Enel Chile S.A. (ENELCHILE) Earnings Call Transcript & Summary

[Foreign Language] Good morning, ladies and gentlemen. A warm welcome to our Virtual 2020 Enel Chile's Investor Day. Thank you all for joining us. We hope that you and your families are doing well and stay healthy. I am Isabela Klemes, Head of Investor Relations. Joining me this morning is our CEO, Paolo Pallotti; and our CFO, Giuseppe Turchiarelli. Before starting, let me introduce a brief video on an important topic to our world and country, the energy transition. You will see why we have been anticipating our business decarbonization as we truly believe that this create concrete benefits for all. [Presentation]

We hope you embrace this call with us. Before I move on, let me highlight that you can carry out virtual visits to our renewable power plants on our Investor Relations website from now on. At this moment, you can place yourself into our facilities, Cerro Pabellón, Sierra Gorda and Finis Terrae. Let's now look at the agenda. First, we will start with our CEO, Paolo, who will drive us through our market context, technological and regulatory evolution, our ambitions and our strategy rationale for this 2021-2023 period. Then, our CFO, Giuseppe, will present our strategic plan for the period with details regarding our business financials and targets. After closing remarks, we will open to a Q&A session. During this Q&A session, analysts and investors connected via Microsoft Teams can participate. [Operator Instructions] As always, our IR team will be available to provide you with any detailed information you may need concerning the figures included in this presentation. Thank you all for your presence. Let's now listen to some message from our Chairman, Mr. Herman Chadwick.

[Foreign Language]

Now let me hand over to Paolo.

