Interconexión Eléctrica S.A. E.S.P. (ISA) Earnings Call Transcript & Summary

Good morning. Welcome to the Result Conference for the First Quarter of ISA and its companies. We are today with Cesar Ramirez, Interim President, CEO and Vice President, Energy Transport; Carolina Botero, Vice President; Olga Patricia, Strategy Vice President of IP; and [indiscernible], Planning Director of the Road business. My name is Diana Cardona, I'm a Specialist in Relations for Investors. [Operator Instructions] To start, I would like to give the mic to Cesar Ramirez, who's going to present relevant events for the quarter.

Thank you, Diana. A pleasure to be with you today. And to start, I invite you to go to the next slide to look at some important events of this quarter. For the first quarter of this year, we have a total investment of COP 789 million, most of it in Brazil, where the construction obtained in [indiscernible] bidding. So as part of those projects, we have Paraguacu, Tres lagoas, Ivai, among others. The other investments we're focused on advancement in projects in Peru, highlighting there 2 important projects that is COYA and YANA and in Colombia, UPME projects like Cerro-Copey, Copey Cuestecitas, Loma Sogamoso and also some connections in these wind and solar parts. We also advanced in Chile in the extension of 2 substations of the network at Maitencillo and Pan de Azucar. Also, the construction of Ruta del Loa and improvement of roads, they are going to generate new revenues and an extension of those road concessions. It's important to highlight that during this quarter ISA contributed to Interconexion Electrica Panama, USD 1.2 million. For environmental impact and social impact studies, design of fields and maritime inspections for the installation of maritime cables. These confirmed our interest to advance in this project that would integrate Andean market with the Central American market, assuring higher renewal sources, connections and warranting the electricity security in the region. For the rest of the year, we're going to continue with our growth dynamics with Tier 3 energy projection that is going to represent more than 5,600 kilometers of circuit. Also, we advanced in the route business in the projects already mentioned that continue in the construction stage. The former numbers correspond to CapEx that will increase as ISA and its companies are giving other bidding. So let's go to the next slide to see the growth opportunities that we observed in the region and we are interested to participate in. When we update our portfolio for investment, we found that for this year 2022, we have opportunities for more than USD 8,000 million and 55%. It's based on the energy transmission business, where we highlight in Colombia to participate in several projects that UPME would put in being process also in Brazil, other biddings that we're going to have 1 at the end of the year. There's others in Chile by the National Electric Coordinator for substations and lines and in Peru, one that I'd like to highlight that is a Peru and Ecuador connection and aligned with that strategy of being -- connected to that integration of the region. So in Peru, there's also some tenders for transmission. We're going to provide more information in the chapter that we have in the transmission at the end of this conference. Where we concentrate the rest 45% ISA is starting its participation in 5G tenders in Colombia. 1 are in still in preprint agreement and others are already in the bidding process. In Chile, we expect to participate in new concessions and the improvement of existing roads and in other tenders among which we have one of our current concession, which is Ruta del Bosque. This process is expected to be completed in June this year. We also are paying attention of whatever it may happen of R&D in the region. Looking not only for the business continuity, but also making sure that the profitability comply with what our shareholders expect. Let's go to the next slide, please. In ESG, we have the following advancement during the quarter. For the fifth year, ISA was acknowledged among the company of ESG, Global Sustainability Yearbook that measures the contribution to the environment, government and community worldwide. Based on this agreement, the company obtained a very important result in the 3 dimensions are assessed. In the economic, we stood out for the corporate conduct code and environment dimension, it was acknowledged the climate change. And in the social dimension, due to the involvement with the different interest communities and groups. Sustainalytics considers ISA as top company when it comes to ESG. This agency identified the 50 best ranked companies worldwide by industry, by region, analyzing more than 14,000 companies in 42 industries. Also during the quarter, in Proximo, specialized in energy infrastructure and projects and Deals of the Year 2021, the green bond of INTERCHILE ISA was acknowledged as the best financial operation of the year at the regional level and has the most important agreement at the Latin American level when it comes to energy. In this way, it's the only winning financial operation won in this. Let's remember that this bond at the end of the year, received by the prestigious international publication, LatinFinance, the ESG Deal of Year award for the best financial sustainable operation. Finally, when it comes to environment, we're very happy to inform Puma Conexion, a program that we're going to start to protect in Chile more than 20,000 hectares of the forest and to reduce 2,023 tons of CO2 by 2030. That would add to the projection to more than 7,000 tons mitigated of carbon and more than [ 700,000 ] hectares protected. Next slide, please. The contribution of ISA to the social cause is one of our priorities. And in that regard through our initiative of human aid We All Are One, we contributed in this quarter with the vaccination of more than 19,000 through vaccination brigade in Antioquia. The total vaccinations given is 45,000. Also, we started the supporting actions to the reactivation economic and entrepreneurship with an investment estimated by 2022 of more than COP 6 billion with a lot of our export lease when it comes to [indiscernible]. I want to highlight also that for 2022, we're going to have an investment close to COP 2 billion to rural energy projects in rural areas or deep access. Our talent has 28% of women in management positions, 23% of women in STEM careers. And this means women in science, technology, engineering and math. Also, in our Board, we have the participation of women in the 22%. In addition to this, 37% of our personnel are part of different agreements and collective unions of the organization. Finally, during this quarter, we didn't have any human rights violation events. The respect of these human rights is an ethical and moral part of our policies, activities and in our participation in discussion environments at the local and national level. So let's go to the next slide, I would like to give the word to Carolina to go to the financial results explanation.

