Good morning. Welcome to Grupo Energía Bogotá's second quarter 2026 financial and operating results conference call. The results reports were published yesterday and are available on GEB's website for your reference. The conference will start with an overview of the quarter's results, the main events in the economic environment, followed by the group's financial milestones. At the end of the presentation, a Q&A session will follow. On the bottom right of your screens, you will find a question and answer section for you to write your questions at any time, or you can raise your hand if you would like to ask your questions live. Our conference speakers will be the CEO, Juan Ricardo Ortega, the CFO, Jorge Tabares, and the financing and investor relations manager, Karen Guzmán. Juan Ricardo, the floor is yours.
Thank you. Good morning, everyone. Welcome to our second quarter 2026 earnings call. It is my pleasure to present the key operational and strategic developments across the group during the quarter. Yesterday, August 13th, Grupo Energía Bogotá commemorated the 130th anniversary of its founding. The extraordinary journey of growth, transformation, and value creation has established the company as a leading multinational platform in electricity transmission and natural gas transportation and distribution, with operations across Colombia, Peru, Brazil, and Guatemala. Throughout more than a century of history, the group has contributed to the economic and social development of millions of people by delivering essential infrastructure that enhances competitiveness, improves communities' quality of life, and generates sustainable value for shareholders, investors, and all stakeholders. This milestone is ultimately a recognition of our ability to evolve and successfully navigate challenging economic environments, together with the talent and commitment of our people.
We will continue building on the legacy while preparing to address future challenges and seize opportunities that contribute to the development of the territories wherever we operate. Regarding our results, adjusted EBITDA for the first half of the year totaled approximately COP 3.2 trillion, representing a 5% decrease compared to the first half of 2025. The comparison reflects, in part, the COP 153 million dividend declared by Argo that had some one-offs in the prior year, as well as the impact of the appreciation of the Colombian peso against other currencies and the current natural gas supplies constraints in Colombia that is clearly impacting TGI. Over the last 12 months, EBITDA reached approximately COP 5.8 trillion, increasing 5% year-over-year. On July the 29th, the group completed the first dividend payment of 2026, distributing approximately COP 1.4 trillion to more than 26,000 shareholders.
In accordance with the distribution approved by the general shareholders meeting in March. The payment reflects the economic value generated and shared with those who are part of the group shareholder base. Fitch Ratings reaffirmed GEB's international credit rating with stable outlook, highlighting the resilience of our regulated business, the geographic diversification of our portfolio, our financial discipline, and our ability to execute our growth strategy. Both agencies also recognized the strategic potential of Brazil as a long-term growth platform, supported by the consolidation of Gebbras and the development of the Varenne alongside La Caisse, one of the world's leading institutional investors. Moody's further stated that the group continues to maintain a strong capacity to mitigate risks associated with El Niño phenomenon, despite uncertainty regarding the intensity and duration of future weather events. Let's move to the next slide, please. Now we'll see the operational and market highlights.
Here I would like to begin with the recent developments in Brazil. In mid-July, we successfully closed the transaction with Axia Energia, the old Eletrobras, completing the acquisition, funded entirely by our own resources of the remaining 49% equity interest in the four electricity transmission concessions companies in Brazil. Strategic market for the group. Full ownership of these concessions represent the first step towards the creation of the joint control platform with La Caisse. The agreement continues to advance through the corresponding regulatory approvals in Brazil, a process that will position us as the fifth-largest private transmission player in Brazil. In Colombia, the environmental authority, ANLA, approved the amendment of the environmental license for the Chivor II Norte 230-kilovolts project, enabling the full execution of the project of 162 km transmission line.
