance Reports within the framework of

the National Environmental Licensing Authority’s environmen-

tal monitoring process for competition projects, establishing

annual, semi-annual or quarterly dates so that ANLA may have

a better opportunity to review them throughout the year. At

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the same time, it was actively involved in the construction of

environmental flows in the Bogotá River. The methodology ap-

decree 2106. It seeks to simplify, eliminate and reform unnec-

plies to projects subject to environmental licensing and seeks

essary procedures and processes in the Public Administra-

to establish percentages of the utilization of the flows accord-

tion, with particular attention to environmental administrative

ing to the water supply pursuant to the provided ecosystem

procedures, where it was also proposed that the Government

services in different sections of the basin. The management

should become part of the prohibition suspension process in

of the standard was carried out jointly with the Presidency

order to reduce the time of license emissions, a proposal that

of the Republic, the Ministries of Mines and Energy and the

was approved.

Environment and Sustainable Development, IDEAM, UPME,

CNO, XM, Andesco, Andi and other companies in the sector.

In relation to archaeology, Decree 138 represents a significant

This standard poses a risk to Enel-Emgesa and the operation

move forward to establish administrative procedures and their

of generation chains in the Bogotá River basin because the ap-

respective times that the Colombian Institute of Anthropology

plication of the methodology could limit the flows available to

and History (ICANH) has to rule on the applications submit-

the plants, authorized by concessions issued by CAR, regional

ted as part of the projects and, is the result of the manage-

environmental authority for Cundinamarca, and which must

ment carried out for more than two years in collaboration with

apply the methodology in the aforementioned basin. Addition-

guilds and different entities permitting alternatives to be iden-

ally, Resolution 1869 declared the Salto del Tequendama wa-

tified to speed up and optimize the procedures presented to

terfall, a natural formation near the plants located on the river

the ICANH. Similarly, Resolution 297, as part of the regulation

and tourism spots in the middle of the basin, as Colombia´s

Decree 138, established the way the registration application

Natural Heritage.

will be presented by any natural or legal person who wants to

implement a Preventive Archaeology Program.

Our Company also took part in the definition of the National

Circular Economy Strategy which seeks to maximize the add-

Regarding Watershed Management Plans, Resolution 957

ed value of production and consumption systems in economic

approved the adjustment and upgrade of the Bogotá River

(return), environmental (climate change) and social (employ-

Watershed Management Plan becoming a standard of higher

ment) terms, based on material, energy and water flows cir-

hierarchy and environmental determinant for the development

cularity. We participated, throughout 2019, in events related

of the Territorial Management Plans throughout the basin. This

to updating sectoral targets (source line and energy use) and

was developed through participatory processes that permit-

regional workshops related to the Strategy.

ted participants to make contributions, clarifications and ad-

justments in reference to the existing infrastructure and pos-

In relation to Climate Change, we made important inroads into

sible future projects.

energy transition through the study “Zero greenhouse gas

emissions roadmap for Colombia: diagnosis, perspectives and

One of the issues with the greatest impact during the 2016-

guidelines to define possible strategies for climate change”

2019 period was related to environmental flows, where the

aimed at identifying a potential roadmap for the Colombian

Ministry of the Environment sought to regulate the use of the

energy transition, in an exercise involving different national

water resource in the basins by issuing a nation-wide meth-

stakeholders. The purpose of this study was to identify how

odology. For 2018, this methodology was modified to include

to achieve carbon neutrality by 2050. As a result of the work,

the Bogotá River basin, seeking compliance with order 4.30

Enel-Emgesa was invited by the Colombian Government to

“Environmental and ecological flow of the Bogotá River” pro-

be part of the official Colombian delegation at COP25 in Chile,

vided by the Cundinamarca Administrative Tribunal, through

held in Madrid in December 2019, to present the results of

which the Ministry of the Environment and Sustainable De-

the study in the Colombia pavilion, in conjunction with the

velopment had to develop and adopt a specific methodology

Ministry of the Environment and Sustainable Development

to evaluate the environmental flows. As a result, Resolution

through the Colombian Carbon Low Development Strategy ,

2130 was issued adopting the methodology to evaluate the

which shares the 2050 carbon neutrality target for Colombia.

16. Regulatory framework of the electricity industry

139

Peru

Industry Structure

lation. It also manages the short-term market and prepares

the Guaranteed System Transmission Plan. The COES incor-

porates representatives of generating, transmitting, and dis-

tributing companies as well Large Users (free clients whose

consumption exceeds 10MW).

In rural areas there are small isolated systems that supply

The general legal framework applicable to the Peruvian elec-

electricity in specific areas representing approximately 6% of

tricity industry consists mainly of the Law on Electric Conces-

the total national production.

sions (Decree Law No. 25844/1992) and its regulatory norms.

The general regulatory framework applicable to the Peruvi-

(i) the separation of the three activities: generation, transmis-

an electricity industry is primarily comprised by the Electric

sion, and distribution; (ii) open market for the supply of energy

Concessions Law (Decree Law Nº 25,844 from 1992) and its

to unregulated clients; (iii) a regulated price system, primarily

regulatory norms.

based on a long and short-term tender process.

The main characteristics of the electric industry in Peru are:

The Ministry of Energy and Mining (MINEM) defines energy

policies at a national level and, together with the Ministry of

the Environment, it regulates all the environmental aspects

applicable to the energy sector and is the competent authority

Regulation of generation
companies

to grant or withdraw permits and concessions for activities

related to energy generation, transmission and distribution.

Generation companies that own or operate a generation plant

with an installed capacity that exceeds 500 KW require a con-

The Supervising Organism of the Energy and Mining Invest-

cession for a set period or an authorization granted by the

ments (Osinergmin) is the regulatory entity that controls and

MINEM.

oversees the enforcement of legal and technical norms re-

lated to electricity, hydrocarbons, and mining activities, and

The COES oversees the dispatch coordination of electricity

enforces the obligations established in concession contracts.

operations, establishing the spot prices and the management

The Regulating Osinergmin Tariffs Agency (GRT) is the com-

of economic transactions that occur in the SEIN.

petent authority that establishes regulated tariffs. Osinergmin

also controls and supervises tender processes required by

Generation companies can sell their energy directly to dis-

distribution companies to purchase energy from generation

tribution companies and free clients and liquidate their dif-

companies.

ferences in the spot market at marginal costs. The sales to

non-regulated clients are carried out at mutually agreed prices

and at agreed conditions, including fees and compensations

Meanwhile the Environmental Evaluation and Enforcement

for the use of transmission systems, and potentially fees for

Organism (OEFA), which depends from the Ministry of the

the use of distribution networks.

Environment, is responsible for supervising and enforcing

environmental obligations contained in the approved environ-

The Electric Concessions Law permits to signs bilateral con-

mental instruments.

tracts at a price not exceeding the Bar Rates, in the case of

regulated clients, or at a price agreed by all the parties in the

The Economic Operation System Committee (COES) is the

case of unregulated clients. In addition to this bilateral meth-

operator of the National Electric Interconnected System (SEIN

od, Law 28.832 of 2006, known as the Law to Guarantee

by the Spanish acronym). It coordinates the dispatch of gen-

the Efficient Development of Electricity Generation also es-

eration units according to the minimum cost and prepares

tablished the possibility for distributors to meet the demand

diverse studies that are the base for the annual price calcu-

of regulated and unregulated client demands via energy and

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power tender processes supervised by the Osinergmin. The

In 2018, the percentage of NCRE was 4.7% of the SEIN de-

approval of this mechanism is important for the generators

mand. This percentage increased to 5% in 2019.

because it permits them to reply on a stable price for the du-

ration of the contract which is not set by the regulator and can

Peru also established a capacity charge set up according to

last up to 20 years.

the amount that pays for the development of a gas turbine, as

a marginal unit that contributes to the system demand. Like in

Due to the introduction of tender mechanisms, a large portion

Chile, the capacity payment does not depend on its dispatch

of the energy sale contracts to distributing companies to at-

and pays for availability if it is placed within the objective effi-

tend clients comes from such tenders. Just a small portion of

cient margin defined by the corresponding authorities.

the electricity bought by distribution companies comes under

a bilateral contract model.

With regards to the transactions in the wholesale market, the

Regulation of the Electricity Wholesale Market (MME Regula-

tion) was approved through Supreme Decree No. 026-2016-

Regulation of distribution
companies

EM. The main aspects of the regulation are as follows: The

The electricity tariff for regulated clients includes charges for

“MME” is made up by the short-term market (“MCP” by its

energy and power for generation and the Distribution Added

Spanish acronym) and the allocation mechanisms for comple-

Value (VAD) that considers a regulated return on investments,

mentary services, operational inflexibilities and the allocation

fixed operating and maintenance charges, and a standard per-

of congestion revenues. The authorized participants that take

centage for energy losses during the distribution process.

part in the purchasing process in the MCP are: generators to

meet their supply contracts, distribution companies to serve

In September 2015, Decree No. 1,221 was published. It es-

free clients for up to 10% of their maximum demand; and

tablished that the VAD (Distribution Added Value) setting pro-

large users to serve up to 10% of their maximum demand.

cess must take place every four years and must be calculated

COES calculates the marginal costs of energy and congestion.

for each Company (before this decree the VAD was calculated

Participants require payment guarantees of their obligations in

for a company representing a group and a typical sector, and

the MME. Furthermore, actions from COES are incorporated

this VAD was applied to all of the companies that made up

in case of a participant´s payment default.

the respective group). Additionally, an extra charge for fees in

technologically innovative projects and efficient energy proj-

Legislative Decree 1002 and its regulation (Supreme Decree

ects previously approved by the Osinergmin would be award-

050-2008-EM) created a model to promote non-conventional

ed. Incentives would be offered to improve service quality and

renewable energy sources (NCRE) through tender offers for

the opportunity to extend the concession areas for distribu-

specific technologies with a guaranteed income mechanism

tion companies in rural areas next to their concession zones.

paid according to the demand through a tariff charge included

in the connection toll. This decree established a 5% target of

The real return on the investment of a distribution company

the Interconnected System electricity demand to be supplied

depends on its performance with regards to the standards set

with NCRE awarded through this model. The authorities may

by the Osinergmin for a theoretical model company. The tariff

review this 5% target pursuant to the country´s National Plan

system means greater returns for distribution companies that

for Renewable Energies. The technologies considered as re-

are more efficient than the model company. Preliminary tariffs

newable sources are the following ones: biomass, wind, tidal,

are tested to guarantee that the internal return rates are 12%

geothermal, solar and mini hydro (hydroelectric power plants

with a +/- 4% variation.

with capacity of less than 20 MW are not considered in the

5%).

The tariffs are indexed to the exchange rate, the wholesale

price index (Spanish acronym IPM), and commodity prices

16. Regulatory framework of the electricity industry

141

such as copper and aluminum, thanks to which Peru does not

have to face exchange risks.

Environmental Regulation

The Distribution Added Value process for the 2018-2022 peri-

od for Enel Distribución took place in 2018.

The environmental legal framework applicable to activities

related to energy in Peru is established by the General En-

vironmental Law (Law No. 28,611) and in the Environmental

Protection Rules for Electric Activities (Supreme Decree 029-

Regulation of transmission

94-EM).

Following the aforementioned principles and regulations and

Transmission activities are defined under different regimes.

additional ones contained in Law 28.245, the Framework Law

Facilities built before 2006 are divided into the Primary Sys-

for the National System of Environmental Administration, the

tem, whose aim is common use permitting energy to flow

National Policy of the Environment and the United Nations

through the national network, and the Secondary System

Framework Convention on Climate Change Law No. 30754

which is mostly unidirectional and is used to evacuate energy

or the Framework Law on Climate Change was approved per-

from a generation power plant or to take energy to the end

mitting the State, through transversal and jointed regulation,

consumer.

to issue regulations related to the development of the RER

generation, electric vehicles and sustainable investments pur-

Facilities built after 2006 are divided into: Guaranteed Sys-

suant to the Paris Agreement.

tem made up by common use lines, part of the Transmission

Plan developed by the COES and whose tolls are paid by the

whole demand of the network, and the Complementary Sys-

tem whose lines are connected to a power plant or to the

system´s user and are paid by the beneficiary.

The Transmission Plan, prepared by the COES and approved

by the MINEM, establishes the development of the Guaran-

teed System lines, which are put to tender through a BOOT

model with a maximum 30-year duration. The transmission

concessions of the Guaranteed System receive an annual

fixed income paid under said tenders.

The Complementary System lines are developed through

investment plans presented by the agents and approved by

the Osinergmin, an entity that calculates the average annual

cost to pay for each installation, considering the standard in-

vestment, operating and maintenance costs, with an updated

12% rate before tax and a 30-year duration.

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16. Regulatory framework of the electricity industry

143

144

Annual Report Enel Américas 2019 17.

DESCRIPTION OF
THE ELECTRICITY
BUSINESS BY
COUNTRY

17. Description of the electricity business by country

145

Electricity
Generation

Electricity
distribution

In this segment, Enel Américas owns operating subsidiaries in

The distribution business is carried out via Edesur in Argenti-

Argentina, Brazil, Colombia, and Peru.

na, Enel Distribución Río, Enel Distribución Ceará, Enel Distri-

bución Goiás and the recently acquired Enel Distribución São

The gross installed capacity of Enel Américas Group was 11,267

Paulo (former Eletropaulo) in Brazil, Enel Codensa in Colom-

MW in December 2019 and consolidated electricity generation

bia, and Enel Distribución Perú in Peru. In 2019, our main dis-

totaled 41,760 GWh, while energy sales reaching 72,553 GWh.

tribution subsidiaries sold 119,998 GWh.

In the electricity industry, business segmentation between hy-

Currently, Edesur, Enel Distribución Río, Enel Distribución

dro and thermal generation is natural since the variable costs of

Ceará, Enel Distribución Goiás, Enel Distribución São Paulo,

generation are different for each method of electricity produc-

Enel Codensa and Enel Distribución Perú serve the main cities

tion. Thermal generation requires fossil fuels and hydroelectric

in Latin America, providing electricity services to more than

generation requires water from dams and rivers.

24.6 million clients.

Generation

Transmission

Distribution

Córdoba

Costanera

Buenos Aires

Dock Sud

55% of Enel Américas’ consolidated generation capacity comes

In 2018 the Company launched a new business line: Enel X, a

from hydroelectric sources and 45% from thermal sources.

global business that is in the lead of the power sector transfor-

mation. Enel X seeks to change paradigms, helping clients to

Arroyito

Mendoza

Edesur

Hence, the definition of the generation company’s commercial

use technology to transform energy into new opportunities, to

policy is relevant to correctly manage the generation business.

thrive and lead progress worldwide. Enel X is a global compa-

The Enel Américas Group generation business is made up of

ny with strong roots in the energy sector, with an open strate-

the following subsidiaries: Enel Generación Costanera, Enel

gy oriented towards digitization, sustainability and innovation.

Generación el Chocón and Central Docksud in Argentina, EGP

Enel X uses smart simple and fast technologies to help clients

Cachoeira Dourada, Enel Generación Fortaleza and EGP Volta

discover new ways of using energy globally.

Grande in Brazil, Emgesa in Colombia and Enel Generación

Perú and Enel Generación Piura.

Enel X´s mission is to provide innovative technology solutions

and value-added services, to create new value for residential

clients (B2C), companies (B2B) and cities (B2G).

Motogeneradores

El Chocón

Neuquén

Electricity
transmission

Enel Américas´ electricity transmission business is mainly car-

ried out through the interconnection line between Argentina

and Brazil, via Enel Cien, a subsidiary of Enel Brasil, whose

transport capacity totals 2,100 MW.

146

*Non-billable consumptions are not included in distribution business.

Annual Report Enel Américas 2019 TypeHydroNet Installed Capacity 128 MWTypeHydroNet Installed Capacity 1.200 MWTypeThermoNet Installed Capacity 2,210 MWEnergy Sales16,798 GWhEnergy Losses15.5%Clients2,490,449TypeThermoNet Installed Capacity 34 MWTypeThermoNet Installed Capacity 846 MW
Generation

Transmission

Distribution

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Buenos Aires

Dock Sud

Arroyito

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Neuquén

Motogeneradores

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*Non-billable consumptions are not included in distribution business.

17. Description of the electricity business by country

147

TypeHydroNet Installed Capacity 128 MWTypeHydroNet Installed Capacity 1.200 MWTypeThermoNet Installed Capacity 2,210 MWEnergy Sales16,798 GWhEnergy Losses15.5%Clients2,490,449TypeThermoNet Installed Capacity 34 MWTypeThermoNet Installed Capacity 846 MW

Argentina

Electricity generation

In September 2019, about 50 of the 88 projects approved

during the second round of the RenovAr program were vir-

tually paralyzed mainly because of difficulties on part of the

successful bidders to guarantee adequate financing and

warranties. Therefore, on September 11, Sebastián Kind, the

Undersecretary of Renewable Energy and Energy Efficiency,

sent a note to CAMMESA to instruct them to temporarily

Enel Américas S.A. participates indirectly in electricity gener-

suspend non-compliance summons with the scheduled dates

ation through Enel Argentina S.A.’s subsidiaries: Enel Gener-

and work progress pursuant to the renewable electricity sup-

ación Costanera S.A. (Costanera), Enel Generación El Chocón

ply contracts. For various reasons, the undersecretary, after

S.A. (Chocón) and Central Dock Sud S.A. (CDS).

just under 30 days, sent a note fully repealing everything in-

structed in the first place.

Costanera, Chocón and CDS together own 4,419 MW net in-

stalled capacity. This capacity, by the end of 2019, represent-

On June 16, 2019, a complex failure caused the collapse of

ed 11.7% of the total capacity of the Argentine SIN (National

Argentina’s interconnected system affecting Argentina, Uru-

Interconnected System). Electricity generation of these com-

guay and certain areas of Paraguay. The demand was normal-

panies reached 12,974 GWh as of December 31, 2019, equiv-

ized gradually and the balance between generation and the

alent to 9.9% of Argentina´s total generation.

normalized demand was monitored. The effective recovery

process began at 7:11 and finished at 19:23 lasting just over

Some of the most important business groups that partic-

12 hours.

ipates in the Argentine Electricity Market in the generation

sector are the following: AES, SADESA and Pampa Energía

In February 2019, SEES Resolution No. 19/2017 was replaced

– a company that in 2016 acquired Petrobras Argentina. Other

by Resolution SRR and ME No. 1/19, establishing the guide-

companies participating in the generation sector are YPF En-

lines for the remuneration for existing generation plants.

ergía and Pluspetrol Energía, acquired by YPF.

Participation in installed capacity and in business groups for

ation structure with some changes. The measure, in the first

The new Resolution basically maintains the current remuner-

2019 is distributed as follows:

place, made a downward adjustment of the payment for avail-

ability and for energy from thermal units. In the case of power

Participation by installed capacity and in Business Groups in 2019

availability, the reduction totaled 10% and in case of energy,

Grupo Enel

Pampa Energía

SADESA

AES

National Government

Foninvemem

Provincial Governments

Others

11.70%

11.30%

10.20%

8.60%

15.50%

6.50%

4.70%

31.50%

it was 20%.

A formula for adjusting availability revenues was also estab-

lished based on the historical dispatch of the generating unit.

The units that end up with a dispatch factor in the last mobile

year of less than 30%, will be reduced by 30%, if this factor is

>70%, there is no effect and if it is between 30% and 70%,

the reduction is linear.

In 2019, 931 MW of renewable capacity was added, of which

For hydroelectric plants, the base prices of the power and en-

283 MW correspond to private projects (MATER) and 491

ergy generated and operated are maintained as stipulated in

MW to tenders carried out under the RenovAr program. The

Resolution ex SEE No. 19/2017 but the new regulations estab-

remaining 157 MW belong to the Renewable Energy Promo-

lish that the hours during which the hydroelectric generator is

tion Project (GenRen). To date, the contributions to RenovAr

unavailable for scheduled and agreed maintenance shall not

are delayed by 1,410 MW in this year’s schedule. The RenovAr

be considered for the calculation of power payments. Despite

program is part of Law 27.191, which establishes participa-

the introduced changes, hydropower plants did not suffer a

tion of this type of energy in the market, and which, by 2025,

significant reduction in their revenues.

should reach 25%.

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Continuing with the precepts instructed by the SE to CAMME-

In relation to the Resolution on the contingent liabilities de-

SA in previous years, to bring down gas costs required for

riving from the availability contracts of the TV units and the

generation, MEGSA held two auctions to purchase gas for

Costanera Combined Cycles signed in 2012, on September12,

generation in thermal plants, with satisfactory results. The

2019, an agreement was signed with CAMMESA establishing

first was held on December 27, 2018. The supplies offered

there were no outstanding claims thus eliminating Costaner-

were interruptible for the period from January to December

a´s risk of fines together with waiving a part of future tariffs.

2019. The minimum PIST prices obtained were US$ 2.2107/

MMBTU (summer), US$ 3.2235/MMBTU (winter) and weight-

Resolution 2018-70-APN-SGE of November 2018 permitted

ed average prices of US$ 3.0953/MMBTU (summer) and US$

generators, co-generators, and self-generating agents to pro-

4.3446/MMBTU (winter). The second auction took place on

cure their own fuel for electricity generation and permitted to

May 23, 2019. Unlike the previous auction, supply on this oc-

manage the fuel - natural gas - for the plant in 2019. Upon the

casion was strong, with a term ranging from June 2019 to

publication of the Resolution, CAMMESA issued the Decla-

May 2020, inclusive. PIST prices were US$ 2.207/MMBTU

ration of Variable Production Costs (CVP), which allowed to

and US$ 3.2446/MMBTU for summer and winter respectively,

prepare a commercial strategy to optimize the costs incurred

with a clear gas price decrease in the wellhead from the first

and the declared CVP.

auction to date.

In December 2019, through Resolution 12/2019, the Govern-

tion 2019-12- APN-MDP in the Official Journal, Resolution

ment decided to repeal Resolution No. 70/2018 of the former

2018-70-APN-SGE was repealed, and the commercial man-

Energy Secretariat of the former Ministry of Finance that al-

agement was once again centralized in the dispatch agency

lowed companies to manage their own fuel supplies, leaving

as well as the dispatch of fuels from the MEM plants.

As of December 30, 2019, with the publication of Resolu-

Mercado Mayorista Eléctrico Sociedad Anónima (CAMMESA)

again in charge.

Enel Generación Costanera S.A.

Enel Generación El Chocón S.A.

Enel Generación El Chocón SA is a generation Company, op-

erating El Chocón and Arroyito hydroelectric power plants,

Enel Generación Costanera, located in the city of Buenos

located on the Limay River, in the Neuquén and Río Negro

Aires, has six steam turbine units totaling 1,062 MW, which

Provinces. The total net installed capacity of this hydroelectric

can operate either with natural gas or fuel oil. Costanera also

complex is 1,363 MW and includes the El Chocón plant, with

operates two combined cycles of 851 MW and 297 MW, re-

1,200MW net installed capacity (hydroelectric power plant on

spectively. Its net installed capacity is 2,210 MW.

an artificial reservoir) and the Arroyito plant, with 128 MW net

installed capacity, both plants use the waters of Limay and

In 2019, CAMMESA carried out a dispatch of the Argentine

Collón Curá Rivers for generation.

Interconnected System (SADI acronym In Spanish) pursuant

to the Resolutions issued by the Ministry of Electricity. The

The Company’s net installed hydro capacity is 1,328 MW,

dispatch prioritized the use of natural gas, taking into account

thermal net capacity is 34 MW and corresponds to moto-gen-

the performance of the units and the use of liquid fuels (gas

erators. Its participation in the SADI is 3.7% in relation to the

oil and fuel oil) in accordance to the restrictions imposed on

total installed capacity.

power plants during the season with an increased residential

demand. As a result of the operations, net generation of Cos-

El Chocón is located in the Comahue region made up by the

tanera’s Convectional Units reached 236 GWh, and net gener-

Argentinean Provinces of Río Negro, Neuquén and the south-

ation of Combined Cycles reached 5,974 GWh.

ern areas of Buenos Aires Provinces, on the Limay River, 80

In February 2019, SEES Resolution No. 19/2017 was replaced

Arroyito is a compensator dam of the El Chocón plant located

by Resolution SRR and ME No. 1/19 establishing the payment

on the same river, some 25 km downstream.

km upstream from the confluence with the Neuquén River.

guidelines for existing generation plants. It is detailed in the

previous chapter on Electricity Generation.

17. Description of the electricity business by country

149

The hydrological year In Argentina starts on April 1 and has

The implementation of Resolution SEE No. 1/2019 reduced

been defined as a dry year according to the contribution of the

the payments of thermal and hydraulic generators compared

hydrological basins of the Limay and Collón Cura Rivers. Net

to the previous regulations, maintaining the same remunera-

generation recorded for these power plants during the year

tive concepts: a variable production charge depending on the

was 2,525 GWh. This generation is made up by 1,981 GWh in

type of fuel (which varies by technology and unit size) and an-

Chocón (78%), 528 GWh in Arroyito (21%) and 16 GWh from

other depending on the available power. These values are set

moto-generators (1%).

in dollars. It also maintained the possibility of offering guar-

anteed availability and additional guaranteed availability com-

The Company started 2019 with the reservoir level of 377.71

mitments (DIGO and DIGO ADICIONAL respectively), with

m.a.s.l. The reserve in the El Chocón dam was 2,168 GWh and

different payments and depending on availability, regardless

in the Comahue it was 6,083 GWh. Both were measured in

of the technology offered.

relation to the minimum level condition of FOE.

At the end of 2019, the level of the reservoir reached 377.55

second half of November 2018, generation agents could get

m.a.s.l. The energy reserves of the Comahue dams were

their own fuel supplies for energy generation. Generation

6,235 of which 2,228 GWh were the El Chocón reserves.

costs were valorized according to the mechanism of recog-

Subsequently, through Resolution No. 70/2018, and as of the

In February 2019, SEES Resolution No. 19/2017 was replaced

by Resolution SRR and ME No. 1/19 establishing the payment

Central Dock Sud used that option from the first half of De-

guidelines for existing generation plants. It is detailed in the

cember 2018, until the second half of December 2019, when

previous chapter on Electricity Generation.

the Ministry of Productive Development issued Resolution

nition of Production Variable costs recognized by CAMMESA.

Central Dock Sud

The Dock Sud power plants are located in the Buenos Aires

Avellaneda district. Dock Sud owns and operates a single gen-

eration power plant with two units, with a total capacity of

846 MW. The Dock Sud power plant (CDS in Spanish acro-

nym) has four gas turbines and one steam turbine. Two of the

gas turbines and the steam turbine make up a combined cycle

power plant.

The energy generated by Dock Sud in 2019 was 4,238 GWh,

accounting for 4.5% of thermal generation and covering 2.9%

of the SADI demand.

On December 31, 2019, Central Dock Sud S.A.´s installed capac-

ity represented 2.2% of the total installed capacity of the SIN.