Thank you, Isabela. Good morning to everybody. Thanks for joining us today. As you will see in the following slides, the evolution of the technology has been transforming our energy industry globally, and Chile among LatAm countries, is driving the energy transition in the region. In the following slides, I will provide you some data about Chile and the accelerated transition to a more sustainable and decarbonized country. Now let's move to Slide 4. I will show you some evidence of this fast transition and some opportunities and challenges ahead. Chile is evolving into a low-carbon energy system. Today, 50% of the total country's toll capacity is based on renewable sources. Considering all the projects reported by the government, by 2024, 60% of the full capacity should be renewable. As part of the long-term energy strategy development by the Ministry of Energy and the government commitment to the Paris Agreement, Chile fixed the carbon neutrality target by 2050. This means that the balance between emissions and capture must be zero and, consequently, 95% of Chile generation should come from renewable sources. Chile offers enormous renewable potential that could reach 70x the current installed capacity according to the government screening. For reference, in the north of Chile, we can find the [ driest war ] desert with the highest radiation levels where the load factor can range 35%. In the south, the wind reach the same power on land as offshore wind farms, with load factor of 60%. All this potential shall pave the way to make Chile a green hydrogen large player in the region with lower cost of production, a potential and output of more than 160 millions of tons according to government analysis. In the last year, the world has been changing increasingly faster, boosted by technological advances in several industry that has contributed to improving efficiency and radically changing how we do things. Chile has not lagged far behind of this digital revolution, which has led to significant cost reduction and positive improvements. Now let's move to Slide 5. Lithium batteries have significantly reduced the cost of improved efficiency, becoming an excellent support to flexibility, enable generation and boosting the E-Mobility. Digital revolution and new technology have promoted the profound transformation in our sector. The decarbonization process will accelerate electrification. Considering Chile carbon neutrality target, the country's electrification rate will more than double from 24% in 2020 to 54% in 2050. This trend consider current and future developments on electromobility, solar panel facility for industry and homes, demand response, electric heating, replacing woods and energy efficiency in the mining industry. Even south's largest improvement will occur from 2030 onwards, and Chile has already been investing and boosting electrification through its business in order to anticipate and promote this transition and its benefits to all our customers. Let's now have a look at the current regulatory framework in Chile. Let's move to Slide 6. Chile has undoubtedly been marked by a year of significant political and social changes that resulted in an institutional response with the approval of the constitutional plebiscite approved by the great majority of Chileans on October 25. From this, the country started the path that will lend to a new constitution starting April with the constituency election who will have the mission of writing the fundamental principle guiding Chile in the coming years. I'm sure the country will come out stronger from this process. Under this context, the energy sector is facing a process of continuous regulatory and legislative changes. On distribution, the process to define the new tariff regime for 2020-2024 is advancing. The government external consultant is carrying out the relevant analysis to deliver reserve report expected by the first quarter '21. We expect a review of the approach to the reference company assumptions to cope with all the investment needed to comply with the quality of service regulation and the new public E-Mobility system. With reference to the distribution unbundling requirements, the corporate reorganization is expected to be implemented by 1st January 2021. On our side, on December 3, Enel Distribución Chile will hold a shareholder meeting to approve the split into 2 separate entities. One, exclusively for distribution business and the other solely for the transmission business. In addition, the segment of energy commercialization activity formally executed by Enel Distribución will be transferred to Enel Generación Chile, for a better exploit of synergies and sourcing cost efficiency to be prepared in advance for market opening. Let's take a look on portability law, Slide #7. The energy transition implies proven transformation of how we do things, and the regulation should evolve accordingly to support the technological developments and client needs and expectation. Under this context, the announced process that should reform the distribution sector is expected to address quality of service and main rules for market opening. Regarding this last objective, Ministry of Energy has presented the bill to the lower house of Congress. We expect that the outcome of those discussions and government support would outline a gradual opening of the market, with transparent rules that will grant a fair competition in the client interest and assure financial sustainability for market players. Clear example of such approaches are coming from more mature market in Western countries. Let's now see how new technologies are entering the energy sector, supported by countries and normal renewable growth potential. Let's move to Slide 8. The massive incorporation of renewable in the energy market will create potential opportunity based on hybridization. System flexibility and reliability in the energy transition are mandatory requirements. Batteries are a key enabler of those functions. In this context of flexibility requirement that are addressed by the recent flexibility strategy announced by Minister of Energy, batteries is going to have an important role when integrated with renewables because of reduction of exposure -- of exposure of renewables to network congestion and additional margin generation through capacity payment and ancillary services. The other way to hybridized renewables is through green hydrogen. Considering Chile renewables resources availability, decarbonization and competitiveness shall enable the creation of a new economy sector, driven by green hydrogen. According to the government projection, by 2030, Chile could become one of the leading global producer of the green hydrogen by electrolysis with the lowest production cost, overcoming the breakeven economics versus other CO2-intensive hydrogen production technologies. From our perspective, our business model will consider proceeds from green hydrogen sales to industrial customers, operating in sector where emissions are hard to abate. The sectors are the cement, for instance; fertilizer and chemical industry as well as transportation by sea or air. Revenue stream coming from ancillary services sold to the grid and revenue streams for the sale of electricity and access not used by the electrolyzer. Technological development is just in the initial phase. We will study its evolution, monitor the country and our regulatory landscape to modulate investment and choice of technology solution. All these context of accelerated changes in the last step of Chile will require utilities to become the center of a complex system. But before moving on, let me just recap our main initiative to face the COVID-19 situation on Slide 9. 74% of our employees continue to work from home, minimizing the contagion risk and preventing the virus from spreading. The ones that are on field are working with extreme safety measures. 