informe para inversionistas - geb...mmpcd) and kallpa (25.5). sources: upme, concentra, mem,...

Results Report 3Q 2017

Bogotá D.C., November 23, 2017


1

Table of Contents

1. Executive Summary and Relevant Facts……………………………………………….2

1.1. Overview of sectors .................................................................................................... 2

1.2. Summary of GEB's financial results 3Q 2017 .......................................................... 2

1.3. Relevant facts of Grupo Energía Bogotá .................................................................. 4

2. Urban Energy Solutions ............................................................................................. 5

2.1. Codensa....................................................................................................................... 6

2.2. Cálidda ......................................................................................................................... 8

2.3. Gas Natural .................................................................................................................. 9

2.4. Contugas ................................................................................................................... 10

3. Interconnecting for Market Development .......................................................... 11

3.1. GEB Transmission .................................................................................................... 12

3.2. TGI .............................................................................................................................. 13

3.3. TRECSA ..................................................................................................................... 15

3.4. EEBIS GUATEMALA ................................................................................................. 16

3.5. REP and CTM Perú ................................................................................................... 19

4. LOW-EMISSION GENERATION ................................................................................ 21

4.1. EMGESA .................................................................................................................... 21

5. ANEXES ..................................................................................................................... 23

Annex 1: Legal Notices & Clarifications ........................................................................ 23

Annex 2: Definitions of EBITDA included in this report .............................................. 24

Annex 3: Consolidates Income Statement as of September 17 .................................. 25

Annex 4: Consolidated financial statement of GEB and individuals: ......................... 26

Annex 5: Method of Participation in affiliated companies ........................................... 26

Annex 6: Regulatory and technical terms ..................................................................... 26

Annex 7: Overview of GEB ............................................................................................. 28


2

1. Executive Summary and Relevant Facts

1.1. Overview of sectors

Electricity Demand

Table No. 1 – Overview of electricity sectors 3Q 2017

(GWh) Colombia Perú Guatemala

Installed Capacity – MW 16,694 10,295 3,423

Demand – GWh 17,058 4,057 1,661

Change in demand 3Q 17/ 3Q 16 - % 1.6 1.6 1.1

*Note: Regarding Peru's electricity demand, the figure for installed capacity is presented as of the fourth quarter of 2016 due to availability of information.

Natural Gas Demand

Table No. 2 – Overview of the natural gas sectors 3Q 2017

(Mmpcd) Colombia Perú

Proven and probable reserves – TPC (2016 COL and 2015 PER)

4.3 17.9

Internal demand - mmpcd 871.5 1,165

Change in internal demand 3Q 17/ 3Q 16 (%)

-1.7 -10.2

Change in demand explanation

The sector that marked the decrease in demand was the thermoelectric, whose consumption experienced a reduction of 26.0%, given that in 2016 due to the impact of the meteorological phenomenon of El Niño, thermal generation increased, on the contrary of what occurred in 2017, when the rainy season increased and the thermal generators decreased their generation and, therefore, their consumption of natural gas was reduced.

The variation in demand is -10.19% (-132.27 MMPCD) and is mainly due to the less amount of gas used for the Melchorita Plant export (35.7 MMPCD) and Kallpa (25.5).

Sources: UPME, CONCENTRA, MEM, Osinergim

1.2. Summary of GEB's financial results 3Q 2017

Table No. 3 – Financial Indicators |

COP Millions 3Q 17 3Q 16 % Sep. 17 Sep. 16 %

Revenues 812,044 559,590 45.11 2,386,098 2,358,229 1.18

Operating Costs and Expenses -502,510 -290,161 73.18 -1,513,819 -1,426,701 6.11

Operating activities results 309,834 269,429 15.00 872,279 931,528 -6.36

Method of Participation 270,408 248,429 8.85 796,550 749,168 6.32

Adjusted Consolidated EBITDA * 1,956,530 2,181,706 -10.32 2,333,932 2550,214 -8.48

Net results 464,597 136,053 241.48 1,231,539 1,105,887 11.36

*In the calculation of the adjusted consolidated EBITDA, the figures re in the first year-round columns (at 3Q) and then the last twelve months.


3

Grupo Energía Bogotá reported consolidated financial results as of 3Q 2017; EEB's consolidated

operating income, parent company of Grupo Energía de Bogotá - GEB -, during the first nine months

reached COP 2,386,098 million, which represents an increase of 1.1% in comparison with the same

period of the previous year, explained mainly by: (i) the distribution segment of Natural Gas which grew

8.44% due to greater consumption from Electrodunas large clients mainly in Lima, closing at COP

1,240,160 million, which resulted mainly from more operational income in our subsidiaries in Perú,

Cálidda and Contugas. (ii) the electricity Transmission segment which grew 16.49%, mainly because of

greater revenue from ongoing Transmission projects in Colombia (Tesalia, Quimbo-Cali and UPME

Bolívar) and in Trecsa (Huehuetenango II, Covadonga, Uspantan and Línea Covadonga) in which the

activation of reactors is recognized, reaching COP 238,607 Million as of September closing.

The Group's costs and expenses in its consolidated structure received a reclassification, which is why the

administrative expenses decreased, being compensated with the line-to-line growth by business

segment. In other words, items that were accounted for as administrative costs in September 2016, are

currently part of the business line to which they are attached as a result of the cost revision and

standardization.

On the other hand, in the regular operation, costs recorded the following performance: (i) the natural

gas distribution segment grew because of greater amortization of the property from Cálidda's

concession, given that the 2017 use index is greater than that reported in 2016 amounting to USD 2235

million, greater monthly transportation cost because of greater capacity reserve amounting to USD 4438

million, and finally, because of greater connections in residential clients amounting to USD 1352 million.

(ii) The natural gas transportation segment reported a growth of 25.9% because of the costs of goods

and services, maintenance contractual orders, depreciation of property, plant and equipment and the

residual associated to other costs. (iii) The electricity transmission segment recorded an increase in costs

due to increases in FAER and FAES contributions, deferred taxes and the portfolio item (Electricaribe).

The electricity distribution segment recorded a reduction in costs due to the non-consolidation of EEC in

the Group's financial statements as a result of the merger with Codensa in September 2016.

The result of operating activities, in accumulated figures, reached at closing of the first nine months of

2017 COP 872,279 million in comparison with the first period in 2016, showing a decrease in Colombian

pesos of 6.36%, mainly by the effect of the merger of EEC both in the revenue and expense accounts.