In February 2019, the former Ministry of Renewable Resourc-

es and Electricity Market, subordinated to the former Ministry

of Finance, through Resolution No. 19E/2017 updated the pay-

ment values of Resolution SE No. 19/2017.

No. 12/2019, which repealed the above-mentioned Resolu-

tion No. 70/2018, establishing that, as of December 30, 2019

CAMMESA would once again centralize fuel supply for the

power generation of the MEM thermal power plants.

Generation Activities and
Projects

Currently, there are no ongoing projects for the expansion of

installed power - combined cycle - in Costanera.

Land reserved for future
projects

Enel Américas has no land reserved for future projects in Ar-

gentina.

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Electricity Distribution

Edesur

tract, reestablishing the full validity of the Concession Con-

tract, the Tariff and the Service Quality Regime, which were

renegotiated pursuant to the principles established by Law

24.065.

Edesur distributes and sells electricity in the southern area

The validity of the RTI tariff period, established between Feb-

of Buenos Aires. This includes two-thirds of the Autonomous

ruary 1, 2017 and January 31, 2022, will require an improve-

City of Buenos Aires (CABA) and twelve districts of the Bue-

ment to the quality of service regime as the expectations of

nos Aires Province, covering a 3,309 km2 area, for a period of

investment development and operational improvements that

95 years starting from August 31, 1992.

EDESUR proposed in the context of RTI will increase. There-

This period includes an initial 15-year term and eight additional

cost of energy not delivered will increase throughout the peri-

periods of 10 years each. On February 5, 2007, the National

od, reaching the values established recently in the last semes-

fore, the quality guidelines will be more demanding, and the

Electricity Regulatory Entity (ENRE) resolved to extend the

ter of the period.

initial period for five extra years, as of the end of the Integral

Tariff Review (RTI) process.

At the same time, SAIDI (one of the indices related to service

quality) improved in 2019 in relation to 2018, with a reduction

On January 27, 2016, the MINEM No. 7/2016 Resolution was

of 4.7 hours, reaching 20.23 hours according to Enel criteria.

issued which instructed ENRE, among other things, to: adjust

the VAD in the company´s tariff charts, on behalf of the RTI (In-

The concession contract establishes that Edesur must supply

tegral Fees Renegotiation) and the framework of the Transito-

energy as required by the owners or inhabitants of the properties

ry Tariff Regime established in the Agreement Act and to carry

located within its concession area, comply with certain quality

our every action required to implement the RTI, which should

standards related to the electricity supplied, comply with opera-

have come into force before December 31, 2016. The process

tional requirements concerning the maintenance of distribution

and schedule for the RTI was established through Resolution

assets and to bill clients on the basis of effective measurements.

ENRE 55 as of April 5, 2016.

In December 2017, the Ministry of Energy and Mining (MI-

As part of the RTI process, on October 28, 2016 a call for a

NEM) presented its proposal and criteria for the treatment of

Public Consultation was launched to inform of the project and

regulatory liabilities. The first measure was, via a Note issued

hear the opinions related to the tariff proposals that the dis-

on December 30, 2017, that the Ministry informed CAMME-

tribution companies Edesur and Edenor presented to ENRE

SA that it took possession of the debt registered by EDESUR

according to Resolution ENRE No. 55/2016.

with said Company for the purchase of energy, for a period

On December 30, 2016, ENRE issued Resolution No. 626, ap-

ment. EDESUR continued to work on the agreement in 2018,

proving the document denominated Final Public Consultation

and the final Resolution regarding these matters was subject

of 90 days pending the signing of the aforementioned agree-

Resolution in order to inform and answer the opinions made

to the change of jurisdiction.

in relation to the Tariffs Proposal presented previously by the

companies with regards to the definition of tariffs to be ap-

On December 4, 2018 Law 27.469 approved the Fiscal Consen-

plied, and move for the consideration of the Undersecretary

sus signed on September 13, 2018 between the Nation and

of Tariffs Policy Coordination of the Ministry of Energy and

most of the Provinces. This agreement considers that “elec-

Mining of the Nation, those proposed issues subjects planned

tricity distribution companies Empresa Distribuidora Norte SA

that are not within the sphere of responsibility of said entity.

(Edenor) and Empresa Distribuidora Sur SA (Edesur) should be

On February 1, 2017 the Integral Tariff Review came into force,

Autonomous City of Buenos Aires (CABA), in line with other

thus ending the renegotiation process of the concession con-

electricity distribution companies in the other jurisdictions”.

part of the jurisdiction of the Province of Buenos Aires and the

17. Description of the electricity business by country

151

Similarly, the General Budget for Expenses and Resources of

On 19 September 2019 Edesur signed an Agreement on Tariff

National Administration Law 27.467 for 2019, published also

with the National State where the latter instructs ENRE to,

on December 4, 2018, established in article 124, to instruct

during the six-month period starting on August 1, 2019, main-

the National Executive Authority to “foster those actions

tain in force the tariff tables prior to the beginning of that peri-

needed for the transfer of jurisdiction of electricity distribution

od for all tariff categories, which means that EDESUR will con-

companies Empresa Distribuidora Norte S.A. (Edenor) and

tinue to receive the compensation included therein due from

Empresa Distribuidora Sur S.A. (Edesur) from the Province of

prior recoveries and disputes (ENRE resolution No. 26/19).

Buenos Aires to CABA” from January 1, 2019, and “once this

The difference in the VAD and the difference in seasonal pric-

becomes effective, the National Entity for Electricity Regula-

es, the increase of which was ratified by the Resolution of the

tion (ENRE in its Spanish acronym) created through article 54

Ministry of Renewable Resources and the Electricity Market

of Law 24.065 will keep its functions and faculties in all mat-

No. 26 issued on September 3, 2019, for the period from the

ters not related to the public service of electricity distribution”.

August 1, 2019 to December 31, 2019, will be recovered in 7

monthly installments as of January 1, 2020.

On 1 February 2019, ENRE Resolutions No. 24/2019 and

26/2019 were published in the Official Journal. The first ap-

Edesur also undertakes to maintain service quality and agrees

proved the values in the tariff table effective for the billing

to postpone the payments of any sanctions until March 1,

for meter readings after zero hours on February 1, 2019, ac-

2020 at their original value plus the adjustments correspond-

cording to the increases in the seasonal price of energy and

ing to the time of payment, in 6 monthly installments.

power. The second Resolution defined the new Distribution

Added Value (VAD) values, to be applied as of March 1, 2019,

The Regulatory Decree No. 1289 issued on October 1, 2019

including deferrals and due compensations. The increases as-

by the Province of Buenos Aires and the previous sanctions

signed to March 2019 followed the VAD standardization pro-

and the publication of Law No. 6180, Decree No. 263 and

cess defined by the RTI published in February 2017.

the Supplementary Resolution No. 161 of June 30, 2019 by

As part of the transfer of the public electricity distribution

both Provinces, what was established in the so-called “Fis-

service, on May 9, 2019, the National State, CABA and the

cal Consensus 2018” and Article 124 of Law No. 27.469. The

Province signed an Agreement implementing the transfer, no-

above-mentioned agreements finalize the transfer of the ser-

tifying Edesur of the agreement which the last signed. The

vice by this Company from the National State to the jurisdic-

Agreement states that the Province and CABA jointly hold the

tions of the Province of Buenos Aires and the Autonomous

the Autonomous City of Buenos Aires ratified, on part of

status of the granting authority of the public service provided

City of Buenos Aires.

by the Company, and that the Company will continue to be

governed by its concession contract and by the national legal

On December 10, 2019, Dr. Alberto Fernández took over as

and regulatory regulations as may apply.

the new President of the Republic of Argentina and Dr. Cristi-

na Fernández de Kirchner as Vice-President.

On 2 May 2019, the new tariff table containing the seasonal

price update for the May-July 2019 period was published, es-

On Friday, December 20, 2019, the National Congress ap-

tablished via Resolution No.14 issued on April 29, 2019 by the

proved Law No. 27.541 denominated the Law on SOCIAL

Secretariat of Renewable Resources and Electricity Market.

SOLIDARITY AND PRODUCTIVE REACTIVATION WITHIN

THE PUBLIC EMERGENCY FRAMEWORK declaring a state

On 10 May 2019, Edesur signed an Agreement on the Regu-

of public emergency in economic, financial, fiscal, administra-

larization of Obligations with the Secretariat of Energy, on be-

tive, planning, tariff, energy, health and social matters until De-

half of the National State, according to which any outstanding

cember 31, 2020. The law authorizes the National Executive

reciprocal claims arising from the 2006 - 2017 transition period

Branch in article 5 to maintain the electricity and gas rates of

were terminated. This was the solution to the cross claims for

the federal jurisdiction and to initiate a renegotiation process

the period in question.

of the still valid Comprehensive Tariff Review in an extraordi-

152

Annual Report Enel Américas 2019 e
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nary capacity and for a maximum period of 180 days tend-

ing to a reduction of the current household, commercial and

industrial tariffs for 2020. And authorizes ENRE to intervene

(Article 6) as it will maintain its scope of competence for the

SE Glew expansion from
2x40 MVA to 2x80 MVA

duration of the emergency by suspending the validity of the

This is a modification and an extension of the current Glew

second paragraph of Article 124 of Law No. 27.467 (Article 7).

Substation, from 2x40MVA to 2x80 MVA. where 16 cells of

13.2 KV will be added, finally reaching a 32 MT outputs.

On Friday, December 27, 2019, ENRE, pursuant to Article 7 of

Law No. 27541, instructed Edesur not to modify the current

In 2019, this expansion work was at the final stage and is es-

Tariff Table even though it no longer belongs to federal juris-

timated to be completed and in service during the first half

diction.

of 2020.

In 2019, Edesur delivered electric power to 2,490,449 clients.

It will benefit the following sectors: Almirante Brown, Esteban

Of the total, 88.1% are residential clients, 11.0% commercial,

Echeverría and Presidente Perón.

0.8% industrial and 0.04% others. Energy sales totaled 16,798

GWh, including distribution services (toll) to large users, with

a 5.4% decrease as compared to the previous year. Overall,

48.9% energy was distributed to the residential sector, 43%

to the commercial segment and 8.1% to the industrial sector.

In 2019, the annual mobile loss rate - technical and non-tech-

nical - reached 15.50%, a worse result if compared to the

14.2% recorded in 2018. This result is obtained in a scenario

of a shrinking demand compared to the previous year (-3.17%

2019 vs 2018) and an increase in aggressiveness, related to

energy thefts, confirming the trend of the previous year. This

is also related to the increase in the rate.

Distribution Activities and
Projects

With regards to the 2019 Investment Plan, total investment

for the year was $ 11,018 million Argentine pesos. The most

important projects implemented in 2019 are as follows:

Renovation of Triple 104
Reconquista-Nuevo Puerto

Expansion of the Sarandí substation
with two new MT sections

The Extension of the Sarandí 132/13.2 kV substation consist-

ed of the installation of two new MT cell sections, an internal

service transformer, two 4.8 MVAr capacitor banks at 13.2 kV

to complete the reactive power compensation.

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103/104/105 triple cables repair at
Reconquista substation

New 5-tern AT cable runs were made within the Reconquista

substation and new terminals and splices were assembled.

Brown substation reconstruction

Reconstruction of the full Section III of MT cells was carried

out with the corresponding civil works.

New High Voltage Clients

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Electricity network currently in operation, with 3.7 km of un-

derground 132 KV of 1,200 mm2 cables with XLPE isolation

in simple triple cable between the Reconquista and Nuevo

In 2019, the feeding work at (132 Kv) of the AYSA water treat-

ment plant continued. The plant is in the city of Bernal in the

Puerto substations. This work will improve the operation of

Quilmes district.

the system as faced with cargo transfer needs between the

northern and southern areas of the GBA.

17. Description of the electricity business by country

153

MT/BT Client Assistance

In 2019, 1,453 clients were attended, including new supplies

and power increases, of which 1,411 correspond to T1, T2 and

T3 BT rates and the remaining 42 to T3 MT Clients. Among

the most relevant cases are the following:

• Mugica Educational Center - CABA

• Buenos Aires Arena SA (Movistar Arena) - CABA

•

IVC – Barrio Alvarado - CABA

• Buenos Aires Holocaust Museum - CABA

•

Villa 21-24 / The Triangle - CABA

• Bs. As Underground. - CABA

•

Industrial Parks Parques Industriales S.A. - Florencio Varela

• Central Mail (SBASE Linea E) - CABA

•

Italian Hospital - CABA

• Mc Donalds Villa 31 - CABA

•

Trust Puerto Madero Siete - CABA

• Diserglass S.R.L - Quilmes

• Rexam Argentina S.A. - Almirante Brown

To improve preparedness in case of severe climate events,

the transformers and distribution chambers mitigation plan

continued to water flooding, thus completing the improve-

ments in 25 underground chambers.

The Company also continued working on mechanical rein-

forcements in the medium voltage transmission grid in the

Buenos Aires Province to prevent pylons from falling during

severe storms. The Company replaced 299 wooden pylons

with concrete pylons.

Network technology improvement

In 2019 work continued to Improve the SAIDI rates by install-

ing 565 additional remote-control pieces of equipment at dif-

ferent points along the medium voltage network, with more

than 1,500 installed points to achieve more efficient operation

of the MT network.

Well Cameras

This project consists of installing MT/BT underground Trans-

formation Centers in areas with critical points and where the

use of conventional equipment is difficult. In 2018, 10 new

cameras were installed in CABA in the following neighbor-

hoods: Flores, La Paternal, Liniers, Mataderos, Parque Avella-

neda, San Cristóbal, Villa Devoto and Villa del Parque and one

new camera in Lomas de Zamora.

Underprivileged Neighborhoods

To normalize the connections in all the homes where there

were no installed meters, the Company initiated a mass stan-

dardization plan in many of the underprivileged neighborhoods

and / or settlements.

In 2019, 4,108 homes were normalized involving 32 different

provincial localities. The cases involved previous social aware-

ness programs aimed at explaining the new conditions to-

gether with their social inclusion as clients.

Infrastructure improvement of
MT/BT network

The most important is the neighborhood of Las Marinas in Es-

teban Echeverría where new networks and a Transformation

Center were installed, and 62 new supplies normalized.

To improve service quality, in 2019 Edesur expanded and re-

In the towns of Guernica and Numancia of the Presidente

newed its network by some 317.9 km medium voltage and

Perón brough we have installed 1,006 new supplies.

275.7 41 km low voltage networks. Regarding the transfor-

mation centers, 238 CT were intervened, including new trans-

Together with the Municipality of Lomas de Zamora we

formation centers, electro-mechanical equipment renovation

worked on the first stage of standardization of the “El Tongui”

and installed power increase (including the well cameras as

neighborhood also called “17 de Noviembre” where we initial-

indicated in the prior sections of the document).

ly plan to normalize 321 new supplies.

154

Annual Report Enel Américas 2019 Finally, the feasibility analysis of the implementation of the

Prepaid Meter has been started by updating the software of

the Smart Meters equipment, with the implementation of a

Pilot Plan in the Piletones neighborhood planned by 2020.

Network Digitization

In 2019, to improve the quality of service, Edesur completed

the installation of the first smart meters to digitize its net-

work. The pilot project consisted of installing 20,000 meters

within the concession area. The new smart meters include

technology that Enel is using around the world and that has

Managing network maintenance

In 2019, the Company started a project to comprehensively

manage the maintenance of AT/MT and BT through inter-re-

lated actions to reduce network failures. The most important

are failure analyses, the implementation of operational risk

analysis, improvement of the CERTA IT system, monitoring

and analysis of maintenance plans. One of the most import-

ant implemented tools was the use of helicopters equipped

with state-of-the-art technology to take photos/ videos, ther-

mographs and image detection using a laser (LIDAR) to study

AT/MT aerial networks and in BT networks it can carry out

Mobile Mapping (obtaining data such as thermography and

many advantages: the consumption reading is done remote-

photos/ videos).

ly and more precisely; network failures are identified in real

time, therefore repair times are much shorter; and they permit

users to read consumption data constantly, while leading to a

more efficient energy consumption.

Regarding MT and BT networks, changes of PIMT networks

were made and the STM system was incorporated, for more

In 2019, in the High Voltage system, the Company started a

new comprehensive preventive maintenance plan of its fa-

cilities (SSEE) and High Voltage transmission lines. The im-

plementation of this preventive maintenance program in the

High Voltage system was very important, because any failure

of the system might lead to power outages of more than

centralized operations.

100,000 clients.

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The point to point integration of the SCADA-STM-SCADA sys-

tems was finalized and would lead to an improved operation

of the network and the upgrade of the CERTA system, for

claims management and the incorporation of new manage-

ment tools for the BT network, which is driven by service

quality indicators.

The Company started to implement the Enel Group´s e-or-

der system and the new work programming system (PDL) to

manage BT claims and maintenance orders, thus improving

employee management and records of the works.

Electro-dependent user support

In 2019, the new regulatory requirements established that dis-

tribution companies must provide alternative energy sources

(FAE by its Spanish acronym) for every electricity-dependent

user, so that in case of an outage power supply would not

be interrupted in homes of this type of users. The Company

developed a prototype for alternative energy source and the

implementation of technical requirements to initially acquire

150 units. To expand this energy source for a greater num-

ber of electricity-dependent users, the Company launched a

tender process to acquire a further 1,500 FAE units including

their supply, installation, and maintenance.

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17. Description of the electricity business by country

155

Generation

Transmission

Distribution

Enel Distribución Ceará

Central Fortaleza

Cachoeira Dourada

Volta Grande

Enel Distribución Goiás

ENEL CIEN

Transmission Line

2,100 MW

Enel Distribución Rio

Enel Distribución São Paulo

*Non-billable consumptions are not included in distribution business.

1. Energy sales since June 2018, date of consolidation of the company.

156

Annual Report Enel Américas 2019 Río de JaneiroBelénManausSao PauloGoianaBrasiliaTypeHydroNet Installed Capacity 655 MWTypeHydroNet Installed Capacity 380 MW12,186 GWh3,924,10714.0%TypeThermoNet Installed Capacity 319 MW11,089 GWh2,867,31822.5%14,259 GWh3,114,06312.3%43,148 GWh7,328,1499.6%Energy SalesEnergy LossesClientsEnergy SalesEnergy LossesClientsEnergy SalesEnergy LossesClientsEnergy Sales1Energy LossesClientse
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Brazil

Electricity Generation

this acquisition, Enel Brasil increased its hydropower capacity

in Brazil by 40%, adding 380 MW to its portfolio.

The acquisition of this concession was financed in 60% with

debt acquisition and in 40% with own equity. Initially a two-

year bridge loan (2018-2019) was considered, under the Enel

guarantee. In 2019, long-term financing for the asset was

Enel Américas participates in electricity generation through

structured, with the issuing its first bonds totaling $ 800 mil-

Enel Brasil and its subsidiaries Cachoeira Dourada, Volta Grande

lion reais for a 10-year term.

and Enel Generación Fortaleza.

Net generation in 2019 was 1,588 GWh and sales reached

These three power plants, two hydroelectric and one thermal,

1,2,270 GWh.

have 1,354 MW of total net capacity and represent 0.8% of

the Brazilian SIN.

Enel Generación Fortaleza

The Enel Group´s electricity generation business in Brazil

reached 5,292 GWh, or 1% of the country´s total generation

(thermal and hydro), with hydroelectric production representing

79% of the Enel Américas Group´s total generation in Brazil.

Other generators connected to the Brazilian SIN are: Eletrobras,

Cemig, Cesp, Copel, ENGIE, CTG, Iberdrola, CPFL and AES.

Cachoeira Dourada

Fortaleza, located in the Caucaia municipality, 50 km from the

capital of the state of Ceará, is a 319 MW net combined cycle

thermal power plant running on natural gas. It can generate

one third of the electricity required by Ceará, a state with a

population of nearly 9 million inhabitants.

Fortaleza was built in a 70,000 m2 area and is part of the infra-

structure of the Pecém Industrial and Port Complex and is part

of the Thermoelectricity Priority Program (PPT) of the Federal

Government. Fortaleza has a strategic location to boost re-

Cachoeira Dourada, located in the State of Goias, 240 km

gional growth and to facilitate the operation of other indus-

south of Goiânia, is a power plant with ten units with 655 MW

tries. Its main client is the distribution Company Enel Distribu-

of net installed capacity. It is a run-of-the-river power plant and

ción Ceará and its most important supplier is Petrobras.

uses the waters of the Paranaiba River.

Electricity generation in 2019 was 1,128 GWh, while sales

Net generation in 2019 was 2,575 GWh and sales reached

reached 4,742 GWh.

22,890 GWh.

Volta Grande

Land reserved for future
projects

Enel Américas, through its subsidiary Enel Brasil, acquired the

rights to operate for a 30-year period the Volta Grande hydro-

electric power plant, located in the Rio Grande River, between

the Brazilian states of São Paulo and Minas Gerais. The total

cost of the concession was $1,420 million reais (approximate-

ly US$420 million).

Enel Brasil owns 75 hectares in the city of Macaé, the state of

Río de Janeiro, reserved for future projects.

Electricity Transmission

Enel Brasil won the auction for hydroelectric concessions car-

mission and sale in Brazil through the interconnected line be-

ried out by the Brazilian government on September 27, 2017, in

tween Argentina and Brazil, through Enel Cien where it has

The Enel Américas Group also participates in electricity trans-

an open public session at the São Paulo Stock Exchange. The

nearly complete ownership.

management of the plant began on November 11, 2017. With

17. Description of the electricity business by country

157

Enel Cien

Enel Cien is an energy transmission company in Brazil. The

complex consists of two frequency conversion stations, Ga-

rabi I and II Garabi II, converting both ways the frequencies in

Brazil (60 Hertz) and in Argentina (50 Hertz) and transmission

lines. On the Argentinean side, they are managed by two sub-

sidiaries: Compañía de Transmission del Mercosur S.A. (CTM)

and Transportadora de Energía S.A. (TESA). Enel Cien fully

controls the shareholding capital of both companies.

The interconnection system consists of two transmission

lines whose total length Is 1,006 km, and the Garabi Conver-

sion Station, SE STA (Santo Angelo/RS) and SE YTA (Itá/SC).

On April 5, 2011 the decrees, published in the Official Journal

defined the annual value of the Annual Permitted Payment (RAP)

for Enel Cien. With this, the regulator equates Enel Cien (whose

assets consist of the Garabi lines 1 and 2) to the concessionaires

of public service transmission. The total annual RAP is adjusted

annually, and the tariff review processes takes place every four

years. As of April 2011, Enel Cien was officially authorized to re-

ceive payments under this new business model.

Electricity Distribution in Brazil

Enel Américas participates in electricity distribution through

Enel Brasil and its subsidiaries Enel Distribución Río, Enel Dis-

tribución Ceará, Enel Distribución Goiás and Enel Distribución

São Paulo.

In 2019, Enel Distribución Río supplied electricity to 2,867,318

billed clients. Of that number, 92% are residential clients, 5%

are commercial clients and 3% other users.

Energy sales in 2019 reached 11,089 GWh, representing a 1%

increase in relation to 2018. An important part of this figure

is the participation of residential clients, representing 44% of

physical sales, followed by commercial clients with 17% of

sales, industrial clients with 2% and other clients and tolls

representing 37% of sales. Enel Distribución Río emphasizes

its fight against energy theft developing projects that make

use of modern technology and social activities.

However, current energy losses still represent one of Enel

Distribución Río´s main challenges. 2019 closed with energy

losses of 22,5%. Compared with 2018 it was a 1.5 p.p in-

crease mainly due to the upsurge of risk areas and the eco-

nomic downturn in the State of Río de Janeiro.

Additionally, in 2019 Enel Distribución Río also took certain actions

to improve its quality indicators, reducing the SAIDI (time without

energy supply) by 7% in relation to 2018 (13,15h vs 14,10h).

Enel Distribución Ceará

Enel Distribución Ceará is an electricity distribution Company that

operates the State of Ceará, in northeastern Brazil, covering a

148,921 km2 concession area. The Company serves a population

of over 9 million inhabitants.

In 2019, Enel Distribución Ceará supplied energy to 3,924,107

billed clients. Of the total, 79% are residential clients, 5% com-

Enel Américas directly and indirectly has 99.7%, 74.1%,

99.9% and 95.88% shareholding of these companies, respec-

mercial clients and 17% other users.

tively.

In Brazil, the main distribution companies in the electricity

Energy sales in 2098 reached 12,186 GWh, increasing by 2.9% in

relation to the previous year. Residential clients represented 38%,

commercial clients 15%, followed by tolls and other clients with

system are: CPFL, Cemig, Light, Coelba and Copel.

47%.

Enel Distribución Río

Enel Distribución Goiás

Enel Distribución Río (former Ampla) is an electricity distri-

bution Company with operations in 73% of the territory of

the Río de Janeiro State, equivalent to a 32,188-km2 area. The

population Inhabiting the area is approximately 8 million peo-

ple distributed in 66 municipalities. The biggest are Niteroi,

São Gonçalo, Petrópolis, Campos and Cabo Frío.

Enel Américas, through its subsidiary Enel Brasil, acquired

94.8% of Enel Distribución Goiás (former Celg) shareholding

capital, a distribution company operating in the Brazilian State

of Goiás. The investment was $ 2,187 million reais (approxi-

mately US$ 640 million).

158

Annual Report Enel Américas 2019 In November 2016 Enel Brasil won a public tender for the

Energy sales in 2019 totaled 43,148 GWh, a 1% increase in

privatization of Celg, carried out by the Brazilian government

comparison with 2018. The residential, commercial, and rural

through Banco Nacional de Desarrollo BNDES, and took over

types of clients grew by 0.9%, 3.3% and 3.2% respectively

the asset on February 14, 2017. In May 2017, Enel Brasil ac-

while the Industrial and public sectors decreased by 3.4% and

quired an additional 5% of Celg (currently Enel Distribución

2.8% respectively.

Goiás) for $ 81.7 million reais. Additionally, Enel Brasil carried

out a capital increase in Enel Distribución Goiás for $1,600

Enel Distribución São Paulo also took certain actions to im-

million reais. By the end of 2017, Enel Brasil´s shareholding in

prove quality indicators and in 2019 recorded a 10% decrease

Enel Distribución Goiás reached 99.93%.

in the SAIDI (time without electricity) compared to 2018 (38 6

The Enel Distribución Goiás acquisition was completely fi-

outages) recorded a 16% reduction (3.71 vs 4.39) compared

minutes vs 431 minutes), while the SAIFI (frequency of power

nanced with the cash from the capital increase of Enel Améri-

to 2018.

cas, which was approved by the end of 2012.