Cesar, thanks a lot, and good morning to everybody. As usual, I'm very happy to address and talk to you today. I will go into detail about the financial results of ISA and its companies for this quarter. For the first quarter of 2020, the total revenues reached COP 2.8 trillion, and this represents a 17% higher than in the same period for 2021. As you know, revenues are divided between operating revenues and construction revenues. So let's start with the former. Operating revenues totaled COP 2.3 trillion, 19.2% more than in the same period of the previous year. By business units, these are the factors that explain this variation. Let's start with electric power transmission. First, we have the entry into operation after the first quarter of 2021 of different projects in geographic locations where we are present. For instance, in Brazil, we have higher revenues of COP 180 billion, of which COP 76 billion are due to higher returns of the contractual assets and the RBSE receivables. COP 53 billion from the inflation adjustment, IPCA and IGPM of revenues in ISA CTEEP and its company and COP 43 billion from the incorporation of 2 months of PBTE. Let's now look into Colombia. In Colombia, we have higher revenues of COP 95 billion due to the entry of UPMES connection services and the effect of macroeconomic variables, IPP and TRM. In Peru, we have higher revenues of nearly COP 40 billion due to the exchange rate effect from dollars to pesos, favorable in the revenues at the time of consolidation. The Road Concession business unit, on the other hand, presented an increase in revenues of 5.4%, mainly due to higher yields on financial assets and the increase in revenues associated with the operation and maintenance of concessions and toll management in Chile, partially offsetting the termination of the Ruta del Maule concession contract. Turning to construction revenues we have - they increased by COP 29 million. This is 6.9% more than in the first quarter of 2021. This variation is mainly explained by higher construction activity in Brazil, partially offset by lower construction activity in Chile, Peru and Colombia; the latter due to the entry into operation of RUTA COSTERA, ceasing to generate construction revenues to start contributing to operating revenues. Let's go to the next slide, please. Before explaining the EBITDA behavior, it's necessary to inform you that as of January 1 of this year, we standardized its calculation with that of the other companies of Ecopetrol Group. What is this change about? It's mainly due to the inclusion in the indicator of the results of the co-controlled companies. For the purposes of our reports of this year, we will recalculate the EBITDA for each quarter of 2021, according to the new methodology to facilitate the comparison between quarters. Therefore, under this new methodology and for the first quarter of this year, EBITDA increased by 17%, reaching COP 2 trillion. And the EBITDA margin, excluding construction is 83.5%. This confirms the continued operational strength of ISA and its companies. Now when we compare this result against the budget, EBITDA is 20.7% above the projected figure. The reasons for this increase can be explained by the dynamic shown in revenues, in addition to the behavior of operating costs. Regarding the latter, for the quarter, the total COP 1 trillion, 13.5% more than in the same period of 2021. As with the revenue, operating costs are divided between construction costs and administration, operation and maintenance cost, which we refer as AOM. As for construction cost, we observed an increase of 11.7%, corresponding to COP 44 billion due to high construction excuse in Brazil, partially offset by lower construction activity in Peru, Colombia and Chile. Now regarding the AOM, these amounted to COP 553 billion with a growth of 14.8%. Here, what is important to highlight is that this growth it's below the increase in operating revenues, which was 19.2%. The AOM performance responded mainly to the consolidation of PBTE, the entry into operation of new projects and increase in costs due to inflationary pressures, mainly in Brazil and Chile. All the above was partially offset by a decrease in AOM due to termination of the Ruta del Maule concession. The next item that we'll begin to explain from now on and that is part of EBITDA, as we mentioned at the beginning, is the results of the companies where ISA has joint controlled and significant influence, which totaled COP 149 billion. This represents an increase of COP 8 billion with respect to the previous year's quarter mainly due to higher profits of ATP, which is a communications tower company, which has a 24.7% share. Let's move on to the next slide, please. The net income for the quarter closed in COP 431 billion, a 16% higher to the result that it was expected for the period. And this is mainly by the higher inflationary indexes of Brazil and Colombia that, as you know, are the indexes of