So far this year, financial revenues grew 43.47% due to an increase in the financial asset, reaching COP

314,787 million. With respect to the financial expenses, these had a stable pattern reporting a change of

0.25% in increase.


4

The net exchange rate difference reached COP -40,975 so far this year, mainly due to the effect of the

devaluation of the Colombian peso, which has an impact in the company's commercial operations. This

effect is as a result of the use of the United States dollar as functional currency in commercial

operations of some of the companies that are consolidated in the group's results.

The equity method reported a positive variation of 6.32% with respect to the immediately prior year

where the main impact was attributed to the fact that in 2016, Goías Transmisión and MGE Transmisión

went through a tariff review process and had a reduction of income, thus generating a loss in the

financial asset. In the year 2017, both companies had a readjustment of IPCA in July/17's RAP and also,

from said readjustment they had a delta benchmark to the adjustment of the 2016 tariff review.

As for EBITDA, it reached close to COP 2.33 in the last twelve months with a 6.98% growth with respect

to the same period in the immediately prior year due to an increase of revenue and controlled costs and

expenses.

The net income corresponding to the first nine months of 2017 reached COP 1,231,539 million, with an

increase of 11.36% with respect to the same period in 2016 as a result of: (i) a decrease of

administrative expenses that reached an amount of COP -94,596 million, which means a reduction of

69% for this item. (ii) a reduction of 67% in tax expenses, mainly due to TGI's deferred taxes, closing in

an amount of COP -142,914 million.

1.3. Relevant facts of Grupo Energía Bogotá

On June 6, 2017, Empresa de Energía de Bogotá S.A. ESP (EEB S.A. ESP) approved the programs for the

disposal of its equity interests in Interconexión Eléctrica S.A. E.S.P.-ISA, Grupo Nutresa S.A. and Banco

Popular S.A.

On June 6, 2017, EEB GAS SAS, in accordance with the instructions given by the Board of Directors of

EEB S.A. ESP, approved the program for the disposal of its equity interest in the share capital of

Promigas S.A. E.S.P.

On June 20, 2017, the Extraordinary Shareholders Meeting approved a credit guarantee for Contugas

and changes its alternate member of the Board of Directors.

On June 27, 2017, Fitch published the technical rating report of Empresa de Energía de Bogotá E.S.P.

On July 05, 2017, the first dividend payment of 50% in the present year was made.

On August 14, 2017, the first phase of the Program for the Disposal of the shares that EEB S.A. ESP has in

Grupo Nutresa S.A., Banco Popular S.A., Interconexión Eléctrica S.A. ESP, and of the shares that EEB GAS

SAS has in Promigas S.A. ESP was finalized.


5

On September 27, 2017, Empresa de Energía de Bogotá, for the fourth consecutive year, received the IR

Recognition from the Colombian Stock Exchange because of its high standards of disclosure as issuer of

securities.

On October 3, 2017, EEB notifies that the Ministry of Finance and Public Credit, through Resolution No.

3152 of 2017, authorized EEB to execute an intra-company external loan with EEB Perú Holdings Ltd., a

subsidiary of the Group, up to an amount of USD 100,000,000.

On October 12, 2017, Fitch Ratings reaffirmed the credit rating (BBB), with stable outlook for the

corporate debt of Empresa de Energía de Bogotá S.A ESP and its subsidiary Transportadora de Gas

Internacional S.A ESP. This rating corresponds to investment grade.

On October 20, 2017, the Program for the Disposal of the Equity Interest that Empresa de Energía de

Bogotá S.A. E.S.P.'s has in Ecopetrol was finalized.

On October 20, 2017, Standard & Poor’s, through its yearly review report, ratified the credit rating of

Empresa de Energía de Bogotá in the investment grade and maintained the "stable" outlook.

On October 31, 2017, the second dividend payment of 50% in the present year was made. In total,

during the year 2017, $99/share were paid.

2. Urban Energy Solutions

Table No. 6 – Selected financial indicators of Codensa September 2017

Urban Energy Solutions (SEU) is focused on developing energy infrastructure to satisfy the demand of big

cities (currently, Bogotá and Lima). This is achieved by a better understanding of markets and their

consumers and contributing in the creation of an energy development agenda (uses, applications, services

and technologies) with a positive impact on the energy chain and users.

COP Mm Codensa Cálidda

(USD Thousands) Gas Natural

Contugas

(USD Thousands)

Operative income 3,362,461 425,113 1,713,582 60,486

Operative profit 1,470,324 79,284 240,697 6,720

EBITDA 1,151,139 105,992 269,086 13,471

Net Profit 464,955 48,236 168,539 -4,817


6

2.1. Codensa

Table No. 5 – Overview of Codensa 3Q 17

Results

Number of clients 3,314,587

Market participation - % 22.40%

Codensa Demand – Gwh 11,187

Var % demand 2Q 17 vrs. 2Q 16 2.54%

Loss index (%) 7.80%

Control Enel Energy Group

EEB's stake 51.5% (36.4% ordinary; 15.1% non-voting preferred)

Table No. 6 – Selected financial indicators of Codensa 3Q 2017

COP Millions USD Million

3Q 17 3Q 16 Var % 3Q 17 3Q 16 Var %

Operative income 3,362,461 3,026,314 11.1 1,144.0 644.3 77.6

Contribution Margin 1,470,324 1,289,090 14.1 500.0 275.2 81.7

EBITDA 1,151,139 1,014,766 13.4 392.0 215.9 81.5

EBITDA margin % 34.2 33.5 0.02 34.3 33.5 0.02

Net Profit 464,955 405,168 14.8 158.0 85.7 84.4

Paid dividends 409,277 270,214 51.5 140.1 86.9 61.2

EBITDA Interests P&G 7.8 7.4 - 7.8 4.8 -

Relevant Facts

On July 19, 2017 Fitch Affirmed Codensa's Ratings in ‘AAA (col)’; Stable Outlook.

Codensa communicates that the Board of Directors approved amendments to the Regulation of the

Program for Issuance and Placement of Ordinary Bonds and Commercial Papers.

On September 20, Codensa communicates that the Board of Directors in an regular meeting approved

and revoked appointments for Legal Representatives for Judicial and Administrative Matters.

On October 20, Codensa S.A. ESP communicates that the Board of Directors of the company approved

the appointment of Mr. Erik Jhoani Yazo Herrera as Legal Representative for judicial and administrative

matters.


