Good morning, and thank you for waiting. Welcome to Companhia Paranaense de Energia Copel's video conference about the acquisition of the Aventura and Santa Rosa and Mundo Novo wind complexes. We inform that participants will be in listen-only mode during the presentation. Later, we will have a Q&A session when further instructions will be given. Before proceeding, we clarify that forward-looking statement that might be made during the call in relation to Copel's business outlook, as well as operating and financial projections and targets, are beliefs and assumptions of Copel's management, as well as information currently available. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties, and assumptions as they refer to future events, and therefore depend on circumstances that may or may not occur.
General economic conditions, industry conditions, and other operating factors may affect Copel's future performance and may lead to results that differ materially from those expressed in such forward-looking statements. Today, with us, we have Mr. Daniel Pimentel Slaviero, CEO of the company. Mr. Adriano Rudek de Moura, CFO and Investor Relations Officer. Mr. Cássio Santana da Silva, Business Development Officer, and Mr. Moacir Carlos Bertol, General Director of Copel Geração. Now, we would like to give the floor to Mr. Daniel Pimentel Slaviero, CEO of the company. You may proceed. Good morning, everybody, and it is a great pleasure for me to announce, on behalf of Copel, the acquisition of the Aventura, Santa Rosa, and Mundo Novo wind complexes, increasing the generation capacity by 260 MW.
This acquisition is fully aligned with our strategic plan, with our investment policy, and with the long-term objectives of the company to consolidate as one of the major players in Brazil in a fully integrated company. With this acquisition, we increased by 28% wind generation and the renewable sources or the pure wind and solar already represent 17% of our generation capacity in Copel Geração, 6.7% now with the acquisition. If we take from 2018 up to now between acquisitions and brownfield, and greenfields, we have 255% growth, reaching 1.2 GW, basically in wind energy, consolidating the company as the second-largest generator in Rio Grande do Norte. As you know, this state has an excellent position in terms of wind generation, has a privileged position.
We are executing in this plan with discipline in our capital allocation. Cássio will be talking about the characteristics and also the different synergies and the benefits that we are consolidating in Rio Grande do Norte. Moura will talk about the technical aspect and the return that we believe is very attractive for the company and for all our shareholders. Cássio? I would like to remind you about our investment policy and this policy that you can see here. You have on the screen our wind investment and in our strategy to recompose our EBITDA. In Rio Grande do Norte, we have over 150 MW in Rio Grande do Norte. This asset satisfies all these premises and it is totally aligned with our investment policy. Going ahead, we get into more details about our wind farms of Copel.
On this slide, we can see eight complexes in Rio Grande do Norte. The Aventura is number one. It is listed as number one here, and it is less than 30% distant from the other one, so it gives a very good operating energy. Item number two, which is Santa Rosa and Mundo Novo, 155 MW, a little bit more than 100 km from Jandaíra. These are assets that give us an operating energy that is very important for Copel, and this is really a major advantage when we analyze these assets. Here we are talking about four wind farms in Aventura with 155 MW. In Santa Rosa and Mundo Novo, 155 MW installed capacity. This complex has a solar project as well. It is already adapted for hybrid generation.
10 MW in a project with solar. Copel will be developing this when we consider it convenient. Going ahead with the presentation, we see some technical aspects about the installed capacity and assured energy and commercial operation. Beginning to contract the energy from these farms. You can see an assured energy of 157.8 MW. The commercial operation of these farms, Aventura, will be in July 2021. It was in July 2021, and Santa Rosa and Mundo Novo between December 2021 and February 2022. It's very important to highlight this because the nature of the operation, it was a lockbox operation. The whole period from December 31st, 2021 until the closing of the operation, all the cash flow already is Copel's. This was a project that was an A-6 in the auction, an A-6 in 2017.