our revenues in those countries. Now when we compare that income with the same period last year and as you can see in the slide, we see a decrease of 15% that it was anticipated in our budget. So now let's go into details to understand this graphic. As you can see, the component that contributed most of the increase in the income is the operation revenues by projects after the first quarter of 2021 as it was already mentioned, and the behavior on the prices that our revenues are indexed. This, again, ratify the solid behavior at the operational level of isa and its companies that is translated in a higher EBITDA as it was explained before. So the behavior, the challenges, the most are the net financial expenses with a growth of 67% compared to 2021. And this represents COP 256 billion that we can divide in 2 parts: Firstly, a higher expense of interest for COP 148 billion for the cancellation of PBTE debt and the increase in indebtedness regarding the first quarter of 2021, needed to finance the growth of Isa and its company, added to the increase of the price indexes, mainly the IPC in Colombia, IPCA in Brazil that impacts the financial expenses. And as a second measure, a higher spend by the different exchange rate of COP 107 million because of the inflationary pressures in Chile that are translated in a higher U.S. a variable that is indexed, the debt in the road concessions in that country and by resources that we keep in dollars in Chile for future investments in energy projects. At the end of the quarter, we closed with a net margin of 15% and an ROE of 11.1%. These ROE 2-digit aims our objective of maximizing the value for our shareholders. Let's go to the next slide, please, to see the behavior of the cash flow. It's important to highlight that ISA and its companies have a very robust cash position. We started the year with initial balance of COP 4.7 trillion. As you know, about 30% corresponds to restrictive cash flow, mainly explained by the financiation schemes under project finance of our roads in Chile. During the quarter, we generated operating cash flow for COP 2.5 trillion. We received COP 394 billion because of liquidation of different investments and net debt disbursements. The use of these resources were mainly to pay interest to capital of the debt service for COP 700 million -- CapEx for COP 700 million, OpEx and other operating payments about COP 779 billion, dividend payments external to Isa and its companies COP 50 billion, and tax payments at COP 329 billion. The quarter ends with a solid position of the cash of COP 4.8 trillion that allows us to continue financing the operation, the investments and also to respond to the debt for the next year. Let's go to the next slide. As of March, the consolidated financial debt amounted to COP 27.8 trillion with a 1% reduction compared to the end of 2021. This small variation is due to debt prepayments made by Ruta del Bosque, Ruta de la Araucania, Interconexiones and IESUL. These repayments were offset by the following disbursements: ISA CTEEP received COP 180 billion from BNDES Bank for investment in projects and improvements to the electrical system. Ruta del Loa received resources for COP 22 billion to continue financing the construction phase. At the end of the quarter, the translation effect amounted to COP 29 billion due to the valuation of the closing rate of the peso against the Chilean unit, the UF and the UVR and the revaluation against the other currencies. The debt EBITDA ratio closed at 4%, reflecting adequate levels to maintain a current credit rating with room to continue leveraging our growth strategy. On the other hand, and has relevant fact of the quarter, we would like to share with you that on March 22 of this year, ISA CTM announced a tender offer and constant solicitation of it USD 450 billion (sic) [ USD 450 million ] bond maturity in 2023. On April 21, the repurchase of this international bond was successfully completed through a buyback offer, which obtained an 80% participation of the bondholders and the exercise of the early redemption option. Next, a new international corporate bond was made for $500 million with an interest rate of 5.2% for a term of 16 years, which was oversubscribed by 3.4x. The international rating agencies, Fitch Ratings and Moody's maintained the rating of the issuance within the investment-grade range. What were the success factors that were highlighted by investors? The stable regulation of electrical market, the business model of ISA and its company's focus on a strategy based on sustainability, the company's leadership in the electricity transmission business as well as good corporate governance and the experience of its employees. Next slide, please. So now once again, I would like to present Cesar again that he was going to talk especially about the main chapter of this conference dedicated to the electric power transmission business. Cesar, I give you the floor once again.

