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AnnualReport
The Company 10
Business and Markets 16
Electric Business 2014 40
Corporate Governance 74
Our People 86
Corporate Social Responsibility
and the Environment 94
Additional Information 102
AES Gener S.A. Financial
Statements 118
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02
03
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CONTENTS
COMPANY NAME AES Gener S.A.
CHILEAN TAXPAYER ID NUMBER 94.272.000-9
TYPE OF COMPANY Open Stock Company
SECURITIES REGISTRY NUMBER No. 0176
ADDRESS Rosario Norte 532, 19th Floor,
Las Condes, Santiago, Chile
TELEPHONE (56-2) 2686 8900
FAX (56-2) 2686 8991
P.O. BOX No. 3514, Santiago
WEB PAGE www.aesgener.cl
STOCK EXCHANGE TICKER SYMBOL AESGENER
KEY COMPANY DATA
Conventional thermoelectric, hydroelectric, and
combined cycle generation used to produce electricity.
SUCCESSFUL
CAPITAL INCREASE
CHIVOR´S MAIN WATER
CONCESSIONEXTENDED
Angamos bond issue:
US$800MILLION.
CHILE’S LARGEST
GENERATION COMPANY IN
US$150MILLION.
2014
Current generation capacity: 5.082 MW
Capacity under construction: 1.256 MW
Operating on four separate markets: the SIC and the SING in Chile, the SIN in
Colombia and the SADI in Argentina
Diversified portfolio: Generation sources, clients, and markets
Investment grade credit rating: BBB- (Fitch and S&P) and Baa3 (Moody’s)
AES GENER: A SUMMMARY
Financial Summary at December 31 (in thousands of US$)
2012 2013 2014
Gross earnings 589,893 536,386 510,079
EBITDA 660,702 623,029 671,215
Earnings attributable to owners of parent 202,933 201,321 183,651
Total assets 5,831,406 6,591,902 6,836,897
Current liabilities 491,298 892,249 710,849
Non-current liabilities 2,859,087 3,062,687 3,761,689
Non-controlling interests 3,354 93,610 51,807
Equity attributable to owners of the parent 2,477,667 2,543,356 2,312,552
Total Income
2012 2013 2014
2,327,721 2,244,790 2,328,406
EBITDA por Mercado 2014
SIN 262,931 39.2%
SIC 253,586 37.8%
SING 122,921 18.3%
SADI 31,777 4.7%
Total 671,215
Dear shareholders:
It is my great pleasure to update you on what AES Gener
has accomplished in 2014.
2014, a year of innovation and challenges, was one in which
our company contributed greatly to all of the markets in
which we operate, which fills us with immense satisfaction.
We were the power company with the highest generation
in Chile in 2014, providing 28% of the country’s total
generation. We remain the company with the most plants
under construction, helping the country to diversify its
energy supply with projects that provide jobs directly to
over 11,000 workers and that will increase our company’s
installed capacity in Chile by 1,236 MW by 2018. We also
reached record generation at the TermoAndes plant in
Argentina, we completed tests for exporting energy from
Chile to Argentina via Chile’s only international transmission
line, and, in Colombia, we renewed Chivor’s main water
concession for another 50 years.
We remain the company with the most plants under construction, helping the country to diversify its energy supply with projects that provide jobs directly to over 11,000 workers.
LETTER FROM THE CHAIRMAN
The company’s EBITDA was 8% higher this year than in
2013. The increase in earnings, US$671 million compared
to US$623 million the previous year, is due primarily to
increased generation at our plants in both Chile and in
Colombia.
This highlights the company’s solid position in terms of its
operational excellence and its portfolio, which is diversified
in terms of both technology and markets.
Although the company’s profits declined 9% in 2014, the
decrease stems from the amortization of deferred expenses
from our subsidiary Eléctrica Angamos’ debt refinancing,
the depreciation of the Argentine peso, and, to a lesser
extent, the depreciation of the Chilean and Colombian
peso against the U.S. dollar.
2014 was a milestone year for AES Gener, with its record
generation levels, extensive growth with world-class
partners Global Infrastructure Partners, Mitsubishi, and
Antofagasta Minerals, and innovations to maximize value
through leveraging on our existing platforms.
The company has five generation projects under construction,
which will increase installed capacity by 1,256 MW: Alto
Maipo 1 (531 hydroelectric MW on the SIC1), Cochrane 2 (532
coal-fired MW on the SING2), Andes Solar (21 photovoltaic
MW out of a total of 220 MW on the SING), Guacolda V
(152 coal-fired MW on the SIC), and Tunjita 3 (20 run-of-
river hydroelectric MW on the SIN3). .
In terms of innovation, we have not only started using
photovoltaic technology for the first time ever, but we
have also begun construction on a desalinization plant
located alongside the Angamos power plant in Mejillones
that will enable us to reduce costs and, in the future, to sell
desalinated water to third parties.
The company executed several transactions to continue
streamlining its capital structure, the most significant of
which was the refinancing of the Eléctrica Angamos debt
by issuing investment-grade bonds for a total of US$800
million on international markets. The bonds will mature
in 2029.
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The town provides goods and services for the construction of
the Alto Maipo project, which contributes to the development
of the local economy. In addition, over 20% of the project’s
employees are hired from the surrounding area.
Ladies and gentlemen, the results obtained by AES Gener
in 2014 are a demonstration of the ongoing efforts put
forth by each and every employee on a daily basis to help
us hold our position as a leader among South American
generation firms, without losing sight of the need to be a
great place to work and a driving force for development
in all of the countries in which we operate.
I thank you for the trust that you have placed in the
company, in the Board over which I preside, and in our
1000-plus employees. Thanks to the dedication, effort, and
commitment of each one of its people, AES Gener means
reliable energy for Chile, Colombia, and Argentina.
Another achievement was our continuing improvement in
the Great Place to Work ranking thanks to our excellent
teamwork throughout the company.
Additionally, AES Gener received two second place awards
in the First National Sustainability Awards (Primer Premio
Nacional en Sustentabilidad) organized by the Recyclápolis
Foundation and the El Mercurio newspaper. The prizes
were awarded in the “Air” category for the Ventanas plant’s
industrial gas biorefinery project and in the “Water” category
for the Angamos plant’s cooling towers.
These awards were given in recognition of AES Gener’s
commitment to the environment, manifested daily in our
implementation of best practices and our installation of
the latest technology in our plants.
Part of our mission is to work closely with and support the
communities where our plants are located and where our
projects are being built. The company sponsors a number
of initiatives that contribute to these communities through
its community relations policy, whose clear objective is to
help improve our neighbors’ quality of life.
Part of our responsibility as a company is to create jobs and
to promote the use of local goods and services so that we
help grow the economy of the communities in which we
are present. San José de Maipo is a good example of this.
También tuvimos nuestro programa de entrega de becas de
estudio de preuniversitario en Puchuncaví, a partir del cual
los jóvenes, año tras año, han subido considerablemente
su nivel de educación.
Another example is our scholarship program for college
entrance exam preparation in Puchuncaví through which,
year after year, young people have been able to considerably
increase their educational level.
Part of our responsibility as a company is to create jobs and
to promote the use of local goods and services so that we
help grow the economy of the communities in which we
are present. San José de Maipo is a good example of this. ANDRÉS GLUSKI W.Chairman of the Board
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(1) Central Interconnected System(2) Greater Northern Interconnected System(3) National Interconnected System
REGULAR DIRECTORS
ANDRÉS GLUSKI
CHAIRMANMaster in Economics, University of Virginia, USAPh.D. in Economics and International Finance, University of Virginia, USA Passport No.: 6024620Citizen of Venezuela
ARMINIO BORJASAttorney-at-Law, Universidad Católica Andrés Bello, VenezuelaPassport No.: D0259811Citizen of Venezuela
IVÁN DÍAZ-MOLINACivil Engineering, Universidad Nacional de Córdoba, ArgentinaMaster of Science, Carnegie-Mellon University, USAChilean ID No.: 14.655.033-9Citizen of Argentina
JOSÉ PABLO ARELLANOEconomics, Pontificia Universidad Católica de Chile, ChileMaster’s in Economics, Harvard University, Ph.D. in Economics, Harvard University Chilean ID No.: 6.066.460-9Citizen of Chile
MARGARET TIGRE (1)
Bachelor of Science in Accounting, George Mason University, USAPassport No.: 498340129Citizen of the USA
RADOVAN RAZMILICRoad, Canal, and Port Engineering, Universidad Politécnica Superior de Madrid, SpainChilean ID No.: 6.283.668-7Citizen of Chile
TOM O’FLYNNMBA in Finance, University of Chicago, USAPassport No.: 502095720Citizen of the USA
ALTERNATE DIRECTORS
STEPHEN COUGHLIN Bachelor of Science in Commerce, University of Virginia, USA. M.B.A., UC Berkeley, USAPassport No.: 445104208Citizen of the USA
MARTÍN GENESIOElectronic Engineering, Universidad Nacional de Río Cuarto, ArgentinaPassport No.: 25715530NCitizen of Argentina
VARSOVIA VALENZUELABusiness Administration, Pontificia Universidad Católica de Chile, ChileChilean ID No.: 6.662.587-7Citizen of Chile
RAFAEL GONZÁLEZ AMARALCivil Engineering, Pontificia Universidad Católica de Chile, ChileChilean ID No. 6.662.587-7Citizen of Chile
JOEL WILLIAMS ABRAMSON (2)
International Politics and Economics, Middlebury College, USAPassport No.: 046657322Citizen of the USA
BERNERD DA SANTOS BusinessAdministration, Universidad José María Vargas, VenezuelaMaster’s in Finance and Business Management, Universidad José María Vargas, VenezuelaPassport No.: 037105150Citizen of Venezuela
BOARD OF DIRECTORS AND MANAGEMENTas of December 31, 2014
(1) Margaret Tigre replaced Andrew Vesey as Regular Director; Mr. Vesey resigned as Regular Director of the company, effective November 30, 2014.(2) The Board of Directors received the resignation of Joel Williams Abramson from his post as Alternate Director of the company at the board meeting held on February 27, 2015.
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EXECUTIVES
LUIS FELIPE CERÓN
CHIEF EXECUTIVE OFFICERIndustrial Civil Engineering, Pontificia Universidad Católica de Chile, ChileMaster of Science in Accounting and Finance, The London School of Economics, EnglandChilean ID No.: 6.375.799-3Citizen of Chile
VICENTE JAVIER GIORGIO
CHIEF OPERATIONS OFFICERElectronic Engineering, Universidad Tecnológica Nacional, ArgentinaMBA, Universidad del Cema, ArgentinaChilean ID No.: 23.202.311-2Citizen of Argentina
DANIEL STADELMANN (1)
CHIEF FINANCIAL OFFICERBusiness Administration and Finance, University of St. Gallen, Switzerland MBA, IMD, SwitzerlandChilean ID No.: 6.921.313-8Citizen of Chile
LUIS KNAAK
CHIEF ENGINEERING AND CONSTRUCTION OFFICER Mechanical Engineering, Universidad Santa María, ChileMaster’s in Industrial Engineering, Pontificia Universidad Católica de Chile, ChileChilean ID No.: 11.261.393-5Citizen of Chile
VALERIE BARNICH
CHIEF DEVELOPMENT OFFICERCivil Industrial Engineering, Université Libre de Bruxelles, BelgiumChilean ID No. 14.642.201-2Citizen of Belgium
ALBERTO ZAVALA
LEGAL COUNSELAttorney-at Law, Pontificia Universidad Católica de Chile, ChileChilean ID No.: 7.054.225-0Citizen of Chile
MARIANA SOTO
CHIEF CORPORATE AFFAIRS OFFICERAttorney-at-Law, Universidad de Chile, ChileChilean ID No.: 12.240.551-6Citizen of Chile
(1) Daniel Stadelmann Rojas left the company on December 31, 2014 and was replaced by Ricardo Manuel Falú on January 2, 2015. Mr. Falú is a Certified Public Accountant from Argentina. He earned his undergraduate degree at the Universidad Nacional de Salta in Argentina and received his MBA from the IAE Business School, where he graduated Summa Cum Laude.
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THE COMPANY
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AES Gener S.A. (AES Gener or the Company) is an open stock corporation whose mission is to generate electricity in Chile safely, reliably, and sustainably, fulfilling its commitments to customers, shareholders, employees, communities, suppliers, and other individual and group stakeholders.
INTRODUCTION
MISSION, VISION Y CORPORATES VALUES
OUR COMPANYWe use our electricity platforms and knowledge to provide
energy and infrastructure solutions for the markets in which
we choose to operate.
OUR MISSIONWe use our electricity platforms and knowledge to provide
energy and infrastructure solutions for the markets in which
we choose to operate..
CORPORATE VALUES AND BUSINESS ETHICSThe Company has always been committed to its values, the
foundation for its Code of Conduct, which provide guidelines
on how to conduct its day-to-day business.
The Company has various ways of promoting the concrete
application of these values on the job, and it develops
activities and materials that encourage employees to
reflect on them. The Code of Conduct is distributed to (and
accepted by) all of the Company’s collaborators. It is also
given to contractors, suppliers, and business partners, and
is available on the Company’s web site. The main aspects
of the Code are:
Safety FirstGuaranteeing safe operations at our facilities is the
cornerstone of all daily activities and decision-making.
Company members must make work-related safety and risk
prevention a prime concern for personnel and contractors,
and in the communities in which they work. AES Gener
periodically holds different activities for all of its workers
throughout the Company, including monthly talks at all the
facilities, in order to keep this culture of safety alive and well.
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Act with IntegrityCompany employees must be honest, trustworthy, and
responsible. Integrity must be the essence of their individual
behavior and of their interactions with one other and with
third parties on the job.
Honor CommitmentsThe individuals who make up the Company must honor
the commitments the organization has made to all of its
stakeholders: workers, customers, communities, shareholders,
investors, suppliers, contractors, and partners.
Strive for ExcellenceCompany members must strive to be the best in all they
do and to have world-class levels of performance.
Enjoy the JobMembers of our organization know that work can be
interesting and gratifying. They are called upon to enjoy
their work and to value the satisfaction of being part of a
team that makes a positive difference.
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1889
The Chilean Electric Tramway and
Light Company is founded in Santiago.
Its assets are merged in 1921 with
those of the Compañía Nacional de
Fuerza Eléctrica, created in 1919, to
form the private enterprise Compañía
Chilena de Electricidad (Chilectra).
1970
Chilectra is nationalized and is taken
over by the Corporation for the
Development of Production (CORFO).
1981
The Company is restructured into
a parent, Chilectra S.A., and three
subsidiaries: Chilectra Metropolitana
S.A. (serving the Santiago metropolitan
area), Chilectra Quinta Región S.A.
(serving Valparaiso and the Aconcagua
Valley), and Chilectra Generación S.A.
(an electricity generation company
and owner of the former Chilectra’s
transmission assets).
1989
The Company’s name is changed
to Chilgener S.A. upon completion
of the privatization process, begun
in 1986 and finalized in 1988 when
CORFO transfers 100% of Chilectra
Generación S.A.’s ownership to the
private sector.
Chilgener S.A. has an installed capacity
of 579 MW distributed throughout
Chile’s Metropolitan and Valparaiso
Regions.
1998
Once again the Company’s name is
changed, this time to Gener S.A., to
reflect the Company’s new international
standing as it expands its operations
to new markets and businesses both
in Chile and abroad.
Gener is involved in the electricity
generation business in Chile, Argentina,
Colombia, and the Dominican Republic.
It also expands into other activities such
as steam generation; coal extraction
and sales; natural gas exploration,
extraction, and transportation; oil
exploration and production; densified
biofuel production and sales; shipping
and port services; and engineering
services provided primarily to the
electricity and sanitation sectors.
2000
The Company begins the search for
a strategic partner or investor that
will enable it to continue growing,
considering its smaller size and more
limited debt capacity as compared
to its large international competitors.
AES Corp, through its subsidiary
Inversiones Cachagua Ltda., launches
a tender offer for a controlling
percentage of the Company. It also
enters into an agreement with the
French company TotalFinaElf under
which the latter agrees to purchase
Gener’s electricity assets in Argentina.
Inversiones Cachagua Ltda. purchases
61.11% of Gener’s capital stock while, in
the U.S., Gener’s ADRs, representing
a 34.56% stake in the Company, are
exchanged for AES Corp shares.
2001
Inversiones Cachagua Ltda., through
a second public offering in Chile,
acquires an additional 2.87% of the
Company’s stock for a total ownership
of 98.54%, a stake that will later
increase to 98.65% through other
purchases on the stock market.
The Company changes its name to
AES Gener S.A. and begins to sell
assets in order to concentrate the
Company’s business activities in
power generation, primarily in Chile.
2004
In 2004, through a capital increase,
Inversiones Cachagua’s stake in the
Company increases to 98.79%.
2007
The Company undertakes its first
expansion phase involving the
construction and commercial startup
of 1,696 MW, which represents a
significantly larger installed capacity
and an investment of roughly US$3
billion.
This first expansion phase incorporates
generation assets including Eléctrica
Ventanas’ efficient Nueva Ventanas
coal-fired plants (272 MW), Eléctrica
Angamos’ two Angamos units (545
MW), Eléctrica Campiche’s Ventanas
IV (272 MW), and the third and fourth
units owned by the related company
Guacolda (304 MW). Backup capacity
includes two diesel-fired units, Los
Vientos (132 MW) and Santa Lidia
(139 MW). The expansion phase also
includes two battery energy storage
OUR HISTORY
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systems (BESS) in Chile, Norgener
BESS (12 MW) and Angamos BESS
(20 MW).
2009
From 2006 to 2009, Inversiones
Cachagua sells part of its 98.79%
ownership in AES Gener in several
stock market transactions:
• 2006: 7.59% sold
• 2007: 0.91% and 10.98% sold
• 2008: 9.55% sold
However, AES Gener also carries out
two capital increases on the stock
market in which Inversiones Cachagua
retains its stake:
• 2008: US$272 million capital increase
• 2009: US$246 million capital increase
By the end of 2009, Inversiones
Cachagua holds a 70.67% stake in
AES Gener.
2012
A second expansion phase gets
underway, involving the construction
of five power generation projects
totaling 1,256 MW and an investment
of some US$4 billion. Construction
begins on the Tunjita hydroelectric
project (20 MW) in Colombia and
the fifth Guacolda unit (152 MW) on
the Chilean Central Grid, in July and
October 2012, respectively.
2013*
Construction begins on the Cochrane
thermoelectric project (532 MW) on
the Chilean Northern Grid at the end
of March 2013 with the Mitsubishi
Corporation as a minority partner,
with 40% ownership in the project.
Construction also starts on the Alto
Maipo hydroelectric project (531
MW) with Minera Los Pelambres, a
subsidiary of Antofagasta Minerals,
as a minority partner, also with a 40%
interest in the project.
Included in this second phase in 2014
is the construction of the first stage
of the 21 MW Andes Solar project on
the Northern Grid and a desalinization
plant adjacent to the
Angamos plant in Meji l lones.
Investment also continues
in emissions control equipment, begun
in the last quarter of 2012 at the
Norgener 1 and 2 and the Ventanas
1 and 2 plants.
The Ventanas IV plant starts
commercial operations on the Central
Grid, completing the first phase of the
expansion plan and consolidating the
Company as a key market player as
it successfully meets Chile’s growing
energy demands.
2014
After concluding a stock option period
on a US$150 million capital increase
and a total subscription of 98.6%,
Inversiones Cachagua increases its
ownership slightly to 70.71%.
*The second expansion phase begun the previous year continued in 2013.
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busiNEss ANd MArkETs
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As of December 31, 2014, with all of its plants in operation, the
Company provides electricity to the Sistema Interconectado
Central (SIC, Central Grid) through four run-of-river
hydroelectric plants, one coal-fired thermoelectric plant,
three diesel-fired thermoelectric plants, and one cogeneration
plant, all of which are owned directly by AES Gener.
Through its subsidiaries, it also provides the SIC with electricity
from a combined cycle plant that can operate on either
natural gas or diesel oil, and from three diesel oil-fired plants,
all of which are owned by Sociedad Eléctrica Santiago SpA.
(Eléctrica Santiago). Two coal-fired thermoelectric plants,
one owned by Empresa Eléctrica Ventanas S.A. (Eléctrica
Ventanas) and the other by Empresa Eléctrica Campiche
S.A. (Eléctrica Campiche), also provide power to the SIC.
AES Gener also supplies the grid with power through its
related company Empresa Eléctrica Guacolda S.A. (Guacolda),
which operates four coal-fired units on Guacolda Island in
Huasco in the Region of Atacama.
Additionally, the Company provides electricity to the
Sistema Interconectado del Norte Grande (SING, Northern
Grid) through a coal-fired thermoelectric plant in the city
of Tocopilla, owned by Empresa Eléctrica Angamos S.A.
(Eléctrica Angamos), which also has a coal-fired plant in
the municipality of Mejillones.
This combination of power generation options provides AES
Gener with competitive advantages in the Chilean electric
market, as the company does not depend exclusively on a
particular energy source to produce electricity.
In addition to its activities in the Chilean power industry,
AES Gener produces electricity in Colombia through its
subsidiary AES Chivor, which has a hydroelectric plant at
the Boyacá reservoir, and in Argentina through its subsidiary
TermoAndes S.A. (TermoAndes), which has a natural-gas-
fired combined cycle plant in Salta.
TermoAndes is also connected to the SING through a
transmission line owned by the subsidiary InterAndes and
to the Sistema Argentino de Interconexión, or SADI, the
Argentine Grid.
(1) Some of the plants have more than one generating unit.
AES Gener supplies electric power to four separate markets: the Central Grid (SIC) and the Northern Grid (SING) in Chile, the National Grid (SIN) in Colombia, and the Argentine Grid (SADI).
COMPANY OPERATIONS
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AES Gener is also in the business of transporting natural
gas through GasAndes S.A. and GasAndes Argentina S.A.
The company is currently in the process of building the
Cochrane thermoelectric plant owned by the subsidiary
Empresa Eléctrica Cochrane S.A.. (Eléctrica Cochrane)
in the Antofagasta Region, the Alto Maipo run-of-river
hydroelectric plant owned by the subsidiary Alto Maipo
SpA (Alto Maipo) in the Metropolitan Region, the Tunjita
run-of-river hydroelectric plant in Colombia owned by AES
Chivor, and the fifth unit at the Guacolda complex in Huasco
in the Atacama Region, owned by the subsidiary Guacolda.
As of December 31, 2014, Inversiones Cachagua SpA owns
a 70.71% stake in AES Gener. Inversiones Cachagua SpA is a
subsidiary of AES Corp (AES), an international power and
infrastructure company that does business in 21 countries.
Its main offices are located in Arlington, Virginia, in the U.S.
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THE AES GENER* GROUP OF COMPANIES
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NOTE:This diagram presents the companies with their full corporate name (e.g. AES Gener S.A. and
Sociedad Eléctrica Santiago SpA).This annual report subsequently refers to the companies an abbreviated form (e.g. AES Gener
and Eléctrica Santiago), except in the Financial Statements.The AES Gener Group includes AES Gener and its subsidiaries and related companies.
*As of December 31, 2014
AFFILIATES ASSOCIATES
50.01% Empresa EléctricaGuacolda S.A
99.99%
%6
13% 99.99%13% 94.82%
5.18%0.01%
94% 92.04%
7.96%
13.01%8.82%
86.99%91.18%
Sociedad EléctricaSantiago SpA
Gasoducto GasAndes S.A.
Gasoducto GasAndes Argentina S.A.
Empresa Eléctrica Ventanas S.A.
Empresa Eléctrica Angamos S.A.
GenerArgentina S.A.
Energen S.A.
TermoAndes S.A.
InversionesTermoenergía de
Chile Ltda.
0.01%
47.50% 99.99%0.01%
99.99%
99.99%99.99% 99.99%
0.01%100%100%60%
60%
99.99%50.63%
0.63%
0.63%
Genergía S.A.
Norgener SpA
AES Chivor S.A.Gener Blue Water Ltda.Alto Maipo SpA
Inversiones Nueva Ventanas SpA
Genergía Power Ltda.
AES Chivor y Cía.SCA E. S. P.
Empresa Eléctrica Cochrane SpA
Empresa Eléctrica Campiche S.A.
0.01%
InterAndes S.A.
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NOTE:This diagram presents the companies with their full corporate name (e.g. AES Gener S.A. and
Sociedad Eléctrica Santiago SpA).This annual report subsequently refers to the companies an abbreviated form (e.g. AES Gener
and Eléctrica Santiago), except in the Financial Statements.The AES Gener Group includes AES Gener and its subsidiaries and related companies.
*As of December 31, 2014
AFFILIATES ASSOCIATES
50.01% Empresa EléctricaGuacolda S.A
99.99%
%6
13% 99.99%13% 94.82%
5.18%0.01%
94% 92.04%
7.96%
13.01%8.82%
86.99%91.18%
Sociedad EléctricaSantiago SpA
Gasoducto GasAndes S.A.
Gasoducto GasAndes Argentina S.A.
Empresa Eléctrica Ventanas S.A.
Empresa Eléctrica Angamos S.A.
GenerArgentina S.A.
Energen S.A.
TermoAndes S.A.
InversionesTermoenergía de
Chile Ltda.
0.01%
47.50% 99.99%0.01%
99.99%
99.99%99.99% 99.99%
0.01%100%100%60%
60%
99.99%50.63%
0.63%
0.63%
Genergía S.A.
Norgener SpA
AES Chivor S.A.Gener Blue Water Ltda.Alto Maipo SpA
Inversiones Nueva Ventanas SpA
Genergía Power Ltda.
AES Chivor y Cía.SCA E. S. P.
Empresa Eléctrica Cochrane SpA
Empresa Eléctrica Campiche S.A.
0.01%
InterAndes S.A.
MAIN ASSETS OWNED BY AES GENER
(MAP SHOWING THE COMPANY’S PRESENCE IN SOUTH AMERICA)
CHILE
AES GENER SING
21 MW
in construction
AES GENER
SIC
90 MW
AES GENER
SIC
271 MW
ELÉCTRICA
SANTIAGO
371 MW
ALTO MAIPO
531 MW
in construction
AES GENER SIC
15 MW
ELÉCTRICA
SANTIAGO
379 MW
ELÉCTRICA
ANGAMOS
545 MW
AES GENER
SING
277 MW
ELÉCTRICA
COCHRANE
532 MW
in construction
GUACOLDA
608 MW
152 MW
in construction
AES GENER
SIC
340 MW
ELÉCTRICA
VENTANAS
272 MW
ELÉCTRICA
CAMPICHE
272 MW
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Solar
ARGENTINA
COLOMBIA
TERMOANDES
643 MW
AES
CHIVOR
1.000 MW
TUNJITA
20 MW
in construction
Coal
Hydro
Diesel
Natural Gas Biomass
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industry’s companies use in their decision making. Other
agencies include the Superintendencia de Electricidad y
Combustibles (Electricity and Fuels Commission or SEC),
the agency that oversees and supervises compliance
with regulations governing the quality and reliability of
service provided to people and/or assets; the Servicio de
Evaluación de Impacto Ambiental (Environmental Impact
Assessment Service), which carries out environmental
assessments of investment projects prior to their execution
to ensure that the projects meet applicable environmental
standards and that they handle properly any environmental
impacts; and the Superintendencia del Medio Ambiente
(the Environmental Commission), which oversees and
supervises compliance with the commitments made under
the Environmental Qualification Resolutions issued by the
Environmental Ministry. Lastly, the Environmental Courts
are special jurisdictional bodies that resolve any conflicts
that may arise.