These are already in commercial operation with a high capacity factor. We had a recertification which is part of our acquisition process. We reached 61% in this factor. With a very in-depth due diligence and we came to the conclusion that it was very well-built, 62 wind turbines. Top-of-the-line wind turbines. Going ahead in the presentation. We have already talked about the profile of this energy in the regulated market, 76% the energy sold. In the regulated contracting environment, 14% energy sold in the free environment. It has already come to us with this energy already contracted. What I said about 2022, as the contract. This farm already came with very competitive prices, already negotiated at market prices. We have a little bit less than 10% to trade in this project.
Let's get ahead, talk about the operational synergies and environmental aspects of the project. I have already said that we have an additional 260.4 MW optimizing our operational structure. We have full scope contract with us 15 years. With fixed cost dilution, we are maintaining the same structure of Copel GeT and a dilution of about BRL 3 million per year. The benefit of Copel GeT OEM, BRL 6.3 million approximately per year. This gives a very good upside and a very good competitiveness for Copel. As we are talking about the renewable energy or pure renewal, this helps us to continue in our track of focusing on net zero plan, offering to the group, especially to Copel Mercado Livre, the possibility of trading the I-RECs, the certificates. Thank you, Daniel. Going to the last part of the presentation.
Once again, one of the relevant pillars of our strategy is our discipline and governance in capital allocation. This is an acquisition that has a two-digit IRR and relevant synergies and upsides that include the fiscal benefit or the tax benefit of the goodwill. The base date of the transaction was December 31st, 2021. We have a long-term debt with BNDES with very competitive rate. On average, 2% interest rate for both projects. Up to 2043, very long-term debt. The operating synergies that have already been mentioned. We are sure that these acquisitions bring a lot of value to Copel. Any additional remarks or can we open for the Q&A? Thank you very much. We will start the Q&A session for investors and analysts. Should you need to ask a question, please press the Q&A button.
Good morning. Could you get into detail about the financing plans besides the BNDES and the other ones that you mentioned? As I said, one of the upside that we are considering in the project is the possibility to have equity financing at the holding company, and this could vary depending on the cash situation at the moment of the closing. That will be at the beginning of next year. It could be from 50%-100%. Once again, in order to ask a question, please press the Q&A button. Please stand by while we wait for questions.
Nossa próxima pergunta vem de Assis da Costa Oliveira.
Assis da Costa Oliveira, good morning. Congratulations for the excellent acquisition, generating value for shareholders and bringing benefit to society. With the new acquisition, the leverage of the company would be how much? And the net debt EBITDA as well. What is the projection of the cash flow for 2022? What is your projection for your cash flow in 2022 after the deal is closed?
Obrigado, Assis, pela pergunta.
Thank you, Assis, for the question. In relation to the leverage.
Complementa aí, sobre a segunda parte, sobre a segunda pergunta. Em relação aos
Moura will answer the second part. In terms of leverage, we closed the second quarter with 1.3 leverage.
Isso é extraordinário.
Still reflecting some extraordinary event in the last 12 months, and that should go back to normal, and it would be around 1.5%. In this project-
Ponto trinta, ponto trinta e cinco
We have 0.30 or 0.35 to our leverage. We still have a very comfortable situation, even for new opportunities. This is the information that we can give you considering the data of the second quarter and what the project brings, 0.30, 0.35 in the leverage structure of the company.
In relação ao fluxo de caixa, nós estamos falando.
In relation to the cash flow, very long-term, which is up to 2052. If you bring this to present value, it would be about BRL 400, considering the IRR that we are estimating.
Mais uma vez, para realizar perguntas, utilize o botão.
In order to ask a question, please use the Q&A button. Ricardo Grosco, good morning. Which are the next steps for new investment in transmission for the company? In our investment policy, Ricardo, you saw that Copel participated in the last couple of auctions in June and December last year, and we ranked second in these two lots that I mentioned.
Valorizar ter perdido, mas tem o fato muito positivo, que foi todo o trabalho de escuta.
