Good morning, and welcome to our third quarter results conference call. I am Karen Guzmán from the IR and financing team at Grupo Energía Bogotá. This conference is being recorded. The information you will see today is uploaded in the Investor section at GEB's webpage. In the right corner of your screens, you can ask questions at any time in the Q and A section, or raise your hand and we will allow your question live in due order. When doing so, please state your full name and the name of the company you represent, so we can easily identify you. Let's welcome Juan Ricardo Ortega, our CEO, who will lead the call today. Good morning, Juan Ricardo.
Good morning, Karen, good morning, everybody. It's a pleasure for us to be able to present GEB's third quarter results. I'm going to go over a brief presentation, then we're going to have a Q and A session, where you can ask any of your questions. Karen, if we could begin. We're going to have a very simple presentation. We're going to go through the milestones that we have accomplished this third quarter, some of the operational and financial performance facts, then we'll go into the Q and A. Let's start, Karen. As you know, I'm Juan Ricardo Ortega, I'm the CEO of the company. Usually it's Jorge, the one making the presentation. For personal reasons, he could not be here today, I'm going to make my best effort to be able to replace him. We're gonna begin with a snapshot, we're continuing with positive results.
The success of the company, we believe, is very [audio distortion] that has allowed us to continue reducing costs. At the same time, we continue to grow the businesses. As you can see, the EBITDA shows an increase quarter-to-quarter of close to COP 90 billion. That is about 10%, we're in at COP 906 b illion, for the quarter. If you look at the geography, most of that EBITDA is coming from Colombia, mostly from the operational activity of TGI and Enlaza. That allows us to continue to show positive results regarding the return on equity of 16%. If you look at the dividend that we are paying this year, both the regular dividend plus the extraordinary one, you would get a 12.5% yield.
The results of the company, even though we face a significant regulation that impacted our incomes in dollars, we are still investment grade, AAA, BBB, Baa2, we just had some new certification by Fitch and Moody's. The company continues to be in very good health, with a return on assets of 10% and a coverage net debt to EBITDA of 3.1 x. The interest rates coverage is 6.8x, with a small reduction from the 7.1x that we were showing in the roadshow. Most of the income is indexed to the IPP, the production price index. Those have slowed down, fortunately, with a reduction on inflation in most countries to a 3.7% year-on-year and a 3.6% year-on-year in Colombia.
This just gives you a brief snapshot on the results, which fortunately, continue to show a positive performance on all the companies that belong to the group. If we could go into the details, Karen, we're gonna go through the income and expenses. First, we're gonna go through some of the milestones. As I just said, Fitch Ratings reaffirmed the long-term international credit rating at BBB, the local credit rating AAA, both with a stable outlook. The acquisition of Transnova allows us to strengthen Conecta in Guatemala. This is a transmission infrastructure in the north of Guatemala that used to belong to Enel, and we're gonna have significant synergies because all the maintenance is in the middle of the line that we built in all that part. We expect that to strengthen the income of Conecta and allows it to continue investing in that transmission system.
There is the end, there is a significant event that we're gonna begin to see this month of November. There was the resolution last year of the tariff pact, where there was a reduction because of the significant increase of electricity prices due to the indexation to the IPP that grew at some point at 80%. Last year, there was an agreement to just increase the indexed incomes to the lowest between inflation and the IPP. That is ending at the end of September. At the middle of October, we were already beginning to issue tariffs based on the traditional formula. There is a significant concern in the Colombian domestic electricity market because of lack of liquidity on behalf of the distribution commercialization sector.
The Minister of Mines issued Resolution 40611, which is a measure that guarantees the sale of electricity, even though there might be cash flows issues at the level of distributors and commercializers. That is significant and continues to be a source of concern. There is a package of loans subsidized at Findeter that could begin to bring some cash into that segment, that is gonna be something to watch for in the coming future. There is one good news, ISA and Grupo Energía Bogotá, we jointly participated in one of the equivalent of in Peru, we won, it's going to be a significant project, the largest tender in the last decade, probably. It's going to be CapEx over $800 million. We're going to go 50/50 with ISA, continuing the growth of Transmantaro.