The Dirección General de Aguas (General Water Authority,
DGA), an agency in the Ministry of Public Works, issues and
regulates the water-use rights for hydroelectric generation,
while the Ministry of Energy grants the concessions for
generating, transmitting, and distributing electricity for public
use. The construction and commissioning of generation
plants, whether hydroelectric or thermoelectric, require
environmental permits regulated by Chilean law, and
legislation requires that thermoelectric plants be granted
a construction permit as well.
While the Chilean electric system is subject to the ordinary
courts of law, it also has a Panel of Experts, an independent
technical agency whose role is to study and promptly resolve
most controversies that may arise among companies within
the electricity sector, or between one or more of these
companies and the energy authorities.
The electricity sector’s different activities are regulated by
the General Electricity Services Law, DFL 1/1982 enacted
by the Mining Ministry, with its subsequent amendments,
Law No. 19,940/2004, known as Short Law I, and Law No.
20,018/2005, or Short Law II, which did not modify the
fundamentals of Chile’s stable electricity sector model.
These laws were redrafted and systematized under DFL
4/2007 of the Economy, Development, and Reconstruction
Ministry. The sector’s activities are also governed by the
In accordance with the country’s constitution and current
legislation, certain government agencies, including those
related to the electricity sector, perform a regulatory and
oversight role.
These agencies are grouped under the Ministries of Energy
and the Environment. Within this framework, the Comisión
Nacional de Energía (the National Energy Commission
or CNE) is the agency that establishes, regulates, and
coordinates energy policy. It also publishes the semi-annual
indicative investment plan for generation and transmission
activities, whose reports provide important data which the
AN OVERVIEW
Since 1982, the Chilean electricity industry has been based on a private initiative and property structure, with a competitive framework for the generation market and new transmission facilities, and a regulated framework for distribution and transmission based on an efficient company model.
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AREAS OF BUSINESS
CHILEAN ELECTRICAL SYSTEM
corresponding technical regulations and standards.
The industry’s activity is based primarily on long-term
contracts between generation companies and customers
that specify the volume, price, and conditions for the sale
of energy and capacity. The law recognizes two types of
generation company customers: unregulated and regulated
customers:
Unregulated customers are principally and obligatorily
customers whose connected capacity is higher than 2
MW, generally industrial or mining customers, and those
with a connected capacity of between 500 kW and 2 MW
who have opted – for a period of at least four years – for
the unregulated pricing mechanism. These customers are
not subject to price regulation and are therefore free to
negotiate the prices and conditions for supplying electricity
with the generation companies.
Regulated customers, in contrast, are those whose connected
capacity is less than or equal to 500 kW, as well as those
with a connected capacity of 500 kW to 2 MW who have
selected the regulated pricing system, also for a four-year
period. These customers receive electricity from distribution
companies, which must hold public bids to award electricity
supply contracts to meet their consumption needs.
New supply contracts assigned by distribution companies
for their customers’ consumption must be awarded to
generation companies offering the lowest supply price in
regulated public bid processes. These prices, termed long-
term node prices, include indexation formulas and are valid
for the entire term of the respective contract.
More precisely, the long-term node price for energy under
a particular contract is the lowest energy price offered by
the generation companies participating in the respective
public bid, while the long-term node price for capacity is
that set in the node price decree in effect at the time of
the bid process.
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Through an adjustment process, each distributor transfers
an average node price to its customers that is different from
the price that it pays when purchasing from its supplier;
this price may not vary more than 5% from the average
node price throughout the system. This average price is
determined by the CNE, which issues a Technical Report
informing the Ministry of Energy of the results. The Ministry
of Energy then proceeds to set the prices in a decree that
is published in the Official Gazette (Diario Oficial). Within
the regulatory framework, each bid process establishes
specific indexation formulas applicable to the long-term
node prices, and the respective indices are verified monthly
to confirm the price variations.
In Chile, except for the small isolated grids of Aysén and
Punta Arenas, electricity is generated by two major systems.
The first is the Central Interconnected Grid (known as the
SIC), which covers the country from the southern area of
the Region of Antofagasta (the Paposo roadstead) to the
Region of Los Lagos (the town of Quellón) and supplies
electricity to approximately 92% of the country’s population.
The second system is the Northern Interconnected Grid (the
SING), which covers the Regions of Tarapacá, Antofagasta,
and Arica-Parinacota and whose primary customers are
mining and industrial companies. In each of these large
grids, electricity generation is coordinated by the respective
independent Economic Load Dispatch Center, or CDEC, to
minimize operational costs and to ensure that the system
remains highly efficient while meeting all service quality
and reliability requirements established by law.
Specifically, in order to satisfy demand at all times and at
the lowest possible cost, each CDEC orders dispatch from
generation plants based strictly on their variable generating
costs, starting with the lowest variable cost, and does so
regardless of the contracts held by the generation company
that owns each plant. Thus, while the generation companies
are free to enter into supply contracts with unregulated
and regulated customers and are obliged to comply with
such contracts, the energy needed to satisfy demand is
generally produced by the CDEC member whose variable
production costs are lower than the system’s marginal cost
at the time of dispatch.
In addition, the Chilean market is designed to include
payments for capacity (or firm capacity), which are
explicitly paid to generation companies for contributing
to the system’s sufficient availability. These payments
are assigned according to the output each generation
company can guarantee during critical events, particularly
droughts, fuel shortages, and plant failures, and are added
to the final electricity price paid by both unregulated and
regulated customers.
As a result, differences arise between the energy actually
produced and the energy under contract by each generation
company, and between the capacity assigned and that under
contract by each generator, which gives rise to energy and
capacity transfers among the different CDEC members. In
these spot transactions, the companies which, as a result
of the CDEC’s economic dispatch, have generation levels
higher than their contractual energy sales (companies with
generation surpluses) sell energy to those companies with
production levels lower than their contractual energy sales
(companies with generation deficits). A similar situation
occurs with capacity transactions, which are determined
annually by the CDEC and result in transfers from generation
companies that have firm capacity surpluses with respect to
their peak capacity commitments to their own customers,
to those companies which, in contrast, are experiencing
capacity deficits.
The physical and financial transfers are determined by the
CDEC and are valued, in the case of electrical energy, at the
hourly marginal cost of the system’s operation. For capacity,
the price is to the marginal cost of capacity, which currently
corresponds to the short-term peak capacity node price.
The law permits generation companies and regulated
customers to agree voluntarily to temporary reductions
in electricity consumption through the use of incentives.
The purpose is to encourage these customers to conserve
electricity and to make efficient use of their consumption,
particularly during shortages.
In addition, Law 20,257 enacted in 2008 promotes non-
conventional renewable energy (NCRE) sources such as
solar, wind, mini-hydro, and biomass power. Specifically,
this law requires that a certain percentage of generation
companies’ supply contracts signed after August 31, 2007
be supplied by renewable sources. The percentage of
renewable energy required starts at 5% for the years 2010
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to 2015 and gradually increases to a maximum of 10% in
2024. The Law to Promote Non-conventional Renewable
Energy (Law 20/25), passed in October 2013, increases
NCRE requirements by doubling the target established
in Law 20,257 and stipulates that, by 2025, 20% of power
sold under contracts signed after July 1, 2013, must come
from renewable sources.
Another law passed in October of 2013 to promote
investment and competition in the power market is
the Electricity Concessions Law (Ley de Concesiones
Eléctricas), which streamlines the process and time frames
for obtaining electricity concessions. This law simplifies
the process for temporary concessions and improves the
procedure for obtaining permanent concessions by reducing
processing times from 700 to 150 days, identifying potential
observations and opposition, modifying the notification
process, updating the property appraisal procedure, and
resolving conflicts among different types of concessions. It
thus provides greater certainty for the players involved and
allows for a more diversified energy system by facilitating
the incorporation of NCRE.
A noteworthy development in environmental regulations
was the Environmental Ministry’s Executive Decree No.
13/2011, which went into effect on June 23, 2011 and set an
emissions standard for thermoelectric plants. This standard
sets limits for atmospheric emissions of particulate matter
(PM), sulfur dioxide (SO2), nitrogen oxides (NOx), and
mercury (Hg), with different emissions limits for new and
existing plants and for different types of fuel (solid, liquid,
and gas). The standard also set deadlines for existing
facilities’ compliance; for PM, the compliance deadline is
36 months after the standard was enacted, or December
of 2013, and the deadline for NOx and SO2 compliance
is four years after enactment for plants located in areas
declared as latent or saturated (in terms of pollution) and
five years for the rest of the country.
Tax reforms were enacted in 2014 imposing a new tax on
emissions, referred to as the “green tax,” levied on particulate
matter (PM), sulfur dioxide (SO2), nitrogen oxides (NOx),
and carbon dioxide (CO2) emitted into the atmosphere by
plants of 50 MW or higher. The new tax goes into effect
in 2017 and imposes a US$5-per-ton penalty on carbon
dioxide emissions.
For high voltage transmission, the law guarantees
transmission line owners the right to recover all of their
capital, operating, maintenance, and administrative costs.
This is done by dividing the transmission network into three
subsystems: the trunk line, comprised of transmission lines
that are essential to keeping the entire system supplied;
sub-transmission lines, which are primarily power lines that
satisfy consumption in distribution companies’ licensing
areas; and additional lines consisting of those that mainly
provide electricity to unregulated customers or evacuate
electricity from generation plants.
The CNE sets regulated tariffs every four years for the trunk
and sub-transmission line systems based on studies done
by independent consultants on the investment value and
expansion of each of these networks. These studies appraise
the value of existing facilities and recommend works to be
carried out over the next ten years. However, and principally
for the trunk line system, it is market interaction that finally
determines which works are undertaken since the opinions
of the CDEC and the CNE are also taken into account, and
when controversies arise, the issue is submitted to the Panel
of Experts for resolution. The works are finally assigned to
the company offering the lowest annual charge in public
bids held by each CDEC.
.
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OVERALL SHARE ON THE SINCAND THE SING
Total installed capacity for electricity supply in Chile, including
the plants owned by all CDEC-SIC and CDEC-SING members,
amounted to 20,076 MW at the close of 2014. Of this 2014
capacity, 31.9% was hydroelectric generation, 63.3% was
thermoelectric, and 4.8% was wind and solar power. The
AES Gener Group contributed 4,082 MW, or 20.3%, to this
total, including 3,811 MW of thermoelectric and 271 MW
of hydroelectric capacity. During the year, the AES Gener
Group became the country’s largest generation company
overall, as well as its largest thermoelectric generator.
THE CENTRAL GRID (SISTEMA INTERCONECTADO CENTRAL, SIC)
Total installed capacity in the SIC, including the plants
owned by all the CDEC members, amounted to 15,181
MW at the close of 2014, which accounts for 76.3% of all
installed capacity in the SIC and SING grids in Chile. Of
the total, 41.9% is hydroelectric, 52.5% is thermoelectric,
and 5.6% is wind and solar power. Hydrology continues
to be a relevant factor for the SIC, given that the river
flow volumes and initial water levels in reservoirs largely
determine the dispatch from the grid’s hydroelectric and
thermoelectric plants.
The year 2014 began with 27.5% more hydroelectric energy
available in reservoirs than in the previous year, with 2,153.8
GWh available on January 1, 2014. By the end of the year,
the system had sufficient water in reservoirs to generate
some 3,035.6 GWh, 40.4% more than on December 31, 2013.
Of the total demand for power in 2014, 44.9% was supplied
by hydroelectric plants, 52.1% by thermoelectric generation,
and the remaining 3.0% was supplied by wind and solar
power. Total electric power production in the SIC in 2014
was 52,263 GWh, 2.6% higher than in 2013.
The entry of new efficient plants onto the grid in 2014,
combined with more precipitation than in 2013, helped
offset increases in the grid’s marginal costs. The overall
result was an average marginal cost of US$134.80/MWh
in 2014, compared to the 2013 average of US$153.70/MWh
(at the Alto Jahuel node).
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50
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150
200
250
300
dec-14jul-14jan-14jul-13jan-13jul-12jan-12jul-11jan-11jul-10jan-10jul-09jan-09
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SIC: MARGINAL COST OF POWER AT ALTO JAHUEL 220 KV
MARGINAL COST OF POWER AT ALTO JAHUEL 220 KV
2009 2010 2011 2012 2013 2014
[US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh]
January 117.8 114.1 174.3 188.3 122.7 152.4
Febrary 145.5 138.9 242.7 188.8 128.3 142.6
March 138.1 144.5 260.8 240.1 178.5 200.1
April 124.3 139.5 223.9 279.3 171.8 146.7
May 96.8 145.3 246.9 260.3 219.4 148.7
Jun 111.1 157.8 257.4 146.8 251.5 175.5
July 102.2 151.9 196.0 139.4 240.9 202.7
August 97.2 181.4 167.1 172.0 209.9 74.8
September 67.4 132.7 165.9 165.3 95.8 90.1
October 103.0 134.2 136.0 181.1 71.2 76.8
November 83.2 143.0 153.9 190.5 70.9 90.4
December 65.4 199.9 171.2 181.7 83.9 116.8
Promedio 104.3 148.6 199.7 194.5 153.7 134.8
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Increased Capacity
The grid’s installed capacity grew by 1,019 MW in 2014
due to the completion of other generating companies’
projects. Of the total capacity added to the SIC, 405 MW
is hydroelectric generation, 77 MW is thermal generation,
349 MW is wind-generated capacity, and 189 MW is solar
power. The largest projects are Colbún’s Angostura plant (324
MW reservoir hydroelectric power), Antofagasta Minerals’
El Arrayán wind farm (115 MW of wind-generated power),
EPM’s Los Cururos wind farm (110 MW), and SunEdison’s
Llano Llampos solar farm (101 MW of photovoltaic power).
THE NORTHEM GRID (SISTEMA INTERCONECTADO DEL NORTE GRANDE, SING)
Water resources are too scarce on the SING for hydroelectric
power generation. Therefore, 97.2% of the system’s total
installed capacity, which was 4,724 MW at the close of
DEVELOPMENTS ON THE SIC IN 2014
2014, comes from thermoelectric generation. Of this, 45.2%
comes from natural gas plants, 45.7% from coal plants,
8.8% from diesel-fired plants, and 0.4% from cogeneration
plants. The remaining 2.8% is generated by hydroelectric,
solar, and wind power. The consumption areas, primarily
mining companies, are far apart, and some have demand
levels that account for a relatively high proportion of the
grid’s total consumption.
A total of 17,702 GWh was generated in the SING in 2014,
2.7% higher than in 2013. Coal generated 79.6% of the SING’s
energy demand for the year, while 11.1% was generated by
natural gas and 6.4% by diesel or fuel oil; the remaining
2.9% was generated using Non-conventional Renewable
Energy (NCRE). The grid’s average marginal cost declined
from US$80.30 per MWh in 2013 to US$75.60 per MWh in
2014 primarily as a result of lower fuel costs during the year.
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MARGINAL COST OF POWER AT CRUCERO 220 KV
2009 2010 2011 2012 2013 2014
[US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh] [US$/MWh]
January 111.8 100.6 101.6 64.7 99.2 92.6
Febrary 89.9 148.2 96.1 88.1 68.8 98.2
March 91.8 144.5 118.6 78.5 65.8 73.3
April 104.7 143.9 131.9 112.2 82.1 100.2
May 104.9 101.0 104.5 112.3 73.6 86.7
Jun 120.4 120.6 126.2 132.9 74.5 76.4
July 123.1 113.9 76.5 74.9 81.9 85.7
August 127.4 108.0 74.5 67.5 80.0 60.8
September 140.1 121.7 66.5 71.7 64.3 62.7
October 110.3 108.7 105.5 69.1 90.1 61.4
November 120.9 123.8 83.2 81.6 88.3 57.9
December 89.3 122.9 65.6 84.9 95.0 51.5
Promedio 111.2 121.5 95.9 86.5 80.3 75.6
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DEVELOPMENTS ON THE SING IN 2014
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Increased Capacity
Construction began in 2014 on AES Gener’s first solar
power plant, the 21-MW-capacity Andes Solar, which will
inject its power production onto the SING at the Andes
substation. The plant, slated for commissioning in 2015,
has a PPA with Quebrada Blanca, which will purchase all
of the energy produced at Andes Solar.
During 2014, the system’s installed capacity increased by
117 MW due to the projects completed by other generating
companies.
Of the total capacity added to the SING, 90 MW is from
wind, 24 MW is solar, and 3 MW is diesel generation. The
largest addition is the Valle de los Vientos wind farm (90
MW of wind power) owned by Enel Green Power.
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AN OVERVIEW
Since 1994, the electricity sector in Colombia has allowed
private companies to participate in the different types
of businesses in the industry chain, with a free market
framework for the generation and sale of electricity and
a regulated framework for transmission and distribution.
The different activities of the electricity sector are governed by
the Public Service Code, Law 142 of 1994; and the Electricity
Code, Law 143 of 1994. The industry’s activities are also
governed by the regulations and technical standards issued
by the Energy and Gas Regulation Commission (CREG).
The wholesale energy market began operating in July 1995,
and since that time generating companies have to submit
price bids and report the quantity of energy available on
a daily basis in a competitive environment.
There are two types of customers in the market, unregulated
and regulated. Unregulated customers, who must have a
minimum monthly consumption of 100 kW or 55,000 kWh
per month, can negotiate freely with power generation,
distribution, or sales companies. Regulated customers’
consumption may be supplied by either energy sellers or
distributors, and it must be purchased through public bids
that establish two-party agreements that normally last
from one to six years.
OVERALL SHARE ON THE SIN
EThe Colombian electricity system is structured around
a single National Interconnected Grid (SIN), which had
actual installed capacity of 15,528 MW as of December 31,
2014. Of this total, 69.3% is hydroelectric capacity, 29.8%
is thermoelectric, and 0.9% is from alternative resources.
Energy demand during 2014 reached 64,327 GWh, a growth
of 4.4% compared to 2013 demand.
International energy transactions, or TIES, with Ecuador
and exports to Venezuela meant that Colombia continued
to be a net energy exporter, with approximately 850 GWh
exported. This accounted for 1.3% of the demand served
by the Colombian generating system.
COLOMBIAN ELECTRICAL SYSTEM
BUSINESS AREAS
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AES Gener, through its subsidiary AES Chivor, has a
reservoir with an installed capacity of 1,000 MW which, as
of December 2014, represented 6% of the total installed
capacity on the SIN.
DEVELOPMENT ON THE SIN IN 2014
Hydrology in Colombia During the Year
The year 2014 was a dry one overall. Water supplies were
down 94.5% in the first half of the year on the Colombian
grid (the SIN) compared to the historical average. During this
period, AES Chivor contributed only 81.7% of its historical
average, with particularly low levels of power supplied
until the last week in May. Then, in the second half of the
year, water flow in the AES Chivor basin was up to 95.7%
of the historical average, while flows were at 88.5% of the
historical average for the country as a whole.
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AN OVERVIEW
The Regulatory Framework for Argentina’s power industry
was established in Law No. 15,336 of 1960 and Law No.
24,065 of 1992, which together make up the Argentine
Electricity Code and divide the industry’s activities into three
segments: generation, transmission, and distribution. Under
the Argentine Electricity Code, the federal government
created the Wholesale Electricity Market (Mercado
Eléctrico Mayorista, or MEM) with four types of participants:
generating companies, transmission companies, distribution
companies, and large customers; the latter may both by
and sell electricity.
In Argentina, the mixed public/private company CAMMESA
is responsible for coordinating dispatch, managing
transactions on the MEM, and calculating spot prices.
The market participants are CAMMESA shareholders,
who own 80% of the company’s equity, while the Energy
Department (Secretaría de Energía) owns the remaining
20%. CAMMESA’s main objective is to ensure that the
demand for power is supplied at minimum cost. Under
recent changes in regulations, CAMMESA supplies fuels
to generation companies and unit dispatch is determined
considering caloric consumption, price, and fuel availability
for each generator.
The President of CAMMESA is appointed by the Ministry
of Federal Planning, Investments, and Public Services. The
National Electricity Regulatory Agency (Ente Nacional
Regulador de la Electricidad, ENRE) oversees public service
activities in the power industry and enforces jurisdictional
rulings. The Ministry of Federal Planning, Investments, and
Public Services is primarily responsible for implementing the
Argentine Electricity Code through the Energy Department.
This Department’s main tasks are to regulate dispatch
and grid activities in the MEM and to grant concessions
or permits for each activity in the power industry. The
Energy Department is also responsible for establishing
policies for the natural gas and oil industry, which have a
direct impact on thermoelectric generators and the power
industry in general.
In Argentina, generation, distribution, and other general
electricity activities are carried out on the Argentine
grid or SADI (Sistema Argentino de Interconexción), the
country’s main electric power transport system that covers
the entire country.
The generation sector is organized on a competitive basis
in which independent generators sell power on the spot
market. The power supply is highly dependent on fossil
fuels, chiefly natural gas.
The availability of fuel has become an important issue
for the SADI since 2004 due to the decline in natural
gas production in the country. To replace this natural gas
production, the Argentine government has increased the
volume of LNG, gasoil, and fuel oil imports, primarily during
the winter season (May through August).
Regulated and industrial customers on the SADI are defined
as Large Users on the Power Market and are divided into three
clearly defined categories depending on their consumption
level: Major Large Users (GUMA, Grandes Usuarios Mayores),
with a capacity greater than 1 MW and power consumption
of over 4,380 MWh per year; Smaller Large Users (GUME,
Grandes Usarios Menores), with capacity from 30 KW to
2 MW; and Large Private Users (GUPA, Grandes Usarios
Particulares), with capacity from 30 KW to 100 KW.
Contract prices are directly negotiated with industrial
customers in bilateral agreements. They are denominated in
U.S. dollars and include payments for power and capacity.
At the end of 2006, Resolution SE 1281/06 was published
creating the Energía Plus (Energy Plus) program. This
program established a new supply service that can receive
power from generators, cogenerators, or own generation
from companies that were not members of the MEM on the
resolution’s publication date or whose capacity or generation
units were not connected to the grid at that time. The
purpose of the program was to meet the increasing demand
of large customers who consume upwards of 300 kW.
The execution of the Energy Plus program requires a supply
contract between the parties, and the price agreement
must cover the costs involved and include a profit margin.
These contracts and the costs involved must be approved
by the Ministry of Federal Planning, Investments, and
ARGENTINE ELECTRICAL SYSTEM
BUSINESS AREA
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Public Services, and the profit margin is set by the Energy
Department.
Energy Plus contracts are short term, normally expiring within
18 months. As these contracts cover industrial customers’
excess demand, their use of installed capacity is usually
low. In addition, these contracts are supplied through
backup agreements signed with other generators to sell
power that has been contracted but not used, resulting in
a greater load factor.
Power generated by plants participating in the Energy Plus
market is not sold through contracts, but rather on the
spot market at market prices, which have had a ceiling of
AR$120 MWh since Resolution SE 406 of 2003. However,
since the variable production cost is actually higher than
AR$120 MWh, new variables have been included in energy
payments in order to reflect actual variable costs and
guarantee a minimum profit margin of AR$5 MWh.
The Energy Department issued Resolution 95/2013 in March
of 2013, which affects payments to generators that sell
their power on the spot market. This resolution turned the
Argentine power market into an “average cost” compensation
scheme, increasing the sales of generators that were not
selling their production under the Energy Plus program or
through power supply agreements with CAMMESA (these
generators are not covered by Resolution 95).
In May of 2014, the Energy Department issued Resolution
529/2014 to update the prices established under Resolution
95/2013 to reflect increased costs. The resolution also
adds adjustments for certain costs, such as a new charge
to finance major maintenance work and a charge to cover
the difference when using biodiesel as fuel.
Power transmission is a public service supplied by various
companies that have been granted concessions by the federal
government. Currently, one concessionaire operates and
maintains high-voltage facilities, and eight concessionaires
maintain and operate high- and medium-voltage facilities
to which generation units, distribution systems, and large
customers are connected. Transmission systems with
international connections also require concessions that
are granted by the Energy Department. The transmission
companies are authorized to charge tolls for their services.
Distribution is also a public service granted to companies
through concessions. Distribution companies are required to
make power available to the end users within a concession
area regardless of cases where the customer has an
agreement with the distributor or directly with a generator.
Therefore, these companies’ rates are regulated and they
are subject to service quality specifications.
Distribution companies obtain power from the MEM on the
spot market at prices that vary depending on the season.
These seasonal prices, set by the Energy Department, are the
maximum costs of the power acquired by the distributors
and are transferred to regulated customers.
The regulations state that when generation is insufficient
to meet customer demand, the generation companies
participating on the Energy Plus market must buy power
at marginal cost, which is much higher than contract prices.
This risk is mitigated by backup contracts among generators
with sales prices that are lower than the marginal cost but
higher than spot market prices.
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OVERALL SHARE ON THE SADI
Total installed capacity for power supply in Argentina,
including the plants of all of the SADI-member companies,
was 31,405 MW at the end of 2014. Of total energy demand,
63.4% was supplied by conventional thermoelectric
generation, 31.0% by hydroelectric plants, 4.0% by nuclear
plants, and the remaining 1.6% by imports or other types
of power generation. A total of 131,138 GWh of power was
generated on the SADI in 2014, 1.0% higher than in 2013.
No power was imported from Brazil in 2014 due to the dry
hydrological conditions that affected Brazil’s southern region.
The 642.8 MW Salta plant, owned by the subsidiary
TermoAndes, is located in the Argentine province of Salta
and is connected to both the SADI grid in Argentina and
the SING grid in Chile. Before hooking up to the SADI, the
plant supplied only the SING through a transmission line
owned by the subsidiary InterAndes S.A. (InterAndes). In
September of 2007, following the directives of the Argentine
authorities, its TermoAndes steam turbine was connected
to the SADI and then, to maximize its power exports to the
SING, it connected its two natural gas-fired turbines to the
SADI in 2008 and used the steam turbine to supply power
for the Chilean market. However, from mid-December 2011
to the present, 100% of TermoAndes’ generation has been
sold to the SADI. In 2014, TermoAndes was able to remain
the market leader with a 32% share, with 277 contracts
and 1,285 GWh in sales.
During 2014, the Salta plant generated power exclusively
for the SADI, selling 4,455 GWh on that grid. All of the
power was generated with natural gas, of which 1,285
GWh was sold to customers and 3,170 GWh was sold on
the spot market.
DEVELOPMENTS ON THE SADI IN 2014
There were no new plants commissioned on the Energía
Plus market in 2014. .