100% of our plants and networks are fully operational, which ensure our services continuity. As a result, derived from the combination of technology, procedures, our people, contractors and supplier strong commitment. During this year, we extended our commitment to our clients. We have made available more option to access our company services like WhatsApp, web page, chatbot on our web page, app for instance, and increase the numbers of digital payment platforms available to give our clients more flexibility in remote paying during this challenging year for Chile and for the world. We have reaffirmed our commitment to our communities, putting into action a voluntary campaign to respond to the challenge of COVID-19 and to support the most vulnerable communities, especially the ones most affected and closer to our activities. Let's now see our positioning today and how we have prepared our company. Let's move on Slide 11. We have consolidated our position as the largest operator of renewable power plants in Chile, with 4.7 gigawatt of emission-free stored capacity. During 2019, our renewable generation represented 66% of the total one. Enel Chile holds a strong and diversified generation portfolio. We manage a generation matrix that includes highly efficient thermal capacity largely based on LNG, with the last of our coal facility to be phased out on May 2022. On the distribution side, we are the largest network operator in terms of energy distributed, serving 33 municipalities in the metropolitan region of Santiago, with more than 2 million clients. The energy transition and technological advances require a maximum focus over carbon-free solutions with adoption of new energy users. Today, the clients are constantly evolving, and we are proactively anticipating the energy requirements. Electric mobility is a great example of that. Enel Chile, together with other partners, is pushing different initiatives aiming at contributing to the electrification and decontamination of the cities. Let me give you an overview of our journey during the last 3 years and how our path for the ones to come, now on Slide 13. After Enel Chile creation, in 2018, we completed the corporate reorganization with the acquisition of Enel Green Power Chile, adding 1.2 gigawatts of renewable capacity and strengthening our leadership position in the energy generation business. Also in 2018, considering the energy transition context we decide to create and develop our subsidiary analytics as the agent driving the change, capable to offer new products and advanced energy services, able to satisfy, especially those customers with a growing awareness on sustainability and efficient use of energy. In the meantime, we started a digital transformation to evolve towards a digital company. This transformation has positively improved our performances. But at the same time, it has in the base for our quick reaction in front of recent events like social turmoil and COVID pandemia, allowing us to move most of our people to work remotely in a safe and affordable way and keeping unchanged our level of services. In 2019, we signed an agreement with the government regarding the decarbonization of our generation matrix, which included the closure of our 3 coal-fired plants. On May 2020, we decided to accelerate this process so that by 2022, we will become the first electrical company in Chile to phase out our coal fleet, reaffirming our commitment to our sustainable strategy. During the last years, we have also been developing an active commercial strategy to capture a large share of the free market that is growing due to the migration of the potentially free customers from the regulated market. Thanks to this commercial activity, we have currently captured around 70% of the migrated clients, equivalent to 5.6 terrawatt hour per year approximately. Today, we are preparing our company to move from the traditional utilities business models into a circular and digital platform model. In 2020, we have intensified the integrated offering of our commodities and services to create new revenue stream for our company. Some example on Slide 14. We have shaped our commercial activity to evolve according to our customers' needs and technology improvements. Nowadays, a strong awareness on climate change, renewable sources availability and the more efficient intelligent ways of using energy is growing among our clients. At the same time, there are more empowered, well-informed, always connected to the media and digital channel with a lot -- willingness for digitalization. Let's put some numbers. We secured more than 7 terawatt hour in 2019 renewable PPAs. We celebrated different partnership and agreements to boost electrification in the concept beyond commodities. 77% of the payments were made via digital channels, an impressive number once compared to previous year standards. More than 290,000 clients have downloaded our distribution app, increasing the digital communication with our distribution company. In that sense, continued communication with our clients is one of the fundamental pillars to reach high levels of quality and affordability within the context. The sustainability and governance are crucial. Let's move to sustainability, as shown on Slide 15. ESG dimensions are integrated in our business. And our vision of the economic progress is even more connected with social and environmental progress. Our sustainability strategy is based on constant and improved process. The process includes analysis and monitoring of stakeholder reports, planning or resulting action, measurement and reporting. ESG rating results are referent inputs of our process, allowing us to improve our performances and compete at the highest level of the electrical sector worldwide, as we will see then in details. In 2020, we measure our sustainable business, environmental and social performances by over 30 indicators around the way all the value chain. These are the KPIs that our investors are largely used to monitor and, therefore, are the ones we consider as a reference for us. Now let's move to governance, Slide 16. The policies and codes represents the backbone of why we're doing business. As you can see, we care about integrity through the different codes and, for example, the ethical code, the human rights policy, anticorruption plan. Let me highlight that this policy is certified with ISO 37001, which is us being recognized only to few companies in Latin America. We also take care of the transparency of our operation and the data protection of our customers. And finally, but not less important, let me highlight our policy regarding the environment, diversity, biodiversity and community relation for data protection, healthiness and inclusion. All the policies and codes that we have adopted are the evidence of our compromise with all our stakeholders and explain our constant improvement on our ESG scores. Let's now have a look at our scores in the ESG world. Move to Slide 17. The previous 2 slides have shown the planning, the processes, the policies and the codes that support our strategy development. The different ESG raters analyze the results, and we are pleased by the score that we have achieved. Clearly, we are conscious of the improvements still to be implemented looking at the best practice at global level. We are very pleased that Enel Chile achieved the first place in Dow Jones Sustainability Index Emerging Market, MILA and Chile categories where we compete. All is as a reference, our score corresponds to the fifth place in the world score of electric industry sector where we do not compete, a tangible scene about our real commitment to sustainability. Now let's move on Slide 18. I will show you an ambition how we create value for all. But before digging into it, let's first a video summarizing what we are doing. [Presentation]