Now, we approved the sustainability financing framework that is part of our commitment in ESG. Based on that, and all the work we've been doing on that regard, we just issued the first Colombian corporate sustainable bond, $400 million. That is going to help us on the payment of the syndicate loan for $ 390 million that was due next year. That totally changes our debt profile and makes the coming years very manageable. There is another good news on that regard, that the loan buyback in Guatemala, that is about $170 million. We're going to see that a little bit further down in the presentation. We managed all the approval processes at the Ministry of Finance, that is going to be long-term financing as well. Those two payments from early next year and this year from the BAC have already been financed.
Cálidda continues performing extremely well. It won a significant portion of the budget assigned by the governor of Peru that is called Con Punche Perú. Those are 349 km of additional network with an investment of $36 million. It continues with a very positive growth in the conversion of vehicles to natural gas. That is over 330,000 vehicles and over 130 heavy trucks that have been converted. That trend is very significant, and it's showing a very positive growth in gas consumption, with very positive impact on the quality of air in the city of Lima, plus about 50% of the emissions are reduced by the substituting diesel by gas. Enlaza completed the 220 kV Río Porce-Tova line. It also was certified carbon neutral, and it was awarded a substation that is going to be about $7 million in CapEx. It's a 230 kV in Villa.
We're already way into the construction of Colectora. Over 50 towers have already been built. That project is progressing significantly, and that is one of the sources of income that is helping us to keep the performance of the group. On behalf of TGI, there is going to be quite a much longer explanation going down. It's just a positive outlook at the moment is the one thing to point out to. With regards to Contugas, which is our more challenging company in Peru, it won the Quantum Award, in the excellence in efficiency. The reductions of expenses in Contugas, has allowed us to continue to strengthen the company. There is a very positive news, regarding the agreement between Pluspetrol and Enex from Chile, that are going to be building a quite significant size plant of petrochemicals in Marcona.
That is going to be a very positive outcome for Contugas in the coming future. Next. Here, looking at the financial performance, we're going to begin just by the operations income, operating income. You see an increase of about 13% and mostly comes from an increase of revenues. It's all operational because dividends were already distributed at the beginning of the year. If you look at the results, what you see is two good news. One is on behalf of Enlaza is increasing its income, mostly because of Colectora that began being remunerated at the end of last year. From the quarter to quarter, that is a positive result. On behalf of TGI, El Niño required a significant increase of the usage of the transportation system, because of the thermoelectrics.
At the same time, there were some aspects of the pesificación of TGI that increased its positive results. If you look at the year-over-year, you're gonna see on the administrative expenses, some significant increases in electricity transmission, that is because of the higher uses of the electricity system. That is a 9% from mostly Enlaza, and it's because there is a tax that is paid to the system by the number of kilowatts that are transmitted. You see an increase in gas transportation of— an increase, sorry, of 30%. That's because of all the efforts in the reduction of expenses in TGI. We're very conscious of the challenges the company is facing, there is a very aggressive efficiencies program that is generating positive results, and we're continuing committed in that aspect.
In electricity distribution as well, there is a reduction of administrative expenses. The one that is growing is the holding, because we are implementing a whole service hub that is managing both personnel, procurement, IT, and the management of inventories. That has put some pressure on GEB, but we are beginning to show very positive results by being able to manage procurement as a group from all the companies as a whole. We hope to begin to show the savings that this is generating. On the operational side, gas transport and gas distribution are the ones that have some significant numbers.
Gas distribution, the reason that it decreases is the same reason why the income decreases in Cálidda, and is mostly because these are operating income companies in dollar terms, and you see a reduction of about COP 300 on the average dollar price from last year's third quarter to this year's third quarter, from COP 4,300 to about COP 4,000. That is what is impacting the results for Cálidda. But if you look at the details that are on the spreadsheet, you see that Cálidda is performing extremely well, with an increase of about $40 million in income, and is very likely to reach over $100 million in net income towards the end of the year. Next.
