ISA CTEEP is constantly evaluating growth opportunities in the market, having recently made advances in this direction. The Company’s strategy consists in expanding its presence in Brazil through auctions and/or acquisitions with synergies with existent operations.
In line with its growth strategy and in accordance with the Material Fact published on April 6, 2018, ISA CTEEP signed a Share Purchase Agreement with Cymi Construções e Participações S.A. (“CYMI”) to acquire 50% of the capital stock in Interligação Elétrica Sul A.A. (“IE SUL”) for the amount of R$ 20 million. The conclusion of the acquisition is still subject to the approval and agreement of certain third parties. Once completed, the Company will assume full control of this subsidiary.
In the last two years, the Company has bid successfully for ten lots in ANEEL transmission auctions which will add 1.3 thousand kilometers of extension to its transmission lines with an addition of 7.5 thousand MVA to its portfolio. The new projects amount to an estimated CapEx of R$ 2.9 billion, representing an increase in RAP of approximately R$ 448 million, once all assets are operational.
The implementation of the projects is in line with the challenging estimated budget and timeframe, which builds in a reduction in CapEx and the start up ahead of schedule.
The IE Itapura and IE Itaquerê subsidiaries, both wholly-owned by ISA CTEEP, began their construction in May and July 2018, respectively, according to the established schedule.
|Auctions||Subsidiaries||% ISA CTEEP||Location||ANEEL CAPEX
ISA CTEEP Participation
|50%||Minas Gerais||171||0,0%||36||Real Profit||Feb/17||Feb/22||Jan/192||3Q19||-|
|100%||Espírito Santo||298||25,1%||47||Presumed Profit||Feb/17||Feb/22||Jul/18||Sep/186|
|100%||São Paulo||398||44,5%||46||Presumed Profit||Aug/17||Aug/21||Jun/18||Jul/18|
|100%||São Paulo||602||52,7%||54||Presumed Profit||Aug/17||Aug/21||Dec/21||1Q19||-|
|100%||Santa Catarina||641||66,7%||38||Presumed Profit||Sep/18||Sep/23||Sep/214||N/A5||-|
2 Conditioned to Lot 2 (Alupar)
3 To receive the totality of RAP
4 According to draft of concession contract 5 Does not require Environmental License
6 IE Itaúnas is formed of the implantation of tarnsmission line 345 kV Viana 2 (ES) - João Neiva 2 (ES), the construction of new substation 345/138 kV João Neiva 2, and the expansion of substation 345 kV Viana. The Company begain its construction work of substation Viana. The installment license for the Transmission Line and the João Neiva 2 Substation still has not been issued
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ISA CTEEP and its wholly and jointly-owned subsidiaries invested BRL 93.7 million in 3Q18, 64.3% above the amount reported for 3Q17. The variation is explained principally by:
(i) increased investment in pre-operational subsidiaries for payment of environmental licensing fees and landrelated negotiations. Investments are in line with the challenging budget and schedule that has been set. It is worth noting that the main investment flows at the subsidiaries will occur in the 3rd and 4th year of their respective construction work;
(ii) higher investments in operational subsidiaries reflects mainly additional CapEx at IE Madeira for the solution of pending issues, partially compensated by:
(iii) reduction in reinforcements and improvements activity. Investments in reinforcements and improvements are in line with the planned budget. Investments between the quarters under review are not comparable since both periods have distinct projects and depend on Authorizing Resolutions from ANEEL.
In the first nine months of this year, investments totaled BRL 327.7 million (+76.5% vs. 9M17).
|(BRL million)||3Q18||3Q17||Chg (%)||9M18||9M17||Chg (%)|
|ISA CTEEP (Reinforcements/Improvements)||47,8||54,1||-11,6%||112,3||148,8||-24,5%|
Updated on January 7, 2019.