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MAIN SUPPLY CONTRACTS HELD BY AES GENER AND ITS SUBSIDIARIES IN 2014
Main Energy and Capacity Sales Contracts Energy
[GWh]
Regulated Customers Chilectra S.A. 2,806.5Chilquinta Energía S.A. 1,091.4Empresa Eléctrica Melipilla Colchagua y Maule S.A. 601.0Empresa Eléctrica Atacama S.A. 323.5Compañía General de Electricidad Distribución S.A. 237.9Empresa Eléctrica de Talca S.A. 62.9Empresa Eléctrica Puente Alto Ltda. 75.6LuzLinares S.A. 63.1Compañía Eléctrica del Litoral S.A. 41.3LuzParral S.A. 52.8Energía de Casablanca S.A. 30.5Empresa Eléctrica de Antofagasta S.A. 11.2Empresa Eléctrica de Casablanca S.A. 9.9Unregulated Customers Minera Escondida Ltda. (1) 4,216.4Anglo American Sur S.A. 992.6Compañía Contractual Minera Candelaria 775.8Minera Spence (1) 634.4Corporación Nacional del Cobre 393.9Sociedad Química y Minera de Chile (SQM) 334.2Minera Sierra Gorda SCM 266.8Papeles Bio Bio Ltda. 250.3Cemento Polpaico S.A. 151.1Cristalerías Chile S.A. 96.4Mantos de la Luna S.A. 75.5Minera Quebrada Blanca 74.9Compañía Contractual Minera Ojos del Salado 63.0Proacer Ltda. 51.0CMPC Maderas S.A. 38.4CCU 32.4Fundición Talleres Ltda. 23.7Puerto Ventanas S.A. 7.4Chilquinta Energía S.A. 3.6Minera Río Colorado S.A. 0.7Minera Lo Valdés Ltda. 0.4Minera Los Pelambres (AMSA) 0.0
Main Energy and Capacity Sales Contracts Energy
[GWh]
Empresa Eléctrica Ventanas S.A. (2) 1,956.9
Empresa Eléctrica Campiche S.A. (2) 1,938.5
Empresa Eléctrica Guacolda S.A. 601.5
KDM Energía S.A. 136.1
Energía Coyanco S.A. 78.1
Masisa Ecoenergía S.A. 54.5
Eléctrica San Miguel 3.2
Agrícola Ancali Ltda. 5.8
(1) Includes energy redirected to the spot market(2) Inter-company agreement with AES Gener
AES GENER’S AND SUBSIDIARIES’ CONTRACTS FOR TRANSMISSION SYSTEM USE
AES Gener had several contracts in 2014 with companies
that use its transmission systems, including agreements
with Termoeléctrica Colmito, Enap, Codelco, GNL Quintero,
and others. The Company also has contracts with Chilectra
and Transelec for the use of their transmission systems
and facilities.
MAIN CUSTOMERS AND SUPPLIERS
ElECTriC busiNEss 2014
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FINANCING
The Company undertook significant measures 2014 to streamline its financing structure. This enabled it to ensure financing for its second construction phase, take advantage of market conditions, and increase its financial flexibility.
At the subsidiary level, Eléctrica Angamos refinanced its debt
through a US$800 million senior bond issue, AES Gener’s
largest, and AES Chivor’s bond was paid on its maturity
date at a total of US$170 million. At the consolidated level,
the Company increased its capital by US$150 million with
a 98.6% subscription rate, and two bonds were prepaid,
one 144A bond for US$147 million and a local bond in
the amount of UF1.2 million. Finally, in order to generate
administrative, operational, and commercial synergy, the
Company completed the sale of Eléctrica Guacolda, retaining
an ownership interest of 50% plus one share.
ELECTRIC BUSINESS 2014
All of these transactions have enabled the company to
keep its capital structure balanced and in line with the
requirements of an investment-grade company.
Prepayment of AES Gener Bonds
The Company successfully prepaid two bond issuances
in 2014.
The first took place on January 27 and involved senior
bonds totaling US$147 million issued under Rule 144A and
Regulations S of United States securities regulations. The
funds used in the prepayment were a portion of those
obtained from the subordinated bond issuance that took
place in December of 2013 for a total of US$450 million
and with a 60-year term.
In addition, in July 2014 the Company redeemed its local
Series O bonds early, in the amount of UF1.2 million, as
they matured in June of 2015. The cross currency swap
associated with this debt was also concluded prior to
term in order to convert the bonds’ payments in UF, Chile’s
indexed currency, to United States dollars.
Capital increase of US$150 Million
The AES Gener special shareholder’s meeting held on
October 3, 2013 approved the company’s proposed capital
increase for up to US$450 million.
The Company concluded the stock option period on April
30 with the issuance of new shares. A total of 330,619,858
shares were subscribed and paid at a value of Ch$255 each,
a 98.6% subscription rate for an equivalent of US$150 million.
The funds obtained in this capital increase, plus those taken
in from its operation, will be used, in part, to finance the
Company’s investment plan. The plan involves the construction
of new generation plants, including the Cochrane and Alto
Maipo projects.
AES Gener’s controlling shareholder subscribed and paid
100% of its stock option.
FINANCE 2014 / FINANCIAL HIGHLIGHTS 2014
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Eléctrica Guacolda Transactions
At the end of March, the Company exercised its preferred
stock option to purchase the remaining 50% of Eléctrica
Guacolda stock offered by Empresas Copec S.A. (Copec)
and Inversiones Ultraterra Limitada (Ultraterra).
The Company acquired the shares for US$728 million,
half of which was paid each to Copec and Ultraterra at
the time the purchase agreement was signed. In order to
access sufficient funds to pay the amount agreed upon, the
Company took out a loan for approximately US$700 million
with Deutsche Bank Trust Company Americas, which has
acted as coordinating and administrative agent on behalf
of and representing a syndicate of banks consisting of
Deutsche Bank AG, London Branch, and Sumitomo Mitsui
Banking Corporation.
On the same date as the purchase, the Company sold 50%
of the Guacolda shares, minus one, to a company related to
Global Infrastructure Partners (GIP). The transaction took
place under financial conditions that were substantially
similar to those of the purchase.
The US$700 million loan was paid in full upon completion
of the sale. As a result of the transaction, AES Gener owns
50%, plus one share, of Guacolda stock, while GIP obtained a
49.99% stake. We note that AES Gener does not consolidate
Guacolda into its financial statements.
Eléctrica Angamos Issues Senior Bonds for
US$800 Million
In November 2014, Eléctrica Angamos issued senior bonds
totaling US$800 million under Rule 144A and Regulation S
of United States securities regulations. The bonds mature in
15 years and accrue a nominal annual interest rate of 4.875%.
The purpose of the issuance was to refinance the Project
Finance debt with which Eléctrica Angamos financed the
construction of its two units starting in 2008. The structure
and term of the debt was selected to match the term of the
power sales agreements signed by Eléctrica Angamos and
to take advantage of the favorable interest rates available
on the international credit markets.
The issuance attracted the interest of over 80 investment
accounts in Europe and the Americas, which submitted
orders for over US$2.2 billion, or 2.5 times the amount
offered in bonds. This issuance is the Company’s largest
in senior bonds denominated in U.S. dollars.
The issuance was rated by the international rating agencies
Moody’s and Fitch Ratings at Baa3 and BBB-, respectively,
due primarily to the strength of its contracts with non-
regulated customers, its stable cash flow, and its relationship
to AES Gener.
Citibank, JP Morgan, and HSBC are the banks that coordinated
and led the transaction.
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On December 30, 2014, the Company paid AES Chivor bonds
totaling approximately US$170 million. The bonds had been
issued in 2004 at a nominal annual interest rate of 9.75%.
HEDGING STRATEGY
Since the U.S. dollar is AES Gener’s functional currency, the
Company continued its strategy for hedging exchange rates
in 2014, which limits the Company’s exposure to exchange
risks with the Chilean peso. Although most of the company’s
power supply agreements in Chile have rates denominated
in dollars, they are actually paid in Chilean pesos at an
exchange rate that is fixed for a specific period of time.
Therefore, a strategy was established using exchange rate
futures to hedge against the Company’s net exposure to
the dollar/peso exchange rate.
The subsidiary AES Chivor in Colombia, which uses the
Colombian peso as its functional currency, continued with
an exchange rate strategy to hedge against the company’s
exposure to the volatility of the Colombian currency. This
strategy also uses exchange rate futures, which cover up
to 90% of accounts receivable from bilateral power sale
agreements, whose tariffs are stated in Colombian pesos
once expenses have been deducted in the local currency.
CREDIT LÍNEIn order to give the Company liquidity and flexibility, the
UF6,000,000 five-year credit line taken out in October
2011 with a syndicate of Chilean banks was retained in
2014. As of the end of 2013, this credit line had not been
used. However, the line was modified to take advantage of
market conditions and to provide flexibility for the capital
needs during the construction of the second expansion
phase: the term of the credit line was extended to 2018,
the interest rate decreased, and the Project Finance debt
was excluded from the financial covenants.
INVESTOR RELATIONS
During 2014, AES Gener carried out and took part in a
number of activities aimed at maintaining an ongoing
flow of accurate, reliable communication with current and
potential shareholders and investors, market analysts, and
other interested parties. These activities included an onsite
visit to the Alfalfal plant in San José de Maipo with some 60
investors, which provided an opportunity to show in detail
how a run-of-river plant operates, as well as the similarities
between Alfalfal and the Alto Maipo project. The Investor
Relations team also continued participating in significant
national and international conferences and in breakfast
meetings organized by important financial institutions.
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In 2014 AES Gener’s national and international credit ratings
were ratified by the main credit rating agencies, remaining
at BBB- and Baa3 on the international scale and A+ on the
national scale, all with stable outlooks.
The company’s shares were rated First Class Level 2 by
Fitch Ratings and Feller Rate at the end of fiscal year 2013.
The table below summarizes the Company’s national and
international credit rating on December 31, 2014:
Internacional Nacional
Standard & Poor’s
BBB- perspectiva estable
Feller Rate
A+ perspectiva estable
Fitch Ratings BBB- perspectiva estable
Fitch Ratings
A+ perspectiva estable
Moody’s Baa3 perspectiva estable
Colombian subsidiary AES Chivor’s current international
rating with Standard & Poor’s was confirmed at investment
grade “BBB-” with a stable outlook; the rating has held
steady since 2011.
Moody’s upgraded AES Chivor’s rating from Ba1 to Baa3,
still with a stable outlook, due to that agency’s expectations
regarding the company’s capacity to generate cash flow
over the medium term and to its business policy, subject
to its generous dividend distribution policy.
Both credit ratings are in connection with AES Chivor’s
US$170 million bond issuance. With the early repayment
of the bond on December 30, 2014, the ratings are no
longer relevant.
Fitch Ratings confirmed subsidiary Eléctrica Santiago’s
national credit rating in August 2014 at ‘A’ with a stable
outlook, while Feller Rate upgraded its national rating from
‘BBB’ to ‘A-‘, also with a stable outlook. The upgrade in
Eléctrica Santiago’s rating stems primarily from the strength
of its individual credit profile, as its stable revenue base has
expanded after the commissioning of new generation assets.
The rating report issued by Fitch Ratings held subsidiary
TermoAndes’ national credit rating steady at ‘A’ with a
stable outlook.
CREDIT RATING
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BUSINESS POLICY
The Company’s business policy seeks to minimize cash flow volatility, managing its risks based on market and industry conditions. In order to do so, the following factors are among those analyzed: contract levels, proportion of unregulated and regulated customers that make up AES Gener’s and its subsidiaries’ client portfolio, and contract terms.
In its business analyses, AES Gener estimates demand growth
and projects marginal costs and prices within the system.
Based on this information, the Company determines the
level of contractual sales that will allow it to stabilize cash
flow and manage an acceptable level of risk.
A business factor that is particularly relevant for the Company
is the fact that it is the SIC’s principal thermoelectric
generation company, which provides it with a highly reliable
supply regardless of hydrological conditions. Similarly,
OPERATIONS AND MAINTENANCE
the Company carries out viability studies periodically in
its search for options for expanding its current efficient
generation capacity, and several short-term contracts have
been signed to use LNG at the Nueva Renca backup plant
at competitive prices.
THE AES GROUP´S ACTIVITIES ON THE SIC
The AES Gener Group’s electricity generation capacity on
the SIC was 2,617 MW as of December 31, 2014. The parent
company AES Gener contributes 715 MW produced by four
hydroelectric and five thermoelectric plants.
The Alfalfal, Maitenes, Queltehues, and Volcán hydroelectric
plants generate 271 MW; while the two units at the Ventanas
plants, the Laguna Verde TV (steam turbine), the Laguna
Verde TG (gas turbine), the Mostazal plant (gas turbine)
and the Laja cogeneration plant account for AES Gener’s
thermoelectric generation, with 445 MW of installed capacity.
Sociedad Eléctrica Santiago, meanwhile, has an installed
capacity of 750 MW and is composed of the Renca and
Nueva Renca thermoelectric plants, the Los Vientos TG
plant, and the Santa Lidia TG plant. Of the plants belonging
to the AES Gener Group’s other companies operating in
the SIC, subsidiary Eléctrica Ventanas contributes 272
MW through its coal-fired Nueva Ventanas plant, and the
subsidiary Eléctrica Campiche provides 272 MW with its
coal-fired Ventanas IV plant. Subsidiary Guacolda, in turn,
contributes 608 MW to the grid with its four-unit Guacolda
thermoelectric plant.
During 2014, the AES Gener Group sold a total of 8,884
GWh to its customers on the SIC and to other generators
in the system, 5,408 GWh of which was sold to distributing
companies. AES Gener’s contractual commitments in the SIC
as of December 31, 2014 had decreased by 1.8% compared
to 2013 due to the termination of supply contracts with
CCU and Minera Los Pelambres.
CHILE
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AES GENER GROUP THERMOELECTRIC PLANTS IN THE SIC
AES Gener GROSS CAPACITY
(MW)
Ventanas Plant (1) 340.0
Laguna Verde TV Plant 47.0
Laguna Verde TG Plant 18.8
Laja Plant 12.6
San Francisco de Mostazal TG Plant 25.7
Eléctrica Santiago
Nueva Renca Plant 379.0
Renca Plant 100.0
Los Vientos TG Plant 132.0
Santa Lidia TG Plant 139.0
Eléctrica Ventanas
Nueva Ventanas 272.0
Eléctrica Campiche
Campiche 272.0
Guacolda
Guacolda Plant (2) 608.0
Total 2,346.1
AES GENER GROUP HYDROELECTRIC PLANTS IN THE SIC
AES Gener GROSS CAPACITY
(MW)
Alfalfal 178.0
Queltehues 49.0
Maitenes 31.0
Volcán 13.0
Total 271. 0
Through the year, 100% of the power sold to customers
was covered by power generated by AES Gener and its
subsidiaries plus purchases from other producers in the
system under long-term contracts that the Company has
with Eléctrica San Miguel, Coyanco, Guacolda, Masisa,
KDM, and Ancali.
The power generated at the Nueva Renca plant was important
to the central part of the country in 2014 due to the system’s
water shortage and restrictions on transmission; the plant
was able to lend greater reliability to the SIC’s energy supply
during this time. Short-term liquefied natural gas (LNG)
purchase agreements with various suppliers guaranteed
the availability of this fuel for the plant from January to
mid-May, enabling it to generate 393 GWh with LNG. The
plant also delivered 728 GWh to the grid using diesel oil.
Total production was 80% higher than in 2013.
The AES Gener Group plants, including Guacolda, contributed
26% of the SIC’s gross generation in 2014.
AES GENER’S ENERGY BALANCE IN THE SIC IN 2014 Energy
(GWh)
NET PRODUCTION (1) 7,846
Purchases
Others 812
CDEC-SIC 225
Total Purchases 1,037
Sales
CDEC-SIC 852
Distribution companies 5,525
Unregulated customers 2,507
Total sales 8,884
Losses on the grid -2
(1) Includes generation from the Nueva Ventanas (owned by the subsidiary Eléctrica Ventanas), Ventanas IV (owned by the subsidiary Eléctrica Campiche), and Nueva Renca (owned by the subsidiary Eléctrica Santiago) plants.
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THE AES GENER GROUP´S ACTIVITIES ON THE SING
The AES Gener group has gross generation capacity of
1,465 MW on the SING. The Norgener plant contributes
277 MW from its plant of the same name, 643 MW comes
from the Salta plant owned by the subsidiary TermoAndes,
and 545 MW is generated by the two units at the Angamos
plant, which belongs to the subsidiary Eléctrica Angamos.
The subsidiary TermoAndes’ Salta plant, located in the
Argentine province of Salta, is connected to the SING by
means of a 345 kV, 408-kilometer long transmission line
that connects the Salta substation to the Andes substation
located in Chile’s Antofagasta Region. We note that in 2014
the TermoAndes plant, which is also connected to the
Argentine grid, only exported power to the SING under
blackout emergency conditions, since, as of December
2011, the plant sells power only to the SADI in Argentina.
The AES Gener Group’s coal-fired plants, Norgener and
Angamos, have BESS systems (battery energy storage
system) that allow them to replace a portion of their base
reserves and increase their maximum dispatch capacity.
The Norgener plant’s 12 MW BESS system was installed at
the SING’s Andes substation, while the Angamos plant’s
BESS, with its 20 MW total, was installed at the Angamos
substation.
In 2014 the Company leased the CTM3 combined cycle
plant from E-CL and purchased LNG to operate the plant
in order to lower operating surcharges by replacing higher-
cost diesel generation.
Also in 2014, the Norgener and Angamos plants’ gross
production on the SING was 2,103 and 3,955 GWh, respectively,
while the CTM3 plant run on AES Gener’s natural gas
contributed another 322 GWh. All total, this accounts for
36.1% of overall production on the SING.
Norgener generated a total of 1,964 net GWh and purchased
790 net GWh on the spot market during the year. Overall
consumption of its customers SQM, Minera Escondida,
Codelco, Minera Sierra Gorda, and Minera Quebrada Blanca
for the year was 2,985 GWh. Angamos, in turn, generated
a total of 3,544 net GWh and sold a total of 1,472 GWh on
the spot market. The actual consumption of customers
Minera Escondida and Spence was 1,981 GWh.
THE AES GENER GROUP’S THERMOELECTRIC PLANTS
IN THE SING
GROSS CAPACITY
(MW)
Norgener
Norgener Plant (1) 277.3
Angamos
Plant Angamos (2) 545.0
TermoAndes
Salta Plant (3) 642.8
(1) Unit 1: 136.3 MW; Unit 2: 141 MW(2) Unit 1: 272.4 MW; Unit 2: 272.6 MW(3) Plant located in Argentina and connected to the SING by a transmission line that belongs to InterAndes, a subsidiary of AES Gener. The plant currently sells power exclusively to the SADI grid in Argentina.
NORGENER’S ENERGY BALANCE IN THE SING IN 2014
Energy
(GWh)
NET PRODUCTION 1,949
Purchases
Otros Generadores 316
CDEC-SING 790
Total purchases 1,107
Sales
CDEC-SING 0
Unregulated customers 2,985
Total sales 2,985
Losses 71
Operation and Maitenance / Chile
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49ANGAMOS’ ENERGY BALANCE IN THE SING IN 2014
Energy
(GWh)
NET PRODUCTION 3,544
Purshashes
CDEC-SING 0
Total purchases 0
Sales
CDEC-SING 1,472
Unregulated customers 1,981
Total Sales 3,453
Losses 91
in the subsidiary Guacolda. Underlying the success of this
project is the Company’s ongoing effort to comply in full
with all legal standards and, in many cases, going beyond
the requirements of such standards.
Another new standard that went into effect in 2014 in the
power generation industry is Executive Decree No. 38
regarding noise emissions, effective as of June 2014. This
standard required that modifications be made at the Nueva
Renca plant located in the municipality of the same name
in Santiago, as well as at the Ventanas plant. The project
to install the equipment to meet these new requirements
was contracted with an American company with extensive
experience in these works and required an investment of
some US$8 million.
A highlight in environmental matters was receiving two
second-place awards in the contest organized by Recyclápolis
and El Mercurio. The first award was in the Water Category
for the Cooling Towers project at the Angamos plant, and
the second was in the Air Category for the Industrial Gas
Biorefinery project at the Ventanas plant. A total of 77
projects from different companies in a wide range of areas
participated in the contest in its five different categories.
The Cooling Towers project reduces the amount of seawater
flow used to cool the Angamos plant by more than 90%.
This significantly reduces the environmental impact in the
water transport area and lowers electricity consumption,
thus decreasing the emissions of greenhouse gasses.
OPERACIÓN Y MANTENIMIENTO
The Company, and particularly the Operations Division,
dealt with a number of operational challenges in 2014,
such as taking over operations at Guacolda as a new AES
Gener plant, commissioning new atmospheric emissions
control equipment, and installing equipment to reduce
noise emissions.
Executive Decree No. 13 of January 18, 2011 and published
on June 23 of that year established new emissions limits
for new and existing generation plants. In order to comply
with this standard, which is among the most stringent in the
world, modern emissions control equipment was installed
in Ventanas units 1 and 2, in Norgener units 1 and 2, and in
Guacolda units 1, 2, and 4. This project required an investment
of some US$360 million, including the Company’s share
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The Industrial Gas Biorefinery project makes partial use of
the gasses emitted by Ventanas units 1 and 2 as a nutrient
source for biomass (microalgae), which is then processed
and converted into biofuel (biodiesel and biogas), lipids
(for use in foods), and biofertilizer.
As for new plants, in April 2014 AES Gener took over
operations of all operating units at the Guacolda complex. This
milestone kicks off the process, still under development, by
which Guacolda will reach the same operating, maintenance/
planning, and administrative standards as those used by
AES Gener and, in general, the will apply the full range of
AES Gener initiatives aimed at operating excellence and
ongoing improvement.
Regarding major maintenance, although no overhauls were
performed in 2014, the Company did carry out regular annual
preventive maintenance, including extensive maintenance on
the Costa Complex Unit 2 at Ventanas. Various boiler pipe
panels were replaced under the Performance Parameter
Recovery Plan for that unit, with which approximately 60%
of the Recovery Plan is now complete. The plan is slated
for conclusion in 2017.
The Operations Department dedicated a good portion of its
efforts in 2014 to the continuing process of implementing
the Physical Asset Management System under the AMS
(Asset Management Standards) Project. This system, a step
beyond the previously adopted AMF (Asset Management
Framework), has practice standards that, like its predecessor,
are based on the British Standard Institution’s (BSI) PAS
55. It is also completely in line with ISO 55,001, 55,002
and 55,003:2014 standards. The goal of this project is to
comply with the physical asset management guidelines
set out by AES Corp.
Work was also done in 2014 to develop the reference
aspects, harmonize the system with the existing GENERA
program, begin skill administration systems, manage OPEX
and CAPEX, and systematize risk management. The program
will then practice the implementation stages in order to be
certified as scheduled.
AES Gener believes that one way to generate a difference
in the market is to make the most of its people’s experience
and knowledge to discover innovative ideas that will provide
new benefits. Accordingly, AES Gener was once again
recognized as one of Chile’s most innovative companies,
earning 1st place in the energy company segment of the
Most Innovative Companies of 2014 ranking drawn up by
the Universidad de Los Andes’ ESE Business School. The
next step for 2015 will be to complete implementation of
the innovation practices administration system, integrating
this incremental system, also known as the ongoing
improvement system, into the Company’s integral concept
of Operational Excellence.
One of the values AES Gener emphasizes most is the
safety of its own and its contractors’ workers. The company
has proudly completed implementation of its integrated
environment, health, and safety management system,
called Genera, which was developed under ISO 14,001 –
OHSAS 18,001 standards and has been certified for all of
its business units. Another important milestone reached
during the year was completion of construction on the
Ventanas IV unit, with over 7 million man hours worked
without lost time incidents, an achievement recognized and
honored by the National Safety Council (Consejo Nacional
de Seguridad), which acknowledged this accomplishment
as one of the most significant in Chile. Even more important
was the recognition this agency gave AES Gener with its
Rosalino Fuentes award, given to the Chilean company with
the best accident prevention record. Finally, the Workers’
Safety Institute (IST, Instituto de Seguridad del Trabajador)
honored AES Gener with its IST Grand Prize, an award the
institute gives to its member company that has had the
most outstanding prevention program.
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AES GENER (SIC)Termoelectric Plants
AES Gener’s thermoelectric units include Units I and II at
the Ventanas plant; the two diesel-fired steam units at the
Laguna Verde plant; the diesel-fired turbine at the Laguna
Verde plant; the diesel-fired turbine at the San Francisco
de Mostazal plants; and, finally, the Laja plant, which runs
on forestry biomass fuel.
Unit I at the Ventanas plant generated 694 GWh in 2014.
It underwent seven days of maintenance during the year,
during which baghouse filters were installed and started
up to limit emissions as required under Executive Decree
13. Unit II, in turn, generated 1,082 GWh and underwent 39
days of maintenance. Particularly important is the work
done on the turbogenerator, where the blades of the first
stage of the low-pressure turbine were repaired, the rotating
exciter was replaced with one that is digitally controlled, and
maintenance was performed on the turbine’s main valves.
On the boiler, 60% of the main superheater’s pipes were
replaced, along with 40 domestic pipe panels, expansion
joints, and carbon pipes. In addition, the baghouse filters
to control emissions were connected and started up, and
safety valve silencers were installed.
A lining was applied to the main condenser’s pipes, which
will extend their useful life.
One of the water circulation system’s main pumps was
replaced, and a new system of fixed and movable screens
was installed to allow for more efficient filtration of marine
solids.
These improvements are all part of the Recovery Plan
mentioned previously, which will minimize load limit
constraints and forced outages.
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The San Francisco de Mostazal diesel-fired TG operated
occasionally, generating 1.3 GWh, while Laguna Verde’s
steam-fired units remained available to the grid but without
production in 2014. Its diesel-fired TG was unavailable to
the grid during the course of the year.
Finally, Laja, the only biomass plant, generated a total of
32 net GWh, in addition to the 160,645 tons of steam sold
to the forestry company CMPC Maderas S.A. An important
development this year was the completion of the process
for replacing of all of the pipes on the boiler’s generating
bank, giving the plant greater reliability during the life of
the contract.
Plant Location Commissioned Turbine Units Capacity SpecíficConsumption
Availabity2013
Availabity2014
(MW) (BTU/KWh) (%) (%)
Ventanas 1 Ventanas, V Región 1964 coal-steam 1 120 10,808 66.97 79.05
Ventanas 2 Ventanas, V Región 1977 coal-steam 1 220 10,744 84.71 74.21
Laguna VerdeLaguna Verde, Valparaíso, V Región
1939-1949 diesel-steam 2 47 19,031(1) 100.00 100.00
Laguna VerdeLaguna Verde, Valparaíso, V Región
1990 diésel-TG 1 18.8 11,419(1) 0.00 0.00
San Francisco de Mostazal
San Fco. De Mostazal. VI Región
2002 diésel-TG 1 25.7 14,275 100.00 100.00
Laja Cabrero, VIII Región 1995cogenera-tion with biomass
1 12.6 16,602 90.54 90.68
These facilities are owned by AES Gener.There was no generation during the year; this figure is that of the plant’s design.
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Run-of-River Hydroelectric Plants
AES Gener’s Alfalfal, Maitenes, Queltehues, and Volcán
hydroelectric plants are all “run of river,” meaning that they
do not have reservoirs, which minimizes their environmental
impact.
These plants, with an installed capacity of 271 MW, are all
located in the municipality of San José de Maipo The four
plants remained in service throughout 2014 and generated
a net 1,204 GWh during the year, 3.4% less than in 2013 due
to lower-than-normal precipitation.
A number of operating improvements were made in 2014
including the installation of new turbine runners at the
Alfalfal plant, which increased capacity by 14 GWh per year.
Scheduled maintenance was also successfully completed on
the two Maitenes units, one Queltehues unit, and the two
Alfalfal units. Maintenance was performed on the Alfalfal 2
unit’s spherical valve and its excitation system was replaced
in order to keep critical equipment updated.
