Colbún anticipates higher sales to free customers in 2023 based on a balanced portfolio of assets and projects

PRESS RELEASE from Colbún
December 7, 2022

(Machine translation of the original release, issued in Spanish)

• The Company projects that next year its sales to non-regulated customers will continue to increase, thus going from 41% of its revenues in 2016 to 80% in 2023.
• Regarding investment in renewables, US$1 billion have already been disbursed or committed to date and an additional investment of US$1 billion is projected by 2025.

An update on the progress of its Strategic Agenda and the plans for 2023 was carried out by the energy generating company and energy solutions Colbún SA during its fifth version of Investor Day, which was held this Wednesday in a hybrid format with the presence of more than 110 representatives of investment banks, brokers, institutional funds and AFPs.

When opening the day, the Chairman of the Board of Colbún SA, Hernán Rodríguez, summarized the challenges facing the electricity market as a result of the significant increase experienced by renewable energies - such as operational challenges, transmission network congestion, community involvement and regulatory changes-, later detailing how the Company's Strategic Agenda has addressed these challenges. "We have a clear roadmap, which has been consistent and coherent over time, and which is expressed in this agenda that today we believe is paying off," said Rodríguez, referring to the good performance in results that Colbún SA has achieved in 2023. .

During his speech, the executive commented that, as part of its growth strategy, the Company has already disbursed or committed investments of US$1,000 million in renewables and plans to invest another US$1,000 million by 2025.

For his part, José Ignacio Escobar, CEO of Colbún SA, focused on the deployment of the company's strategy. "Colbún's commitment is to provide a safe, efficient, competitive and sustainable supply, based on two axes: first, having a balanced portfolio of assets and projects, with a presence in different regions and with various technologies, incorporating storage, for example, that it is increasingly important to provide renewable energy continuously. And second, to be the partner that customers need, responding to their most diverse energy needs with the innovative and comprehensive solutions that they require today”, he said.

One of the focuses of the Company's strategy is free clients. Sales to this segment have experienced a sustained increase, which -according to the projections shown to investors- will go from 41% of total sales of Colbún SA in 2016 to 80% in 2023. "Without a doubt, the Unregulated clients have become protagonists of the energy transition, because it is thanks to their demand for energy without emissions that it has been possible to grow in renewable projects”, Escobar pointed out. In addition, he highlighted the growth in the supply of certified renewable energy, which increased from 85 GWh in 2018 to 4,490 GWh in 2022.

International plans and green hydrogen

José Ignacio Escobar reinforced the company's interest in growing through acquisitions both in the countries where it is already present -Chile and Peru- as well as in other international markets.

With respect to new countries where Colbún SA could enter, the strategy aims at renewable assets in operation or ready to be built, favoring renewable project platforms with the development of local teams, the inclusion of partners in said operations and the design of financing sources that limit the Company's exposure. “We are prepared to open up to new markets and also support the energy transition in them. Today, being renewable or having green energy is not enough. We have to find ways so that this investment in green energy is well done”, said José Ignacio Escobar.

Regarding the current portfolio of renewable initiatives of Colbún SA in Chile, the company reported that it comprises more than 1,800 MW in wind projects, over 2,200 MW in solar initiatives and 600 MWh in battery storage. The company proposed to build at least 4,000 MW of generation based on these sources by 2030, doubling its current size. This portfolio of projects includes the recently inaugurated Diego de Almagro Sur, in the Atacama Region, with 232 MW of solar generation plus 32 MWh of storage.

Escobar also emphasized the Company's intention to grow in Green Hydrogen and desalination and water treatment projects, noting that Colbún has competitive advantages in the construction and operation of large infrastructure projects and a client portfolio aligned with the demand for those kinds of services and products.

In relation to green hydrogen, the CEO of Colbún SA detailed the two axes around which the Company is guiding its strategy. On the one hand, an important focus on supporting customers in their demands regarding this technology, making possible, for example, the replacement of part of their fuels with green hydrogen; on the other, enabling large-scale projects for export, which would materialize through large consortiums as partners, in alliances where Colbún can contribute its knowledge in project development, generation and infrastructure.

Market situation and regulatory framework

During the presentation to investors, Juan Eduardo Vásquez, Manager of the Business and Energy Management Division, addressed the current situation of the energy sector, where there is a slight improvement in hydrological conditions and intensive thermal generation, to which Add challenges such as the rise in fuel prices, congestion in the transmission infrastructure and interruption in the payment chain, estimating that its economic impact for the system would be between USD 36 and 78 million.

Paulina Basoalto, the Company's Regulation Manager, meanwhile, referred to some of the issues that are currently on the country's regulatory agenda, such as the price stabilization fund; decarbonization; storage law; and the bill for the promotion of penetration of renewable energies.