The Company, located in the central western area of Brazil, has

plify and optimize its corporate structure, in particular (i) Enel

a concession area covering approximately 337 thousand km2

Distribución São Paulo ‘s reverse merger with Enel Brasil In-

and serves a population of more than 6 million inhabitants.

vestimentos Sudeste, completed in November; (ii) Public Of-

fer for Share Acquisition and Conversion of Registration, with

In 2019, the Company Implemented some measures to sim-

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Energy sales reached 14,259 GWh in 2019 increasing by 3.7%

the subsequent listing in the stock exchange. As a result, Enel

as compared to 2018. The distribution of clients is as follows:

Brasil ended 2019 with a full control of Enel Distribución São

86% residential clients, 7% commercial clients and 7% oth-

Paulo and the Enel Group became the company’s sole share-

ers.

holder.

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In 2019, Enel Distribución Goiás supplied energy services to

3,114,063 billed clients. The classification by type of clients

shows that 86% are residential, 7% are commercial, and oth-

Distribution Activities and
Projects

er clients represent 7%.

Additionally, Enel Distribución Goiás took certain actions to

improve quality indicators and in 2019 reduced SAIDI (time

without energy supply) by 11% in relation to 2018 (11,32x vs

15,02x).

Enel Distribución São Paulo

Energy efficiency

Energy efficiency projects involve actions that promote con-

scious energy consumption, changes of equipment (refrigera-

tors, freezers, lamps) and electrical wiring, with an important

impact on energy consumption and home energy efficiency

improvement. In 2019, 894,752 people in Enel Distribución

Río, Enel Distribución Ceará, Enel Distribución Goiás, and

Enel Distribución São Paulo is the largest electricity distribu-

recently, Enel Distribución São Paulo, benefited from the

tion company in Brazil in terms of energy sales, and operates

change of equipment in 136 implemented initiatives. 788,639

in 24 cities in the Metropolitan Region of São Paulo including

lamps and 14,942 refrigerators were changed in the initiative

the capital, Brazil´s main economic and financial center.

and in others. Some 266,892 consumers benefited from the

Its concession area covers 4,526km2 and concentrates the

conferences and workshops, 71,211 via community agents

educational projects for conscious consumption (108,302 via

country´s largest domestic GDP and the highest demographic

and 87,369 via school program).

density, 1,616 consumer units per km2 with 18 million people,

equivalent to 9% of the total energy consumed in the country.

The projects are supported by touring trucks equipped with

In 2019, Enel Distribución São Paulo supplied energy services

distribution processes, consumption simulators and interac-

to 7.3 million billed clients. Of the total, 94% are residential

tive totems with fun units for all ages. As it is a mobile project

clients, 6% are commercial clients, and 1% other users.

it guarantees access to information for residents and students

explanatory models of energy generation, transmission and

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17. Description of the electricity business by country

159

in areas located far from metropolitan sectors. The program’s

results in 2019 were 46,813 (MWh/year) of energy saved and

8, 812 (kW) of avoided demand. This energy saving is enough

to supply 26 thousand residences per year, with an average

consumption of 150kWh per residence.

In 2019, Enel Brasil´s energy efficiency program concentrated

its initiatives in the regions with greater impact on commercial

losses (electricity theft), promoting responsible energy con-

sumption initiatives among the population, especially among

low-income consumers. The resources invested by distribu-

tion companies are regulated and are equivalent to 0.4% of

the companies’ net operational revenues.

Enel X Projects in Brazil

Claro Photovoltaic project

Enel X built Pernambuco’s largest Claro photovoltaic plant. The

project included the installation of 15,330 panels that will sup-
ply clean energy, avoiding 1,203 tons of CO2 per year.

The project was implemented through a Power Purchase

Agreement (PPA) business model. Work on the project was

completed in October 2019, but the plant will be energized

during the first months of 2020, due to some relevant proce-

dures with the local distributor (CELPE).

Generation

Transmission

Distribution

Codensa

Barranquilla

Medellín

Bogotá

Cali

Neiva

Laguneta

Termozipa

Cartagena

El Paraíso

Limonar

Tequendama

El Salto II

Darío Valencia

Charquito

La Guaca

Betania

El Quimbo

El Guavio

160

*Non-billable consumptions are not included in distribution business.

Annual Report Enel Américas 2019 TypeThermoNet Installed Capacity 225 MWTypeHydroNet Installed Capacity 18 MWTypeThermoNet Installed Capacity 184 MWTypeHydroNet Installed Capacity 276 MWTypeHydroNet Installed Capacity 150 MWTypeHydroNet Installed Capacity 18 MWTypeHydroNet Installed Capacity 57 MWTypeHydroNet Installed Capacity 35 MWTypeHydroNet Installed Capacity 19 MWTypeHydroNet Installed Capacity 324 MWTypeHydroNet Installed Capacity 540 MWTypeHydroNet Installed Capacity 1,260 MW14,307 GWh3,526,7767.7%TypeHydroNet Installed Capacity 400 MWEnergy SalesEnergy LossesClientsGeneration

Transmission

Distribution

Codensa

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Barranquilla

Medellín

Bogotá

Cali

Neiva

Laguneta

Termozipa

Cartagena

El Paraíso

Limonar

Tequendama

El Salto II

Darío Valencia

Charquito

La Guaca

Betania

El Quimbo

El Guavio

*Non-billable consumptions are not included in distribution business.

17. Description of the electricity business by country

161

TypeThermoNet Installed Capacity 225 MWTypeHydroNet Installed Capacity 18 MWTypeThermoNet Installed Capacity 184 MWTypeHydroNet Installed Capacity 276 MWTypeHydroNet Installed Capacity 150 MWTypeHydroNet Installed Capacity 18 MWTypeHydroNet Installed Capacity 57 MWTypeHydroNet Installed Capacity 35 MWTypeHydroNet Installed Capacity 19 MWTypeHydroNet Installed Capacity 324 MWTypeHydroNet Installed Capacity 540 MWTypeHydroNet Installed Capacity 1,260 MW14,307 GWh3,526,7767.7%TypeHydroNet Installed Capacity 400 MWEnergy SalesEnergy LossesClients

Colombia

Electricity Generation

because of the effect of the “El Niño Débil” (Weak El Niño)

phenomenon in the 2018-2019 period that seriously reduced

rainfall in Colombia. In the second quarter, contributions were

at a surplus, with no impact on weak ENSO conditions. During

the second half, there was a deficit in contributions due to

low rainfall during the country´s rainy season, especially in the

Antioquia region, mainly because of atmospheric phenomena

Enel Américas participates in electricity generation through its

that inhibited precipitations such as the subsiding phase of

subsidiary Emgesa, where it controls, directly and indirectly,

the intra-seasonal MJO (Madden Julian Oscillation).

48.5% of its shareholding (economic participation) and 56.7%

of political participation. In 2019, Enel Américas´s electricity

Hydrological contributions accumulated in 2019 in the Bogotá

generation in Colombia reached 21.7 % of the country´s to-

and the Guavio River basins were slightly above historical av-

tal generation. Other generators connected to the Colombian

erage, Quimbo basin was normal and the Betania River basin

electricity system are: Empresa Pública de Medellín, Isagen,

showed a deficit in hydro contribution.

Gecelca, Celsia and Chivor.

Emgesa

On September 1, 2007, the Colombian companies Emgesa

S.A. E.S.P. and the Central Hidroeléctrica de Betania S.A. E.S.P.

completed a merger with the latter being the absorbing com-

pany with a subsequent change of name to Emgesa S.A. E.S.P.

Emgesa is the largest electricity generation company in Colom-

bia given its net installed capacity and generation.

Effective maintenance
management of generation
power plants and production
management milestones in
2019

In 2019 net energy generation of Emgesa reached 15,250

It is made up by 17 power plants with 3,506 MW of total in-

GWh, showing an 8.5% increase as compared to 2018, main-

stalled capacity, among which the most important is El Guavio

ly due to a higher hydro generation considering the increased

with 1,260 MW of installed capacity, and it is also the largest

hydrologic contribution of the Bogotá River in relation to

hydroelectric power plant in the country. Of the 17 existing

historical average and increased thermal generation due to

plants, 15 are hydroelectric and 2 are thermal. Net generation

the system´s higher requirement from the plants which po-

was 15,250 GWh in 2019. Hydro generation reached 14,620

sitioned Enel Emgesa as the first generator in the country

GWh and thermal generation was 630 GWh.

with 21.7% of total generated energy. At the same time, this

Hydrology Context for
Emgesa in 2019

year the historical record generation month was exceeded in

two of the hydraulic power plants: Guavio with 849.2 GWh/

month-July and El Quimbo 273.2 GWh/month-August. In addi-

tion, the annual generation record in El Quimbo was achieved

since it began to operate commercially (2,231 GWh/year).

The ENSO (acronym for El Niño Southern Oscillation) condi-

tions in the Central Pacific were typical of a weak El Niño ep-

The availability of Emgesa’s generation park in 2019 was 90.3

isode, which, according to publications of the Institute of Hy-

%, a 0.9% decrease in relation to 2018, due to the Imple-

drology, Meteorology and Environmental Studies-IDEAM and

mentation of the life extension project and environmental Im-

international agencies, began in September 2018 and ended

provements in the Termozipa Plant.

in June 2019.

During the first quarter of 2019 at a national level (SIN) the con-

registered in 2019, 7,990 fewer than in 2018. The use factor

tributions of the main rivers were at a deficit in the dry season

reached 50% as compared to 46% for the year before.

A total of 177,461 service hours of the generation units were

162

Annual Report Enel Américas 2019 e
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Generation activities and
projects

Land reserved for future
projects

Improvements in the Termozipa
Thermal Power Plant

Termozipa, located 40 km from Bogotá, is a thermal power

plant owned by Emgesa. This power plant has four units and

its total installed capacity is 235 MW. It is fired by coal from

the coalmines located nearby. Among other things, the im-

provements project in the plant includes, among others, inter-

vention of boilers, turbines, generators and water intake. This

will permit to increase the plant´s useful life by an additional

15 years or 100,000 hours of operation.

In 2019, scheduled maintenance stops took place to install

new burners with ultra-low NOx emissions, a change of the

main boiler banks in units 3 and 4, compliance with legal emis-

sion tests for Units 4 and 5 with satisfactory results following

the interventions of the Life Extension project and BEPP (best

environmental practices). Furthermore, 2019 also saw the be-

ginning of the installation of the first Energy Storage System

(BESS) in Colombia.

Improvements in the Betania
Hydroelectric Power Plant

Betania is a hydraulic plant located 30 km south of Neiva with

a net installed capacity of 540 MW. In 2019, the largest in-

tervention in its 32 years of commercial operation was car-

ried out in Unit 2 which included changing the stator winding,

modernizing the speed and voltage regulators, recovering

profiles in impellers, installing a flow measurement system,

among others. With a programmed break that lasted 95 days,

more than 170 people involved, 69,000 man hours worked, an

investment of $12 billion Colombian pesos, all the goals were

reached - the schedule was met, and also the cost and the

scope but most importantly, the work was carried out with

zero accidents.

Enel Américas has no land reserved for future projects in Co-

lombia.

Electricity Distribution

Enel-Codensa

Codensa is Enel Américas´ electricity distribution and sale

company in Colombia, serving the Bogotá and Cundinamarca

markets as well as the thirteen districts of the neighboring

departments of Meta, Tolima and Boyacá.

By the end of 2019, the Company served more than 3.5 million

clients due to the urban dynamics and densification that is char-

acteristic of the Cundimarca department and the city of Bogotá.

In 2019 Enel Codensa carried out important infrastructure proj-

ects centered on current and future demand, service quality

and reliability improvements and obtained important mile-

stones in development. One of the most important results

was the improvement in the average interruption frequency of

our clients’ service which was 6.83 (*) times in SAIFI ( SAIFI

- System Average Interruption Frequency Index-) and a de-

crease in the duration of interruptions of 664 (*) min In SAIDI (

SAIDI -System Average Interruption Duration Index-) pursuant

to the approved calculation methodology of the Enel Group.

The activities and projects focused on:

• Projects to improve service quality.

•

Telecontrol of the Network

• Reposition, normalization and repowering of high and

medium voltage infrastructure (substations and lines)

• Expansion of installed capacity in power substations and

MT networks

• Connections to the national transmission system and

network extension

• Coverage expansion for rural areas

•

Improvement of energy losses control

• Massive connection of clients and generators

• Smart measurement

• Network digitization

17. Description of the electricity business by country

163

The results described above, showcase Enel-Codensa´s vision

from previous months) was 130 GWh year, representing a

of how to manage the networks to achieve world-class stan-

41% improvement as compared to the 2018 result.

dards in terms of service quality, higher demand, coverage

and public lighting systems under scenarios of higher invest-

As a network operator, Enel-Codensa distributes power to

ments and operations, also implementing actions related to

both the Company´s clients and to clients of other companies;

our networks, thus obtaining satisfactory results in the above

this energy, plus the energy that is lost in the distribution sys-

mentioned aspects for all our clients.

tem, makes up the energy demand of Enel-Codensa Network

Thanks to the technical inspection plan and the management

Operator (OR).

of actions to reduce energy losses, a 7.67% loss rate was

As of December 31, 2019, the Enel-Codensa OR demand was

achieved in 2019, reducing non-technical losses by -10 GWh

15,200 GWh-year with a 2.27% annual increase representing

compared to December 2018. Total energy recovery (increase

an improvement on the 2018 closing rate (1.17%). The figure

in post-technical inspection turnover and recovered energy

shows the development of demand as a network operator

over the past three years.

Codensa OR demand (GWh-year)

2017

2018

2019

14,690

14,862

15,200

The breakdown of OR demand is shown in the following chart, in which the market segment of clients commercial-

ized by Enel-Codensa had an increase of 0.66%, while the segment of other traders increased by 5,92%

OR demand breakdown (GWh-year)

Codensa trader

Other traders

10,370

4,830

Regarding advanced measurement, 87,083 meters were in-

in construction projects and for the first small-scale self-gen-

stalled in Bogotá and in some of the Cundinamarca and Toli-

eration clients, AGPE.

ma municipalities, of which 84,910 are with clients and 2,173

as macro meters in distribution transformers. Furthermore.

During the first quarter of 2019, the advanced measurement

advanced measurement was improved as a complementary

management system was upgraded to ePlus SMM, which

technology for the control of energy losses, with the instal-

streamlined the process of activating meters and commercial

lation of 1,838 meters in neighborhoods with high levels of

operations, achieving remote billing of more than 50,000 cli-

energy loss and in areas of difficult periodic access such as

ents during the month of November and more than 4,300 sus-

Hacienda los Molinos and El Peñón; facilities were also built

pension and remote reconnection operations during the year.

164

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As part of the lighting and street lighting plan for 2019, con-

tinuing Bogotá´s illumination system modernization project,

more than 75,000 LED lights were installed of a total accu-

mulated 144,000 LED lights in the city. Additional 4,318 lights

Artistic Christmas Lighting Project
in Bogotá and Ibagué, Colombia

were installed in Bogotá’s public lighting system.

The city of Bogotá, Colombia once again chose our energy

to illuminate its streets and create a magical atmosphere

Enel-Codensa continued the so-called Metro Program where

during the Christmas season. Thanks to the collaboration of

three fundamental projects are grouped together to guaran-

Enel-Codensa and the Bogotá Mayor´s Office, our Company

tee the start of construction works and the supply of energy

renewed its commitment to illuminating the festive season

for the first Metro line in the Colombian capital. In 2019, the

in the Colombian capital. Working with a team of more than

Company´s tendering and contracting department shall carry

450 people, we designed an efficient and low-energy lighting

out the early transfer of networks while in the energy supply

project for “The Christmas Route”, a project organized by the

project the structuring was completed and the process of ob-

Mayor of Bogotá with Enel – Codensa since 2005, which per-

taining the relevant permits and property management was

mitted us to illuminate almost 12 km of streets and a 150,000

initiated.

m2 area including plazas and parks. “Christmas closer to the

stars” was this year´s motto and it also included ornamenting

Furthermore, Enel-Codensa started the planning phase of the

the El Tunal city Christmas tree in a park. The tree was 56 me-

works necessary to clear the Western Tramway corridor trans-

ters high and was ornamented by some 160,000 LED bulbs

ferring and removing networks and assets that might interfere

which connected two trees with the same technology, each

with the infrastructure layout of the Regiotram Project that will

15 meters high, joined by light curtains.

be carried out by the Cundinamarca Department Governorate.

Enel-Codensa reiterates its commitment and willingness to

of Ibagué, where we contributed to illuminating 18 sectors

continue contributing to the construction of the vision of the

working with a team of more than 50 people. The project illu-

region and the city facing the challenges that in the short and

minated parks, avenues and shopping malls and included the

medium term impose the needs of the Department of Cundi-

construction of an interactive snow ramp 25-m long. More

namarca and the city of Bogotá.

than 500 thousand inhabitants and visitors were able to enjoy

Christmas was magical not only in Bogotá, but also in the city

the illuminated metropolis.

Enel X projects in Colombia

Comestibles Italo PV Project

Comestibles Italo signed an agreement with Enel X to install

1,080 photovoltaic panels on the roofs of their factory, in an

industrial area of Bogotá. It will be the largest solar installation

in the city, with a 490 MWh per year of generated energy and

will cover 13% of the company’s electricity demand.

In a second phase, the facility will install 2,500 more panels,

which will allow the company to generate a surplus of elec-

tricity in relation to its demand permitting it to sell to the sur-

plus to the national grid. Thanks to the energy savings and tax

incentives offered under Colombian law, the company esti-

mates it will achieve the return on investment in just 10 years.

LED Public Lighting Modernization
in Bogotá

Among the main projects developed in the city, the following

are the most Important:

Bogotá Localities:

As part of the public Illumination system Improvement or-

dered by the Mayor of Bogotá, UAESP and Enel – Codensa

installed more than 74,000 lights in the towns of Bosa, Usme,

Fontibon, Puente Aranda, Engativa and Usaquen.

17. Description of the electricity business by country

165

Main Bogotá Motorways:

As part of the modernization through the use of LED public

lighting technology, the project of the Bogota Mayor, ran by

Enel-Codensa in coordination with UAESP, the North Highway,

Avenida NQS and Calle 13 were intervened with the installa-

tion of more than 3,000 lights. The avenues now have a new

public lighting system with LED technology and have better il-

lumination offering visual comfort, road safety for citizens and

renovated lighting along these roads.

Public Lighting Management in
Cundinamarca Municipalities

Two contracts were signed to manage, modernize, operate

and maintain the public lighting systems in the municipalities

of El Colegio (2,130 LED lights) and Lenguazaque (500 LED

lights) providing continuity of the Company´s involvement

with these municipalities and the maintenance and genera-

tion of new revenues through modernizing LED systems, im-

proving the lighting conditions in the area and the quality of

life for Its inhabitants.

Incorporation of the sewage
business model into the Enel
X product portfolio

In Colombia, sewage services are charged through anoth-

er public service and in the Enel Codensa concession area

this service was historically collected via the aqueduct ser-

vice. However, since 2018, Codensa began to approach some

government-approved operators to incorporate the sewage

service invoicing into the energy bill, thus managing to in-

corporate It into the Enel X portfolio in 2019, implementing a

joint billing service with the sewage service via two operators

in the city of Bogotá and one in Cundinamarca. More than

960,000 clients are currently billed under this system and

their payments collected through our Enel Codensa invoice,

which contributed in EUR 1 million to the 2019 revenue and

EUR 3 million are expected in 2020 thanks to the incorpora-

tion of a new operator in September.

166

Generation

Transmission

Distribution

Enel Distribución Perú

Edelnor

Cuzco

Arequipa

Chiclayo

Trujillo

Lima

Malacas

Moyopampa

Callahuanca

Huinco

Matucana

Huampani

Santa Rosa

Ventanilla

Yanango

Chimay

*Non-billable consumptions are not included in distribution business.

Annual Report Enel Américas 2019 8,211 GWh1,433,6388.2%Energy SalesEnergy LossesClientsTypeHydroNet Installed Capacity 69 MWTypeThermoNet Installed Capacity 336 MWTypeHydroNet Installed Capacity 83 MWTypeHydroNet Installed Capacity 276 MWTypeHydroNet Installed Capacity 133 MWTypeHydroNet Installed Capacity 31 MWTypeThermoNet Installed Capacity 400 MWTypeThermoNet Installed Capacity 460 MWTypeHydroNet Installed Capacity 42 MWTypeHydroNet Installed Capacity 151 MWe
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Generation

Transmission

Distribution

Enel Distribución Perú

Edelnor

Cuzco

Arequipa

Chiclayo

Trujillo

Lima

Malacas

Moyopampa

Callahuanca

Huinco

Matucana

Huampani

Santa Rosa

Ventanilla

Yanango

Chimay

*Non-billable consumptions are not included in distribution business.

17. Description of the electricity business by country

167

8,211 GWh1,433,6388.2%Energy SalesEnergy LossesClientsTypeHydroNet Installed Capacity 69 MWTypeThermoNet Installed Capacity 336 MWTypeHydroNet Installed Capacity 83 MWTypeHydroNet Installed Capacity 276 MWTypeHydroNet Installed Capacity 133 MWTypeHydroNet Installed Capacity 31 MWTypeThermoNet Installed Capacity 400 MWTypeThermoNet Installed Capacity 460 MWTypeHydroNet Installed Capacity 42 MWTypeHydroNet Installed Capacity 151 MW

Peru

Electricity Generation

The Company owns seven hydroelectric power plants, five in

Lima and two in Junín. Callahuanca hydro power plant has been

under reconstruction and out of service since June 15, 2017 be-

cause of the damage caused by flooding that occurred in March

of that year caused by the “El Niño Costero” phenomenon.

The hydroelectric power plants in Lima are located in the Rí-

Enel Américas S.A., through Enel Perú S.A.C. holds 83.60%

mac River basin. The Huinco Power Plant is located in the Santa

of Enel Generación Perú´s shareholding and 96.50% of Enel

Eulalia River basin, a tributary of the Rímac River. Its installed

Generación Piura, also through Enel Perú S.A.C., of which it is

capacity is 277.9 MW and the Matucana Power Plant is located

the owner of 100% of its shareholding capital.

in the Rímac River basin, with capacity of 137 MW. A large part

Other generators connected to the electrical system in Peru

town of Barba Blanca, where the Callahuanca Power Plant is

are: Electroperú, Engie Energía Peru and Kallpa Generación.

located, with an 84 MW capacity. The Moyopampa (68.7 MW)

of these rivers Is diverted through tunnels and channels to the

Enel Perú S.A.C.

Enel Perú S.A.C. is a company incorporated in Peru, whose

corporate purpose is to make investments in other compa-

nies, mainly in those dedicated to the exploitation of natural

resources and, especially, those related to electricity genera-

tion, production and sale; develop engineering projects for the

construction of power plants; activities related to the supply,

assembly and commissioning of equipment, facilities and / or

services for electricity production. Additionally, any other ac-

tivity related to the energy and water sectors.

Enel Generación Perú S.A.A.

and Huampaní (30.7 MW) power plants are located down-

stream. The total capacity of these six power plants is 593 MW.

The Callahuanca Hydraulic Power Plant re-entered the system

on March 30, 2019, after about 2 years of reconstruction, re-

habilitation and testing, because of the damage caused by

“huaycos” or the rain effect related to the “El Niño Costero”

phenomenon that took place in the month of March 2017.

The Company also owns 21 lagoons with 282,35 hm3 capacity

which permits it to regulate the energy generation flow and to

supply water to the city of Lima.

The two hydroelectric power plants are in the department of

Junín: Yanango with 42.4 MW, on the Tarma River; and Chimay,

with 151.3 MW installed capacity, on the Tulumayo River. Their

Enel Generación Perú S.A.A, is one of the main private electric-

total installed capacity is 193.7 MW. These two power plants

ity generation companies in Peru which operates through eight

are part of the Chinango subsidiary.

power plants, both thermoelectric and hydroelectric, located in

the departments of Lima and Junín.

Enel Generación Perú also owns three thermal power plants

with installed capacity of 224.3 MW, 187.8 MW and 469.4 MW,

The Company´s net installed capacity is 1,652 MW, (13% of the

respectively. The first one, Santa Rosa is located in the Cercado

total of the National Interconnected Electric System – herein-

de Lima, and is comprised by UTI units with 104.3 MW, TG7

after “SEIN”) where 47% corresponds to hydraulic generation

of 120 MW and Santa Rosa 2, also located in the Cercado de

and 53% to thermal generation, considering the Yanango (43

Lima and is made up by a TG8 unit with 187.8 MW. Ventanilla,

MW) and the Chimay (155 MW) plants, which since May 31,

the third power plant is in the Callao province, and consists of

2009 were divided to become part of Chinango S.A.C.

three combined cycle generation units. The Ventanilla thermal

Enel Generación Perú’s shareholding as of December 31, 2019

and is currently one of the six combined cycles in the system.

is as follows: 83.60% corresponds to Enel Perú S.A.C. (wholly

owned by Enel Américas), Prima AFP S.A. owns 5.92% of the

Our thermal power plants use natural gas from the Camisea de-

company´s shareholding and other shareholders hold the re-

posits as their first fuel option and main fuel, and the alternative

maining 10.48%.

fuel is diesel oil.

power plant was the first combined cycle installed in the SEIN

168

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In May 2019, new natural gas supply contracts were signed

in “natural gas mode”, in addition to its diesel fuel operation.

between the Ventanilla and Santa Rosa thermal power plants

Currently, it has an effective power of 127.78 MW.

with Camisea, following a negotiation with the Pluspetrol con-

sortium that began at the end of 2018. The duration of the new

Enel Generación Piura´s generation reached 658 GWh in

contracts is for a 10-year period and they were renewed after 15

20198, representing a 9.2% improvement as compared to the

years of continuous operation (2004-2019).

previous year. Energy sales totaled 658 GWh in December

2019, a 9.2% increase in relation to the same period of the

Total generation of Enel Generación Perú reached 7,586 GWh in

previous year.

2019, 1.1% more than the previous year. Energy sales totaled

10,541 GWh as of December 2019, representing a 5.5 % in-

crease as compared to the year before.

Enel Generación Piura S.A.

Generation Activities and
Projects

Enel Generación Piura carries out activities related to electri-

cal energy generation and sale and maintains its participation

in the natural gas business.

Activities and projects in
hydroelectric plants

The power plant is in the city of Talara, in northeastern Peru,

and the administrative area is in Lima. Its operations are car-

ried out within the concession area. The current legislation

permits the company to carry out any civil, industrial, com-

mercial activities and of any other nature related or that lead

to the main corporate purpose.

As of December 31, 2019, the Enel Generación Piura share-

holding was as follows: 96.50% controlled by Enel Perú S.A.C.

(Company wholly owned by Enel Américas) and other share-

holders own the remaining 3.5%.

Enel Generación Piura has three open cycle thermoelectric

generation plants, located in the Talara province, Piura depart-

ment, northern Peru.

The first one, Malacas, consists of a Siemens brand genera-

tion unit, SGT-800 model called TG6 whose effective power is

50.77 MW. This unit began its operating on February 25, 2017.

Malacas 2 consists of an ABB-brand generation unit, called

TGN-4 whose effective power is 105.38 MW. That unit began

operating in February 1998.