Plant Location Commissioned Turbine Units Capacity Availability2013
Availability2014
(MW) (%) (%)
Maitenes Los Maitenes, Cajón Río Colorado, RM. 1923-1989 francis 5 31.0 96.66 94.18
Queltehues Los Queltehues, Cajón Río Maipo, RM. 1948 pelton 3 49.0 94.95 95.49
Volcán Cajón Río Maipo, RM. 1949 pelton 1 13 96.82 99.31
Alfalfal Cajón Río Colorado, RM. 1991 pelton 2 178 93.47 91.28
These facilities are owned by AES Gener.
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Load Dispatch Center, and Operation and Maintenance of SIC Substations and Transmission Lines (TSIC)
AES Gener began dispatch from the Guacolda plant in the
second half of 2014 through its Dispatch Center. With the
significant amount of power generated at the new solar
and wind farms in the north of Chile (in addition to the
delay or cancelation of local projects), the generation from
the Guacolda units decreased based on transfer limits and
the reliability of the trunk transmission system. Finally, in
December and with a new EDAG system, the transfer limits
of phases 1 and 2 between the Maitencillo and Nogales
substations were increased by almost 60%.
A tender process was held for a new Scada system in
2014. It was awarded to Siemens Chile and will be used to
integrate AES Gener’s dispatch onto the SIC and the SING.
Simulations were carried out for such emergency situations
as earthquake, tsunami, and fire in coordination with
the Energy Ministry, the Onemi (the Oficina Nacional
de Emergencia del Ministerio del Interior, the National
Emergency Office), the CDECs (from the SIC and the
SING) and the generating, transmission, and distribution
companies. An emergency protocol was also drawn up
among the government agencies, CDECs, and generating
companies to determine and regulate how to coordinate
communication during such events.
Work continued on the SIC’s transmission system in 2014
to repair the structures of the transmission towers located
on the Valparaíso Region coast. In addition, the project
for remote control of all the different sections of the SIC’s
transmission lines completed, which will enable the Company
to implement its Service Recovery Plans.
Ventanas established an alternative connection to feed
the Quintero substation from the plant’s main transformer
and vice versa, so that N-1 feeding is now available for
both facilities.
Replacement of switches on the Las Vegas – Cerro Navia
line began at the Cerro Navia substation in 2014 due to the
increase in potential short circuits with the entry of new
plants and the works underway to expand the transmission
system.
In matters of safety and the environment, TSIC was recertified
for ISO 14,001 and OHSAS 18,001 and was recognized by
AES Corp for five years of operation without lost time
incidents (LTI).
AES GENER’S TRANSMISSION LINES AND SUBSTATIONS
Type of Circuit Voltaje AES Gener
(KV) (KM)
Single 220 1
Dual 220 73
Single 110 4
Dual 110 249
Total 327
AES Gener
Substations Alfalfal
Maitenes
Queltehues
La Laja
Punta de Peuco
Pachacama
San Pedro
Ventanas 110 Kv
Ventanas 220 Kv
Torquemada
Laguna Verde
Sections or connections to other
companies’ substations
Los Almendros
Florida
Cerro Navia
Las Vegas
La Calera
Miraflores
Quillota
Nogales
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Eléctrica Santiago
Eléctrica Santiago operates:
a) The Nueva Renca combined cycle plant, which has a gross
installed capacity of 379 MW and operates interchangeably
on liquefied natural gas (LNG) or diesel as its main fuels,
and utilizes propane for the supplementary burners on the
heat recovery boiler, and
b) The Renca plant, which has two diesel-fired steam turbines
that together have a joint gross capacity of 100 MW and, as
of June 2014, the Los Vientos and Santa Lidia plants with
gross installed capacity of 132 and 139 MW, respectively.
The Nueva Renca plant ran on LNG and diesel oil in 2014,
and was reliable in its dual operation. With its combination
of LNG and diesel fuel, the plant had a net 2014 generation
of 1,133 GWh, with 1,468 service hours fired by liquefied
natural gas and 2,636 service hours running on diesel fuel.
The plant’s net generation was 85.7% higher than that of
the previous year, primarily due to lower than normal
precipitation and greater availability of LNG.
No dispatch was required from the Renca plant, although
it was available for operations in 2014.
Sociedad Eléctrica SpA purchased the Los Vientos and
Santa Lidia plants on June 1, 2014 from its parent, AES
Gener. Over the last year, Los Vientos dispatched power
at the direct or “express” injection point at the Cerro Navia
110 kV busbar and, under normal conditions, at the Las
Vegas substation busbar. Los Vientos generated 10.3 GWh,
while Santa Lidia operated less frequently than in 2013,
generating 0.2 GWh in 2014.
During the second half of the year, the combustion of the
Nueva Renca gas turbine was inspected after completing
8,000 hours of generation, and at the end of the year a
section of the heat recovery unit’s pipes was replaced.
In environmental matters, ISO 14,001 certification was
accredited, and the first inspection for OHSAS 18,001
certification took place.
Major investments were also made in 2014 in noise reduction
construction and equipment at the Renca complex.
Plant Location Commissioned Turbine Units Capacity SpecificConsumption
Disponibilidad2013
Disponibilidad2014
(MW) (BTU/KWh) (%) (%)
Renca Comuna de Renca, Santiago, RM. 1962 diésel-steam 2 100 15.787(1) 100.00 100.00
Nueva Renca
Comuna de Renca, Santiago, RM. 1977combined
cycle
1 turbogas 1 steam turbine
379 (2) 7,631 61.58 82.81
Los Vientos Las Vegas, Llay Llay, V Región 2007 diésel-TG 1 132 11,421 98.72 98.82
Santa Lidia Cabrero, VIII Región 2009 diésel-TG 1 139 11,368 99.57 100.00
These facilities are owned by Eléctrica Santiago(1) There was no generation during the year; this figure is that of the plant’s design. (2) The Nueva Renca plant has a capacity of 355 MW when operating on diesel and 379 MW when operating on natural gas.
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Eléctrica Ventanas
The coal-fired Ventanas III plant (Nueva Ventanas) owned
by the subsidiary Eléctrica Ventanas was commissioned
on February 5, 2010. The plant generated 1,994 net GWh
in 2014 and had an availability rate of 92%.
One of the important activities at this plant during the
year was the 23 days of maintenance during which the low
pressure turbine’s blades were inspected (with no problems
detected), the boiler’s circulation pumps were replaced
and repaired, smokestack silencers were installed in order
to comply with Executive Decree 38, the ash transport
system was streamlined, and one of the water circulation
pumps was replaced.
Plant Location Commissioned Turbine Units Capacity Specífic Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
Nueva Ventanas Ventanas, V Región 2012 coal-steam 1 272 9,436 93.01 91.81
These facilities are owned by Eléctrica Ventanas.
Eléctrica Campiche
La central a carbón Ventanas IV (Campiche) de la filial
Eléctrica Campiche entró en operación comercial el 15 de
marzo de 2013. En 2014 generó 1.977 GWh netos y registró
una disponibilidad de un 93%. Dentro de las actividades
relevantes de esta unidad se contó la realización de un
mantenimiento de 16 días, que incluyó el montaje del
silenciador en chimenea para cumplimiento del Decreto
Supremo N° 38, la normalización de la planta de desalinización
de agua de mar, reemplazo de la bomba de aceite de control
de la turbina e inspecciones en los diferentes sistemas.
Plant Location Commissioned Turbine Units Capacity Specífic Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
Campiche Ventanas, V Región 2013 coal-steam 1 272 9,516 95.50 93.18
These facilities are owned by Eléctrica Campiche.Includes the parameters only for the days since its commissioning.
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Eléctrica Guacolda
The related company Guacolda has four coal-fired
thermoelectric generation units of 152 gross MW each,
for a total installed capacity of 608 gross MW located on
the Guacolda Peninsula in the Atacama Region’s Huasco
Municipality.
The Guacolda thermal complex’s gross generation was 4,890
GWh in 2014, exceeding projected generation by 0.7%. Its
availability rate was 94.5%, compared to a projected 90.8%.
A great deal of progress was made on the Guacolda V
project in 2014. The new plant remains on schedule at 80%
complete, and it is expected to be commissioned at the
end of 2015 as planned. Emissions control projects are also
being executed, including systems to reduce particulate
matter (PM10), sulfur dioxide (SO2), and nitrogen dioxides
(NOx) in units 1, 2, and 4.
Guacolda changed its ownership structure in 2014 with the
entry of a new player, Global Infrastructure Partners (GIP).
Nevertheless, AES Gener retained its ownership interest and
GIP allowed it to take over management of the company.
Particularly important among the maintenance performed
on units 1, 3, and 4 was the chemical wash of boilers 3
and 4. The maintenance process was highly efficient, and
in some cases the units were able to return to operation
ahead of schedule.
The 134 km double circuit Maitencillo-Cardones transmission
line [220 kV] was sold in 2014.
Another notable operative development during this period
involves phases 1 and 2 of the Generation Disconnection
Plan (EDAG, Esquema de Desconexión de Generación)
requested by the CDEC to streamline capacity transfer to
the SIC’s load center on the Maitencillo line.
In environmental matters, the continuous emissions monitoring
systems (CEMS) were implemented and fully certified for
the smokestacks on units 1, 2, 3, and 4. Recertification was
also obtained for ISO 14,001 and OHSAS 18,001 in 2014.
A highlight in the Company’s community relations during
the year was its participation in the government-sponsored
three-party roundtable program Community, Public Services,
and Companies within the framework of the government
program “Environmental Recovery in Huasco Municipality.”
In addition, the Company monitored and maintained good
relationships with all of the Guacolda complex’s stakeholders,
reflected in the fact that the construction of Guacolda V, its
environmental control projects, and the operation of units
1, 2, 3, and 4 have not been affected by external events that
impact the normal functioning of the company.
Plant Location Commissioned Turbine Units Capacity Specífic Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
Guacolda Huasco, III Región 1995-1996-2009-2012 carbón-vapor 4 608 9.824 95.40 94.50
These facilities are owned by Eléctrica Guacolda.
Operation and Maitenance / Chile
Guacolda Transmission Lines
TYPE OF CIRCUIT VOLTAGE (KV) AES GENER (KM)
DOUBLE 2X220 KV 34
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Eléctrica Angamos
The Angamos plant owned by the subsidiary Eléctrica
Angamos has two units and a gross installed capacity of
545 MW. The plant’s annual net generation in 2014 was
3,544 GWh, 321 GWh higher than the previous year. The
record for net monthly generation during the year was set
in May, with 346 GWh.
Angamos is South America’s most modern coal-fired plant,
with cutting edge technology for controlling emissions
and reducing seawater use. It is well within all the current
legal standards in terms of emissions, liquid waste quality,
and noise levels. Since Chile is a highly seismic country,
the Angamos plant was designed to withstand medium-
intensity quakes without forced outages.
An important development in 2014 includes annual
maintenance performed in less time than originally planned.
This maintenance included preventive and corrective work
in the turbine, generator, boiler, emissions control system,
and baghouse filters.
Construction began in October 2014 on the first stage of
the reverse osmosis desalinization plant, which will replace
the evaporation plant currently in operation. The new plant
will reduce the plant’s variable costs, and any excess water
produced can be sold to third parties.
It is important to note that Eléctrica Angamos went four
years and nine months without lost time incidents, per
OHSAS standards.
Plant Location Commissioned Turbine Units Capacity Specífic Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
Angamos Mejillones, II Región 2011 coal-steam 2 544.8 9,591 86.14 90.84
These facilities are owned by Eléctrica Angamos.
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Operation and Maitenance / Chile
AES GENER (SING)
The Norgener plant consists of two steam turbo generators
with a coal-fired boiler and a gross generation capacity of
277 MW. The units generated 1,949 net GWh in 2014.
Among the work performed at the Norgener plant during
the year was the annual 21-day maintenance on both
units, during which equipment was added to meet new
environmental regulatory requirements. During the first half
of the year, new voltage correction systems were installed
on each unit’s electrostatic precipitator in order to increase
their efficiency and to comply with Executive Decrees 13
and 70. Then, in September and October the new baghouse
filters went into use to better control the units’ particulate
emissions. In addition to this maintenance, the Norgener
plant performed well in terms of operational metrics, with
89.9% availability in 2014.
Regarding safety, it is very important to note that 2014
marked the 11th year without lost time incidents among
Norgener personnel, per OHSAS standards.
Plant Location Commissioned Turbine Units Capacity Specífic Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
Norgener Tocopilla, III Región 1995-1997 coal-steam 2 277.3 9.383 90.70 90.50
These facilities are owned by AES Gener.
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Load Dispatch Center, and Operation and Maintenance of SING Substations and Transmission Lines
Regarding transmission in the SING, in 2014 the Norgener
Dispatch Center was moved to the Angamos plant as an
operational reliability measure. The Center was also key in
the electrical studies for the SING-SADI interconnection
project at the Andes substation, as well as in the coordination
and operation of that project.
The Center also took part in the study and empty connection
of the 345 kV Andes-Salta transmission line to improve
the voltage level of the mining companies to which we sell
power in the mountain region of the SING.
Se realizaron los mantenimientos preventivos de todo el
sistema de transmisión y subestaciones pertenecientes
a Norgener, AES Gener, Angamos y clientes en el SING,
destacándose la reparación de la línea de Transmisión
220 KV Norgener-Crucero, sector Pampa y el cambio de
protección diferencial de barras de la Subestación Norgener.
Finally, we note that, in matters of environment and safety,
the company has gone 12 years and seven months without
lost-time incidents per OHSAS standards.
AES GENER’S TRANSMISSION LINES AND SUBSTATIONS
Circuit Voltage AES Gener Norgener Eléctrica Angamos
(KV) (KM) (KM) (KM)
Single 345 140
Single 220 108 95
Dual 220 63 72 142
Single 110 33
Single 220 Leased 228
Total 539 200 142
AES Gener Norgener Angamos
SubstationsAndesNueva ZaldívarLaberinto
NorgenerOesteMinsalLa Cruz
AngamosNuevaZaldivar extensionLaberinto extension
Battery energy storage system (BESS)
BESS Angamos 20 MWh
BESS ANDES12,8 MWh
Sections or connections to other companies’ substations
2 sections at Mantos Blancos substation
1 section at Lomas Bayas Substation2 sections at Crucero substation2 sections at Barriles substation
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InterAndes
InterAndes has a concession for transmitting electricity
from the Salta plant in Argentina and the Paso Sico node
on the Chilean border. It also has an agreement with
TermoAndes to provide the latter with electrical power
and capacity transport services between the Salta plant
and that border node.
Three successful interconnection tests were completed
in 2014 between Chile’s northern and the Argentine grid,
with the participation of CAMMESA, the CDEC-SING, and
InterAndes personnel. The tests confirmed the conditions
needed for the two grids to operate continuously and
reliably in synchronization.
In environmental and safety matters, InterAndes had no
lost-time incidents involving its own and contractors’
personnel in 2014. InterAndes also retained its certification
for the ISO 14,001 environmental standard as well as the
public safety and emergency plan systems, ENRE 057 and
22, respectively.
AES GENER’S TRANSMISSION LINES AND SUBSTATIONS
Tipo de Circuito Voltaje InterAndes
(KV) (KM)
Single
Total 268
InterAndes
Subestaciones Salta
These facilities are owned by InterAndes.
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BUSINESS POLICY
AES Chivor’s commercial strategy is to maximize the business margin and reduce its volatility. To achieve this objective, it carries out integral business risk management to determine the desired level of bilateral contracts for each year depending on each plant’s generation profile and its customer credit rating policy.
The year 2014 brought important challenges for AES Chivor’s
strategy of giving the margin adding value, including an
ongoing search for the best ways to optimize water use,
price volatility on energy markets, energy sales under
energy agreements, backup sales of firm energy to cover
maintenance periods at some of the system’s plants, and
additional coverage through the energy derivatives market,
the Derivex.
The company also drew up a pilot plan to provide power
to an unregulated customer in 2014 and 2015. In addition,
it initiated activities to sell energy in 2015 to the largest
power user, Cerromatoso, a customer on the unregulated
OPERATIONS AND MAINTENANCE
COLOMBIA
market with which a price was set in dollars. We note the
company’s activities on the unregulated market with an eye
to gaining a larger share of those customers; a consultant
was hired to provide regulatory, operative, and strategic
assistance in this regard. Regarding tenders on this market,
AES Chivor focused on submitting bids in U.S. dollars.
THE AES GENER GROUP´S SHARE ON THE SIN
AES Chivor owns the third largest hydroelectric plant in the
country, with an installed capacity of 1,000 MW. In 2014,
water flowed into its La Esmeralda reservoir at 90.6% of
the historical average, and the reservoir’s level was at 77.9%
of its useful capacity by the end of the year.
AES Chivor’s net power production during the year was
3,985 GWh. It sold 5,979 GWh, of which 2,573 GWh was
traded on the energy market and the remaining 3,407 GWh
was sold through long-term agreements.
THE AES GENER GROUP’S PLANT IN COLOMBIA
INSTALLED CAPACITY
[MW]
AES Chivor 1,000.0
Total 1,000.0
AES CHIVOR’S ENERGY BALANCE IN COLOMBIA IN 2014 Energy
[GWh]
Net Production 3,985.4
Purchases
Spot Market 1,966.7
Total Purchases 1,966.7
Sales
Contracts 3,406.8
Spot Market 2,572.6
Total Purchases 5,979.4
Losses 27.3
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OPERATIONS Y MAINTENANCE
The amount of water flowing into the AES Chivor basin in
2014 was at 90.6% of the historical average, the tenth lowest
of the last 36 years. There was potentially an El Niño event
over the Pacific Ocean during the year, especially during
the first quarter and in the middle of the third quarter of
the year, but it never materialized. Nevertheless, this event
did affect climatic conditions to some extent, resulting in
longer, more intense dry spells than normal.
Monthly precipitation was quite low in six months of 2014,
especially in May and November, with 52% and 63%, respectively.
The wettest months for the region were June, July, and
August, which are typically when the most precipitation falls.
AES Chivor generated 3,985 GWh of power in 2014, which
represents 97.5% of the 2004-2013 average and covered
6.2% of the country’s total energy demand in 2014. Given
the maturity and solidity with which the asset management
standards are applied, maintenance strategies emphasized
the execution of projects to restore water conduction assets.
Accordingly, the company conducted large-scale shutdowns
of the Chivor II conduction system in order to extend the
plant’s useful life and to guarantee its long-term reliability
and integrity. The system was first inspected to determine
the degree of intervention needed given its condition and
associated risk.
The conduction system was first emptied and then
maintenance was done on the upper tunnel (including the
gravel trap), the floor of the lower tunnel, and the spherical
valves, and the vertical well was inspected. Maintenance
scheduled under the Master Maintenance Plan was also
performed on the generation units, namely the reconditioning
of unit 7 and general maintenance on unit 8, which allowed
technology updating projects to be completed ahead of
schedule, such as the updating of PLCs, spherical valves,
and annunciators.
Other scheduled maintenance was performed on the units
in the second half of the year, including general maintenance
on unit 1, needle replacements in units 2 and 5, and other
maintenance on the plant’s ancillary electromechanical
equipment and civil structures. Thus, care is taken to keep
the assets in operating condition and to meet the technical
and business needs to ensure business continuity.
As part of the company’s ongoing improvement program,
in 2014 the local certification agency audited compliance
with AES Chivor’s management system. Once again, it was
concluded that the organization’s management model is
solid and mature, has interactive processes, and is focused
on constant improvement and sustainability over time.
Plant Location Commissioned Turbine Units Capacity Availability2013
Availability2014
(MW) (%) (%)
AES Chivor Boyacá, Colombia 1977-1982 Pelton 8 1,000 89.30 77.40
These facilities are owned by AES Chivor.
Throughout the year, the current management model was
projected toward an integral asset management model
designed to respond to the requirements established in
the corporate Asset Management Standards (AMS), which
are based on international asset management norms (PAS
55 and the ISO 55,000 family of standards).
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BUSINESS POLITY
TermoAndes is authorized to sell a portion of its power generation to customers in the Energy Plus program, and the rest is sold on the spot market. TermoAndes’ commercial strategy is to maximize income and increase its business margins.
The goal of this strategy is to increase the average price
and capacity contracted under the Energy Plus program. It
should be noted that TermoAndes has remained the leader
in sales on the SADI. It is also essential to have a low-cost
natural gas supply available and to ensure the technical
availability of its equipment in order for the company to
meet its Energy Plus contract commitments.
Due to increased demand and a lack of new investment,
regulations state that future increases in demand must be
covered by contracts under the Energy Plus program. Given
Argentina’s supply deficit and the fact that TermoAndes is
the most efficient plant on the grid, TermoAndes is expected
to continue supplying a significant portion of Argentine
industries’ increasing demand for power.
OPERATIONS AND MAINTENANCE
ARGENTINA
Record eneration Levels
The TermoAndes plant set a record for annual generation
in 2014: generation for the year was 4,455 GWh, beating
the previous record of 4,184 GWh set in 2013.
THE AES GENER GROUP’S THERMOELECTRIC PLANTS IN THE SADI
Gross Capacity
(MW)
TermoAndes
Salta Plant 642.8
Total 642.8
AES CHIVOR’S ENERGY BALANCE IN ARGENTINA IN 2014 Energy
(GWh)
Net Production 4,455
Purchases
Purchases 0
Total Purchases 0
Sales
Contracts 1,285
Spot Market 3,168
Total Sales 4,453
Losses (2)
OPERATIONS Y MAINTENANCE
The Salta plant consists of a combined cycle unit made up
of two gas turbo generators (TG) that can be fueled by
either natural gas or diesel oil, two heat recovery boilers,
and a steam turbo generator (TV). It has the capability of
connecting any one of the three turbo generators to either
power grid, the SING in Chile or the SADI in Argentina,
without interconnecting the two grids.
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The Salta plant provided power to the SADI under normal
conditions in 2014. It generated 4,455 GWh, the highest
annual figure ever for the plant. The previous record of
4,184 GWh had been set in 2013. All of the power generated
was delivered to the SADI, of which 1,285 GWh was sold
to customers and 3,170 GWh was sold on the spot market.
TermoAndes remained the leader in sales, ahead of its
competitors on the Energy Plus market in 2014, with a 32%
market share in that segment.
In June 2014, construction was completed on a 45 km 132
kV power transmission line begun in 2011. The line connects
the Salta plant directly to the distribution ET (transformer
station, ET from its name in Spanish) called the ET Salta
Este located in the city of Salta, streamlining the delivery
of TermoAndes’ power production to the market and
increasing the reliability of the system.
Another 2014 milestone was the beginning of works to
install the 345/500 kV transformer, which will increase the
interconnection capacity between the Chilean SING grid
and the Argentine SADI grid.
In environmental and safety matters, 2014 was the fifth year
in a row without lost-time incidents among TermoAndes plant
and contractor personnel. The company also retained quality
certification ISO 9001 and environmental certification ISO
14,001, while obtaining OHSAS 18,001 certification in 2014.
Plant Location Commissioned Turbine Units Capacity Specific Consumption
Availability2013
Availability2014
(MW) (BTU/KWh) (%) (%)
SaltaSalta, Argentina
1999 combined cycle2 turbogás 1 steam turbine
642.8 6,876 89.80 95.90
These facilities belong to TermoAndes.
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BUSINESS DEVELOPMENT
In order to be able to respond efficiently to the needs and
opportunities on the Chilean and Colombian markets, and
in line with its growth strategy, AES Gener has embarked
on an ambitious second phase of expansion, developing
and beginning construction on major power generation
projects. This has enabled the Company to become a
key player in the development and construction of new
initiatives to satisfy the Chilean electric system’s growing
demand for energy.
The Company successfully continued in 2014 with the
construction of its second expansion phase, incorporating
into its portfolio the Angamos plant’s water desalinization
project and the Solar Andes project, both on the SING.
Financing for both projects closed at the end of 2013 for
a total of US$4 billion using a capital structure balanced
between debt, mainly at the project level, and capital. This
has enabled the Company to maintain its investment grade
rating among national and international credit rating agencies.
Work continued on the construction of the Tunjita project
in Colombia and on the fifth unit of the Guacolda complex
on the SIC, as well as on the installation of emissions
control equipment at Units I and II of the Ventanas and
Norgener complexes. Construction at Cochrane, located on
the SING, continues on time and on budget, while work is
progressing on the construction of tunnels at Alto Maipo,
located on the SIC.
This new phase of expansion will increase installed capacity
by 25%, or 1,256 MW, compared to 2014 capacity at 5,082 MW.
PROJECTS UNDER CONSTRUCTION AND UPCOMING CHALLENGES
PROjECTS UNDER CONSTRUCTION
GUACOLDA V THERMOELECTRIC PROJECT (SIC-CHILE)
The Guacolda V thermoelectric project, owned by related
company Guacolda, is the fifth unit in the Guacolda complex
located in Huasco in the Atacama Region. The new 152
MW-capacity unit will be similar to the other existing units.
It is being built under a turnkey arrangement by Mitsubishi
Corporation, the same contractor that built the other units
at the complex.
The plant will use pulverized coal technology and will
be fueled by bituminous and sub-bituminous coal. The
project is designed with reduction systems to control SO2,
NOx, and particulate emissions. The project obtained its
environmental permit in 2010.
Financing for the project closed at the end of 2012 with
a credit line for US$318 million with the Banco Itaú Chile
and BancoEstado de Chile. The remaining amount of
the investment has been provided by Empresa Eléctrica
Guacolda’s partners according to their ownership interest
through the reinvestment of dividends distributed.
Construction of the plant continued according to schedule
in 2014 and by the end of the year 87% of the works
were complete, including final installation of the boiler,
turbine, and generator, connection of the power supply for
commissioning, and hydrostatic testing of the boiler. This
unit will contribute approximately 1,200 GWh to the SIC
each year. Start-up is slated for the end of 2015.
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TUNJITA HYDROELECTRIC PROJECT (SIN-COLOMBIA)
The Tunjita hydroelectric project involves the construction of
a 20 MW run-of-river plant next to AES Chivor’s Esmeralda
Reservoir. It makes use of the water capacity generated
by diverting the Tunjita River and takes advantage of the
tunnel that channels the river’s water to the reservoir.
Construction on this project continued in 2014 with works
91% complete by the end of the year, including the lining
of the trench and connection gallery. In addition, work
began to prepare the existing tunnel so that it will be able
to withstand the pressure used at this type of plant.
Commissioning of the Tunjita plant is scheduled for the
second half of 2015.
COCHRANE THERMOELECTRIC PROJECT (SING-CHILE)
The Cochrane thermoelectric project entails the construction
of two coal-fired thermoelectric plants of 266 gross MW
each and a 20 MW battery energy storage system (BESS)
that will be built north of Antofagasta in the municipality of
Mejillones in the Antofagasta Region. The project obtained
environmental approval in September 2009. The plant,
which will use pulverized coal technology, will be fueled
by bituminous and sub-bituminous coal, and it will have
reduction systems to control SO2, NOx, and particulate
emissions.
The EPC contract (engineering, procurement, and
construction) was signed in 2011 under a “lump sum, fixed
date, turnkey” arrangement with Posco E&C, the contractor
that had previously built the Angamos plant, which has
similar characteristics. The Company completed construction
of the Angamos project on schedule and within budget.
The Cochrane project already has long-term power sales
agreements with SQM, Quebrada Blanca, and Sierra Gorda
for almost 100% of the power it will generate.
Closing on a non-recourse financing loan for US$1 billion
took place in March 2013 for 74% of the total investment.
The lenders are Japanese and South Korean export credit
agencies as well as financial institutions from those two
countries. Mitsubishi Corporation is also involved through
Diamond Pacific Investment Limitada in the company
Empresa Eléctrica Cochrane SpA by virtue of its 40% stake
in that company.
