Promigas S.A. E.S.P. (PROMIGAS) Earnings Call Transcript & Summary

[Audio Gap] [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to the Promigas Investor Relations Officer, Ms. Juliana Vergara. Please go ahead.

Good morning. I am Juliana Vergara, Director of Investor Relations at Promigas. We thank you very much for joining us at our inaugural Investor Day. Today, you will have a chance to meet our leadership team and hear about the many milestones achieved. They will also provide an overview into the organization and discuss our operating and growth strategies as well as how we are looking towards the future. Through a series of videos, you will also see our company in action. At the end of the presentation, you will have a chance to ask your questions. On this slide, you can see a detailed agenda for the morning. I will now run you through just a few administrative details. You will see a box titled submit a question on the webcast. Please feel free throughout the presentation to send us your questions, which we will be compiling to respond to during the Q&A session starting after the 5-minute break at approximately 11:40 a.m. Eastern Time. Additionally, for those of you who prefer to personally ask your question, there is a phone number that was provided along with the link to join us today. That number will be provided again at the initiation of our break. On this slide, please notice our disclaimer statement, and we will pause for a moment. I'd like to introduce you to Mr. Eric Flesch, our CEO.

Good morning, and welcome to everybody. I'm very pleased that you are joining our Investor Day meeting, the first one we have in the history of our company. I hope you enjoy having all the information we're going to share with you today. This Investor Day, for obvious reasons, will be virtual this time, but hope in the future of COVID, we'll have several other meetings in person, and then we can just shake hands, which would be much better. For now, I would like to present my executive team. Alejandro Villalba, which is VP of Operations; Ricardo Fernández, VP of Transportation; Wilson Chinchilla, VP of Distribution; Natalia Abello, VP of Legal and Sustainability; and Aquiles Mercado, CFO. Each one of them will have a presentation, going more in-depth in different areas that we will be interested in. For now, I would like Juliana, who is with us, to play the corporate video. Thank you very much. [Presentation]

Okay. I hope you liked the video. This is a very short video about what Promigas is. Now I'm going to give some words in my presentation to you and then share what Promigas is. First, let's just start Promigas [indiscernible]. Promigas placed in Colombia and Peru in a regulated monopoly, essential for the energy metrics in the 2 countries, Colombia and Peru. Promigas has a profitability. It has profitability, highly predictable and stable cash flows, has a strong liquidity and financial flexibility. Promigas also has access to liquidity through local and international issuance in capital markets. We have a very conservative financial policy with a strong commitment to maintain investment-grade profile. For instance, we have been AAA -- the rate AAA for the last 20 years in Colombia. It's a local rate. Also, we got the AA3 by Moody's for the last 3 years and rated BBB minus by Fitch for the last 10 years. So Promigas is a very stable company. And therefore, we have a stable outlook by both Moody's and Fitch. We have a very stable investment-grade ratings of the subsidiaries level also. In Promigas, we have a very disciplined and focused growth. We have returned, as a main criteria, for expansions. Also, we have a long term -- we are a long-term investor with a high level of social awareness and strategic partners for developing energy markets. Also, we have a very comprehensive management with a sustainable approach. Colombia, just to give you an idea -- as an example about the energy metrics. In Colombia, 68% of the electricity of -- the generation of electricity is by water -- is hydroelectricity; 15% by natural gas; 9% by coal; 4% diesel; 2% fuel; 2% others. So Colombia is a very bullish country over other countries. In Colombia, the reserves of gas actually is -- are 8.1 years. They foresee that we could start seeing some deficit beginning January 2024, but there are supply alternatives. First of that -- of those alternatives are LNG importation. So we all expect we control the company and based in Cartagena. And we have enough FSRU with a capacity of 400 million square -- 400 million cubic feet per day capacity. And we can just have a note -- we can just extend our contract beyond our capacity in the future. Also, Colombia is exploring the feasibility of Buenaventura as an LNG plant. Also, some oil companies are working on onshore fields. And there is a potential reserve of plus 24 teras. And also, we are in the middle of some fracking pilots that would boost the capacity of oil and gas in Colombia. And other oil and gas companies are also working in offshore fields in the exploration and [indiscernible] offshore fields in the Caribbean and Pacific Coast. There will give an additional or a potential reserve plus over 30 teras, and that exploration is potentially expected to be after 2025. Colombia has a very good footprint of pipe -- gas pipelines, as you see in the map. It's an example for any other country in the region. You'll see in blue, the blue line is the Promigas transmission. And then you see other companies all across the country, which is very interesting. Promigas, in year 2015, we had 2,900 kilometers of gas lines. And today, we have over 3,200 kilometers. In other words, in the last 5 years, we have expand -- we have built over 300 kilometers. That means, let's say, over all the expansion of the country, 82%. Other companies have halted expansions. And -- but Promigas, it's the most dynamic, growing, expanding the gas transmissions. On the distribution side, we have 10.4 million users and then we have 750 municipalities served actually, and Promigas distributes to 38% of Colombia. Peru is a country committed to natural gas growth. Peru is a country with a very nice reserve of gas, is over 22 years. And Promigas is a leader in that country through our distribution companies. We have there -- we have already actually 1.1 million users in Peru and their consumption is 1.2 million cubic feet per day already. Promigas is the natural leader of gas based on distribution synergies in Peru. So you see the map. We are just in the -- where the capital is and also -- in Lima and also Northern Peru. The coverage of gas -- of natural gas in the Americas. When we see this map, we can see what Colombia is very privileged. Colombia has a coverage on the population of 71%, while, for instance, the United States is 48%; Mexico, only 8%; Brazil, only 5%; and Peru, where we already have operations, 11%. Peru has a potential. It's very important room to grow in the near future. Promigas, for years, we were a pure transmission company, and then we are moving to an energy holding. You'll see all this in chart. And then on Colombia, what we can see here is Promigas is focused in treatment of gas, in regasification, in import pipelines, in transportation, in distribution and commercialization for the residential, commercial, industry and natural gas vehicles. In Peru, we are focused for now on distribution and commercialization, also for the different sectors, residential, commercial, industrial and NGV. We have a very strong competitive position in Colombian and Peruvian energy metrics. We transport 48% of the natural gas in Colombia. We have nearly 3,300 kilometers of gas pipelines. The only regasification plant in Colombia with a capacity of 400 million cubic feet per day capacity is controlled by Promigas. We support over 22% of the electricity energy generation in the country. And we added value, services, gas treatment around 35 million cubic feet per day. So also, as you've seen in the 2 maps in Colombia and Peru, we have the footprint in Colombia basically throughout all the country for north -- from north to south and on the west, where the country is developed with the different companies of transportation and distribution we have. And of course, the Brilla, which is now our nonbanking financial company, it's also rendering services in Colombia and Peru. We have a very strong competitive position for the energy metrics. In energy, we have, in Colombia, 400,000 users through our company, CEO, which is Compañía Energética de Occidente. And we have reached 15.5 megawatts in that company. So we have already, in the cluster of companies, over 3,000 employees and -- between Colombia and Peru, our performance. We had -- we were facing this pandemic since March last year, and nobody was expecting this to happen worldwide. And we were just getting ready the company for just having 100% normal operation rendering the best, I would say, the excellent service we are used to, to all our customers. We were distributing our employees to work basically from home office. Around 73% to 75% were -- are being working home office with all their systems, all their IT, and 27% of all our employees in the fields. We have the prevention strategy, a biosafety protocols, COVID-19 test plans, safe facilities. We have a very good and strong financing strategy, also customer support to work virtually to just give support virtually to everybody, and of course, a very outward support to our communities where we have operations. Promigas met 2020 targets, despite challenge posed by COVID-19 pandemic, confirming our value proposal. We are very proud to say that our company has showed that is very resilient. We guarantee 100% of credibility in our services. No one noted any failure. Our service was 100% very effective and efficient. We complied to our budget over 100%, 133% of our budget with a net income of $331 million. We were supporting our different communities in Colombia and Peru. We just gave donations of around $6.4 million for poor people and also to make stronger the health facilities in different hospitals and to support with PPE to the health employees. And also in the middle of the pandemic, we were working on the definition of our corporate strategy and beginning its implementation. Also, we've been moving and moving. As we say, Promigas doesn't stop. We decided in Peru to launch Brilla. Brilla is already rendering service to the Peruvians. Also, we acquired 100% of Gascop in Peru. And we have been increasing every day our presence in that country where the potential as we saw before in the map, the coverage is only 11%, while in Colombia, it's over 70%. We also had a very important operational achievements. The Ministry of Technology, Science and Innovation granted recognition to Promigas of the first company in the oil and gas sector in Colombia, with a unit of investigation, development and innovation. Also, we completed the project of 100 million cubic feet per day to bring gas from South of Córdoba down to Barranquilla. We had a record in our gasification plant, SPEC, and we had a maximum volume regasified since the beginning of the operation, over 200 million cubic feet per day. And also, we launched our organization for the segment of pipeline between Jobo and Transmetano, which is [indiscernible] to just transport gas to that region of the country. We keep our convenience to create value for our stakeholders. To the government sector, we paid over $420 million in the last 5 years in taxes, et cetera; to the financial institutions, $124 million in financial expenses. For our customers, the way they see it, there was a survey of the Chamber of Commerce, and we are in first place. 94% of the purchase are local suppliers. So we support the economy of Colombia and the local businesses in the different areas across the country. We have a very strong and mid corporate governance -- the model of corporate governance, subsidiaries, concrete guidelines for international functioning of the subsidiaries, Board meetings. So we have a very, very strong corporate governance. Now we're going to talk about innovation and sustainability a little. Our different Vice Presidents will go more in depth, but this is something that we have been focusing more and more and more, taking the company to be the most innovative and the most sustainable in the coming years. On innovation, our innovation strategy is led from our center for research and innovation in energy and gas. Future projects to produce and gradually integrate renewable gases, biomethane, biosynthetic and green hydrogen in our portfolio. We've been working in development of a state-of-the-art digital technologies for operational, technical administrative processes. And we are already using robotic processes, automation, digital platforms and artificial intelligence. All of this are already part of Promigas, and we are moving on and on and increasing in that regard. There is a plan -- an innovation acceleration plan for the next 4 years, very important in that regard. On the sustainability side, we are recognized by both local and international prestigious organizations for our commitment to sustainability. Promigas ESG vision is aligned with the United Nations sustainability development goals, and we are working in 4 aspects that comprises -- that comprise all those 11, let's say, focus and basically our respect for human rights, climate impact reduction, human capital safety and development and interaction with our commitments. We also have a very strong corporate governance standards that reinforce execution of our strategic objectives. And Fundación Promigas' strategy unifies the diverse efforts of companies in the group, generating synergies and maximizing social input. Our goals for the coming years. We are just looking for diversification of 50%. We want 50% of the income by approaching new geographies and business different to gas infrastructure in Colombia. So the vision is that 50% of our incomes will be out of Colombia and different than gas. And that is our strategy for the coming -- for the next 10 years. Also, we are focused strongly in growth, in net income and a stable return for our investors. To have a high recognition for our customers as best company of energy services in countries where we operate and we want to be recognized as the leaders in sustainability and innovation. We want everybody to see Promigas that way from now on. Last, for now, I will say our robust transport, gas distribution, and energy and regasification infrastructure will be of service in Colombia and Peru to support the reconstruction of the economy [Technical Difficulty]. During 2021, we will make our best effort to control those variables identified as critical because of their impact in 2020. Using dynamic models of planning and simulation and continuous feedback exercise caused by volatility, our efforts will be focused on the mitigation of their impact and in obtaining the best results for our shareholders and interest groups. Resilience and planning are our best tools to face the challenges that we have established. For now, this is something that I wanted to share those -- these pages, and then I will give the presentation to Alejandro, our VP of Operation and Innovation. Go ahead, Alejandro. Thank you very much.