Finally, Malacas 3 consists of a Siemens-branded generation

unit, called TG-5, operating on B5 diesel fuel in an open cycle

as a Cold Reserve. On 4 July 2018, a new effective power of

187.46 MW of the unit was approved for diesel mode oper-

ation. Since August 2017, Coes Sinac approved its operation

Reconstruction of Callahuanca

After more than two years of continuous activities, in which

the technical criterion for the early recovery of the plant pre-

vailed, we successfully concluded the reconstruction of the

Callahuanca Hydroelectric Power Plant (83.3 MW), after its in-

frastructure was damaged by the “El Niño Costero” phenom-

enon in 2017. The company Invested more than 146 million

soles and managed to complete the activities with zero on

site accidents. The plant, located in the Huarochirí province,

was built in 1938 and produces about 600 GWh of clean ener-

gy per year, equivalent to the consumption of 450,000 homes.

Automation and telecontrol

In line with our digitization strategy, we have taken on the

challenge of automating our hydropower plants, whose aver-

age age is 50 years. The evaluation of the economic, technical,

and operational feasibility of this project has been carried out

in recent years with the overall support of the Enel Group, and

has considered the risks we face, the benefits for our compa-

ny and general operational synergies.

The automation and telecontrol project consists of three

phases: (i) constructing and implementing a new control cen-

ter located in the Moyopampa Hydroelectric Power Plant, from

where the operation of our hydroelectric plants will be con-

trolled, (ii) the automation of four hydroelectric plants (Huinco,

17. Description of the electricity business by country

169

Matucana, Moyopampa and Huampaní); and (iii) developing

which lasted approximately 30 continuous days and the par-

the appropriate connectivity of our hydroelectric plants with

ticipation of local and foreign companies, we extended the

the control center.

life of our generation unit by 25,000 hours and managed to

improve its reliability. This major maintenance was completed

In 2019, we completed the implementation of the control cen-

successfully and with zero on site accidents. With the partici-

ter, and the connectivity of automated power plants (Chimay,

pation of the Enel Group´s local and global areas we complied

Yanango and Callahuanca). At the end of 2019, the Company

with the safety and quality standards according to the estab-

made an investment of 19 million soles and we hope to com-

lished work plan.

plete the project in 2021.

Activities and projects in
thermoelectric plants

Construction of the first Energy
Storage System (BESS) in the
Ventanilla Thermal Power Plant

In 2019, we started the construction of a battery-based energy

storage system known as “Battery Energy Storage System”

(BESS), which permits to perform the primary frequency reg-

ulation (complementary service to keep energy under qual-

ity standards required by the electrical system). This project

seeks to explore new technologies in the complementary ser-

vices market and will make us the first company to implement

this type of state-of-the-art technological solutions in the Peru-

vian electrical system.

The system consists of eight Lithium-Ion battery banks, spe-

cially designed to provide a total capacity of 14.6 MW, and

its estimated investment is 29 million soles. It is considered

one of the most representative projects of the Enel Group’s

portfolio in Peru today.

Change of combustor to Dry Low
NOx (DLN) technology in TG4

Our commitment to reducing gas emissions and reducing wa-

ter usage in energy generation led us to exploring sustainable

initiatives to combat greenhouse gas emissions. In 2019, we

started a project aimed at changing our combustion chamber

in unit TG4, which currently uses a water injection system for

the reduction of emissions, for another using the so-called Dry

Low NOx (DLN) technology. This technology does not use wa-

ter and involves replacing the main burner and its auxiliary com-

ponents. These changes will lead to lower emission levels of

around 15-25 NOx in baseload generation, representing one of

the lowest levels obtained by current technologies which is in

line with Enel’s global policy to promote compliance with global

legal standards, as well as the use of cutting-edge technologies

to exceed the levels required in different countries.

This project will also significantly reduce water consumption in

power generation. Currently, the TG4 uses demineralized water

to control emissions, a consumption that will be reduced to

zero once the new combustor is installed.

In addition to this project, a Fogging System will be installed in

the air intake system, which will allow to recover active power

This energy storage system will be the first of this type to be

in the same unit.

implemented in the Peruvian electrical system.

Mayor maintenance in the
Ventanilla Thermal Power Plant

We hope to conclude the project in 2022 with a total invest-

ment of 29 million soles, which is part of the Company´s short-

term high-impact initiatives portfolio and will directly benefit the

neighboring communities of Malacas and Talara.

With an investment of more than 13 million soles the Compa-

ny completed the 125,000-hours maintenance of the TG3 unit

in the Ventanilla Thermal Power Plant. It was the fifth largest

maintenance service carried out during the life of the unit. It

Land reserved for future
projects

included changing critical turbine parts, as well as inspecting

burners and the electric generator. With this maintenance,

Enel Américas has no land reserved for future projects in Peru.

170

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Electricity
Distribution

Enel Américas S.A. through Enel Perú S.A.C. has an 83.15%

shareholding of Enel Distribución Perú.

Other distributors participating in the electrical system in Peru

are: Luz del Sur, Electrosur, and Grupo Distriluz.

Enel Distribución Perú S.A.A.

Enel Distribución Perú is the concessionaire of the public

electricity utility in the northern area of Metropolitan Lima. Its

concession area covers about 1,550 km2, extending over the

northern area of Metropolitan Lima, the constitutional prov-

ince of Callao and the provinces of Huaura, Huaral, Barranca

and Oyón, covering exclusively 52 districts of the above-men-

tioned provinces and another 5 in shared with the distribution

Company of the south area.

In 2019, our client base grew by 0.8% as compared to 2018,

reaching 1,433,638 clients. The distributed energy, including

tolls for 2019 totaled 8,211 GWh, 2.1% higher than the pre-

vious year.

Activities and projects in dis-
tribution

At the Enel Group, we constantly strive to improve our pro-

cesses and operations through digitization and technological

innovations.

In 2019 , the second phase of the LIDAR (Light Imaging, De-

tection, and Ranging) network was digitized permitting us to

simulate an image of our medium and low voltage networks,

and facilitate the identification of support poles of third-party

communication networks and home issues, avoiding potential

risks in the networks.

Taking advantage of the knowledge transfer available thanks

to the fact that we belong to a multinational group, we have

locally developed digital tools that improve the security and

efficiency of our processes, such as Smart Detect and SEDs

360 degrees.

Enel X projects in Peru

ON Energy Storage Project

In May 2019, Enel X Peru signed the Memorandum of Un-

derstanding (MoU) with ON Energy, a company dedicated to

designing, implementing, operating and maintaining battery

systems with operations in several countries around the con-

tinent. The document lays the foundations for cooperation for

the development of energy storage solutions in Peru, combin-

ing operational capacity and localized experience. It is the first

step in implementing such large-scale projects with a great

potential for the entire region. This MoU gives Enel X Peru the

opportunity to position itself as an early leader in the Peruvian

market. The Peruvian market requires this type of service as

some clients have an energy demand of monthly peaks of up

to 30-40% of their bills.

Peru´s first electric bus:

The Global Sustainable Electricity Partnership (GSEP) and

member companies, Enel X and Hydro-Québec, inaugurated

the first electric bus in Lima with the collaboration of Protrans-

porte and the Peruvian Ministries of Energy and Mines, Trans-

port and Communications, and the Environment. Transport

electrification can play an important role in meeting Peru’s

commitment to reduce its carbon footprint by 30% by 2030.

The 80-passenger electric bus will be operated by the Allin

Group, one of Protransporte’s local operators, along the Red

Corridor line (Main Avenue of Lima: Faucett-La Marina-Javier

Prado), one of the busiest urban arteries. Over the next two

years, the three partners will be responsible for maintaining

the cargo infrastructure that has been specifically designed

and built to permit the operation of this vehicle taking into

account the country´s and the city´s requirements. The pilot

project will collect for six months real-time information on

factors such as speed, occupancy, battery behavior, environ-

mental impact, comparisons with vehicles using diesel or gas,

among other parameters. This data will permit to create the

baselines and provide the necessary knowledge to adopt and

implement a massive electric transport system in Peru.

17. Description of the electricity business by country

171

First contract to improve public
lighting system for the San
Miguel Municipality:

It is a project that will improve public illumination in the San

Miguel district through an agreement signed in June 2019 to

install 138 LED lights. This is how Enel X’s B2G (Business to

Government) business line signed with the San Miguel Mu-

nicipality the first stage of the plan to install smart lights in

the district including main roads and parks in the district and

which are located in the proximity of the Municipality. The proj-

ect was implemented within a 60-day period as of September.

Seguros CHUBB becomes a
commercial partner and IGS an
assistance partner

In April 2019, the Swiss insurance company CHUBB with op-

erations in 53 countries, became a commercial partner. The

commercial relation began with the sale of three types of in-

surance: accidents, home, and life with 2,665 insurance pol-

icies sold.

At the same time, IGS became a healthcare partner and the

two companies designed dental, medical and funeral assis-

tance products at affordable prices for the Enel X client seg-

ment, selling 5,582 services in 2019.

Electric taxi project

Thanks to the cooperation between Enel X, the Chinese car

manufacturer BYD and the Peruvian Company Taxi Directo, a

pilot project was launched to implement two electric taxis in

Lima, the Peruvian capital. The taxis will run for six months to

collect all the necessary information about the performance

of the vehicles and then evaluate the inclusion of 30 more

electric cars into the fleet of the taxi company.

Enel X will install the charging stations, a Juicebox Pro 32 and

a Fast Charge while BYD will supply the two electric vehicles

that Taxi Directo will run and manage.

172

Annual Report Enel Américas 2019 e
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17. Description of the electricity business by country

173

174

Annual Report Enel Américas 2019 18.

SUSTAINABILITY

18. Sustainability

175

Context

The current framework within which our business is run is

dynamic and challenging and incorporates additional factors

to the traditional ones such as the climate crisis, new social

demands, demographic changes, and the digital revolution. To

meet these challenges and expectations of their stakehold-

ers, companies have had to rethink their strategies, innovate,

Sustainable
business
strategy

and put environmental, social and governance (ESG) aspects

For Enel, sustainability is synonymous with the creation of

at the center of their thoughts and actions. Consequently,

value developed through a model that integrates economic,

modern investors require a more holistic look at the invest-

environmental, social and governance objectives into the busi-

ment processes, increasingly evaluating companies´ ESG per-

ness plan and creates long-term value for all its stakeholders.

formance in their search for stable and long-term returns.

Given that the ESG variables have a lasting impact on busi-

able Development Goals (SDGs) that guides the management

ness, international entities such as IPCC and COPs see global

of all areas of the Company and its subsidiaries through spe-

warming as a priority because of their interconnected impacts

cific indicators.

This model is then embedded in a plan linked to the Sustain-

on the economic and social horizons as well as the environ-

mental one. Demographic changes pose challenges because

of an increasing urbanization and the need to develop sus-

tainable cities that improve the life quality of their inhabitants,

especially in Latin America, where 80% of people live in urban

areas. As stated by the United Nations, the urban population

growth requires paying more attention to such aspects of

modern life as accommodation, transport, energy, education

and health services and employment to meet citizens´ neces-

sities. From this point of view, electricity plays a crucial role as

an enabling factor for sustainable growth and progress.

These changes, coupled with the exponential development of

digital technologies, have redefined the purpose of the elec-

trical industry, called to be a major player in energy transition.

As a way of leading this transition, Enel Américas has focused

its investments on digitization with the development of eco-

systems and platforms, as a way of both giving new uses to

energy and overcoming energy poverty, which mainly affects

the outlying areas of large cities.

Sustainabi-
lity in
business
Dimension

Aware of the role that the Company plays through its busi-

ness, in contributing to resilience to climate change and social

phenomena related to urbanization, Enel Américas bases its

services on low carbon services through the electrification of

cities, quality services and network digitization, as well as on

electricity generation mainly from renewable sources, leading

the transition to low carbon economies in the countries where

it operates.

176

Annual Report Enel Américas 2019 Growth through low carbon
technologies and services: the role of
electrification and power generation

Enel Américas’ investments have been focused on increasing the efficiency of its assets and operating standards, mainly the

expansion of distribution networks and on clients through new connections and more services.

Total capex

Total capex by business

Total capex by country

34%

29%

11%

21%

US$ 5.3 bn

10%

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37%

Asset Development
Asset Management
Customers

81%

Gx
I&N
Retail
Enel X

56%

Argentina
Brazil
Colombia
Peru

14%

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Enel Américas has focused its operations on power generation based on hydroelectric technologies accounting for 55% of its

total capacity.

This energy industry transformation process must place the client in the center and encourage new electricity uses in a more effi-

cient and accessible way. With this in mind, Enel Américas is driving electro-mobility, energy efficiency and greater grid resilience,

as a way forward in the decontamination of cities.

Performance measurement indicators in low carbon technologies

ODS

7,13

7, 13

7, 11

7, 13

9, 11

Indicator

% of installed capacity with renewables

% of generation with renewable sources

Reduction of specific emissions gCO2/Kwheq

Number of clients (million))

MW demand response

Installed photovoltaic systems (MWp

Managed light points (thousands)

9, 11,

Innovation & Infrastructure, through Charging Points (#PoC)

18. Sustainability

2019

162

24.7

417

357

Results

2018

170

24.5

411

221

2017

192

17.2

N/A

177

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In 2019, 61% of Enel Américas’ power generation came from

renewable technologies, where the geographical diversifica-

tion of our generation plants allows us to take advantage of

the differences in hydrology, affected, to varying degrees, by

climate change.

At the same time, to capitalize on the opportunities of electri-

fication of cities, the Company, through Enel X, invests in solu-

tions and services for new and efficient energy uses, in the

infrastructure necessary to develop electro-mobility and elec-

trical services for clients, whose base has increased steadily

with the incorporation of Enel Distribución São Paulo in 2018.

Operative
improvement for
quality service

Network development is critical to increasing the resilience

and reliability of power supply and delivering quality services.

Therefore, the Company has focused its investments on the

digitization of networks and assets.

In the generation area, Enel Américas continuously makes im-

portant investments to incorporate the latest advances in in-

novation, digitization, robotization, automation, different data

driven and predictive maintenance technologies in its gener-

ating park. This has permitted us to use resources more effi-

ciently and to improve the management of our assets, while

maintaining excellent performance.

Indicators to measure service
quality

Value chain

One of the pillars of our business sustainability is a sustain-

able supply chain. That is why we share a common purpose

with our suppliers to create value from the same long-term

perspective. We constantly reduce the risks related to social,

environmental, and occupational safety breaches, also re-

warding best practices.

Sustainability measurement
indicators in the supplier
chain

Results

ODS Indicator

2019

2018

2017

Evaluation of health and safety
suppliers.

Evaluation of suppliers in
environmental performance.

Evaluation of suppliers in
human rights.

100%

N/A

100%

N/A

100%

N/A

Sustainabi-
lity in the
social
dimension

ODS

Indicator

9 11 Number of clients (million))

9, 11, Total Loss index 1

9, 11 SAIDI (minutes)

9, 11 SAIFI (times)

Results

2018

24.5

787

2019

24.7

747

2017

17.2

1,085

Involving our
people

At the time of energy transition and the resulting transforma-

tion of the business model, people in companies play a key

role in tackling technological and innovation challenges. That

1 Total loss corresponds to high, medium, and low voltage and include commercial losses and those caused by theft.

178

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% of employees involved in
digital skills dissemination
activities

Gender diversity (% of
women)2

Participation of women in
selection short lists (% of all
candidates)

Work environment survey
(employee participation)3

Employees referring to
colleagues with disabilities

Work flexibility – Smart
Working4 (Number of
employees)

5, 10

is why training employees in new skills, overcoming barriers

to achieve a more inclusive company and providing tools for a

new role in the energy market are vital instruments to create

long-term value.

Indicators to measure initia-
tives focused on local devel-
opment

Indicators to measure sus-
tainable development in the
work environment

ODS

Indicator

2019

2018

2017

Results

N/A

ODS Indicator

2019

2018

2017

Results

Access to clean and affordable
energy (thousands of
beneficiaries accumulated
since 2015)

Economic development and
decent work (thousands of
beneficiaries accumulated
since 2015)

Inclusive, equitable and
quality education (thousands
of beneficiaries accumulated
since 2015)

4,042

2,995

1,575

522

354

288

383

345

316

N/A

100%

N/A

81%

Health and Safety

1.108

810

466

assets seeking to reduce accident rates in all the countries

Enel Américas considers people´s health and safety its most

Involving local
communities

Enel Américas considers the constant relationship with com-

munities a pillar of its business sustainability. Permanent di-

alogue, symmetry of information and transparency are nec-

essary foundations to reach consensuses with stakeholders.

where we operate in the case of both our own and third-party

employees. With this in mind, we develop and promote safety

culture by highlighting both self-care and the definition of pol-

icies, integration of safety in processes, training, quality con-

trol, accident analysis and exchanges of best practices. More

details in the Occupational Health and Safety section.

Health and safety measure-
ment indicators

ODS

Indicator

2019

2018

2017

Results

Enel Américas operates in territories where it works with ded-

icated community relations teams.

Lost-Time Injury Frequency
Rate (LTIFR) own employees
and contractors

0.69

0.99

1.00

Focusing on local development, the Company implements in-

clusive and participatory projects that seek to bridge the gaps

in multidimensional poverty investing in improving people´s

access to clean and affordable energy, economic develop-

ment, and quality education. This way, synergies between so-

cial progress and corporate performance can be forged.

2 The decrease is explained by the incorporation of Enel Distribución São Paulo in 2018.
3 It takes place every two years.
4 Smartworking is a program that allows Enel Chile´s and its subsidiaries´ employees to select one day per week, either Tuesday or Thursday, to work
remotely from their home or any physical place that offers good internet connection and complies with security standards.

18. Sustainability

179

ESG analysis
methodology
(environmental,
social and
governance)

Materiality analysis and
stakeholder prioritization

Enel Américas acts according to the methodology adopted by

the Enel Group that complies with GRI international standards

(Global Reporting Initiative). One of the main focuses of these

standards is to put stakeholders at the center of both actions

and Ideas when establishing the Company’s strategic issues.

Therefore, the company caries out the process of their identi-

fication and prioritization directly Involving the entire Company

and its subsidiaries. The result of this work is the identification

of the relevant groups that are consulted about their priorities

and expectations regarding the Company. The Company es-

tablishes its strategic priorities in the same way.

Based on the above, the Company´ defines its materiality

which, in turn, governs our strategic planning which we inform

in the different public reports.

Enel Américas´ Materiality Matrix 5.

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Economic and financial value creation

Costumer engagement

Sound governance andfair corporate conduit

Energy distribution

Engaging the local communities

New technologies and solutions

Environmental management

Decarbonization of the energy mix
Occupational health and safety
Employees management, development & motivation
Sustainable supply chain
Innovation and digital transformation

Priority of Issues for Stakeholder

5 The final materiality matrix indicates which issues are a priority for our stakeholders and at the same time strategic for the Company. The
information it provides serves as an input for the formulation of the sustainability plan, which is updated annually.

180

Annual Report Enel Américas 2019

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ESG Risk Analysis

ESG risks are an integral part of the risk management policy,

as described in the Risk Factors section, and are identified with

the following references:

• Most rlevant issues to consider in materiality, identified accord-

ing to the 2020 Global Risk Report, implemented by the

World Economic Forum (WEF).

• Risk assessments carried out in the context of the human

rights due diligence process and integrated management

systems (environmental, quality and safety) among others.

• Analysis carried out by the most prestigious international sus-

tainability rating agencies, which use specific risk assess-

ment systems to define the Company´s performance levels

in terms of ESG.

Due Diligence in
Human Rights

The Enel Group is committed to the principles that safeguard

and promote the protection of human rights, a fact that is re-

flected in the policy approved by the Board in 2013.

In line with the UN guidelines, Enel Américas has been con-

ducting a fundamental human rights due diligence process

since 2017 which involves the entire value chain and seeks to

identify potential violation risks within the scope of its opera-

tions and to establish redress mechanisms to bridge potential

gaps.

Creating Long-
term economic
value

The value created by our sustainable business strategy is re-

flected in the economic indicators by which we measure our

performance.

Low carbon products and services
EBITDA (MM$)

Low carbon products and services
CAPEX (MM$)

Ratio of Low carbon products and
services Capex in relation to total (%)

Shareholder Remuneration (US$ per
share)

2019

2018

2017

2,490

2,954

3,510

1,524

1,556

1,498

0.0106

0.0084

0.0062

Market
recognition
- rating and
sustainability
indices

Analysts specializing in sustainable investment evaluate com-

panies according to their ESG performance or, more general-

ly, in sustainability. These assessments are key tools for the

Company to improve or reorient the management of its core

business while allowing investors to integrate non-financial

information (ESG) into their business decisions.

In 2019, Enel Américas improved its position in most ratings

and sustainability indices, including:

• We are part of the 10% of the best electric utility com-

panies in the world, according to the Dow Jones Sus-

tainability Index (DJSI) which ranked us in 11th position

in the DJSI Chile, DJSI MILA Pacific Alliance and DJSI

Emerging Markets indices. We were also included for the

second time in the RobecoSAM Sustainability Yearbook

and recognized in the bronze category as the only Chil-

ean Company, together with Enel Chile, to receive these

distinctions and be present in three indices.

• For the third consecutive year, Enel Américas was con-

firmed in the FTSE4Good “Emerging Markets Index” and

“Latin America Index” categories.

• Enel Américas was included for the second consecutive

year in the Best Emerging Markets Performers ranking in

the utilities sector, evaluation carried out by Vigeo Eiris.

•

In 2019, Enel Américas was ranked AA by MSCI, as part of

the various sustainability stock indices offered by this entity.

• Enel was placed in the 70th percentile under the new

Sustainalytics risk methodology.

18. Sustainability

181

182

Annual Report Enel Américas 2019 19.

SUMMARY
OF SHAREHOLDINGS

19. Summary of shareholdings

183

Direct and Indirect
Economic Participation

Business

Ownership

Gx, Dx

40.25%

100.00%

72.09%

99.92%

99.96%

75.62%

65.69%

100.00%

36.04%

33.33%

16.98%

25.37%

Business

Ownership

Gx, Dx, Tx

99.73%

99.75%

100.00%

74.05%

100.00%

99.93%

100.00%

Argentina

Central Dock Sud S.A.

Compañía de Transmisión del Mercosur S.A.

Empresa Distribuidora Sur S.A.

Enel Argentina S.A.

Enel Trading Argentina S.R.L.

Enel Generación Costanera S.A.

Enel Generación El Chocón S.A.

Transportadora de Energía S.A.

Sacme S.A.

Yacylec S.A.

Central Térmica Manuel Belgrano

Central Térmica San Martin

Central Vuelta Obligado S.A.

Brasil

Enel Distribución Río S.A.

EGP Cachoeira Dourada S.A.

Enel Generación Fortaleza S.A.

Enel Cien S.A.

Enel Distribución Ceará S.A.

Enel Brasil S.A.

Enel X Brasil S.A.

Enel Distribución Goias S.A.

Enel Distribución Sao Paulo S.A.

Enel Green Power Proyectos I (Volta Grande)

Central Generadora Fotovoltaica Sao Francisco Ltda.

Enel Tecnología de Redes S.A.*

Enel Trading Brasil S.A. **

Nuxer Trading S.A.

184

Annual Report Enel Américas 2019 Colombia

Compañía Distribuidora y Comercializadora de Energía S.A.

Emgesa S.A. E.S.P.

Enel X Colombia S.A.S

Perú

Enel Perú S.A.C.

Chinango S.A.C.

Enel Generación Perú S.A.

Enel Distribución Perú S.A.

Enel Generación Piura S.A.

Compañía Energética Veracruz S.A.C.

Enel X Perú S.A.C. ****

Gx: Generation
Dx: Distribution
Tx: Transmission / Commercialization
Ox: Gas pipelines and others

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Business

Ownership

Business

Gx, Dx

48.30%

48.48%

48.30%

Ownership

100.00%

66.88%

83.60%

83.15%

96.50%

100.00%

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19. Summary of shareholdings

185

Perimeter of Enel
Américas’ corporate
shareholdings

ENEL

AMÉRICAS S.A.

48.481619%

5.049462%

48.302608%

Emgesa S.A

94.94084%

Sociedad Portuaria
Central
Cartagena S.A.

Inversora
Codensa S.A.S.

100%

Codensa S.A.

Enel Generación

Chile S.A.

100%

ENEL Perú

S.A.C.

99.999967%

Compañía

Energética

Veracruz S.A.C.

ENEL X
Colombia S.A.S.

100%

Central
Dock Sud S.A.

0.2509%

69.9925%

ENEL
Generación
Costanera S.A.

75.6813%

57.141692%

Inversora
Dock Sud S.A.

33.33333%

Yacilec S.A.

1.42%

Termoeléctrica
Manuel
Belgrano S.A.

5.326%

1.42%

Termoeléctrica
José de
San Martín S.A.

6.40%

Central Vuelta de
Obligado S.A.

5.326%

1.3%

18.85%

33.2%

8.674093 %

ENEL
Generación El
Chocón S.A.

59.00%

41.941145%

Hidroinvest S.A

54.757107%

Chile

Argentina

Brazil

Peru

Colombia

Uruguay

186

0.079318%

ENEL

Argentina S.A.

99.920682%

44.996467%

55.003533%

ENEL Trading

Argentina S.R.L.

ENEL

Generación

Perú S.A.

80%

Chinango

S.A.C.

83.151796%

83.597016%

96.496857%

ENEL

Distribución

Perú S.A.

ENEL

Generación

Piura S.A.

100%

Compañía

Energética

Veracruz S.A.C.

Distrilec

Inversora S.A.

51.50%

99.999999%

ENEL

Brasil S.A.

99.926465%

Enel Distribución

Goiás S.A.

56.357697%

74.051061%

99.734188%

ENEL

Distribución

Ceará S.A.

43.097063%

Edesur S.A.

50%

SACME S.A.

0.001%

TESA S.A.

99.999%

CTM S.A.

99.999%

ENEL

Distribución

Río S.A.

ENEL

Generación

Fortaleza S.A.

0.0001%

ENEL X

Brasil S.A.

100%

EGP Cachoeira

Dourada S.A.

99.754055%

100%

Enel Distribución

São Paulo S.A.

100%

99.9999%

EGP PROJETOS I

(Volta Grande)

100%

Central Geradora

Fotovoltaica

Sao Francisco Ltda.

ENEL CIEN

S.A.

100%

Enel Tecnología

de Redes S.A.

Nuxer

Trading S.A.

100%

Enel Trading

Brasil S.A.

Annual Report Enel Américas 2019

Perimeter of Enel

Américas’ corporate

shareholdings

48.481619%

5.049462%

48.302608%

Emgesa S.A

94.94084%

Sociedad Portuaria

Central

Cartagena S.A.

Inversora

Codensa S.A.S.

100%

Codensa S.A.