As of December 31, 2014, AES Gener had invested
US$686 million on the Cochrane project and it was 74%
complete, on schedule and on budget. According to the
Occupational Safety and Health Administration, OSHA,
the project reached the milestone of 2 million man hours
worked without lost time. On the same date, the Cochrane-
Encuentro transmission line being built by Sigdo Koppers,
had reached 98.9% completion.
Both units and the BESS should be connected to the SING
in 2016 to help meet the growing demand for power from
the large mining companies operating in northern Chile.
ALTO MAIPO HYDROELECTRIC PROJECT (SIC-CHILE)The Alto Maipo hydroelectric project consists of the
construction of two consecutive run-of-river plants in
the Maipo River basin, called Alfalfal II (264 MW) and Las
Lajas (267 MW), with a total installed capacity of 531 MW.
The project itself received its environmental approval in
2009, the transmission system was approved in 2010, and
the power concession was granted in December of 2012.
The main agreements to provide the generation equipment
and to build the underground works were signed in 2012
with three top-level international contractors. The main
civil works and tunnels will be built by the Austrian firm
Strabag AG through its Chilean subsidiary Strabag SpA,
along with Constructora Nuevo Maipo SpA, owned by the
German company Hochtief AG and the Italian firm CMC
Di Ravenna. The Brazilian and Chilean subsidiaries of the
German company Voith Hydro will supply and assemble
the plants’ electromechanical equipment. The reason for
selecting two contractors to build the underground works
was to mitigate risks and to start construction at the two
plants simultaneously.
Non-recourse financing for the project closed in December
2013 with a syndicate of development financial institutions
Projects under costruction and upcoming challenges
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and local and international banks for up to US$1.217 billion,
or 60% of the total investment. The remaining portion will
be financed by AES Gener and the Los Pelambres mining
company (a subsidiary of Antofagasta Minerals S.A.), which
became a shareholder of Alto Maipo SpA when it acquired
40% of that company’s shares in July of 2013.
In the agreement, AES Gener and Minera Los Pelambres agreed
to provide the funds necessary to continue construction of
the project at 60% and 40%, respectively. A power purchase
agreement was also signed with Los Pelambres for up to
110 MW of capacity for up to 20 years to supply energy its
mining activities, which are already in operation.
By December 2014, US$405 million had been invested in
Alto Maipo and the works were 11% complete, including
earthmoving activities such as the construction of access
roads and camps on the worksites and the beginning of
tunnel excavation. A total of one kilometer of tunnels was
completed by the end of the year. In early January 2015,
two of the three tunnel boring machines, or TBMs, arrived
at the Chilean port. One was transported to the excavation
site at the end of January, and the second TBM is expected
to be transported to the site shortly.
Orders were given to the three main contractors in December
2013 to proceed with connecting the first unit to the SIC
in the fourth quarter of 2017, and the second unit in the
second quarter of 2018.
Alto Maipo will be a key energy source for the SIC,
producing 2,200 to 2,300 GWh per year of clean, efficient,
economical power. The project will not significantly impact
the environment since 90% of its works are underground
and it does not involve a reservoir, and the SIC will benefit
significantly from its reliability in power transmission and
savings on transmission costs as a result of the project’s
proximity to the city of Santiago, with only 17 kilometers
of new transmission lines needed.
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PROJECT TO INSTALL EMISSIONS CONTROL EqUIPMENT AND RETROFITTING (SIC AND SING – CHILE)
In 2011, the Ministry of the Environment issued Executive
Decree 13 on the prevention and control of particulate
matter, SO2 (sulfur dioxide), NOx, and mercury emissions
in zones that are declared unsaturated, latent, or saturated
in terms of pollution. As a result, in 2012 AES Gener began
retrofitting emissions control equipment at four plants at
Ventanas (Units I and II) and Norgener (Units I and II), all
built between 1964 and 1997. Related company Guacolda
also began installing emissions control equipment at its
Units I, II, and IV in August of 2013.
These projects will help reduce the emissions from these plants
and will comply with Chilean standards for thermoelectric
plants that limit particulate and gaseous emissions produced
by fossil fuels, particularly coal. For existing plants, including
those currently under construction, the limits on particulate
matter have been in effect since the end of 2013, while the
new limits on sulfur dioxide, nitrogen oxide, and mercury
will go into effect in mid-2016. The exception is in areas
declared saturated or latent, where the limits will go into
effect in June of 2015.
Investments will total US$251 million at AES Gener plants
and US$222 million at Guacolda, of which the Company will
pay 50.01%. By December 2014, the Company had invested
US$203 million at the consolidated level and US$114 million
at Guacolda for installing this equipment.
WATER DESALINIZATION PROJECT AT THE ANGAMOS PLANT (SING-CHILE)
On June 2, 2014, the Company signed an agreement with
the company Abengoa for the construction and subsequent
operation of a desalinization plant alongside the Angamos
plant in the town of Mejillones. It will replace TVC technology
with reverse osmosis to increase the efficiency of the plant’s
own energy use with high quality water and, in the future,
to sell desalinated water to industries in the north of Chile.
The plant will have a production capacity of 4,800 m3 per
day, which may be increased in a second phase to 19,200 m3
per day. The project involves a total investment of US$26
million, and it was 28% complete as of December 31, 2014.
The main works completed thus far are the purchase orders
issued for the main equipment needed, metal structures,
and the excavation for concrete foundations at the worksite.
The plant is expected to go into operation in the second
half of 2015.
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SOLAR ANDES PROJECT (SING-CHILE)
The Los Andes Solar project, located adjacent to the Los
Andes substation, 260 km southeast of Antofagasta,
involves the construction in various stages of a 220 MW
photovoltaic solar farm. The project’s environmental permit
was approved in 2012.
At the end of June 2014, the order was signed to
proceed with the construction of the project’s first stage,
involving 21 MW. The following stages may be built in
units of different sizes until the full 220 MW project
is complete. The project will supply power to current
mining customers under long-term power purchase
agreements. Construction should take nine to 12 months.
As of December 31, 2014, the project was 16% complete.
The main milestones reached during the year were the
installation of the on-site camps, which is still in process,
and the reception of the main metal structures at the site.
PROjECTS UNDER DEVELOPMENT
The Company has an extensive project portfolio that
includes renewable energy projects such as battery energy
storage systems and solar, mini-hydro, and wind generation
projects. Some of these are scheduled for development
and construction in the medium term, such as the Los
Andes solar project, whose environmental permit has
been issued and on which the first stage of construction
has already begun.
THE SING - SADI INTERCONNECTION
The SING – SADI interconnection project makes use
of the AES Gener transmission line currently in place
between Chile and Argentina to export energy from
Chile’s Northern Grid (the SING) to the Argentine Grid
(the SADI).
This line, which connects the TermoAndes plant in Salta,
Argentina, with the Los Andes substation in Chile, is
currently the only international transmission line in Chile.
Three interconnection operation tests were completed
in 2014 in which power of up to 200 MW flowed in both
directions, thus confirming the technical viability of the
project. The tests had positive results, with a significant
improvement in the SING’s frequency regulation, all in
accord with the technical studies that AES Gener submitted
to the regulatory agencies CDEC-SING and CAMMESA. A
maximum of 250 MW of power will be exchanged only
when there are surpluses available and it is economically
beneficial to both countries. Therefore, neither reliability of
service nor local prices will be adversely affected in Chile.
In early February 2015, the Chilean government authorized
the exportation of power requested by the Company in July
2014. The pertinent decree is to be published in the coming
weeks and will include the export permit and regulation.
COrPOrATEgOvErNANCE
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DOCUMENTS OF INCORPORATION
AES Gener S.A. was founded on June 19, 1981 in a public
deed registered by Santiago Notary Public Patricio Zaldivar
Mackenna. The name of the Company at the time was
Compañía Chilena de Generación Eléctrica S.A. (Chilectra
Generación S.A.). Its by-laws were approved by the Chilean
Securities and Insurance Authority in Resolution 410-S of
July 17, 1981 and were published in Diario Oficial No. 31.023
on July 23 of the same year. The Company is registered in
the Business Registry of the Santiago Property Registrar
on pages 13,107 No. 7,274 of 1981.
THE ROLE OF THE BOARD OF DIRECTORS
The Board of Directors is the official body that, in accordance
with the Chilean Corporation Law Code and the Company’s
by-laws, is responsible for the administration of the
Company. It is composed of seven regular members and
their respective alternates, all of whom are elected for a
three-year term at the ordinary shareholders’ meeting and
are eligible for reelection.
AES Gener’s by-laws specify that its Directors are not to
be remunerated for their duties as such.
During fiscal year 2014, the Company’s Directors did not
receive remuneration of any kind for additional duties; for
expenses of representation, travel, or gifts; or any other
stipend. However, those Directors that are also Board
Committee members received remuneration as detailed
in the following section.
In 2014, the Board of Directors did not make use of the
US$25,000 annual budget authorized by the annual
shareholders’ meeting on April 29, 2014, for consultation
services.
BOARD COMMITEEMEMBERS
The members of the Company’s Board Committee are Mr.
Iván Díaz-Molina (Chairman and Independent Director),
Mr. José Pablo Arellano (Independent Director), and Mr.
Radovan Razmilic.
REMUNERATIONS FOR BOARD MEMBERS AND COMPANY EXECUTIVESREMUNERATIONS AND BUDGET
At the annual shareholders’ meeting held on April 29, 2014,
it was agreed to set Board Committee members’ fees at
160 UF per month.
The Board Committee contracted for an independent
insurance market study to determine the value of the
premiums that could be obtained for the insurance required
by the Company to cover its business operations. The cost
of the study, performed by Indecs Consulting Ltd., was
charged against the Committee’s 2014 expense budget of
US$25,000 authorized at the annual shareholders’ meeting.
The cost of the study was US$12,947.
Remunerations were paid to the Directors who are Board
Committee members in the amounts shown in the following
table.
CORPORATE GOVERNANCE
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Board Commitee Remunerations (in UF)
2014 2013Juan Andrés Camus 640 1,920
Iván Díaz-Molina 1,920 1,920
Radovan Razmilic 1,920 1,920
José Pablo Arellano 320 -
Total 4,800 5,760
MAIN EXECUTIVES
Remunerations for the Company’s executive officers during
2014 totaled US$4.661 million. This includes fixed monthly
remuneration and variable bonuses based on corporate
earnings and performance, which are also awarded to the
other AES Gener employees.
The Company’s incentive plan for its executives consists of
an annual variable bonus based on corporate earnings and
performance; the amount of the bonus is determined on a
yearly basis according to the aforementioned parameters.
It should be noted that, according to Company policy, AES
Gener executives who are members of related companies’
Boards of Directors do not receive remuneration for their
duties as Directors, or they may decline the allowance due
them as individuals.
In 2014, the Company disbursed US$420,000 in severance
pay for executive officers.
BOARD COMMITEE ACTIVITIES
In accordance with Article 50 bis of the Chilean Corporations
Law Code, amended by Law 20,382, the Board Committee
met on eight occasions in 2014 to make decisions regarding
the Company’s operations and contracts with related
companies in accordance with Title XVI of Law 18,046
governing corporations. It also discussed other matters
within its legal capacity and subsequently notified the
Board of Directors of its decisions and recommendations.
The operations between related companies examined by
the Committee were in accord with market conditions
and in the interest of the corporation, so the Committee
recommended their approval by the Board of Directors.
At the January 25 meeting, the Committee examined
the information, and agreed, by a unanimous vote of its
members, to approve the Company’s balance sheet, financial
statements, and External Auditors’ Report for the fiscal
year ending December 31, 2013.
At the February 26 meeting, the Committee:
• Examined the data and, in a unanimous vote of the
members present, agreed to recommend that the Board
proceed with the annual renewal of the insurance policy held
with AES Global Insurance, an AES Corp related company,
covering the Company and all of its subsidiaries against all
risk and business interruption.
• Examined the data and unanimously agreed to
recommend that the Board enter into a cash balance
management agreement between AES Gener and its
subsidiaries.
At the March 24 meeting, the Committee reviewed the data
and, in a unanimous vote of the members present, agreed
to recommend that the Board approve the Corporate
Governance Policy report and submit it to the Chilean
Securities and Insurance Commission (SVS) as required
under General Standard 341.
At the March 26 meeting, the Committee examined the
data and unanimously agreed to recommend to the Board
that, at the company’s next annual shareholders’ meeting,
the Ernst & Young auditing firm be proposed as the first
choice for external auditors for fiscal year 2014, followed
by BDO Auditores & Consultores Ltda. as a second option.
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At the April 23 meeting, the Committee:
• Analyzed the data and unanimously agreed to
recommend that the Board approve the 2014 internal
auditing plan to be conducted by the parent, AES
Corp, as well as the funds necessary for these services.
It also recommended:
1. To analyze the appropriateness of replacing the
special service item “Travel and Entertainment
Expenses” with another type that is more pertinent
to the Company’s business, while still monitoring
this type of expenses as usual; and
2. That certain transactions that take place between
the Company and its parent as operations between
related parties be reviewed by an independent
auditor hired by the Board Committee for this
purpose.
• Analyzed the data and unanimously agreed to
recommend that the Board issue a US$25 million
letter of credit to the subsidiary Inversiones Nueva
Ventanas SpA.
• Analyzed the data on the corporate restructuring plan
within the AES Gener holding company proposed
by the management and unanimously agreed to
request that the management present the final
conclusions of its analysis at the next meeting of the
Board Committee so that the Committee can issue
a decision on the proposal.
At the May 28 meeting, the Committee:
• Analyzed the data and unanimously agreed to
recommend that the Board approve a coal purchase
swap agreement between AES Gener and its subsidiary
Empresa Eléctrica Guacolda S.A. for one or two
shipments, which would give rise to a net payment
between the parties of approximately US$5 million
per shipment.
• Analyzed the data on the corporate restructuring plan
within the AES Gener holding company proposed
by the management and unanimously agreed to
recommend that the Board approve the changes to
be made to the corporate structure and the transfer
of the assets involved, and that the Company enter
into and sign all statements, contracts, and documents
in the manner and under the terms and conditions
presented to the Committee, as well as all other
statements, contracts, agreements, declarations,
or documents that may be necessary, pertinent, or
adequate to improve, clarify, or complement the
reorganization of the Company’s subsidiaries.
• Analyzed the data and unanimously agreed to
recommend that the Board approve a loan to the
subsidiary Norgener S.A. in the amount of US$240
million to finance the distribution of a dividend to
be paid by Norgener to the Company in the manner
and under the terms and conditions proposed to the
Committee.
At the August 20 meeting, the Committee examined the
data and unanimously agreed to recommend that the
Board approve a transaction with the insurance company
AIGIC, an AES Corp related company, for two losses:
• A loss in the Tunjita tunnel at the Chivor plant
(Colombia), for which it recommended acceptance
of payment of US$0.3 million in compensation; and
• A loss involving a turbine rotor blade at the Nueva
Renca plant, for which it recommended acceptance
of payment of US$4.4 million in compensation.
At the November 24 meeting, the Committee examined
the data and unanimously agreed to recommend that
the Board renew, for a three-year period, the global IT
support services agreement between AES Gener and AES
Servicios América, a subsidiary of AES Corp, under which
the latter provides the former with technical assistance
for SAP and its respective licenses and applications, the
maintenance and configuration of systems, new versions
of SAP, and other services. The value of these services
is US$1.6 million per year.
Corporate Governance
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CODE OF CONDUCT AND ETHICS AND COMPLIANCE PROGRAM
The Board approved the Code of Conduct and the Ethics
and Compliance Program, whose purpose is to ensure
that the Company and its employees, business partners,
suppliers, and contractors behave according to the highest
ethical standards and comply with all legal and regulatory
requirements in effect in Chile. One of the most important
local laws is No. 20,393 (Law on the Criminal Responsibility of
Legal Entities), as well as the pertinent international laws and
standards as the OECD Convention on Combating Bribery
of Public Officials in International Business Transactions and
other anti-fraud and corruption laws, the U.S. Foreign Corrupt
Practices Act, and other applicable legislation.
As a requirement for employment, our Code of Conduct
regulates the actions of all those who work at AES Gener,
including those employed by our subsidiary companies.
The Ethics and Compliance Department provides training,
information, and certification programs for AES Gener
employees on the Code of Conduct, as well as programs to
prevent and detect criminal activity, to promote a business
culture that encourages ethical behavior and respect for
the law, and to monitor and enforce Company policies on
corruption, bribery, money laundering, and connections with
terrorist groups. The Code of Conduct is published on the
website www.aesgener.cl. Any changes made to the Code
of Conduct will be published on the website.
Finally, in order to ensure compliance with General Standard
270 issued by the Securities and Insurance Commission
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(SVS) on December 31, 2009, the Company sets forth in its
Manual for Handling Information of Interest to the Market its
internal policies and standards governing the handling of all
information that, without being material events or information,
is useful for a proper financial analysis of AES Gener and
its subsidiaries, its securities, or the sale of the securities.
The Manual is understood to include all legal, economic,
and financial information regarding aspects relevant to the
corporate business or that could have a significant impact
on these aspects (“information of interest”). This document
may be found at the Company’s web site, www.aesgener.cl.
RESPONSABILITY TO SHAREHOLDERS AND INVESTORS
AES Gener’s commitment to its shareholders and investors
is one of the basic pillars of how it does business and relates
to others. The Company aims not only for adequate returns
on its investments, but seeks to make them sustainable
over time.
For AES Gener, transparency of relevant Company information,
as well as the quality, efficacy, and promptness of its
availability to the public, in keeping with the laws governing
corporations and securities markets, are an important part
of its corporate responsibility, all while carefully considering
what strategic information must be kept confidential in
order to do business properly.
Regarding the Company’s relations with investors, it held
periodic meetings in 2014 with local and foreign analysts
to present its official results and to explain its business
strategy and its operational, commercial, and financial
goals. Particularly important were the conference calls, held
quarterly, during which the CEO and the CFO explained
important developments during the period. Many investors
that follow the Company took part in these calls.
AES Gener also participated in conferences with local
investors as well as some of the most important ones held in
other countries. The senior management has been involved
in breakfast meetings with relevant financial groups, and
the Company has hosted groups of foreign stakeholders
in on-site visits.
The successful capital increase and the corporate bond
issued by Eléctrica Angamos in December 2014 reflect the
growing interest and confidence that national and foreign
investors have in the Company thanks to the efforts put
forth by all of AES Gener’s various departments.
OWNERSHIP AND CONTROL OF THE COMPANY
AES Gener is an open stock corporation whose shares
are traded on three stock exchanges: the Santiago Stock
Exchange, the Valparaiso Securities Exchange, and the
Chilean Electronic Stock Exchange.
As of December 31, 2014, shareholders’ equity stood at
US$2.394 billion, divided into 8,400,318,891 shares and
distributed among 1,494 shareholders. At the end of the
fiscal year, Inversiones Cachagua Ltda. held a 70.71% stake
in AES Gener. The American company AES Corp. controls
AES Gener indirectly through its approximately 99.9%
ownership of Inversiones Cachagua SpA.
Due to the fact that the ownership of AES Corp is highly
disperse, the names of the individuals who own shares of
that company are omitted from this report.
Corporate Governance
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TWELVE LARGETS SHAREHOLDERS
Name No. of Shares Ownership Interest
Inversiones Cachagua SpA 5,940,023,140 70.7%
Banco de Chile on behalf of Third Parties
232,593,433 2.8%
Banco Itau on Behalf of Inverstors
184,662,813 2.2%
Provida C Pension Fund 181,166,529 2.2%
Habitat C Pension Fund 133,077,279 1.6%
BTG Pactual Chile S.A. Stock Brokers
130,584,660 1.6%
Cuprum A Pension Fund 109,200,443 1.3%
Capital C Pension Fund 105,118,934 1.3%
Habitat A Pension Fund 100,912,370 1.2%
Provida A Pension Fund 98,815,647 1.2%
Banco Santander - JP Morgan 98,808,288 1.2%
Cuprum C Pension Fund 97,329,715 1.2%
Total 12 largest shareholders 7,412,293,251 88.2%
Other shareholders (1,482) 988,025,640 11.8%
Total shareholders 8,400,318,891 100.0%
Type of Shareholder
No. of Shareholder
No. ofShares
OwnershipInterest
(%)
Chilean individual 1,224 26,416,389 0.31
Foreign individual 2 3,968 0.00
Foreign legal entity 7 339,144,833 4.04
Chilean legal entity 261 8,034,753,701 95.65
Total Shareholders 1,494 8,400,318,891 100.00
OWNERSHIP STRUCTURE
INVESTMENT AND FINANCING POLICIES
In accordance with the agreement reached at the extraordinary
general shareholders’ meeting held on July 4, 2001, the
Company’s by-laws make no reference to investment,
financing, or commercial policies either for the Company
or for its subsidiaries.
However, the by-laws do state that, in order for the
Company to fulfill its corporate purpose, it may manage the
investments that it makes in each of the companies that it
forms or to which it makes contributions; it may supervise
and coordinate the management of the companies that
it forms and to which it makes contributions; and it may
provide, to the companies that it forms or to which it makes
contributions, management services; auditing services;
financial, commercial, technical, and legal consulting
services; and, in general, services of any kind that are
deemed necessary for best performance.
The by-laws also state that whenever it forms companies
by contributing assets directly related to the generation of
electricity, AES Gener will retain at least 51% of the ownership.
70.7%
12.9%
16.4%
AES Pension Funds Others
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DIVIDEND POLICY
As instructed in Chilean Securities and Insurance Authority
(SVS) Bulletin No. 687, the Board of Directors, at meeting
599 held on March 26, 2014, agreed on the dividend policy
it considers suitable for the Company’s 2014 fiscal year.
This policy is stated below.
“It is the intention of the Board of Directors to distribute
up to 100% of the net income generated during 2014 in
dividends among its shareholders. The Board expressly
states its intention to distribute interim dividends during the
2014 fiscal year, but it also expressly states that fulfillment
of this dividend policy will be subject to the net income
actually earned, the results of periodic projections made
by the Company, the need for Company funds to finance
investment projects, and restrictions on dividends contained
in the Company’s by-laws and in existing loan agreements,
which consist largely of requiring compliance with the
negative covenants of those loans agreements and with
Company cash and investment policy.
Regarding dividends in upcoming years, the Board agreed
to maintain a dividend policy similar to the above over the
medium term.”
This policy was approved at the AES Gener annual
shareholders’ meeting held on April 29, 2014. The previous
year’s divided policy is stated below:
2013 DIVIDEND POLICY
As instructed in Chilean Securities and Insurance Authority
(SVS) Bulletin No. 687, the Board of Directors, at meeting
575 held on March 27, 2013, agreed on the dividend policy
it considers suitable for the Company’s 2013 fiscal year.
This policy is stated below.
“It is the intention of the Board of Directors to distribute
up to 100% of the net income generated during 2013 in
dividends among its shareholders. The Board expressly
states its intention to distribute interim dividends during the
2013 fiscal year, but it also expressly states that fulfillment
of this dividend policy will be subject to the net income
actually earned, the results of periodic projections made
by the Company, the need for Company funds to finance
investment projects, and restrictions on dividends contained
in the Company’s by-laws and in existing loan agreements,
which consist largely of requiring compliance with the
negative covenants of those loans agreements and with
Company cash and investment policy. Regarding dividends
in upcoming years, the Board agreed to maintain a dividend
policy similar to the above over the medium term.”
This policy was approved at the AES Gener annual
shareholders’ meeting held on April 30, 2013.
Corporate Governance
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Dividends distributed in recent years, in dollars per share:
N° Dividendo Tipo dividendo Fecha pago Monto por acción (US$) Imputado al ejercicio % de las utilidades
88 Interim 12-15-2009 0.004960 2009 12.0%
89 Final 05-11-2010 0.008709 2009 21.0%
90 Final additional 07-07-2010 0.005558 2009 14.0%
91 Final additional 10-07-2010 0.005558 2009 14.0%
92 Interim 01-05-2011 0.00905 2010 43.0%
93 Final 05-06-2011 0.011988 2010 57.0%
94 Eventual 05-06-2011 0.008922 2010 24.8%
95 Interim 09-14-2011 0.009790 2011 24.2%
96 Final 05-08-2012 0.002333 2011 5.8%
97 Final additional 05-08-2012 0.009316 2011 23.1%
98 Final additional 08-08-2012 0.018970 2011 46.9%
99 Interim 11-15-2012 0.008798 2012 35.0%
100 Final additional 05-22-2013 0.007786 2012 31.0%
101 Final additional 08-27-2013 0.008563 2012 34.1%
102 Interim 12-17-2013 0.009666 2013 38.7%
103 Final 05-22-2014 0.007480 2013 31.2%
104 Final 08-27-2014 0.007201 2013 30.0%
105 Interim 12-15-2014 0.013012 2014 50.6%
DIVIDENDS PAID AGAINST FISCAL YEAR 2013 PROFITS
At the annual shareholders’ meeting held on April 29, 2014, it
was agreed to distribute US$201,320,785.05 or approximately
100% of fiscal year 2013 net income, by distributing:
• An interim dividend of US$0.0096658 per share paid
in December 2013 for a total of US$78,000,096.91,
equivalent to 38.74% of 2013 earnings.
• A first additional dividend of US$0.0074795 per share
paid on May 22, 2014 for a total of US$62,829,869.70,
equivalent to 31.21% of 2013 earnings.
• A second additional dividend of US$0.0072010 for a
total of US$60,490,818.44, equivalent to 30.05% of 2013
earnings, paid on August 27, 2014.
Then, and in accordance with the dividend policy approved
at the annual shareholders’ meeting held on April 29, 2014,
the Board of Directors, at meeting no. 607 held on November
24, 2014, agreed to distribute US$109,300,749.25 in an
interim dividend of US$0.0130115 per share, to be charged to
fiscal year 2014 net income. This interim dividend amounts
to 50.60% of fiscal year 2014 net income, and was paid on
December 15, 2014.
de 2014, la cantidad de US$109.300.749,25 mediante el
reparto de un dividendo provisorio de US$0,0130115 por
acción, el cual corresponde a 50.60% de las utilidades del
ejercicio de 2014, el cual fue pagado a contar del día 15 de
diciembre de 2014.
Include transactions on the Santiago Stock Exchange, the Valparaíso Securities Exchange, and the Chilean Electronic Exchange
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INCOME DISTRIBUTION
Utilidad Distribuible MUS$
Net income attributable to parent company shareholders, fiscal year 2014
183,651
Less interim dividends paid (109,301)
Balance of distributable net income attributable to parent company shareholders, fiscal year 2014
74,350
Retained Earnings IFRS as of 12-31-2013 537,818
Retained Earnings IFRS as of 12-31-2013 218,757
Final 2013 dividends paid and charged to 2013 earnings (123,323)
Adjustment per SVS Official Bulletin No. 856 (130,742)
Retained Earnings and Proposed Dividend Reserve Accumulated for Distribution
502,510
Total Retained Earnings + Reserve for Future Dividends
576,860
STOCK MARKET INFORMATION
SHARE TRANSACTIONS (1)
There were no share transactions with related parties during
the 2013 and 2014 fiscal years.