Here we look at the evolution of the EBITDA, and we see that the greatest impact comes from gas transport, that is TGI, both on the income side, because of the significant increase in the usage because of El Niño, and the reduction of expenses because of their aggressive cost-cutting plans. Electricity transmission is not as large, but you have two projects that came into line, or at least recognized by the system to begin to receive income, that is Colectora and San Juan. Electricity distribution pretty much remains the same. The only impact that is negative in gas distribution is because Contugas, if you compare last year's third quarter to this year's, there was the income of one of the Peruvian government companies that we had a legal suit against them, and we lost it. That income is not being accounted for anymore, Egasa.
That is the reason of that reduction, but it at least shows a positive increase in the EBITDA of about COP 80 billion. You can see that is all from the controlled companies, and all the positive news come mostly from TGI and Enlaza. If you look at the adjusted EBITDA, is pretty much the same quarter-to-quarter. You see the big increase in transport and electricity transmission. If we go to the next slide, going to the Q and A. If we want to look at the financial performance, although there is a very significant increase in financial expenses, and that comes because of the indebtedness that we got last year in the syndicate loan to buy Quantum in Brazil. The increase in the interest rates, and the change from the old SOFR. That is an impact of COP 359 billion.
That is compensated by the equity method. There is a very positive performance from Enel that helps out with COP 411 billion. You begin to see Argo. We're going to have, in a couple of years, from 2025, to begin to see Argo distributing over $100 million in dividends. Those are the purchases of all the lines that we've been buying in Brazil. That is the strategy with EREJA. When you look at the evolution from the operating income, that is mostly operational of COP 670 billion, you look the financial revenue that comes partly because of all the coverage of the data at TGI that had some positive accounting numbers.
You have the reduction of the financial expenses, you have the equity method with Enel and Argo, and obviously the companies from ISA, allows us to reach a growth in net income of over 1% quarter-over-quarter, to reach COP 764 billion. If we go to the next slide. This is just the gross debt indicators. As you can see, the composition of the debt has changed. We were managing a 55% fixed interest rate, we just are gonna be paying the syndicate loan that was covered. We're gonna go to just 38% fixed debt, to a total indebtedness of $4.4 billion. If you look at the composition, most of the debt is already in SOFR, 36%. There is still a tiny LIBOR percentage that we have to fix and some domestic bonds that are indexed to the CPI.
That's one of the sources of an increased cost of debt. Colombia continues to have a large inflation of over 10%, that has had a significant impact. If you look at the debt by currencies, it continues to be a mix of pesos and dollars because of the pesificación of TGI. That is the most significant change. There is the 2028 $750 million bond by TGI. We already bought back close to $200 million, and the rest was hedged. That is the reason that you see a significant change in the debt that is denominated in dollars and the debt denominated in pesos. You can see how you have a COP 80% and a COP hedge of 4% and a U.S. hedge of 4%. We continue to have a healthy cash balance of $342 million, that is the policy of the company.
If you look at the proactive management of our debt, we were focused on the refinancing of 2024. We already have the money for the syndicate, we still have the Contugas syndicate towards the end of the year, that is the one debt that we have to manage going forward. The $ 189 million, that is the BAC loans, because there were quite significant delays in the approvals at the Ministry of Finance. We had a short debt financing, it was just a bridge. That bridge has already been solved, we are signing the long-term loan, with BAC for Guatemala. You can look at the profile. It is pretty flat, it's on 2026 and 2027 that we are gonna have to begin managing in a couple of years. Other than that, if we can go to the next slide.
The results on equity and assets, they continue to grow and is mostly because of the effort in reducing costs and continue to grow the business way. If you look at the CapEx commitments, we haven't incorporated yet, the project with ISA. That's gonna be $800 million, but it's gonna be a couple of years, and that is mostly gonna be financed from within the companies in Peru. That the requirements from our side is at the beginning is just barely a couple of million dollars . The biggest CapEx is gonna be coming from transmission, and it's in Enlaza, and that is the construction of Colectora and the two lines that access Bogotá, Soacha, Muzo, Chivor, and the one on the west of Colombia, that is called Sur Occidente, that connects La Virginia to Cali.
That's what you are gonna see on 2023, 2024, and 2025, when we are planning to finish all those transmission lines that are absolutely strategic for Colombia. On behalf of Cálidda, you see the $110 million that was part of the tariff schedule. That was what was agreed with the government for the new tariff cycle. That is ending this year. We presented a letter to the of Peru to consider the extension of the concession. If that were to be approved, there would be $330 million CapEx in the future to provide gas and create a gas network in the states of Cusco, Junín, and a couple of others in the highlands in Peru. Trecsa is finishing the construction of the transmission line in Guatemala, with some significant investment this year and next year.