ENEL X

Colombia S.A.S.

100%

Central

Dock Sud S.A.

0.2509%

69.9925%

ENEL

Generación

Costanera S.A.

75.6813%

57.141692%

Inversora

Dock Sud S.A.

33.33333%

Yacilec S.A.

1.42%

Termoeléctrica

Manuel

Belgrano S.A.

5.326%

1.42%

Termoeléctrica

José de

San Martín S.A.

5.326%

1.3%

6.40%

Central Vuelta de

Obligado S.A.

18.85%

33.2%

ENEL

8.674093 %

Generación El

Chocón S.A.

59.00%

41.941145%

Hidroinvest S.A

54.757107%

Chile

Argentina

Brazil

Peru

Colombia

Uruguay

ENEL
AMÉRICAS S.A.

Enel Generación
Chile S.A.

100%

ENEL Perú
S.A.C.

99.999967%

Compañía
Energética
Veracruz S.A.C.

0.079318%

ENEL
Argentina S.A.

99.920682%

44.996467%

ENEL Trading
Argentina S.R.L.

55.003533%

ENEL
Generación
Perú S.A.

80%

Chinango
S.A.C.

83.151796%

83.597016%

96.496857%

ENEL
Distribución
Perú S.A.

ENEL
Generación
Piura S.A.

100%

Compañía
Energética
Veracruz S.A.C.

Distrilec
Inversora S.A.

51.50%

99.999999%

ENEL
Brasil S.A.

99.926465%

Enel Distribución
Goiás S.A.

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56.357697%

43.097063%

Edesur S.A.

50%

SACME S.A.

0.001%

TESA S.A.

99.999%

CTM S.A.

99.999%

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ENEL
Distribución
Ceará S.A.

74.051061%

99.734188%

EGP Cachoeira
Dourada S.A.

99.754055%

100%

Enel Distribución
São Paulo S.A.

100%

99.9999%

ENEL
Distribución
Río S.A.

ENEL
Generación
Fortaleza S.A.

0.0001%

ENEL X
Brasil S.A.

100%

EGP PROJETOS I
(Volta Grande)

100%

Central Geradora
Fotovoltaica
Sao Francisco Ltda.

ENEL CIEN
S.A.

100%

Enel Tecnología
de Redes S.A.

Nuxer
Trading S.A.

100%

Enel Trading
Brasil S.A.

19. Summary of shareholdings

187

188

Annual Report Enel Américas 2019 20.

IDENTIFICATION OF
SUBSIDIARIES AND
ASSOCIATE COMPANIES

20. Identification of subsidiaries and associate companies

189

CENTRAL DOCK SUD S.A.

Company Name
Central Dock Sud S.A.

Type of Company
Limited Liability Company

Address
Avenida Debenedetti 1636
Dock Sud Avellaneda

Phone
4229-1000

Subscribed and paid-in capital (US$
thousand)
356,221

Human Resources and General Services
Manager
Leonardo Limoli
Commercial Manager
Fabián Mario Cabana
Operations Manager
Graciela Babini
Planning and Control Manager
Sebastián Ortiz
Acquisitions and Stores Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. - 1.22%

Subscribed and paid-in capital (Thousand
US$)
20,560,67

Company Name
Central Vuelta Obligado S.A.

CENTRAL VUELTA OBLIGADO S.A.

Corporate purpose
The company’s purpose is electricity
generation and its block sale. It may carry
out any supplementary and additional
activities linked to its corporate purpose and
has full legal capacity to acquire rights and
commit obligations and carry out all actions
not forbidden by law, by these by-laws, the
Document of the International Public Tender for
the Sale of Central Dock Sud S.A’s Shares, or
by any other applicable regulation.

Core activities
Electricity generation

Héctor Martín Mandarano
Chairman
Santiago Matías Sajaroff
Vice-president

Regular directors
Juan Carlos Blanco
Michele Siciliano
Mónica Diskin
Jorge Esteban Ravlich
Andrea Biasotto
Rodolfo Eduardo Berisso
Rodolfo Heriberto Freyre

Alternate Directors
Alejandro Aníbal Avayu
Patricio Javier Cipollone
Nicola Melchiotti
Rodrigo Quesada
Sebastián Torres
Claudio César Weyne da Cunha
Juan Manuel Alfonsin
Maria Elizabeth Thouldjian

Senior Management
Juan José Marcet
General Manger
Verónica Susana Balletto
Finance Manager
Natalia Nicali

190

Type of Company
Limited Liability Company

Address
Av. Thomas Edison 2701
Buenos Aires, Argentina

Phone
(5411) 5533 0200

Subscribed and paid-in capital (Thousand
US$)
8.35

Corporate purpose
The company’s purpose is rlectricity generation
and its block commercialization particularly
equipment purchases, construction, operation
and maintenance of a thermal power plant
named Vuelta de Obligado complying with
“Management and Operation of Projects,
Increase of Thermal Generation Availability and
Generation Compensation Adaptation 2008-
2011 Agreement” signed on November 25,
2010 by the National State and the subscribing
generation companies.

Core activities
Construction of a thermal power plant called
Central Vuelta de Obligado.

Regular Directors
Leonardo Pablo Katz (Chairman)
Adrián Gustavo Salvatore (Vice-president)
Michele Siciliano
Mónica Diskin

Alternate Directors
Leonardo Marinaro
Ignacio Villamil
Andrea Biasotto
Juan Carlos Blanco
Senior Management
Leonardo Pablo Katz
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A

CHINANGO S.A.C.

Company name
Chinango S.A.C.

Type of Company
Limited Liability Company

Address
Calle César López Rojas N° 201, Urb. Maranga,
San Miguel
Lima, Perú

Subscribed and paid-in capital (Thousand
US$)
80.333,00

Corporate purpose
The company’s purpose is electricity
generation, sale and transmission, The
company may carry out any activity and may
also enter Into all contracts permitted under
Peruvian law for such purposes.

Core activities
Electricity generation.

General Manager
Enel Generación Perú S.A.A., represented by
Eugenio Calderón López

Commercial relations
The company has no commercial relation with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.02%

CODENSA S.A. E.S.P.

Company name
CODENSA S.A. E.S.P.
NIT: 830.037.248-0

Type of Company
Limited Liability Company– Residential public
utility company.

Address
Carrera 13 A No. 93-66
Bogotá D.C, Colombia

Telephone
(57 1) 601 6060

Subscribed and paid-in capital (Thousand
US$)
4,106,10

Corporate purpose
The company’s main purpose is the distribution
and sale of energy, as well as other similar,
connected, complementary and related

Annual Report Enel Américas 2019 activities in electricity distribution and sale; the
implementation, design and consultancy of
electrical engineering works, sale of products
for the benefit of clients. The company may
also carry out other activities related to the
supply of public services in general, manage
and operate other utility companies, sign and
Implement special management agreements
with other utility companies and sell or loan
goods or services to other economic agents
related with utilities, in or out of the country
and related to public services. . The company
may also participate in other utility companies
as a partner or a shareholder, directly or in
partnerships with other persons, or in joint
ventures.

Core activities
Electricity distribution and sale

Regular Directors
Andres Caldas Rico
Jose Antonio Vargas Lleras
Lucio Rubio Diaz
Andrés Baracaldo Sarmiento
Felipe Castilla Canales
Gustavo Moreno Montalvo
Andrés López Valderrama

Alternate Directors
Carlos Mario Restrepo
Leonardo Lopez Vergara
Michele Di Murro
Gloria Astrid Álvarez Hernández
Freddy Iván Ussa Lizarazo
Daniel Rodríguez Ríos
Mario Antonio Cajiao Pedraza

Senior Management
Francesco Bertoli
General Manager
Francesco Bertoli
Infrastructure and Networks Manager
Andres Caldas Rico
Legal and Corporate Affairs Manager
Carlos Mario Restrepo
Enel X Manager
Michele Di Murro
Administration, Finance and Control Manager
Maria Celina Restrepo Santamaría
Communications Manager
Rafael Carbonell Blanco
Human Resources and Organization Manager
Diana Marcela Jimenez
Regulations and Institutional Relations Manager
Eugenio Belinchon
Audit Manager
Raúl Fernando Vacca Ramírez
Procurement Manager
Ana Patricia Delgado Meza
Digital Solutions Manager
Ana Lucia Moreno Moreno
General Services and Security Manager
Gian Paolo Daguer
Sustainability Manager

COMPAÑÍA ENERGÉTICA VERACRUZ S.A.C.

Company name
Compañía Energética Veracruz S.A.C.

Type of Company
Limited Liability Company

Alternate Directors
Nicola Melchiotti
Claudio Cesar Weyne Da Cunha
Jorge Lemos

Senior Management
Sandro Ariel Rollan
General Manager

Address
Calle César López Rojas N° 201, Urb. Maranga,
San Miguel
Lima, Perú

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Subscribed and paid-in capital (Thousand
US$)
870.06

Shareholding of Enel Américas S.A. 0.03%

Corporate purpose
Develop and operate hydroelectric projects in
any river basin in Peru.

Company name
Distrilec Inversora S.A.

DISTRILEC INVERSORA S.A.

Core activities
Holder of the Veracruz hydroelectric project.

Type of Company
Limited Liability Company

General Manager
Claudio Helfmann Soto

Address
San José 140
Buenos Aires, Argentina

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Telephone
(54 11) 4370 3700

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Shareholding of Enel Américas S.A. 0.07%

CTM Compañía de Transmisión del
Mercosur S.A.

Company name
Compañía de Transmisión del Mercosur S.A.

Type of Company
Publicly Traded Company incorporated in the
city of Buenos Aires, Argentina

Address
Bartolomé Mitre 797, piso 11, Ciudad
Autónoma de Buenos Aires, Argentina

Subscribed and paid-in capital (Thousand
US$)
1.669,87

Corporate purpose
The purpose of the company is to supply high-
tension electricity transmission services, both
for national and international electrical systems
under current legislation. The company may
participate in national or international tenders,
become a high-tension electricity transmission
concessionaire, locally or abroad, and engage
in such activities as may be deemed necessary
for its corporate purpose.

Core activities
International interconnected electricity
transmission.

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Subscribed and paid-in capital (Thousand
US$)
8.309,49

Corporate purpose
The company´s exclusive purpose is to invest
capital in established companies or ones to be
established whose main activity is electricity
distribution or which directly or indirectly
participate in companies whose principal
activity is electricity distribution by carrying out
all kinds of financial and investment activities,
except for those provided for by laws of
financial entities, the purchase and sale of
public and private securities , bonds, stocks,
negotiable bonds and loans, and the placement
of funds in bank deposits of any kind.

Core activities
Investment company

Regular Directors
Nicola Melchiotti
Chairman
Mónica Diskin
Leonel Sánchez
Claudio Da Cunha
Guillermo P. Reca
Andrés L. Vittone
Gonzalo Péres Moore
Victor J. Díaz Bobillo
Rubén López

Alternate Directors
Sandro Rollan
M. Victoria Ramirez
Hernán Alberto Rey
Fernando Boggini
Juan Manuel Pazos
Rubén Vázquez
Pablo Javier Viboud
Patricio Jorge Richards
Leonardo Marinaro

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 7.41%

Regular Directors
Juan Carlos Blanco
Chairman
Mónica Diskin

20. Identification of subsidiaries and associate companies

191

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 0.03%

Emgesa S.A. E.S.P.

Company name
Emgesa S.A. E.S.P.
NIT 860.063.875-8

EDESUR Empresa Distribuidora Sur S.A.

Company name
Empresa Distribuidora Sur S.A.

Type of Company
Private Commercial Corporation.
Public Utilities Company

Address
Carrera 11 N°82-76, piso 4
Bogotá, D.C. Colombia

Procurement Manager
Ana Patricia Delgado Meza
Digital Solutions Manager
Ana Lucia Moreno Moreno
General Services and Security Manager
Gian Paolo Daguer
Sustainability Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 9.34%

Type of Company
Publicly Traded Company

Address
San José 140 (1076)
Capital Federal, Argentina

Telephone
(54 11) 4370 3700

Subscribed and paid-in capital (Thousand
US$)
15,005.23

Corporate purpose
Electricity distribution and sale and similar
operations.

Subscribed and paid-in capital (Thousand
US$)
199,473.42

Corporate purpose
The company’s purpose is electricity
generation and sale and the sale of fuel gas,
as well as other activities that are similar,
connected, supplementary and related to its
main corporate purpose, including liquid fuels
produced from petrol for energy generation
purposes, and also imports of natural gas for
energy generation and/or its commercialization
and (ii) participation in energy commodities
financial derivatives markets.

ENEL ARGENTINA S.A.

Company name
Enel Argentina S.A.

Type of Company
Publicly Traded Company

Address
Av. España 3301
Buenos Aires, Argentina

Telephone
(5411) 4307 3040

Core activities
Electricity distribution

Regular Directors
Juan Carlos Blanco
Chairman
Nicola Melchiotti
Vice-president
Claudio César Weyne Da Cunha
Gonzalo Peres Moore
Victor José Díaz Bobillo
Mónica Diskin
Ernesto Pablo Badaraco
Jaime Barba

Alternate Directors
To be filled
To be filled
Hernán Alberto Rey
Andrés L. Vittone
Ruben Omar López
Mauricio BarretoTo be filled
María Victoria Ramirez
Jorge Lemos

Senior Management
Gianluca Palumbo Fanizzi
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 5.85%

192

Core activities
Electricity generation and sale and fuel gas
sales

Subscribed and paid-in capital (Thousand
US$)
38,368.88

Corporate purpose
The company’s purpose is to invest in
companies dedicated to electrical energy
production, transmission and distribution of
electricity and its sale, as well as financial
activities except those prohibited to banks
under valid legislations.

Core activities
Investment company

Regular Directors
Juan Carlos Blanco
Chairman
Mónica Diskin

Alternate Directors
Nicola Melchiotti
Jorge Lemos
María Victoria Ramírez

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 4.21%

Regular Directors
Andrés Caldas Rico
Lucio Rubio Diaz
Jose Antonio Vargas Lleras
Gloria Astrid Álvarez Hernandez
Álvaro Villasante Losada
Luis Fernando Alarcón Mantilla
Luisa Fernanda Lafaurie Rivera

Alternate Directors
Diana Marcela Jiménez Rodríguez
Fernando Javier Gutierrez Medina
Michele Di Murro
Andrés Baracaldo Sarmiento
Felipe Castilla Canales
Rodrigo Hernán Galarza Naranjo
Maria Paula Camacho Rozo

Senior Management
Marco Fragale
General Manager
Marco Fragale
Power Generation Manager
Andres Caldas Rico
Legaland Coporate Affairs Manager
Fernando Javier Gutierrez Medina
Energy Management Manager
Michele Di Murro
Administration, Finance and Control manager
Maria Celina Restrepo Santamaría
Communications Manager
Rafael Carbonell Blanco
Human Resources and Organization Manager
Diana Marcela Jimenez Rodriguez
Regulations and Institutional Relations Manager
Eugenio Belinchon
Audit Manager
Raúl Fernando Vacca Ramírez

Annual Report Enel Américas 2019 e
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ENEL BRASIL S.A.

Company name:
Enel Brasil S.A.

ENEL CIEN S.A.

Company name:
ENEL CIEN S.A.

Type of Company:
Privately Held Corporation

Address:
Praça Leoni Ramos, N°1, 7° andar, bloco 2
Parte, Niterói, Río de Janeiro, Brasil

Address:
Praça Leoni Ramos, N° 1, piso 6, Bloco 2, São
Domingos, Niterói
Rio de Janeiro, Brasil

Telephone:
(55 21) 3607 9500

Subscribed and paid-in capital (Thousand
US$):
70,858.87

Corporate purpose:
The company´s purpose is to participate in the
production, industrialization, distribution, and
marketing of electricity, including importing and
exporting activities. To achieve its purpose,
the company will promote the study, planning
and construction of the facilities related to
energy production, transmission, conversion
and distribution systems, making and
capturing the necessary investments for the
development of the works aimed at providing
such services. The company may also promote
the implementation of associated projects,
such as activities inherent, additional, or
complementary to the company´s services and
work. To achieve its purposes, The company
may participate in other companies.

Core activities:
Energy transport

Company without a management committee
(board)

Senior Management:
Guilherme Lencastre (General Manager)
Raffaele Grandi
Anna Paula Hiotte Pacheco
Déborah Meirelles Rosa Brasil
José Nunes de Almeida Neto
Janaina Savino Vilella Carro
Margot Frota Cohn Pires

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.89%

Telephone:
(5521) 3607 9500

Subscribed and paid-in capital (Thousand US$):
4,143,033.84

Corporate purpose:
The company’s purpose is to participate in
the shareholding of other companies, in any
segment of the electricity or gas sectors,
including commercial companies or the
supply of services to companies operating in
those sectors, in Brazil or abroad; the supply
of transmission, distribution, generation or
marketing services for electricity and related
activities, as well as imports, exports and trading
of natural gas in any physical condition for own
or third-party use; and to participate, individually
or through joint venture, company, consortium
or other similar forms of partnership, in tenders,
projects and ventures for the development of
the services and activities mentioned above.

Core activities:
Investment company

Board:
Mario Fernando de Melo Santos
Chairman
Antonio Basilio Pires de Carvalho e
Albuquerque
Vice-president
Aurelio Ricardo Bustilho de Oliveira

Senior Management:
Nicola Cotugno
General Manager
Raffaele Grandi
Antonio Basilio Pires de Carvalho e
Albuquerque
Alain Rosolino
Anna Paula Hiotte Pacheco
José Nunes de Almeida Neto
Janaina Savino Vilella Carro
Flávia da Silva Baraúna
Margot Frota Cohn Pires
Márcia Massotti de Carvalho
Luis Alonso Campos Rivas
Guilherme Gomes Lencastre
Cristine de Magalhães Marcondes
Carlos Omar Arriagada Retamal
Roberto Zanchi
André Osvaldo dos Santos
Bruno Franco Cecchetti

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 59.38%

ENEL DISTRIBUCIÓN CEARÁ S.A.
COELCE (Companhia Energética do Ceará
S.A.)

Company name:
Companhia Energética do Ceará

Type of Company:
Publicly Traded Company

Address:
Rua Padre Valdevino, 150 - Centro
Fortaleza, Ceará, Brasil

Telephone:
(55 85) 3453-4082

Subscribed and paid-in capital (Thousand
US$):
200,920.99

Corporate purpose:
The company´s purpose is the production,
transmission, distribution and trading of
electricity, implementation of correlated
services granted or authorized to them and
the development of activities associated with
services, such as related commercial activities.

It may also carry out studies, planning,
projects, construction and operation of energy
production, transformation, transport and
storage, distribution and trading systems of any
origin or nature, in the form of concessions,
authorizations and permits granted to them
under the jurisdiction in the territorial area of
the State of Ceara, and other areas defined by
the granting authority. The company may also
carry out studies, projects and implementation
of plans and program to research and
develop new energy sources, in particular
renewables and the study, development
and implementation, in the energy sector, of
economic and social development plans and
programs in the regions of the company´s and
community interest.

Core activities:
Distribution and sale of electricity and related
services in the State of Ceará, Brazil

Regular Directors:
Mário Fernando de Melo Santos
Chairman
Nicola Cotugno
Vice-president
Teobaldo José Cavalcante Leal
Guilherme Gomes Lencastre
Cristine de Magalhães Marcondes
Francisco Honório Pinheiro Alves
Fernando Augusto Macedo de Melo
João Francisco Landim Tavare

Alternate Directors:
José Nunes de Almeida Neto
Márcia Massotti de Carvalho
Monica Hodor
Maria Eduarda Fischer Alcure
Michelle Rodrigues Nogueira
Dilma Maria Toledo
Artur Teixeira Neto

20. Identification of subsidiaries and associate companies

193

Senior Management:
Charles de Capdeville (General Manager)
José Távora Batista
Teobaldo José Cavalcante Leal
José Nunes de Almeida Neto
Janaina Savino Vilella Carro
Luiz Antônio Corre Gazulha Junior
Margot Frota Cohn Pires
Cristine de Magalhães Marcondes
Fernando Andrade
Márcia Sandra Roque Vieira Silva

ENEL DISTRIBUCIÓN PERÚ S.A.A.

Company name
Enel Distribución Perú S.A.A.

Type of Company
Publicly Traded Company

Address
Calle César López Rojas 201 Urb, Maranga,
San Miguel
Lima, Perú

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Telephone
(51 1) 561 2001

Shareholding of Enel Américas S.A. 7.57%

ENEL DISTRIBUCIÓN GOIÁS S.A.
CELG DISTRIBUIÇÃO S.A. - CELG-D

Company name:
CELG DISTRIBUIÇÃO S.A. - CELG-D

Type of Company:
Limited Liability Company

Address:
Rua 2, Quadra A-37, nº 505, Jardim Goiás,
Goiânia, Goiás.

Telephone:
(62) 3243 1771

Subscribed and paid-in capital (Thousand
US$):
1.261.756,22

Corporate purpose:
The company’s purpose is to explore electricity
distribution technically and commercially.

Core activities:
Electricity distribution

Board of Directors:
Mario Fernando de Melo Santos (Chairman)
Nicola Cotugno (vice-president)
Déborah Meirelles Rosa Brasil
Guilherme Gomes Lencastre
Aurelio Ricardo Bustilho de Oliveira
Márcia Sandra Roque Vieira Silva

Senior Management:
Jose Luis Salas Rincon
Marcia Sandra Roque Vieira Silva
Michelle Rodrigues Nogueira
Cristine de Magalhães Marcondes
Flavia da Silva Baraúna
Rosana Rodrigues dos Santos
Margot Frota Cohn Pires

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 10.14%

Subscribed and paid-in capital (Thousand
US$)
192.512,48

Corporate purpose
Activities specific to the supply of electricity
services distribution, transmission and
generation, as per current legislation. In
addition, The company may engage in the sale
of goods in any form, as well as the supply
of advisory and financial services, among
others, except for those services for which an
express authorization is required under current
legislation.

Core activities
Electricity distribution

Board of Directors
José Manuel Revuelta Mediavilla
Chairman
Guillermo Lozada Pozo
Vice-president
Carlos Alberto Solis Pino
Patricia Teullet Pipoli
Martín Pérez Monteverde
Rafael Llosa Barrios
Daniel Abramovich Ackerman

Senior Management
General Manager
Ricardo Lama (until March 26, 2019)
Simone Botton (from March 26, 2019)
Guillermo Martin Lozada Pozo
Administration, Finance and Control Manager
Carlos Alberto Solis Pino
Commercial Manager
Soraya Ahomed Chávez
Legal Affairs Manger
Milagritos Tatiana Lozada Gobea
Regulations Manager
Rocío Pachas Soto
Organization and Human Resources Manager
María Alicia Martínez Venero
Communications Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 4.90%

ENEL DISTRIBUCIÓN RÍO S.A.
AMPLA ENERGÍA (Ampla Energía e Serviços
S.A.)

Company name:
Ampla Energia e Serviços S.A.

Type of Company:
Publicly Traded Company

Address:
Praça Leoni Ramos, N° 01, São Domingos,
Niteroi
Río de Janeiro, Brasil

Telephone:
(55 21) 2613 7000

Subscribed and paid-in capital (Thousand
US$):
621,031.69

Corporate purpose:
The company’s corporate purpose is to study,
plan, build and explore electricity production,
transmission, transformation, distribution
and trade systems as well as provide related
services that have been or may be granted
in the future; conduct research in the energy
sector; participate in regional, national and
international organizations in the electricity
sector and participate in other companies
related to the energy sector as a shareholder,
including in privatization programs in Brazil.

Core activities:
Electricity distribution

Board of Directors (regular directors):
Mario Fernando de Melo Santos
Monica Hodor
Roberto Zanchi
Deborah Meirelles Rosa Brasil
Luiz Carlos Franco Campos
Otacilio de Souza Junior

Board of Directors (Alternate Directors):
José Nunes de Almeida Neto
Michelle Rodrigues Nogueira
Márcia Massotti de Carvalho
Cristine de Magalhães Marcondes
Luiz Carlos Franco Campos

Senior Management:
Artur Manuel Tavares Resende (Chairman)
Raffaele Grandi
José Nunes de Almeida Neto
Janaina Savino Vilella Carro
Anna Paula Hiotte Pacheco
Cristine de Magalhães Marcondes
Margot Frota Cohn Pires
Déborah Meirelles Rosa Brasil
Fernando Andrade
Marcia Sandra Roque Vieira Silva

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 9.02%

194

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ENEL DISTRIBUCIÓN
SÃO PAULO S.A.
ELETROPAULO METROPOLITANA
ELETRICIDADE DE SÃO PAULO S.A.

ENEL GENERACIÓN
COSTANERA S.A.

Company name
Enel Generación Costanera S.A.

Company name:
Eletropaulo Metropolitana Eletricidade de São
Paulo S.A.

Type of Company:
Public Limited Company

Type of Company:
Publicly Traded Company.

Address
Avda, España 3301, Buenos Aires, Argentina

Address:
Avenida Dr. Marcos Penteado de Ulhôa
Rodrigues, nº 939, lojas 1 e 2 (térreo) e 1º
ao 7º andar, Bairro Sítio Tamboré, Torre II
do Condomínio Castelo Branco Office Park,
Barueri, São Paulo

Telephone
(5411) 4307 3040

Subscribed and paid-in capital (Thousand
US$)
11,722.32

ENEL GENERACIÓN EL CHOCÓN S.A

Company name
Enel Generación El Chocón S.A.

Type of Company
Public Limited Company

Address
Avda, España 3301
Ciudad Autónoma de Buenos Aires, Argentina

Subscribed and paid-in capital (Thousand
US$)
4,985.98

Corporate purpose
The company’s purpose is the production and
block sales of electricity

Telephone:
(21) 2716-1113

Corporate purpose
The company’s purpose is the production and
block sales of electricity

Core activities
Electricity generation.

Subscribed and paid-in capital (Thousand
US$):
765.534,91

Core activities
Electricity generation.

Corporate purpose:
The company aims to: exploit public energy
services, mainly electricity services, in the areas
referred to in the Concession Contract and in
others where, under applicable law, it is authorized
to act, study, develop, design, execute, explore
or transfer research and development plans and
programs related to any type or form of energy;
participate in electricity distribution and trade in
electricity distribution and sale; supply technical
services for the operation, maintenance and
planning of third-party electrical installations;
provide services for optimizing consumers´
energy processes and electrical installations;
onerous transfer of right of way passage tracks
of exploitable lines and land areas of plants and
deposits. Other public or private services, including
IT services through the operation of infrastructure,
in order to produce additional alternative revenue;
contribute to the preservation of the environment,
as well as participate in community interest social
programs; participate in ventures that permit to
make use of real estate assets; and participate
in other companies as a partner, part owner or
shareholder.