This decision allows progress on the strategic project aimed at strengthening transmission systems reliability and meeting growing electricity demand in Bogotá and central Colombia. This is absolutely critical because both the hydroelectricity of El Guavio and Chivor require maintenance during the summer times, and for that, the city will need to bring its energy from other areas of Colombia. With progress over 80%, Colectora continues to establish itself as a cornerstone project for Colombia's energy transition. Construction of transmission lines and substations is advancing as planned. The substation is finished, and there are just a couple of towers that need to be built in order to finish the project. This is supported by extensive community engagement efforts and a robust environmental management strategy focused on biodiversity protection and the compliance with all the project commitments.
The critical infrastructure will enable the renewable energy generated in La Guajira to be injected into the National Interconnected System. This is a great opportunity for the country of the winds of the Guajira to be brought as competitive energy. In the electricity generation business, Enel Colombia continues to generate significant value with our investment portfolio, supported by higher contracted volumes, the recovery of spot market electricity prices, and continued expansion of its renewable generation platform. The commissioning of Guayepo III during the first quarter of 2026, together with the contribution from the Atlántico Solar Park, currently in its testing phase, further strengthen Enel Colombia's position as the country's leading solar power generator with approximately 1,115 GW hours of generation and over 1.7 GW of power.
The allocation of 21% of firm energy obligations in the reliability charge auction for the 2029/2030 delivery period, supported by a portfolio comprising of 12 generation units, four hydroelectric, seven solar, and one thermal plant, reaffirming the company's strategic role in ensuring long-term energy security. In the distribution segment, our associate, Enel Colombia, continued to deliver solid and resilient performance driven by demand growth, expansion of the regulatory asset base, and competitive tariff component uptakes. As a result, the contribution margin increased by 15% year-over-year. At TGI, however, the regulatory and market environment continued to present significant challenges for Colombia natural gas sector. The market remains affected by constraints associated with the limited gas availability, creating pressures on supply conditions and commercial dynamics across the industry.
Despite this environment, the company continues to closely monitor regulatory and market developments while proactively managing its operational and commercial strategy to mitigate potential impacts and preserve service quality and reliability. This is going to be a gap at the most a year or a couple of years while the molecule is found by other means. Finally, the newly elected Fujimori administration has identified natural gas modification and acceleration of the energy infrastructure investment as strategic priorities for the 2026-2031 period, promoting energy decentralization, regulatory simplification, and the attraction of private investments. If implemented as respect, these initiatives will create favorable conditions for the development of natural gas distribution and transportation projects, strengthening the growth outlook for the group's assets in the country, and produce very positive performance. I will now hand the call over to Jorge Tabares, Chief Financial Officer, who will present the financial performance for the quarter.
Please, Jorge, go ahead. Thank you, everyone.
Thank you, Juan Ricardo. Good morning, everyone. As of June, operating results were influenced by the 10% average appreciation of the Colombian peso against the U.S. dollar. In addition to other factors, operating revenue decreased 13% year-over-year, including a COP 166 billion negative translation effect. All figures are going to be in Colombian billions. Of all segments, natural gas distribution was the most affected by effects translation, with COP 145, equivalent to 87% of the total translation effect. The segment results reflect a 6% reduction in pass-through revenues, which do not generate margins for Cálidda and Contugas, and are related to network expansion and gas transportation activities. At Cálidda, excluding lower pass-through revenues, the quarter reflected a stable distribution revenue performance in functional currency, partly explained by the definition of the average distribution tariff, which was favorable for the company.
At Contugas, distribution margin revenues decreased 23% year-over-year, COP 5.4 million, mainly due to lower demand from the fishing sector associated with El Niño phenomena. The natural gas transportation business contracted 11% year-over-year, mainly due to the reduction of the regulatory WACC from 11.88%- 10.94%, and lower fixed charge revenues associated with capacity contracting adjustment by shippers. This trend is consistent with lower structural demand and reflects current natural gas supply availability and pricing conditions in the market. In the electricity segment, the appreciation of the Colombian peso against the U.S. dollar generated an estimated seven, while the appreciation of the Colombian peso against the Peruvian sol resulted in an additional 14 impact. These foreign exchange effects put pressure on revenues in both the transmission and distribution businesses, which reported year-over-year declines of 4% and 6% respectively.