PRECIO Y VOLUMEN TRANSADO DE LA ACCIÓN EN LA BOLSA DE COMERCIO DE SANTIAGO EN 2014
Mes Nº acciones
Ch$ Totales
Precio Promedio
(Ch$)
January 109,220,071 29,614,084,122 271.1
February 51,520,820 14,515,448,408 281.7
March 71,970,052 21,089,388,873 293.0
April 72,297,204 21,544,627,365 298.0
May 62,634,982 18,412,887,939 294.0
Jun 72,082,470 20,341,253,243 282.2
July 44,275,854 12,803,138,602 289.2
August 43,388,499 12,968,936,440 298.9
September 38,909,040 12,155,647,836 312.4
October 88,318,697 27,230,471,609 308.3
November 66,386,404 21,638,524,845 326.0
December 57,265,849 18,348,409,027 320.4
Total 778,269,942 230,662,818,309
Corporate Governance
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SHARE PRICE
SUMMARY OF SHAREHOLDERS’ COMMENTS AND PROPOSALS
During 2014, the Company did not receive comments or
proposals regarding the management of the company from
shareholders or their representatives owning 10% or more
of shares with voting rights, in accordance with Article 74 of
Law No. 18,046 governing Chilean stock corporations and
Article 13 of that law’s regulations.
EXTERNAL AUDITORS
At the April 29, 2014 shareholders’ meeting, the auditing
firm Ernst & Young was designated as the independent
auditor for the 2014 fiscal year.
INSURANCE
Insurance is an integral part of the company’s risk
management. AES Gener’s focus in insurance is on mitigating
financial losses and guaranteeing the continuity of its
business activities. Among its relevant insurance coverage
are all-risk policies covering the operation and construction
of all of its plants, including coverage for material damage
and financial losses resulting from business interruption
due to machinery breakdown, fire, acts of nature, and other
types of risk coverage offered on the insurance market.
Assets that must be imported such as coal, replacement
and spare parts, and other supplies are covered under all-
risk maritime, land, or air shipping policies. In addition, AES
Gener has general liability insurance coverage for itself and
its employees, as well as its contractors and subcontractors.
It also provides insurance policies for its workers in addition
to that required under Chilean law, including life insurance.
BRAND NAMES AND INTERNET DOMAINS
The Company has duly registered trademarks or trademark
applications in process for all of its brand names and those
of its subsidiaries, including registration of the different
company names and corporate slogans.
The Company has also registered its brands’ Internet domain
names to protect its intangible interests and assets.
jan-14 feb-14 mar-14 apr-14 may-14 jun-14 jul-14 aug-14 sep-14 oct-14 nov-14 dec-14
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HUMAN CAPITAL
The number of workers employed by the company in 2014
remained the same as in the previous year.
Personnel Employed by AES Gener and Subsidiaries at December 31, 2014
N° ofEmployees
AES Gener employees
Executives 52
Professionals staff members 336
Technicians and administrative personnel 371
Subtotal 759
Subsidiaries´Employees
AES Chivor 90
TermoAndes 51
Eléctrica Santiago 72
Eléctrica Angamos 106
Eléctrica Cochrane 35
Eléctrica Alto Maipo 78
Eléctrica Guacolda 197
Subtotal 629
Total Employees AES Gener and Subsidiaries 1,338
In matters of recruiting and hiring, 120 positions were filled
in 2014, most of which were in connection with new projects.
In order to attract new talent to the company, AES Gener
has continued with the internship agreements with the
industrial schools near our plants. The goal is to attract
internship-level students who are interested in our company
in order to develop and maintain ties over the long term. In
2014, students from the different towns filled 80 internships,
a figure that is expected to increase in 2015..
In order to ensure that newcomers to the company receive
key information on the organization, approximately 98% of
new hires participate in the company’s e-learning induction
program as well as its traditional on-site workshop
OCCUPATIONAL HEALTH AND SAFETY
Because AES Gener considers the human factor to be the
pillar that supports its business activities, “Safety” heads the
list of its corporate values. In order to take the company to
an accident-free level, we strive daily to meet the world’s
highest standards of health and safety. We encourage all
AES Gener personnel and contractors to live a culture of
safety not only at work, but when they are off the job as well.
The Company has adopted four safety tenets in order to
strengthen an awareness of how to perform daily activities
more safely:
1. Safety comes first for our personnel, our contractors, and
the people in our communities. All work activities must
be carried out safely in order to promote personal health,
safety, and wellbeing.
2. All occupational incidents can be prevented.
3. Working safely is a condition for employment, and all
individuals are responsible for their own safety, as well
as for that of their co-workers and of the people in the
communities where we work.
4. It is the right and obligation of all AES Gener personnel
and contractors to stop work immediately whenever they
see a situation that they consider to be unsafe.
This fourth tenet was developed as a final barrier to prevent
accidents, and it is the senior executives of the company
who have enacted it and empowered all Company personnel,
whether its own or that of collaborating companies, to put
it into practice as soon as an unsafe condition or action
is detected.
In the Company, all activities are carried out in accord with
AES Corp standards, which are based on international
standards such as OSHA, ANSI, and others. We also comply
with all Chilean standards and laws on risk prevention such
as Law 16,744 and its decrees and annually implemented
protocols.
OUR PEOPLE
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AES Gener S.A. and its subsidiaries use an integrated
management system called Genera, based on ISO 14,001
and OHSAS 18,001:2007. This management system, in place
since 2013, was recertified at all work centers in 2014, during
which all of the inspections were completed without Major
Noncompliance observations.
Like AES Gener group workers, contractors also carry
out their activities following the guidelines of the Safety,
Occupational Health, and Environmental Management
Regulations for collaborating companies, which must be
applied in all works, worksites, and/or service contracting.
These regulations seek to protect the safety of the individuals,
equipment, materials, and environment involved in the
work done by AES Gener and contractor employees. The
regulations also require that contractors conduct their
activities under a safety management system whose starting
point is our Occupational Environmental, Safety, and Health
Management system, Genera. As a means to empower
prevention among collaborating companies, the Company
has urged contractors to certify their management systems
in line with Genera so that their activities are carried out
consistently, effectively, and as safely as possible.
Our virtual safety champion, Máximo Segura, has continued
to be used in campaigns to emphasize safety in the Cardinal
Rules of Occupational Safety and Health, responsibility
in reporting incidents, and techniques to create a “super
safe” workplace.
A total of two lost-time incidents (LTI) occurred among all
AES Gener Group workers in Chile in 2014.
In 2014, an average of 1,279 AES Gener employees worked
a total of 3,455,482 man-hours. This results in an LTI rate
(per OSHA) of 0.134.
There were no contractor accidents involving lost time
(OSHA LTI) in 2014 during the 4,553,744 man-hours worked
by an average of 1,995 contractor employees.
Therefore, a monthly average of 3,274 AES Gener and
contractor employees worked 8,009,226 man-hours with
only two lost time incidents (OSHA LTI), giving an LTI
rate of 0.049, lower than the best 10% of the members of
the Edison Electric Institute (a rate of 0.14 for generation
and transmission companies). AES is a member of Edison
Electric and bases its global risk prevention goals on that
Institute’s figures.
Our construction projects are also built to exacting safety
standards. In 2014, construction contractor personnel
worked a total of 15,600,258 man-hours with an average
of 6,747 workers.
Among the honors the Company received in 2014, the
National Safety Council (Consejo Nacional de Seguridad)
recognized AES Gener for its outstanding risk prevention at
the Guacolda V project, which recorded 6 million man-hours
without LTI, and at the Ventanas project, which posted 2
million man-hours in the installation of emissions control
equipment with no LTI.
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The south region’s Work Safety Institute (IST) awarded AES
Gener the “Merit Prize” for its five LTI-free years at the Santa
Lidia plant, along with the national “Outstanding Prevention
Action or Contribution” prize, the IST’s highest award for
its members recognizing workers’ performance in risk
prevention. Finally, the Costa complex’s manager earned the
central region’s “Effective Leadership in Prevention” award.
HUMAN RESOURCES, WORK BENEFITS, AND QUALITY OF LIFE ON THE jOB
With a view toward Company sustainability and benefit to
its workers, AES Gener aims for its members to develop
along with the organization in order to be adequately
equipped to handle present and future challenges, which
adds value to our business. To administer its generating
plants efficiently and to bring the projects in its portfolio
to fruition, the Company seeks to attract, stimulate, and
retain the best people while strengthening its team by
adding the right individual for each position, those with
the development potential to handle new projects and to
make up replacement staff.
During 2014, the AES Gener Group invested Ch$1,000,047,775
in Chile in training and organizational development programs,
10% more than in 2013. The Training Department offered
382 courses with a total of 57,438 class hours to 1,213
workers during the year, amounting to an investment of
Ch$907,353,687. The increase in hours spent, individuals
trained, and investment made stemmed primarily from
the startup of the e-learning program, called the Technical
School (Escuela Técnica), which allows for the retention
and transfer of knowledge within the organization through
courses designed by in-house operations, maintenance,
and transmission experts to meet the specific needs of
our business. The result was a higher number of individuals
LTI Rate refers to the number of accidents with injury per each 200,000 man-hours worked.
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trained, which lowered the investment and time needed
for training.
To date, 883 people have received training over the course
of eight months, with a total of 22 courses given through
17,820 hours of education. The Technical School was
first implemented for Chile, although it is already up and
running in Argentina as well and will soon be implemented
in Colombia, becoming a regional training program for
SBU Andes.
Additionally, the Performance Management process continued
this year as a key tool for strengthening the performance of
all of the Company’s collaborators. All employees from all
of the departments participate, both from AES Gener and
its subsidiary companies. The process has three essential
stages: (i) setting performance objectives and criteria for
measuring achievement; (ii) review or feedback at mid-
year to take a look at the progress made so far; and (iii)
final assessment of goals and skills at the end of the year.
The main goal of the Performance Management Process
applied in the Company is to promote each person’s
professional development, which helps the individual
properly perform his or her specific job. To this end, the
relevant skills and objectives are assessed annually in order
to identify which aspects need to be developed over the
coming year to maximize an individual’s effectiveness in
that position. This helps achieve the company’s objectives
while also enhancing the employees’ personal development.
In order to strengthen this process, the Performance
Management course was implemented for all Company
employees through the e-learning method, which provides
tools to carry out this process more effectively.
The Great Place to Work survey was given for the third
year in a row, in which AES Gener ranked 45th among
the best companies to work in Chile, four places higher
than in the previous survey. The main goal is to compare
companies from the same industry and to improve our
current procedures and plans for the company’s human
resource management. We will continue to participate in
the annual survey, which will be held again in 2015, in order
to continue strengthening our procedures and plans for
HR management.
In 2014, Ch$92,694,068 was invested in different company-
wide programs focused on enhancing important aspects
of our organization’s work environment.
AES Corp and the AES Gener companies use the Hay
Group methodology in their practices and policies to set the
companies’ pay scales in such a way as to ensure a balance
between internal fairness and external competitiveness.
This methodology provides tools and common language
to describe each position’s actual responsibility and then,
based on eight factors, determines the proper level and
range of salaries for each position depending on what
the market is paying and our in-house situation in order
to maintain balance and fairness. The companies’ internal
situation is determined using market studies on pay scales
and benefits. We have also implemented follow-up tools
for personnel to handle salaries, promotions, and positions
on the salary scale.
From the first day they enter our company, AES Gener
employees receive a number of benefits that give them and
their families peace of mind and help them in the different
areas of their lives.
Workers have complementary health and life insurance that
covers spouses and children up to the age of 24 in addition
to the standard group coverage with the Isapre, or insurance
company. In addition, in 2014 all workers aged 35 and up
were given a preventive health checkup, repeated every
two years at no cost to the worker, for early detection of
illnesses that can affect their quality of life. When a worker
goes on medical leave, the company pays the first three
days of the leave, which are not covered by the Isapre,
as well as a complementary payment in addition to that
received from the Isapre so that they continue to receive
their regular salary during their illness.
Women employees with children under the age of five
receive a monthly supplement to help defray the cost of
child care until the child enters kindergarten. In 2014, outlay
for this item was Ch$31 million.
The company also offers educational benefits, including a
program for workers and their college-age children to apply
for scholarships to universities and professional institutes.
It gave out 115 of these scholarships in 2014, as well as 10
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scholarships based on academic excellence for elementary and
secondary school students in the Tocopilla area. In addition, all
children of employees receive annual bonuses for schooling, the
amount of which depends on what grade they are in. In all, the
company paid out approximately Ch$300 million in educational
benefits in 2014.
AES Gener provides recreational and sports facilities for workers
and their families in Valle Alegre and Maitenes, and it sponsors
activities for workers’ children during their winter and summer school
vacations. Approximately 200 children of employees participated in
these activities in the central, southern, and northern regions of Chile.
The Quality of Life Program, which is implemented systematically in
all of the country’s work centers, has continued to benefit workers’
health. Exercise and massage programs are held during breaks
and nutrition services are offered, all of which helps employees to
connect with one another and enhances the work environment.
Likewise, the alcohol and drug abuse prevention policy continued
with its program of random testing.
Workers also receive bonuses for births, weddings, and vacations.
In 2014, 62 birth and 17 marriage bonuses were given, along with
two payments made for the death of direct family members
Our People
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COrPOrATE sOCiAl rEsPONsibiliTY ANd THE ENvirONMENT
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CORPORATE SOCIAL RESPONSABILITY AND THE ENVIRONMENT
COMMUNITY AND ENVIRONMENT
At AES Gener, Corporate Social Responsibility (CSR) or Responsible Business (RB) is a way of doing business that takes into account the social, environmental, and economic effects of business activities, and incorporates respect for ethical values, individuals, communities, and the environment.
AES Gener understands CSR to be part of its operational
excellence, which is not simply how it operates its plants
and business activities, but also how it relates with the
communities where it carries out these activities, the same
ones that are home to a large percentage of its workers
and contractors, and with which it has a permanent “good
neighbor” policy.
The Company seeks to be socially responsible by fulfilling
its business mission – to provide a reliable source of
power – while acting ethically and responsibly toward all
the company’s stakeholders: its employees, communities,
customers, shareholders, investors, suppliers, contractors,
and partners. Its goal is to be an efficient, reliable company
that understands that the main issues in its business are risk
management, innovation, and creating value for all of its
stakeholders, and thus being mindful of its own sustainability.
It is being a company whose business activity, as a whole,
makes a positive contribution to society.
There are three pillars underlying AES Gener’s CSR: education,
employability, and community infrastructure. Through the
AES Gener Foundation, the Company carries out activities
in these three areas in all of the municipalities in which it
has operations.
COMMUNITY RELATIONS
AES Gener’s Policy on Ties and Relations with Local
Communities (PVRCL, from its initials in Spanish) guides its
relationship with the communities in which its plants and
projects are located, enabling the Company to manage its
social and environmental ties with the community effectively
and sustainably.
In addition to the CSR policy that AES Gener implements
through its AES Gener Foundation, each complex has specific
alliances established with their neighboring communities.
One example is the Angamos complex, which has signed
agreements with the Mejillones Municipality and with
educational establishments. It also serves on the Board of
the Foundation for the Sustainability of the Tern as well
as on the Board of the Mejillones Industrial Association.
The Norgener Complex sponsored a number of initiatives
in 2014 with its neighboring community. One highlight
was the third annual AES Gener Foundation Cup held
jointly with the Fundación Ganamos Todos (the We all Win
Foundation). In addition, the cooperation agreement with
the Tocopilla Municipality was renewed for the third year,
as was the strategic alliance with the Tocopilla Polytechnic
High School. Donations were also made to the municipality’s
fire department to update their equipment, which is key to
handling emergencies in the area.
In the Metropolitan Region, the Renca and Nueva Renca
plants have close ties with the community, and students
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from various industrial schools and institutes frequently
visit the facilities. Particularly important is its collaboration
with the Andes Professional Technical High School, the only
secondary school associated with DUOC Chile, a branch
of the Catholic University of Chile. The management and
workers also take part in a variety of activities with the
community and in conjunction with the Municipality of
Renca and its social and athletic organizations.
The AES Gener hydroelectric plants in the Cajón del
Maipo continue to maintain their long-standing tradition
(Maitenes, dating back to 1923) of keeping close ties with
the communities near their production centers, particularly
the towns of Alfalfal and Maitenes, all in line with company
policy. In 2014, in connection with the construction of the
Alto Maipo project, local residents received training in
such skills as rigger operator, housekeeper, agro-industrial
quality control agent, and security guard, all positions in
great demand in the construction of the project.
In 2014, 40 San José de Maipo residents received
entrepreneurial and information technology training in
the first AES POETA Project, an program developed by
AES Gener in connection with the Alto Maipo project that
provides entrepreneurial skills to young people and fosters
socioeconomic development in the town. Students were
taught how management, marketing, production processes,
and sales skills can be applied to the fields of tourism,
confectionery, greenhouses, and services.
The classes were given in a classroom equipped with
computers, software, and tools donated by the AES Gener
Foundation, Magenta, Microsoft, and the Trust for the
Americas, an agency in cooperation with the Organization
of American States (OAS).
In addition, thanks to an alliance between the Alto Maipo
project and the Claro cell phone company, residents of
the villages of Maitenes and Alfalfal and the surrounding
areas were able to access cell phone and Internet service
for the first time.
Several programs have been implemented at the Ventanas
plant to foster community development, and one important
contribution was the remodeling of the town’s municipal
gymnasium. The bleachers, locker rooms, restrooms, and
flooring were all improved, and the building was painted
both inside and out. This building is very important to the
residents of the area, as it is the only facility for hosting
athletic and cultural events indoors.
A project that AES Gener has implemented in conjunction
with other companies in the area provides transportation
grants to solve a problem common among higher education
students from Puchuncaví: the cost of traveling to schools
outside of their home municipality. A total of 250 students
received these grants that ease families’ expenses and
support community development by helping these future
professionals.
Scholarships were also awarded for students to attend
college entrance exam preparation centers, or what are
called pre-universities, and for students who attain the
municipalities’ highest scores on the PSU, the national
college entrance exam. In 2014, 30 students from two
Puchuncaví high schools (the Sargento Aldea de Ventanas
Educational Complex and the General Velásquez School)
received year-long college preparation scholarships at
the Pre-universitario de Pedro de Valdivia in Viña del Mar,
enabling them to prepare for the PSU in the subjects of
language and math. The three highest PSU scores also
received a one-time financial award.
One of the most important initiatives implemented in 2014
in Puchuncaví is the competitive grant fund, a program
that will last for 10 years.
THE AES GENER FOUNDATION
The Foundation began in 1995 as a non-profit agency named
the Maitenes Foundation. Its mission was to offer outdoor
educational programs to contribute to the educational and
ethical development of children, young people, and adults.
In 2011, the Maitenes Foundation changed its legal name to
the AES Gener Foundation as part of an effort to further
strengthen its role in formulating and implementing the
Company’s community programs. The organization’s activities
expanded to include designing and executing educational and
work training programs, promoting employment, improving
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community infrastructure, and supporting sports, culture,
and the arts. All of this is done within the framework of the
Foundation’s primary values: sustainability, environmental
protection, and safety.
The AES Gener Foundation has a General Council made
up of Company executives and professionals who see to
it that the Foundation fulfills its objectives and that its
funds are properly administered. The Foundation is led by
a General Director who directs, oversees, and leads the
implementation of the programs and activities that are
scheduled each year.
EDUCACIÓNPrograma MUNK
The MUNK program has been in place in Mejillones and
Tocopilla public schools since 2011. In 2014, it benefited
over 2,000 fifth to eighth graders who attend the public
schools in those towns.
This program works actively with local schools to provide
students access to an online platform that uses cartoons
and games to help the students practice their English.
The focus is on “edutainment,” which combines education
and entertainment to encourage a love of learning and to
improve grades.
MUNK gets the students’ teachers and parents involved
as well. The educators monitor their students’ progress
through online reports for the class overall as well as for
each pupil. They then use this data to focus their teaching
on areas where the class or individual students are having
the most difficulty. The parents receive progress reports
and other information on their children.
In 2011 the AES Gener Foundation, in an effort to expand
the career options available to young people, established its
Pre-university Scholarship program for high school seniors
from Puchuncaví. The program awarded 30 scholarships to
the Pedro de Valdivia college entrance exam preparation
center in Viña del Mar to local 12th graders in 2014.
As in 2013, academic excellence scholarships were awarded
to the students who achieved Puchuncaví’s three highest
2014 college entrance exam (PSU) scores to help defray
their living expenses during their first year at the university.
Work/Study and Employability
The AES Gener Foundation sponsors the Work/Study program
at the Ventanas plant in the Municipality of Puchuncaví.
The program seeks to produce competent professionals
with practical experience in their area of expertise, to help
young people become more employable, to have better
trained technical personnel with skills adapted to actual
industrial conditions, and to create a link between the
Company and the community.
Under this program, 11th and 12th graders at Puchuncaví’s
Sargento Aldea Educational Complex go to the AES Gener
Ventanas plant twice a week to gain hands-on experience
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in subjects whose theory they have studied in school in
their different areas of expertise: administration, electronics,
and electricity. AES Gener not only opens its doors to the
students, but also provides them with an expense allowance,
meals, safety equipment, and bus fare.
SPORTSThe AES Gener Foundation Cup
This athletic event, sponsored by the AES Gener Foundation
together with the Ganamos Todos Foundation since 2012,
seeks to encourage athletic activity among boys and girls
in 5th to 8th grade who live and study in Tocopilla.
The purposes of the program are to encourage physical
activity; create jobs for young people and adults through
training as coaches, umpires, and leaders; encourage good
nutrition to improve quality of life; and reinforce social values
such as teamwork, discipline, and perseverance.
The AES Gener Foundation Cup has helped decrease drug
and alcohol use among young people in the community,
many of whom live in highly vulnerable socioeconomic
conditions.
A highlight of the 2014 championship was the participation
of the Pedro Aguirre Cerda Special School team, made up
of special-needs children in the municipality.
TRAINING AND EMPLOYABILITY PROGRAMS
The AES Gener Foundation has developed programs to
improve job opportunities in the communities where the
Company has operations or is building new plants. For
example, programs to train residents as rigger operators,
housekeepers, agro-industrial quality control agents, and
security guards have been offered in San José de Maipo,
while in Tocopilla residents have been trained as customs
agents, linemen, and nurses’ aides.
COMMUNITY INFRASTRUCTURE
One of the pillars of AES Gener’s CSR area is to help improve
community infrastructure.
The improvement and construction project on the Mejillones
Sports Complex was completed in 2014. The complex now
has two fields for five-player soccer, two fields for seven-
player soccer, and one regulation size field with locker
rooms, restrooms, and an administrative office. The tennis
courts and a multi-purpose court were also remodeled,
and bleachers were built on the north side of the Mejillones
Municipal Stadium. Total investment was Ch$1.2 billion.
SAN JOSÉ DE MAIPO GRANT FUND
The AES Gener Foundation administers the social program
that was created under the Community Accord signed
with the community of San José de Maipo as part of the
Alto Maipo Hydroelectric Project (PHAM for its initials in
Spanish). This program consists of the Fondo Concursable
San José de Maipo fund for projects that will benefit the
community as a whole. The program will last for 30 years
and finances projects for UF5,807 per year.
In July and August, over 100 people learned how to draw
up bids for community projects and micro-entrepreneur
funding. A manual on presenting a proposal was used to
help with the training and is available on the AES Gener
Foundation website (http://www.fundacionaesgener.cl).
Out of the 104 projects proposed in 2014, a selection was
made of 16 proposals submitted by community organizations
in the fields of education and training, community development
and infrastructure, and a variety of athletic disciplines.
Nine micro business projects were also awarded funding.
The initiatives are highly diverse, and include the projects
“Learning for Entrepreneurship, “An Interactive Library in
our Preschool,” “Sports and Fun Culture for my Neighbor,”
“Technology for Better Communication,” “Creating Hope
through Practicing Mountain and River Sports,” and many
others led by community organizations. Among the micro
business projects selected are Ana María’s Secrets, Souvenir,
and the Historical Heritage of San José de Maipo.
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AES GENER PUCHUNCAVÍ GRANT FUND
The AES Gener Puchuncaví grant fund, established in 2014,
benefits 31 social organizations that develop projects to
support community infrastructure, social development,
and initiatives that foster tourism and culture, promote
and develop productive or service activities, and promote
a healthy, active lifestyle.
The AES Gener Puchuncaví will contribute UF4,117 per year
for 10 years to help residents to create the community
they desire.
CUSTOMERS
AES Gener is fully aware that the service it provides is very
important to individuals’ quality of life and to the economic
development of the country. The Company knows that the
reliability and efficiency of our processes are highly relevant
to the competitiveness of our industrial customers and to
the budgets of end consumers.
Knowing that a reliable power supply is crucial, AES Gener,
as the country’s largest thermoelectric generation company,
seeks to back its contracts with actual efficient generating
capacity to ensure that electricity really will be available
under critical supply conditions.
With a view to process efficiency, we at the company
constantly monitor our operational parameters, seeking to
reach world-class standards in our generation practices.
For each one of our projects, the company selects the fuel
option that is most economically efficient for generating
electricity and that meets specific standards of reliability
and safety, all while complying with all applicable regulations
and its environmental policy.
Likewise, AES Gener stresses the prevention of outages
or technical problems that are unlikely but could cause
potentially serious impacts, constantly seeking to improve
the quality of its service.
Corporate Social Responsabilityand the Environment
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SUPPLIERS AND CONTRACTORS
Providing proper health and safety conditions is AES Gener’s
primary responsibility toward workers and contractors that
regularly or occasionally work at company facilities.
The safety equipment measures and standards in place at
AES Gener facilities apply to both company and external
employees, and for technical work at its plants. All workers
are required on an equal basis to undergo pre-hiring medical
screening to reduce the risk of accidents.
AES Gener’s policy is to give priority to hiring suppliers
and contractors from the towns in which the Company
operates and that meet both the safety and expertise
standards required.
Another relevant aspect, primarily regarding those who
provide specialized services, is the long-term relationship
that the Company seeks to establish with them. This is
due to the high degree of specialization and strict safety
standards required for maintaining electrical power plants
and transmission lines, and it provides an incentive for
employers to train and improve outsourced personnel as
part of a stable relationship of mutual cooperation that
demands high quality service at competitive prices.
In 2014, AES Gener added new options for handling
international tender processes, ensuring equal access to
information for all potential suppliers and the application
of objective selection criteria, thus incorporating best
practices into the procurement system.
Also to ensure transparency and access of information,
the Company continued strengthening its work with the
REPRO Suppliers Directory administered by Achilles Chile,
a company that specializes in dealings with suppliers.
This directory enables supply companies to see and update
the information on their products and services directly on
the Internet, information that is subsequently validated
by Achilles. The system gives suppliers and contractors
greater visibility among their clients while also generating
economies of scale: Since the system is open to all energy
sector players, the companies registered become available
for any procuring company that participates in REPRO.
The system operates with the industry’s highest security
and control standards, with easily traceable transactions,
so purchases are handled safely and reliably.
AddiTiONAl iNFOrMATiON
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MARCH 21, 2014
The Company reported that the Board of Directors agreed
primarily to the following regarding AES Gener S.A.’s
issuance of cash shares: (i) to offer and place 335,229,412
cash shares to be charged against the Company’s capital
increase approved at the Special Shareholders’ Meeting held
on October 3, 2013; (ii) to set the deadline for determining
the shareholders who will be entitled to a preferred stock
option at March 26, 2014; (iii) to set the period for exercising
the preferred stock option from April 1, 2014 to April 30,
2014; and (iv) to establish the subscription price of Ch$255
per share.