There was something very positive coming out of that, although we were not the winners, because we learned a lot. It showed one of the characteristics that is very important of our company. For Jandaíra, for Bela Vista, for all the projects that we had, for Cutia. It is also valid for this project and for the next that we will have. Cássio can talk to you about what we are aiming at in the next few auctions. We also have Moacir from GeT, and he can also share some data with you. Looking to the future of transmission.
De acordo com a política de investimento.
According to the investment policy of the company, we look for assets that may have a RAP over BRL 100 million, and that may have operating synergies with other assets that we already own. The next two auctions, it's more clear now the assets that will be available. We have already started our due diligence, our studies, and as soon as we can, we will come to you and inform which will be our priorities. Transmission lines are constantly studied by our team based on all the premises that Daniel mentioned, minimum return and capital allocation discipline, and as we always do at Copel GeT. Good morning, everybody.
Disposição em ir olhando todos os negócios.
The same way that we look at all businesses to grow in generation, the same we do with transmission. Copel GeT looks to the future, growing and increasing the farms, and also the complexes of generation and transmission. As Daniel said, the auction and mainly next year, the offers of lots are very high and there will be opportunities for transmission companies to participate in these auctions. Copel is already studying the lot that fits into the investment policy of Copel, and we are very willing to acquire transmission lots in order to increase our transmission infrastructure the same way that we are growing in wind, in transmission as well.
Nossa próxima pergunta vem de Luiza Candiota.
Luiza Candiota. Good morning, everybody, and thank you for the questions. I have one doubt in relation to the strategy that you will be adopting. Regarding the decontracted energy part, given the expectation of prices, do you intend to contract this part in the free market? And what is the level of the long-term PPA that you see in the free environment? Luiza, these 10% are added to the portfolio of sales that we have in our strategy, both Copel GeT and Copel Mercado Livre. 2.3 GW, and we have a strategy of negotiation. Water, wind, and a little bit of solar. What do we see for that? It is going to get into this whole of energy that we have available, in part will be used as a natural hedge for our exposure in the GSF.
We see this as a very interesting alternative in order to mitigate. This is the reason why we are investing in wind and in solar as well. In relation to the strategy and the outlook for prices, we are working with a more long-term view, five years on. Lower than BRL 190 incentivized. This is what we consider as adequate. Regarding 2023 and 2024, we have left the biggest hydro crisis in 91 years and going to the highest rainfall. There was a downward pressure on prices, but we believe that there will be two wet periods and one dry period, and we see a perspective of recovery of prices in the very short term.
What is part of our strategy is not to have this at a spot market and looking with our clients, with our partners, with our customers, contracts from two-five years. As I said before, we had prices that were a little bit depreciated for 2022 and 2024. Eduardo Granjeiro, you have an increase in your debt. What is the maximum leverage that is your aim? Will there be an additional profit distribution this year? Eduardo, you have been following us, and you know that Copel, since 2020 or 2019, we have had the lowest ever leverage. It reached 0.9, and we have been talking about that consistently, and we consider this as too low.
We don't think this is adequate as a capital structure, so our objective. At the time, it was between three-five years, so we are in the middle of this transition, and we want to go toward 2.5. This can be done with two levers. One is acquisition, and the other lever is the dividend policy. What we seek is to have a balance and conciliate these two sides, and we have been executing this in a very adequate fashion. What we see here in this process, as was said in the last call. We will always follow our dividend policy, which says two events. One, based on the reported EBITDA of the first half and the net income reported in the first half.
With non-cash effect and the low leverage makes the company study and discuss this internally at the management level. At the executive level and also the board of directors, what is more interesting for the company up to the third quarter. These studies will be mature until the end of the third quarter, and they will be submitted to our board of directors so that they may make the most adequate decisions considering this balance and the fact that our leverage is still towards the ideal point, which is 2.5. Pedro Manfredini from Goldman Sachs. Good morning, Daniel, Moura and team. The acquisition, does it have a pipeline? Could you talk about the competitive process? Were other players involved? How did you get to that? Have you studied other M&A situations and you lost because of any reason whatsoever? Thank you, Manfredini.