Operating costs decreased 15%, COP 166, mainly due to a COP 110 FX translation effect, representing 66% of the total reduction. In natural gas distribution, the foreign exchange translation totaled COP 100 billion impact, followed by a reduction in pass-through cost at Cálidda. Natural gas transportation cost decreased 9.4% compared to the second quarter of 2025, primarily due to lower maintenance expenses, reduced emergency response costs, and lower line pack gas consumption. In transmission, the foreign exchange translation effect amounted to COP 3, which together with lower depreciation and maintenance expenses explains the COP 9 reduction reported in the segment. Administrative expenses declined 24% year-over-year, mainly explained by a COP 18 foreign exchange translation effect on a lower provision related to IRE receivable portfolio within the electricity transmission segment.
The latter generated a COP 95 positive impact following a change in the expected credit loss methodology, under which the general approach was applied to the IRE portfolio in accordance to IFRS 9. Administrative expenses in the natural gas transportation segment increased 42%, mainly associated with the regasification project, reflecting higher spending on technical studies, subscriptions, and legal advisory services. The COP 5 increase in operating margins across segments was primarily impacted by the following factors. The natural gas transportation segment, which reflects the most significant impact on operating income as a result of lower revenues associated with the current constraints in natural gas availability, weakening industrial demand, and recent reduction in the regulatory WACC to 10.94%, in addition to higher administrative expenses related to the regasification project.
Second, the pressure of the FX effect on the U.S. dollar and Peruvian soles currency denominated income from our Peruvian gas and electricity distribution businesses, as well as on transmission in Colombia and Guatemala. This was partially counteracted by the related provision of the IRE receivables in the transmission segment, in which we use the expected losses methodology. As of June, the total IRE receivables balance amounts to COP 284 billion. On the next slide, I will discuss the main factors driving the evolution of net income during the quarter. Net income reached COP 702, increasing 15% year-over-year, driven primarily by equity method income, particularly the strong results delivered by Enel Colombia following the recovery in the spot market electricity prices. Financial income increased by COP 25 due to the increase in term deposits and improved investment returns.
Financial expenses increased 11%, mainly due to the impact of the $500 million international bond issuance completed in October 2025. Foreign exchange decreased 71%, mainly reflecting the impact of foreign currency denominated financial obligations and the appreciation of the Colombian peso against the U.S. dollar during the quarter, which generated a favorable valuation effect of the U.S. dollar denominated liabilities. The equity method increased by COP 119, primarily driven by Enel Colombia and Gebbras, which benefited from a 0.5 percentage point increase in the IPCA index in Brazil. Income tax expenses increased 147% year-over-year, mainly due to the higher deferred tax effects associated with dollar-denominated debt movements. As a result, the controlling net income increased 18% year-over-year, reaching COP 662.
The group's equity method income increased 23% year-over-year, reaching COP 629 during the quarter, primarily driven by Enel Colombia, which reported a more than 50% year-over-year increase in net income during the April to June period, supported by the strong performance of the generation business. Results benefited from the recovery in spot electricity prices and continued growth in power demand. Regarding our Brazilian associates, particularly Gebbras, the results improved by the increase in IPCA mentioned during the quarter, which impacted positively the performance of regulated assets. The contribution from our Peruvian associates was negatively impacted by approximately 10%, mainly due to the appreciation of the Colombian peso against the U.S. dollar.
Investments executed through June totaled $265 million, representing a 10% year-over-year increase, mainly driven by the electricity transmission business in Colombia, which accounted for 66% of the total investment, and increased 23% compared to 2025. This reflecting a continued execution of legacy projects, such as Colectora, Chivor II Norte, Refuerzo Sur Occidental, and Sogamoso. The second most important investment focus remains natural gas distribution, led by Cálidda. The 17% reduction compared to the same period last year reflects the businesses' growing operational maturity, which naturally requires lower levels of infrastructure and network expansion investments. The updated five-year organic CapEx plan amounts to approximately $1.7 billion, led by investments in the electricity transmission segment associated both with projects currently under construction and future awarded projects.