MARCH 28, 2014 Material Event
Pursuant to Article 9 and paragraph two of Article 10 of Law
18,045 and to SVS General Standard No. 30, the Company
reported as a material event that on this date the Company
agreed to buy the shares representing a 50% ownership
interest in Empresa Eléctrica Guacolda S.A. offered by
Empresas Copec S.A. and Inversiones Ultraterra Limitada.
AES Gener S.A. agreed to purchase from Empresas Copec
and Inversiones Ultraterra Limitada 108,845,612 shares
in Empresa Eléctrica Guacolda S.A. at a total price of
US$728,000,000 to be paid to those companies in equal
parts. The transaction is to take place within 15 days of the
acceptance of the offer.
The Company also reported that, in order to have access to
sufficient funds to pay the purchase price, AES Gener had
signed a non-revolving corporate financing credit for up
to US$700,000,000 with Deutsche Bank Trust Company
Americas, which acted as coordinating and administrative
agent on behalf and in representation of a syndicate of
banks including Deutsche Bank AG, London Branch, and
Sumitomo Mitsui Banking Corporation. Finally, it reported
that, also on this date, AES Gener agreed to sell 108,845,611
Empresa Eléctrica Guacolda shares to Global Infrastructure
Partners under conditions substantially similar to those
of AES Gener’s purchase of those shares from Empresas
Copec S.A. and Inversiones Ultraterra Limitada, under the
condition precedent that AES Gener first acquire the shares
MATERIAL EVENTS REPORTS SUBMITTED TO THE CHILEAN SECURITIES AND INSURANCE AUTHORITY (SVS) IN 2014
from those companies. As a result of these transactions,
AES Gener S.A. will become owner, directly or indirectly,
of 50.01% of the shares in Empresa Eléctrica Guacolda
S.A., which will become a subsidiary of the former, while
Global Infrastructure Partners will become indirect owner
of the approximately 49.99% remaining ownership interest.
MARCH 28, 2014Material Event
Pursuant to Article 9 and paragraph two of Article 10, both
of Law 18,045 governing the securities market, and to SVS
General Standard No. 30 and Bulletin 660, the Company
reported as a material event that at regular board meeting
599 held on March 26, 2014, the AES Gener S.A. Board of
Directors agreed to call an Annual Shareholders’ Meeting
to be held on April 29, 2014 in order to present and vote
on the following matters:
(i) Approval of the Financial Statements and the Annual
Report for the fiscal year ended December 31, 2013, including
the external auditors’ report; (ii) Distribution of earnings
and the final dividend; (iii) Setting of the remunerations
for the Board Committee members, approval of the
Committee’s budget and its consultants for 2014, and the
report on the Committee’s expenses and activities during
2013; (iv) Designation of an external auditing company for
the 2014 fiscal year; (v) Dividend policy; (vi) Information
on transactions between related companies as referred
to in Title XVI of Law 18,046 governing corporations; (vii)
Other matters of Company interest pertinent to this type
of meeting; and (viii) Any other agreements necessary to
implement the decisions made at this Shareholders’ Meeting.
MARCH 28, 2014Material Event
Pursuant to Article 9 and paragraph two of Article 10, both
of Law 18,045 governing the securities market, and to SVS
General Standard No. 30 and Bulletin 660, the Company
reported as a material event that in board meeting 559 held
on March 26, 2014, in which it was agreed to call for the
Annual Shareholders’ Meeting on April 29, 2014, the Board
also agreed to propose at the Shareholders’ Meeting the
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distribution of 100% of the earnings of the fiscal year ended
December 31, 2013 that may be distributed as dividends,
for a total of US$201,320,785.05.
It also reported that the amount of the final per-share
dividend to be distributed would be determined upon
completion of the Company’s share issuance and placement
that was in process at that time, and whose preferred
stock option period would begin on April 1. The interim
dividend of US$0.0096658 paid in December 2013, totaling
US$78,000,096.91, would be deducted from that amount;
this interim dividend represented 38.74% of the earnings
for the year ended December 31, 2013 that were eligible for
distribution as dividends. Of the balance to be paid as final
dividend, US$62,829,869.70, or 31.21% of the earnings for
the fiscal year ended December 31, 2013 to be distributed
in dividends, would be distributed among shareholders
entitled to receive it on May 22, 2014; and on August 27,
2014, the amount of US$60,490,818.44, or 30.05% of the
earnings for the fiscal year ended December 31, 2013 to be
distributed in dividends, would be paid to the shareholders
entitled to receive it.
APRIL 3, 2014
Pursuant to SVS Bulletin 832 of April 2, 2014, the Company
reported that as of that time it had not detected any effects
or impacts as a result of the earthquake that occurred on
April 1, 2014.
APRIL 11, 2014Material Event
Pursuant to Article 9 and paragraph two of Article 10 of Law
18,045, and to SVS General Standard No. 30, the Company
reported as a material event that on this date the Company
purchased 108,845,612 of the shares in Empresa Eléctrica
Guacolda S.A. from Empresas Copec S.A. and Inversiones
Ultraterra Limitada for a total of US$728,000,000, an
amount which was paid in equal parts to the two selling
companies, as each company owned 54,422,806 shares
of Empresa Eléctrica Guacolda S.A. stock. It also reported
that, on the same date, AES Gener S.A. sold 108,845,611
shares of Empresa Eléctrica Guacolda S.A. stock to El
Aguila Energy SpA, a Global Infrastructure Partners related
company, under conditions substantially similar to those
under which AES Gener S.A. acquired the shares from
Empresas Copec S.A. and Inversiones Ultraterra Limitada.
As a result of these transactions, AES Gener S.A. became
direct owner of approximately 50.01% of Empresa Eléctrica
Guacolda S.A.’s capital stock, by which the latter became
a subsidiary of AES Gener S.A., while El Aguila Energy
SpA became direct owner of the approximately 49.99%
remaining shares. Finally, the Company reported that
AES Gener S.A. would not consolidate its new subsidiary
Empresa Eléctrica Guacolda S.A. in its accounting given
the agreement reached with Global Infrastructure Partners.
AES Gener and its subsidiary Empresa Eléctrica Guacolda
entered into a services agreement on this same date.
APRIL 30, 2014Material Event
The company reported the decision made at the AES Gener
Annual Shareholders’ Meeting held on April 29, 2014 to
distribute US$201,320,785.05 in dividends, to be charged
against the earnings of the 2013 fiscal year. This amount is
100% of the 2013 earnings eligible for dividend distribution.
The interim dividend of US$0.0096658 per share, totaling
US$78,000,096.91, which was paid in December 2013
must be deducted from the final dividend. The balance to
be paid as a final dividend will be paid in a first additional
dividend, distributed among the shareholders entitled
to receive it, totaling US$62,829,869.70, or 31.21% of the
earnings of the fiscal year ended December 31, 2013 that
are eligible for dividend, to be paid on May 22, 2014; and
a second additional dividend, to be distributed among
the shareholders entitled to receive it, on August 27, 2014,
totaling US$60,490,818.44, or 30.05% of the earnings of
the fiscal year ended December 31, 2013 that are eligible
as dividends. The Company also reported that, given that
on this date the Company’s share issuance and placement
process was still in progress, with the preferred stock
option period having begun on April 1, at this time it was
not possible to determine the exact per-share amount of
the dividend to be paid. Therefore, the amount to be paid
on each date would be determined by dividing the total
amount of the dividend to be paid by the total number
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of shares entitled to receive the dividend that had been
registered with the Company’s Shareholders’ Registry by
midnight on the fifth working day prior to the payment
date indicated.
MAY 2, 2014Material Event
Pursuant to Article 9 and paragraph two of Article 10 of
Law 18,045, and to SVS General Standard No. 210, the
Company reported as a material event that on April 29,
2014, it learned of the resignation of Mr. Juan Andrés Camus
as Regular Director of AES Gener.
MAY 5, 2014Material Event
Pursuant to Article 9 and paragraph two of Article 10 of
Law 18,045, and to General Standard No. 30 and Bulletin
1375, both of the SVS, the Company reported that,
regarding the capital increase approved at the Special
Shareholders’ Meeting held on October 3, 2013, when the
preferred stock option period ended on April 30, 2014 for
the 335,229,412 first-issue cash shares, charged against
the said capital increase, a total of 330,619,858 shares
had been subscribed and paid at a price of Ch$255 per
share, and that Ch$84,308,063,790 had been raised. The
Company also reported that the controlling shareholder,
Inversiones Cachagua SpA, subscribed and paid 100% of
its stock option. Finally, it reported that the Board would
at a later date decide on the end use of the 4,609,554
cash shares that were not subscribed during the preferred
stock option period.
MAY 9, 2014Material Event
The Company reported that, as a complement to the
additional dividend payment information reported on April
30, 2014, having completed the preferred stock option period
for the Company’s cash shares that began on April 1, 2014,
the Company determined the number of shares that would
be entitled to receive the first additional dividend payment
and the per-share amount to be paid in the dividend, which
would be US$0.0074795 per share.
MAY 29, 2014Material Event
Pursuant to Articles 9 and 10 of Law 18,045 on the securities
market and to SVS General Standard No. 30, the Company
reported as a material event that, in its meeting held on May
28, 2014, the AES Gener S.A. Board of Directors agreed to
change the group’s corporate structure, primarily for the
purpose of simplifying its business structure. To this end,
the following were among the decisions made: (i) Through
a sales agreement, AES Gener would transfer the group’s
Santa Lidia and Los Vientos diesel-fired generating plants
to the subsidiary Sociedad Eléctrica Santiago SpA (ESSA).
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The coal-fired thermal generation plant owned by Norgener
S.A. (Norgener) in the municipality of Tocopilla in the
Antofagasta Region (the Tocopilla plant), consisting of two
units of 136 MW and 141 MW of capacity each, respectively,
would be transferred to AES Gener. To achieve this, AES
Gener S.A., as majority stockholder of Norgener, would
divide that company and would assign the Tocopilla plant,
as well as all of its commercial power sales and operations
agreements, to the new corporation that would be created
in the division. Immediately afterward, the said company
that would be created in the division and that would be
assigned the Tocopilla plant and its contracts would be
absorbed by AES Gener, who would finally be the new
owner of the Tocopilla plant and Norgener’s legal successor
in all contracts; and (ii) the consolidation in Norgener of
the entire operation generated by the Special Purpose
Subsidiary or Affiliate Finance Project and the investment
in the Colombian subsidiary AES Chivor S.C.A. ESP.
JUNE 13, 2014
Pursuant to Section II of SVS General Standard No. 30, the
Company submitted to that Commission a copy of the early
redemption notice for the Series O bearer bond redemption
published in the newspaper El Mercurio on June 12, 2014.
OCTOBER 6, 2014
Pursuant to Article 63 of Law 18,046 governing corporations,
the Company reported that, regarding the resignation
tendered by Mr. Juan Andrés Camus as regular director
of AES Gener S.A. on April 29, 2014, the Board voted
at its September 24, 2014 meeting to call for a Special
Shareholders’ Meeting on October 23, 2014 in order to study
and vote on the following matters: (i) The dissolution and
election of a new board of directors for the company; (ii)
Information on transactions with related parties governed
by Title XVI of Law 18,046 on corporations; and (iii) Any
other agreements needed to implement the decisions made
at this Shareholders’ Meeting
OCTOBER 23, 2014Material Event
Pursuant to Article 9 and Article 10, paragraph 2 of Law
18,045 governing the securities market and to Section II, No.
2.2 of SVS General Standard No. 30, the Company reported
that the Company’s board of directors was dissolved at
the Special AES Gener Shareholders’ Meeting held on
October 23, 2014 and that a new board was elected. The
new board will exercise its functions until the 2017 Annual
Shareholders’ Meeting and is made up of the following
regular and alternate members:
Regular Alternate
Andrés Gluski W. Stephen Coughlin
Radován Razmilic Joel Williams Abramson
Arminio Borjas Martín Genesio
Andrew Vesey Margaret Tigre
Tom O’Flynn Bernerd Da Santos
Iván Díaz-Molina Varsovia Valenzuela
José Pablo Arellano Rafael González Amaral
The Company also reported that the directors Iván Diaz
Molina and José Pablo Arellano Marín and their respective
alternates will serve as independent directors as stated in
Article 50 bis of Law 18,046. Finally, it reported that at the
special board meeting held on this same date, and after
the Special Shareholders’ Meeting previously mentioned,
the Board of Directors appointed Mr. Andrés Gluski Weilert
as Chairman of the Board and President of the Company.
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NOVEMBER 20, 2014 Material Event
Pursuant to Article 9 and Article 10, paragraph 2 of Law
18,045 governing the securities market, and to SVS General
Standard 30, the Company reported that on November 19,
2014 it learned of the resignation tendered by Mr. Andrew
Vesey as regular director of the AES Gener Board. The
resignation is effective November 30, 2014.
NOVEMBER 21, 2014Material Event
Pursuant to Articles 9 and 10 of Law 18,045 governing the
securities market, and to SVS General Standard 30, the
Company reported that on this date Empresa Eléctrica
Angamos S.A., a subsidiary of AES Gener S.A., agreed to
issue and place on the international market, under Rule 144A
and Regulation S of United States securities regulations,
US$800,000,000 in long-term bonds at an initial annual
interest rate of 4.875% and maturing in 2029. It reported
that the purpose of these bonds would be to finance: (a)
a portion of the loan with which Angamos financed the
construction of its plant; (b) the costs of terminating the
derivative agreements entered into by Angamos in connection
with the loan referred to in letter (a) above; (c) the costs
involved in the 144A bond issuance; and (d) other general
corporate purposes of Angamos, including work capital.
Additional Information
NOVEMBER 24, 2014Material Event
The Company reported that the AES Gener S.A. Board
of Directors in its November 24, 2014 meeting agreed to
distribute US$109,300,749.25 in an interim dividend of
US$0.0130155 per share, to be charged to fiscal year 2014
earnings. The dividend would be paid in cash on December
15, 2014.
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AES CHIVOR & CIA SCA ESP
Identification
Type of company
Foreign partnership limited by shares
Address: Av. Calle 100 No. 19-54, Piso 9, Bogotá, Colombia
Telephone: (57 1) 407-9555 - Fax: (57 1) 642-7311
Business activities
Generation and sale of electricity. Maintenance and repair
of equipment used in generation or other similar types of
plants.
Capital and shares
Paid-in capital
US$ 0 (Col$ 0)
Subscribed and paid shares
222,818,836
Ownership
99.99% indirectly through Norgener S.A. (222,769,668)
and AES Gener (1 share)
INFORMATION ON RELATED COMPANIES AS OF DECEMBER 31, 2014
Regular Directors
Daniel Stadelmann (2)
Luis Carlos Valenzuela
Roberto Junguito
Luis Felipe Cerón (1)
Elizabeth Hackenson
Alternate Directors
Federico Echavarría
Alberto Zavala (9)
Brian Miller
Arminio Borjas (3)
Annemarie Reynolds
Chief Executive Officer
Federico Echavarría
Personnel*
7 administrative staff
15 executives
30 professional staff
38 technical staff
AES CHIVOR S.A. (SOCIO GESTOR DE AES CHIVOR & CIA SCA E.S.P.)
Identification
Type of company
Foreign corporation
Address: Av. Calle 100 Nº 19-54 Piso 9, Bogotá, Colombia
Telephone: (57 1) 407-9555 - Fax: (57 1) 642-7311
Business activities
The subscription, acquisition, sale of, or investment in
securities, shares, bonds convertible into shares, and all
types of debt instruments; investments in other companies;
investments in all types of goods for it to carry out its
business activities; joint ownership of other companies,
contributing capital to or acquiring or holding shares
and debt of other companies. It does not collateralize or
guarantee third-party debt or that of its own shareholders.
Capital and shares
Paid-in capital
US$57,554 (Col$120,000,000)
Subscribed and paid shares
120,000
Ownership
99.38% directly and indirectly through Norgener S.A. and
Sociedad Eléctrica Santiago SpA.
ALTO MAIPO SPA
Identification
Type of company
Limited liability stock company
Chilean Taxpayer ID No.: 76.170.761-2
Address: Rosario Norte No. 532, Piso 19,
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Fax: (56 2) 2686-8990
Business activities
Hydroelectric power generation; providing engineering
services; transmission and distribution of electricity.
Capital and shares
Paid-in capital
US$ 128,577,301
Subscribed and paid shares
6,320,160 Subscribed and paid shares; 134,575 shares
subscribed and pending payment
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Information on Related Companies
Ownership
60% indirectly through Norgener SpA.
President
Daniel Stadelmann (2)
Regular Directors
Luis Felipe Cerón (1)
Daniel Stadelmann (2)
Alejandro Rivera
Nicolás Caussade
Alternate Directors
Vicente Javier Giorgio (4)
Alberto Zavala (9)
Anna Gretchina
Juan Esteban Poblete
Chief Executive Officer
Luis Knaak Quezada (8)
EMPRESA ELÉCTRICA ANGAMOS S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 76.004.976-K
Address: Rosario Norte No. 532, Piso 19,
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Fax: (56 2) 2686-8990
Business activities
Generation, transmission, purchase, sale, and distribution
of electricity or any other kind of energy, anywhere in the
country or the world.
Capital and shares
Paid-in capital
US$ 326,869,538.99
Shares issued and paid
22,150,749,834
Ownership
100% directly and indirectly through Inversiones Nueva
Ventanas S.A.
President
Ricardo Falú (5)
Directors
Ricardo Falú (5)
Vicente Javier Giorgio (4)
Luis Knaak Quezada (8)
Chief Executive Officer
Vicente Javier Giorgio (4)
Personnel*
Technical and Administrative
staff: 60
Professional staff: 45
Executives: 1
EMPRESA ELÉCTRICA CAMPICHE S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 76.008.306-2
Address: Rosario Norte 532 piso 19
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Business activities
Generation, transmission, sale, and distribution of electricity;
extraction, distribution, and exploitation of fuels.
Capital and shares
Paid-in capital
US$8,669,066
Shares issued and paid
522,974,841
Ownership
100% directly and indirectly through Inversiones Nueva
Ventanas S.A.
President
Vicente Javier Giorgio (4)
Directors
Ricardo Falú (5)
Vicente Javier Giorgio (4)
Osvaldo Ledezma (6)
Chief Executive Officer
Luis Knaak Quezada (8)
EMPRESA ELÉCTRICA COCHRANE SPA
Identification
Type of company: Limited liability stock company
Chilean Taxpayer ID No.: 76.085.254-6
Address: Rosario Norte No. 532, Piso 19,
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Business activities
Generation of energy; engineering services; transmission
and distribution of electricity.
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* Luis Knaak Quezada resigned on March 27, 2015 and was replaced by Elizabeth Hackemson.
Capital and shares
Paid-in capital
US$ 173,413,746
Subscribed and paid shares
257,163,745
Ownership
60% indirectly through Inversiones Nueva Ventanas S.A.
President
Ricardo Falú (5)
Regular Directors
Luis Felipe Cerón (1)
Ricardo Falú (5)
Masao Ikeya
Toshiro Shimazaki
Luis Knaak Quezada (8)*
Alternate Directors
Vicente Javier Giorgio (4)
Alberto Zavala (9)
Takao Fujii
Montserrat Galimany
Valerie Barnich (7)
Chief Executive Officer
Luis Knaak Quezada (8)
EMPRESA ELÉCTRICA GUACOLDA S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 96.635.700-2
Address: Apoquindo No. 3885, piso 10 Las Condes, Santiago,
Chile
Telephone:(56 2) 2362-4031
Fax: (56 2) 2362-1675
Business activities
Exploitation, generation, transmission, purchase, distribution,
and sale of electricity; provision of port and pier, engineering,
and other services.
Capital and shares
Paid-in capital
MUS$343,160,331.30
Shares issued and paid
217,691,224
Ownership
50.01%
President
Jorge Rodríguez Grossi
Regular Directors
Luis Felipe Cerón (1)
Daniel Stadelmann (2)
Vicente Javier Giorgio (4)
Jonathan Bram
Thomas Frazier
Randy Robertson
Alternate Directors
Alberto Zavala (9)
Juan Ricardo Inostroza (10)
Luis Knaak Quezada (8)
Churcri Hjeily
Patricio Chico
Roberto Callahan
Chief Executive Officer
Vicente Javier Giorgio(4)
EMPRESA ELÉCTRICA VENTANAS S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 96.814.370-0
Address: Rosario Norte No. 532, Piso 19,
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Business activities
Generation, transmission, purchase, sale, and distribution
of electricity or any other kind of energy, anywhere in the
country or the world; extraction, distribution, sale, and
exploitation, in any way, of solid, liquid, and gaseous fuels;
sale and provision of engineering-type maintenance and
repair services; lease, construction, or acquisition of piers
or ports and their exploitation, in any way; and all other
productive and commercial activities that are complementary
to these business activities.
Capital and shares
Paid-in capital
US$ 29,553,528
Subscribed and paid shares
39,719,916,310
Ownership
100% directly and indirectly through Inversiones Nueva
Ventanas S.A.
President
Vicente Javier Giorgio (4)
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Information on Related Companies
Directors
Vicente Javier Giorgio (4)
Luis Knaak Quezada(8)
Ricardo Falú(5)
Chief Executive Officer
Luis Knaak Quezada(8)
ENERGEN S.A.
Identification
Type of company: Corporation
Address: Reconquista 336, Piso 3, Oficina GG, Ciudad
Autónoma de Buenos Aires C1003ABH, Argentina
Telephone: (54 11) 4891-2300
Business activities
Wholesale purchase and sale of electricity generated by and
to be used by third parties; import, export, consignment,
brokerage, and sale of electricity in Argentina and/or in other
countries; any type of business and/or activity related to
electricity generation, transmission, and distribution; fuel
sales of any kind.
Capital and shares
Paid-in capital
AR$51,710 (US$21,000)
Shares issued and paid
51,710
Ownership
94% directly and 6% indirectly through Gener Argentina S.A.
President
Martín Genesio
Regular Directors
Patricio Testorelli
Vicente Javier Giorgio (4)
Alternate Director
Emiliano Chaparro
Chief Executive Officer
Martín Genesio
GASODUCTO GASANDES S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 96.721.360-8
Address: Avenida Chena 11650, Parque Industrial Puerta
Sur, San Bernardo, Santiago, Chile
Telephone: (56 2) 2366-5960
Fax: (56 2) 2366-5074
Business activities
Transporting natural gas and investing in everything related
to natural gas services in Chile or in other countries, on its
own behalf, in association with, or on behalf of third parties,
with the ability to apply for the concessions and permits
needed for these purposes. May take part in any kind of
business or activity directly or indirectly related to its line of
business, including but not limited to: establishing, operating,
exploiting, handling, and using natural gas transportation
facilities or networks; separating and processing natural gas
liquids; the engineering and technical services necessary
for pipelines or ducts; administering the construction
of pipes or ducts; and, in general, all of the services or
activities connected with transporting, marketing, storing,
or processing natural gas.
Capital and shares - Capital issued
US$ 16,264,000
Subscribed and paid shares
172,800
Ownership 13%
PresidentHugo Antranik Eurkirian
Regular DirectorsHugo Antranik Eurkirian
Santiago Marfort
Matias Brea
Emilio Daneri
Victor Turpaud Fernandéz
Francisco Gazmuri
Klaus Lührmann Poblete
Osvaldo Edezma
Santiago Garcia Mira
Alternative DirectorsNéstor Raffaeli
Fernand Ketchian
José Rolandi
Bernardo Andrews
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Business activities
Financial and investment transactions on its own or others’
behalf, including granting or taking out loans; capital
contributions; purchase and sale of shares, debentures,
negotiable debt instruments, transferable securities, and
commercial papers; taking part directly or through other
controlled or related companies in bid(s) for shares of
companies whose assets are hydraulic or thermal plants that
have not yet been privatized by the Argentine government
or develop other projects in the Argentine power industry.
Capital and shares
Paid-in capital
AR$544,443,672 (US$ 224,928,640)
Subscribed and paid shares
544,443,672
Ownership
92.0% directly and 7.96% indirectly through Norgener SpA
President
Martín Genesio
Regular Directors
Patricio Testorelli
Vicente Javier Giorgio (4)
Alternate Directors
Emiliano Chaparro
Chief Executive Officer
Martín Genesio
GENER BLUE WATER LIMITED
Identification
Type of company: Foreign corporation
Address: P.O. Box 309, Ugland House
Grand Cayman KY1-1104, Cayman Islands
Telephone: (1 345) 949-8066
Fax: (1 345) 949-8080
Business activities
Any line of business, may conduct all types of business
activities and investments.
Capital and shares
Paid-in capital
US$ 24,165,943.97
GASODUCTO GASANDES ARGENTINA S.A.
Identification
Type of company: Foreign corporation
Address: Bonpland 1745, Ciudad Autónoma de Buenos
Aires, Argentina
Telephone: (54 11) 4316-5600
Fax: (54 11) 4316-5601
Business activities
Natural gas transportation.
Capital and shares
Paid-in capital
AR$83,467,000 (US$ 19,393,000)
Subscribed and paid shares
83,467,000
Ownership:
13%
Directors
Matías María Brea
Emilio Daneri Conte-Grand
Víctor Turpad Fernández
Santiago José García Mira
Osvaldo Ledezma (6)
Matías Pérez Cruz
Eduardo Hugo Antranik Eurnekian
Santiago Marfort
Klaus Richard Luhrmann Poblete
GENER ARGENTINA S.A.
Identification
Type of company: Foreign corporation
Address: Reconquista 336, Piso 3, Oficina GG, Ciudad
Autónoma de Buenos Aires C1003ABH, Argentina
Telephone
(54 11) 4891-2300
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Information on Related Companies
Capital and shares
Paid-in capital
US$ 20,613,514
Subscribed and paid shares
2,488,637
Ownership
99.99% indirectly through Genergia Power Ltd.
President
Vicente Javier Giorgio(4)
Directors
Ricardo Falú (5)
Vicente Javier Giorgio (4)
Osvaldo Ledezma (6)
Chief Executive Officer
Cristián Antúnez (11)
Ownership
100%
Directors
Ricardo Falú (5)
Vicente Javier Giorgio (4)
Alberto Zavala (9)
GENERGIA POWER LTD.
Identification
Type of company: Foreign limited liability corporation
Address: P.O. Box 309, Ugland House
Grand Cayman KY1-1104, Cayman Islands
Telephone: (1 345) 949-8066
Fax: (1 345) 949-8080
Business activities
Investments in South America.
Capital and shares
Paid-in capital US$ 22,448,116
Ownership
100%
Directors
Ricardo Falú (5)
Vicente Javier Giorgio (4)
Alberto Zavala (9)
GENERGÍA S.A.
Identification
Type of company: Close corporation
Chilean Taxpayer ID No.: 96.761.150-6
Address: Rosario Norte No.532, Piso 19,
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Fax: (56 2) 2686-8990
Business activities
Investments, engineering consulting services.
INTERANDES S.A.
Identification
Type of company: Corporation
Address: Reconquista 336, Piso 3, Oficina GG, Ciudad
Autónoma de Buenos Aires C1003ABH, Argentina
Telephone: (54 387) 491-9646
Fax: (54 387) 491-9657
Business activities
Building, operating, and/or maintaining power
transmission lines and systems of any voltage;
transmitting power of any voltage within Argentina or
across its borders; and generating, selling, exporting, and
importing electricity.
