Grupo Energía Bogotá S.A. E.S.P. (GEB) Earnings Call Transcript & Summary

It is 8:00 a.m. Good morning, and welcome to our second quarter results conference call. I am Karen Guzman from the IR and Financing team at Grupo Energía Bogotá. This conference is being recorded. The information you will see today is uploaded in the Investors section at GEB's webpage. [Operator Instructions]. Now let's welcome Jorge Tabares, GEB's CFO, who will lead the call today. Good morning, Jorge.

Thank you, Karen. Good morning, everyone, and thank you for the interest in the second quarter results for Grupo Energía Bogotá. We'll follow the same format and the same agenda as in the previous call. So please go to next page. The snapshot and the theme here is that businesses continue to do well, and the results are highly positive. In this case, the currency impact and business diversification in Colombia support the solid results. On the left, you see the EBITDA. These figures are in Colombia billion pesos. So the COP 882 billion of EBITDA during the quarter represents almost a 20% growth. And the major business lines, gas transportation, gas distribution and energy all show very healthy growth in EBITDA terms. By geography, as this quarter represents basically the operational results as we did not receive a major dividend during the quarter that is incorporating our adjusted EBITDA. Colombian businesses drive that growth, growing 25% and representing, in this case, Colombia, 62% of the total EBITDA for the quarter. In the middle, the net debt-to-EBITDA at 3.3x shows a robust leverage and that is lower than in the previous quarter, mainly associated with the current currency variations of the Colombian peso I'll talk later about the ROE and ROA. And you see in the bottom part, revenues growing mostly in line with the EBITDA growth of 19%, very healthy operating income growing at 40%. And if I go to the controlled net income, that shows a reduced growth rate and mainly impacted by one-offs of noncontrolled entities, and also by financial expenses that have been higher doing given the macro environment that we're going through. We invested during the quarter USD 167 million equivalent, and that's a slight reduction. And this is mainly associated with the natural pace of investment in Calidda, in which we have a mature portfolio of CapEx development. On the top right, I highlight both the PPI in Colombia and the U.S. have moderated significantly, which put us in a more normal macro environment than what we saw in the previous few quarters. The currency during the quarter had an appreciation of 13% on the currency. Go to the next page, please. In terms of milestones, some of them we have extensively published our Colectora project, which is one of the 2 main transmission projects we are pursuing in Colombia completed a very significant milestone reaching agreement with 235 ethnical communities in the Guajira area, and we will start the construction of a lower piece of the transmission line, which is Cuestecitas La Loma, that we already initiated that construction. It took us about 4 years to complete the prior consultation process. And we think the way we manage the process and the cultural engagement with the communities should give us a good foundation to go to the next stages of the project, licensing on one side and then when we start construction on the field. I think the foundation we have built over many years should help us to complete the project successfully. The Minister of Mines and Energy published Decree 929, which effectively -- we see it as the alternative that the government took as the presidential intent of getting the powers of the CREG of the regulatory commission as those -- that intent failed, the government moved towards the Decree 929. And it is important to note that most of what it incorporates is we think the regime, the regulatory framework in Colombia and mostly gives the CREG guidelines for them to use as they actually enact any further regulation in the future. So that is a positive. And I think there was a change in Minister of Mines and Energy and the new minister in the initial public remarks mentioned that he planned to appoint on a firm basis, the CREG members, the commissioners, which we think is a positive step towards maintaining the independence of the technical body, which is the CREG. Moving to the top right, for those of you who did not participate in the TGI conference call yesterday, there was a change in the currency of the company. The revenues are now since June 1 in COP as opposed to U.S. dollars. And it also was -- another regulatory piece was enacted that increases the WACC of the remuneration to 11.88%. That's more than 100 basis points above what we had before, and it's clearly a positive for the company. With that specification of the company, we executed successfully hedges for all the currency exposure as the company debt was basically all of it in U.S. dollars. The result of that execution gives us COP interest rates variable, which should moderate in the next few quarters. Currently, the rate is high given the macro environment in Colombia. And we are pending a final CREG resolution that will allow the company to recoup some of the hedge costs via tariffs, via cost recovery. And that should clear the regulatory path for TGI which has been in the works for about 18 months now, almost 2 years. We launched a road map for gas -- for natural gas in Colombia. I think the highlight of that is that the company has -- or gas has a very significant role to play in the supply of energy for the Colombian economy, at the same time contributing to energy transition. We had a contingency in an area called Cerro Bravo in the center of the country that was already sold and had a limited impact on TGI basically