(Bloomberg) – Interconecone Eléctrica SA, an electricity service company, is expanding its network of power transmission lines in Latin America to support the increase in renewable energy in the region.
ISA, as the company is known, will be “aggressive” in the tender for lines connected to renewable generation, which can be financed through the sale of sustainable debt, Bernardo Vargas, executive director, said in an interview. The investment grade company has no immediate plans to sell debt, but is monitoring capital markets for opportunities, such as an acquisition, he said.
“Bad times are bad times. But bad times bring opportunities, “said Vargas. “We are watching the debt markets all the time. Generally, we look at domestic debt markets, but given the fact that interest rates are where they are, we look at those denominated in US dollars in New York. ”
ISA, which operates in Colombia, Brazil, Peru, Chile and Bolivia, is interested in projects that will connect customers with solar and wind power generators.
“In all countries we are seeing renewable energy,” said Vargas. “The lines are very important because they help increase the renewable energy footprint. It is a virtuous cycle ”.
Last year, Latin American countries pledged to source 70% of their energy from renewable sources by 2030, which will require building wind, solar and hydro parks and connecting them with customers. Colombia is planning a 30-fold increase in the amount of solar and wind energy it generates in the next three years.
The company’s subsidiary, Consorcio Transmantaro SA, last year became the first corporation in Peru to sell green bonds. The $ 400 million in bonds recovered after a sell-off, trading at around 108 cents on the dollar on Friday, up from 91 cents in March, according to data compiled by Bloomberg.
ISA, which is majority owned by the Colombian government, has abandoned plans for a possible expansion in Argentina and Mexico. Instead, it will focus on Panama and, eventually, North America, Vargas said. The company is preparing to start work next year under a joint venture on a long-awaited power line that will connect Panama and Colombia for the first time.
The company, which also operates toll roads and fiber optic networks, has resumed work on projects across the region with a small workforce after having to close entirely in some countries as governments implemented quarantine measures to stop the spread of the coronavirus.
Despite the closings, ISA posted a 7.2% year-over-year increase in net income in the first quarter with a 14% increase in revenue. Vargas said the company’s business structure, based on long-term, fixed government contracts, largely protects it from temporary drops in energy demand.
“For us, it will not be a tragic year,” he said.
ISA’s shares have outperformed the market since Colombia began its quarantine in March, increasing 38%, compared to 15% for the Colcap benchmark, according to data compiled by Bloomberg.
Original Note: Latin American Power Giant Eyes ‘Aggressive’ Bet on Green Energy
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