There is a TGI CapEx that could come, with an agreement with Shell for the infrastructure needed to bring to market the gas of the deepwaters well that was found with Ecopetrol. That is gonna take a while. Other than that is the TGI 112, 120, 2026 and 2027. But all of that might take a while because of licensing and all the challenges of the development of such a large gas well that requires a lot of investment on behalf of Shell and Ecopetrol. Other than that is the CapEx that is planned. At some point, the CTM, the Peru Transmantaro $ 800 million project is gonna require those $ 400 million. That is, as I said, is gonna be funded from within those companies. Karen, I think that we went through the presentation.
Yes, we have.
For the Q and A, we are more than happy to answer any of your questions.
Yes. We haven't received any questions on the chat. If you like, you can, of course, raise your hand. We have a question from Rahul. Hi, Rahul. Allow us to unmute your microphone, and then you can ask your question live. Okay, you can unmute yourself and then you can ask your question.
Hi. Yes. Thank you very much for the presentation and the call. I had three broad questions. I'd probably go one by one, if you don't mind.
Sure.
First is on the electric sector, and you touched upon this in the start about the tariff pact and the DISCOMs that are seeing some cash flow issues. Can you help me understand for the next six months or the one year? I think you're going to feel the impact mainly from Enel Colombia. What is the impact that you're seeing already on the distribution business, on the generation business? Is Enel generation not being paid on time by the distribution business? Is the distribution business not getting money on time from the consumers? I assume there's no impact on the transmission business, if you could confirm that. Just to help understand, where are the stress point in the electric system?
Yes. Let me answer that. That is the most challenging question at the moment. There is still quite a bit of uncertainty, Rahul. I don't want to give you a sense that I know exactly what might happen. I will give you some details. The companies that are most challenged are the ones that are owned by the government. Those are the small distributors like EMSA in Meta or the one from Huila, Nariño, which are small states. They are all government-controlled. If the government were not to fulfill its obligations, the people administering those companies would be facing significant challenges with the control entities. Most likely, they would be punished. It's on the government's hands to capitalize those companies. I don't think they have much room for maneuvering, otherwise. What would happen if they don't do that?
They would be taken over by the supervisor, which is the government himself. The supervisor would have to run the companies. What kind of consequences that could have? The supervisor could decide to declare a bankruptcy of the companies. Their debts to the systems would be unpaid. Also, the companies that have sold energy to those companies would be in trouble, particularly the ones that have contracts. Given that those companies are known not to be well-managed, they have no contracts for medium to long-term. In that regard, Enel has no risk. The ones that would be facing risk would be the ones that sold. That is a pretty short-term. It would be a couple of days. Mostly a week that would be at risk by the companies that would sell them in the spot market.
That's one of the big financial pressures those companies are facing, that they are totally exposed to the spot. Spot at the moment has been pretty low. It reduced its prices significantly because there's been quite a bit of rain as of late. Things will be challenging coming April when we believe the El Niño is going to be at its highest. Is when the spot price is going to be around 1,200 on a continuous basis. The government offered a COP 1 billion cash line to these companies. That might not be enough. They were committed to increase that. That hasn't happened. As I said, if things go wrong, it's going to be the government at the end paying up for the expenses and the operating of these companies if they fall on its lap.
Regarding the private companies in the Caribbean coast, there are two companies. Afinia, owned by EPM. EPM cannot allow itself to default because they have a cross-default clause. EPM will have to bear all the costs that Afinia might bring. On that regard, there is no risk whatsoever. The biggest challenge is Air-e. Air-e is a distribution company that controls Guajira, Cesar, Magdalena Atlántico. It is owned by the Ríos family, extremely politically connected, quite powerful. They are 15% of the market. If they run into trouble, they would lose all the equity invested in that company, and it would be taken over by the government. The last time the government did that, they suffered significant losses themselves. I don't see the government that willing, both politically, because of the power of the Ríos family, and financially, because of the expenses that it would bring forward.