associated with cutting the service to its clients in the south of the country as a precautionary measure to protect the asset but it's now established and the situation is determined to be -- to have been solved by now. In Calidda, we see a few upsides associated with the government with the President, Dina Boluarte, intent to reactivate or dynamize the economy. We are part of the plan Punche Peru and are going to make an investment of about $36 million in support of that. So in addition to helping clients and citizens with service, it allow us to make some moderate margin. But most importantly, I think, is to align with the government gas massification intent, in which we can play a significant role to Calidda. The volumes were higher for the quarter, and this is mainly associated with natural gas and power plants and the money that the government entity is going to accelerate the conversion of natural gas vehicles, which helps the quality of the Lima area, which badly needs it. And which ratified our rating. I think finally, on the bottom Enel. Enel announced the suspension of the Windpeshi project in La Guajira. This is a wind power plant 204 megawatts. It is a signal of the difficulties to access the site, actually to execute the project and an assessment that and even if we manage to construct the project, operating, it will have been difficult given the instability of accessing of the road -- of transiting of the roads to access the project. It is not a general decision by Enel of not pursuing renewal projects in Colombia as they keep advancing and constructing 800 megawatts of projects in areas different than Guajira and have actually an ample portfolio to continue growing the generation business and supporting at the same time, the energy transition. And the company decided also announced the sale of the thermal plant in the north of Colombia and that's associated with the carbonization strategy, and it's very good news because the company was in the brinks of having to invest money to dismantle the facility and a new player will continue operating it. That's kind of the key milestones in terms of performance. At the top left, the operating income, as mentioned, growing at 41%. And this is mostly associated with the additional revenues and additional revenues are a combination of higher tariffs, higher volumes in many of the businesses also and a moderation of the administrative expenses, which we continue to try to moderate and are running an austerity plan to ensure that every penny we invest, we expand in support of the businesses. In the operating income in the bottom, you see all businesses growing at healthy rates. And when we break down that growth of COP 307 billion, it's a combination of operating income and the FX conversion of the U.S. dollar-based businesses associated with the movement in the exchange rates, which is part of the diversification and the portfolio we have built over time and also Elecnorte showing full quarter of contribution, which we did not have in the same quarter in 2022. This is the company we acquired -- the transmission company assets -- operating assets, we acquired in the north of Colombia as some of you may recall. Bottom right, the operating cost, increasing slightly higher than the operating income, but in terms of current nominal amounts, increasing by COP 178 billion, which is much lower than the 307 increase in the operating income, which that delta is reflected in the increase of the operating income during the quarter. You see some high numbers also on the operating cost, and some of those are associated with the purely operational expenses, gas that we buy to sell, and that's why in both cases, you see high double-digit numbers in both cases, meaning operating income and operating costs and FX effect, which is much lower than the income FX effect. And in the administrative expenses, you see a moderation in most of the material businesses and again, a reflection of the cost consciousness that we are operating, the environment we have created a culture of taking care of all expenses. Go to the next page, please. Consolidated EBITDA, as I mentioned, this quarter is mostly operating. We did not receive material dividends. And how gas transportation and power transmission drive that 19.5% growth in the consolidated EBITDA. By company, you also see the main contributors showing very healthy growth rates. And when you look at the consolidated EBITDA by business in the bottom, you see the energy transmission having a 27% increase in the consolidated EBITDA, which is part of the strategy, and that is -- that captures Elecnorte asset acquisition that is, again, part of the business strategy. Go to the next. Here, there are a few important movements that I will explain. So the net income increases moderately by 4.5% -- 4.8%, that's below inflation, which stands about 12% in Colombia, impacted by one-offs and higher interest rates. And also, we have some positives that are one-offs associated with the TGI operations. So in financial revenue, we have an increase or a contribution rather, of COP 116 billion . And part of it is the repurchase of TGI bonds. We did an upper market transaction of -- on the TGI 2028 bonds, and this was the strategy to reduce the hedging cost and that we acquired those bonds about 97% of the price, and that is reflected in that additional financial revenue. And of course, higher interest rates that we continue seeing -- we continue seeing during the quarter. Higher financial expenses, you see that delta of about 100 over the higher financial revenue, and that is what to some extent, moderate the increase in net income. In the FX difference, we had a one-off positive the TGI specification started in June 1, 2023, and it took us a few weeks to actually execute