Thank you, Eric Flesch. And now I would like -- my name Alejandro Villalba. I'm the Operation and Innovation Vice President. And now I would like to share with you the next video to give you an overview of our system and our operations. [Presentation]

As it shows in the video, our infrastructure is strong enough to deliver natural gas to all our customers, honoring the contracts and also to be ready to react to contingencies and to maintain a high level of distribution. As you can see, our service continuity is 99.86% in all of the incorporated companies in Colombia and Peru. We have 3,292 kilometers of lane in our transmission systems, and we have a capacity of 1,153 million standard cubic feet per day of natural gas in transmission. And in distribution, we have almost 5 million of users. My colleagues in distribution and transmission are going to go in deep in these topics. Next, please. Pipeline terrific performance, main role in our operations. In order to guarantee, this entails 3 key factors which are high and comply with the appropriate operational standard. This is only an overview of them. In context, this is the only regulation that is mandatory here in Colombia. The other ones are followed by us as best practices to maximize our system and operations to have a more reliable and safe work environment. In addition, we belong to the American Gas Association, AGA, in the Gas Control Committee. We are the only Latin American company that has a seat on this important forum that creates a standard for our industry. So as you can see here in the screen, we put together the technical standards, the [indiscernible] data, the patrolling data and the in-line inspection data in order to have and process a very reliable integrity system. We use state-of-the-art process and technology to assure our pipeline's integrity. In-line inspections or "smart pigs" are an example of this, with which we obtain the detailed information about the internal state of the pipe. In addition to this, all the communities information, maintenance and patrolling data allowing us to have an integrity system management that is well consolidated. This enable us to reduce possible adverse effects in our employees, the community and the environment. As you can see here in the picture and in the video, we are running an in-line inspection that allow us to have very reliable information of our state of the infrastructure. With this, we have an efficient allocation of our resources for prevention, detection and mitigation activities and projects. We use this technology to integrate all the data and have very reliable information for all the maintenance and different project that we develop in our system. As a consequence of our strong operation and infrastructure, we have achieved superior operational results. For instance, as you can see on the left side, our gas losses always are far below 1%, which is the regulatory limit in Colombia, allowing us to transfer those efficiencies of -- at a better rate to our customers. You can see the yellow line is the limit in Colombia, and we are far below that limit. The space between that limit and the real information or the real data of the losses for Promigas are savings for our customers. we have a benchmark with Iran. That means that to compare our performance to other gas transmission companies located in South America and Europe. On the screen, you can see 3 indicators regarding to operations and maintenance, total spendings, along with the dispatching, which is control room operation and maintenance alone. I think on the 3 indicators, we are performing below South America and Europe. You see in yellow Promigas and the other ones are [indiscernible] for Europe and South America. As you can see, we are, in most of the time, in the middle of the cost of the operations of all compared with those companies or with those sectors in Europe and South America. This risk indicator shows that we are efficient in our daily operations. We have a strong performance in safety. The indicator shows us a thorough and substantial downward trend in 2020. Despite of the COVID-19, around 70% of our manpower continued executing on field activities with a considerable reduction in the accident rate. As you can see, it's a very, very good figure in injury frequency rate. On the right side, we can see a key indicator expected from AGA benchmark. Remember, AGA is the American Gas Association, a conglomerate of all the American gas transmission and distribution companies. And in the yellow -- and the yellow markings are Promigas. We are below the average leak indicators. Next, please. We constantly develop expansion and optimization projects. Expanding now, we have the Canal del Dique, as we show in the video, which is 3.4 kilometers length and 16 inches horizon down the water drilling. You can see in the video, the complexity of the project. It's the longest horizontal drilling in Latin America and the eighth in the world. It was a very challenging project and very complex one that we did last year in order to complete the expansion in order to put new gas in our markets. Regarding our expansion projects, last year, we finished 150 million standard cubic feet per day project. That represents a 20% of capacity growth. The biggest expansion in our company history. All of this demonstrates our capability to engineer, develop and construct world-class projects. As you can see here in the pictures, we did a very complex project with a very narrow path right of the way. You're seeing the video, the turbines that we installed into the different stations that we build in the project, almost 23,000 horsepowers in compression that we give to the communities, almost 4,000 temporary jobs in this project. We almost doubled our CapEx with the new infrastructure in 2021. In relation to our position [indiscernible] that we are constantly improving our infrastructure in order to keep it reliable and durable. We have 14 construction projects planned, and we have 6 of those developing right now, and we have 5 new projects in prefeasability stage. All that projects in distribution and transmission are almost $300 million for this year. We don't just focus on our activities on transmission and distribution of natural gas. We also integrate, as Mr. Flesch said in the beginning, innovation into our core activities. In 2020, we spent almost $10 million in R&D, and we obtained revenues and savings for $26 million, and we have 114 people working -- personnel in R&D and innovation projects and activities. We create a center called CX. CX was awarded by the Ministry of Science and Technology of Colombia as the first Colombia oil and gas unit recognized as innovation one. And besides that, we were recognized also as the first Latin American company by the Global Innovation Management certifying our corporate governance in the CX. Next, please. We have built on a strategic innovation plan aligned with the Promigas general strategic plan. Attributing these advances on our business based on new alternatives like new gases and new ways to perform our operations, always standing by our current and future sustainable core values. As you can see here, we have innovation driver. It's build sustainable future where our energy services keep promoting our customers' success. And also, we have strategic objectives in innovation. One of those is to diversify our portfolio, make our business sustainable and achieve operational excellence by increasing safety, flexibility -- and flexibility in our operations. We prioritize in the planning the areas in products and servicing innovation. We define distributed generation as a focus, energy districts, energy recovery, hybrid energy generation and new energy resources for distributed generation. And also, very important for us, renewable gases like biomethane, biosynthetic natural gas, hydrogen and ammonia. These new gases going to be the future for our actual business in the transmission and distribution. I'm going to show you more in the next slide, but I want to give the message that we have a key enabler for the innovation, digital technologies and data science in all our projects. Next, please. As I told you, renewable gases are very important, and I want to stress -- I want to stress on biomethane and hydrogen and biosynthetic natural gas. We are developing projects concerning these areas. Regarding biomethane, we have a project in Bielkówko, which we will be starting in 2023. In relation to hydrogen, we are developing assessing applications that will improve mobility in Colombia and in this fuel. As a company, in the fossil fuel business, we are committed to the lowering our carbon footprint. One example is being that we plan to deliver these new gases to our clients, as you can see here in the slide. We are planning to deliver biomethane, biosynthetic natural gas and hydrogen through our transportation and distribution lines in order to have a more sustainable fuel for our customers. As a company keen on innovation, we are working alongside with entities such as USDA on projects. For example, we were awarded last year for this -- for implementing here a study for $650,000 to conduct a study of feasibility with companies growing in addition as a contractors in order to have or to study the first plant based in solar heating to produce power in our country. You can see in the picture, example in Granada, Spain. This kind of technology concentrate the solar energy in a special fluid that goes in the middle of the mirror that you can see in the picture in order to obtain steam as a driver power. This is going to change -- this is going to be a game changer in the energy in our country. And we are conducting this study this year. Finally, as an example of all mentioned above related to operations, infrastructure projects, innovations, we want to share with you our current project that -- of augmented reality that we are implementing in our operation in order to achieve the operational excellence. Please run the video. [Presentation]

Okay. After all of this, we can say that variability, operational efficiency and innovation are our business levers. Thank you. And now my colleague, Ricardo Fernández, who is the Vice President of Transportation, is going to continue. Please, Ricardo, go ahead.

