An interview with Astrid Álvarez
What is Grupo Energía de Bogotá?
Grupo Energía de Bogotá (GEB) is a leading multilatina company in the Latin American electricity and natural gas industry, with over 6 million customers in countries like Brazil, Colombia, Guatemala and Peru.
GEB, with over 120 years of experience, is the only group in Latin America to operate in the entire energy chain, including power generation, transmission, distribution and commercialisation, as well as natural gas transportation and distribution.
The group works as a platform for large energy companies to grow and develop their markets. We do this across territories where we operate through a solid infrastructure and by having the highest standards of corporate governance, hence, protecting our shareholders.
What does the Strategic Corporate Plan include? What are the main medium and long-term goals?
By late 2016, GEB formulated its new corporate strategy. We set an ambitious goal: to become the leading Latin American multinational energy company by 2025. This means that by then, Grupo Energía de Bogotá will be the non-mining company with the highest profits in the Colombian market. The aggregated income of the group’s companies is expected to exceed COP$35 trillion (about US$12 billion at current exchange rates), becoming the most valuable holding company on Latin America’s integrated market (MILA).
Three Strategic Business Units were defined in our new strategy:
Urban Energy Solutions: development and operation of infrastructure to meet strong electrical energy and natural gas demand in large cities. Today, GEB provides natural gas and electricity-related energy solutions to over 6 million customers.
Interconnection for Energy Markets: connecting energy generation sources to mega-centres of consumption. This business unit connects regions through 7,800 miles of electrical energy transmission lines and 2,500 miles of gas pipelines.
Low Emission Generation: capitalises on renewable energy opportunities in countries transitioning to sustainable energy, with a current significant base of hydropower generation.
This is a cost-effective growth strategy that will be executed through investments in leading regional companies, global strategic partners, the best human talent available and corporate governance standards that abide by OECD guidelines.
Bogota City Hall approved, in September 2016, EEB’s partial divestment. Can you please provide further details on this operation?
In late 2016, the Bogota City Council authorised City Hall to divest up to 20% of its shares in the company, after which the city will hold a 56%, controlling stake in the group. In this regard, this is not a privatisation, but rather a “democratisation” process that will allow the greatest possible number of citizens to become our shareholders. Divestment is expected to start during the second semester of 2017 with the initial offering going to pension funds and former employees.
The mayor’s office has stated that resources received from this divestment will be used for public infrastructure and transportation projects in the city. Several analysts have forecasted that this process will be one of the most significant transactions in the stock market as well as, undoubtedly, a very valuable opportunity for the company to improve its corporate governance standards.
This process will result in better practices given the new balance on the board of directors, and most importantly, the new shareholder agreement via the majority shareholder declaration. In this regard, we expect the city to provide clear dividend policy guidelines and investment policies, and technical profiles for our board members and other management appointments.
GEB holds a very significant presence outside Colombia. Does the group plan to continue to grow outside the country?
The group–under its new strategic roadmap–will continue to grow and consolidate its presence through its companies in the four consumption markets where we operate: Central America, Colombia, Pacific South region, and the southeast region of Brazil. For the 2017-2020 period, we have an ambitious investment plan of over US$1.5 billion, with US$545 million designated to investments outside Colombia.
GEB will continue its internationalisation process by focusing on countries where we currently operate and where we can competitively develop markets with strategic partners that allow us to optimise resources and expertise, as well as manage risks more effectively.
OECD Forum 2017 issues