the hedging, which is now completely done. And that time frame is where the Colombian crisis -- political prices broke up and there was a currency appreciation during that time, and that help us to monetize some positives in that currency exposure we had due to the starting point of pacification. On the equity method, we had a negative 13%, and that's mainly associated with noncash situations, both in Enel and situation also in Argo that I will explain in a minute. And overall taxes, we had an increase mostly is not expected to be cash, payment taxes in the near future, as some of that is related to deferred tax. And the combination of that is what leads to 4.8%. So lower growth rate than the EBITDA but mostly associated with the bottom part of the equation, which is the equity method. And the Enel Colombia situation is the most significant one, in which we had a reduction from COP 340 billion to COP 237 billion. And the key driver there was a write-off that the company had to do of COP 285 billion because they lost legal action against the easing in Costa Rica, and the company expected in the financial -- in the accounts, they expected to win some of the expectations of that legal action. I have to say that when we did the transaction with Enel and incorporated these Central American assets, we put 0 value on that legal action that they had. So we did not pay for the expectation that was in their accounting books, which ended up being a negative outcome for them, and that's what drove that write-off. And in Argo, we had -- the COP 80 billion -- the base, is affected by a accounting recategorization or adjustment that we had in 2022. So that's why you see a reduction from COP 80 billion to COP 47 billion. And part of it is associated, but 1/3 of that difference that you see there with the ICPA in Brazil that was lower by about half between '22 and '23. If you were to look at the equity method for the 6 months, these -- all these figures are quarterly but for the 6 months, the Argo outcome is basically flat, and it's not as lower as you see in this one-off. And on the bottom right, you see others is mainly Gebbras on the contribution of the assets we acquired there. So again, 4.8% growth mainly impacted negatively by those one-offs in the bottom. And with the positive of the TGI also a couple of one-offs that we saw. Next, not much changes in the level of indebtedness. We are now on the top left about to finalize after the quarter end that we -- all the LIBOR loans were converted to SOFR. So we'll see from now on about 36% of the debt linked to SOFR. Increased debt costs, the COP debt is at 15%. It was in June of last year, it was 11.78% and the U.S. dollar debt at 5.8%, is also an increase from 4.41% at the end of this second quarter of last year. In terms of currency, you start seeing in 2023, a couple of new sections here, the COP hedge and the U.S. hedge. So now we have more debt in Colombian pesos due to the hedging of the TGI debt. It now accounts for 31% the total [ copy ] debt. Again, that 13%, as I mentioned, is variable. And on the top right at 3.3 net debt to EBITDA, which again give us ample space to pursue for the acquisitions, which is our key strategy. In the cash balance, you see a slightly higher cash balance than normal after this quarter ended, the first payment of the dividends, which is about $250 million to our shareholders. Finally, we have very moderate cash pressure for our maturities of the portfolio, the 2023 are basically addressed now, which is -- part was in Calidda, parts in Guatemala, loans that have been agreed and are in defined Calidda was disbursed and the Guatemala is in the process of approval by the Ministry of Finance in Colombia and we're actively prioritizing the advanced renewal rollover of those $319 and $355 million loans -- syndicated loans that are due in 2024. Next, in terms of CapEx, we're seeing an expectation of $427 million in Colombia. You see energy transmission, which is the key component of the '24 CapEx on the following years. We're building more than 2,000 kilometers of transmission lines in Colombia from which Colectora that I mentioned is a key project Refuerzo Suroccidental reinforces the transmission system. I mean the center and South country, another very important project there and you see how, as I mentioned, Calidda reduces their CapEx profile as we stand now. We are seeing some growth opportunities in Calidda that could change this and are very actively engaged with the Peruvian government to support the gas massification. And finally, the slight increase in ROE and the reduction in ROA in part is due to the dividend. We had extra cash at the end of the quarter that was that was dragging down slightly the ROA at the end of the quarter. That is next -- that is what we had in terms of the overall summary of the operation. Again, positive results in wholesale segments. I did not mention, for example, in Guatemala, which we are very actively trying to reduce the gap between the advancing of the project and the advancing of the revenues. We had in U.S. currency a 16% increase in the revenues because of the new energization of an asset that will allow us to get more revenue for the company. We continue to manage cost and to find this balance between the growth of the revenue and the growth of the cost that we are seeing, for example, in TGI, we're seeing some cost pressures. We executed the hedging strategy in TGI and are now in the process of -- being engaged with the CREG and pursuing the finalization of the -- final publication better of the cost recovery resolution, the 702 resolution. And finally, we are proactively managing the 2024 maturities. With that Karen, I open to Q&A, and you can post the questions there in the chat or I think raise the hands also.