Thank you, Alejandro. Good morning, everybody. I'm Ricardo Fernández, Vice President of Transmission. I'm with the company for 36 years. And in the next slides, I will take you through our vision of this business unit. First, I would like to start with a short introductory video, please. [Presentation]

Thank you. We are proud to say that Promigas is the largest privately-owned midstream gas company in Colombia, with the longest track record in Latin America. As you saw in the video, our division has 3 business units: natural gas transmission services through Promigas, Promioriente, Transmetano and Transoccidente. LNG regasification services, it's our unit that through a SPEC LNG, which is our terminal -- important terminal. And we also provide industrial services through Promisol. In transmission, we have a well-connected network, as we have mentioned in many of the slides of more than 3,200 kilometer pipes, through which we transport 50% of Colombia's natural gas. SPEC LNG is the only natural gas regasification terminal in the country, which makes it a critical asset for the national energy system reliability. We have a capacity of regasification to meet 40% of the Colombia's thermal generation needs. Finally, to Promisol, we provide services to other industry, especially energy generation, hydrocarbon product services, treatment plants, making it a strategic align for oil and gas and industrial companies in the country. Promigas leadership in this more than 45 years of operation as well as our outcomes in our growth and acquisition strategy are the result of the application of these key pillars; excellence, innovation and reliability. As Alejandro was mentioning, we prefer under standards that keep ordinary standards. Our actions constantly lead us to the creation of new ideas, processes, which last result in a consistent, reliable and secure service. Next slide, please. We have invested intensively in a network to guarantee access in a new and changing supply reality. The supply context changed in the coastal region of Colombia. Initially, we have Ballena as our main traditional field, as you see in the picture in the North side of Colombia in the Guajira Peninsula, but it started a decline process very rapidly. So we have to plan a new field of our pipelines. This supply was replaced by small new fields located in the opposite part of Promigas system, creating a challenge to our company. To incorporate this new gas, Promigas had to make investments of more than $450 million, requiring a variety of lubes and compressor station to increase this capacity and reverse the traditional gas flow of our system from north to south. With this, we enabled the access of -- to our main markets in our main cities in the Colombia Coast to be able to receive this new gas resources. These investments backed by long-term contracts demonstrates Promigas' commitment to guarantee gas supplies and reliability to the demand as well as ensuring the growth of the natural gas sector in Colombia. Next slide, please. Our natural gas transmission business unit generates predictable and stable income from clients who are leaders in their industries and have solid financial ratings. Among these clients, we have the principal local distribution companies in Colombia, characterized by their high position in the gas distribution with firm and sustainable demand trends like [indiscernible] Vanti in Cundinamarca and Santander, Gases de Occidente in Valle del Cauca, Guacari and Surtigas in Atlántico, Bolivar, Córdoba [indiscernible]. We also serve the main thermal plants of the coastal region that supports the Colombian electricity generation as well as the principal refiners in Colombia, such as Refineria de Cartagena and La Refineria de Barrancabermeja. 58 of our capacity is contracted a 5-year average contract term. But most importantly, 70% of our income is fixed and guaranteed, generating predictable and stable revenues. Regarding the regulatory framework, it stands out for being highly developed and stable. The industrial structure -- the institutional structure, excuse me, is characterized by autonomous transparent entities with a strong decision-making process. The Energy Ministry defines national energy policies, the national hydrocarbon agency, AMH, develops E&P-related framework and overseas reserves administration. The energy planning unit defines the natural gas sector's infrastructure needs. The public service superintendency is in-charge of the supervision and control of public services, and the FERC is the independent regulatory body that develops natural gas and energy frame. The new FERC framework is a result of the proposal for a body of 8 great experts where all entities such as the Energy Ministry, Defense Ministry, the National Planning Department and the Public Service Superintendency participates in the creation of the new energy and gas rules. Some of the -- not yet. We -- back to the last -- yes. Some of the key factor of the tariff methodology, as you see in the right side of this slide, we apply price cap scheme that determines the maximum price of an -- that an operator can charge. We operate on the contract carriage model, where the operator allocates capacity rights via contracts that allows the expansion of the system that we are [indiscernible] all the time back by contracts and then by our tariff, which are distance based rates where shipper is paid for the number of regulatory pipeline segments used in their gas routes to take the gas to their markets. The CapEx, OpEx and demand projections and WACC, the discount rate are the tariff components. Regarding the WACC, we have a range of 11% to 14% in real terms before taxes. We have approved rate since 2012, and we estimate that the new tariff methodology will be set in 2021 and the new rates for 2022. Next slide, please. Next slide. Thank you. Now I would like to invite you to watch a short video of a SPEC. [Presentation]

Regasification terminal in the country and Colombia's connection point with the international LNG market. It was conceived from its start of operations in December of 2016 as a liquified natural gas import and regasification terminal that supports the country's thermal generation, which offer reliability to the electric power system by guaranteeing the required supply to avoid rationing in periods of critical hydrology, scheduled maintenance of the networks, the electric emergencies of all the electric clients. SPEC LNG has allowed significant savings to the energy end user by enabling the power generation with the use of natural gas instead of other liquid fuels. In addition to the positive impact of the emission indicators of particulate material, through SPEC LNG, the country not only has access to greater reliability, but also supports the future country natural gas needs when the natural gas we sell will be now available in the future at competitive prices. SPEC LNG is characterized by a long-term contract with clients of great financial strength and position in the electricity market, as you can see in the picture, Tebsa, Prime energy and Termocandelaria. We have signed contracts until 2026. But the future for SPEC is greater than that. We will continue investing in the connectivity of our network by closing the loop in the pipeline system, reversing flows and expanding SPEC LNG. SPEC LNG has the potential capacity to expand up to 800 million cubic feet per day expansion, and I would like to strengthen this. That will represent a solution to the structural natural gas that is advised -- projected in Colombia for the coming years. Our strategic position will allow the access production -- or fetch, supply gas that sits in North America. And we are the closest terminal connecting those huge reserves to Colombia. The expansion of a SPEC LNG terminal, complemented by reversing the flows from the gas infrastructure from Cartagena to Ballena. A project that will create bidirectional abilities in our system will allow the incorporation of the gas from the coast to the interior part of the country, connecting, as you see in the signs of flow, will reverse the flow now to Ballena and then connect it, the reserves to the pipeline system of [ CGI ], allowing the interior part of the country to connect very, very efficiently with the reserves of the north coast and also the import terminal of the SPEC. Finally, as you see also in the picture, Jobo-Transmetano pipeline will provide -- which is another expansion plan. It's an Open Season that we have open. It will allow and provide greater reliability to the national transportation system by allowing the coast-interior interconnection, closing the circuit in the system with competitive and efficient rates for users. It will allow the injection of new natural gas reserves to the markets in the interior of the country, providing a supply solution given the decline period of the traditional fields, like Cusiana in the interior of the country. It has all the skills, the experience in construction and operation of gas pipelines to develop this project, and we have important advances in technical, environmental, social, land and commercial levels. Finally, Promisol, is our industrial service company. We leverage our strong customer base and expertise in building and operating natural gas-related assets, and we also reliable and competitive solution to companies in the hydrocarbon and industrial sector through its different business units dedicated to the construction and cash finance, power and generation, natural gas treatment and preventive and corrective maintenance of the natural gas transportation infrastructure. Our client portfolio are key players in the oil and gas sector, such as gas producers and industrial clients, such as [indiscernible] and [indiscernible]. Regarding the gas treatment unit, Promigas has -- Promisol has 15 years of experience treating more than 520 million cubic feet per day of natural gas, converting Promisol in a key partner for gas producers. Promigas -- Promisol has constructed more than 350 kilometers of pipelines in the last 4 years, including the longest horizontal drilling river crossing in Latin America, and maintained a network of more than 2,700 kilometers of pipelines. Finally, Promisol operates 40 megawatts cogeneration plants in Mamonal's industrial cluster and 7 megawatts of distributed generation network units in Colombia. Promigas plans to continue growing by further leveraging its expertise to expand and diversify its value added, replicating its successful business model in Colombia and in selected Latin American geographies. We see interesting opportunities for our industrial service unit in Colombia gas treatments for new gas fields in the Valle Inferior del Magdalena region, new pipeline construction projects in the Magdalena region for Promigas and gas producers during 2021 and 2022, generation and cogeneration projects in Antioquia and Atlántico that represents more than 25 million cubic feet per day of new gas demand. Also in Peru, we plan to diversify our industrial service portfolio. Regarding natural gas transmission, we also see expansions in the Gibraltar-Barranca pipeline, which is Promioriente, that will provide the incorporation of new gas fields in the Piedemonte region via [indiscernible]. And also, we are close analyzing the possibility of diversifying our participation in other countries in Latin America, such as Brazil and Ecuador. In LNG services, besides the SPEC expansion, we see interesting projects to build LNG terminals in the Caribbean and some Latin American countries that need to diversify their energy matrix. Our LNG terminal in Cartagena is also strategically located to meet regional LNG demand and can carry out reshipment operation to mid and small-sized carriers that will allow to provide natural gas, let's say, to the islands in the Caribbean. Our goal is to continue applying our innovation culture to adapt to shifts in supply and demand, staying flexible, dynamic and selective in the pursuit of business opportunity inside Colombia and Latin America. That's my presentation for today. Now I give the floor to Mr. Wilson Chinchilla, which is the Vice President of Distribution.