Regular Directors
Juan Carlos Blanco
Chairman
Michele Siciliano
Vice-president
Nicola Melchiotti
Claudio Cesar Weyne Da Cunha
Mónica Diskin
Jorge Piña
Matías Maria Brea
Marcelo Luis Diez

Alternate Directors
To be filled
María Victoria Ramirez
Jorge Lemos
Fernando Boggini
Rodrigo Quesada
To be filled
Mariano Pessagno
Hernan Castro Giovanni

Senior Management
Pablo Gutiérrez
General Manager

Regular Directors
Juan Carlos Blanco
Chairman
Claudio César Weyne Da Cunha
Vice-president
Mónica Diskin
María Victoria Ramírez
Daniel Garrido
Alex Daniel Horacio Valdez
Néstor Hugo Martín
Alberto Eduardo Mousist

Alternate Directors
Jorge Lemos
Fernando Boggini
Rodrigo Quesada
Nicola Melchiotti
Sebastián Eduardo Guasco
Oscar Horacio Carvalho

Senior Management
Daniel Garrido
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 1.40%

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 1.29%

Core activities:
Electricity distribution

Board of Directors:
Britaldo Pedrosa Soares
Nicola Cotugno
Antonio Basilio Pires de Carvalho e
Albuquerque
Aurelio Ricardo Bustilho de Oliveira
Bernardino Jesus de Brito
Guilherme Gomes Lancastre
Helio Lima Magalhães
Marcia Sandra Roque Vieira Silva

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 26.07%

20. Identification of subsidiaries and associate companies

195

ENEL GENERACIÓN FORTALEZA S.A.
CGTF - CENTRAL GERADORA
TERMELÉCTRICA FORTALEZA S.A.

Company name:
CGTF - Central Geradora Termeléctrica
Fortaleza S.A.

Type of Company:
Privately Held Corporation

Address:
Rodovia 422, Km 1 s/n,
Complexo Industrial e Portuário de Pecém
Caucaia, Ceará, Brasil

Telephone:
(55 85) 3464-4100

Subscribed and paid-in capital (Thousand
US$):
37,769.51

Corporate purpose:
The company’s purpose is to study, plan,
construct and explore electricity production,
transmission, distribution and trading systems,
awarded, permitted or authorized by any
title, as well as any other activity related to
the aforementioned activities; acquire, obtain
and explore any right, concession or privilege
related to the aforementioned activities,
as well as the practice of all other actions
and businesses necessary to achieve its
purpose; and participate in the shareholding
of other companies, as shareholder, partner or
participant,, whatever the purpose.

Core activities:
Electricity generation.

Board of Directors: (N/A)

Senior Management:
Raffaele Grandi
Pedro Werbest Alves Silva
Ana Claudia Gonçalves Rebello
Anna Paula Hiotte Pacheco

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 1.05%

ENEL GENERACIÓN PERÚ S.A.A.

ENEL GENERACIÓN PIURA S.A.

Company name
Enel Generación Perú S.A.A.

Type of Company
Publicly Traded Company

Company name
Enel Generación Piura S.A.

Type of Company
Public Limited Company

Address
Calle César Lopez Rojas N° 201, Urb. Maranga,
San Miguel
Lima, Perú (cambio Address memo 2015)

Address
Calle César López Rojas 201, Urb. Maranga,
San Miguel
Lima, Perú

Subscribed and paid-in capital (Thousand
US$)
824.878,00

Subscribed and paid-in capital (Thousand
US$)
24,590.00

Corporate purpose
In general, the company’s purpose is electricity
generation activities.
It may also carry out actions of any other nature
related or leading to the company’s main
purpose.

Corporate purpose
The company´s main purpose is electricity
generation, sale and all the actions and
agreements allowed under current legislation.

Core activities
Electricity generation and sale of natural gas

Directors
José Manuel Revuelta Mediavilla
Chairman
Guillermo Martin Lozada Pozo
Vice-president
Marco Raco

Senior Management
Rigoberto Novoa Velásquez (representative of
Enel Generación Perú S.A.A.)
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.86%

Core activities
Electricity generation.

Directors
José Manuel Revuelta Mediavilla (Chairman)
Guillermo Martín Lozada Pozo (Vice-president)
Daniel Abramovich Ackerman
Ernesto Villanueva Roca
Francisco García Calderón Portugal
Carlos Rojas Perla
Elena Conterno Martinelli

Senior Management
Marco Raco (Hasta 17 de diciembre 2019)
Rigoberto Novoa Velásquez (A partir del 17 de
diciembre de 2019)
General Manager
Pedro Cruz Vine
Energy Management and Sales Manager
Daniel Abramovich Ackerman
Legal Counsel
Guillermo Marín Lozada Pozo
Administration, Finance and Control Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 4.49%

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ENEL GREEN POWER CACHOEIRA
DOURADA S.A.

Company name:
ENEL GREEN POWER CACHOEIRA
DOURADA S.A.

ENEL GREEN POWER VOLTA GRANDE
S.A (anteriormente ENEL GREEN POWER
PROJETOS I S.A)

Company name:
Enel Green Power Volta Grande S.A

ENEL PERÚ S.A.C.

Company name
Enel Perú S.A.C.

Type of Company:
Limited Liability Company

Type of Company:
Privately Held Corporation

Type of Company:
Limited Liability Company.

Address:
Rodovia GO 206, Km 0, Cachoeira Dourada
Goiânia
Goiás, Brasil

Telephone:
(55 62) 3434 9000

Subscribed and paid-in capital (Thousand
US$)
15,994.15

Corporate purpose:
The company´s purpose is to carry out studies,
planning, construction, installation, operation
and exploitation of electricity generation plants,
and the trade related to these activities. The
company may also promote or participate
in other companies whose purpose is the
production of electricity, in or out of the Sate
of Goiás.

Address:
Praça Leoni Ramos, nº 1, 5º andar - parte, bloco
1, São Domingos.
Niterói, Rio de Janeiro.
Telephone:
(21) 2716-1100

Subscribed and paid-in capital (Thousand
US$):
140.640,64

Corporate purpose:
The company’s purpose is electricity
generation as granted, allowed, and authorized
by the Granting Authority. The company may
also trade energy in any form and in any
market.

Core activities:
Electricity generation.

Company without a board of directors

Senior Management:
Fabio Destefani Campos
Margot Frota Cohn

Address
Calle César López Rojas 201, Urb. Maranga,
San Miguel
Lima, Perú

Subscribed and paid-in capital (Thousand
US$)
1,687,048.00

Corporate purpose
The company´s corporate purpose is to
invest in other companies, preferably in
those involved in the exploitation of natural
resources, and especially those related to
electricity distribution, transmission, and
generation. Engineering services for the
construction of power plants; activities related
to the supply, assembly, and commissioning of
equipment and/ or services for the electricity
generation industry. Additionally, the company
may carry out any other activity related to the
electricity and water sectors. The company
may also make equity investments in any kind
of property including stocks, bonds and any
other type of transferable securities, as well as
the administration of such investments. The
activities deemed to fall within the purpose of
the company may be carried out in Peru and
abroad.

Core activities:
Electricity generation.

Board of Directors (regular directors)
Nicola Cotugno
Francesco Tutoli
Anna Paula Pacheco
Senior Management:
Fabio Destefani Campos (Gerente Interino)
Raffaele Enrico Grandi
Javier Florencio Alonso Perez
Janaina Savino Vilella Carro
Ana Claudia Gonçalves Rebello
José Nunes de Almeida Neto
Anna Paula Hiotte Pacheco
Margot Frota Cohn Pires

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 1.05%

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Core activities
Investment company

Shareholding of Enel Américas S.A. 1.30%

SEnior Management
José Manuel Revuelta Mediavilla
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 10.46%

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20. Identification of subsidiaries and associate companies

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ENEL TECNOLOGIA DE REDES
S.A (anteriormente ENEL BRASIL
INVESTIMENTOS SUDESTE 82 S.A)

ENEL TRADING BRASIL S.A (anteriormente
ENEL BRASIL INVESTIMENTOS NORDESTE
86 S.A)

trading of various products, and services in
general for the electricity sector and others.

Company name:
Enel Brasil Tecnologia de Redes S.A

Company name:
Enel Trading Brasil S.A

Type of Company:
Limited Liability Company.

Address:
Praça Leoni Ramos, nº 1, 7º andar, bloco 2, São
Domingos.
Niterói, Rio de Janeiro.

Telephone:
(21) 2716-1138

Subscribed and paid-in capital (Thousand
US$):
2.49

Subscribed and paid-in capital (Thousand
US$):
248,59

Corporate purpose:
The company’s purpose is to plan, develop,
Implement energy generation, distribution,
transmission or /or marketing activities. In
addition, the shareholding of other companies
operating or established to operate in the
electricity generation, distribution, transmission
and/or marketing segments as a shareholder;
distribution of appliances, instruments
and equipment for electricity distribution,
measuring and control and the sale of devices
to measure, distribute and control energy.

Corporate purpose:
The company’s purpose is wholesale and
retail trading of energy and other unspecified
products, import and export activities,
management activities, as well as related
products and services, and participation in
other enterprises.

Core activities:
Electricity generation.

Company without a board of directors

Core activities:
Distribution of appliances, instruments,
and equipment for electricity distribution,
measuring and control and the sale of devices
to measure, distribute and control energy.

Senior Management:
Antonio Basilio Pires de Carvalho e
Albuquerque (General Manager)
Raffaele Grandi

Company without a board of directors

Senior Management:
Antonio Basilio Pires de Carvalho e
Albuquerque (General Manager)
Aurelio Ricardo Bustilho de Oliveira

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

ENEL X BRASIL S.A (anteriormente ENEL
SOLUÇÕES S.A.)

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Company name:
ENEL X BRASIL S.A.

Type of Company:
Limited Liability Company incorporated under
the laws of the Federal Republic of Brazil.

Address:
Praça Leoni Ramos nº 01
Parte, São Domingos, Niterói, Rio de Janeiro,
Brasil.

Telephone:
(55 21) 2613 7000

Subscribed and paid-in capital (Thousand
US$):
28.665,65

Core activities:
General services for the electrical energy
sector and others.

Company without a board of directors

Senior Management:
Carolina Farinas Pinheiro
Carlos Eduardo Cardoso de Souza

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.11%

Enel Trading Argentina S.R.L.

Type of Company
Limited Liability Company

Address
San José 140, piso 6, CABA
Buenos Aires, Argentina

Telephone
(5411) 4124-1600

Subscribed and paid-in capital (Thousand
US$)
233,98

Corporate purpose
The company´s corporate purpose is
wholesale purchase and sale of power and
electricity produced by third parties and/or to
be consumed by third parties, including the
import and export of power and electricity
and the sale of royalties, as well as the
supply and/or development both at home
and abroad of services related to computer
services and/or control of the operation and/or
telecommunications.

Also, transactions for the sale or purchase of
natural gas, and/or its transport, including the
imports and/or exports of natural gas and/or the
sale of royalties, as well as the supply and/or
development of related services.

Commercial activities and transactions for
the sale or purchase of liquid fuels and crude
oil, and/or lubricants and/or transport of such
elements, including the imports and/or exports
of liquid fuels and the sale of royalties, as well
as the supply and/or development of related
services.

Core activities
Sale of electrical energy, gas, and derivatives.
Computer operations and/or control services
and/or telecommunications.

Corporate purpose:
The company’s purpose is to participate in the
shareholding capital of other companies, in
Brazil or abroad, production, industrialization,
assembly and trade in general, including import
and export activities, for own or third-party

Regular Manager
Nicola Melchiotti
Claudio Cesar Weyna Da Cunha
Deputy Managers
Mónica Diskin
Fernando Boggini

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Senior Management
Livio Filippo Colasanto
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A.
0.08%

HIDROINVEST S.A.

Company name
Hidroinvest S.A.

Type of Company
Public Limited Company

Address
Avda, España 3301
Buenos Aires, Argentina

Telephone
(5411) 4307 3040

Subscribed and paid-in capital (Thousand
US$)
923,64

Corporate purpose
The company’s purpose is to acquire
and maintain a majority shareholding in
Hidroeléctrica Alicura S.A. and/or Hidroeléctrica
El Chocón S.A. and/or Hidroeléctrica Cerros
Colorados S.A. (“the concessionaires”) created
by the National Executive Power decree 287/93
and manage such investments.

Core activities
Investment company

Regular Directors
Nicola Melchiotti
Chairman
Claudio Cesar Weyne Da Cunha
Vice-president
Juan Carlos Blanco

Alternate Directors
Mónica Diskin
Fernando Carlos Luis Boggini
María Victoria Ramírez

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 0.27%

INVERSORA CODENSA S.A.S.

Company name
Inversora Codensa S.A.S.
NIT 900.351.013-6

Type of Company
Simplified Joint Stock Company

Address
Carrera 13 No. 93-66
Bogotá, Colombia

Telephone
(571) 601 6060

Subscribed and paid-in capital (Thousand
US$)
1.52

Corporate purpose
The company´s purpose is to invest in in
residential public electric utility services,
especially the acquisition of shares in any
public electric utility company or in any other
company that also invests in utilities whose
main purpose is residential electrical energy
services under Law 142 of 1994, or in any
other company that invests in utilities whose
main purpose is residential public electric utility
services.

Core activities
Investment company

Senior Management
David Felipe Acosta Correa
Manager
Leonardo Lopez Vergara
First deputy manager
Juan Manuel Pardo Gómez
Second deputy manager

consortiums and any other kind of association,
and in general, the purchase, sale and
negotiation of securities, shares and all other
kinds of securities and credit documents in any
of the systems or methods created or to be
created.

Core activities
Investment company

Regular Directors
Juan Carlos Blanco
Chairman
Michele Siciliano
Vice-president
Mónica Diskin
Héctor Martín Mandarano
Santiago Matías Sajaroff
Jorge Esteban Ravlich

Alternate Directors
Nicola Melchiotti
Claudio Cesar Weyne Da Cunha
Patricio Javier Cipollone
Sebastián Torres
Alejandro Aníbal Abayu

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Share of the investment of Enel Américas’
assets. 0.05%

SACME S.A.

Company name
Sacme S.A.

Type of Company
Limited Liability Company

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Address
Avda, España 3251
Ciudad Autónoma de Buenos Aires, Argentina

INVERSORA DOCK SUD S.A.

Company name
Inversora Dock Sud S.A.

Type of Company
Limited Liability Company

Address
Avenida Debenedetti 1636 Dock Sud
Avellaneda

Telephone
4229-1000

Subscribed and paid-in capital (Thousand
US$)
13,842.28

Corporate purpose
The company’s purpose is to participate
in companies of any nature, by creating
shareholding companies, transitory company
ventures, collaboration groups, joint ventures,

Telephone
(5411) 4361 5107

Subscribed and paid-in capital (Thousand
US$)
0,20

Corporate purpose
The company´s purpose is to conduct, supervise
and control the operation of electricity generation,
transmission and sub transmission system of
the Federal Capital and Greater Buenos Aires,
and the interconnections with the Argentine
Interconnected System (SADI by its Spanish
acronym). Represent Distribuidora Edenor S.A.
and Edesur S.A. in terms of operations before
the Wholesale Electricity Market Management
Entitiy (Compañía Administradora del Mercado
Mayorista Eléctrico CAMMESA in Spanish).
In general, carry out all the actions necessary
to manage the business correctly, established
for that purpose by the concessionaires in the
electricity distribution and trading in the Federal
Capital and Greater Buenos Aires, as established
In the international public tender for the sale of

20. Identification of subsidiaries and associate companies

199

withdraw, accept, endorse, insure, deduct, and
in general negotiate, securities or any kind of
individual or collective loans; j) enter into any
kind of public or private contracts; k) become
part of , as permitted by law and by-laws,
other companies, to expand or supplement
The company’s purpose, either by subscribing
or acquiring quotas or shares to remain part
of or merge with them; l) enter into contracts
to participate, either actively or passively,
in consortia, temporary companies, joint
ventures and any other legal way of business
collaboration; m) enter into or implement, in
general, any action or contract required to
develop the company’s purpose.

Regular Directors
Lucio Rubio Díaz
Carlos Mario Restrepo Molina
Michele Di Murro

Alternate Directors
Andrés Caldas Rico
Diego Rolando Valderrama
Cecilia Inés del Toro

Senior Management
Carlos Mario Molina
General Manager
Diego Rolando Valderrama First deputy of the
Manager
Cecilia Inés del Toro
Second Deputy of the Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.01%

Class A shares in Edenor S.A. and Edesur S.A.
and applicable regulations.

Core activities
Management, supervision, and control of the
operation of a part of the Argentine electricity
system

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.01%

Regular Directors
Emilio Jiménez
Giuseppe Fanizzi
Daniel Flaks
Eduardo Maggi

Alternate Directors
Fabio Canosa
Vincenzo Ruotolo
Miguel Patricio Farrell
José Luis Marinelli

Senior Management
Francisco Cerar
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

SOCIEDAD PORTUARIA CENTRAL
CARTAGENA S.A.

Company name
Sociedad Portuaria Central Cartagena S.A.

Type of Company
Public Limited Company
NIT 900.325.249-7

Address
Carrera 13 A No. 93-,66, piso 2
Bogotá, D.C. Colombia

Subscribed and paid-in capital (Thousand
US$)
27.31

Corporate purpose
The company’s main purpose is to invest,
construct, and maintain docks and private
and public ports, their management and
operations and the development and operation
of multipurpose ports pursuant to current laws,
among others.

Regular Directors
To be filled from June 2019
Leonardo Lopez Vergara
María Yolanda Cortés Macias

Alternate Directors
Fernando Javier Gutierrez Medina
Luis Fernando Salamanca
Francesco Cirillo

Senior Management
Gustavo Gómez Cerón
General Manager
Oswaldo Rafael Novoa Arroyo
First deputy of General Manager
José Arturo López Rodriguez
Second deputy of General Manager

200

ENEL X COLOMBIA S.A.S.

Company name
Enel X Colombia S.A.S.

Type of Company
Simplified Joint Stock Company
NIT 901.176.579-6

Address
Carrera 13 A No. 93-,66, piso 2
Bogotá, D.C. Colombia

Subscribed and paid-in capital (Thousand
US$)
1.522,17

Corporate purpose
The company´s corporate purpose is to carry
out any legal commercial or civil activity. In
particular, The company may : a) Implement
public lighting projects to modernize,
manage, operate and maintain, expansions,
teleprocessing, collection of inventories,
photometric designs, auditing, among others;
under the different contract modalities with
the state such as concessions, individually
or jointly building strategic alliances; b)
develop electricity engineering projects
of low, medium and high voltage, special
lighting projects, architectural illumination and
Christmas lighting, energy storage projects and
renewable energies through the participation
in public and private tender processes, enter
into contracts with government entities or
companies, of mixed economies or fully
private; c) design, develop, maintain, build
all types of electric installations in industrial
and/or commercial areas and/or free zones.
d) commercialize electric materials, provide
basic and detailed conceptual engineering
services, such as advisory services, studies,
auditing and project supervision; development
and sale of renewable energy projects,
energy intelligence software, operation and
maintenance of public service systems; e)
develop and implement new products and
services related to public and private sectors
need, through the following: 1) use of existing
public lighting infrastructure to leverage
innovation and technology projects (Smart
Cities); 2) urban development projects such
as the installation and maintenance of traffic
lights, traffic signals, bus stops, advertising
and parks among other urban spaces. 3)
implementation of Energy as a Service model,
respond to the demand, increase reliability
of industrial users in the country; f) carry out
every legal action and operation required for
the development of The company’s purpose; g)
acquire and develop goods of any nature, either
movable or immovable properties, corporeal or
incorporeal, required for the development of
the Company´s businesses; h) sell, lease, tax
and manage the Company´s assets; i) issue,

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Company name
Transportadora de Energía S.A.

Type of Company
Public Limited Company

Address
Bartolomé Mitre 797, piso 11
Buenos Aires, República de Argentina

Telephone
(5411) 4394 1161

Subscribed and paid-in capital (Thousand
US$)
1.67

Corporate purpose
The company´s purpose is high tension
electricity transmission services linked to both
national and international electrical systems.
For this purpose, the company may participate
in national and international tenders, become
a high-tension electricity transmission utilities
concessionaire, locally or abroad, and carry out
any kind of activity deemed necessary to reach
Its purpose.

Core activities
Electrical energy transmission

Regular Directors
Juan Carlos Blanco (Chairman)
Paolo Giovanni Pescarmona (Vice-president)
Mónica Diskin

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Alternate Directors
Jorge Lemos
Nicola Melchiotti
Claudio Cesar Weyne Da Cunha

Senior Management
Sandro Ariel Rollan
General Manager

Commercial relations
The company has no commercial relations
with Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.03%

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TERMOELÉCTRICA JOSÉ DE SAN MARTÍN
S.A.

TERMOELÉCTRICA MANUEL BELGRANO
S.A.

TESA

Company name:
Termoeléctrica José de San Martín S.A.

Company name:
Termoeléctrica Manuel Belgrano S.A.

Type of Company:
Public Limited Company

Address:
Maipú 757, Piso 9° Ciudad Autónoma de
Buenos Aires, Argentina

Address:
Azopardo 1487, Ciudad Autónoma de Buenos
Aires, Argentina

Telephone:
(54 11) 4117-1011/1041

Telephone:
011 3221-7950

Subscribed and paid-in capital (Thousand
US$):
8,35

Subscribed and paid-in capital (Thousand
US$):
8.35

Corporate purpose
The company´s purpose electricity generation
and its block sale, and particularly the
management of equipment, construction,
operation and maintenance of a thermal
plant as defined in “Final agreement for the
management and operation of projects for the
re-adaptation of the MEM as established by
Resolution SE No. 1427/2004”, approved by
Resolution SE No. 1193/2005.

Corporate purpose.
The company’s purpose is electricity
generation and its block sale and particularly
the management of equipment, construction,
operation and maintenance of a thermal
plant of a thermal plant as defined in “Final
agreement for the management and operation
of projects for the re-adaptation of the MEM as
established by Resolution SE No. 1427/2004”,
approved by Resolution SE No. 1193/2005.

Core activities
Electricity generation. Management services
(purchase of equipment, construction,
operation and maintenance of a thermal power
plant)

Core activities
Electricity generation. Management service
(purchase of equipment, construction,
operation, and maintenance of a thermal power
plant)

Regular Directors:
Jorge Rauber
Chairman
Adrián Salvatore
Vice-president
Michele Siciliano
Mónica Diskin
Guillermo Giraudo
Julián Mc Loughlin
José Manuel Tierno
Gerardo Carlos Paz
Ruben Turienzo

Alternate Directors:
Leonardo Katz
Leonardo Marinaro
Juan Carlos Blanco
Andrea Biasotto
Diego Gabriel Baldassarre
Juan I Castellanos Mon
Sergio Raúl Sánchez
Luis Agustín León Longombardo
Rodrigo Leonardo Garcia

Senior Management
Fernando Rabita
General Manager

Regular Directors:
Andrea Biasotto
Chairman
Mónica Diskin
Vice-president
Julián Mc Loughlin
Guillermo Giraudo
Adrián Gustavo Salvatore
José Manuel Pazos
Gerardo Carlos Paz
Rubén Turienzo
José Manuel Tierno

Alternate Directors:
Juan Carlos Blanco
Michele Sicialiano
Luciano Palombella
Juan I Castellanos Mon
Leonardo Marinaro
Leonardo Katz
Luis Agustín León Longombardo
Rodrigo Leonardo García
Sergio Raúl Sánchez

Senior Management
Francisco Monteleone
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

20. Identification of subsidiaries and associate companies

201

YACYLEC S.A.

Company name
Yacylec S.A.

ENEL X PERÚ S.A.C.

Company name
Enel X Perú S.A.C.

Type of Company
Limited Liability Company

Address
Bartolomé Mitre 797, piso 11º;
Ciudad Autónoma de Buenos Aires, Argentina

Address
Calle César López Rojas 201 Urb, Maranga,
San Miguel
Lima, Perú

Telephone
(51 1) 561 2001

CENTRAL GERADORA FOTOVOLTAICA SÃO
FRANCISCO LTDA

Company name:
Central Geradora Fotovoltaica São Francisco
Ltda

Type of Company:
Limited Liability Company incorporated under
the laws of the Federal Republic of Brazil

Address:
Praça Leoni Ramos nº 01
Parte, São Domingos, Niterói, Rio de Janeiro,
Brasil.

Subscribed and paid-in capital (Thousand
US$)
905,94

Telephone:
(55 21) 2613 7000

Corporate purpose
The company participates in trade, production,
industrialization, assembly, even imports and
exports, for the sale of its own or third -party
products, and services, in general, for the
electricity sector and others.

Core activities
Electricity distribution

Senior Management
General Manager
Alejandro Barragán Osorio

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

Shareholding in Enel Américas S.A.
(Indirect) 99,999967%

Subscribed and paid-in capital (Thousand
US$):
188.67

Corporate purpose:
The company’s purpose is any kind of activities
related to the rental and management of
equipment to produce solar energy, energy
efficiency, electrical infrastructure and others.

Core activities:
Rental and management of equipment to
produce solar energy, energy efficiency,
electrical infrastructure, and others.

Company without a board of directors

Senior Management:
Rafael Felipe Coelho da Silva

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Shareholding of Enel Américas S.A. 0.01%

Telephone
(5411) 4587 4322/4585

Subscribed and paid-in capital (Thousand
US$)
333.97

Corporate purpose
The company´s purpose is the construction,
operation, and maintenance of the first
electrical link between Yacyretá Hydroelectric
Plant and the Resistance Transformation
Station, and electricity transmission services,
including the exploitation under concession as
independent carrier.

Core activities
Electrical energy transport

Regular Directors
Juan Carlos Blanco
Marcelo Daniel Meritano
Juan M. Pereyra
Guillermo Osvaldo Diaz
Eduardo Martin Albarracin
Raffaele Sardella
Luis Juan Bautista Piatti
Santiago Acosta
Mónica Diskin
Oscar Arturo Quihillalt
Sebastian Luis Ferreyra Alternate Directors
Carlos Fernando Bergoglio
Juan José Arena
Nicola Melchiotti
Claudio Cesar Weyne Da Cunha
Mateo Nazzari
Matteo Milanesi
Debora Paula Ureta
Dzeno Schio
Sergio Alejandro Vestfrid
Jorge Alberto Lemos
Robert Ortega
Alberto Esteban Verra

Senior Management
Sandro Ariel Rollan
General Manager

Commercial relations
The company has no commercial relations with
Enel Américas S.A.

202

Annual Report Enel Américas 2019 ENEL TECNOLOGIA DE REDES
S.A (anteriormente ENEL BRASIL
INVESTIMENTOS NORDESTE 82 S.A)

Company name:
Enel Brasil Tecnologia de Redes S.A

Type of Company:
Limited Liability Company.

Address:
Praça Leoni Ramos, nº 1, 7º andar, bloco 2, São
Domingos.
Niterói, Rio de Janeiro.