Thank you, Jorge. We have no questions on our chat. However, we have a question from Rahul Bhat. Rahul, we are going to unmute your microphone and then you can unmute yourself okay?

I have a few usual questions, probably to start with Jorge, can you remind us what impact do you expect from El Nino this year? And yes, both on Enel Colombia and TGI business because I think you will get impacted mainly from those 2, which I'm not mistaken. Do you want me to go one by one or?

Yes, please.

Okay. So then the other ones were basically on TGI for the new contracts, like a lot of TGI contracts are expiring in 2024. I think last quarter, the guidance was there was going to be some new contracts signed in second quarter. So I don't see any update on that. Could you please give some color on that. And then also the intercompany debt that you have with TGI, what is the plan? How is TGI going to refinance that? Or is GEB going to just push the maturity of that?

[indiscernible] Rahul and with Juan Ricardo also, our CEO, that is attending the call. In terms of El Nino, so actually, the diversification also helps us there because we have the El Nino, which is a broad season in the north of the continent in Peru actually it's the opposite, so we had some kind of hedging there. But so if I start from the South, what we saw in the -- so far is less rain in the center of the country of Peru, where the main hydropower plants are, and that has had a positive impact in Calidda, as we have sold more gas to power plants in Peru. In Colombia, which, of course, is where the major impact is, it's difficult to forecast the intensity of El Nino. It is a given now that we're going to have an El Nino and what that typically just in the energy sector, means is higher electricity costs because of the scarcity of the resource. It should have a positive impact on the portion of the Enel generation that is sold on the spot market. But overall, it's probably not a huge positive impact given that most of the energy is sold in advance. The clients are going to -- overall in Colombia, the users of electricity are going to probably suffer because of higher prices. And that's where we are acting with TGI to try to ensure that the power plants that can be run on fuel or natural gas, running natural gas, so the cost spike moderates and the citizens don't have to pay as much. So that actually creates -- if that materializes, that creates an upside for TGI during the last Nino, the system was able to hit a peak about 200 million cubic feet per day to supply those central -- the power plants in the center of the country, and that creates an upside, a temporary upside in which TGI can monetize the Nino while helping the country. And if you go further north, Panama, we also have seen less rain already, which has impacted the generation ability of the hydropower plant that Enel has in -- especially in Panama and Costa Rica, mostly in Panama the higher impact. So overall, the Nino, I expect to have a moderate impact on our business but tends to be positive. Of course, for the economy overall, there are more other -- there are much more consequences than just electricity as water scarcity, agriculture and crops. So those are important impacts for the economy, but do not impact us significantly. Juan Ricardo, go ahead.