While the natural gas transportation segment reflects a higher investment outlook, driven primarily by the development of the IPAT projects and ongoing network maintenance programs. Adjusted EBITDA for the quarter reached COP 813, declining 24% year-over-year, mainly reflecting the comparison against 2Q 2025, when Argo had declared COP 153 dividend. Results were also impacted by a COP -57 FX effect. As shown in the chart on the upper right, the variation in controlled EBITDA was primarily driven by the gas businesses. TGI, which accounts for 40% of the variation, reflects lower transportation volumes and higher expenses associated with the regasification project. Cálidda, accounting for 27%, was mainly affected by the appreciation of the Colombian peso against the U.S. dollar.
In others, Contugas reported a significant decline due to the appreciation of the Colombian peso, lower gas demand during the first fishing season, and the lack of billing to customer Tenga during the period. I will now hand the presentation over to Karen Guzmán, financing and investor relations manager, who will cover the debt section. Please go ahead, Karen.
Thank you, Jorge. Good morning, everyone. Turning to financial position during the second quarter, we maintain an active and disciplined approach to managing our debt profile, focused on preserving financial flexibility and maintaining a capital structure aligned with the group's long-term growth objectives. As of June, consolidated debt totaled $5.7 billion, of which 53% corresponds to GEB and 47% to our operating subsidiaries. Our financial structure continues to reflect a balanced risk profile, with 53% of debt at a fixed rate and 47% at floating rates, primarily indexed to SOFR, IBR, and CPI. In terms of currency composition, 63% of debt is denominated in U.S. dollars, 34% in Colombian pesos, and 3% in Peruvian soles. In addition, 17% of the total debt portfolio is hedged through derivative instruments to mitigate foreign exchange exposure.
In this regard, foreign exchange risk remains appropriately managed through the natural diversification of our cash flows across Colombian pesos, Peruvian soles, and Brazilian reais, complemented by both natural and financial hedging strategies. In this context, during June, we executed a $160 million principal-only swap on the international bond issue in 2025, taking advantage of the appreciation of the Colombian peso against the U.S. dollar, while further strengthening the portfolio foreign exchange risk management strategy. Consistent with our long-term funding strategy, we also advanced the filing process before the Colombian Ministry of Finance and Public Credit for the execution of a $600 million syndicated loan facility. From a credit metrics perspective, we closed the quarter with stronger financial indicators.
Consolidated leverage measure as net debt to EBITDA improved from 3.3x- 3x compared to the same period last year, supported by 5% growth in last 12 months EBITDA in a robust cash position. Likewise, our EBITDA to interest expense coverage ratio increased from 4.8x- 5.8x , mainly as a result of the appreciation of the Colombian peso against the U.S. Dollar. In addition, we benefited from a lower average cost of U.S. dollar-denominated debt, reflecting a more favorable interest rate environment compared to the same quarter of the previous year. At the subsidiary level, Cálidda made approximately $10 million in amortization payments on its existing IDB facility, reducing the outstanding balance to approximately $60 million.
Meanwhile, at Grupo Electro Dunas, we successfully refinanced approximately 141 million Peruvian soles of short-term debt, extending maturities and securing more competitive financing conditions, including an interest rate reduction of approximately 30 basis points. Additionally, we obtained 57 million soles in short-term financing to support working capital requirements and ongoing capital investment execution. With that, I will hand the call back to Jorge to continue with the ESG section.