My guess is, I began the presentation mentioning the Minister of Mines' resolution that the company will continue getting electricity even though they could be suffering some challenges paying back. That kind of gives you a signal that they don't want Air-e to run into trouble and force the government to take control. The companies that are exposed to Air-e, it would be Enel, ISA, and EPM, mostly. I know they have continuous negotiations, and they've been paying. That is the dimension of the challenge. They have the income, but the issue is that most of that income is part of what was called the tariff option during the COVID, where some of the consumer spending were postponed, and that, in the system as a whole, now adds close to COP 6 billion. Air-e has a significant share, over COP 1 billion, of that.
If the government finds a way to discount that and to use that as a collateral, and that is what they are trying to think, that they could lend the money, based on those options that have not been collected. That would provide the cash to Air-e. My belief is that they are going to provide some accommodation, to provide the liquidity to Air-e. It is extremely risky for the government for Air-e to go bankrupt, particularly on the political side because of how influential the controllers are. I don't know if that gives you an enough accurate picture.
That was very good and very comprehensive. Helped me understand. Just one small follow-up on this one. If, one, CREG is not really functioning anymore, from what I read. How does that impact the situation? Two, now that the tariff option has expired, does it stop the problem from getting bigger?
That is something that we have to see. It's up to the companies to increase tariffs, there is two counterbalancing forces. You now have the possibility of increasing the tariff, on the other hand, that could create a backlash on behalf of the government. To come up with the number that the increase is reasonable, it begins to reduce exposure, but it's not too large that it creates an aggressive reaction on behalf of the public. These are challenging times. I don't know how the companies are going to play that out. Honestly, I have no idea. In Enel, I'm of the position that we have to be cautious, that we have to look at how people's incomes are behaving and employment is behaving, and try to have an increase that doesn't increase inflation as a whole.
It's a difficult equilibrium to find, that's what we are thinking of at the moment. I don't know how other companies are gonna manage it. Last year, Afinia from EPM, they went full into the tariff, probably because of the political close relationship between Mayor Quintero and Petro. The government didn't say anything. Now, the politics have changed quite significantly. It's hard to tell how that is going to evolve.
Understood. The CREG?
The CREG, that's gonna be solved. The Minister announced that the series of the new CREG members were gonna be published today. I'm looking forward to see that. That is supposed to be solved by next Tuesday. We're expecting to have CREG operational again next week.
Okay. Understood. Perfect. The second broad question I have was on the gas system. There, from the central Colombia, at least, the gas fields there, production has been an issue. We had Canacol Energy earlier this year that had some gas issues. They canceled a pipeline or a gas contract that they had with EPM as well. How do you think that impacts TGI and the whole gas system in Colombia? Are you seeing any payment problems from any of your gas companies, or do you have to rely on offshore gas in the future?
In the short term, the Canacol Energy's decision to cancel the EPM contract has been positive to us because that has gotten EPM to sign the contract with TGI for the transport of that gas. The only way for Medellín to get gas is going to be through our infrastructure that goes to Sebastopol. On that regard, that has been one of the positive news for TGI. We believe, but Canacol Energy hasn't made the information public, that the reduction of Canacol Energy reserves is significant. That definitely is a challenge for Colombia, and we don't see the Orca and Uchuva projects from Ecopetrol coming to markets on the 2026 and 2027 as they've been portrayed. Because just the public consultation with indigenous communities, in our case, took five years. If they are lucky, we estimate three.
We see the beginning of the licensing process on the 2027 in the best of all scenarios. Those projects are not going to be coming to market any time sooner than 2029, 2028 in the best. That definitely creates a challenge for the supply of gas in Colombia, particularly on the 2026 and 2027. There is the possibility to increase the regasification, and then we would be depending on the international market. From the point of view of TGI, that would be a much more significant usage of Barrancabermeja, which is one of the main pipes owned by TGI. That would be an increase of gas price. How that price increases would be a challenge to continue to keep the demand for gas growing, particularly as a substitute for vehicles and industry.