Thank you, Carolina. Well, so as it was already announced by Carolina, we're going to talk about the electric power transmission business. So in the next slide, this slide is a summary of what the electric power transmission of ISA is in the region. To have a foundation, we talk -- that we have a direct control of more than 48,000 kilometers of the grid. We add what we call the participated the ones that we share control with that size of the grid goes to close to 67 kilometers now. So talking about transformation when that high-voltage energy is substations. On the control, we are more than 104,000 MVA transformation, but we added the non-control this reached out to -- almost 133,000 MVA. In regulations, we would like to have an approximate number. To understand the magnitude in regulation matters, the annual revenues for 2021, that was USD 1,700 million revenues. When you see the pie of operational revenues, transmission represents 78% and EBITDA transmission represents 80%. So now on the map that you have on the right here, what we're showing is how is our market participation in each of the countries that we are and that participation we're measuring in revenues. If we look at that participation in infrastructure and size numbers may vary a little, but to talk to these revenues, we use in that method. In Colombia, clearly, we are a very important player with 67% of the energy transmission market in Peru also, we have a very, very strong position with 72%. If you look in kilometers of the grid, Colombia and Peru, are similar; in Peru, 12,000 kilometers and in Colombia, more than 13,000 kilometers in transformation. So we have a higher load in Colombia, the non-control in Colombia is higher than in Peru. In Chile, we have a market participation of 13% that as you can see, we are only 2,000 kilometers a number, and we want to increase in the coming years to become the most important company there. As a matter of fact, we're going to talk a little bit about project in Chile that is going to add a couple of kilometers there. In Brazil -- Brazil, because of the size, even though our operation in Brazil compared in infrastructure is higher than anyone that we have in the rest of the countries. Comparing the revenues once again, if we look at infrastructure, it would be a different issue, but it represent 10%. We add the non-control, we would have 18% of market in Bolivia. We have a small or participation management remember that in Bolivia, we enter with a Greenvale project of 587 kilometers. But in Bolivia, all those changes of motor hasn't been possible to continue participating in these tenders. So this is a good snapshot and also another topic. Even the participation is small, it's the network that interconnects all the countries of South America because we're talking about Interconexion Colombia, Panama, that connection integrates to that EPR that is the system in Central America. So now let's go to the next slide, please. So now talking about project structuring, what we obtained in 2021? We have about USD 1.2 billion investment in transmission. Of those, that amount, 53% for [ tenders and acknowledgment ] are the ones that [indiscernible] in Peru does or the regional electric coordinator in Chile. And the other 42% is what we call expansion and reinforcement and this means that we need to increase the capacity of line or an existing substation. And since we are the owners, in some circumstances, we are authorized to expand without getting into a bidding process. Well we saw or compete with our players. This is very important because these are revenues that play a bolt-on role when it comes to the participation of revenues and mainly in Brazil. A lot of these expansion and improvements happen in Peru also and some in Chile. But also it's evident here, a phenomenon that we call technically speaking the optimization of assets, and there are assets that start and in its life span, we are authorized to update those assets and make investments. So as a summary, for these, we were awarded, which going to represent one it's in operation, USD 120 million in additional revenues. On the right on the map what we show here are some of the examples of what were awarded. I would like to start talking about the Kimal-Lo Aguirre line is a line of 1,400 kilometers. It's aligned with direct current high-voltage technology that is going to reinforce the connection between the north of Chile and the metropolitan region. So it's a very important transmission line, and that's what we participated and we obtained this project in a consortium with Transelec that is an incumbent company, is the ISA in simple terms of Chile. And CSG, that is a Chinese company with a lot of expertise and a lot of indirect current, not only in Chinese but also in other countries. Also to highlight in Brazil, besides the reinforcements and extension expansion, we were awarded the first project for large-scale battery energy and storage. This is going to be in their digital substation located in the state of Sao Paolo. In Colombia, we had 2 different tenders being processes substation that is close to the Cauca river in Colombia, close to a population of Trujillo. So this is a very important project for possible developments later of that region. And that also important as well by letter of contracts, we have been able to advance close a lot of different connection business of these new projects that are being installed, especially in the Caribbean region. Okay so that is what I have to tell you about these product structuring for this slide. Let's go to the next slide. What entered into operation in this year, 2021, we had grown in transmission, USD 720 million. These projects are adding USD 90 million per year of revenue from now on. Also important to highlight here, a very important connection in Colombia that restore -- we completed the line of Ituango transmission lines. Those lines connect to a substation that is called San Antonio substation. There's a double to grid that connects to the Cerromatoso substation. There was a energy transmission line that connects until Sogamoso. And the other line that connects that substation as well to what we call the [indiscernible] substation that is very close here in Medellin and [indiscernible] connects to [indiscernible] that is in the south of the city of Medellin. That in Colombia. In Peru, 2 very important connections, 1 which is called Quellaveco and another one that is called Petroperu. In Brazil, I think we have informed in the media. We have comes the first substation and that's a technological milestone, but also we have some reinforcements, Aguapei substation. In Chile, in operation, we have some compensations in Pan de Azucar Polpaico and expansion of Maintencillo Pan de Azucar substation expansion. So all these enter into operation. It's going to bring this USD 90 million that I already mentioned. Next slide, we can talk about the infrastructure under construction. What is in 2021, we had a data pipeline process and in the project manufacturer line, if we call it like that. So there we are ending 2021 more than USD 3.5 billion that it's more