I will answer part of that, and Cássio will be answering part of that as well. We analyze projects, and this is part of our routine. We do this every day, considering the size of Copel and also our growth strategy. We always look at the opportunities, such as the transmission auctions and others. Currently, we are looking at other opportunities, but this one was the one that really went ahead, and it seemed to us to be the best return from the strategic and financial viewpoints, and we ultimately decided to close the deal. Maybe you could talk about the competitive process and how long it took, and tell us more details. EDP Renováveis is one of the most respected global players in renewable projects, as you know. Copel participates in competitions basically in two ways.
One, by means of projects that have public invitation, and others are invitations for M&A. In this case, we received an invitation from the sell side, and we immediately started to study it. Of course, we don't know how many players were competing with us. There were so many phases. You have a non-binding phase, and then you have a binding phase. We submitted a competitive proposal at the beginning. It didn't get to the target that the sell side had, so we had to come back and make some changes. We understand that there was a very high competition for this asset. We also participated in other assets. That is to say, we have been studying other assets. Entry about this project, about the pipeline.
No, it doesn't have a very big pipeline, but it does have a solar project for 10 MW, as I said at the beginning of the call, in order to have a hybrid project, basically. EDP Renováveis published a material fact in Madrid, where it is listed. This is part of the global strategy that they have in terms of turnover of assets of about EUR 8 billion. It is part of the strategy of EDP, so that they may use these funds in order to refinance and start growing in the pipeline. Bernardo Vieira. Could you talk about hybrid generation? When could it really take off? Thank you, Bernardo. As I said, we have a project for 10 MW, and we are going to concentrate our endeavors in order to have the closing of this operation.
also immediately after we conclude this stage, we are going to seek to make it feasible, because as soon as it gets. Well, the sooner it gets, the sooner we will tap into the synergy. We will go back to that as soon as we can. Pedro Aurélio Teixeira. Do you have any other acquisitions on your radar screen? What is the profile of the asset that you evaluate for acquisition purposes? Pedro, as we said before, this is part of our daily routine. All the time, we analyze projects that come to us or that we are prospecting. Our line is what is reflected in our investment policy, minimum size for each kind of source, minimum RAP. Where is the location? Is there at least a minimum synergy in terms of location?
What I can say is that we continue to follow the same lines. We have constant investments in distribution, as you know, but we also have room to grow in generation and transmission as well.
No que nós delineamos como.
This is what we have as our macro vision. Also in terms of portfolio, we have been repeating this in other opportunities to the market. We reached 17%. Our objective between wind and solar or pure renewables, we want to reach 25%. It was from three- five years. We are halfway. We are about halfway. We will continue with this consistent growth. This is our vision.
De brownfields nós
From the viewpoint of brownfields, we have already concluded one stage, an important stage, which was the recomposition of the EBITDA of the company.
E agora-
Because of the investment that we had to make in Copel Telecom. Although we have a lot of pressure now, we are looking at greenfield possibilities, because we can tap into the advantage of being an integrated company and the biggest trader in. We are very encouraged with this perspective.
Encerramos agora a sessão de perguntas e respostas.
The Q&A has come to an end. We would like to turn the floor back to Mr. Slaviero. Mr. Slaviero may proceed. Once again, we would like to thank you for participating in this call, investors and analysts and individuals. I would like to reiterate our commitment with our strategic vision for the future. On November 22nd, we will have our Copel Day, and we will be telling you about our future. The essence of our strategy will continue to be the same, which is to focus on the energy business and expanding our current businesses in T, G&D. Always having discipline on in capital allocation. We participated in the transmission auctions and others, and you can see our.
Tem se mostrado bastante robusto pra companhia.
You can see that this has been very good for the company. We continue on this track of growth and with a dividend policy that may bring adequate returns for everybody, for everybody in the company and all the investors as well.
Senhoras e senhores, a videoconferência da Copel está encerrada.
Copel's video conference has come to an end. Thank you very much for participating, and we wish you all a very good day.