During the next 3 years, we will add 2.4 gigawatts of stored capacity, of which 1.3 gigawatts are under construction in 2020. The mix of capacity, mainly solar and wind, reaching 7.1 gigawatt of renewable capacity by 2023, representing 77% of our total installed capacity and contributing to the derisking of our generation matrix. We will continue to grow on renewables. And by the end of 2030, we expect to reach a share of more than 85% over our total installed capacity. Our solid pipeline and the adoption of new technologies are the pillars of our sustainable long-term growth, enhancing value creation for all our stakeholders. Let's now review our pipeline on Slide 20. Considering the availability of country natural resources and the flexibility and adaptability of our business development platform, we have been able to have a pipeline of 13.8 gigawatts, of which 2.6 are under execution, including hydro plant. Our solid and diversified pipeline has a mix based on mostly capacity, then wind and hybridized our platform through batteries. With reference to hydrogen. The first green hydrogen pilot project is under development in the Magallanes region, and Enel Chile is one of the partners of the project. Renewable growth is in line with our commitment to decarbonization strategy towards reducing our emission. Let's see first a short video summarizing our initiatives on this front. And then I will record one of the main pillars of our plan, the decarbonization of our operation. [Presentation]

Now we are on Slide 21. Our path towards a cleaner generation mix and a carbon-neutral business approach is sustained by the development of renewable capacity and the acceleration of the phasing out of our position on coal. The phasing out of coal protects generation margins, limits the risk of additional environmental costs and increase the value of our asset base. As a result of our commitments, we already closed the Tarapacá coal-fired plant in December 31, 2019. And by the end of this month, we will also disconnect Bocamina 1 coal-fired plant. As announced, Bocamina 2 power plant will be closed by May 2022. Let me remind you that our coal facility decommissioning will be carried out without access into the energy strategic reserve. With these achievements, we will become the first electric company in Chile to phase out our coal fleet by 2022. This process is being implemented through a fair transition policy, promoting a [ steeper ] economy perspective to contribute to the development of the areas where the units are located, an additional confirmation of our commitment to a sustainable strategy. These efforts resulted in ambition targets in terms of greenhouse emissions reduction, as we will see in the next slide. Slide 22. This is our path towards GHG emission reduction. Enel Chile takes the commitment to reduce its specific Scope 1 emissions by 64% in 2023 versus 2017, reaching a number below 100 grams CO2 equivalent per kilowatt hour. Let's now move to the networks and their roles in the sustainable electric system. Let's take a look at the following video. [Presentation]

Today, the resilience of the grid is one of the main requirements to improve electrification to support the energy transition and the new users of energy. The equilibrium between adoption of new technologies, improvements of efficiencies, digitalization and high-level quality of service on one side and the fair regulatory regime promoting such changes on the other is one of the main tasks of the regulators vis-à-vis the distribution sector. Within this context, our main effort are to ensure the highest level of quality through our digitalization plan and investment for the improvement of the resilience of the grid. We will add new 250 telecontrol equipment up to the end of 2023 with possible expansion according to market and regulatory context. We are targeting improvements in our quality service with a decrease of the SAIDI indicator, approximately 16% to 161 million. Smart meters are fundamental elements in the digitalization and evolution of the network. On the second half of the next year, the updated version of our digital meter in compliance with the technical requirement issued by the Chilean regulator will be ready to be installed with full functionalities. With an installation plan based on new real estate connections and substitution of company-owned as well as customer-hold meters, we expect to reach a total number of 600,000 to 800,000 digital meters installed by 2023. In accordance to the context of the new 4-year distribution tariff cycle and potential regulatory improvements, we will be ready to accelerate our installation plan and other grid conditions. Now let me dig into our strategy to support new customer needs through our Enel X business. Let's now take a look at the following video. [Presentation]

Slide 24. Today, Enel X is the real agent of change to offer new products and advanced energy solutions in the context where customers are improving with a growing public awareness on sustainability and efficient use of energy. We are supporting administration in developing a strategy for the decarbonization and long-term sustainability of the cities, with the objective of reducing carbon footprint and improving people quality of life. Real example are the electrification of the public and private transportation and the massive implementation of smart lighting. Those key elements will also reduce the spending of the public sector. To implement and speed up such changes, we have also made strategic partnership, in particular, to develop electromobility and charging infrastructure in the country; with AMP Capital, an alliance to develop massive electric public transportation, in which we have already contributed with 435 electric buses operating in Santiago. Our target is to reach around 2,000 electric buses by 2030 with Shell Enex in Chile to add Enel X electric charging stations on Shell facilities. This agreement is intended to support our plan of 1,200 charging points through countries, high west and interstates. Our ambition is to reach up of 70,000 charging points by 2030. We have also signed agreements with important manufacturers such as Nissan, Volvo and BMW to supply analytics integrated electric vehicle charging solution in both domestic and public environments. In real estate sector, Enel X is very active in implementing new energy services and new technologies for home automation and installing charging infrastructure, thus supporting new technological advanced offer for new real estate projects. On mining industry, we have been working closely to support and foster its electrification through electric mobility project, installation of batteries and renewables facilities. We are advancing with the integration of energy services and products with the sale of energy as a commodity in order to capture new clients, increase our customer loyalty and preserve our margin. To conclude my section, let me summarize Enel Chile's strategic rationale. We are on Slide 26. As we have seen, decarbonization, electrification, network digitalization will continue to be key in our strategy onwards. In order to capture all these new opportunities rising ahead and to create value for all, now it's fundamental to convert our company into a platform-based utility, centralized in our clients' needs. This transformation is possible thanks to our full and timely migration into cloud, which proved its value not only to improve our performance in terms of scalability, automation, efficiency and accessibility of all our business line, but also, as I mentioned before, as a key factor during the pandemic phase, enabling that all our activities on networks, power generation units and digital clients' attention were maintained without interruption. During 2021, such transformation will advance, particularly on Enel X business line, where we expect to develop our platform for apps and systems to expand our services and anticipate needs of our clients. Our generation plants have been designed as digital from the beginning. Complying with the highest cybersecurity standards, the plants are connected with a centralized control room to be monitored and operated using a big data platform, in which are implemented predictive maintenance and optimizing performance tools. Our control room in the distribution business continue to be improved in order to guarantee high availability standards in the integrated operation of all our infrastructures. Another key factor today is the cybersecurity. And for us, at Enel, it is a fundamental actor in the digital transformation strategy that we are developing. We have been working on updating hardware and software to prevent possible cyber attacks as well as ensuring both the availability and the integrity of our systems, our infrastructure and our power plants. Cybersecurity is also essential to protect industrial networks and to comply with legal regulation and local authorities. It is also worth mentioning that the use of drones and smart glasses have brought multiple benefits to our operations such as increased security and reduced risk regarding control of contagion by COVID and improve the safety of our people but not being exposed to expansion in dangerous sites. Additional positive effects include reduced time and transport cost or technical expert who can now provide support remotely and also guided virtual tours to our facility for the management, for the Board members and other authorities. Let's now move to the rationale of our CapEx allocation and initiatives towards our circular economy, Page 27. In our commitment to sustainability, we have defined specific declaration to the United Nations SDG 7, 9 and 11, all of them contribute to SDG 13. 93% our cumulative CapEx plan will contribute directly to SDG. 71% will be destined to SDG 7 on affordable clean energy, supported by the globalization and growth in renewables, with the addition of approximately 2.4 gigawatt capacity by the end of the year 2023. 20% will be deployed on SDG 9 on industry innovation and infrastructure, improving the resilience, reliability, digitization, efficiency and flexibility of our networks. And finally, 2% for SDG 11 on sustainable city and communities, mainly based on electrification of services, for example, over 5,200 public and private charging points for the electromobility and over 440,000 public lighting points using LED technology, making them more efficient. All such deployments of SDGs 7, 9 and 11 will contribute to SDG 13 to reduce the impact on climate change, a priority in our agenda. With reference to circularity in our investments, in this slide, you can see and find some example that illustrate our approach to anchor the circular economy within different projects with our main businesses. As a result, all our strategic action and goals, we are proposing a sustainable share value model for all. Now let's move to Page 28. Enel Chile has a sustainable and integrated business model that gives us the confidence to achieve our targets. Our strategic plan envisages a CAGR of 11% for DPS on a 2020-2023, implying a 6.3% dividend yield by 2023. This year is an unusual one given the current COVID-19 situation. Within this complex situation, the deployment of renewable project is a driver for a green economy recovery. Thanks to the effort of our management, our people, we have been able to advance in the construction of the plant despite bureaucratic delay on certain approvals and logistic constraints due to local lockdowns, deploying during the planned period around 5,800 jobs, applying rigorous safety procedures to prevent COVID-19 contagion among workers. Bocamina result anticipation is another clear example of just transition and sustainability into action. Our current commitments with local community concerning the settlement and local deployment initiatives will be maintained and executed during the Plan '21-'23. Any future developments and use of the sites will be performed accordingly with local stakeholders' perspective. With the disconnection of the 2 units of Bocamina, Enel Chile will be the first company in the country to map the road towards an environmental sustainable economy. The reduction of our direct CO2 emissions with base on 2017 values is a great result for all. We are not only investing in the capacity, we are investing to make Chile as a healthy and greener country. Now I hand over to Giuseppe to deep dive into '21-'23 business plan target.