than 7,133 circuit km and more than 14,000 transformation MVA. So in those projects we have distributed in Colombia almost USD 700 million in Peru, in Chile, USD 75 million. We are making some expansions in Brazil, close to USD 1 billion. In this, we haven't included 2 projects that are important as well, 1 Kimal Lo Aguirre, which is the one that we were awarded with a consortium and the other one, the interconnection Colombia Panama, that -- we're in study right now and possibly we're going to prepare this year, the '22 to '23 to make more investments to advance with this project. Let's go to the next slide, where we have a summary. This is the general snapshot of growth opportunity that we announced at the beginning of the conference. Just to say that in Greenfield tender call in transmission, we see about USD 4.4 billion. We're going to participate to try to get that part of that package, that value, that amount of USD 4.4 billion we have prioritized and we are selected and we are making efforts. We're preparing and we're getting ready to gain those standards, to be awarded those [indiscernible] to see that Brazil because of the size, but also for its needs, that has important growth to move electricity it's happening what happened in Colombia that is an important nonconventional renewal outsourcers, they are getting a lot of reinforcement in the grid that is happening here in the online cost with the Colombian case. So summarizing, while we started in Brazil to participate in this public bidding process more than USD 3,500 million. Colombia, Peru and Chile, our values are close to the USD 300 million each. So without a doubt, in Brazil, it's the tool to the opportunities right now to us when we talk about Greenfield. Next slide. Here, we have a very fast analysis of the projects that we have in construction. This is what we see our entry into operation. This year, we have a very important year because we have in Brazil like Tres lagoas, Paraguacu, Ivai but it's a very important investment project in Brazil. Itaunas, Biguacu it's a very interesting project that has underground submarine and airlines. So it's been a very interesting thing, and it's a good opportunity to run for the Panama, Colombia Interconexion in Colombia. We have Cerro-Copey that's going to start in June. The substation Rio in August. This is a close smart -- it's a very interesting solution based on compensation, static compensation that allows to increase the capacity of the transmission lines and control [indiscernible] and this is the type of solution that in Colombia, we have accomplished to analyze some of these options. This is a top-notch technology. It's what we call power electronics. So we have also Sabana Bolivar project. We talk about Guayepo nonconventional rail source in Peru, we have COYA; in Colombia, we have the Windpeshi connections and Copey Cuestecitas. And also in Peru, we talk about COYA-YANA. So those are the 2 projects that have become the challenges -- important challenges. Next slide, please. In this slide of regulatory agenda, of course, these are some of the topics. So these are businesses, as you know, transmission is a highly regulated business. So ISA knows when the tariff reviews are when there's a change of parameters, and that's where we do a very important management with the regulators, and we need to prepare. Why? Because there is a process known about provisional information, but also some debates and application of methodology. So these methodologies are written are clearly defined. So what we do is to make sure that the interpretation and the information that is used corresponds to the reality and reflects, of course, the true investment costs that is used in all these countries, the same methodology to define the interests. So in Colombia, as is little bit typical we have this regulatory for more than 5 years. And it's typical in Colombia because there is a proposal of change in the methodology that could happen. That's not something strange. This is not something that happened periodically, but in Colombia, we have this debate about [indiscernible] positively. We've been in very good talks with regulators and we expect throughout the first project -- not first project, the project to have an outcome final project. Hopefully, we're going to have that, hopefully, this semester with all these processes, it could actually be affirmed and the second semester. And we estimate that that's the way we've been planning based on the rest of the proposals, the application of this new change starting in 2024. But if there is a delay in the publication of that, it could take a little bit more time on that application. And in Colombia it's important because that's very important based on the [indiscernible] Brazil is a tariff -- transmission tariff revision, just revised different to Colombia that could be changed the methodology. And in Colombia, there's a lot of information to take the real data or closest to reality. I mean Brazil is important and after this revision it's going to apply to 80% of the revenues back. We have won, we expect these make the corresponding investments to take into colorations. Factors, macroeconomic factors is what microeconomic factors based on costs and others. In Chile, there is a tariff transmission revision. Here, we need to remember that in Chile, most of our revenues are linked to Greenfield projects that are obtained in public tenders. So they only have their own dynamic and only one bar that was allocated as a reinforcement that is applied the methodology of existing assets. And that's why as a revision, but it's only for the case of Chile. So we have a very low revenues. It's not the case of Transelec. But Transelec is very similar to ISA, and it has existing assets that start before the big transformation of the energy sector happened in the region. Let us remember this model is a model implemented in '90s in these countries, which was a pioneer in parallel with English model. So these more apply in Chile. It's the same that was by the rest of the countries, and it's very similar to the English model. Okay. So we're about to finish. This final slide, we have in -- what is the outlook for 2022? I always mentioned, we're structuring opportunities to be in those processes, more than $4.4 million in projects. We're going to put into service projects, commissioned projects were USD 1.1 billion, that is 3,600, circuit km, 5,500 MVA with annual revenues of USD 132 million. And to end up this year having about 52,000 circuit kilometers and about 110,000 MVA. And as a foundation, we estimate that demand that is served to our grid we're talking about 460 terawatts a year. So I think that's what I wanted to tell you, to let you know where we are at, at the transmission level and why this business it's core and is important for ISA when it comes to regional coverage. When we look at the footprint of ISA in the region is an integration concept that someday allows us to have that dream of negotiate energy produced in Brazil to deliver probably in Mexico. That's what I wanted to share with you. Thanks a lot for your attention.