7

Codensa's results during the first nine months of 2017 reflect the addition of the assets and the market

operation of the Empresa de Energía de Cundinamarca (EEC) following the merger carried out in

October 2016.

EBIDTA for the first nine months of the year reached COP 1,151,139 millions, with an increase of 13.4%

in comparison with the same period in 2016.

Codensa continues to execute an important investment plan aimed at modernizing the network, the

improvement of the quality of the service and the support to organic growth, reaching COP 462,124

million so far this year.

Codensa's cumulative energy demand between January and September 2017 was 10.965 GWh.

The following financial indicators as of 3Q 2017 are highlighted:

i. Gross debt / EBITDA: 1.2X (Last Twelve Months – LTM).

ii. EBITDA / Financial Expenses: 7.8X LTM.

Investment Projects Progress

Table No. 7 – Codensa Investments 3Q 2017

3Q 2017 3Q 2016 Var %

COP Millions 462,124 429,425 7.61

USD Millions 157 140 12.14

Between January and September 2017 investments in an amount of COP 462,124 million were made,

which represent 7.6% more with respect to the same period of the previous year, of which 65.4% were

aimed at growth, improvement in the quality of the service, as well as in the expansion and

modernization of the network. The remaining 34.6% was allocated to the maintenance of assets in

operation.

On July 1, 2017 the Nueva Esperanza Substation became operational with an investment close to COP

111,000 million between 2011 y 2017. This substation is one of the most modern in the country, and

increases in 11% Codensa's installed capacity in terms of energy exchange between the Regional

Transmission system with the National Interconnected System, supporting the reliability and quality of

the service for the middle-east region of the country.


8

2.2. Cálidda

Table No. 8 – Selected indicators of Cálidda – 3Q 2017

3Q 2017 3Q 2016 Var %

No. of clients 534,038 416,954 28.1

Operating income - USD Thousands 425,113 398,822 6.6

Operating profit – USD Thousands 79,284 72,299 9.7

EBITDA – USD Thousands 105,992 94,289 12.4

EBITDA Margin 23.4% 24.2% -3.0

Net profits – USD Thousands 48,236 43,070 12.0

Net debt / EBITDA LTM* 2.7 2.8 -2.9

EBITDA LTM / Interests LTM* 8.5 7.6 11.7

*Note: Quarterly data

Until September of this year, the Company has connected more clients than in all of 2016 (95,595 vs

93,227 clients).

The basis of accumulated customers and the invoiced volume increased during 3Q 2017 in 28% and 4%,

respectively, in comparison with 3Q 2016.

Likewise, during the last 12 months, 955 km of networks were built, with which the distribution system

runs through 8,112 km of underground networks.

Total Income and EBITDA for the 3Q 2017 period increased in 6% and 12% respectively due to an

increase in the income from distribution because of a larger base of clients and an increase in the

connection rights by GNV stations.

In parallel, the Company has made progress in the implementation of a new strategy. In this regard, the

Company redesigned its organizational structure and geared it towards a different and innovative

business vision. With this, the Company expects that the generating and support areas have the

conditions to present comprehensive energy proposals to its customers. On the other hand, controls

are being prepared to anticipate the effects that the external environment and regulations could have

in business operation.

EBITDA of the last twelve months as of 3Q 2017 was USD 136 million, which represented an increase of

15% in comparison with that reported in 3Q 2016.

Relevant Facts

In the 3Q 2017, Peru produced an average of 1,268 MMPCD (million cubic feet per day), showing a

decrease of 13% versus the average volume produced in the #Q 2016, with 1,459 MMPCD.


9

So far in 2017, Cálidda connected 94,772 clients in the Residential segment and has operations in 22 of

the 49 segments of the cities of Lima and Callao: Villa El Salvador, Comas, San Juan de Lurigancho, El

Agustino, San Miguel, Santiago de Surco, Jesús María, Magdalena, Pueblo Libre, Cercado de Lima, Los

Olivos, San Martín de Porres, San Juan de Miraflores, Santa Anita, Villa María del Triunfo, Ate, Callao,

Independencia, Carabayllo, Lurin, San Vicente de Cañete and Puente Piedra. Similarly, in the Industrial

and Commercial sector, and GNV stations, Cálidda is present in 37 districts.

The Invoiced Volume in 3Q 2017 increased in 4% in comparison with 3Q 2016. This is mainly due to the

addition of new industrial clients. These added 605 MMPCD (563 MMPCD Electric Generation + 42

MMPCD Industrial), which represent 79% of the Invoiced Volume.

At the close of 3Q 2017, Cálidda estimates that there are about 810,000 potential clients, of which

534,038 are currently connected. This results in a 66% penetration ratio of the network.

During 2017, capital investments totals were USD 60 million and USD 80 million in the last twelve

months, allocated mainly to the building of polyethylene networks for residential connections.

2.3. Gas Natural

Table No. 9 – Overview of Gas Natural – 3Q 2017

COP Millions

Operative income - COP MM 581,068

Quarter EBITDA - COP million 88,291

Control Gas Natural de España

EEB's stake 25%

Table No. 10 – Selected financial indicators of Gas Natural 3Q 2017

COP Millions USD Millions

3Q 2017 3Q 2016 Var % 3Q 2017 3Q 2016

Operative income 581,068 551,986 5.3 197.9 191.7

Cost of Sales 466,737 414,962 12.5 158.9 144.1

Operative profit 78,966 106,952 -26.2 26.9 37.1

EBITDA 88,291 113,363 -22.1 30.1 39.4

EBITDA margin (%) 15.2 20.5 -26.0 15.2 20.5

Net Profit 51,022 71,461 -28.6 17.4 24.8

Net debt / EBITDA LTM 4.9 2.6 83.2 4.9 2.6

EBITDA LTM / Interests LTM 12.4 13.2 -6.2 12.4 13.2


10

Relevant Facts

A drop in the margin of the Natural Gas Vehicle (NGV) with respect to the expectations in the 2017

budget, mainly because this segment shows a contraction in demand.

More income as a result of a better performance of the subsidiaries.

For September 2017, a reduction in volumes sold with respect to the same period of 2016 was

identified; this as a result of a drop of sales in the secondary market associated to "El Niño" phenomena

that did not occur this year.

Contracting of financial resources related to credit up to COP 119.000 million, which limits its expansion

plans.