Thank you, Paolo. Good morning, everyone, and thank you for your participation here today. As you have already seen, we have gone through our ambition, and now we will share our vision for the next 3 years on Slide 31. EBITDA will increase 38% in 2023 compared to the adjusted 2020 estimated EBITDA, mainly due to the start of operation of 2.4 gigawatt of new project installed capacity, and performance covering the business line tied to the [ country evolution ]. We forecast an increase in our EBITDA margin to 43% in 2023, mainly due to higher weight of renewable capacity into our matrix and other efficiencies. Net income will increase by 38% compared with the 2020 estimated figures adjusted by Bocamina 2 impairment. Mainly driven by the higher EBITDA, slightly offset by higher depreciation for the expansion of our renewable planes. Our CapEx will be basically in line with the CapEx estimated for the previous Plan 2020-2022 and will be mainly allocated in our renewable project in order to reach our target of 77% of renewable capacity in our matrix by 2023. Regarding the net debt to EBITDA, we target to decrease 1.2x in the period plan mainly to the higher EBITDA and cash generation. Let me underline that our FFO EBITDA ratio will reach 88% in 2023. Now let's dig into our CapEx plan on Page 32. In the next 3 years, our CapEx will continue to be allocated mainly to develop renewable project to cope with the evolution of the electricity market and clients' needs. We will also invest around $0.5 billion in network business to continue improving our grids quality, resilience and efficiency focusing on our customer needs. On development CapEx, we have allocated $1.7 billion, 90% devoted to renewables, mainly on solar power plant, especially in the north of Chile, considering the solar energy significant resources. A 4% will be allocated on repowering our CCGT power plants, mainly San Isidro, that is located close to the capital, Santiago, which is one of the most massive consumption point in the country. The other 5% will be invested in our networks activity to improve the digitalization and resilience of our grids. Now let me give you some color on the performance of each business line on Page 33. Starting wind generation. Our CapEx allocation will reach $1.8 billion in the period, mostly focused on asset development in renewable power plants. Development CapEx will totalize $1.6 billion, mostly allocated to developing solar power plants. This CapEx will result in an increase of our renewables installed capacity to 77% of our total matrix in 2023. Besides, this CapEx plan include project to improve the CCGT power plant through repowering activity and social program in the community where our plants are located. On the EBITDA of the generation business line, significant growth will come from demand positive net contribution of $40 million, assuming a national demand increase of 4.5% in 2021 versus 2020 figures and a range of 2.5% to 3% annual increase onwards. New contracts secured during 2019 and 2020 will also bring a net contribution of $70 million in this window's period, $270 million coming from additional production due to the new capacity into operation, while lower thermal production revenues almost fully offset by lower variable costs. Higher hydro production of around 2 terawatt hours coming from hydrology and more efficient operational condition with an impact of almost $80 million. Finally, the net impact of injection price reduction deriving from the new renewable system capacity and the variance in the sales margin represents $150 million decrease in EBITDA. Let's now move to our energy balance and performance indicator on Page 34. The evolution of the production mix will be driven by our decarbonization plan with the disconnection of Bocamina 1 power plant in December 2020 and Bocamina 2 in May 2022. Let me highlight that in December 2019, we have already closed Tarapacá coal fired plant. Therefore, Enel Chile will become the first electric utilities in the country with 0 coal capacity by the end of 2022. Additional 6.7 terawatt hour coming from new projects, mainly solar power plants. Hydro production increasing by 2 terawatt hour to reach 11.9 terawatt hour by the end of 2023 based on the average of 10 years of hydro generation. Lower thermal dispatch, mainly due to the commissioning of new renewable capacity in the national electric system. By the end of 2023, 91% of our generation will come from renewable sources with 0 carbon emissions. Regarding the commercial side, our regulated sales are expected to maintain around 11.1 terawatt hours. In contrast, sales to free market will increase 33% to 15.2 terawatt hours in 2023, mainly due to the new PPAs with mining company signed in 2019, such as BHP Billiton and Anglo America, both starting in 2021. On the side of performance indicator, even though PPA price will be decreased along the period, the EBITDA per megawatt hour will increase 5% on average per year, reflecting the additional renewable capacity, which reduced the average cost of generation. In connection to above, OpEx per megawatt is expecting to decrease by 4% between 2020 and 2023. Now let me dig on the strength of our commercialization strategy on Page 35. In our generation business, we had continuously developed a long-term diversified portfolio of contracts, including regulated, mining and other free market clients. Our strategy and generation portfolio mix has also enabled us to increase our stake in a more resilient industry in the country, that is the mining company. Therefore, PPA portfolio will grow 12% between 2019 and 2023 and improve its diversification in terms of off-take, increasing the presence of the free market, especially in the mining industry, reaching a 29% stake in 2023. Another vital strength of our commercial strategy is geographic diversification. We have foreseen a significant sale increase in country northern zone, a region where the largest part of our solar expansion is placed. Our portfolio is also a long-term duration. More than 30% of the contract hold a tenure longer than 2030, and only 18% will expire during this plan. Overall, 10-year is the average duration of our PPAs, which leads us to a stable, long-term commercial situation and recurring EBITDA in the following years. The quality supply location and duration of the portfolio support our profitability and capability to deliver the target. Finally, all the factor above allow us to reduce risk in terms of having more presence in a less sensitive demand market, reducing the exposure to price volatile and to spot market and establishing a long-term revenue base. Now let's go to our network business on Page 36. Quality and resilience will be the key driver to support the expected increase in load associated with the electrification trend and external events related to the climate change consequences. In this context, we will invest $490 million in the period, 66% in our distribution business and the remaining part in the transmissions. More than 50% of our total CapEx will be allocated to improve the quality and resilience of our networks to increase the value recognized by the clients. 35% will be devoted to providing new connection, which benefit from the growing demand, driven by urbanization and electrification of consumption. More than 10% of our CapEx will be devoted to further digitalize our networks to continue providing agility, flexibility and efficiency in our networks. We expect an increase of 42% in EBITDA by the end of 2023. Excluding the FX impact, the growth should have reached 23%, mainly due to the increasing of energy demand and new connection, tariff indexation, efficiency and recovery on our losses, slightly offset by the decrease of the remuneration for the distribution [ pay ] business for the period. We will now look at the main drivers of our Enel X business on Page 37. Our effort for the next 3 years will be focused on promoting electrification and contributing the accelerate -- to accelerate the adoption of the new energy uses. Enel X will continue to be a low CapEx-intensive business supported by partnership and platforms. More than 70% of our total CapEx will be devoted to B2B segment. We will continue consolidating our position as an energy partner, supporting our clients in the decarbonization and electrification process by integrating beyond the commodity services and products. In that sense, our investment during the period will reach $15 million, boosting our platform based management, mainly devoted to public charging network and e-Industries project, a small solar panel and energy efficiencies. 5% of our CapEx will be allocated to our B2C segment. Energy transition will empower our clients and will lead them into the electrification, which will result in energy volume increase from other business lines. We will continue to promoting sustainability of cities. In line with that, we will devote around 23% of our investment into B2G segment to support cities in the decarbonization and electrification process through eco-friendly and efficient solution. All in all, our EBITDA will double, reaching EUR 39.3 million in 2023, reflecting the growth and the importance of electrification process. To conclude this session, let's move to Slide 38 to review the strategic action and to see the consolidated contribution of all the business line for Enel Chile. EBITDA will increase 38% in the plan period, mainly driven by the generation business to the starting operation of the new renewable project, the electric demand recovery in the country and the start of the new contract with mining companies signed in 2029 and 2020. The distribution business will recover its performance increase in the EBITDA, mainly due to the lower energy losses and other efficiencies achieved in the operation in addition to the country economic recovery along the plan period. The operative currency of the distribution business is mostly the Chilean pesos. The reason why the appreciation of the currency against the dollar will increase its way in the EBITDA. This effect will be offset by the new regulated tariff applied in the period. EBITDA generated by Enel X will double in 2023 comparing to 2020 estimated, mainly due to the higher volume in services and product sales, driven by the economic recovery, electrification and customer centricity. Now let's take a look at our debt evolution and fund allocation on Page 40. Our operation will bring us $3.9 billion as cash generation from our businesses. Hence, we will need to add EUR 200 million in new debt to finance our growth strategy in order to support higher CapEx expenditure and working capital needs. By the end of 2023, we expect to accumulate EUR 700 million in cash, which will be an essential competitive advantage for the future development of hydrogen and new technologies, ensuring agility and flexibility in our company. Regarding our net debt evolution, we forecast a 14% reduction by the end of 2023 compared to 2020, mainly explained by an important cash generation during the plan period, as clearly shown by the increase of the FFO per EBITDA ratio. We forecast a decrease in the cost of debt in the upcoming year with an average cost of debt of 4.5 percentage in 2023, primarily due to expiration of more expensive debt, which is refinanced with a lower interest rate, partially offset by longer maturity of the new debt. Given the above, we estimate that our net debt-to-EBITDA ratio will improve by 39%, which means a decrease to 1.9x in 2023 from 3.1x in 2020, which, as you know, has been affected by the COVID outbreak. Let me now give you more detail on our financial structure on Slide 41. We reached a strong liquidity position during our business plan, allowing us to fund our CapEx plan and dividend payment, coping with the current economic scenario. This will also allow us to meet credit maturity in the coming year of $930 million, representing a comfortable and smooth maturity profile. The new debt will be used to fund the investment plant in the first year until new projects start operating and generating EBITDA by the end of the plan period. Let me now show some sensitivity on Slide 43. Given the volatility of the current scenario, we present some sensitivities regarding our strategic plan related to the commodity price and U.S. CPI, demand evolution and hydrology. In the first sensitivity, a variation of 10% in commodity, including Brent, Henry Hub and coal index and 1% in U.S. CPI for the plan period may affect our EBITDA for $20 million per year. This volatility is explained by the fact that 91% of our sales portfolio is indexed to U.S. CPI. The second one is related to the demand volatility. A 1% variance in our demand could bring us a variation of around $10 million of our annual EBITDA. Lastly, on the hydrology, a decrease in hydrology of 1 terawatt hour per year would result in an average impact of around $60 million by the year. On the other hand, a better hydrology versus what has been considered in the plan would result in average impact of around $4 million per year. Let me remind you that the impact is not proportional, considering the effect of dispatching in the thermal power plant in case of a dry condition. Finally, let's talk about our target on Page 45. Given the subject cover until now, we have decided to move to range-based target in the future. EBITDA is expected to grow at annual compound growth rate between 9% and 13%, and the net income between 11% and 16%. Management will propose a dividend payout of 50% for 2020 results, adjusted by the decarbonization impairment effect. This proposal must be approved by the general shareholder meeting in April 2021. From 2021 onwards, to give us flexibility, depending on what might come from the hydrogen and storage revolution in Chile and to provide more visibility to all our shareholders, we have decided to consider a minimum payout rate of 50%. This rate may be increased depending on the evolution of the economic recovery and other market opportunity that might come into the medium term. And now I hand over to Paolo for closing remarks.