Thanks a lot, sir. Now we're going to be to the Q&A session. We would like to start with one Mauricio Castano, one of our shareholders, and he asks in the formal conference, we were talking about the work with Ecopetrol about synergies. Could you update us about the advancement in this regard?

I would like to -- maybe Patricia could answer this better. Go Patricia.

Sure. No problem. Yes we told you in the formal presentation part of the synergy for that moment, there's a lot of things that we can mention when it comes to the advancement. The integration of isa to the Ecopetrol Group has brought very interesting results. And the generation of value and we want to continue in the path of identification of capture of those synergies. I would highlight some of those elements. In the first group of synergies that happened as of the knowledge and the expertise that ISA has in the administration of electric infrastructure and the idea is to capitalize on the fact that Ecopetrol is a huge energy consumer. I'm going to mention 3 examples: #1, the optimization of the infrastructure component in the main oil production fields of Ecopetrol to reduce the deferred production based on electric failures. In this case, we hope to reduce about 30% or 40% those failures. The second example is to promote the interconnection of Ecopetrol to the national interconnection system and to promote ISA as an efficient operator of those net and grids. Currently we have a valuation process, a pipeline of projects for the 2022 that is about USD 40 million in investments, and we have a pipeline of 11 projects in addition for 2023. And the third example in this big group is the jointly assessment of a storage group equivalent to more than 50 megawatts of capability. This provide capability in the plant ISA CTEEP Brazil. This second big group of synergies has to do with opportunities in the procurement front, 3 examples here: #1 is the reduction in the international logistics transportation to about 30% for ISAs; 2, a reduction in maintenance costs of IT applications and licenses of IT in about 8%; and third, we continue maturity opportunities that we hope that are going to have an impact and purchase of electronic components and other goods and services. The third big group of synergies that we mentioned in the formal presentation is connected with the environmental and social management front. In this case, we are working together, and we hope that is going to allow us to duplicate accumulated compensation defined for the [indiscernible] project. Also, we expect to be able to increase between a 25% and 30% that we planned. The fourth group of synergies is a linear infrastructure project, which is generally work between of Ecopetrol Group of ISA, in which we'll continue working to generate benefits regarding to the integrity management, administration of assets as well as the pre-administration that want to favor an impact the estimate of ISA for the kind of projects. And the large group of synergies, and this is very interesting, it's linked with financial issues. And these -- we worked to have extensive and the optimization, about 30 basis points for the companies that we have in Colombia, optimization in taxes and other matters. With this, my answer regarding to synergies. However, I would like to close with a very important thing and is that on a strategic level, we maintain the joint efforts to identify and wait opportunities in new energy business as well as the definition of mechanisms that allows us to consolidate that goal that we have by '23 of to enter to the United States in 2023.