Capital and shares
Paid-in capital
AR$ 135,365,996 (US$ 55,876,946)
Subscribed and paid shares
135,365,996
Ownership
13% directly and 87% indirectly through Gener Argentina
S.A.
resident
Martín Genesio
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Regular Directors
Patricio Testorelli
Vicente Javier Giorgio (4)
Alternate Director
Emiliano Chaparro
Chief Executive Officer
Martín Genesio
INVERSIONES NUEVA VENTANAS SPA.
Identification
Type of company: Limited liability stock company
Chilean Taxpayer ID No.: 76.803.700
Address: Rosario Norte No. 532, Piso 19
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Fax: (56 2) 2686-8990
Business activities
Investments in all types of assets movable and immovable,
tangible and intangible; ownership interest in other companies.
Capital and shares
Paid-in capital
US$ 373,003,211
Subscribed and paid shares
261,660,937,852
Ownership
100% directly and indirectly through Norgener SpA
Managing Partner
Norgener SpA
Chief Executive Officer
Vicente Javier Giorgio(4)
INVERSIONES TERMOENERGIA DE CHILE LIMITADA
Identification
Type of company: Limited liability company
Chilean Taxpayer ID No.: 78.759.060-8
Address: Rosario Norte No. 532, Piso 19
Las Condes, Santiago, Chile
Telephone: (56 2) 2686-8900
Fax: (56 2) 2686-8990
Business activities
All types of energy projects: generation, transmission,
marketing, and purchase and sale of electricity, natural
gas, and all types of energy, on its own or others’ behalf.
Capital
Paid-in capital
US$24,165,944
Ownership
99.99% indirectly through Gener
Blue Water Ltd.
NORGENER SPA.
Identification
Type of company: Limited liability stock company
Chilean Taxpayer ID No.: 96.678.770-8
Address: Jorge Hirmas 2960,
Renca, Santiago, Chile
Telephone: (56 2) 2680-4710
Fax: (56 2) 2680-4895
Business activities
Electricity generation, transmission, and sales.
Capital and shares
Paid-in capital
US$324,167,105.82
Subscribed and paid shares
2,859,166,629
Ownership
99.99% directly
Managing Partner
AES Gener S.A.
Chief Executive Officer
Vicente Javier Giorgio (4)
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Information on Related Companies
SOCIEDAD ELÉCTRICA SANTIAGO SPA.
Identification
Type of company: Limited liability stock company
Chilean Taxpayer ID No.: 96.717.620-6
Address: Jorge Hirmas 2964, Renca, Santiago, Chile
Telephone: (56 2) 680-4760
Fax: (56 2) 680-4743
Business activities
Exploitation, generation, transmission, purchase,
distribution, and sale of electricity or any other type of
energy; sale of fuels; engineering services.
Capital and shares
Paid-in capital
US$247,765,685
Subscribed and paid
shares
125,308,749
Ownership
100% directly
Managing Partner
AES Gener S.A.
Chief Executive Officer
Carlos Moraga
Personnel*
Technical and
Administrative staff: 44
Professional staff: 28
TERMOANDES S.A.
Identification
Type of company: Sociedad Anónima
Address: Reconquista 336, Piso 3, Oficina GG, Ciudad
Autónoma de Buenos Aires C1003ABH, Argentina
Telephone: (54 387) 491-9646
Fax: (54 387) 491-9657
Business activities
Production, sales, export, and import of electricity, on its
own or others’ behalf.
Capital and shares
Paid-in capital
AR$ 581,869,516 (US$ 299,833,447)
Shares subscribed and paid
581,869,516
Ownership
8.82% directly and 91.18% indirectly through Gener Argentina
S.A.
President
Martín José Genesio
Regular Directors
Patricio Testorelli
Emiliano Chaparro
Alternate Director
Vicente Javier Giorgio (4)
Chief Executive Officer
Martín Genesio
Personnel*
Technical and Administrative
staff: 34
Professional staff: 15
Executives: 2
AES Gener S.A.’s business relations with its related companies
are governed by contracts that are currently in force. Their
effects are presented in the Financial Statements. AES
Gener S.A. executives do not receive remunerations for
serving as directors of related companies.
The information on subsidiaries whose corporate capital is
expressed in a foreign currency other than the U.S. dollar is
presented in this section in U.S. dollars using the exchange
rate in effect on December 31, 2014.
(1) Chief Executive Officer of AES Gener S.A. (2) Chief Financial Officer of AES Gener S.A. until December 31, 2014. (3) Director of AES Gener S.A.(4) Chief Operations Officer of AES Gener S.A.(5) Chief Financial Officer of AES Gener S.A. as of January 2, 2015.(6) Environmental Director of AES Gener S.A.(7) Chief Development Officer of AES Gener S.A.(8) Chief Engineering and Construction Officer of AES Gener S.A. (9) Legal Counsel of AES Gener S.A.(10) Commercial Director of AES Gener S.A.(11 Assistant Supply Chain Manager of AES Gener S.A. (12 Equipment Manager of AES Gener S.A.(13) CIO and Senior Vice President of Global Business Services, AES Corp
*Personnel from related companies whose results are consolidated with those of AES Gener and that have hired personnel.
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Angamos Plant7ª Industrial No. 1100 esquina Avda.
Longitudinal Barrio Industrial Portuario
de Mejillones, Mejillones, Chile
Telephone: (56 55) 268-9962
Alfalfal PlantRuta G-345 Km. 23,
San José de Maipo, Chile
Telephone: (56 2) 2686-8102
Chivor PlantChivor Hydroelectric Plant
Santa María, Boyacá, Colombia
Telephone: (57 1) 594-1400
Guacolda PlantIsla Huasco s/n, Huasco, Chile
Telephone: (56 51) 2 564 100
Laguna Verde PlantCamino Principal s/n,
Valparaíso, Chile
Telephone: (56 32) 234-8294
Laja PlantCamino a Laja Km. 1.5,
Cabrero, Chile
Telephone: (56 43) 240-2705
Los Vientos PlantRuta 5 Norte, Km. 91
Llay Llay, Chile
Telephone: (56 2) 2686-8606
Maitenes PlantRuta G-345 Km. 14,
San José de Maipo, Chile
Telephone: (56 2) 2680-4875
San Francisco de Mostazal
PlantLongitudinal Sur Km. 63,
San Francisco de Mostazal, Chile
Telephone: (56 72) 249-2592
Cochrane ProjectPuerto 1 No.7705
Barrio Industrial Portuario Mejillones,
Chile
Telephone: (56 55) 2680-4716
Alto Maipo ProjectRuta G-345 Km. 14 (formerly the
Maitenes camp)
San José de Maipo, Chile
Telephone: (56 55) 2686-8239
Renca Administrative
BuildingJorge Hirmas 2960
Renca, Chile
Telephone: (56 2) 2680-4710
Norgener PlantBalmaceda s/n, Tocopilla, Chile
Telephone: (56 55) 243-2623
Ventanas PlantCamino Costero s/n,
Puchuncaví, Chile
Telephone: (56 32) 216-0201
queltehues PlantRuta G-465, Km. 3,
San José de Maipo, Chile
Telephone: (56 2) 2686-8391
Renca and Nueva Renca
PlantsJorge Hirmas 2964
Renca, Chile
Telephone: (56 2) 2680-4760
ADDRESSES AND TELEPHONE NUMBERS OF POWER PLANTS
Santa Lidia PlantCamino a Yungay s/n Km.7
Cabrero, Chile
Telephone: (56 43) 450-527
TermoAndes PlantRuta Nacional No 9 - Km. 1557
(4432) Cobos-Salta, Argentina
Telephone: (56 2) 2680-4760
Volcán PlantRuta G- 465, km. 3,
San José Maipo, Chile
Telephone: (56 2) 2686-8111
Edificio MattaRosario Norte 532, piso 19, Las Condes
Santiago, Chile
Telephone: (56 2) 2686-8900
FiNANCiAl sTATEMENTs AEs gENEr s.A.
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Independent Auditors’ Report
To the Shareholders and Directors of
AES Gener S.A.
We have conducted an audit of the attached consolidated financial statements of AES Gener S.A. and
its subsidiaries, consisting of the consolidated statements of financial situation as of December 31, 2014
and the corresponding consolidated statements of comprehensive income, changes in equity, and cash
flow for the year ended on the same date, as well as the notes to the consolidated financial statements.
The Management’s responsibility for the financial statements:
The Management is responsible for preparing these consolidated financial statements and for presenting
them with explanatory notes, per the instructions and standards for preparing and presenting financial
information issued by the Superintendencia de Valores y Seguros (SVS, Chilean Securities and Insurance
Commission) as described in Note 2 of the consolidated financial statements. The Management is also
responsible for designing, implementing, and maintaining the pertinent internal control for the preparation
and presentation, with notes, of the consolidated financial statements in such a way that they are free
from material misrepresentation, whether due to fraud or to error.
The auditor’s responsibility:
Our responsibility consists of expressing an opinion on these consolidated financial statements based
on our audit. We have conducted our audit using generally accepted auditing standards in Chile. These
practices require that we plan and carry out our work in order to achieve a reasonable degree of certainty
that the consolidated financial statements are free from material misrepresentation.
An audit consists of conducting procedures to obtain auditing evidence on the amounts and disclosures
presented in the consolidated financial statements. The procedures are selected at the discretion of the
auditor, including the assessment of the risk of material misrepresentation in the consolidated financial
statements, whether due to fraud or to error. When assessing these risks, the auditor considers the
pertinent internal controls used in the preparation and presentation, with notes, of the entity’s consolidated
financial statements in order to design auditing procedures that are appropriate for the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls.
Therefore, we do not express such an opinion. An audit also includes an assessment of the adequacy
of the accounting policies used and the reasonableness of the significant accounting estimates made
by the Management, as well as an assessment of the overall presentation of the consolidated financial
statements.
We believe that the auditing evidence that we have obtained is sufficient and adequate to provide us
with a basis for our auditing opinion.
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INDEPENDENT AUDITORS’ REPORT
Report on regulatory accounting:
In our opinion, the aforementioned consolidated financial statements fairly present, in all material respects,
the financial situation of AES Gener S.A. and its subsidiaries as of December 31, 2014, and the results
of its operations and its cash flow for the year ended on that date, in accordance with the instructions
and standards for preparing and presenting financial information issued by the Superintendencia de
Valores y Seguros described in Note 2.
Basis of Accounting
As stated in Note 2 of these consolidated financial statements, by virtue of the power vested in it, the
Superintendencia de Valores y Seguros issued Official Bulletin 856 on October 17, 2014, instructing
the oversight agencies to record against equity in the respective fiscal year any differences between
deferred tax assets and liabilities that may arise as a direct result of the increase in corporate income
tax imposed under Law 20,780, which changes the framework for preparing and presenting financial
information in effect until that time since the previous framework (International Financial Reporting
Standards) were to be adopted fully, explicitly, and unreservedly. The quantification of this change in
accounting framework as of December 31, 2014 and for the year ended on that date is also described
in Note 2. Our opinion is not affected by this matter.
Other matters:
We had previously audited the attached consolidated financial statements of AES Gener S.A. and its
subsidiaries for the year ended December 31, 2013 using generally accepted auditing standards in Chile.
In our February 25, 2014 report, we issued an unmodified audit report on those consolidated financial
statements.
Oscar Gálvez R.
EY LTDA.
Santiago, February 25, 2015
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INDEPENDENT AUDITORS’ REPORT
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CLASSIFIED CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAs of December 31 2014 and 2013(In thousands of US dollars)
ASSEETS Note December 31, 2014 December 31, 2013
MUS$ MUS$
CURRENT ASSETS
Cash and Cash Equivalents 8 228,691 707,516
Other Current Financial Assets 9 7,205 25,462
Other Current Non-Financial Assets 11 18,359 15,263
Trade and Other Receivables 12 384,596 333,421
Related Party Receivables 13 3,631 1,680
Inventory 14 116,820 109,760
Income taxes Receivable 15 43,794 23,346
Total Current Assets 803,096 1,216,448
NON-CURRENT ASSETS
Other Non-Current Financial Assets 9 39,429 83,377
Other Non-Current Non-Financial Assets 11 38,367 40,614
Trade and Other Receivables 12 50,632 1,402
Investments in Associates 16 343,502 321,759
Intangible Assets 17 53,308 48,765
Goodwill 17 7,309 7,309
Property, Plant and Equipment 18 5,432,043 4,871,754
Deferred Taxes 15 69,211 474
Total Non-Current Assets 6,033,801 5,375,454
TOTAL ASSETS 6,836,897 6,591,902
The accompanying notes form an integral part of these consolidated financial statements.
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The accompanying notes form an integral part of these consolidated financial statements.
LIABILITIES AND EQUITY Note December 31, 2014 December 31, 2013
ThUS$ ThUS$
CURRENT LIABILITIES
Other Current Financial Liabilities 19 103,533 444,135
Trade and Other Payables 20 495,432 374,882
Related Party Payables 13 28,256 17,517
Provisions 21 3,541 2,624
Income taxes Payable 15 40,451 13,266
Employee Benefits 22 2,684 1,244
Other Current Non-Financial Liabilities 23 36,952 38,581
Total Current Liabilities 710,849 892,249
NON-CURRENT LIABILITIES
Other Non-Current Financial Liabilities 19 2,869,307 2,425,982
Trade and Other Payables 20 46,223 55,318
Non-Current Related Party Payables 13 158,169 47,019
Provisions 21 120,741 65,892
Deferred Taxes 15 522,001 417,144
Employee Benefits 22 34,320 36,505
Other Non-Current Non-Financial Liabilities 23 10,928 14,827
Total Non-Current Liabilities 3,761,689 3,062,687
TOTAL LIABILITIES 4,472,538 3,954,936
EQUITY
Issued Capital 24 2,052,076 1,901,720
Retained Earnings 24 358,103 537,818
Share Premium 49,864 49,908
Other Components of Equity 24 224,791 223,817
Other Reserves 24 (372,282) (169,907)
Equity Attributable to Shareholders of Parent 2,312,552 2,543,356
Non-Controlling Interests 51,807 93,610
Total Equity 2,364,359 2,636,966
TOTAL EQUITY AND LIABILITIES 6,836,897 6,591,902
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFor the years ended December 31, 2014 and 2013(In thousands US dollars, except for earnings (losses) per share shown in dollars)
The accompanying notes form an integral part of these consolidated financial statements.
STATEMENT OF COMPREHENSIVE INCOMENote December 31, 2014 December 31, 2013
ThUS$ ThUS$
Statement of Income
Net Income
Operating Revenues 25 2,328,406 2,244,790
Cost of Sales 26 (1,792,020) (1,734,711)
Gross Profit 536,386 510,079
Other Operating Income 1,389 972
Administrative Expenses 26 (93,322) (113,366)
Other Operating Expenses 26 (1,128) (4,608)
Other Income (Loss) 27 (20,187) 5,239
Finance Income 28 10,490 8,962
Finance Expenses 28 (151,532) (123,906)
Equity Participation in Net Income of Associates 16 38,781 38,526
Foreign Currency Exchange Differences 28 (66,435) (38,856)
Income before Taxes 254,442 283,042
Income Tax Expense 15 (79,546) (84,525)
Net Income from Continuing Operations 174,896 198,517
Net Income from Discontinued Operations - -
Net Income 174,896 198,517
Income Attributable to:
Income Attributable to Shareholders of Parent 183,651 201,321
Income Attributable to Non-Controlling Interests (8,755) (2,804)
Net Income 174,896 198,517
Earnings per Share
Basic Earnings per Share
Basic Earnings per Share from Continuing Operations 29 0.02 0.02
Basic Earnings per Share from Discontinued Operations - -
Basic Earnings per Share 0.02 0.02
Diluted Earnings per Share
Diluted Earnings per Share from Continuing Operations 0.02 0.02
Diluted Earnings per Share from Discontinued Operations - -
Diluted Earnings per Share 0.02 0.02
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The accompanying notes form an integral part of these consolidated financial statements.
STATEMENT OF COMPREHENSIVE INCOMEAccumulated
December 31, 2014 December 2013
ThUS$ ThUS$
Net Income 174,896 198,517
Components of Other Comprehensive Income that not be Reclassified to Net Income, before Taxes
Other Comprehensive Income from Actuarial Gains (Losses) on Defined Benefit Plant, before Taxes (4,686) 462
Other Comprehensive Income from investments in equity instruments, before Taxes 323 -
Other Comprehensive Income that will not be Reclassified to Net Income, before Taxes (4,363) 462
Components of Other Comprehensive Income that will be Reclassified to Net Income, before Taxes
Income (Loss) from Foreign Currency Traslation Adjustments (85,699) (42,119)
Unrealized Income (Loss) for Cash Flow Hedges (255,101) 115,340
Other Comprehensive Income from Associates and Joint Arrangements accounted for under Equity Method
2,448 7,080
Other Comprehensive Income that will be Reclassified to Net Income, before Taxes (338,352) 80,301
Other Components of Other Comprehensive Income, before Taxes (342,715) 80,763
Income Tax Related to Components of Other Comprehensive Income that will not be Reclassified to Net Income
Income Tax Related to Actuarial Gains (Losses) on Defined Benefit Plans 1,229 180
Income Tax Related to Components of Other Comprehensive Income that will not be Reclassified to Net Income
1,229 180
Income Tax Related to Cash Flow Hedges of Other Comprehensive Income that will be Reclassified to Net Income
Income Tax Related to Cash Flow Hedges of Other Comprehensive Income 70,683 (23,218)
Income Tax Related to Comprehensive Income that will be Reclassified to Net Income 70,683 (23,218)
Income Tax Related to Other Components of Other Comprehensive Income 71,912 (23,038)
Total Other Comprehensive Income (270,803) 57,725
Total Comprehensive Income (95,907) 256,242
Comprehensive Income Attributable to:
Comprehensive Income Attributable to Shareholders of Parent (18,724) 248,484
Comprehensive Income Attributable to Non-Controlling Interest (77,183) 7,758
Total Comprehensive Income (95,907) 256,242
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CONSOLIDATED STATEMENTS OF CHANGES IN EqUITY For the years ended December 31, 2014 and 2013 (In thousands of United States dollars)
The accompanying notes form an integral part of these consolidated financial statements.
Statement of Changes in Equity
Other Comprehensive Income
Issued Capital Share Premiun Others
Components of Equity
Foreign Currency
Translation Reserve
Cash Flow Hedge Reserve
Defoned Benefit Plan Reserve
Others Miscellaneous
Reserves
Total Others Comprehensive
Income
Retained Earnings
Equity Attributable to Shareholders of
Parent
Equity Attributable to
Non-Controlling Interests
Total Equity
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Opening Balance, January 1, 2014 1,901,720 49,908 223,817 31,261 (87,059) (7,499) (106,610) (169,907) 537,818 2,543,356 93,610 2,636,966
Changes in Equity - - - - - - - - - - - -
Comprehensive Income
Net Income - - - - 183,651 183,651 (8,755) 174,896
Other Comprehensive Income - - - (85,699) (113,542) (3,457) 323 (202,375) - (202,375) (68,428) (270,803)
Comprehensive Income - - - - - - - - - (18,724) (77,183) (95,907)
Issued Capital 150,356 (44) 150,312 150,312
Dividends - - - - - - - - (232,624) (232,624) - (232,624)
Increases (Decreases) for Transfers and Other Changes - - 974 - - - - - (130,742) (129,768) 35,380 (94,388)
Total Changes in Equity 150,356 (44) 974 (85,699) (113,542) (3,457) 323 (202,375) (179,715) (230,804) (41,803) (272,607)
Ending Balance, December 31, 2014 2,052,076 49,864 224,791 (54,438) (200,601) (10,956) (106,287) (372,282) 358,103 2,312,552 51,807 2,364,359
Statement of Changes in Equity
Other Comprehensive Income
Issued Capital Share PremiumOther
Components of Equity
Foreign Currency
Translation Reserve
Cash Flow Hedge Reserve
Defined Benefit Plan Reserve
OTher Miscellaneous
Reserves
Total Other Comprehensive
Income
Retained Earnings
Equity Attributable to Shareholders of
Parent
Equity Attributable to
Non-Controlling Interests
Total Equity
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ MUS$
Opening Balance, January 1, 2013 1,901,720 49,908 222,859 73,380 (175,699) (8,141) (132,790) (243,250) 546,430 2,477,667 3,354 2,481,021
Change in Equity - - - - - - - - - - -
Comprehensive Income
Net Income - - - - - - - 201,321 201,321 (2,804) 198,517
Other Comprehensive Income - - - (42,119) 88,640 642 - 47,163 - 47,163 10,562 57,725
Comprehensive Income - - - - - - - - - 248,484 7,758 256,242
Dividends - - - - - - - - (209,933) (209,933) - (209,933)
Increases (Decreases) for Tranfers and Other Changes - - 958 - - - 26,180 26,180 - 27,138 82,498 109,636
Total Changes in Equity - - 958 (42,119) 88,640 642 26,180 73,343 (8,612) 65,689 90,256 155,945
Ending Balance, December 31, 2013 1,901,720 49,908 223,817 31,261 (87,059) (7,499) (106,610) (169,907) 537,818 2,543,356 93,610 2,636,966
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Statement of Changes in Equity
Other Comprehensive Income
Issued Capital Share Premiun Others
Components of Equity
Foreign Currency
Translation Reserve
Cash Flow Hedge Reserve
Defoned Benefit Plan Reserve
Others Miscellaneous
Reserves
Total Others Comprehensive
Income
Retained Earnings
Equity Attributable to Shareholders of
Parent
Equity Attributable to
Non-Controlling Interests
Total Equity
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$
Opening Balance, January 1, 2014 1,901,720 49,908 223,817 31,261 (87,059) (7,499) (106,610) (169,907) 537,818 2,543,356 93,610 2,636,966
Changes in Equity - - - - - - - - - - - -
Comprehensive Income
Net Income - - - - 183,651 183,651 (8,755) 174,896
Other Comprehensive Income - - - (85,699) (113,542) (3,457) 323 (202,375) - (202,375) (68,428) (270,803)
Comprehensive Income - - - - - - - - - (18,724) (77,183) (95,907)
Issued Capital 150,356 (44) 150,312 150,312
Dividends - - - - - - - - (232,624) (232,624) - (232,624)
Increases (Decreases) for Transfers and Other Changes - - 974 - - - - - (130,742) (129,768) 35,380 (94,388)
Total Changes in Equity 150,356 (44) 974 (85,699) (113,542) (3,457) 323 (202,375) (179,715) (230,804) (41,803) (272,607)
Ending Balance, December 31, 2014 2,052,076 49,864 224,791 (54,438) (200,601) (10,956) (106,287) (372,282) 358,103 2,312,552 51,807 2,364,359
Statement of Changes in Equity
Other Comprehensive Income
Issued Capital Share PremiumOther
Components of Equity
Foreign Currency
Translation Reserve
Cash Flow Hedge Reserve
Defined Benefit Plan Reserve
OTher Miscellaneous
Reserves
Total Other Comprehensive
Income
Retained Earnings
Equity Attributable to Shareholders of
Parent
Equity Attributable to
Non-Controlling Interests
Total Equity
ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ MUS$
Opening Balance, January 1, 2013 1,901,720 49,908 222,859 73,380 (175,699) (8,141) (132,790) (243,250) 546,430 2,477,667 3,354 2,481,021
Change in Equity - - - - - - - - - - -
Comprehensive Income
Net Income - - - - - - - 201,321 201,321 (2,804) 198,517
Other Comprehensive Income - - - (42,119) 88,640 642 - 47,163 - 47,163 10,562 57,725
Comprehensive Income - - - - - - - - - 248,484 7,758 256,242
Dividends - - - - - - - - (209,933) (209,933) - (209,933)
Increases (Decreases) for Tranfers and Other Changes - - 958 - - - 26,180 26,180 - 27,138 82,498 109,636
Total Changes in Equity - - 958 (42,119) 88,640 642 26,180 73,343 (8,612) 65,689 90,256 155,945
Ending Balance, December 31, 2013 1,901,720 49,908 223,817 31,261 (87,059) (7,499) (106,610) (169,907) 537,818 2,543,356 93,610 2,636,966
The accompanying notes form an integral part of these consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS (DIRECT METHOD)
STATEMENT OF CASH FLOWS - DIRECT METHOD December 31, 2014
December 31, 2013
ThUS$ Th US$
Cash Flows Provided by (Usedin) Operating Activities
Classes of receipts from Operating Activities:
Receipts from Sales of Goods and Services 2,783,513 2,886,910
Other receipts from Operating Activities 52,074 14,851
Classes of paymentsPayments to Suppliers for Goods and Service (1,997,217) (2,240,386)
Payments to Employees (68,819) (69,759)
Other Payments for Operating Activities (57,587) (17,296)
Dividends Paid (230,434) (209,932)
Dividends Received 736 1,996
Interest Paid (162,337) (111,475)
Interest Received 7,330 8,938
Income Taxes Paid (38,566) (104,018)
Other Cash Outflows (31,065) (19,467)
Net Cash Flows Provied by Operating Activities 257,628 140,362
Cash Flows Provided by (Used in) Investing Activities
Proceeds from loss of control of subsidiaries or other businesses 731,180 -
Cash Flow used to obtain control of subsidiaries of other bussinesses (728,000) -
Proceeds from sales of equity or debt instruments of other entities 26,019 -
Proceeds from sales of Property, Plant an Equipment 53 348
Purchases of Property, Plant and Equipment (829,489) (531,614)
Purchases of Intangible Assets (2,216) (6,139)
Purchases of Other Assets (73,313) -
Other Cash Inflows 3,980 983
Net Cash Flows Used in Investing Activities (871,786) (536,422)
Cash Flows Provied by (Used in) Financing Activities
Proceeds from Share Issuance 184,876 108,695
Proceeds from Long-Term Borrowings 1,234,194 706,619
Proceeds from Short-Term Borrowings 700,000 -
Loan Payments (1,884,001) (32,435)
Payment of Finance Lease Obligations (2,046) (2,042)
Other Cash Outflows (70,182) (50,636)
Net Cash Flows Used in Financing Activities 162,841 730,201
Net Cash and Cash Equivalent Decrease, before Foreign Exchange Difference (451,317) 334,141
Net Foreign Exchange Differences on Cash and Cash Equivalents
Net Foreign Exchange Differences on Cash and Cash Equivalents (27,508) (23,829)
Decrease in Cash and Cash Equivalents (478,825) 310,312
Cash and Cash Equivalents at Beginning of Period 707,516 397,204
Cash and Cash Equivalents at End of Period 228,691 707,516
The accompanying notes form an integral part of these consolidated financial statements.
For the years ended December 31, 2014 and 2013(In thousands of United States dollars)
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SIGNING AND STATEMENT OF RESPONSIBILITY
Luis Felipe Cerón Cerón
Chief Executive Officer
Chilean ID No.: 6.375.799-3
Citizen of Chile
Radovan Razmilic
Director
Chilean ID No.: 6.283.668-7
Citizen of Chile
Arminio Borjas
Director
Passport: DO259811
Citizen of Venezuela
Andrés Gluski Weilert
Chairman of the Board
Passport: 6.024.620
Citizen of Venezuela
Iván Díaz-Molina
Director
Chilean ID No.: 14.655.033-9
Citizen of Argentina
As required by the regulations of the Superintendencia de Valores y Seguros (SVS, the Chilean
Securities and Insurance Authority) this AES Gener S.A. annual report has been approved and
signed by the Company’s Chief Executive Officer and the Directors listed below, who comprise
a majority of the AES Gener S.A. Board of Directors as it stands as of the date this report was
published. They assume responsibility, under oath, for the accuracy of the information contained
in this report.