Okay. Thank you very much, Ricardo. Good morning, everyone. Good morning to all the investors that are here in this event. Be welcome. My name is Wilson Chinchilla, and I'm responsible for our portfolio when it comes to electric utilities in Colombia and Peru. So I'll be responsible for showing a little of our current business in the growing perspective for this region. So this is the slide I'm going to address first. We are a key transporter in Colombia, but we are also a relevant actor when it comes to LNG gas in Peru and Colombia and also electricity in Colombia with 5.4 million customers. And the gas sold is 10.9 billion of cubic meters. Our energy demand is something around 996 gigawatts per year. Besides these business lines of gas and electricity, Promigas has also 2 business focus: First, the loans, nonfinancial ones through Brilla. Brilla is a brand that promotes access to credit to very low resources families and low resources customers so they can improve their livelihoods. And in these lines of nonbanking loans, we have granted loans in the last 13 years, around $1.13 billion. The second line that we have in our business portfolio has to do with the renewable nonconventional energy focused on photovoltaic solar energy. And in this business line, we have installed in recent years -- in the recent 1.5 years 15.7 megawatts. Next slide, please. With that said, it is clear the impact that we have seen by the pandemic, the lockdowns that we have had because of the COVID-19 health crisis. We, of course, saw some problems. By collecting the bills is 83% last year compared with 93% of bill collection in 2019. And this reduction, the increase in demand was 13%. The reduction in the industry levels was smaller. But the NGV, the gas for vehicles reduced the demand for -- in about 33%. Despite these problems and thanks to the cost management strategies that we had in Promigas, and thanks to the closer relation we have with our customers, and because we've been very innovative when it comes to our workers and our strategies, we were able to achieve the goals that we had for 2020. We were able to make a 120% of EBITDA for 2020. And at the same time, we were able to relieve discounts -- to give discounts or relief for more than $2 million for customers. So that's very interesting. So besides -- I mean, we are acting in favor of our clients. And even so, we are also reaching our financial targets, which is very interesting. Okay. Our strategy is focused on maximizing the potential of current initiatives while exploring new opportunities in this region. When it comes to natural gas distribution, the first box that you see in this slide, the goal is to accelerate our growth in Peru so we can reach residential penetration that is similar to what we have today in Colombia. Besides, we want to explore new opportunities, as our CEO said, in new countries like Ecuador, Mexico, Brazil, among others. In energy services, we want to be acknowledged as the main player in Colombia, Peru, offering comprehensive solutions for solar and thermal districts, energy efficiency, cogeneration. And when it comes to nonbank financing, we need to maximize the possibilities of this business line and evolve to a more digital model where we can expand and offer our customers new products, new services and new possibilities. Next slide, please. Well, in the previous slide, I want to say that when it comes to energy distribution, we may take advantage of the experience that we have now in Colombia to explore electric utility assets in Colombia and Peru, and we can have more scale in different and efficient operations. Okay. When it comes to the distribution of oil and gas, we have a regulatory framework, which is the standard for everyone, and it allows you to have the -- well, you have in the right side of the slide, you have a regulatory framework that allows you to have a maximum tariff or tariffs by market. In both sectors, you have these tariffs that are valid for 5 years. And in general terms, they allow you to recover the costs of lending these services -- service offering. You have, for example, here, 11.98% of WACC, and for electricity, it's 11.50%. This is in Colombian pesos, COP, before taxes, okay. So it's interesting to notice that for our distribution and generation business, we have a very steady regulatory framework, predictable income. And this is important because this revenue represents 70% of the gross profit. It's fee-based, which is very interesting. When it comes to our presence in Peru, we have 4 companies. Our footprint in Peru, you can see them there: Promigas, Quavii -- with -- from the north, Quavii from the Pacific region and the Cálidda. With these 4 companies, we have become the leaders of natural gas distribution in Peru with an accrued investment or a accumulated investment from Promigas around $380 million. And with these companies, we can serve 1.17 million customers. Let's take a look now at some important figures of these 4 companies that we have used to develop the market in Peru. The first one is Promigas, upper left corner. If you take a look at this, with an acquisition in July 2020 of a company named Gascop. Gascop company that was in charge of trading natural -- compressed natural gas in -- for vehicles and for industry in Peru. We bought this company last year. And in December, Gascop, the company, turned into Promigas Peru. And Promigas Peru will now -- from now on to be responsible of the strategic management of the company's control that are GDP and Quavii and -- from the north and from the Pacific region. You can see some important figures here. From Gases del Pacífico, the -- or Quavii, you see that we have an EBITDA around $108 million, sales around 78 million of cubic meters. And the important sector here -- or industries, 78%. And it's a concession that was obtained for 21 years starting in 2013. We have 7 different areas that you can see on here in the north region of Peru. Quavii -- but now Quavii from the north of the country, which is the upper corner at the right side of this slide, is a company that is building a pipeline. Is more or less $330 million, the cost of this gas pipeline and will start the partial operation tomorrow -- no, April 30 will start the commercial -- early commercial structure and the definite -- or the permanent activities will be started in 2022 in July definitive structures. It was a concession obtained in 2019. Term is 32 years for the 5 cities that you can see here in the north of the country. And then we have Cálidda. Cálidda, we have 40% of the share in this -- of the ownership share. Promigas is as a -- is an investor of Cálidda since 2007, and we work on Lima -- in Lima and Callao, 2 regions in the country, and we have 1.1 million clients. So as a wrap-up, these companies, they have a very, very important potential of growth because you can tell that they are really close to each other, geographically speaking. They are controlled by Promigas, and they are next to each other physically. So that offers important synergies, important complementary possibilities. And if we can take or if we can make good use of these synergies, the companies will be more profitable. Next, the opportunity that I just mentioned because of being together, being close, because we may have these synergies with the services because we can have LNG or we can have CNG, right, liquefied or compressed. And we can have also network natural gas. That means that it's complementary. I mean it's -- they're -- they can complement each other. And the idea is to capture the synergies that we have by working strategically in these 3 companies that we have from Promigas Peru, the company that I mentioned that was created last year. So this model in Peru, it represents important savings. We understand that the synergies can reach $10 million just because we are close to each other, and we have a centralized strategy. Of course, we have some numbers, you see here in the figures, of our strategy in building. But the most important thing that I want to pinpoint here is that the rate, the annual growth rate that is made up by the demand for 2020, 2024 is 57% and the annual -- the composed annual growth rate for users is 17%. So these companies, as you can tell, they offer a great annual growth rate for the investors. Another interesting growth factor for Peru has to do with the competitiveness of our prices compared with other energy sources. And you can have important savings for families and for consumers in the north region of the country. These savings, as you can tell here by this slide, are around 30% to 57%, 59% that -- leaving aside the natural environmental benefits that you can have by taking a less polluting agent, such as the one we offer. The next slide will give us a sneak peek of the activities that we have had in Promigas when it comes to renewable energy and sustainability. It's a video that gives you a message of the new role of Promigas and the energy transition. Please. [Presentation]