Thank you, Giuseppe. Let's wrap up with some closing remarks on Slide 47. We have settled our ambitions for the period and continue to contribute to country's decarbonization with 2.4 gigawatt of renewable capacity for the period '21-'23, with the target to reach more than 85% of our installed capacity, free of emission by [ 2023 ]. We will continue to promote electrification of the country and Santiago, in particular, offering new services to our clients enabled by our business platform, an integrated offering approach through innovation will improve the contamination and unlock efficiency, preserving margins. Quality of service, resilience and efficiency will continue to be our priorities of our networks to support electrification and client needs. Sustainability continues to be the center of our strategy, sharing value with all stakeholders. With a commitment to 2023 CO2 targets and the adoption of circularity in our businesses, we will be able to create value along the way defined by ESG and to share economic benefits with all our customers. Thank you very much. I will hand over to Isabela for the Q&A session.

Thank you, Paolo. Thank you, Giuseppe. Let's now start the Q&A session. [Operator Instructions] Okay. Now so we have a question from Javier Suarez from Mediobanca.

This is Javier Suarez at Mediobanca. Three questions on my side. The first one is on the CapEx and on the dividend policy of the company. The thing that probably has surprised me the most has been the reduction in the annual CapEx for the company in light of the energy -- ongoing energy transition. So you can help us to understand why the company has reduced that level of annual CapEx versus the previous business plan. Second question is on the dividend payout policy. And that is a question probably linked to the previous one. Under the previous business plan, the payout was 60%. Now with lower CapEx, the payout has been reduced to 50%. So you can help us to understand the rationale for that. I think that during your presentation, you have been speaking about potential new opportunities. If you can explain the reason why the payout has been reduced. Is that because you are maintaining weapons within the company to take those opportunity or is it because of the company gives the necessity to be a little bit more conservative in light of the financial difficulties that we are all facing? And the third and final question is on the debt evolution. If you can help us to understand in the Slide #40, when you're mentioning the cash generation, how have you been considering the evolution of the working capital of the company in the period that goes from 2021 to 2023?

Thank you, Javier. Now I hand over to Paolo. Paolo?

Yes. Thank you. Thank you, Javier, for the question. Regarding our business plan and our CapEx plan. What we are planning is to, let's say, to develop our generation metrics, adding 2.4 gigawatts of new capacity. The curve that you see is to have, let's say, the largest bunch of new capacity entering into the 2021. And then the plan gives us flexibility in order to continue to push on our pipeline. We have more than 13 gigawatt of capacity to be developed and construct. Or to, let's say, to invest, let's say, to use this capacity for the new technology, the new economy that could be hydrology and even if we see that this may take place maybe in midterm with -- at the very end of the CapEx in the plan period. So what we see here is the plan that give us, let's say, a strong platform in the decarbonization. All the plans are already identified, so we can develop our position towards the 3 years, give us flexibility in order to push new projects regarding hydrogen, when and if we can come within this period and also to, let's say, give flexibility also to push on other businesses. We have -- in this way, we have also flexibility to restart a more profound digitalization process in the next years, considering that the real requirement of the networks will be to have more resilient and more digitalized. So we have, in this way, let's say, a very solid business plan with full flexibility in order to, let's say, get all the opportunities that we will have in advance. At the same time, regarding the way in which we are, let's say, giving our -- the dividends to our shareholders. What -- it is clear, as you mentioned, that 2020, it was a very complex year for everybody. Here in Chile, we face -- just coming out for the social turmoil we faced the COVID pandemia. So what we are, let's say, waiting from real deep economic crisis in 2020 and a recovery in the next year. So what we see is a '21 year of transition and then to have a full exploit of the country potential from 2022 onwards. So this is, let's say, the way in which we shape our business plan, let's say, to have flexibility to be ready to get opportunities for the future and also to manage the potential carbon recovery that we expect to take the country. I leave to Giuseppe the answer on that.

Yes. I mean talking about the net working capital projection. Let me say that we have used the same assumption on the previous plan. The only difference is that in 2021, we are assuming to have a second part of the factoring related to the PEC mechanism, the price stabilization mechanism. So the receivable that the generation company on versus the distribution. And we are assuming that the situation in the country will go back to the normality. So we are assuming to recover the receivable that the distribution company didn't get this year. So basically, we are assuming 2021 that all the receivable is going to be paid from the customer. Except for that, let me say that the net working capital is basically pretty in line, of course, taking into the consideration all the activity, all the measures that we put in place, as usual, in the net working capital in order to improve it, but no special things, let me say, except for what I already said.

Okay. So now we have a second question from Enrico Bartoli, MainFirst, please.

Can you hear me?

Yes, now I can hear you.

Yes. The first one is related to the power generation business. You showed in a slide that actually, the average price for PPAs is expected to go down to $66. If you can elaborate on your expectations on the trend that could occur beyond the business plan horizon. And -- but despite this reduction, it seems that actually your EBITDA, unit EBITDA is going up. So as your view on the average margins over the period that also may be beyond the 2023 as effect of the evolution of our prices and installation of renewables. Then I have a question regarding the discussion regarding the unbundling in the network business. What opportunities and risk you expect from this process? If you can provide some details on the proposals by the regulator and what you expect in terms of evolution of the supply margins. And the last one, of course, it's a bit difficult to say, but if you can elaborate a bit your view on the opportunities from hydrogen in the medium, long term. Chile has a quite, I would say, aggressive targets in terms of evolution of hydrogen production, also the aim of exporting hydrogen in the medium term. So what kind of opportunities you see for the company over the next years?

Thank you, Enrico. Paolo?