Telephone:
(21) 2716-1138

Subscribed and paid-in capital (Thousand
US$):
2,49

Corporate purpose:
The company’s purpose is to plan, develop
and implement energy generation, distribution,
transmission or /or marketing activities. In
addition, the shareholding of other companies
operating or established to operate in the
electricity generation, distribution, transmission
and/or marketing segments as a shareholder;
distribute appliances, instruments and
equipment for electricity distribution, measure
and control and sell devices to measure,
distribute and control energy.

Core activities:
Distribution of appliances, instruments and
equipment for the distribution, measurement
and control of energy and trading of devices to
measure, distribute and control energy.

Company without a board of directors

Senior Management:
Antonio Basilio Pires de Carvalho e
Albuquerque (General Manager)
Aurelio Ricardo Bustilho de Oliveira

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

NUXER TRADING S.A (URUGUAY)

Company name:
Nuxer Trading S.A

Type of Company:
Limited Liability Company.

Address:
Avenida Luis Alberto de Herrera, n. 1248, Torre
II, Piso 15, OF 11300, Montevideo, Uruguay.

Telephone: N/A

Subscribed and paid-in capital (Thousand
US$):
2.14

Corporate purpose:
The company’s purpose is to a) industrialize
and trade in all kinds of goods, leases of goods,
works and services in the areas of: food,
household and office items, automotive, bar,
bazaar, rubber, communication, construction,
cosmetics, leathers, sports, publishing,
electronics, electrotechnical, education,
shows, pharmacy, hardware, photography,
hotel, printing, IT, jewelry, toys, wool, laundry,
books, cleaning, wood, machines, maritime
, mechanics, metallurgy, mining, music,
engineering works, optics, paper, perfumery,
fishing, plastics, press, advertising, chemistry,
professional, technical and administrative
services, tobacco, television, textile, transport,
tourism, securities, clothing, veterinary,
glass; (b) imports, exports, representations,
commissions and appropriations; (c) purchase
and sale, leasing, administration, construction
and any kind of real estate transactions; (d)
agricultural development, afforestation, fruit
farming, citriculture and its derivatives; (e)
participation, incorporation or acquisition of
companies operating in the aforementioned
areas.

Core activities:
The company’s activities are indicated above

Company without a board of directors

Senior Management:
Jorge Manuel Cernadas Rivarola

Commercial relations:
The company has no commercial relations with
Enel Américas S.A.

Notes:
1. There are no actions or contracts celebrated
by Enel Américas with its subsidiaries or
associate companies that might significantly
influence its operations and results.
2. With regard to commercial relations, the
future projected links with subsidiaries or
associate companies are part of The company’s
purpose, in particular to provide its subsidiaries
with the financial resources necessary for
the development of their businesses and,
additionally, to provide the subsidiaries with
management, financial, commercial, technical
and legal advisory services; and, in general,
services of any kind that are deemed necessary
for their performance, notwithstanding that
none of these future links are expected to
significantly influence the operations.

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20. Identification of subsidiaries and associate companies

203

204

Annual Report Enel Américas 2019 21.

SIGNIFICANT
EVENTS

21. Significant events

205

2019

Relevant or
Significant Events

7. Appointing an external audit firm pursuant to Title XX-

VIII of Law 18.045.

8. Appointing two Regular and Two Alternate Account In-

spectors and establishing their remuneration.

9. Appointing Private Risk Rating Agencies.

10. Approving the Company´s Investment and Financing

Policy.

11. Dividend Policy Proposal and information on the pro-

cedures to be used in dividend distribution.

12. Information on Board agreements related to actions or

contracts under Title XVI of Law No. 18.046.

13. Information about the costs of processing, printing and

Pursuant to articles 9 and 10, paragraph 2 under Securities

dispatch of information required under Circular No.

Market Law No. 18,045, and as established under General

1.816 of the Superintendency of Securities and Insur-

Norm No. 30 of the Superintendency of Securities and Insur-

ance.

ance (SVS, currently the Financial Market Commission, CMF)

14. Other matters of corporate interest and competence of

we hereby report the following Significant Events:

the Ordinary Shareholders’ Meeting and,

15. Accepting other agreements necessary for the ade-

• On 27 February 2019, the following was reported as a

quate implementation of adopted decisions.

Significant Event:

The Extraordinary Shareholders´ Meeting will be held im-

The Board of Enel Américas S.A. (“Enel Américas” or the

mediately after the Ordinary Shareholders’ Meeting, and

“Company”), in a session held on February 27, 2019, re-

In the same place, putting to vote the capital increase

solved, by the unanimous vote of its members, to sched-

of up to US$ 3,500,000,000 (three billion U.S. dollars),

ule the Company´s Ordinary Meeting and Extraordinary

whose aim is to seize investment opportunities through

Shareholders´ Meeting both to be held on April 30, 2019,

mergers and acquisitions and the purchase of minority

in San Isidro street, No. 74, Borough of Santiago, Santia-

shares as well as provide funds to the subsidiary Enel

go.

Brasil S.A., through a further capital increase in the latter

and/or one or more loans, to permit Enel Brasil S.A. to

The Ordinary Shareholders’ Meeting was scheduled to

repay Enel Finance International N.V. the loan which re-

be held at 9:00 a.m., proposing the following matters to

placed Enel Brasil S.A.´s debts related to the acquisition

be submitted and discussed:

of the Brazilian company Eletropaulo Metropolitana Elet-

ricidade de São Paulo S.A., as well as the restructuring of

1. Approval of the Annual Report, Balance Sheets, Fi-

the Company´s pension funds liabilities and the reduction

nancial Statements, and the reports prepared by Ex-

of contingent funds.

ternal Auditors and Inspectors corresponding to the

accounting year ended on December 31, 2018.

2. Profit distribution and dividend distribution for the

Specifically, the matters to be submitted to the knowl-

year.

edge and decision of the Extraordinary Shareholders’

3. Complete renewal of Board members.

Meeting shall be as follows:

4. Establishing Directors’ remuneration.

5. Establishing the remuneration of the members of

1) Capital increase. The increase of Enel Américas´ cap-

the Directors´ Committee and setting their respective

ital by up to US$ 3,500,000,000 ( three point five bil-

budgets for 2019.

lion US dollars), by issuing the corresponding new

6. The Board´s Expenditure Report and the Annual Re-

payment shares, all of the same series and without

port on the Activity and Expenditure Management of

par value, at the price and other conditions approved

the Directors´ Committee.

by the Extraordinary Shareholders’ Meeting.

206

Annual Report Enel Américas 2019

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The placement price will be calculated based on the

mission and on the local stock exchanges, as well

weighted average price of Enel Américas stock trans-

as the registration of the new shares and the new

actions on the Chilean stock exchanges, correspond-

American Depositary Shares with the Securities and

ing to the five trading days prior to the start date of

Exchange Commission of the United States of Amer-

the first pre-emptive subscription period, with a 5%

ica and New York Stock Exchange (NYSE) of that

discount. For this purpose, the Extraordinary Meet-

country, carry out the appropriate actions to com-

ing shall ask the Company’s Board to calculate the

plete the capital increase and, in general, refine all

placement price, applying the above formula, provid-

other actions related to the capital increase, adopting

ed that the placement is initiated within 180 days of

other agreements necessary to formalize and imple-

the date of the Meeting, pursuant to Article 23 of the

ment the corporate changes in Enel Américas as in-

Law on Joint-stock Companies.

dicated above , with broad powers.

It shall also be established that the offer to place

4) Other matters related to the capital increase. Agree

shares must be made first within the pre-emptive

on other aspects of the described capital increase

subscription period pursuant to Article 25 of the

operation that the shareholders’ meeting should

Law on Joint-stock Companies. The shares not sub-

deem convenient to approve and that are necessary

scribed during this first pre-emptive subscription pe-

or additional to said transaction.

riod and those corresponding to fractions produced

in the apportionment among shareholders, shall be

The fundamentals, terms and conditions related to

offered in a second pre-emptive subscription pe-

the capital increase shall be made available to share-

riod intended only for those shareholders or third

holders on the Company’s website: www.enelameri-

parties who have subscribed shares during the first

cas.com within the time limits established by law.

pre-emptive subscription period, on a pro rata basis

for the shares they have subscribed and paid during

• On March 1, 2019, the following was reported as a Signif-

the said first pre-emptive subscription period , and at

icant Event:

the same price at which they are offered during the

first pre-emptive subscription period.

On March 1, the Significant Event issued on February 27,

2019 received additional information as to the following

2) By-law amendment. Modify Enel Américas´ by-laws

background:

to reflect the agreement related to the capital in-

crease, replacing for this purpose Transitory Articles

1) The amount or percentage of the capital increase

Fifth and First of the by-laws.

to be allocated to investment opportunities through

merger and acquisition operations and the purchase

3) The authority of the Enel Américas´ Board of Direc-

of minority shares.

tors to register new shares in the Securities Register

of the Financial Market Commission and in the lo-

The use of the funds collected via the proposed cap-

cal stock exchanges, to register new shares and the

ital increase Is as follows:

new American Depositary Shares with the Securities

and Exchange Commission of the United States of

• US$ 2,650 million will be allocated to provide funds

America and New York Stock Exchange (NYSE) of

to the subsidiary Enel Brasil S.A. through a further

that country, and other powers related to the capital

capital increase in the latter and/or one or more loans

increase. Permit the Enel Américas´ Board to Imple-

to permit Enel Brasil S.A. to repay Enel Finance In-

ment all necessary actions related to the capital in-

ternational N.V. the loan which replaced Enel Brasil

crease, including requesting the registration of the

SA.´s debts with banks, related to the acquisition

new shares representative of the capital increase in

of the Brazilian Company Eletropaulo Metropolitana

the Securities Register of the Financial Market Com-

Eletricidade de São Paulo S.A. (Eletropaulo).

21. Significant events

207

• US$850 million to restructure Eletropaulo’s pension

The main Pension Fund risks that affect Eletropaulo are

fund liabilities and the reduction of contingent funds

those related to discount rates, mortality tables, and ex-

or litigation provisions in Brazil.

pected rates of return on assets. Actuarial liabilities as

of December 31, 2018 reached US$ 3.3 billion and the

In view of the above, the resources raised through

deficit was US$ 1.0 billion.

the capital increase are not intended to be used in

potential mergers and acquisitions and the purchase

To verify the impact on actuarial obligations in this actuar-

of minority shares, but should this capital increase

ial liability, the table below illustrates a sensitivity analysis

take place, its aim shall be to seize investment op-

of actuarial premises, considering a 0.25% variation in

portunities by strengthening the Enel Américas S.A

the discount rate. The quantitative result on December

balance sheets.

31, 2018 is shown as follows:

2) Type of mergers and acquisitions and the purchase of mi-

nority shares referred to in the Significant Event.

Sensitivity

Impact on the established
benefit

Total liability of the
established benefit

Discount rate

+0.25%

-0.25%

-0.07 Bi USD

+0.07 Bi USD

3.2 Bi USD

3.3 Bi USD

Should the current conditions of the plans be maintained

without taking any action, the deficit will grow because

of increased life expectancy and/or the reduction of the

discount rate of the pension fund’s liability. To mitigate

this exposure, Eletropaulo develops a voluntary migration

plan of the Established Benefit plans that Eletropaulo cur-

rently has for Established Contribution plans, mitigating

deficit risk to increase by actuarial premises in the future,

and the possible restructuring of Eletropaulo’s debt con-

tracts with FUNCESP. This Plan shall be evaluated by the

competent bodies in the coming months.

The contingent funds or litigation provisions in Brazil: the

distributors controlled by Enel Américas S.A. in Brazil,

through Enel Brasil S.A. — Eletropaulo, Enel Distribuicao

Rio, Enel Distribuicao Goias and Enel Distribuicao Ceará

- are engaged in approximately 70,000 litigation cases as

of December 2018. The corporate balance sheets make

provisions for some US$ 600 million. These liabilities,

according to Brazilian rules, are mostly subject to a 1%

monthly upgrade plus inflation-reflecting rates or those

that approach inflation, leading to an excessive financial

burden, and thus they significantly reduce the compa-

nies´ net profit and the distribution of dividends to share-

holders , draining the companies´ cash flows.

Based on the use of “analytics” of the behaviors of the

parties active in mass litigation, a system that can identi-

fy potential agreements with such active parties is being

put in place, and for future cases, aimed at avoiding fur-

ther litigation. This plan requires funding of some US$150

As part of the capital increase purpose indicated in the

Significant Event issued on February 27, 2019, this opera-

tion would place Enel Américas S.A. in a financial position

that would allow it to finance mergers and acquisitions

and to purchase minority shares.

Therefore, the potential mergers and acquisitions and the

purchase of minority shares to be assessed are as fol-

lows:

•

Purchases of minority shares in any of the current

subsidiaries of Enel Américas S.A., which today rep-

resent opportunities for up to US$ 2 billion.

•

Potential acquisitions of companies in the electricity

sector in the markets in which Enel Américas S.A.

participates through its subsidiaries (Argentina, Bra-

zil, Colombia, and Peru).

3) The restructuring of pension funds liabilities and the re-

duction of contingent funds in Brazil.

The restructuring of pension fund liabilities: Eletropaulo

contributes to additional retirement and pension benefit

plans for its current and former employees and benefi-

ciaries, with FUNCESP being the entity responsible for

managing such benefit plans. FUNCESP is Brazil’s largest

private pension fund (the fourth largest, including govern-

ment-controlled pension funds), it has multiple contribu-

tors and manages assets of approximately US$ 7.5 billion

of nearly 50,000 people, of whom 17,000 people are from

Eletropaulo.

208

Annual Report Enel Américas 2019

million which will be allocated to manage agreements

The four risk rating agencies unanimously agreed to rate

and to implement technological platforms. This would

this operation as “credit positive” for Enel Américas, S.A

provide an expected initial benefit of a 30% reduction in

highlighting, among others, the following:

the provided value, and a reduction in the volume of new

litigation cases based on the latest pilot plans implement-

•

“Proposed capital increase of up to US$3.5 billion

ed in 2018.

is credit positive and will help solidify its investment

grade rating”.

4) Financial effects that such capital increase may have.

We can foresee the following financial effects as a result

overall positive impact on Enel SpA’s and Enel Améri-

of the proposed capital increase:

cas’ credit metrics.”

•

“Once completed, the transaction is likely to have an

•

Improved cash flow and profit in Enel Américas S.A.:

•

“Enel Américas’ Potential $3.5 Billion Capital in-

By repaying the debt that Enel Brasil S.A. incurred

crease is Consistent With its Aim to Maintain Strong

with Enel Finance International N.V., restructuring

Financial Profile.”

the liabilities of pension funds and reducing the con-

tingency funds or litigation provisions in Brazil, the

•

“We consider the proposed transaction to be a favor-

financial burden would significantly decrease leading

able development for Enel Américas’ credit quality

to lower financial spending and thus to a greater prof-

because it should strengthen the Company’s short-

it and improved cash flows , both in Brazil and in Enel

term credit metrics.”

Américas, which consolidates the latter.

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• Higher dividends to be received by Enel Américas: in-

Américas as it will reduce leverage”.

creasing profits and improving the cash flow in Enel

Brasil could increase dividend distribution, which, in

•

“This injection of funds is positive for the Company,

turn, would allow Enel Américas S.A. to receive high-

especially for the subsidiary Enel Brasil S.A., which

er dividends.

would lead to greater efficiencies and the deleverage

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Increased creditworthiness: By lowering debt levels,

Enel Américas S.A.’s credit indicators would improve

For further information, the four Press Releases cited above

of the financial profile”.

considerably, allowing it to have greater flexibility to

are attached.

incur debt in financial markets.

(5) Any other information deemed relevant for the correct

understanding and evaluation of the Significant Event.

To complete other information considered relevant to bet-

ter understand the operation, we would like to indicate

that on February 27, 28 and on March 1, the three interna-

tional credit rating agencies covering Enel Américas S.A.

as well as the local agency published their corresponding

Press Releases commenting the operation in question.

The above rating agencies are as follows:

- International: S&P, FITCH Ratings and Moody’s.

- National: Feller Rate

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21. Significant events

209

Bulletin:
Enel Americas' Potential $3.5 Billion Capital
Increase Is Consistent With Its Aim To Maintain
Strong Financial Profile

Primary Credit Analyst:
Candela Macchi, Buenos Aires (54)-11-4891-2110; candela.macchi@spglobal.com

BUENOS AIRES (S&P Global Ratings) Feb. 27, 2019--S&P Global Ratings said today
that its rating and outlook on Chile-based electric power integrated utility,
Enel Americas S.A. (BBB/Stable/--), were unaffected following the announcement
of a $3.5 billion capital increase.

Overall, we view the proposed transaction as a favorable development for the
rating, because the capitalization should alleviate the group's short-term
credit metrics that deteriorated in fiscal 2018 following the acquisition and
integration of Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.
(Eletropaulo), the largest electric power distributor in Brazil in terms of
revenues and energy distributed. We consider the capital raise to be in line
with the group's commitment to maintaining a healthy financial profile.

Our base-case scenario previously assumed a gradual improvement in the group's
main credit metrics thanks to higher EBITDA, particularly at the newly
acquired entities due to gains in efficiency, but we now expect the recovery
to occur sooner. Our updated forecast indicates that pro forma after the
capitalization, adjusted debt to EBITDA should trend down to around 1x by the
end of 2019, a similar level prior to Eletropaulo's acquisition, from 2.3x in
2018. This expected level is now more comfortably aligned with our expected
range for the rating. Previously, we expected this to occur only by 2021. In
addition, we expect the capitalization and a less leveraged balance sheet to
allow Enel Americas to seek new investment opportunities in the region in the
upcoming years through either buyouts of minority investors or privatizations

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FEBRUARY 27, 2019 1

210

Annual Report Enel Américas 2019 Bulletin: Enel Americas' Potential $3.5 Billion Capital Increase Is Consistent With Its Aim To Maintain Strong
Financial Profile

and consolidations. Given that we consider the capital increase to be in line
with the group's strategy and our updated forecast for metrics to be aligned
with historical levels, there's no impact on our current assessment of Enel
Americas' credit quality. However, if the group further deleverages in the
following years and continues to consolidate its asset base, an upgrade is
possible.

The capitalization will be discussed during an extraordinary shareholders'
meeting on April 30, 2019, and if approved, it will likely be completed during
the second half of 2019. According to the group's information, it will use
proceeds to repay a $2.65 billion short-term intercompany loan from Enel
Finance International that was used to acquire Eletropaulo and to repay some
other obligations at the Brazilian subsidiaries, including pension liabilities
at Eletropaulo and other contingencies for around $850 million. As a result of
the plans for proceeds, we expect a significant deleveraging and optimization
of the Brazilian assets that should bolster dividend distributions to the
ultimate holding company starting in the third quarter of 2019.

The group announced the capital increase in conjunction with its 2018 results,
which highlighted Enel Americas' continued robust operating performance,
including a 14% rise in EBITDA over the prior comparable period.

This report does not constitute a rating action.

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FEBRUARY 27, 2019 2

21. Significant events

211

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FEBRUARY 27, 2019 3

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28 Feb 2019 Comment

Fitch Ratings: Enel Americas' Proposed USD3.5B Capital

Increase a Credit Positive

Fitch Ratings-New York-28 February 2019: Fitch Ratings believes Enel Americas'(BBB+/Stable) proposed capital

increase of up to USD3.5 billion is a credit positive and will help solidify its investment grade rating. Proceeds

from the proposed capital increase, to be executed as a rights offering, will be used to provide Enel Brasil S.A.

with funds to prepay the USD2.65 billion intercompany loan between Enel Brasil and the funding vehicle of the

parent Enel S.p.A. (A-/Stable), Enel Finance International NV. The company expects to use the approximately

USD850 million remaining for pension obligations and other contingencies in Brazil.

Fitch believes the completed transaction will solidify Enel Americas investment grade credit profile. It will also

ratify Enel S.p.A.'s very strong commitment toward Enel Americas, demonstrating the strategic importance of

Enel Americas to the overall group.

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Fitch estimates that successful completion of the capital increase would result in pro-forma Net debt to EBITDA

for 2019 of approximately 1.0x for Enel Americas. We believe a successful issuance will provide the company

greater flexibility to continue exploring its inorganic growth initiative, which includes acquiring minority interest in

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Fitch expects Enel S.p.A will maintain at least its existing 51.8% stake in Enel Americas and will contribute cash

to the capital increase. At a consolidated level, the transaction will bring a cash inflow related to the equity

injected by Enel Americas' minority shareholders.

Although Fitch does not expect a sizeable benefit to Enel America's consolidated ratios (up to 0.1x reduction for

FFO net adjusted leverage), the transaction reinforces our view of the company's strategy as well balanced

between pursuing growth and keeping a moderate leverage for the main subsidiaries and the whole group.

Based on Enel S.p.A.'s latest business plan, their total activities in Latin America should increase their

contribution to the group's EBITDA to 35% in 2021 from 29% in 2018.

On Feb. 27, 2019, Enel Americas announced a capital increase of up to USD3.5 billion to be executed as a

rights offering in the Santiago Stock Exchange, Electronic Stock Exchange and CMF, concurrent with the U.S.

SEC registration of American depositary shares (ADS), which trades on the NYSE. The price setting mechanism

is a risk offer price equal to a five-day volume weighted average price of common shares minus a 5% discount.

The transaction will proceed upon the approval by shareholders in the scheduled extraordinary shareholders

meetings on April 30, 2019. Upon approval, a mandatory pre-emptive rights period (PRP) will be held for 30 days

in Chile, followed by an extended PRP to American depositary receipts (ADR) holders, which is expected to start

in June ending in August 2019, and the rump placement will end in September.

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Contact:

Enel Americas

Saverio Minervini

Director

+1-212-908-0364

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

Jose Ramon Rio

Associate Director

+56-2-2499-3316

Enel S.p.A/ Enel Finance International NV

Principal Analyst

Pilar Auguets

Senior Director

+34 93 467 8747

Supervisory Analyst

Antonio Totaro

Senior Director

+39 02 879 087 297

Fitch Italia S.p.A.

Via Morigi 6

20123 Milan

Media Relations: Elizabeth Fogerty, New York, Tel: +1 212 908 0526, Email:

elizabeth.fogerty@thefitchgroup.com

Additional information is available on www.fitchratings.com

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE

READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:

HTTPS://WWW.FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING

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DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC

WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE

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a result, despite any verification of current facts, ratings and forecasts can be affected by future events or

conditions that were not anticipated at the time a rating or forecast was issued or affirmed.

The information in this report is provided "as is" without any representation or warranty of any kind, and Fitch

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recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and

reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating

and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group

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For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial

services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only.

Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within

the meaning of the Corporations Act 2001

Fitch Ratings, Inc. is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized

Statistical Rating Organization (the "NRSRO"). While certain of the NRSRO's credit rating subsidiaries are listed

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may be used by regulated entities within the EU for regulatory purposes, pursuant to the terms of the EU

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are updated on a daily basis.

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Ante el anuncio de un eventual aumento de capital por
US$ 3.500 millones en Enel Américas, Feller Rate ratifica
sus clasificaciones de riesgo.

ENEL AMERICAS S.A.

COMUNICADO DE PRENSA

Solvencia
Perspectivas

Dic. 2018
AA-
Estables

Feb 2019
AA-
Estables

Contacto: Nicolás Martorell / nicolas.martorell@feller-rate.cl; Camila Sobarzo / camila.sobarzo@feller-rate.cl

SANTIAGO, CHILE – 28 DE FEBRERO DE 2019. Ante un eventual aumento de capital, Feller Rate ratificó en “AA-” las
clasificaciones de la solvencia, los bonos y las líneas de bonos de Enel Américas S.A. A la vez, confirmó la clasificación de sus
acciones en “Primera Clase Nivel 2” y la de sus líneas de efectos de comercio en “Nivel 1+/AA-”. Las perspectivas de la
clasificación se mantienen “Estables”.

El 27 de febrero de 2019, a través de un Hecho Esencial, Enel Américas convocó a una Junta Extraordinaria de Accionistas -a
realizarse el día 30 de abril- para votar por un nuevo aumento de capital de US$ 3.500 millones, mediante nuevas acciones de
pago. Este tiene como objetivo prepagar cerca de US$ 2.650 millones de deuda con empresa relacionada (Préstamo
financiero otorgado por Enel Finance International usado para la adquisición de Electropaulo y el prepago de deuda de filial
brasileña) y subsanar contingencias ligadas al pago de pensiones en Brasil por US$ 850 millones. Cabe destacar que, si este
aumento de capital fuese aprobado, la operación se llevaría a cabo hacia el segundo semestre de este año.

Feller Rate ve como positiva esta inyección de fondos para la compañía, en especial para la filial Enel Brasil S.A., lo que
resultaría en mayores eficiencias y en un desapalancamiento del perfil financiero, el cual se ha visto presionado en 2018 ante
de adquisición de Electropaulo y mayores costos financieros ligados al encarecimiento de créditos en ese país. De hecho, el
indicador deuda financiera neta / ebitda alcanzó 2,1 veces a diciembre de 2018 (1,2 veces en 2017), a pesar del aumento del
ebitda de un 15%. Asimismo, este aumento de capital es consistente con el compromiso de la firma de mantener un perfil
crediticio equilibrado, donde el indicador deuda financiera neta / ebitda llegaría a 1,0 veces después de la operación.

No obstante, a pesar de una mejora relativa de los indicadores crediticios en plazos menores a los esperados inicialmente, la
compañía mantiene la intención de potenciar el negocio en la región, aprovechando nuevas oportunidades de fusiones,
adquisiciones y compras de minoritarios. De esta forma, Feller Rate espera que el financiamiento de estas eventuales
operaciones sea a través de nuevo endeudamiento y fondos propios, manteniendo la expectativa que la compañía mantendrá
un indicador de deuda financiera neta / ebitda con un máximo de 2,5 veces, en línea con la categoría asignada.

Además, será relevante la materialización de las expectativas de mejora económica tanto en Brasil como en Argentina, países
con importantes desafíos que se encuentran clasificadas en “B/Estables” y “BB-/ Estables” por agencias internacionales, donde
para Enel Américas tienen una importancia relevante.

El significado detallado de todas las categorías de clasificación está disponible en www.feller-rate.cl en la sección Nomenclatura

Las clasificaciones de riesgo de Feller Rate no constituyen, en ningún caso, una recomendación para comprar, vender o mantener un determinado instrumento. El análisis no es el resultado
de una auditoría practicada al emisor, sino que se basa en información pública remitida a la Comisión para el Mercado Financiero en aquella que voluntariamente aportó el emisor, no siendo
responsabilidad de la clasificadora la verificación de la autenticidad de la misma.

www.feller-rate.com

220

Annual Report Enel Américas 2019

• On April 10, 2019, the “Comunicato Stampa” by our parent Company, Enel SpA. was issued reporting having increased its

shareholding in Enel Américas S.A. by 4.62% and having reached 56.42% of the Company.