Very clear. And very good detail.

Thank you. Thank you, Cesar. We have 2 questions from Andrew McCarthy from CrediCorp Capital. First, he's asking if taking into account that was higher, 2022, the revenues are going to increase the guidance of the net for the 2022? And second, in which level we are projecting the debt over EBITDA by 2022, if we continue adding space to canteen participating in the new business where we have opportunities?

Carolina, please.

Thanks a lot, Cesar. Thanks a lot, Andrew, thanks a lot for your question. Very good questions. I'm going to answer both of them. Let's start with the guidance. Let us remember that at the end of the year, we mentioned that we were expecting to have a growth between 7% and 11% for 2021 income. So that's the first quarter. So it's kind of early to move from that guidance. But the good news that I could give you is that, if everything continues the way we are observing and projecting, we expect by -- for the second quarter to refresh that guidance and give you a very positive answer. The second question regarding to the debt over EBITDA, we project as we do it with the price CapEx, investments that we're executing, in this moment, we will close levels below what we have today, which is a 4% that we are reducing today, and this gives us enough space to observe the business opportunities that we are assessing with coming new businesses, and there are many. Those will be my 2 questions -- my 2 answers to your questions.

Thank you, Carolina. There is another question from Andres Duarte from Corficolombiana. I would like to know if the control of Ecopetrol, is it going to continue applying to all the calls that ISA has interest in right now?

Well Look, I think that it's important to be clear that the 2030 strategy that ISA has defined and why we are working on regarding to our investment plan, all the initiatives, all the goal, it's valid even with the entry of Ecopetrol. As a matter of fact, Ecopetrol has publicly said that like ISA's strategy, support ISA strategy, and he has suggested that we even be a little more ambitious in those goals. This means that we continue with the same dynamics of looking for different opportunities, not only Greenfield opportunities, but also acquisitions in the region, not only in transmission where we have a lot of participation but also in road. So for sure answer is that we continue with the same dynamics looking for opportunities in the countries analyzing new geographies, not only in Colombia, but also in the countries where we are present. I hope I have answered properly to your question.

Thank you, Cesar. Question from Diego Buitrago Bancolombia. He thanks us for the presentation and especially for the special energy transmission chapter that we mentioned. He would like to know if we can tell besides the adjustment of the EBITDA methodology, there's going to be more adjustments in the accounting level that is going to impact the financial statement to homologate the practices with Ecopetrol?

Diego, thanks a lot for your question. As we anticipated, we just integrated with Ecopetrol. No we do not expect more changes regarding to these homologation of the methodologies. Okay. We're running out of time at this conference. Thanks a lot to all the parties involved. Thanks for your interest in ISA, we are especially to be in [indiscernible]