Table No. 11 – Investments - Gas Natural Cumulative

3Q 2017 3Q 2016 Var %

COP Millions 11,894 6,822 74.3

USD Millions 4.05 2.37 71.0

2.4. Contugas

As of the close of 3Q, income of more than USD 20.7 million and a cumulative EBITDA of USD 13.5

million were recorded.

Despite that net profits continue registering negative results, a recovery in such item is noted,

estimating better projections for next year.

Table No. 12 – Selected indicators of Contugas

3Q 2017 3Q 2016

No. of clients 43,358 38,290

Operating income - USD Thousands 20,656 16,080

Operating profit – USD Thousands 1,493 2,313

EBITDA – USD Thousands 3,702 3,742

EBITDA Margin 17.9% 23.3%

Net profits – USD Thousands (2,865) (6,518)

Net debt / EBITDA 19.7 91.4

EBITDA / Interests 3.8 1.0


11

Relevant Facts

Contugas signed an addendum to the integral contract for supply, transport and distribution executed

with its client Central Térmica Humay (TermoIca), expanding its contracting capacity for the project from

37.5 MMPCD to 45 MMPCD.

Contugas signed a memorandum of understanding to explore the provision of the natural gas

distribution service through a pipeline network to a thermal generation plant that will be installed in the

Marcona region, with a consumption of 30 MMPCD and a capacity of 250 MW and with expected

commencement of operations for September 2023.

In September, the Directorate of Contugas approved the signing of all documents and contracts

necessary for the execution of credit operations, debt management and coverage in an amount of up to

USD 355 million, in order to refinance the current debt.

In September, the Directorate of Contugas approved the company's Corporate Governance Code, which

describes the main principles of Contugas's management and control system, defines the framework of

action of its governing bodies, as well as their interaction with other decision-makers of GEB.

On September 27, Contugas entered into a short term loan operation with a local bank (180 days) for

PEN 26.17 million (approx. USD 8.00 million) at a 4.30% fixed rate.

3. Interconnecting for Market Development

Interconnecting for Market Development (IDM) is focused on interconnecting energy sources with

consumption centers and big users. IDM has the mandate of consolidating a Multi-Latin of electric energy

transmission from the transmission assets and the current organization in Colombia and contribute to the

process of consolidation of the most important gas carrier in Colombia with growing presence in Peru.

Table No. 13 – Financial Indicators in IDM September 2017

COP Mm GEB

Transmission

TGI

(USD

Thousands)

TRECSA

(USD

Thousands)

Contugas1

(USD

Thousands)

REP

(USD

Thousands)

CTM

(USD

Thousands)

Operative income 205,134 308,577 21,222 60,486 212,819 207,545

Operative profit 131,305 187,779 12,445 6,720 90,309 130,448

EBITDA 142,612 251,221 4,116 13,471 148,848 184,709

Net Profit 66,191 97,092 4,058 -4,817 53,482 66,170

1. Contugas is a part of the strategic group of Urban Energy Solutions, but is included in table 14 for comparative purposes..


12

3.1. GEB Transmission

Table No. 14 – GEB Transmission Indicators

3Q 17 3Q 16 Var %

Investments – COP Million 231,581 91,969 151.8

Infrastructure availability - % (1) 99.93% 99.79% 0.140

Compensation for unavailability - % (2) 0.006% 0.208% -97.2

Maintenance program compliance - % (3) 100.00% 99.50% 0.5

Participation in Colombia’s transmission activity - % (4) 15.0% 12.6% 18.8

Relevant Facts

EEB was awarded the Public Call UPME STR 05 of 2017 for the supply, construction and operation of a

2nd transformer 230/115 kV of 150 MVA in the Altamira Substation, department of Huila.

In the month of July, UPME requested to EEB to express its interest in executing the project for the

expansion of the La Loma Substation 500 kV under the expansion mechanism. EEB accepted the request

to execute the project. The project consists of the supply, construction and operation of 2

transformation bays and 2 central cuts at 500 kV in the La Loma Substation in the department of Cesar.

CREG issued resolution 141 of 2017 pursuant to which it temporarily amends some regulatory aspects

related to an event that occurred in the municipality of Mocoa.

Table No. 15 – Progress Investment projects EEB transmission business 3Q 2017

UPME Project Progress IAE

USD MM

Start of

operations

Chivor II Norte, Bacata and Líneas 56.9% 5.50 25/11/2017

Cartagena Bolívar 220kV 79.6% 11.60 06/12/2017

Río Córdoba 220kV 85.8% 1.80 13/12/2017

Armenia and Líneas a 230kV 97.0% 1.28 01/12/2017

Tesalia and Líneas a 230kV 89.0% 10.90 04/01/2018

Sogamoso – Norte – Nueva Esperanza 500kV Line 56.3% 21.10 08/05/2019

Southwestern reinforcement 500kV 27.7% 24.40 30/09/2018

Ecopetrol San Fernando 230kV* 65.6% 6.00 26/06/2018

Transformers Río Córdoba 220/115 kV* 94.7% 0.65 13/12/2017

La Loma 500kV 65.5% 1.30 11/11/2017

La Loma 110kV* 34.0% 6.96 30/06/2018

Drummond Ltd Connection* 73.7% 0.87 10/12/2017

Altamira 1.2% 0.66 31/03/2019

Expansion La Loma 500 kV 0.01% 0.35 30/06/2018

IAE: Expected Annual Income.


13

3.2. TGI

Table No. 16 – Selected indicators of TGI – 3Q 2017

3Q 2017 3Q 2016 Var %

Operating income - USD Millions 308,577 332,308 -7.1

Operating profit – USD Millions 187,779 213,618 -12.1

EBITDA – USD Millions 251,221 281,229 -10.7

Net profits – USD Millions 97,092 62,678 54.9

Transported volume – Mmpcd 432 458 -5.6

Firm contracted capacity - Mmpcd 692 671 3.08

International credit rating

S&P BBB-/Stable 22/12/yy

Fitch BBB/Stable 19/10/yy

Moody’s Baa3/Stable 01/06/yy

Relevant Facts

As of the date herein, Resolution 090, 2016 issued by the regulatory agency, CREG, pursuant to which

the methodology for the calculation of the WACC rate was defined for tariff purposes in the natural gas

transportation activity is currently under review. According to the regulator's work plan, it is expected

that the final methodology will be explained during the last quarter of 2017.