Please, I will get, let's say, the first, the third and the fourth, and then leave the question on margins to Giuseppe. Regarding our portfolio sales, you see that on average, is a mix between regulated and free market contracts. And the price along the year is driven by the evolution of that SING [ fee ] part of the portfolio. It is clear that considering the mix that we are facing and also the trend of -- on the free market, there is a component -- it is the, let's say, the component of the portfolio with a lower price, even if, let's say, also on the regulated market, there is a trend due to the fact that some -- a contract that has been signed years ago will expire in between 3 and 4 years. So the trend is driven by -- from one side, the contract -- the evolution of contracts in the free market and the expiration of the -- and the entering of the new contract, mostly based on renewables in the regulated market. Regarding the -- and what it is in the chart is the, let's say, the evolution of the average price. If we consider the period between 2021 and 2023, '24, maybe also even after the 2023, the average price considered the bundle between regulated and free market is in the range of $65 per megawatt hour. Regarding the unbundling, the unbundling is a decision included in the law, the Ley Corta de Distribución, that has been issued last November, together with the new details regarding the WACC on distribution. This split is to give more clarity and transparency regarding the regulated business and the results of the regulated business. What does it mean for us is that all the regulated activity related to the network will be, let's say, will remain in Enel Distribución in Chile. At the same time, the activity that we have on transmission that is related to -- it is currently within the perimeter of Enel Distribución will be separated in a different company. And this split will be proposed during the next extraordinary shareholder meeting of the third. At the end, we will have 2 separate companies. One totally focused on the management of the distribution grid and the business related to these assets. And the other to the, let's say, perimeter of transmission that currently is within Enel Distribución. Regarding our activities, according to the law, nonregulated business like public lighting will be, let's say, moved in Enel X, that is the player that will perform that activity. And also the sales to the free market will be moved from Enel Distribución in Chile to Enel Generación in Chile. This is an internal decision that we have taken based on, let's say, the constraint of the law that forced to stop promoting activity of sale of electricity to the free market on Distribución. So the result of this activity clearly give to the, let's say, to the client, to the regulator, visibility on the activity of each of the business, transmission and distribution. At the same time, with the decision to, let's say, to move that part of commercial activity to sell electricity to the free market that today, during these days, are in distribution to generation give us the possibility to have, let's say, a single point of sales of electricity to the free market with obvious synergies and to be prepared to manage, from a single commercial point, the future opening of the market. And the last one on my side was?

The hydrogen opportunity in [ hydrology ].

Yes, hydrogen.

No, in hydrology.

Yes, hydrogen.

Hydrology.

Hydrology?

Yes.

Okay, hydrology. I wasn't -- regarding hydrology, what we see in our plan, some forecast based on reduced number of years that we have taken into account compared to the exercise that is doing the [indiscernible] the reference that we have taken is, especially for the last year. You have to consider as well that looking backwards, we are having, and we had last year 2 quite draft years, especially this year was very draft. But in 2018, we reached 11.5 terawatt hour of generation based on some stocks that arrived in the second half of the year. So to be honest, it is difficult to predict the evolution in, let's say, in the following years, always based on statistics and some model that we use internally. What we have certain, our plan is a forecast based on the recent years of hydrology. Giuseppe, regarding the margin?

Yes. So for what concern the margin, together with the decrease in the PPA price, we have also a decrease in withdrawal energy price. What does it mean that because of the energy production or renewal production putting the system, the price for withdrawal energy reduced a lot. So basically, we have, on one side, a negative effect of the PPA price reduction. But on the other side, we have also a positive effect of withdrawal energy price. Exactly for what I said because of new capacity, renewable capacity in the system and hydrology. So because of that, we see a reduction in the EBITDA, but not so big as expected. As a matter of fact, in the slide that you were mentioning, we have a box that -- where we declared EUR 150 million lower EBITDA, where you can find the reason of what I said is the reason.

Okay. Perfect. Thank you, Giuseppe. Now we have Murilo Riccini from Santander.

This is Murilo Riccini from Santander. Actually, I have 2 questions regarding the Page 34. The first one will be the strategy and the rationale for awarding 3.8 terawatt hour by 2023 with 3 clients. And how do we evaluate the [ competitive ] scenarios to do this? The second one is what price levels are you seeing for the renewal of short PPAs to reach the level of $66 per megawatt hour by 2023? I think this -- well, this is very important assumptions. And I see that the growth is coming mainly from these 2 assumptions and the rest coming from [ micro assumptions ]. Could you elaborate a bit more on that, please?

Okay. Thank you, Murilo. Paolo?

Yes, Murilo, the line was quite disturbed. So I have a -- difficult to understand the 2 questions. The first is regarding the Page 24.

Yes, exactly about the evolution of our free market.

Yes.

Okay.

Yes. The -- let's -- so the assumption is based on the current view and the current situation that we see in the free market. The current situation, the split between the regulated and free markets based on the segmentation, current segmentation that define the free market with the connection capacity over 5 megawatts. The connection between 5-megawatt and 500 kilowatt is potential eligible free clients and below is regulated clients. In this segment, in the segment of the middle between 500 and 5 megawatts -- kilowatt and 5 megawatts, there is, let's say, then clients that today are migrating into the free market. Most of -- some of them are in the concession areas, some others outside the concession area. And the strategy is to target that client and to, let's say, to be proactive in making effort and offers in order to capture that client that have the potentiality to move from one market to the other. According to this action and according to the total amount, it is in the range of more than 7 terawatt hour, what we have captured for the time being in the range of 70%. So this is the numbers that -- and clearly, the size of these clients are smaller than the ones that today are within -- not in the free market. And the remaining that should be captured for the following months, the following couple of years are smaller. So we need a commercial activity, focused to capture that kind of clients that are, let's say, the smaller one with the consumption that could be in the range of some gigawatt hour per year. So this is -- let's say, the assumptions and the condition of our commercial effort to capture that kind of clients.

Okay. The second question is for Giuseppe about the EBITDA evolution relating to generation associated to the growth. Giuseppe?

Yes. So -- well, I believe that one of the question was also related to the decrease of the PPA price. I would like only to mention the fact that the decrease, being an average price, is basically coming from the fact that we have a new contract with the mining company with the prices that are in line with the market. So they decreased the average price of PPA. In terms of new capacity, of course, we estimated the production according to our plan, and we evaluated the impact considering the margin that this production will come. So basically, again, always the concept between the sales of energy and the withdrawal energy price. So we estimated $280 million in the plan.

Perfect. Thank you, Giuseppe. Now we have questions from Alex Varschavsky from LarrainVial.

My first question is regarding the transmission business. Now given that you have to unbundle the distribution and the transmission business, have you looked at the opportunity to even sell this business given the rich valuations of later transactions of transmission assets? And can you give us the exact EBITDA of this business? I think that it's roughly at $100's million, but an exact figure would be great. My second question is related to Enel X. You show a huge growth in Enel X EBITDA, roughly 2x, with a small amount of CapEx. Is this growth related also to the bundling? Is there -- is some part of this EBITDA in the past attributed to the distribution assets? Or is it pure growth? And could you be -- could you elaborate about this growth in which a specific business is happening? And my third question is regarding to the regulated auction, which will take place in 2021. Will you participate in this auction given the uncertainty about the portability deal? And what are the risks in this on auction even all the regulatory changes?