One thing that you should keep in mind is this El Nino where we have the most water. We had a really great raining season. So Guavio is almost to the top, the same as Guatepe, which are the 2 main hydros. So in that sense, the offer of electricity is going to be better than usual. And we are trying not to allow prices to go too high given the political environment. So Enel has been proposing for sort of auction. So most distributors have long-term contracts instead of being exposed to the spot because that is key to moderate the spot prices in order to keep political environment that is stable. So on the hand of electricity, we don't see much of an upside. And gas-wise, although there used to be a huge upside for TGI, there is not enough supply of gas. So unless the supply of gas is resolved and the connection between Promigas and TGI in the North increases its capacity because it needs the investment of a compressor by Promigas in order to be able to use the Regasificadora. I don't know how you say that in English but the equipment that Promigas has to import gas into the Colombian market, you need to improve the transportation from the north to the center. Otherwise, they will need to be used diesel fuels if there is a scarcity of gas. That is going to limit TGI's upside. But overall, it should be positive with the exception of Panama, where the needs of water for the canal is clearly constraining the generation of the Fortuna hydropower and we are exposed various [indiscernible] in the spot market there. That's the reason the Enel results are not so positive this time. This is that, Jorge, go ahead.

The typically in the center, so there are kind of 2 rain patterns in Colombia and the Nino has had typically less impact in the center, which is where most of Enel assets and it appeared that the fact that Guatepe, which is the higher reservoir in Colombia, it has so much water and most more water than in the previous El Nino's. I think it's the impact of [indiscernible] as EPM has been able to generate with the 600 megawatts that are operating, that has helped us help them to save water and that is most likely to have a positive impact overall in Colombia. On the TGI contract, so I think the overall view is gas supply and gas shipment has been slightly lower than in the previous quarter of last year not a significant change and no new findings have been announce or no new production is coming online. So the actual shipments on TGI had a relative stable profile, so the clients don't have the need to secure capacity and to sign firm contracts, even paying slightly higher prices for interruptible capacity in some cases. I think in general, it's no new information or no development that could change materially the TGI contracting profile. In the intercompany then -- so it's $370 million that are due in December. Those are hedged already. So the company has no FX exposure. And we are taking a group approach, so TGI is pursuing some financing options in order to pay part of that debt. The final definition will be made with the group overall comp [indiscernible] too expensive, we probably will just renew the intercompany. And if not, we will take some money off the market. I highlight that TGI has bought back $202 million of the bond. So the leverage of the company currently is much lower. I think it's 2.3x EBITDA. So it's significantly under levered compared to what we have seen a few quarters back.

Thank you, Jorge. We have a question -- excuse me Rahul, do you have any other question?

Sorry, I just had a follow-up. On firstly, for Juan Ricardo on El Nino for Promigas? Is it spec LNG capacity that has to increase? Or is it something in the pipeline that needs to come? And then.

Is on the pipeline.

Is on the pipeline. Okay.

Yes, you need more compressors. You can only get 50 million cubic feet on the interconnection between Promigas and TGI in [indiscernible] Guajira. So you need a compressor in order to be able to increase that capacity to 200 million or 150 million cubic feet.

Understood. Understood. And then for Jorge, so in 2024, when these TGI contracts expire, what do you think is like the financial impact going to be for the company in the sense and because it's so such a material part of your EBITDA as well. Do you think like basically revenues and EBITDA are going to stay stable or declines because of the contracts expiring similar to we saw in 2021, I think.

Go ahead. Go ahead.

No, no, go ahead. Juan Ricardo is the Chairman of the Board of TGI. So go ahead.

No. No. We -- at the moment, we are not expecting significant changes. Most of the contracts is -- it's got that is being demanded. So we don't see that as a risk at the moment. And actually, we are pushing for an increase the consumption of gas. It makes a lot of sense as part of the energy transition and the government policies to be more committed to increase gas consumption. So we're going to be pushing on that side. That's not a concern at the moment.

It will not be a change as drastic as '21, as you pointed, Rahul. The contract expiration is spread out in time but also the volumes, I think the key is the volumes are flowing and will continue flowing. So even if the clients don't pay for the reservation and they don't use take or pay, the flow and the revenue will continue coming to the company. So we won't see a significant impact there.

We have a question from Lucas Howard Noguera from LarrainVial. Hello, what is your view about resolution 101 and spot price formation, dominant position?