Resolution 026 of 2017, published in April, is also under consideration. Such resolution deals with issues

related to remuneration and competitive processes for projects included in the Natural Gas Supply Plan,

prepared by the UPME and adopted by the Ministry of Mines and Energy through Resolution 40006 of

January 4, 2017, which includes the following projects which are complementary to TGI's system:

iii. Two-way Yumbo - Mariquita

iv. Construction Loop 10”, Mariquita - Gualanday

v. Two-way Barrancabermeja – Ballena

vi. Compressors El Cerrito – Popayán

Additionally, this resolution defines projects that given their location are complementary to TGI's system

and that shall have a competitive selection process, as follows:

i. Construction of Pacific Regasification Plant

ii. Construction of Gas Pipeline Buenaventura – Yumbo


14

Table No. 17 – Status of expansion projects in Colombia 3Q 2017

Description

Capex

(USD

mm)

Execution

(%)

Entry into

Operations

Cusiana Phase III

Increase of Capacity in Cusiana - Vasconia en 20 MPCD to satisfy the demand in the center of the Country. Basic Engineering, Details, Environmental Studies, request for environmental permits before CAR, procurement of compression units, equipment and piping, environmental and social compensation, Supervision and Construction for the expansion of Miraflores, Puente Guillermo, Vasconia stations and Upgrades to Vasconia Hub.

31 95 In execution

Cusiana – Apiay –

Ocoa

"Expansion Cusiana Apiay Termo Ocoa. Construction of two new gas compression stations, PARATEBUENO Station on the Cusiana - Apiay Gas Pipeline and VILLAVICENCIO Station on the Apiay - Villavicencio-Ocoa Gas Pipeline. The project will increase the transportation capacity to satisfy the natural gas demand from dispatchers that requested transportation capacity Cusiana, Apiay and Villavicencio in 32 MMSCFD; 7MMSCFD were diverted for the Apiay-Villavicencio-Ocoa gas pipeline".

48 74 4Q 17

Loop Armenia

Construction of Loop Armenia of 37 Km in 8" inches between PK 219 of the main highway of 20 inches and the derivation from Ramal to the municipality of La Tebaida and Loop Dos Quebradas of 8 Km in 3" inches between PK4 and PK 11 from Ramal towards Dos Quebradas that seeks to supply the growing demand in the region, such that the Loop in el Ramal to Armenia will enable the increase of the capacity in 8.288 MPCD and the Loop in el Ramal to Dos Quebradas in 0.438 MPCD.

19 84 4Q 17

Cusiana Phase IV

Expansion of the transportation capacity of the gas pipeline Cusiana- Vasconia : I. 43 Mmpcd for the section Cusiana - Vasconia through the construction of a 49,6 Km loop in 24” II. 17 Mmpcd for the section Puente Guillermo - Vasconia, through the expansion of the Compressor Station of Puente Guillermo.

70 11

I. Cusiana -

Vasconia 4Q

2018

II. Puente

Guillermo-

Vasconia 1Q

2018

Substitution and

Maintenance for

completing the legal

useful life.

18 gas pipelines of TGI's system complete their regulatory life. TGI decided to substitute five (5) sections and continue operating the other thirteen (13)

49.0 7 2Q 17

For additional details on the financial, operational and commercial information of TGI, please follow this link link.

On the other hand, and in compliance with CREG's requirements, the company submitted to said entity

information for the characterization of the new gas pipeline Galán Casabe Yondo, within the activities

being carried out for the definition by mutual agreement of the regulated charges for said gas pipeline.

On August 25, Grupo Energía Bogotá communicates that as of such date and after exercising the

transfer option, Transportadora de Gas Internacional TGI, will start the operation and maintenance of

the Mariquita-Cali gas pipeline built by Transgas de Occidente.

This past October 3, Grupo Energía Bogotá communicates that the arbitration tribunal of the Chamber

of Commerce of Bogotá issued an arbitration award within the proceeding driven by EPM ESP., and

ISAGEN S.A. ESP against TGI S.A. ESP; this award was executed in accordance with the certification

http://www.grupoenergiadebogota.com/inversionistas/informes-para-inversionistas


15

issued on October 4, 2017 by the Tribunal's Secretary, given that neither party presented an annulment

recourse.

3.3. TRECSA

PET Project

Scope

Design, construction, land obtaining, establishment of easements, supervision, operation and maintenance

of the Transmission works of the following lots A, B, C, D, E and F, which were part of the Open Bidding PET-

01-2009 for the provision of the electric energy transport service for the amount of the annual fee. It

comprises the construction of:

866 kilometers of transmission lines.

11 new substations.

12 expansions of current substations.

2117 sites for towers.

Progress of the project

With the new transmission line layouts:

__________________________________________________________________

Figure No. 1 – Status of TRECSA's guarantees – 3Q 2017

Status Number of

Municipalities Percentage

Approved 61 74,39%

Revoked 2 2,44%

Denied 1 1,22%

Not granted 11 13,14%

In Process 7 8,54%

Total 82 100%

Construction of transmission lines

Energized 387 of 866 km. (45%).

Civil Works 1433 de 2117 sites for tower (68%).

Mounting 1400 of 2117 sites for tower (66%).

Layout 471 of 866 km. (54%).

Construction of substations


16

Energized 14 of 23 substations (61%).

Under construction 5 of 23 substations (22%).

With pending situations 4 of 23 substations (17%).

3.4. EEBIS GUATEMALA

Cempro Project

Scope

Stage 1 covers the design, supply, construction and commissioning of connection assets of San Gabriel

Plant.

It comprises the construction of:

230 kV line of approximately 17 kilometers to be energized in 69kV.

Build the civil works of substation 230 kV in breaker-and-a-half configuration.

Supply and Mounting of basic structure.

Supply and Mounting of 40 MVA Transformer of 69/13.8 KV.

Schedule progress

__________________________________________________________________

Figure No. 2 – Progress of the Cempro Project Schedule EBBIS GUATEMALA – 3Q 2017

Executed

Transmission lines 90%

Design 100%

Supplies 100%

Construction 65%

Substation 100%

Design 100%

Supplies 100%

Construction 100%

Transmission lines

80 available out of 112 supports for construction.

With complete civil works, 76 poles (68%).

With full mounting, 75 poles (66%).

Laying of pole cable 01 to 54 (44%).

