ISA CTEEP constantly monitors market opportunities for growth and has been making progress in this context. The Company’s strategy is to expand its presence in Brazil through auctions and/or M&A that are synergistic with existing operations, while observing its minimum required return.

In the last three years, the Company has bid successfully for ten lots in ANEEL’s transmission auctions, that amount to an estimated investment of BRL 2.9 billion, with an increase in RAP (2019/2020 cycle) of approximately BRL 491 million, once the assets become operational.

In 3Q19, the Company started up its first project from these lots: IE Itapura (Bauru),18 months ahead of ANEEL’s implementation deadline.

Project evolution is in line with the estimated challenging budget and schedule, which considers capex reduction and an anticipation in start up vs. ANEEL’s assumptions. By September 30, 2019, approximately BRL 687 million had been invested in the 10 projects.

Another important avenue for growth lies with investment in retrofitting projects. In the past five years, the Company invested an average BRL 180 million/year, with an associated average RAP of BRL 50 million/year. It is important to emphasize that these are average amounts and the investments are non-linear, as they depend on ANEEL Authorizing Resolutions. In 9M19, the Company invested BRL 78 million in these projects.

ISA CTEEP and its wholly and jointly owned subsidiaries invested BRL 233.9 million in 3Q19, up BRL 140.2 million from the same period in 2018. The change is mainly due to:

  1. increased investment in pre-operational subsidiaries with the progress of construction, in line with the challenging budget and schedule; partly offset by:
  2. lower investment in operational subsidiaries, justified by the assets’ maturity;
  3. lower investment in reinforcement and improvements. Investments are not comparable between periods because of different project portfolios and dependence on ANEEL Authorizing Resolutions.

In the year to date (9M19), investments have totaled BRL 506.8 million.

Auctions Subsidiaries % ISA CTEEP Location ANEEL CAPEX
ISA CTEEP Participation
(BRL MM)
Discount RAP ISA CTEEP
Cycle 2019/2020
(BRL MM)
Contract signature Implementation Deadline ANEEL Necessity Date¹ Environmental
License (LI)
Initiation of Construction Entry in Commercial Operation

Auction 013/2015 10/28/2016
IE Paraguaçú
(Lot 3) 
50% Bahia
Minas Gerais
255 0,0% 59 Feb/17 Feb/22 Jan/192 2Q19 -
IE Aimorés
(Lot 4)
50% Minas Gerais 171 0,0% 40 Feb/17 Feb/22 Jan/192 2Q19 -
IE Itaúnas
(Lot 21)
100% Espírito Santo 298 25,1% 52 Feb/17 Feb/22 Jul/18 3Q18 -
Auction 05/2016 04/24/2017 IE Ivaí
(Lot 1)
50% Paraná 968 33,2% 147 Aug/17 Aug/22 Feb/213 4 4Q19 -
IE Tibagi
(Lot 5)
100% São Paulo 
Paraná
135 32,2% 20 Aug/17 Aug/21 Jan/17 3Q18 -
IE Itaquerê
(Lot 6)
100% São Paulo 398 44,5% 51 Aug/17 Aug/21 Jun/18 3Q18 -
IE Aguapeí
(Lot 29)
100% São Paulo 602 52,7% 59 Aug/17 Aug/21 Dec/18 3Q19 -
IE Itapura
(Lot 25)
100% São Paulo
(Bauru)
126 57,6% 12 Aug/17 Feb/21 Aug/195 2Q18 Aug/19
Auction
02/2018
06/29/2018
IE Itapura
(Lot 10)
100% São Paulo
(Lorena)
238 73,9% 11 Sep/18 Sep/22 Jan/20 3Q19 -
IE Biguaçu
(Lot 1)
100% Santa Catarina 641 66,7% 40 Sep/18 Sep/23 Sep/21 1Q20 - -
Total 3.831   491  
1 According to concession contract.
2 Conditioned to Lot 2 (Alupar).
3 To receive the totality of RAP.
4 Pending Installation Licenses for 2 525kV transmission lines that connect Sarandi-Guaíra-Foz do Iguaçu.
5 ANEEL anticipated the necessity date from January/2020 to August/2019.

In 3Q19, the Company energized the greenfield project IE Itapura (Bauru), with 18 months in advance in comparison to ANEEL’s implementation deadline.

Investments
(BRL million) 3Q19 3Q18 Chg (%) 9M19 9M18 Chg (%)
ISA CTEEP (Reinforcements/Improvements) 37.8 47.8 (21.0%) 78.3 112.3 (30.2%)
Total Subsidiaries 196.2 45.9 327.7% 428.4 215.3 99.0%
Operational 2.9 16.8 (82.5%) 15.9 44.4 (64.1%)
Pre-operational 193.2 29.1 564.5% 412.5 171.0 141.3%
Total 233.9 93.7 149.7% 506.8 327.6 54.7%
Note: Realized investments are demonstrated in the competence vision.

Updated on November 7, 2019.