Okay. So let's move on. One of the strategic goals of Promigas is to become a relevant player in energy services and emphasizing on photovoltaic power plants, in self-generation, cogeneration and of course, being more efficient. On the right side of the slide, we have some goals that we have set for our company for the upcoming years when it comes to photovoltaic power plant. We're talking about 123 megawatts; in cogeneration, 41 megawatts. But the most important thing is that we have 15.7 million megawatts of installed power capacity in only 6 months where -- in 18 months, I'm sorry, in 18 months we decided to move, to step in, in this market. It may look like a small figure for Promigas. This business is a growth driver, a growth driver that we will bet on in the following years, and it will be very, very important for the company. For electric energy, we have a company in Colombia, is Compañía Energética de Occidente, CEO, that has something like 400,000 customers working in one of the most complicated areas in Colombia in terms of public order. And Promigas invested in this company in the last 10 years, and we're seeing the changes, a transformation in the financial indicators and the satisfaction levels and the service offering levels. And we are awarded today in Colombia, because we are the best company for the region that we work on. So today, the service is provided more smoothly, and you can see here that in 5 years, we doubled the net utility -- the net profit, I'm sorry, the net profits. And we have improved also the indicators of service quality. And these successful management in a very complicated market, allow us the possibility of being an excellent provider in any country of the region. Okay. This is in the next slide that I have. And a very interesting thing of our strategy has to do with client satisfaction. And of course, digital transformation plays a major role here. As a summary, in this slide, I'm showing you some of the recent developments that are enhancing the relations with the customer. And I just want to mention one of the most important ones is that in the system, the invoicing systems, we have more or less 20,000 customers here within on-site billing. And with the smart meters, we have something like 40,000 clients with this system. And we have implemented a pretty big measurement pilot projects for these services, and its very promising next. Okay. Let me talk about our program called Brilla. Brilla is a very nice example on -- it's one of our main pillars of the strategy for Promigas. 94% of our users, they belong to very, very vulnerable social levels. They have no access to alternatives when it goes to formal financing, funding or loans. So we created Brilla as a business for these low-income families, offering different Interest rates that are very competitive and may support these families to have a better life. It's a social program. And at the same time that helps to eradicate poverty in the country, it allows to make the company more profitable at the same time. In same slide in the lower-right corner, we have some important recognition that we have had so far. It's a program that has been very good, that helps to improve the social conditions by improving the business too. And to get adapted to the reality of our customers when it comes to access to the credit and the client possibilities, Promigas is reorienting, refocusing Brilla's strategy to become 100% digital. We want to move on with credit risk assessment models. We want to develop new products, like insurance, technical assistance. And we have since December of last year, the same program in Peru. You can see here the goals that we have for the next 10 years, having EBITDA around $100 million in this business. Finally and to finish my intervention. I want to say that Promigas will keep growing organically with our positions in the country, in the region and diversifying our business lines, exploring new geographies, trying to be together to our customers, innovating always, benefiting from our expertise and our capabilities, okay? I'll give the floor to Natalia Abello. She is our VP for Legal and Sustainability Affairs. Natalia, the floor is yours.

Wilson. It's a pleasure to be here this morning in this our first Investors Day meeting, where we can share and see in a more detailed way our principal goals and objectives. I am Natalia Abello, Legal and Sustainability Vice President. In my presentation, I will share with you how Promigas has been working in sustainability management and how we support our business on ESG principles. First of all, I'm going to leave you with a video that has a sustainable overall view of our corporation and where we emphasize in social topics as it is very relevant and strategic to our operations. [Presentation]

45 years of operations and experience. We have always been sustainability-oriented. We have guided our management on the basis of 2 principal pillars: environmental responsibility and sustainable development. Our actions are built on ethical values and respect for human rights, so we contribute to generate positive transformation. We understand that our business and the position that the company has in the society and the territories that we operate, we have the potential to boost development and produce transformation, to make people life improve and obtain environmental benefits in the community. Our goal is to became sustainability leaders by 2030. Promigas operations are located in Latin America, especially in Colombia and Peru, so our sustainable management model is aligned with our business strategy. Our material issues respond to the strategic goals, and we have an active engagement with our stakeholders and listen to their needs and requirements. This means that our sustainable management touches every activity of the organization and includes a strategic focal point and business, a strategic goal for 2030 and innovation to enhance the sustainability. Here we can see our sustainability model. As I said, it is embedded into our corporate strategy. Through the alignment between the strategical focus and the strategical goals, we respond to the interest of our stakeholders. For the main focus, the strategic main focus are growing profitably and sustainably, being recognized as the best energy company and build sustainable leaders. And our 3 strategic levers are innovation, ethics and corporate governance and risk management. We plan -- when we plan, we take into account mega trends and changes that can impact our business. Our stakeholders demands are increasing toward more sustainable energy agenda. So one notable feature is the acceleration in global trend that we are -- there is a great concern and has been expressed about the depletion of planet resources. Planet resources are overrunning their limit. So we can see big changes in demographics in consumers' behavior and increasing regulations and an accelerated innovation. So in one hand, we have the energy transition with the natural gas as a sustainable transition fuel with low carbon emissions that's playing a very important role. And in the other hand, we have climate change. Energy business are migrating and migrating and increasing renewable energy initiatives. So environmental and stakeholders pressures to achieve a more sustainable energy agenda. And here is where the innovation and a sustainable model plays a significant role. We are aligned with 11 of the 17 worldwide Sustainable Development Goals for 2030 established by the United Nations. A special mention, 4 things that encompass the Sustainable Development Goals to which we aim: First, the respect for human rights. We're committed to ensure that human rights are respected through all our value chains. The climate change. We are committed to reduce our carbon footprint and to transit to a more renewable energy source in our business. In development, we are very committed to the well-being of our people, our community, and we have prioritized the safety of our operations. And we place special emphasis in the interaction with communities. This is very critical to operation. We have always behaved on the premise that ethical and responsible behavior to long term -- leads to long-term and mutual benefit relation. We always reiterate that very -- the every action we take and decision we make is aimed towards contributing to the Sustainable Development Goals. Our business and service are focused on delivering the value we have promised to all of our stakeholders. So to our shareholders and investors, we commit ourselves to sustainable financial performance. We deliver quality products and service to our customers. We have long-term development with our suppliers and contractors. We have a legal and regulatory compliance to government and regulatory agencies. And we have promised communities that we will invest in initiatives that will contribute to their social progress and development. And we promise to introduce adequate and equal pay, health and safety and overall development. We can see here our KPIs that shows the progress of Promigas has been doing in these commitments. With innovation, which is one of our strategic cornerstones of sustainability, we can see how investments in projects grew 55% in 2020, and 2.5% of the revenue was generated by new products and services. We are committed with operational excellence to control and satisfaction -- continuity and satisfaction, and our KPIs are monitored very closely. Regarding employee safety, we had no accidents and few fatalities in the company. We still face challenges with our contractors and suppliers. With respect to the approach to the supply strategy, [ 34 ] come from local suppliers. And our employee satisfaction figures stood in 66.9%. According to the measurement scale we use, it's considered a big level, a very good level. Promigas has been recognized by local and international organizations. The valuation conducts by Standard & Poor Global listed us among 50% of the companies with the best social, environmental, economic and corporate governance performance. And Promigas was included in the Sustainability Yearbook 2021. USAID and Semana Sostenible selected us 1 of the 10 companies in Colombia with the best index of private social investments. We're awarded [ central prize ], Promigas and 3 of our companies. So it's a prize given for maintaining best work environment. And the Colombia chapter of global companies selected us an example of good practices related to SDG 15, which is life on land, for our tropical dry forest conservation projects or strategy. The Minister of Science, Technology and innovation recognized the fact that we are the first gas sector company in Colombia to have an RDI unit, Research, Development and Innovation unit. During 2020, we strengthened our ESG governance. Promigas' commitment to sustainability is so strong that we enforce our organizational structure to secure our oversight position, name and function. So we changed the vice president and now renamed to incorporate sustainability, and we have a new position to strengthen management. Our independent governance, together with high ethical standards, reinforce the execution of our strategic objectives. We recorded no cases of corruption, no fines or sanctions were imposed, no cases of discriminations and any forms of abuse reported. 60% of our Board members are independent, 60% have been -- have prior experience in the sector, 30% are women. And the result of a third-party evaluation was 9.1%, and attendance for meeting was 94%. The Investment, Strategy and Sustainability Committee met in 18 occasions in 2020. We can go in the prior -- this one, yes. The Investment, Strategy and Sustainability Committee met in 18 occasions in 2020, which is -- this reflects the high level of commitment in a tough year and the dynamic nature of strategic investments, all enshrined in sustainability development. Now we turn, [ Paolo ] the next. We are committed to respecting environment and, therefore, we have directed our efforts at protecting and serving strategic ecosystems, one of which is the tropical dry forest, the highly endanger ecosystem. It's common in Colombia and especially in areas where we operate. So we aim to minimize interventions. And as a result of projects, we occupy only 61% of land for which interventions have been approved and 55% of trees authorized in environmental permits have been affected. Last year, we planted 10,000 trees and our total environmental investments were $2 million. Our climate strategy reinforces our competitive position and provide the company with a concrete plan of action for responding risks, which is -- which the company could be exposed. Also identify business opportunities such as the increase of natural gas demand due to climate changes and transition to cleaner fuels. And because Promigas has focused its energy transformation effort on renewable business initiatives, we already have a photovoltaic solar energy business with a current capacity of 50.5 megawatts. So this strategy impacts all our stakeholders, especially communities, customers and investors. In 2020, our environmental KPIs achieved were 11% reduction in our carbon footprint. And we have a carbon footprint -- our carbon footprint is certified under [ ISO 14064 ]. So moving ahead into '21 and 2025, we look for reporting with Task Force on Climate-related Financial Disclosures and to answer to carbon disclosure projects. So go ahead. Our social projects contribute to progress and the well-being and help us in our license to operate. We invest $8.7 million in Colombia and Peru in 2020, 72% are in COVID response. We provided food vouchers and health equipment, reinforcing hospitals and medical capacity. And we had a total of 410,000 beneficiaries over more than 400 communities. And we also had 20% of the investments focused on projects. And one of -- I highlighted one of the most important project was clean energy for homes. We have a gasification in corregimiento Correa and María La Baja, and we reached 236 families. We can follow with the next one. With a view to maximizing the impact of our social strategy, we made the decision to bring together the foundations of our company's portfolio and to focus efforts and projects with unified objectives. So we can follow with -- the next one, please. And looking forward, we are conscious of the room for us to go on improving our sustainable management. Our sustainability action plan includes initiatives to increase from a gas commitment to sustainability even more. We have identified some priorities. On human rights, we are committed to strengthen relations, evaluating impact and conducting diligence. In terms of corporate governance, we're committed to maintain higher standards, maintain female representation in Board of Directors and maintain high level of cyber protection in our digital environment. And in environmental, growing participation in renewable energies, new opportunities in energy services and defining our emission reduction ambition with the goal of becoming carbon neutral. So we are passionate about sustainability. We are fully committed to growing sustainably and search for opportunities to improve our sustainability performance and to generate more value for Promigas and for our stakeholders. And now I will leave the floor to Aquiles Mercado, our CFO.