We have studied it in detail, and it is perhaps a well-intended resolution or Decree. But every expert we have spoken with is very difficult for government to demonstrate manipulation of prices or collusion between the players. We think it's important to have that market operating as transparently as possible. And in that sense, it's perhaps well intended resolution. But the possibility of it having a meaningful impact, it is technically very difficult to have. It is not the first -- I have to say, it's not the first attempt in Colombia to try to monitor the market players closely. So it's not an issue of these new government, it's a worry of the regulatory bodies for a long time in Colombia.

Thank you. We have also a question from [ Hanson from Beta Portugal ]. Could you please provide more color on TGI's WACC change? What do you think will be the impact on the company's financials? What's your feeling about current price composition and what are the first impressions of the new Minister of Mines and Energy?

What was the second part? I'm sorry, you feeling about current...

Price composition. Could you please provide more color on TGI's WACC change? And what do you think the impact on the financials?

The first point is the reason of the change is quite constructive. And I think it's a concrete regulatory action that is technically found, technically sound and important to highlight as such, so the macro environment has changed and CREG updated the calculations, and that led to an increase in the regulatory WACC, which is a positive overall for the -- how the system operates, how the commission is operating. Of course, it's a positive change as we were expecting the forecast we had before were with about 100 basis points lower WACC than we had. We are in the process of updating the whole model in TGI as a few things have changed, their resolution 175 and the changes that were incorporated and what we are expecting from 702. So the overall impact on TGI, we don't know it yet. As we evolve in the projections, we will share some of the key highlights with you. The CREG composition, so the names we see, the people acting on the CREG are technically knowledgeable the fact that they are not appointed on a long-term basis as the commission is set up for is perhaps not ideal. But as I mentioned, the Minister -- the new Minister has signaled that in 2 months, he will be appointing the CREG commissioners on a firm basis, which we see as a constructive signal towards the independence of the CREG. And in terms of first impressions, I think the profile and the studies of the ministry, he's training should be positive for the -- for his capacity to act. And we are trying to engage as always, to be constructive with any minister that comes in order to show the reality of the system and what the needs are in order to have reliable electricity and as cost effective as possible.

And if I may add concerning the new minister so far everybody that has met him and has talked to him, has a very positive impression, extremely constructive, really listening and trying to be helpful. I have a meeting with him next week. He's been very generous on his agenda, and he's willing to look at all the issues in detail and mostly concerned to try to get things done. So we are actually on a very positive side, hoping to be able to work together as we did with Enel and getting things solved, and he has a pretty clear understanding of how the system works. So it's going to be easier in that regard. So actually, we will say we're quite positive on the new minister and hoping to establish a close working relationship.

In some areas, perhaps on the electricity system some of the signals, some of the commentary he has made publicly tend to be -- not to show continuity of what Minister [ Bellas ] was pursuing. So it appears that he's not intending to have continuity of all previous policies.

Particularly, the exploration of gas and oil. So is going in -- I think it's going to work out. We're positive about it.

Thank you, both. We have a live question from Florencia Mayorga from MetLife. We will unmute your microphone and then you can unmute yourself. Please, Florencia.

I have a couple of questions. One, regarding after results of Enel Colombia, are you expecting a lower contribution this year in dividends potentially next year from the subsidiary? I understand that has been one of the largest dividend contributor for the group historically. This is my first question.

Florencia, there are challenges as a company despite higher spot prices in Colombia, lower generation in Central America has been -- is having an impact. On the noncash basis in terms of net profit, the losing the legal action with the ICE is going to have an impact this year. The company is updating the plans. We don't have yet a complete forecast of what the expectation is because some things have gone up, some things have gone down and the overall impact is not seen. I will guess that perhaps we will see a slightly lower dividend next year. But the 2024 results that will lead to '25 dividend should normalize fairly quickly. The supply of electricity in Colombia is not coming as expected. And when you have about 1/4 of the generation capacity of the country, that inevitably will help you capture some higher prices. So the that this balance, so the stretching that reduction in the extra capacity of generation in the country should help the players that generate electricity.