That is going to be a tight equilibrium on how much the price can be increased to accommodate a dependence in the basket from a significant portion being imported. They need to be able to offer the energy at a competitive price, so it is not substituted. There is the possibility, earlier than Uchuva and Orca, that they reach an agreement with Venezuela. If you know Cardón IV, owned by Repsol and Eni, I believe. The American one, Chevron. They have four teras reserves. They are producing 500 million cubic feet, and they could, 1,000. Definitely there is a source at a much more reasonable price that could be brought into market, but that would require to have a close inspection of how the Antonio Ricaurte pipe that connects Colombia to Venezuela, in how bad shape it is.
The last export of Colombian gas to Venezuela was in 2015, and that pipe hasn't been used since. It goes underwater in the Maracaibo Lake, it's very likely that a significant portion will need to be replaced. That would be a 100 km project in the worst-case scenario. The question is, how quickly could that be done, and who is willing to have the CapEx and invest in Venezuela under what conditions to bring that gas to market? At the moment, Cardón has an agreement with the government of Venezuela that can only sell the gas to PDVSA. That is gonna be the biggest question mark. There is political interest on both governments to work something out. I know there is a delegation coming to Colombia early December. We will know more then.
Understood. Third question was probably more broader question from GEB's perspective. There was diversification into Brazil, I guess from your own perspective, you have gas distribution, transmission, electricity distribution, electricity transmission. Is there a portfolio mix that you're going to be comfortable with? Do you want to increase exposure abroad? Is there an ideal 25/25/25 split between gas distribution, transmission? How do I think of that?
We don't have an exact figure, Rahul. We're looking at opportunities. Based on those opportunities and the countries, risk diversification and currency diversification, we accommodate, each as they come. At the moment, our focus is transmission. As you can clearly see, we bought Argo. That was close to a $500 million investment. At the end, it's like $ 600 million if you look at what Argo, on our behalf. There is likely to be a Quantum 2 next year that we're definitely considering looking at. You see the $ 800 million investment in Peru with ISA. In Colombia, there are two significant projects coming up, Alcaraván and La Paz, for Casanare and Arauca in the east of Colombia. We're gonna be participating. That would be a $300 million CapEx. We just won the Huila substation that is a $70 million CapEx.
All the clear objects, projects for investing are transmission. We see transmission as the flagship. Gas is absolutely critical for Latin America in the energy transition. To look at Latin America as Europe or the U.S. or China is quite mistaken. The biggest source of CO2 emissions in Latin America is transport. If you don't look at deforestation, which is 50%. Once you look at land use and forestry, which is the biggest one, and that's where most of the attention should be focused on, the next one is transport. Transport, which is mostly diesel, has a huge impact in public health because of the poor quality of the diesel and the vehicles. Being able to shift transport to gas, the best return, both socially and environmentally for Latin America. That's why we are a strong supporter of gas.
If Cálidda can grow and expand its concession, is something that we are highly interested. We believe Cálidda is critical to keep energy prices low for the middle to low income classes, and at the same time, have a significant impact. Latin America still depends a lot on wood and coal in people's households. It is sad and worrisome that in Colombia, there are 1.7 million households cooking with wood and coal, and in Peru, it's close to 4 million, and in Guatemala, 50% of the primary energy comes from wood and coal. In Latin America, to be able to reduce that has huge environmental and health impact. If we can continue with that concession, that would be $330 million in CapEx in distribution. I don't see much more on that regard, but if opportunities come about, we would consider them in this proceed.
In Brazil, we are just gonna be focusing on transmission.
Understood. Thank you very much for all the answers, very clear and very informative.
Thank you, Rahul.
My pleasure.
We also have a question from Andres Duarte from Corficolombiana. Andres, you can unmute your microphone now and ask your question, please. Andres, you can unmute yourself now.
Hello?
There you go.
Juan Ricardo and Karen, thank you for the presentation. Congratulations for the solid results in terms of margins, and congratulations for the whole team. I have several questions. Let me do three or four of them here, and maybe during the next conference call, I'll do the other ones. The first one is, please detail a bit, what explains the great performance or good performance you obtained in the equity method line. That's the first question. The second question is actually related to the answers you gave to Rahul. Let me ask. Are you expecting major gas imports to begin before Ecopetrol is able to bring offshore gas to our country? The answer is yes.