Thank you, Natalia. Good morning, everyone. Thank you for being here with us in our first investor meeting relation. My name is Aquiles Mercado. I'm the Corporate CFO for Promigas, and I'm going to talk to you about our solid financial performance that guarantees access to capital, future investments and growth. To start, we have decided to highlight corporate most relevant figures, out of which we have chosen 7 that we consider the strongest pillars that provide us with robustness to face challenges. In the first place, we have to talk about our solid business performance through stable and predictable cash flows coming out from basically long-term ship-or-pay contracts in transmission. As you can see in the pie chart, 35% of our contracts currently have a tenor of between 1 and 4 years, but making clear that those customers has been with us for more than 20, 25 years. So renewal of these contracts are expected. And 55% of our contracts in gas transmissions have more than 5 years' term. Also, we have more than 5 million users in Colombia and Peru, providing steady billing and collection served by our local distribution companies in both countries. Secondly, we will find that Promigas has a diversified and strong competitive position in the Colombia and Peruvian energy matrix. 48% of the Colombian transportation system is actually or currently operated by Promigas and 38% of market share in Colombia, we have 93% in Peru in distribution. And we have a strong presence in power distribution provided by our geographical footprint that allows Promigas to own and operate this infrastructure in the 2 countries mentioned. And also remembering that we have and operate -- own and operate the only regasification plant that our country needs for the generation of electric power. In third place, we have to mention that we deploy our activities in order -- inside our stable and sound regulatory framework. In Colombia and Peru, there among other variables [ post fitting and fitable rates ] of return through the years according to market conditions, as my colleagues previously have mentioned already. Moving to our fourth pillar we want to highlight is that we have to mention that we have structured a robust and comprehensive scheme for the mature business in Colombia to provide great support to growth in Peru, allowing us to get a consolidation of management model and get all synergies in Peru and transmitted to the market. In the fifth place, we remark that the company comes with a well-seasoned and mature management team, supported by a strong shareholder base and proven robust governance policy, as our CEO mentioned -- detailed. About the overall natural gas sector, we have been able to prove that it is a resilient sector tested in one of the most difficult circumstance ever. Despite the pandemic, we were able to guarantee 100% reliability in our services and 133% of budget execution in 2020. Last but not least, we have -- we are preparing the main tool to prepare us for the near future. Recently, we developed our corporate strategic plan. We clearly identify opportunity for further growth and challenging organic results. The implementation of this strategic plan started in August 2020. As we mentioned in our pillar #1, it's verifiable since if we track our performance, we will find enough evidence to support it as we will see in the following summary chart, where we, based on evidence, dare to say that this is our main remarkable structural financial feature since when performing a detailed analysis by tracking our historical performance, it shows highly stable and predictable cash flows. We're going to explain it to you through our corporate structure in order to transmit this message in a proper way. We will see figures of our 2 strategic business units. In the right -- in the left-hand side, we can see the strategic business unit of transportation that comprises 7 companies in 3 lines of business: natural gas transmission, gas regasification in our LNG plant and industry solutions provided mainly to the gas producers. And in the right-hand side, you will see the SBU distribution integrated by 14 companies in Colombia and Peru in 3 lines of business: natural gas distribution, power distribution and our nonbanking financing program, Brilla, for low-income brackets. Now having in mind our corporate structure, that I just mentioned and explained, we will see that taking a 4-year average as well as 20,000 results, we will double check evidence that supports payment that title the next slide, the 1 we are watching currently, saying that our main marketable structure feature is that tracking performance shows highly stable and predictable cash flows. Adding before that, we are speaking here about 21 companies with more than 3,000 employees with presence in 2 countries. If you see the bottom line, the full year average of transportation unit, saying clear that the blue cylinder shows the revenues, the green one the EBITDA and the gray one the net income contribution. The full year average for transmission, a strategic unit, shows that this unit provides 31% of the revenues, 53% of the EBITDA and 55% of the net income. The full year average for distribution shows that this unit provides 69% of revenue, 47% of EBITDA and 45% of net income. Now when we see the 20,000 -- excuse me, 2020 year transportation figures, we can verify that this unit provided 31% of their revenues, 43% of the EBITDA and 41% of the net income. And in the right side, in 2020, distribution provided 69% of revenue, 57% of EBITDA and 59% of net income. We can see minor increase in EBITDA and net income contribution with -- coming out from our distribution unit, taking into account the implementation of 15 rule -- accounting rule, which we will talk later on. We have to add on the bottom of the slide that on the top of what we have mentioned, 80 -- more than 82% of our revenues are derived from regulated natural monopolies, generating fixed revenues from long-term fixed contracts across a suitable tariff structure. Following with this chapter, let us move to financing. Well, we can say that our conglomerate has strong liquidity and wide access to financial markets. If we follow this chart clockwise, we see that we have followed the book. In terms of moving from natural markets, local banks to more robust demand in terms of the requirements that they will ask a company to lend money. Moving to international banks, opening of those, then accessing several times our local capital markets and debuting finally and successfully in 2019 in the international capital markets. This allow us to assume that we have had historical access to liquidity through local and international banks and issuance in capital markets, highlighting that even in the midst of the pandemic we've guaranteed the necessary resources for our investment plans in Colombia and Peru. As we can see, next, in our treasury management, during COVID-19, reliable access to financial sources. In the right hand, you can see that more than $815 million on committed trade lines were available for Promigas to access them in case we have need to address those. Local bond issuance program with outstanding capacity up to $58 million. We were able to manage to disburse from banks, local and international, $378 million between March and April, this is only 1.5 months, in response to COVID-19 for operations or guarantee the access for operations and investment commitments for 2020. And last, again, but not least, we have to remark that we have deployed 2 bond issuance in 12 weeks between October and November in the middle of the pandemic with international issuance reopening for $120 million, obtaining a bit to cover of 8.2x and a yield lower than emission in 2019. Local issuance, $475 million with lower rates than previously awarded and gaining tenors up to 25 years of maturity. Emphasizing besides that our conservative financial policy remains steady, we have a strong commitment to maintain our investment-grade profile and enhancing and consolidating as we confine our position as regular and market value issues. Based in our credentials and our transactions in the capital markets, both local and international, as we mentioned, through the last 20 years. Putting also on spotlight, our ratings, we can see in the left part of the slide, we have 3 affiliates, Gases de Occidente, Surtigas and Promioriente, that has more than 7 years AAA local by Fitch ratings. Promigas has been rated AAA local by Fitch in -- by 20 years in a row. We have also obtained the BBB minus international investment-grade for 10 years before even that our country reached that investment grade. And 2 years ago, we were able to get a Moody's second investment-grade rating, Baa3, international, that allowed the company to go to international markets. These credentials or ratings has been the opening doors to complete so far 12 local bond issuances and a successful recent reopening in the international capital market, adding more than $700 million in Promigas local issuances, $824 million through subsidiaries and 100 -- excuse me, $520 million in the international market. In the chart, in the arrow -- blue arrow, you can see the trajectory in the last 20 years, touching international markets, banks, local markets successfully doing this. Given this, we can show you all how we, therefore, have been able to reach a healthy debt profile with an appropriate mix of currency, tenors and overall conditions. Currently, if we see debt by type, we can see that we have, at the end of 2020, 47%. Our debt is represented by bonds, Colombian pesos, 30% bonds in U.S. dollars and green -- lemon green with local and international banks. Now in the right, the debt by type of currency. We can see accurate and upgraded taking into account our income and leverage. 61% of our debt is denominated in Colombian pesos, 37% in U.S. dollars and 2% in Peruvian soles. The rate average in the left part of the slide, we can see that we entered 2020 with an average cost of the debt of 6.28%, and we exited the year with 4.48%, thanks to the -- all the activities we deployed in this front. So diminishing the cost of our debt is more than almost -- almost close to 200 basis points. The duration was also increased from 6 years at the beginning of the year to almost 8 years at the end of 2020. And the ratios, as you can see on the right-hand side, increased in the net debt-to-EBITDA part from COP 389 million -- decreased to COP 354 million, and FFO debt increased from 13.8% to 15.6%, very healthy ratios, that allow us to keep our rating not only local, but internationally. Then we will see that we also have a remarkable profile of payments. And the best way to show this is with the chart. You can see here the bars that show how are we repaying our debt. The most challenging issue we can foresee is, for 2029, we have to refinance our issuance in the international market for $520 million. We will do so. We have time enough to prepare ourselves. And you can see as well that we have even maturity in 2045. So we have a very remarkable profile of maturity of our debt that fares with tranquility in order to perform all our activities. Let us move now to our financial outlook, in order to reflect some results that allow us to predict a promising future, the parting from such results. Revenues, we have increased at a CAGR 8%. In the middle part of the slide, you will see the CapEx as a percentage of revenues, increasing also with a CAGR of 23%. And this shows the expansion of the capacity and the infrastructure, as Alejandro, my colleague of operations, showed. And we have to make clear that we also start expanding our infrastructure when we have sold previously the capacity contracted. In this case, in 2019 and 2020, we finished 150 million cubic feet per day expansion for 1 gas producer that contracted the 100% of the new capacity for 10 years on a fixed basis. Also, we have -- we are deploying intense construction activity in Peru. And EBITDA, one of the most important character or ratios that we follow -- financial follows. We have showed an increase of 18% CAGR, not only in relative figures, but also in absolute ones. We can say that we have a stable and important growth in our EBITDA and EBITDA margin greater than 30%, 35% through the years. These results can be tracked for the last 15 years as shown in next graph, where we can see remarkable KPIs arising from our steady results, depicting consistently growing net income, the blue cylinders; a healthy net debt-to-EBITDA and FFO over debt. You can see some peaks or valleys, depending on the ratio you want to see, that reflects basically the movement -- of the important movement we have gone through in order to expand our activities, not only in Colombia, but in Peru, having always a very fluid conversation with the rating agencies that know that we reach that peaks or valleys. And then we deleverage the company immediately by selling this capacity to the market and receiving back the net income expected from the project. After all info we have shared so far, we can continue now with our 2020 remarkable results that confirm all said before. Since we not only met our budget but our results were boosted by our outstanding construction in Peru. 2020, we reached revenues a smudge of $1.2 billion with an increase of 6% versus previous year despite the decrease in the distribution demand attributable 100% to the COVID-19, especially in the 4 years between March, April, May and June of the last year. And also, we suspended our Brilla program for those 4 months avoiding to the indebtment of these families to grow in the worst moment of the economy, not only for the country, but for those families. The EBITDA increased 41%, reaching $535 million based on administrative operations and many savings through a program that we launched in March called Responsible Austerity program. That allowing to prevail our safety, our security and our reliability ratios or KPI, allowed the company to face the challenge brought by pandemic. In the net income, we were able to reach $331 million, with an increase of 40% comparing '20 with '19 year despite also of higher portfolio provisions in receivables, attributable 100%, not to our work, but to the pandemic donations we made to hospitals and communities throughout the influences of our companies in Colombia and Peru. And also we have the aid, we could say, of the implementation of the IFRS between -- positive impact of $81 million. But we have to say that we consequently ended with that execution or other execution of 183% of the budget. But without this rule, we ended with 101% of execution of the budget as well. In the CapEx -- in terms of CapEx, although we postponed some projects for more than $100 million in order to keep liquidity and be conservative in terms of this, we executed projects for more than $166 million, executing 95% plan basically in the completion of the 150 million cubic feet per day project in order to allow new gas producers to launch or to inject the natural gas in our systems, our Peru investment plan, more than $407 million and other plants that we have to perform despite the pandemic. Although this achievement are without any doubt more than remarkable, they were not easy to reach, this could be interpreted. As long as we have to overcome important challenges, we campaign inside the title of this slide that we said, the hardest test that is not -- that is now looking back one pool of corporate resilience under the most adverse conditions ever. In terms of expenses management, we entered the year expecting to obtain 900 -- or spend $925 million in O&M expenses, but we were able to manage to get cost reductions for more than $16 million. Investments or CapEx, as we mentioned just before, we postponed $110 million of investments that we are performing already. Net profit, 133% execution. The workforce -- we have to face the year with 73% of our people in their home. This is more than 2,700 people in their houses working remote -- in a remote way in order to guarantee our system availability that reached 100%, as Alejandro mentioned before. We were able to maintain our credit ratings, both local and international by Fitch and Moody's, not only Promigas, but its affiliates and improve, even in this tough environment, our credit ratings. There is no doubt that resilience and planning are our best tools to face demand in for coming challenges. So let's take advantage of this strength to transmit to our audience view today that we are expecting for 2021 in terms of results, starting by saying that our financial look in the near future is based upon realistic and zero-based expectations. Our budget for this year showed revenues that we want to reach -- we are aiming to reach for $1.3 billion, an increase of 5% versus previous year and net income -- excuse me, an EBITDA of $532 million with a decrease of 1%, basically because those expenses of activities postponed last year mainly, reflecting this also in the net income, $310 million, a decrease of 7% versus last year. And also here, because of the implementation of IFRS 16, we will have less income, making clear that it is not cash but booked income because of the construction activity in Peru. Retaking those projects not developed, we will reach a higher or greater ratios like net debt-to-EBITDA and FFO to debt, but -- plus commitment acquiring our new concession in the north of Peru raising our CapEx to the figure of $310 million, as we can see in the pie chart, basically concentrated 46% in our distribution unit that is going to deploy an important and relevant investment plan in Peru, reaching more than $118 million. We are going to construct a new pipeline for $21 million already contracted in order for small producers of natural gas -- in natural gas in our system and also we are increasing our investment in distribution -- energy product distribution, not only regulatory committed, but also in solar power plant, basically 100% sold to local customers working with Promigas. All this, while keeping our dividend policy consisting in putting aside resources for OpEx, CapEx and keeping ratios or metrics to maintain our investment-grade profile. So working to fulfill our shareholder expectation whilst meeting healthy business metrics. We can see that we declared dividends in 2020 for $128 million, increasing by 6% to $153 million in 2021. But making remarkable that, as you can see in the bottom line of this quarter, that 51% of the dividends in 2020 came from control companies and 2021, this company -- this controlled company are providing 55% of the dividends we are paying to our shareholders. This shows how our own operations are increasing specifically in the -- some companies that are maturing in Colombia and in Peru as well. Concluding that in the last 5 years, we have reached an average payout ratio of 117%, a CAGR of declared dividends 5% and a 6% average yield, it is important to set clear that this payout ratio and dividends are calculated after the booking noncash items from net income as a main criteria to preserve liquidity and avoid overleveraging. Now when we see 5 years ahead, we will find 2 picture of what Promigas can offer to our stakeholders, to you, to the market. Financial outlook always is assuming 5-year projections, assuming soundness and profitability. Being the first picture, basically in organic moves, we can see growing revenue, steady and growing EBITDA absolute terms and in EBITDA margin, showing healthy ratios, deleveraging as well. But there is no need to say that we have to invest. Even in this picture, almost $1 billion in consolidated investment in projects that reflect natural gas distribution will provide pipeline constructions in order to serve our customer needs, the Peru investment plan, the acquisition of Gibraltar's gas treatment plant is put to sale and energy projects, I mentioned before, mainly solar power. Again, there's no need to say that we are not satisfied with this scenario, although enough but whatsoever because that's why in December 2018 we launched a strategic planning process with Bain to define new growth avenue [Technical Difficulty].