Pending is the definition by CEMPRO of the dates for delivery at pending sites.


17

Substation

The general progress is 100%. (Design, civil work, porticos, rails, 69 / 13.8 kV transformer).

Prónico Project

Scope

Project for the Provision of Services for Engineering, Environmental Impact Study, Electric Studies –

NTAUCT– and Miscellaneous Procedures to Accomplish the Resolution of Access to the Transport Capacity

of PRONICO Plant to the National Interconnected System and Regional Electric System.

Schedule progress

In September 14, 2017, CRIE notifies PRONICO the second Procedural Resolution CRIE-TA-06-2017 in which

among others:

The applicant is notified that it is not necessary to continue with the Administrative proceeding at a

Regional level.

Proceed to archive the proceedings related to this request.

Based on the foregoing, a conference call was held on September 25, 2017 between EEBIS-PRONICO in

which the following was agreed among others:

EEBIS will submit to PRONICO, to proceed in accordance with Clause Four of the contract: Price and

Payment Terms.

The letter to be submitted by EEBIS will include a final report and a compilation of the totality of the

information generated as a result of the services provided.

______________________________________________________________________

Figure No. 3 – Progress of the Prónico Project Schedule of EBBIS GUATEMALA – 3Q 2017

Executed

Substation Engineering 100%

Transmission Lines Engineering 100%

Environmental Management -EIA- 100%

Electrical Studies Management 100%

Weighted Global 100%


18

Anillo Pacífico Sur Project

Scope

Design, Electric Studies, land obtaining, establishment of easements, environmental and municipal

authorizations. Construction, tests, connection and commissioning of the facilities to connect in 230 kV the

generating plants of sugar cane mills with the National Interconnected System.

It comprises the construction of:

4 new substations.

2 realignment of substations.

1 expansion of substation.

92 kilometers of transmission lines.

244 tower sites.

Right of way

37 kilometers paid (40%).

54 kilometers with agreement (58%).

01 kilometers in negotiation (2%).

Transmission lines

Energized 85 of 92 km. (92%).

Civil Works 236 of 244 sites for tower (97%).

Mounting 236 of 244 sites for tower (97%).

Layout 90 of 92 km (97%).

Due to a lack of economic agreement for obtaining the easement with the owner of the Carmen farm, a

variation of 5 km approximately which will allow to complete the Pantaleón - Siquinalá line will be

analyzed. The efforts made are: identification of the owners of the new line and negotiations ranges are

being executed.

Substation

Energized 86%

Civil works 99%

Mounting 90%

Tests 86%

Note: The percentages (Average value of progress in the 7 substations)


19

Schedule progress

_________________________________________________________________________

Figure No. 4 – Progress of the Anillo Pacífico Sur Project Schedule of EBBIS GUATEMALA – 3Q 2017

Executed

Transmission lines 97%

Design 100%

Supplies 100%

Construction 94%

Substation 98%

Design 100%

Supplies 99%

Construction 97%

3.5. REP and CTM Perú

REP Perú

Table No. 18 – Selected financial indicators of REP - 3Q 2017

USD Thousands

3Q 2017 3Q 2016 Var %

Operative income 107,773 99,354 8.5

Cost of Sales -54,097 -50,354 7.4

Operative profit 45,420 41,781 8.7

EBITDA 74,962 67,247 11.5

EBITDA Margin 69.6% 67.7% 2.8

Net Profit 26,074 23,215 12.3

Net debt (2) / EBITDA 3.6 2.3 56.5

EBITDA / Interests (3) 6.7 8.1 -17.3

REP reported an increase in operating income of 8.5% with respect to 3Q 2016, as a result of the

application of a guaranteed annual remuneration and because of the generation of additional energy

transmission services (new contracts).

Despite that non-operating expenses closed in USD 10 million as a result of more financial expenses and

a growing dynamic in the difference of exchange rates, which is part of the nature of the Company's

commercial activities, the net profit had an increase of 12.3% as a result of control in expenses and

operational generation of income.


20

EBITDA increased in 11.5%, closing at USD 75 million.

Investment Projects

As of 3Q 2017 the Company completed the following expansion projects:

i. Expansion 13: New Pariñas Substation – 220 kV, LT at 180 MVA (40 Km), with a total Capex

execution of USD 18.2 million.

ii. Expansion 17: Increase of the capacity of SSEE, with a total Capex execution of USD 26.4 million.

For 2019, the completion of the expansion projects 18 and 19 with a total investment of USD 1.2 million

is expected.

CTM Perú

Table No. 19 – Selected financial indicators of CTM - 3Q 2017

USD Thousands

3Q 2017 3Q 2016 Var %

Adjusted Operating Income 103,374 101,079 2.3

Cost of Sales -38,293 -36,345 5.4

Operative profit 64,112 63,399 1.1

EBITDA 91,314 89,223 2.3

EBITDA margin (%) 89.0% 87.9% 1.2

Net Profit 31,888 30,074 6.0

Net debt (2) / EBITDA 6.0 6.1 -2.3

EBITDA / Interests (2) 3.6 4.0 -9.8

Income increased 2,3% from 3Q 2016 to 3Q 2017, as a result of the materialization of the annual

retribution of the service through electric energy transmission contracts, particularly the – Socabaya y

Zapallal – Trujillo project.

Variation of costs is due to update of the significant operation, maintenance and restitution items,

necessary for the conservation of the infrastructure it manages.

Administrative expenses and sales had a decrease of 26%, as a result of an optimization in the

management of professional fees and external consulting.

Despite a greater dynamics in the generation of income, non-operational expenses remained stable,

thanks to the implementation of strategies in the management of financial expenses and the difference

in the exchange rates.


21

Investment Projects

Concession L.T. 500 kV Mantaro – Marcona: LT 916 Km. Investment value USD 459.1 million.

Commissioning date: 4Q 2017.

Concession L.T. La Planicie –Industriales: LT 17.3 Km. Investment value USD 51.6 million. Commissioning

date: 3Q 2017.

Concession L.T. Friaspata Mollepata y Se Orcotuna: LT 94.0 Km for the new SE Orcotuna. Investment

value USD 52.2 million. Commissioning date, 1Q 2018.

Concession Carapongo: SE Carapongo 500/220 kV and feeder links. Investment value USD 61.9 million.

Commissioning date, 1Q 2018.