Thank you, Karen. The group continues to strengthen its social impact across the territories where it operates through initiatives aimed at creating conditions for well-being and prosperity, benefiting more than 300,000 people during the first half of the year. Investments accounted for approximately $6.6 million, by which the group advanced programs focused on education, employability, entrepreneurship, and community development. Key milestones included the launch of the new phase of Legacy for the Territories, the continued expansion of access to natural gas service, and recognition received by Cálidda Community Kitchens program in Peru. Environmental stewardship remains a strategic priority for GEB. During the period, the group invested more than $4 million in environmental compliance, climate change adaptation initiatives, waste management programs, and environmental management systems.
These efforts contributed to a carbon footprint that remained 13% below target, while the recovery and reuse of more than 122,000 tons of waste, and the recognition received by Cálidda to the Peru Carbon Footprint platform, that demonstrates tangible progress in the group's environmental performance. Finally, strengthening corporate governance sustainability standards that remain a priority across the organization. In this regard, GEB and La Santigueña were recognized for the fourth consecutive year as the top three companies in the District Companies ranking conducted by Bogotá's site office, reinforcing the group's commitment to transparency, integrity, and long-term value creation for all stakeholders. To summarize the quarter, I would say resilient results in a challenging environment, primarily affected by the appreciation of the Colombian peso against the U.S. dollar, and lower volumes in the natural gas transportation businesses. Our regulated assets continue to demonstrate strong operational and financial stability.
Net income increased 15% year-over-year to COP 702 billion, supported by the contribution of strategic investments, particularly in Enel Colombia, as well as improvements in financial management. The group continues to maintain a strong financial flexibility with a net debt to EBITDA of 2.96, $140 million of CapEx executed during the quarter, and a long-term investment portfolio, approximately $1.7 billion, focused on future growth. Key value drivers continue to strengthen, supported by the performance of Enel Colombia, the consolidation of the group's Brazilian platform, and the continued advancement of major transition projects in Colombia. ESG leadership remains a core differentiator, to approximately $11 million investment in social and environmental initiatives, emission reductions exceeding internal targets, and multiple governance sustainability recognitions. The group continues to strengthen its position as a regional benchmark in sustainability and corporate governance. Thank you once again for your interest in the group.
We will now open the floor for the question-
Thank you. Thank you very much for the presentation. We'll now move to the question and answer section. If you would like to ask a question, please press star two on your phone and wait to be prompted. If you're dialed in by the web, you can type your question in the box provided or request to ask a voice question. We already have some text questions in the queue. We'll start with the first one from Daniel Guardiola from BTG Pactual. "Hi, good morning, and thanks for the presentation. Regarding Brazil acquisition, returns on the additional 49%. Following the acquisition of Axia remaining 49% stake in Gebbras, GEB now owns 100% of four Brazilian concessions.
Can you disclose the expected equity internal rate of return or return on invested capital on the incremental investment and compare it with GEB cost of capital and the returns available from organic transmission opportunities in Colombia?
Thank you, Daniel, and good morning, everyone. I'm Jorge Tabares. Given that this is an M&A competitive environment, the precise figures we cannot disclose, but it is accretive. The return on investment that we could get from new acquisitions in Brazil is perhaps about between 200 basis points and 200 basis points above our cost of capital. We see the cost of capital as, given the current high interest rate environment, we always take a kind of a relatively smooth approach in which we consider the last three years' cost of capital, and the fact that our debt is long-term debt supports, to an extent, that. Compared to the greenfield developments in transmission in Colombia, we recently have been asking or requiring projects to deliver a little bit more than 200 basis points, more in the 300 basis points range, for new projects in Colombia.
Those two are kind of the broad considerations to assess value creation in those two strategies, acquisitions and greenfield developments. The precise figures, as I said, given that it's a competitive environment in both places, is not possible to disclose.
Okay. Thank you very much. Second question from Daniel is on ISA. There has been market discussion around potential change in ISA ownership structure. Strategically, would increasing GEB's exposure to ISA be consistent with your capital allocation framework? More broadly, what financial and strategic criteria would have to be met for GEB to consider a transformational transaction of that size?