[Foreign Language]

I'm sorry. I'm sorry. Again, we want to challenge the organic growth by deploying our strategic planning. If we see from bottom to top, if we do nothing, that is not our intention at all, we would grow 3% in the last 5-year CAGR, I'm talking about our EBITDA, and 1% in the 10-year horizon. If we deploy the first pipe opportunities identified in the planning process, we will reach a growth of 8% in the horizon of 8 years. But if our, let's say, alternative number one -- if we reach the 10 opportunities of our strategic plan, we will be able to show a 15% growth CAGR speaking between the next 5 years and 11% in the next 11 years. So the base case is only a motivation for us, the administration of this company to work towards the base case plus strategy consisting of the 10 opportunities we have in the mine. Therefore, and to finish this segment, if we I can achieve this, what is considered in this plan, we will be able to see other and more appealing picture of our stronger company. Being this, the Promigas, that the new generation will see very clear that it will take 3 to 5 years to get there. A new company deploying activities and are renovated and wider footprint by static projects in massive LNG importation from other markets to Colombia in order to take advantage of our regasification unit, the FENIX project that Ricardo, our VP of Transportation Unit, mentioned, the reaching also maximum potential in Colombia and Peru, in Brilla through digital transportation and deploying an intense activity in energy services. So this is what Promigas will be seen if we are able to perform our strategic plan as we don't have any doubt that we are putting our single effort and commitment in this. So this is the Promigas of the future. Thank you so much.

We will now take a 5 minute break. You may dial in using the number on the screen to ask live question and also continue to type in online questions via the webcast question window. [Break]

We will now begin the question-and-answer session. We will begin with the live questions and then move to the questions submitted via the webcast. [Operator Instructions] I would like to turn the call over to Mrs. Juliana Vergara.