Thank you, Alex. Paolo?

Yes. Okay. From one side, let's -- I start for the third one regarding the new tender for the regulated market, the -- let's say, the mechanism is to cover a period where, according to the current prediction, the current evolution, the contract and demand on the regulated market, there will be need of electricity. So that amount has been shaped according to current calculation made by the regulator, but let's say, we are in the same line, consider the current situation, the actual situation of the market. It is clear that the evolution of the portability law should take into account, not only the new vendor but also the overall situation in order to, on one side, to give visibility to open the market and to give the player to play competition in the arena with clear rules for everybody, transparency. And at the same time, preserve the situation, the -- preserve the -- let's say, the position on the regulated market that all the players are developed until now. So this is a way in which the [indiscernible] should be adopted. Clearly, we are monitoring closely the situation. We are a player that we can have a role, sure, for sure, in the remark and the regulated market. And we expect that the rules will be clear, transparent in order to be -- to compete in the new tender as well as to enter into the new arena that will be created for the free market. Then regarding the other questions, the first one was?

The first one is regarding the unbundling on the transmission, if [indiscernible].

Yes. Okay. The unbundling of the transmission. Take into consideration the margin number of 70-30. So the split between the margins between the 2 companies should be in the range of 70 distribution and 30 transmission. The same could be [ considerable ], also the investment maybe that in transmission could be slightly higher, but the margin number should be 70-30. Having saying that, for the time being, we have not received any offers. We are not considering any voluntary play. It is part of our business. It is a regulated business that we can manage, we are able to manage to create value. We don't see any, let's say, dramatic disruption on this situation for the time being.

Perfect. Then we have some questions to Giuseppe. The first one is to give more color on the business EBITDA of the transmission distribution and then talk more about the growth on Enel X.

Yes. So talking about the Enel X, I have to say that the business is not a high capital intensity business. As a matter of fact, it's a low capital-intensive business, except for the B2B business, we are talking about the infrastructure or in electric infrastructure. Now the activity that we believe is going to be put in place during the plan are basically related to the efficiency program for the client, air condition and all the other smart lighting project that we have already in our pipeline. For what concern the distribution, we basically -- we are focusing on the demand recovering and the index linked to the PPA, to the tariff structure. And in the same time, we are targeting efficiency in terms of reducing the losses and reduces in level of OpEx is our main driver for the Enel business.

But just to make a clarification for the questions that has been made and can arrive. When we talk about the transmission, we are referring to the zonal transmission. So we are not referring to the transportation assets. So maybe that the separation is mainly from the unbundling standpoint. Today has been considered and managed as part of the Distribución business, considered to be the same even if managed by 2 different companies. So in order to, let's say, to make clear that the separation is between 2 business that are strictly correlated from the operating standpoint.

Perfect. Thank you, Paolo. Thank you, Giuseppe. Now we have questions from Andrew McCarthy from CrediCorp.

My first question is on the CapEx plan in generation, quite a large CapEx plan in a small period of time. Just wanted to get a sense for why you prefer to do so much CapEx in a very short period of time considering spot prices at the moment are very low and perhaps as an argument that when you compare the levelized cost of energy with those spot prices might not be optimal. Then my second question related to the CapEx plan. Why so much focus on investment in solar power plants? See there, for example, there's a fairly small proportion going into wind. Just be interested to hear why you have that sort of preference. And then my third question is, you mentioned there about moving the free market activities from Enel Distribución into Enel Generación. Just wondering if you could give us a sense for how much EBITDA there is in that business? And would that require some kind of related party transaction to carry that out? Those are my 3 questions.

Okay. Thank you, Andrew. Paolo?

Okay. I can answer the question, then I'll leave Giuseppe for some details. Regarding the CapEx plan, the question why we are investing, let's say, almost in considering the renewable business or more focus on the first 2 years, the answer could be simple is the decarbonization. This is, let's say, the way in which we can create real decarbonized player with a very strong renewable metrics. We have strong renewable assets, supported by competitive gas-fired plants and have, let's say, a primary role in the generation sector. Considering that today, most of the clients are -- especially the large clients are acquiring renewable energy, and considering also the push coming from the regulation, coming from the government in accelerating the [ discarbonization ] fleet of the country. This phasing out of old contaminating assets give us the possibility to enter and to have major roles in our commercial activity. Considering also that the position that we have, we have position in the north, close to the mines. We are developing position in the center. And we are developing wind farm in the south. Regarding our mix, the important point here is time to EBITDA. And what we have found, considering our pipeline, is a very, let's say, attractive CapEx to EBITDA conversion in the solar business. So we have most of the assets that -- the project that are under construction today are solar. And we have 1 wind farm of 140 megawatts in the south. And we are developing for, let's say, the remaining 2.4 gigawatts of generation, mainly solar. So considering that the potential of Chile and considering the new technology in managing the generation from that facility, consider the double phase the solar panel give us, let's say, a strong affordability for these new megawatts coming online. And the third question of Andrew was?

About the [ geronico ], the -- how are you going to beat the process [indiscernible].

Okay. No, I'll give you some colors regarding the sale of the Distributión commercial activity to Generación. You know that today, within Enel Chile, Enel Generación Chile has a commercial activity that is serving large clients like industrial clients, [ live lines ] and a portfolio of mid-sized clients. On the other side, Enel Distribución independently has developed it's commercial activity, serving clients that moved in the free market or are mid -- small, mid-free clients. According to the law, debt activity could be keep within the company within -- for an additional 1 year, but cannot be developed anymore. From that -- this point of view, our, let's say, analysis was to, let's say, have the possibility to develop a single function, a single structure to serve the free market. This is to have synergies and efficiencies also from the sourcing perspective, considering that Enel Generación Chile has already embedded its generation facility within the company, and to have a single point of management. And this is the real rationale. Clearly, the size in terms of terawatt hours of the portfolio that has been sold and moved into generation activity is in the range of 4 terawatt hour.

Perfect. And the remaining questions to Giuseppe. Giuseppe, on the EBITDA?

Yes. I mean for what concerned the EBITDA that will move from Enel Distribución to Enel Generación only related to the retail business. So the commercialization of the retail, we are talking about between $5 million and $10 million in the period. We are not talking about a big number, but of course, important number that can be developed inside Enel Generación.

Okay. Perfect. Thank you, Giuseppe. Just checking if we have more questions. No? So there seems to be no more questions. We remind you that our team, the Investor Relations team will be at the disposal for any other further questions you may have during this period. Thank you very much for your participation here with us. Stay safe. Bye-bye.