AES Gener accelerates its decarbonization

September 29, 2020

• After receiving the payment of US$720 million from Minera Escondida and Minera Spence, AES Gener informed that, like Ventanas 1 and Ventanas 2, the Angamos units will have no contracts and will cease operations as soon as the sufficiency and safety of the system allows.

Santiago, September 29, 2020.- As part of its decarbonization strategy, AES Gener informed by means of an essential fact that part of its thermoelectric plants will no longer be considered strategic assets of the Company, since they will not be associated with the supply contracts and will cease operations as soon as the sufficiency and safety of the system allow.

In line with the strategic goals of AES Gener, on August 31 the agreement of its subsidiary Angamos with the mining companies Escondida and Spence (both subsidiaries of BHP) was formalized, through which it accelerated the monetization of the future value of its PPAs for an amount of US$720 million, completely disassociating the PPAs of Angamos from the physical assets. As of 2022, the Angamos Plant (558 MW) will sell 100% of its energy to the spot market.

Likewise, in the terms provided for in the Disconnection and Cessation of Operations Agreement entered into in June 2019, AES Gener intends to anticipate the withdrawal from operations of Units 1 (114 MW) and 2 (208 MW) to the extent that the system allows it and the regulation has completed its administrative process.

As a result of the successful progress in the implementation of its Greentegra strategy with which it seeks to decarbonize its portfolio, AES Gener will have an impact on its net income of US$560 million during this fiscal year, as a result of the impairment of property, plant and equipment of assets whose income will come exclusively from its activity in the spot market. This non-recurring accounting adjustment will have no impact on the cash flows of the Company.

Ricardo Falú, general manager of AES Gener, pointed out that the decision is in line with the Greentegra strategy, and is another example of the company’s leadership in the energy transition process in Chile. “We have deployed all our capabilities and are moving forward with concrete actions to accelerate the decarbonization of Chile,” he said.

The executive added that they are currently building renewable projects for 719 MW as part of their 2.3 GW growth plan that will be incorporated into the portfolio by 2024. “AES Gener will incorporate 2300 MW of wind, solar, hydroelectric and battery capacity to its portfolio by 2024. This transformation translates into very significant investments and generation of thousands of jobs that will promote social and local development, which is fundamental for the sustainable reactivation of the country,” stated Falú.

The general manager of AES Gener said that “these facts further evidence that the value of the Company lies in its contracts and long-term relationships with its customers and not in coal-fired plants.”