4. LOW-EMISSION GENERATION

Low-Emission Generation (GBE) is currently focused in Colombia and has the purpose of, in addition to

supporting the consolidation of the current position of EMGESA, searching new renewable energy

opportunities in countries where a transition in the energy matrix to this sustainable and low-emission

source is in place in prioritized geographical locations.

4.1. EMGESA

Table No. 20 – Outlook of Emgesa at 3Q 2017

Gross Installed Capacity – MW 3,509

Structure of the capacity 11 Hydro and 2 thermal plants

Generation – Gwh 11,366

Sales – Gwh 13,635

Control Enel Energy Group

EEB's stake 51.5% corresponding to: 37.4% ordinary shares and

14.1% non-voting preferred


22

Table No. 21 – Selected financial indicators of Emgesa

COP Millions USD Millions

3Q 2017 3Q 2016 Var % 3Q 2017 3Q 2016 Var %

Operative income 2,534,571 2,773,580 -8.6 862.00 906.00 -4.9

Contribution Margin 1,689,159 1,711,401 -1.3 575.00 559.00 3

EBITDA 1,534,953 1,553,721 -1.2 522.00 507.00 3.0

Quarterly EBITDA Margin - % 60.56 56.02 0.1 60.56 55.96 0.1

Net Profit 682,457 630,779 8.2 232.00 206.00 12.6

Paid dividends 402,129 515,105 -21.9 137.00 168.00 -18.5

*Total Generation of the System

Relevant Facts

During the first nine months of 2017 Emgesa reached an EBITDA of COP 1,5 billion, thus presenting a

reduction with respect to the same year in the previous period, mainly as a result of lower spot prices.

Nevertheless, the Company's Ebitda margin is maintained above 60%.

Emgesa's net profits for the period was COP 682,457 million pesos, with an increase of 8.2% compared

to the same period in 2016, mainly as a result of a decrease of 24.9% in financial expenses.

During the first nine months of 2017, Emgesa contributed 22.9% of the total generation of SIN, thus

consolidating itself as the second generator of the system.

Between January and September 2017, Emgesa generated 11.366 GWh, presenting a marginal decrease

of 0.1% in comparison with the same period of 2016. Generation with hydraulic sources contributed

98.7% of the total generation of the company, while thermal generation contributed 1.3%. This

represents an increase in the participation in hydraulic generation in comparison with 2016, as a result


23

of a higher level of hydrology observed during 2017, in contrast with the strong El Niño Phenomena in

2016.

During the first nine months of 2017, Emgesa sold 13.635 GWh, which represents 1.4% less in

comparison with the volume sold during the same period in 2016.

84.2% of the sales was carried out through contracts, of which 74.0% were executed with clients in the

wholesale market and 26.0% to non-regulated clients and the remaining 15.8% corresponded to sales in

the spot market.

Investment Projects Progress of EMGESA

Table No. 22 – Investments – Emgesa

3Q 2017 3Q 2016 Var %

COP Millions 114,954 117,641 -2.3

USD Millions 39 38 2.6

During the first nine months of 2017, Emgesa made investments for $114.954 billion pesos,

representing a decrease of 2.3% in comparison with the same period of 2016, mainly due to less needs

in the maintenance Capex of generation plants.

Investments where concentrated in maintenance ($74.523 million pesos) and to a lesser degree in

expansion ($40.431 million pesos).

5. ANEXES

Annex 1: Legal Notices & Clarifications

This document contains words such as “anticipate”, “believe”, “expect”, “estimate” and others with similar

meaning. Any information that is different to the historic information, including, but without limiting to that

refers to the Company’s financial situation, its business strategy, its plans and management objectives,

relates to forecasts.

Forecasts in this report were made under assumptions related to the economic, competitive, regulatory and

operational environment of the business and took into account risks beyond the Company’s control.

Forecasts are uncertain and they may not materialize. One may also expect that unexpected events or

circumstances occur. As a result of the foregoing, actual results may differ significantly from forecasts

herein contained. Therefore, forecasts in this report must not be considered as true facts. Potential investors


24

must not take into account the forecasts or assumptions herein contained, neither should they base their

investment decisions upon them.

The Company expressly waives any obligation or commitment to distribute updates or revisions of any of

the forecasts herein contained.

The company’s past performance may not be considered as a pattern of its future performance.

The figures presented correspond to figures reported by the subsidiary or affiliated companies at the time of

preparing this report. Figures are not audited and are subject to change from time to time.

Clarifications

Only for information purposes, we have converted some numbers in this report to its equivalent in

United States dollars, using the TRM of the end of the period as published by the Superintendency of

Finance of Colombia. The exchange rates used in the conversion are the following:

TRM as of September 30, 2017: 2,936.67.

TRM as of September 30, 2016: 2,879.95.

The comma (,) is used in the numbers presented to separate thousands and the period (.) is used to

separate decimals.

Annex 2: Definitions of EBITDA included in this report

EBITDA is not an indicator recognized by the accounting laws of Colombia or the United States and may

present difficulties as an analytical tool. Therefore, EBITDA should not be taken into account in an

isolated manner as a company cash flow indicator.

EBITDA: EBITDA for a certain period (LTM; Quarter) is calculated taking the operating Profit (or loss),

plus amortization of intangibles and depreciation of fixed assets for said period.

EEB Consolidated EBITDA: In accordance with the agreement of bonds issued by EEB in November 2011,

the Consolidated EBITDA of the company for a specific period is calculated taking the operating income

for such period and deducting the cost of sales, administrative expenses and interests generated by

pension funds. As a result, the decreed dividends are added (regardless of if whether they have been

paid or not), interests from provisional investments, indirect taxes, amortization of intangibles, the

depreciation of fixed assets, provisions and contributions made to pension funds.

EEB Consolidated Adjusted EBITDA for a specific period is calculated taking the Consolidated EBITDA for

such period and adding the cash flows coming that enter EEB from reductions of capital of those

companies in which EEB has a share stake.


25

Annex 3: Consolidates Income Statement as of September 17

Table No. 23 – Consolidates Income Statement GEB

3Q 2016 3Q 2017 Variation % Var.