Thank you, operator. We have received several questions from the audience. I will start with the first one from Eduardo Greca of ICM, and it has to do with our diversification strategy. I will first read the question in English and then in Spanish. Could you please provide more detail about the strategy to diversify 50% of the income? Are you looking at other countries apart from Colombia and Peru? What other businesses apart from gas are you looking at? What is the timing of this diversification? Now I will read it in Spanish. [Foreign Language]

I will take the question. I appreciate, Eduardo, for the question, and I will say the following. Our plan is continue for now that for the total of our revenues. 50% of those would come either from other geography or from other business different than gas. First, I will refer to geographies. As we were seeing in my initial presentation, there are countries where the courage of gas over the population is extremely low, case of Mexico. Mexico is 8%. Brazil is 5%. Peru, where we are, is 11%. So that we are better -- we have a huge potential towards the future. And then the idea would be just to go after these countries. We want to be in Mexico. We want to go to Brazil. We want to go to Ecuador. We want to go to Chile. And as there are opportunities to either acquire or to develop distribution grid, we'll be just pursuing those opportunities. So also, we would like to be -- have more presence throughout the Caribbean LNG business. So that's also an additional geography we are just looking for. In terms of business, of course, natural gas is our core business, but we started like 2 -- almost 3 years ago in the renewable business. Right now, our capacity in renewables are nearly 20 megawatts. So the idea would be for 2025 to be over 100, but the potential for the next 4 years is around 400. So we will try to catch as much as we can from that business in Colombia and Peru and other countries that I mentioned just right now. Also, we want to strengthen our LNG business. We are planning to expand our regasification plant in the coming years. So that will be another line of business that we want to be stronger. And last but not least, we want to be -- to have more presence in the electricity distribution business. Right now, we own 1 company in the Department of Cauca, CEO, Compañía Energética de Occidente, for the Colombian government to [Technical Difficulty] electricity industry companies, but also more countries. So that is something that we are just analyzing and see if we can pursue some of those companies, either in Colombia or abroad. So in other words, the idea will be to work in those matters. One, in the different geographies, as I mentioned, so in the overall energy, we want to grow the electricity distribution and also to grow the LNG business. That would be my answer. I hope I have answered your question. Thank you very much, Mr. Greca.

Thank you, Dr. Flesch. Our next question comes from several people. Several people have asked questions related to Peru. But the summary of those questions is as follows. Most of Promigas's growth strategy is in Peru. Could you give us more color on the expectations, plans and details on the operation in Peru? What is your view about the country presidential elections? Could CapEx plans be changed? I will read it in Spanish. [Foreign Language]

I want just to ask part of the question regarding the politics and the next elections for President in Peru. Of course, we are waiting for the -- what is going to happen for the second round. That will define who the President will be for the next years. And Mr. Castillo is leading the poll right now. But we will have to wait. I just remember that maybe 2 weeks before the first round, Mr. Castillo wasn't in the first 2 positions. So what he did was, in the last 2 weeks, he led the round and he won. So whatever thing may happen in the next 5 weeks until the election day. Peru lately has been, I would say, facing some instability in politics, and there has been many changes of presidents. But the economy has been doing good. It's a country with a huge potential. The cash reserves are very important. There are other main industries that make Peru very attractive. So we are not expecting to change our plans. We will just go straight to give our plans and to expand our operations in Peru as is defined for the next 10 years. Now for the second part of your question, I would like Mr. Wilson Chinchilla who is our Distribution Vice President to answer that question. Wilson, [Foreign Language]. Thank you very much.

[Foreign Language]

Just translating the answer of Mr. Chinchilla. We have great expectations when it comes to gas distribution. In Peru, our coverage is under 20% yet. So we have a lot of things to do in terms of massification. With our branch, Cálidda, with our business, Cálidda, we have 40%. But remember that we have 94% of distribution when it comes to Cálidda. In the north of the country, in the north of Peru, we have a commitment with the state, that is around 215,000 clients. But the potential is 850,000 clients. That's the potential of the consumers we have in the north of Peru. The same thing with Cálidda. We have 1.1 million, but the potential to reach 2 million people. On the other side, our business of non-bank financing, which is something we started in December of 2020, it's another growth factor definitely. We have credit that is offered to the family, so they can improve their livelihoods. It's another way of doing this social business. Another possibility is to take the expertise and all the experience that we got in Colombia in terms of renewable energies, such as solar energy, photovoltaic energy, cogeneration, efficiency to Peru. And as our CEO, Mr. Flesch, said, we need to be attentive. We need to be always paying attention to the new opportunities that we have in the country. Thank you very much.

Yes. I agree, and this is a good summary of what we were saying about Peru. Thank you very much.

Thank you, Mr. Flesch. Our next question -- and we have received questions regarding the topic of Jobo-Transmetano and the open season. What progress has been made? Have contracts been signed with which companies?

That -- the open season is a regulatory tool that we are implementing in Colombia for the first time. And it's a very niche, transparent and efficient tool where we align production, transportation and demand according to the needs of consumption for the coming years. So when we started to launch the open season, the government and the demand were accelerating our efficiency. Of course, so far, already the pipeline -- where the pipeline will go -- the assignment between Jobo and our gas station in Transmetano. And we have -- we process time line, which is expiring by [Technical Difficulty] more or less. Right now, many customers or many potential buyers have shown their interest to participate at contract for volume for the cost. We are still in that process. Our main customer, [ Eganpiokia ], of course, is not a secret, is [ Empresas Publicano ]. They already have the information. They haven't made a decision so far, but we are pretty optimistic that because the project is very efficient in terms of engineering, in terms of CapEx, at the end, we could agree with [Technical Difficulty]. But all the environmental work, all the legal work, all the gearing work is moving on, and will [Technical Difficulty] result that we could just communicate to the public what would be the, let's say, the decision if we move forward, if we should sit or not or yes. But I would like Mr. Ricardo Fernández, our Vice President of Transportation, maybe to complement my answer. Ricardo, please.

Ricardo, please activate your microphone, please.

Sorry. Sorry. Thank you, Eric. I think that you have given a very good explanation. But I just want -- just to add that this process -- it has its own schedule. So we are right now in the process of -- in the key 1A process. As Eric was mentioning, we have received interest from many companies, especially the LBCs of interior part of the country. As Eric was mentioning, we are also trying to engage in this process with APM. They already have their own issues pending to solve, but we are very optimistic. The expected time of closing contracts is in June. That's the due time to have all the contracts closed. And we have a lot of advances in the technical side, the environmental side, that give Promigas a unique position to finish the project in the expected time of construction. So we are expecting to finalize these conversations and the commercial contracts with the customers by end of June and start operation in 2025. We have a 4-year frame to -- time frame to complete the construction of the pipeline. This is going -- this project is very strategic to the country because it closes the loop of the transmission lines in Colombia, given the country, their liability, that it takes to have all of the main sources of natural gas that are going to be able to attend the markets. So we are very optimistic that we are going to close this successfully. We will have more information for you as the process continues. That -- I don't know if that's like the -- all the information that we have for today.

Thank you, Ricardo. It appears we have time for 1 more question. May I remind the audience that the questions that haven't been answered in the event can be sent to [email protected], and we will respond to them individually as soon as we can, okay? So the last question is from Steffania Mosquera, CrediCorp Capital. And the question is, can you give us an update on tariff and WACC changes?

Yes. We'll let Ricardo to answer that question. Ricardo, please?

Sorry. I had the problem with the -- with my system. I didn't listen very well. So may I listen to the question again, please, Juliana? Sorry.

Sure. I will repeat the question. Can you give us an update on tariff and WACC changes?

Okay. We don't expect many changes in the actual methodology. It will still the same methodology that we are -- we just explained. We already have the WACC resolution. And the new WACC will be in the ranges that I just mentioned. They're still pending some discussions regarding the life -- when the pipelines have the NBUs of the life, which is 20 years. Those are a pending discussion. We -- of course, we have a small exposure to this because our system already have started for 80% of all our pipelines. And also there is a proposed tariff scheme, which is to have 2 phases. Per phase is to change the WACC without changing all of the other variables. Then in the second phase -- includes all the variable like CapEx, OpEx and new demand base for calculating tariff, which is expected in the next 2 years. Those are the discussion pending, but overall, we don't expect a great change in our tariff. And that's the -- the CREG is planning to have its story and is analyzing new changes in the methodology, but that's going to happen in year 2026 above. So for this next 5 year, the discussions regarding this -- the Phase I, which is WACC and without changing the other variables and then the complete actualization from our tariffs in the next 2 years. But we don't expect -- we don't foresee greater changes in tariff.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Eric Flesch, CEO of Promigas, for closing remarks.

Thank you very much. Again, it's been a pleasure to meet with you all this morning and to share all this information about Promigas and the future risk and about right now what we are going to do in the next 10 years. Hope this information is helpful for you. So again, thank you for joining us. And hope that for the very [Technical Difficulty] that this pandemic we overcome, we can meet for another Investor Day in person, and then we can shake hands and we can just exchange information and talk a little more and meet each other a little more. So for now, I appreciate very much your company here and have a blessed day. And thank you so much for joining the Investor Day of Promigas. Have a great day and good rest of week. Bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.