The same “Comunicato Stampa” and in relation to the current capital increase, announced in a Significant Event issued

on February 27, 2019, supplemented by a Significant Event issued on March 1, 2019, that Enel S.p.A reported its intention

to vote in favor of its approval at the Extraordinary Shareholders’ Meeting to be held on April 30, 2019; Enel S.p.A also

stated its intention to approve the capital increase and subject to market conditions, to subscribe the shares issued by

Enel Américas, in proportion to its current shareholding, i.e. 56.42%, through the exercise of the pre-emptive subscription

rights.

More details in the “Comunicato Stampa” as attached:

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• On April 25, 2019, the following was reported as a Signif-

dred and four thousand four hundred and twenty-four US

icant Event:

dollars) divided into 76,182,430,202 common, nominative

shares, all of the same series and without par value.

The Enel Américas´ Board, in a session held on April 25,

2019, unanimously resolved to suggest the following

All the new payment shares will preemptively be offered

adjustments in relation to the capital increase to be dis-

to shareholders on a pro rata basis for the shares they

cussed at the Company´s Extraordinary Shareholders’

hold in their name in the Enel Américas Shareholders

Meeting to be held on April 30, 2019, at San Isidro Street,

No. 74, the Borough of Santiago, Santiago , immediately

the date of publishing the notification that initiates the

after the Ordinary Shareholders’ Meeting.

pre-emptive subscription period.

After intense financial market activity and having ob-

We therefore inform that by communication dated April

tained sufficient information from the market, to secure

10, 2019, reported In a Significant Event issued on the

the greatest possible support for the transaction, we

same date, the Company’s controlling shareholder, Enel

suggest that shareholders should agree on the sum of

SpA, expressed its intention, subject to market condi-

US$3,000,000,000 (three billion US dollars), as the cap-

tions, to subscribe all the corresponding shares according

ital increase amount whose aim Is to permit Enel Bra-

to their shareholding.

sil S.A. to repay the Enel Finance International N.V. loan

which replaced Enel Brasil S.A.´s debts with banks, relat-

The shares not subscribed during this first pre-emptive

ed to the acquisition of the Brazilian Company Eletropau-

subscription period and those corresponding to frac-

lo Metropolitana Eletricidade de São Paulo S.A., as well

tions produced in the apportionment among sharehold-

as to restructure the Company´s pension funds liabilities.

ers, shall be offered for a period of 24 days in a second

The resulting improvement of the Company’s wealth

pre-emptive subscription period intended only for those

structure will permit it to seize investment opportunities

shareholders or third parties who have subscribed shares

through mergers and acquisitions and to purchase minori-

during the first pre-emptive subscription period, on a pro

ty holdings.

rata basis at the same price at which they are offered

during the first pre-emptive subscription period and on a

• On April 30, 2019, the following was reported as a Sig-

pro rata basis for the shares which they have subscribed

nificant Event:

and paid for during that first pre-emptive subscription pe-

The Extraordinary Shareholders’ Meeting of Enel Améri-

riod.

cas S.A. (“Enel Américas” or the “Company”) held on

The new shares issued under this capital increase must

April 30, 2019, approved the US$3,000,000 (three billion

be fully subscribed and paid within one year from the

U.S. dollars) capital increase by issuing 18,729,788,686

date of the Extraordinary Meeting and the Board of Enel

new payment shares with the same characteristics as

Américas shall be authorized to refrain from the collec-

the existing ones

tion of the amounts due at said expiration, in which case

the capital will be reduced in full right from the amount

The purpose of the referred to capital increase is to per-

actually paid at the expiration of the indicated period.

mit the subsidiary Enel Brasil S.A. to repay the Enel Fi-

nance International N.V. loan which replaced Enel Brasil

• On April 30, 2019, the following was reported as a Signif-

S.A.´s debts with banks, related to the acquisition of the

icant Event:

Brazilian Company Eletropaulo Metropolitana Eletricidade

de São Paulo S.A., as well as to restructure the Compa-

The Ordinary Shareholders’ Meeting held on April 30,

ny´s pension funds liabilities. The resulting improvement

2019, agreed to distribute the mandatory minimum div-

of the Company’s wealth structure will permit it to seize

idend ( from which the interim dividend paid in January

investment opportunities through mergers and acqui-

2019 will be deducted) and an additional dividend, which

sitions and to purchase minority holdings. This way, the

jointly totals US$ 480,552,341 (four hundred and eighty

Company’s capital shall reach US$9,763,204,424 (nine

million five hundred and fifty-two thousand three hundred

thousand seven hundred and sixty-three million two hun-

and forty-one US dollars) equivalent to US$0.008364 per

share.

21. Significant events

223

Since the above-mentioned Provisional Dividend No.

of the Board of Directors, the Company´s Directors´

98 has already been paid, the remaining Final Dividend

Committee appointed Mr. Hernán Somerville Senn

No. 99 totaling US$ 403,652,031.5 equivalent to US$

as Chairman of that corporate body and Mr. Domingo

0.007026 per share shall be distributed and paid. Said div-

Valdés Prieto as Secretary.

idend will be paid in Chilean pesos, legal tender currency,

according to the exchange rate of the Observed Dollar

• On May 16, 2019, the following was reported as a Signif-

published in the Official Journal on May 10, 2019.

icant Event:

• On April 30, 2019, the following was reported as a Signif-

The Board of Directors of Argentina’s subsidiary Empresa

icant Event:

Distribuidora Sur S.A. (“Edesur”) has decided to call for

an Extraordinary General Shareholders´ Meeting for June

1. At the Ordinary Shareholders’ Meeting of Enel

14, 2019, to ratify the following agreements reached by

Américas S.A. held on April 30, 2019, the Company´s

that subsidiary with the Argentine National State:

new Board of Directors was elected for a three-year

period and consists of the following persons:

1. As part of the transfer of the public electricity dis-

Mr. Francisco de Borja Acha Besga

Mr. José Antonio Vargas Lleras

Mr. Livio Gallo

Mr. Enrico Viale

tribution service granted by the National State in fa-

vor of Edesur to the jurisdiction of the Province of

Buenos Aires (the “Province”) and the Autonomous

City of Buenos Aires (“CABA”), as of May 10, Edesur

signed an Agreement implementing such transfer

Mr. Hernán Somerville Senn (Independent proposed

(“the Agreement”), which must be ratified by the

by the controlling entity)

Shareholders’ Meeting. The Agreement indicates

Mr. Patricio Gómez Sabaini (Independent proposed

that the Province and the CABA would jointly take on

by the controlling entity)

the status of the Granting Power of the public service

Mr. Domingo Cruzat Amunátegui (Independent pro-

provided by the Company, and that it would continue

posed by the AFPs).

to be governed by its concession contract and by the

applicable national legal and regulatory norms. The

2. At the ordinary session of Enel Américas S.A.´s Board

agreement also provides for the creation of the new

of Directors also held on April 30, 2019 and following

regulator: Metropolitan Electrical Service Regulator

the aforementioned meeting, Mr. Francisco de Borja

(Ente Metropolitano Regulador del Servicio Eléctrico

Acha Besga was elected as Chairman of the Board

- EMSE), as a bipartite body made up of the Province

of Directors and of the Company and Mr. Domingo

and the CABA. The Agreement shall enter into force

Valdés Prieto was elected Secretary of the Board of

once ratified by the Provincial Executive Branch and

Directors.

the CABA Legislature.

3. Furthermore, said Board of Directors appointed the

Directors´ Committee pursuant to Law 18.046 on

2. Edesur also signed an agreement on the Regulariza-

Joint Stock Companies and the Sarbanes-Oxley Act,

tion of Liabilities, with the Ministry of Energy – act-

whose members are as follows: Directors Hernán

ing on behalf of the National State – under which all

Somerville Senn, Patricio Gómez Sabaini and Do-

outstanding reciprocal claims from the 2006-2016

mingo Cruzat Amunátegui. Pursuant to Circular No.

transition period shall be considered terminated. Ac-

1.956 of the Financial Market Commission we hereby

cording to this agreement, which must be ratified by

report that all members of said Committee are inde-

Edesur´s Shareholders’ Meeting, Edesur must, on

pendent directors. The Company´s Board of Direc-

the one hand, pay outstanding debts arising during

tors appointed Mr. Hernán Somerville Senn as Enel

the above-mentioned transition period; and, at the

Américas S.A Directors´ Committee Financial Expert.

same time, must implement investments addition-

al to those established in the Comprehensive Tariff

4. At the same time, during the regular session held

Review, aimed at contributing to the improvement,

today and following the above mentioned session

reliability and security of the service.

224

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The total amount committed by Edesur under this

At the same time, the economic and financial im-

Agreement will be approximately $9.5 billion Argen-

pacts of the agreement will be extended for the peri-

tine pesos. At the same time, the National State will

od of five to seven years, as relevant.

compensate the Company, for debts for mutual loans

and energy purchases, social debts Incurred in 2017

Items of assets and liabilities involved in said agree-

and 2018, and forgo the sanctions whose destination

ment and their respective amount as of March 31,

was Public Administration. The total amount com-

2019.

mitted by the National State under this Agreement

is approximately $10.2 billion Argentine pesos. As

The liabilities involved in the agreement present a

a result of the consolidation of assets and balance

balance of $ 20.2 billion of Argentine pesos as of

sheets that the latter agreement involves, Edesur

March 31, 2019.

shall accept the payment of the corresponding taxes

of approximately $2.8 billion Argentine pesos.

4. Financial effects that such agreement will have on

Once these agreements have been ratified by Ede-

sur´s Extraordinary General Shareholders Meeting, it

Edesur undertakes, on the one hand, to pay off the

will be reported in due time in a relevant Significant

remaining debts stemming from the 2006-2016 tran-

profit and cash flows.

Event.

sition period and, at the same time, to implement

investments additional to those established in the

• On May 20, 2019, the following was reported as a Signif-

Comprehensive Tariff Review, aimed at improving

icant Event:

service reliability and security for the amount of ap-

proximately $ 9.5 billion Argentine pesos.

The following information supplements the Significant

Event issued on May 16, 2019 with the following informa-

At the same time, the National State shall compen-

tion:

sate the Company, for debts for mutual loans and en-

ergy purchases and social liabilities incurred in 2017

1. The amount to be allocated for additional invest-

and 2018, and forgo the sanctions whose destination

ments and the nature of such investments.

is the Public Administration. The amount committed

by the National State under this agreement is approx-

The amount allocated to investments is approximate-

imately $ 10.2 billion Argentine pesos.

ly $ 4.2 billion Argentine pesos to be invested in up to

5 years. The plan is focused on improving the reliabil-

Furthermore, as a result of the consolidation of as-

ity and safety of the system as a whole, improving

sets and balance sheets that the latter agreement

high, medium and low voltage facilities, change of

involves, Edesur will accept the payment of the cor-

technology, such as the implementation of smart me-

responding taxes for the amount of approximately $

ters (pilot project), as well as improving commercial

2.8 billion Argentine pesos.

and technical physical facilities, the implementation

of new commercial, technical and administrative-fi-

5. Any other information deemed relevant to correctly

nancial systems of Empresa Distribuidora Sur S.A.

understand and evaluate the Significant Event.

(“Edesur”) and finally , the expansion of the opera-

tional fleet of heavy vehicles, among others.

The agreements to be ratified by Edesur’s Extraor-

dinary General Shareholders´ Meeting, according to

2. Estimated timeframe for the “Agreement on Liability

preliminary estimates, will have a positive impact on

Regularization”.

its 2019 operational income of approximately $ 9.98

billion of Argentine pesos.

The completion of the formal aspects of the agree-

ment will be done throughout June 2019, with the

ratification of the agreement by the Extraordinary

Shareholders´ Meeting of the subsidiary Edesur.

21. Significant events

225

• On June 11, 2019, the following was reported as a Signif-

installments of $ 300 reais million, the first one 12

icant Event:

months after the payment of the first installment;

and (iii) the last payment of $ 250 million reais, 48

On June 10, 2019, the Brazilian subsidiary Eletropaulo

months after the date of the first payment;

Metropolitana Eletricidade de São Paulo S.A. (“Enel Dis-

tribuição São Paulo”) published the attached Press Release

(b) Payments to the legal counsel: (i) 50% after judicial

for the market, in addition to a Significant Event issued by

approval of the agreements with Eletrobras and the

that Company on March 9, 2018 in the Republic of Brazil,

legal counsel, whichever occurs last; and (ii) payment

where it reports the agreements signed by that subsid-

of the balance at the end of 60 months from the first

iary and Eletrobras Centrais Elétricas S.A. (“Eletrobras”)

payment; And

and their legal counsel (the “Agreements”) , in order to

terminate a dispute (case No. 001002119.1989.8.19.0001

c) Payments will be adjusted according to CDI (inter-fi-

- “the Litigation”) involving Eletrobras, Companhia de

nancial deposit rate) + 1% as of January 31, 2018, to

Transmissão de Energia Elétrica Paulista (“CTEEP”) and

the effective date of payment of each installment.

Enel Distribuição São Paulo.

As reported in the attached Press Release, pursuant to

and June 10, 2019, respectively, the conditions to initiate

the Agreements and notwithstanding any appeal actions

the payments were met and Enel Distribuição São Paulo

against CTEEP, Enel Distribuição São Paulo undertook to

paid the first installment under said agreements and duly

Once the agreements were approved on April 25, 2019

disburse $ 1.5 billion reais, to pay off the debt associated

adjusted on June 10, 2019.

with the litigation, of which $ 1.4 billion reais are to be

paid in favor of Eletrobras and $100 million reais in legal

The above-indicated agreements are duly provisioned in

costs, according to the following conditions:

the Consolidated Financial Statements of Enel Américas

from the date on which it was acquired and in control of

(a) Payments to Eletrobras: (i) $ 250 million reais after

Enel Distribuição São Paulo.

judicial approval of the Agreements with Eletrobras

and the lawyers, whichever occurs last; (ii) 3 annual

226

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21. Significant events

227

• On June 18, 2019, the following was reported as a Significant Event:

The Press Release addressed to the National Securities Commission of the Republic of Argentina, issued on June 18, 2019

by the Argentine subsidiary Empresa Distribuidora Sur S.A. (“Edesur”). As indicated in that Press Release said subsidiary

concluded its Extraordinary Shareholders Meeting in which the agreements reached by that subsidiary with the Argentine

National State were ratified and subsequently informed in detail to the market by Enel Américas S.A. as a Significant Event

via Press Releases issued on May 16 and May 20, 2019.

228

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21. Significant events

229

230

Annual Report Enel Américas 2019 • On June 26, 2019, the following was reported as a Signif-

• On June 26, 2019, the following was reported as a Signif-

icant Event:

At the Company´s Board of Directors meeting held on

On June 26, 2019, our subsidiary, Enel Brasil S.A., filed

June 26, 2019, this corporate body, in use of the author-

with the Comissáo de Valores Mobiliários (“CVM”) of

ity conferred by the Board, agreed that the subscrip-

Brazil a request for the registration of the public offer for

tion price of each of the 18,729,788,686 new shares

the acquisition of shares of the subsidiary Eletropaulo

to be offered pre-emptively to the Company´s share-

Metropolitana Eletricidade de Sáo Paulo S.A. (“Eletro-

holders, both in the first and second periods , shall be

paulo”), to cancel the registration of that Company as a

US$0.162108214203236 per share.

Publicly Traded Company under category A (for shares

and liabilities) , and to be registered with the CVM under

Pursuant to the Board’s resolution, the 18,729,788,686

category B (liabilities only). The destination of the offer

new shares must be paid in cash at the time of subscrip-

shall be ordinary shares issued by Eletropaulo in circula-

tion, in US dollars or, its equivalent in Chilean pesos, legal

tion, corresponding to 4.056% of the total shareholding

tender currency, according to the exchange rate of the

capital of that Company, that is to say, for all the ordinary

“Observed Dollar” as published by the Central Bank of

shares of Eletropaulo issuance, which are not directly or

Chile in the Official Journal on the date of the respective

indirectly owned by Enel Brasil, or related persons, and

payment.

different from its own shares in the treasury.

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Further details of the operation are described in the Fato

Relevante issued by Eletropaulo, as attached.

The financial effects of such a transaction are not quanti-

fiable as of this date.

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21. Significant events

231

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21. Significant events

233

• On June 28, 2019, the communication issued as a Sig-

the local and in the US markets, a total of 18,224,843,129

nificant Event by our parent Company Enel SpA where

shares were subscribed and paid, 97.3% of the total new

the Company informed the market about its plans to in-

shares issued and related to the aforementioned capital

crease its stake in Enel Américas S.A. (“Enel Américas”)

increase, for a total amount of US$2,954,396,773, with

by up to 5%, in addition to its current shareholding, to-

504,945,557 new shares, for the total amount of approx-

taling 56.8%. Therefore, Enel SpA has entered into two

imately US$81,855,822 remaining and awaiting subscrip-

swap agreements with a financial institution to acquire

tion and payment.

common shares and American Depositary Shares (ADS)

issued by Enel Américas, including the acquisition and ex-

As authorized by the Board, the Company shall carry out

ercise of preemptive rights corresponding to the Compa-

a second pre-emptive subscription period, in which it will

ny’s ongoing capital increase. Further details can be found

offer the shares not subscribed during the first pre-emp-

in the aforementioned communication, as attached.

tive subscription period and those corresponding to the

The financial effects of such a transaction are not quanti-

shareholders. The second pre-emptive subscription peri-

fractions resulting from the apportionment among the

fiable as of this date.

od in Chile will last for 24 days and the new shares will

be offered at the same price at which they were offered

• On July 30, the following was reported as a Signifi-

during the first pre-emptive subscription period, that is to

cant Event:

say, at a price of US$0.162108214203236 per share.

July 26, 2019 was the final day of the first preemptive op-

These new shares must be paid in cash at the time of

tion period to subscribe the 18,729,788,686 new payment

subscription, in US dollars or, in their equivalent in Chil-

shares issued from the capital increase agreed at the

ean pesos, legal tender currency, according to the ex-

Company’s Extraordinary Shareholders´ Meeting held on

change rate of the “Observed Dollar” published by the

April 30, 2019 (the “Meeting”). During said period, both in

Central Bank of Chile in the Official Journal on the date of

the respective payment.

234

Annual Report Enel Américas 2019

The second pre-emptive subscription period in Chile shall

Company´s shareholders will be offered 504,945,557

start on August 6, 2019, in which only those shareholders

new payment shares and will be entitled to subscribe

or their assignees will be entitled to participate who have

0.0277064418840738 new shares for each share they

subscribed and paid shares during the first pre-emptive

have subscribed and paid for during the first pre-emptive

subscription period and are shareholders of the Company

subscription period.

at midnight on the fifth business day preceding the start

of the second pre-emptive subscription period in Chile.

• On August 5, 2019, the following was reported as a Sig-

Within the second pre-emptive subscription period, the

nificant Event:

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21. Significant events

235

On August 2, 2019, Enel Américas subscribed and paid

On September 12, 2019, the following was reported as a

a capital increase in its subsidiary Enel Brasil S.A. (“Enel

Significant Event:

Brasil”), for the amount of up to $9,475,000,000 reais

equivalent to approximately US$ 2,516,266,100, thus

At an extraordinary session of the Company’s Board of

permitting Enel Brasil to pay off the short-term loans

Directors held on September 12, 2019, this corporate

the Company Incurred from financiers, to repay the debt

body agreed to refrain from placing the 96,119,166 shares

that Enel Brasil incurred with Enel Finance International

issued in the Capital increase up to approximately 0.51%

N.V. With this transaction one of the uses of the funds

of the total shares issued and which were pending sub-

obtained from the capital increase has been met as ap-

scription and payment after the end of the second pre-

proved by the Extraordinary Shareholders’ Meeting held

emptive offer period. Thus, as agreed by the Board, once

on April 30, 2019.

the 1-year deadline as of April 30, 2019 is met, the Com-

pany´s capital will be reduced to the amount actually paid

Because of the repayment of Enel Brasil’s debt, the

at the expiration of the period indicated above.

Company´s financial burden will be significantly eased,

leading to lower financial expenses and thus increased

• On November 25, 2019, the following was reported as a

profits and possible improvements in cash flow, both in

Significant Event:

Enel Brasil and Enel Américas that consolidates the latter.

• On September 2, 2019, a Significant Event reported

held on November 25, 2019, unanimously agreed to pay

a capital increase agreed at the Company’s Extraordinary

a Provisional Dividend of US$ 0.00161991859562863 per

Shareholders’ Meeting held on April 30, 2019 (the “Meet-

share, corresponding to the 2019 financial year profits,

ing”) and registered in the CMF Securities Register under

payable on January 24, 2020. This amount corresponds

The Board of Enel Américas S.A, in a regular session

No. 1083 (the “Capital increase”):

to 15% of Enel Américas’ net profits as of September 30,

2019, established on the basis of the Company’s Financial

Between August 6 and 29, 2019, the Company de-

Statements on that date.

clared the second preemptive period aimed at subscrib-

ing 504,945,557 shares issued in the Capital increase.

Said dividend shall be paid in Chilean pesos, legal tender

During that period, both in the local and US markets, a

currency, according to the exchange rate of the Observed

total of 408,826,391 shares, representative of approxi-

Dollar as published in the Official Journal on January 17,

mately 80.96% of the total shares offered in that peri-

2020.

od, were subscribed, and paid raising approximately US$

66,274,116.

• On November 26, 2019, the following was reported as a

Significant Event:

This way, the Company has successfully completed the

first and second Capital increase preemptive offer peri-

The Company’s Board of Directors, held on November 25,

ods having subscribed a total of 18,633,669,520 shares,

2019, approved Enel Américas´ 2020-22 Strategic Plan.

representative of 99.49% of the total shares issued in

the capital increase, for a total amount of approximately

The macro elements of the Strategic Plan provide a cu-

US$3,020,670,890, reaching the amount approved by the

mulative EBITDA of approx. US$ 15.2 billion and a cu-

Board.

mulative CAPEX of approximately US$ 5.3 billion for the

After the end of the first and second preemptive offer

periods, a total of 96,119,166 new shares were left un-

Given that the contents of the aforementioned Strategic

subscribed. As authorized by the Board, the remaining

Plan obey and are based on hypothetical projections that

shares may be offered by the Company’s Board to share-

may or may not be verified in the future, their effects are

holders or third parties, under conditions and prices other

not quantifiable as of this date.

2020 – 2022 triennium.

than those of the first preemptive subscription offer, pro-

vided that these offers to shareholders or third parties are

carried out in Chilean stock exchanges, which, if any, will

be informed to the market in a timely manner.

236

Annual Report Enel Américas 2019

• On November 27, 2019, the following was reported as a

(b) Redemption Price: the price to be paid per share shall

Significant Event:

be $ 49.46 reais, an amount equal to the per-share

price paid in the Public Offer for the Acquisition of

As part of the public offer to acquire shares submitted

Shares updated by the SELIC rate published by the

by our subsidiary, Enel Brasil S.A., related to the shares

Central Bank of Brazil as of the date of the auction

of the subsidiary Eletropaulo Metropolitana Eletricidade

until the effective payment date of the redemption

de São Paulo S.A. (“Eletropaulo”) said shares were auc-

price.

tioned on November 21. At the auction Enel Brasil ac-

quired 2,959,302 shares corresponding to 1.48% of the

Company’s total shareholding equity making Enel Brasil

the owner of 192,282,847 shares (equivalent to 95.9%

These transactions will permit Eletropaulo to remain reg-

of Eletropaulo´s total shares). The settlement of this

istered with the Securities and Commission (CVM) ex-

transaction was verified on November 25, at the value of

clusively in Category B (reserved for debt issuance) and

$49.39 reais per share. The total transaction was $ 146.2

to cancel its registration in Category A (for shares and

million reais.

debts).

On November 27, 2019, at the General Shareholders´

Enel Brasil has financed the above-mentioned operations

Meeting and pursuant to the corporate rules of the Re-

with the Company´s available cash.

public of Brazil, Eletropaulo approved the redemption of

all the Company’s shares issued and in circulation, in ac-

Further details of the operation described above can be

cordance with the following terms and conditions:

found in the Fato Relevante issued by Eletropaulo yester-

(a) Share Redemption: all of the Company’s 5,174,050

day as attached.

outstanding shares, representing 2.58% of its share-

The financial effects of such a transaction are not quanti-

holding capital.

fiable as of this date.

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Annual Report Enel Américas 2019 22.

STATEMENT OF
RESPONSIBILITY

22. Statement of responsibility

243

244

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Statement of
Responsibility

The Directors of Enel Américas S.A. and the General Manger, signatories of this statement, are responsible under oath for the

veracity of the information provided in this Annual Report, in compliance with the General Norm No. 30, issued by the Financial

Market Commission.

CHAIRMAN

Borja Acha Besga

DNI: 05263174-S

DIRECTOR

José Antonio Vargas Lleras

CI: 79.312.642

DIRECTOR

Hernán Somerville Senn

ID number: 4.132.185-7

DIRECTOR

Patricio Gómez Sabaini

Passport: 16941675N

DIRECTOR

Livio Gallo

DNI: AV 0246369

DIRECTOR

Domingo Cruzat Amunátegui

ID number: 6.989.304-K

DIRECTOR

Enrico Viale

DNI: AU 2580379

CHIEF EXECUTIVE OFFICER

Maurizio Bezzeccheri

ID number: 26.490.357-2

22. Statement of responsibility

245

246

Annual Report Enel Américas 2019 Management and Senior
Executives

CHAIRMAN
Francisco de Borja Acha Besga
Phone (56) 2 2263 4631

DIRECTOR
José Antonio Vargas Lleras
Phone (56) 2 2353 4631

DIRECTOR
Enrico Viale
Phone (56) 2 2353 4631

DIRECTOR
Livio Gallo
Phone (56) 2 2353 4631

DIRECTOR
Hernán Somerville Senn
Phone (56) 2 2353 4631

DIRECTOR
Domingo Cruzat Amunátegui
Phone (56) 2 2353 4631

DIRECTOR
Patricio Gómez Sabaini
Phone (56) 2 2353 4631

CHIEF EXECUTIVE OFFICER
Maurizio Bezzeccheri
Phone (56) 2 2263 9130

INTERNAL AUDIT OFFICER
Raffaele Cutrignelli
Phone (56) 2 2353 4647

CHIEF FINANCIAL OFFICER
Aurelio Bustilho de Oliveira
Phone (56) 2 22353 4510

PLANNING AND CONTROL OFFICER
Paolo Pescarmona
Phone (56) 2 2353 4510

GENERAL COUNSEL AND CORPORATE GOVERNANCE
Domingo Valdés Prieto
Phone (56) 2 2630 9227

HEAD OF ENEL X SOUTH AMÉRICA
Simone Tripepi

Investors and Shareholders
Relations

HEAD OF INVESTOR RELATIONS
Rafael De La Haza Casarrubio
Phone (56) 2 2353 4682

CITIBANK NY
Teresa Loureiro-Stein
Phone (1-212) 816 6814

Design & Production: LEADERS

enelamericas.com