Operative Income 2,358,229 2,386,098 27,869 1.18%

Distribution of natural gas 1,143,627 1,240,160 96,533 8.44%

Transport of natural gas 1,009,763 907,331 -102,432 -10.14%

Distribution of electricity 0 0 0 0.00%

Electricity transmission 204,839 238,607 33,768 16.49%

Costs and Expenses -1,426,701 -1,513,809 -87,108 6.11%

Distribution of natural gas -778,897 -1,007,116 -228,219 29.30%

Transport of natural gas -299,799 -337,998 -38,199 12.74%

Distribution of electricity 0 0 0 0.00%

Electricity transmission -95,799 -126,835 -31,036 32.40%

Administrative expenses -304,462 -94,586 209,876 -68.93%

Other income (expenses), net 52,256 52,726 470 0.90%

Operating activities results 931,528 872,279 -59,249 -6.36%

Financial income 98,652 141,540 42,888 43.47%

Financial expenses -393,946 -394,941 -995 0.25%

Difference in income (expense) change, net 149,399 -40,975 -190,374 -127.43%

Participation in profits (losses) 749,168 796,550 47,382 6.32%

Profit (loss) before taxes 1,534,801 1,374,453 -160,348 -10.45%

Income (expenses) for taxes -428,914 -142,914 286,000 -66.68%

Profit (loss) 1,105,887 1,231,539 125,652 11.36%

Other comprehensive results -222,889 217,381 440,270 -197.53%

Comprehensive results 882,998 1,448,920 565,922 64.09%

Profit (loss), attributed to: 1,105,887 1,231,539 125,652 11.36%

The controlling 1,052,721 1,174,588 121,867 11.58%

Minority stake 53,166 56,951 3,785 7.12%

Table No. 24 – EBITDA Breakdown – Consolidated Cumulative 3Q 2017– Numbers in

Million COP

CONSOLIDATED EBITDA

COP Millions

As of September 2017

Operative income 2,442,426

Net difference in change -40,957

Financial income 120,916

Equity participation method 0

Total income 3,219,387

Operating costs -1,471,949


26

Operating expenses -493,140

Financial expenses 394,941

Minority stake -56,951

Depreciation 195,858

Amortization 101,376

Taxes 59,698

Provisions 7,312

Dividends Received 697,020

TOTAL 1,956,530

EBITDA 60.77%

Note: Operating income of this calculation deducting: i) Other operating income for COP 34,474 mm corresponding to engineering activities and professional fees. ii) Other income in an amount of COP 21,854 mm corresponding to recoveries, indemnities and leases; result in an Operating income of the results statement.

Annex 4: Consolidated financial statement of GEB and individuals:

http://www.grupoenergiabogota.com/inversionistas/informacion-financiera/estados-financieros

Annex 5: Method of Participation in affiliated companies

Table No. 25 – Participation Method Breakdown 3Q 2017 COP million

Company 3Q 2016 3Q 2017

Emgesa 327,343 354,010

Codensa 214,379 240,767

Gas Natural 54,773 42,118

REP 27,540 30,658

CTM 36,846 37,495

EMSA 6,087 4,658

Promigas 72,191 49,490

Brazil Transmitters 10,009 37,353

Total 749,168 796,550

Annex 6: Regulatory and technical terms

BLN: US billion, Factor 109.

CAC: Compound Annual Growth.

COP: Colombian Pesos.

CHB: Central Hidroeléctrica de Betania.

CTM: Consorcio Transmantaro.

http://www.grupoenergiabogota.com/inversionistas/informacion-financiera/estados-financieros


27

CREG: Commission de Regulation de Energía y Gas de Colombia. (Colombia’s Energy and Gas Regulating

Commission). Colombia’s state agency in charge of regulating electric power and natural gas residential

public utility services.

D Electricity: Distribution of electricity.

D Natural gas: Distribution of natural gas.

DANE: (National Administrative Statistics Department) Agency responsible for planning, collecting,

processing, analyzing, and disseminating official statistics in Colombia.

G Electricity: Generation of electricity.

Gwh: Gigawatt hour; unit of energy equivalent to 1,000,000 kwh.

GNV: (NGV) Natural Gas Vehicle.

IPC: (CPI) Consumer Price Index in Colombia.

KM: Kilometers.

KWH: Unit of energy equivalent to the energy produced by a power of one kilowatt (kW) for one hour.

MEM: Mercado de Energía Mayorista de Colombia (Wholesale Energy Market in Colombia).

Mill: million.

Ml: Miles.

MW: Megawatt, power unit or work which equals to one million watts.

N.A. Does not apply.

PCD: Cubic feet per day.

SIN: Sistema Interconectado Nacional (National Interconnected System).

STN: Sistema de Transmisión Nacional (National Transmission System).

SF: Superintendencia Financiera (Superintendency of Finance), State entity responsible for regulating,

overseeing and controlling the Colombian financial sector.

T Electricity: Electricity transmission.

T Natural gas: Transport of natural gas.

TRM: Market Representative Exchange Rate; it is an average of the transactions carried out in pesos–

dollars, and it is calculated daily by the Superintendency of Finance - SF.

UDM: (LTM) Last twelve months.

UPME: (Energy and Mining Planing Unit) State agency responsible for planning Colombia’s mining and

energy sectors,

USD: United States of America Dollars.


28

USUARIO NO REGULADO DE ELECTRICIDAD: (Non-regulated Electricity User) electricity consumers that

have a demand peak higher than 0,10 MW or a minimum monthly consumption greater than 55,0 MWh.

USUARIO NO REGULADO DE GAS NATURAL: (Non-regulated Natural Gas User) user with a consumption

greater than 100 kpcd.

Annex 7: Overview of GEB

EEB is an integrated energy company with operations in Colombia, Peru and Guatemala.

EEB was founded in 1896 and is controlled by the District of Bogota (76.2% ownership). Given that EEB's

share is listed in the Colombian public stock market, it is governed by the corporate governance

international standards.

EEB has an expansion strategy focused in the transportation and distribution of energy in Colombia and

other countries of the region.

EEB participates in the entire electricity value chain and almost the entire natural gas value chain - it

does not participate in the exploration and production activity of this hydrocarbon.

GEB is among the most important Colombian issuers of corporate debt in international capital markets.

In October 2007, GEB and TGI conducted an issuance of corporate bonds in the 144A market for USD

1.36 billion - thousands of millions-. In 2011, TGI exercised a purchase option to reduce its coupon rate

in 263 pbs.

Since 2008, EEB is traded on the Colombian Securities Exchange and is part of the local indexes COLCAP,

COLEQTY and COLIR.

informe para inversionistas - geb...mmpcd) and kallpa (25.5). sources: upme, concentra, mem,...

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