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Enel plans to invest US$900min in Brazil's Eletropaulo between 2019 and 2021, the Italian firm's country manager Carlo Zorzoli said on a conference call following the acquisition of the Brazilian distribution company on Tuesday.
The amount is 34% higher than investments made by Eletropaulo between 2015 and 2017. According to Zorzoli, the majority of the resources will go to improving quality of services and digitalization initiatives in the network, in order to reduce costs and energy losses.
"We will capture synergies with other business lines we have in Brazil to increase our sales to the free market customers and to develop new services. We will also capture the economic benefit of volume growth as the Brazilian economy recovers," said Zorzoli.
The company also plans to implement an efficiency plan to reduce operational costs of the Brazilian distributor, which could bring benefits of between US$150mn and US$200mn by 2021. The company expects a profitability increase of between US$100mn and a US$150mn a year.
"We expect to create additional benefits for other businesses we have in Brazil," said Zorzoli.
The Eletropaulo acquisition turned Enel into the largest distribution operator in Brazil, with 17mn customers and a market share of over 20%. Standard&Poor's and Fitch said the acquisition will benefit Eletropaulo's ratings.