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
(BRL MM)
Discount RAP ISA
CTEEP
(BRL MM)
Profit Regime Contract
signature
Implementation
Deadline ANEEL
Necessity Date¹ Environmental
License (LI)

Auction
03/2015¹
10/28/2016
IE Paraguaçú
(Lot 3) 
50% Bahia
Minas Gerais
255 0,0% 53 Real Profit Feb/17 Feb/22 Jan/192 3Q19
IE Aimorés
(Lot 4)
50% Minas Gerais 171 0,0% 36 Real Profit Feb/17 Feb/22 Jan/192 3Q19
IE Itaúnas
(Lot 21)
100% Espírito Santo 298 25,1% 47 Presumed Profit Feb/17 Feb/22 Jul/18 3Q18
Auction
05/2016
04/24/2017
ERB1
(Lot 1)
50% Paraná 968 33,2% 134 Real Profit Aug/17 Aug/22 Feb/213 1Q20
IE Tibagi
(Lot 5)
100% São Paulo 
Paraná
135 32,2% 18 Presumed Profit Aug/17 Aug/21 Jan/17
IE Itaquerê
(Lot 6)
100% São Paulo 398 44,5% 46 Presumed Profit Aug/17 Aug/21 Jun/18
IE Itapura
(Lot 25)
100% São Paulo 126 57,6% 11 Presumed Profit Aug/17 Feb/21 Jan/20
IE Aguapeí
(Lot 29)
100% São Paulo 602 52,7% 54 Presumed Profit Aug/17 Aug/21 Dec/21 1Q19
Auction
02/2018
06/29/2018
Lot 1 100% Santa Catarina 641 66,7% 38 Presumed Profit Sep/18 Sep/23 Sep/214 N/A
Lot 10 100% São Paulo 238 73,9% 10 Presumed Profit Sep/18 Sep/22 Sep/214 N/A
Total 3.831   447  
1 According to concession contract
2 Conditioned to Lot 2 (Alupar)
3 To receive the totality of RAP
4 According to draft of concession contract


Click here to download the spreadsheet

ISA CTEEP and its wholly and jointly-owned subsidiaries invested R$ 136.7 million in 2Q18, 63.4% more than the amount reported for 2Q17. The variation is explained principally by:

(i) R$ 70.3 million  invested in pre-operational subsidiaries as well as the payment for environmental licensing fees and land-related negotiations. Investments in the pre-operational subsidiaries are in line with the challenging budget and schedule that has been set. It is worth noting that the main investment flows of these subsidiaries will occur in the 3rd and 4th year of their respective construction periods;

(ii) R$ 45.0 million invested in reinforcements and improvements which generate additional revenue for the Company from organic growth. The investments in reinforcements and improvements are in line with the established budget. The investments are not comparable between periods since they involve distinct project portfolios and depend on the issuance of Authorization Resolutions by ANEEL; and,

(iii) R$ 21.4 million invested in operational subsidiaries. Growth of investments at the operational subsidiaries reflects mainly the additional CapEx at IE Madeira for the solution of pending issues.

In the first half of 2018, investments totaled R$ 234 million (+ 82.7% vs. 1H17).

CAPEX
(BRL million) 2Q18 2Q17 Chg (%) 1H18 1H17 Chg (%)
ISA CTEEP (Reinforcements/Improvements) 45.0 52.2 -13.9% 64.5 94.7 -31.9%
Total Subsidiaries 91.7 31.4 191.8% 169.5 33.4 407.9%
Operational 21.4 31.4 -31.9% 27.7 33.2 -16.6%
Pre-operational 70.3 - - 141.9 0.2 -
Total 136.7 83.7 63.4% 234.0 128.1 82.7%
Note: Realized investments are demonstrated in the competence vision

Updated on September 10, 2018.