Yeah.
In what year? Especially, does this import require the regasification plant of Regasificadora del Pacífico to be functioning? The third question is, regardless of—
Can we—
Yes.
My mind is not that great. I cannot store all the questions.
Okay. Great.
If you allow me, the Rahul method is easier for me.
Okay.
I begin thinking the answer, then I don't listen to the other questions, and that would be impolite on my behalf. The Regasificadora del Pacífico, if it were to be ever decided, it would take over 10 years, because of the licensing. There is not the slightest chance that we see it anytime soon. The government hasn't been able to adjust the risks allocations in a way that the delays because of people's opposition and difficulties with environmental licensing, do not change the cash flows in case it is a private finance. If we don't get certainty on the cash flows, regardless of the first major, nobody's going to build Regasificadora del Pacífico. We're going to be mostly dependent on SPEC. For sure, I see SPEC growing its capacity.
It can get, if I remember correctly, about 550 million cubic feet per day. That is enough for most of the time, and it's going to depend on when Ecopetrol or Venezuela come into market. Imports are needed at this time, and you've seen imports by SPEC of over 330, mostly for the thermoelectrics because of El Niño. That's going to continue next year for sure. Once El Niño is gone, if some minor imports will be needed on 2025, but for sure, significant imports will be needed on 2026 and thereafter. It's going to be up to Ecopetrol, Uchuva and Orca, because the one that is on the Morrosquillo Coast, the deep water well with Shell that I'm dyslexic, so I don't want to say the name because I will get it wrong for sure. That one is going to take a long time.
That requires such a huge investment. That's why I'm quite skeptical on the TGI's CapEx in the 2026, 2027 timeline. You need to begin building the infrastructure if that is going to go to market, that the prices are going to be so much higher that I haven't been able to get the numbers really make sense in my mind. I definitely see Uchuva and Orca. The licensing, given what we went through with Colectora, and they have to go through the same. If they do it in three years, it would be amazing. That I would put you at 2027 to begin licensing. Licensing is going to next year. You have to construct. I don't see that before the end of the decade. In the meantime, you are going to be importing gas.
Unless, this is the most significant if, and it could be in 2026, Parex on Piedemonte Llanero. Parex could definitely find gas if there is enough drilling. I've been told they have to go over the $5 million a year drilling. If Parex finds gas with the multi-usage pipes, you could bring that gas to Cusiana, and that could be in the market as early as 2026. It's going to depend on how much investment is Ecopetrol willing to spend in drilling in Piedemonte Llanero with Parex. That is the most positive outcome if the government were to decide.
Great. Let me repeat. Thank you for the answer. Let me repeat the first question, just for a yes or no, because I'm pretty sure that I was mistaken when I read the Enel Américas figures, regarding Enel Colombia. The explanation for the good performance of the equity method, is explained basically by Enel Colombia, right?
Yes.
Okay. I was mistaken there.
Enel had a very positive quarter because they had water. We've been lucky in Guavio, and the prices were high. The generation segment had a very positive quarter.
Great. The last two questions, and thank you for those answers, Juan Ricardo and Karen. The third question is, you're receiving the revenue coming from Colectora as the case has to be. When are you expecting this line to begin operation? What's your latest estimate?
We are already building the segment La Loma Cuestecita. Over 50 towers have already been built. On that, we are on schedule. That should be next year. We are going to be getting the environmental license for the Cuestecita Colectora, which is the La Guajira, at the end of this year. That would allow us, and we're actually bringing the contracts for the building of that line, at the end of this month. It's going to go to the board. We hope to begin construction on February. Once you begin construction, we need 18 months if we go full speed. That means there are not going to be protests and people's movements that stop working. That is hard to guess what is going to happen.
I'm speaking with most authorities, trying to find a commitment on their behalf that they are not going to allow for those strategies on behalf of the community to stop the project, to increase their bargaining power. If that were to happen, those delays can be of any length. It's impossible to guess. In the case of Enel, they made the project unfeasible and Enel decided to quit. Most of the projects that have been built, between five and six months. We hope, given how critical this is for the development of La Guajira and the prospects of the Colombian renewable sector as a whole, that the government is going to be extremely committed to make this happen. By late 2025, we hope to finish.