Since five years ago, we have said openly that ISA is an interesting asset if the owner would like to sell. Currently, we are in a slightly different place because it is a very big transaction for us, and we have successfully deployed capital in our both organic and inorganic structure. Any possible transaction, which we currently are not working on, because the owner has not disclosed any willingness to sell the asset, we will consider it, with maintaining a very clear view on our financial capacity. Perhaps it will have to be with co-investors, and in the past, we have spoken generally with potential co-investors, and that could be a possibility. If our leverage increases over our medium-term targets to maintain the investment grade, we will have to structure a very clear path to delever to those levels.
In terms of the strategic intent or strategic logic of it, transmission Colombia is a business we know very well, and scale is an important factor in that business. We do not know much about roads, and perhaps that will not be a strategic asset for us, but making any other judgments is premature. The same thing with the Brazilian transmission portfolio. Those two are industries and assets that we know well and that we are interested in. Of course, in Peru, we are co-owners with ISA. We are 40%, so we know the asset very well. The knowledge of the industry, the long-term prospect of the industry, especially transmission industry, is what will be appealing for us.
You are rightly pointing that this will be transformational, and in case the owner decides to sell and we decide to participate, a lot of restructuring needs to be done in order to be able to access to that investment from the GEB side.
Thank you. Thank you very much. The third question from Daniel is about TGI. How much of TGI's EBITDA decline came from the lower WACC versus lower contracted capacity? Could the final correct tariff review materially change the 10.94% WACC?
We expect that we are going to be able to charge the new WACC as soon as the new rates are in place, which we have expected momentarily for a few months now. It is about COP 6,000 million per month. The numbers reflected in the quarter are about COP 17,000 million of negative impact.
Thank you. The last question from Daniel is about El Niño exposure. How would El Niño scenario impact Enel Colombia generation EBITDA?
Enel is extremely well-placed to navigate El Niño. Yesterday, NOAA published an updated forecast, and now the possibilities are like 90% of a very strong Niño, which is reflected in the current spot prices in Colombia as generators are trying to save water to ensure that they can fulfill the contract. Perhaps the best way to explain is, compared to 2024, we enter the second part of the year with the reservoir levels not at the optimal levels, and specifically at Enel portfolio. That, plus the activation of the Estatuto de Gestión del Riesgo de Desabastecimiento, caused financial pain in the fourth quarter Enel results in 2024. The first semester has been very good. They have been able to save water. The fact that they have a little bit more of solar capacity provides more flexibility in the portfolio.
And perhaps more relevant is that the rainfall patterns in the eastern side of the country where Enel plants are located, have received much water than the western part of the country. So all the Antioquia generation has been receiving very little water. So our, meaning Enel, reservoirs are about 90%. In fact, the bigger one is like 97% last time we checked. So we are very well placed, and we have been constructively saving water, and in an extent, being able to capture some of the spot prices that have evolved here over the last two months. So overall, we expect that Enel is going to have a very solid year. And different from the 2023, 2024 El Niño, the company is going to over-deliver the budget, compared to the negative impact that we went through, both in April and November of 2024.
Thank you. Thank you very much. Next, we have two text questions from Nicolle Morales Ortega, Credicorp Capital. Could you explain the reduction in accounts receivables from Air-e? Have you reached any agreement with Air-e regarding the payment of its outstanding balances? And second question, what impact do you expect El Niño to have on your businesses? Overall, do you believe the effect will be positive or negative?
Yes, this is the fact that we applied our general expected losses methodology in this quarter. In the last year, we were provisioning 100% of the receivables. So on an ongoing basis, the right thing to do is to apply the expected losses. Now, we are seeing signals from the new government recognizing the importance of Air-e to pay the receivables, mainly the impact on thermal plants that are very critical to support the electricity system through El Niño. In fact, we were looking at the numbers recently, and it is a bit surprising that not all thermal plants are delivering at full capacity, and speculating one of the reasons may be that they do not have enough cash to put into the business, or they are not willing to commit more cash to the business given the huge size of receivables that some of the thermal plants have.