Perfect. And I have a follow-up with regarding the TGI contract. It could be the case that are you expecting that to continue to be recontracted at the lower tenure of the contracts, a trend that we have seen in the market the last year with contracts of 3 year, 2 year, but the average life has been reduced to below 4 years from 5 years, I guess that 2 years ago. So this is the trend that we should expect to see in the near term?

No, that's not exactly what we're seeing, and there is a significant upside of the 99 resolution that updates the prices of all the pipes that have fulfilled their expected utilization life. So the numbers that I've seen from TGI actually are on the positive, not on the negative. I will have a Board meeting this Friday, but I haven't seen anything on that regard, as you seem to point it out. We are having conversations with Ecopetrol because most of it, it will depend on how Ecopetrol evolves. And we are in conversations with them. I'm expecting to have similar contracts than the ones we had before, not as you seem to believe.

The shift so clearly, the shift from take or pay to actual payment for utilization, which is natural for a loan for an asset that is already mature and a gas supply system in Colombia that has reached its peak will have an impact. But the key, I think, is the volumes. The volumes continue flowing and the projection is to have the volumes increase on a moderate basis in many, many years from now.

Yes, that will be the key part.

Thank you. We have a question from Roberto Paniagua from Casa de Bolsa. Enel in the Generation segment, how much energy is under contract and for what term? The second one is development of a new auction in Brazil. The third one is GEB thinking participate in firm energy auction in Colombia? And the last one, any news about Pacific classification plant?

Okay, Roberto. So Enel -- the policy has been stable for quite a while and is to contract only the firm energy that they can supply, that's about 75% to 80% of the capacity and that has not changed, and that's where we stand today. So from the generation part, that's the policy, the internal policy they have -- in Colombia, it's relatively short term because it's driven by distributors and distributors do not have an incentive to buy electricity in the long term. So contracts are 1 or 2 years and 1 or 2 years in advance. What we are seeing now is that when you put yourself on the distributor side, they don't manage overall they don't manage to get all the electricity that they want from generators. Many of the actions which are -- the process is legally defined are do not find suppliers of electricity. In terms of the auction in Brazil, we are studying the option that was just moved to January or February. There may be some interesting assets there, and we are collaborating between the Argo team, the Red Electrica team and the GEB transmission team in order to have the most competitive auction, but also one that this is very important that maintains financial discipline. What we are seeing in Brazil is people are in some cycles, are very, very aggressive and it's difficult to create value, to add value to the company. So we're not going to get crazy, I guess, in the auctions, but we're looking at it in a very careful way and perhaps we participate. In terms of the regas facility, so the information is public, the government got one technical proposal, and that is following the regular process. They need to put financial offer in the next couple of months and some resolution could be done some decision could be made by the government in October, November, TGI is looking in detail at then go ahead on the cut.

But there is one key issue regarding that. The one offer they received has a clause that ask for a conditionality on the approval, the success on the public consultations and the capabilities to execute timely. And that is not part of the government's proposal. So that conditionality, given that it wasn't approved for everybody, we'll make it very likely that is not going to be acceptable. We already presented legal actions just in case if the government were to consider that, that would not be an even playing field because that was not offered for everybody. So that is not going to fly. Just to put it shortly.

Yes. And just to follow that informality, it is clearly a proposal of somebody who do that does not know the Colombian environment. So difficult to pursue. And then in terms of the firm energy auction, Enel has a very ample portfolio of opportunities both in the existing assets and in new assets, and they are looking in detail to try to contribute to have more energy for Colombia. So we see that as an opportunity and there is a good asset base that could help the company make interesting proposals in that auction.

Yes. we are quite positive on that auction. It is expected that not that many people is going to participate. So there are significant upsides for the companies that are in Colombia and are going to be there for sure. We're going to be one.

Karen?

Okay. So we don't have any more questions. We would like to thank you all for your presence today. And as a reminder, the IR team at [indiscernible] are always available to resolve your questions. We hope you all have a good day. I don't know if Jorge or Juan Ricardo would like to say a few words.

Just before Juan Ricardo, just -- we published a lot of detail and the data pack is very complete. So use it. And if you want more information, come to us, we would like you to have all the information you need.

Thank you. Thank you, everybody, for your time, and we're always available for any questions. I appreciate it. Bye-bye.