It's going to depend solely on the government's ability and our strong commitment, which is there, to have an open dialogue with the community so they don't stop the project in order to negotiate whatever new interests arise. There is a tradition in La Guajira for people to split and to divide so they can bargain and bargain and bargain to get a better deal. I understand that, and we'll be willing to discuss and negotiate, but not under the terms that they sequester the project. That's hard to anticipate, Andres. I hope Colombia realizes that there is a huge potential for the wind energy in La Guajira. If you look at the wind speeds, they are absolutely superb. When you look at the math, the productivity of the windmills is a cubic function.
The more you increase the wind, the power is increased to the power of three. 2 km of more wind speed means a growth of eight in kilowatts being generated. La Guajira could grow to six, 7 GW . When you look at the deal they just closed in Brazil between Total and the investors in the wind farms, Total made a very strong commitment to invest in wind energy to produce hydrogen for Europe. That in Europe is part of the energy mix they will need. It would be a shame that Colombia loses the opportunity to develop the wind energy in La Guajira. It's going to be totally up to the government. Otherwise, all investors are going to fly away, as most of them have already.
Okay. The last question, and thank you for that answer, again. This question is related to energy transition, a bit, at least. What is your posture or expectation with respect to Colombia's vehicle fleet transformation? Let me explain the question a bit. In what cases should this transformation be done to gas? In what cases to electricity? In what cases to hydrogen, according to what you've been thinking and analyzing? Thank you.
I don't see hydrogen in transport at all. The costs are huge. The logistics are extremely challenging. The investments on the infrastructure would be very significant for a poor country like Colombia. I don't see hydrogen playing role other than in exports and for Ecopetrol, in order for them to use that as a way for the reduction of sulfur in their refinery process. It makes a lot of sense for Ecopetrol. It's something that they must do. The export market is going to be developed. The ammonia and methanol is something that only Ecopetrol has the advantage to begin producing, because they have Reficar. For them to change and invest in the refinery is what makes the most sense. To build a whole new infrastructure for ammonia or methanol, is over $4 billion or $5 billion investment. I don't see anyone being able to do that.
You would need to invite significant investors from abroad to develop all that sector. I see hydrogen as something that could be an export, and could be a source of foreign direct investment. Colombia has many advantages, if that were to be developed. That's hydrogen. The Colombia energy transition has to go through transport and our bet, and we're doing it in Peru very successfully, is moving transport to gas. All the segment of trucks, taxis, heavy trucks, buses can be shifted to gas and some of them to electricity. Electricity makes a lot of sense for some of them as well. The thing is the EVs are still too expensive. China is really breaking through in that market. For sure, that is going to be an opportunity, as Bogotá has shown, buying most of its buses from China.
I see transport achieved to a mix of gas and EVs. The main aspect other than that, and where you would have the highest impact, is in energy efficiency. There should be new construction codes, particularly for the warm areas of Colombia where you don't use thick ceilings or you have good insulation, that you have the right windows and doors, that you have energy-efficient electrodomestics, particularly air conditioners, refrigerators, and fridges. Those are huge sources of energy waste. When you look at the consumption, the Caribbean coasts, they go 270 kWh per month. If you look at your consumption, I bet you it's not over 140. The reason why it's so high at the coast is because they are very inefficient electrodomestics and horrible construction regulations. That's where you could really improve.
There is a lot of literature and knowledge in Singapore on using plants in buildings and shade. Being able to plant trees in all warm places reduces 40% the need for air conditioning. Changing the paints that you use, investing in the quality of the public infrastructure for transport. There are a lot of opportunities that unfortunately have not been the priority. If you look at the literature, which I've been reading quite carefully, that's where most of the focus should be in Latin America. That would be a reduction in Q that most for sure would more than compensate an increase in P. If people were to be taught how to be efficient consumers, that would be probably the greatest advantage for everybody.
Thank you. Thank you very much.
Thank you, Andres. We don't have any more questions. We would like to thank you all for your presence today. As a reminder, the IR team at GEB are available at any time to resolve your questions. We hope you all have a good day. Thank you very much.
Thank you so much. I appreciate it.