But we are seeing constructive signals and again, recognition of the very critical importance, for the government to pay its debt, and government as the owner of this company, due to the intervention.
Thank you. Thank you very much. Next question is a text question from Evan Walker, Ninety One. Hi there. Congratulations on the results. Can management update us any color on the current status of discussions regarding a potential acquisition of the controlling ISA stake from Ecopetrol?
Hi, Evan. Thank you for the question. This is a speculation, so from us, we have not disclosed anything, and as I said, we don't have a team working on this transaction as of now. We need a signal from the owner, that they are willing to sell and what is the structure of the potential divestment and, going back to my answer to Daniel Guardiola, at that point, we'll have to structure solid financial engineering and strategy to be able to access this asset because it's a very big asset. But we'll intend to do it if that happens. If we're not doing anything now, I will say that it's unlikely that anything happens in the next nine months.
Ecopetrol, no president has been appointed to Ecopetrol, and the way we see that is that a new person needs to come in, kind of go through the learning curve a little bit, understanding the status of the company, most likely a lot of fixes, and then getting into more strategic conversations as this one.
Okay. Thank you. Thank you very much. Our next question is a text question from Diego Gomez Jimenez, Banco Davivienda. What were the sources of investment in Brazil, and how will that affect dividend distribution?
We only paid the minor acquisition of the Gebbras participations. The Varenne, the bigger transaction, is still under approvals. We expect that around the beginning of the 3Q, the actual settlement will happen. We have some cash at hand and some credit lines or credits that are fully ready to disburse, and that's going to be the main source of the cash to pay for the transaction. Remember, we're not paying to La Caisse. We are contributing cash to the company. At the time we close the transaction, Varenne will have about $600 million new dollars to fund acquisitions. In fact, there is a lot of dynamic in the Brazilian electricity transmission market, that the company is evaluating, early stages, but opportunities to dispose that capital and putting it to work are diverse. The transaction is dividend accretive.
Given the debt we are taking, it's on the 6% range in U.S. dollars. The return of the investment is much higher than that. This is going to be positive on the dividend side once we close, and especially during 2027, which we will have the full benefit, because in 2026, we'll only have a benefit for a few months.
Thank you. Thank you very much. Our next question is a text question from Gulen Tanser, Reinsurance Group of America. Could you please address leverage credit metrics and ratings, seeing that there is continued pressure on Colombia ratings, which is high right now, and Bogotá low BBB. What do you need to do to maintain IG ratings in the foreseeable future?
Thank you, Gulen. There are two ways of looking at the rating. Our intent and our strategic approach is that we benefit from investment grade, we would like to be investment grade. All the actions from the corporate level on strategy always take into consideration the maximum leverage on a medium-term sustained basis to maintain the leverage. That's about 4x net debt to EBITDA is the key metric. There is also a cash flow metric, but in that one, we're fairly comfortable that we are within the metric by a good margin. If we do acquisitions that are sizable, that overshoots that four, the conversation with the rating agency always is we will deliver to the 4x soon, 12, 18 months. There is an impact of like what's going to happen here in the Varenne Brazilian transaction with La Caisse.
Once you pay, leverage grows, but you cannot capture the EBITDA until you go to the next 12 months. Currently, we are below 3x as we're going to point, as Karen mentioned in the presentation. We overshoot, but then we go back in 12 months closer to the 4x . That's always the dynamic when we do acquisitions. On the organic CapEx perspective, because CapEx is deployed relatively smoothly, that does not have a significant impact. Although we do have, as mentioned, also a significant portfolio of organic opportunities, about $1.7 billion over the next five years. We already delivered half of this year, so it's a little bit lower than that. Now, the second aspect, which is perhaps what you're pointing is, what if the Colombian government of the District of Bogotá. This is a judgment.
My judgment from the city of Bogotá, given the current administration and the responsibility in which they manage the finances, and the health of the city economics and economic dynamics, I don't think the city is going to trigger any action. From the sovereign perspective, we have less control. Yes, we are linked to the government because of the methodology of the rating agencies. Moody's is more directly, because we are fully linked to the sovereign and the city. The sequence is national government, city is linked to that, and we are linked to the city on the [Moody's] perspective. On Fitch, we are enabled two notches above the sovereign because our country ceiling is Peru, given the size of our investments in Peru. In that, we are a little bit more protected on the Fitch side.
But if Moody's decides to act on the government, they automatically and mechanically act on us and the city on us. Now, given the signals that the current government is, there has been a day and night change in the way public finances are being treated. The last four years, fiscal discipline, efficiency, savings, austerity, were not words that were used at all at any point. Because of that, the public finances deteriorated very significantly over the period. All the signals that the newly appointed government has given the markets are signals of responsibility, of fiscal discipline, and furthermore, of support from multinational, from multilateral banks, a very strong support to help navigate this very bad shape of the public finances in which the country was received.
What is also going to support the public finances is that the private sector, given the signals that they are receiving, on a total change of anti-investment, anti-private sector over the last four years, that also should create a healthy dynamic of both economic growth and at the end, more taxes for the public finances. I think actions on the public finances, given all of these are, I would say, very unlikely in the next 18 months or so. Again, not just the signals, not just the discipline perspective, but the people appointed. Again, a totally different approach, appointing people with experience, people with all the academic credentials to run offices, compared to the previous government, in which that was very rarely the case, if at all. Again, from the corporate side, we're very disciplined.
From the public finances side, we do not have control, but we are seeing very solid signals from the government.
Thank you. Thank you very much. Maybe before the next question, just a quick reminder to our audience. If you are connected via the phone and you would like to ask a voice question, please press star two on your phone keypad and wait for your name to be prompted. Our web participants can also request to ask a voice question or send their question as a text. Our next question-
Gulen, the other point that, just to follow up, as my team is pointing here, just two days ago, Fitch affirmed in the annual review our rating. This is a rating action based on all the updated information from our side. So, as where we are now with the projections, we are solid within the rating. That is based on a deleveraging trajectory that we offer or that we presented to the agency, mainly due to the Brazilian acquisition.
Thank you. Thank you very much. Our next question is a text question from Sergio Daniel Torres, Davivienda Corredores. What is the debt management strategy once the payments for the Axia Energia acquisition in Brazil are completed, given that the resulting leverage level leaves limited headroom for additional debt?
Effectively, when we pay for the Brazilian transaction, we are going to be within a little bit above from our long-term target. Enel is helping us a lot this year. TGI, on the other side, is having this batch of losing volumes, and everybody is chasing new molecules and long-term contracts to recapture that market. I think Enel is going to have a bigger contribution than TGI this year, and the new dividends from Brazil next year is also going to improve EBITDA. From the organic investment perspective, it is mostly neutral, so we do have to take some debt, but it is on a marginal basis. Perhaps the limited headroom that you point in, Sergio, it will be for material new acquisitions. Currently, we are not working on one.
Once we get to that opportunity, we need to assess what is the impact on value creation and overall leverage, the EBITDA contribution that that transaction could bring, and what is the most efficient way of financing that. But it is premature to talk about that at this point.
Okay. Thank you. Thank you very much. Just a final reminder. If you are connected via the phone and you would like to ask a voice question, please press star two on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can also request to ask a voice question or send your question as a text. I will just give a moment or so for any additional question to come in.
Thank you very much for your interest, and our IR team remains open to ask further questions that may come up. Thank you very much.
Thank you. This concludes the call for today. We are now closing all the lines. Thank you and goodbye.