Welcome, everybody. Welcome to the conference call from ENGIE Brasil Energia's result video conference. I am Rafael Bósio, the IR Manager for the company. Like many other companies, we decided to migrate to the video conference format because we feel this format brings us closer together, especially in the current scenario of social distance imposed by the pandemic. You are connected as listeners only, and we will open for questions and answers either by phone or chat. This presentation, followed by the slides, will be simultaneously transmitted through the internet through www.engie.com/bin/investors. A slide presentation and the company's third quarter 2020 earnings release are also available on that website.
Before proceeding, I would like to clarify that all statements made during this video conference regarding business outlooks of the company should be treated as forecasts, depending on the country's macroeconomic conditions, on the performance, and the regulation of the electric sector. Besides other variables, they are subject to changes. Here we have Eduardo Sattamini, the CEO and IRO; Marcelo Malta, the CFO; and Marcio Daian Neves, Manager of Gralha Azul Transmission Project. Ensuing this, there will be a question and answer session both by chat box and over the phone. We remind journalists who wish to ask questions that they can do so by email, sending them to the company press office.
Thank you, everybody. It is a pleasure to be here through a live. The intention, of course, was to be together and to be able to see all of you and to be closer.
We're going to go on to the results, and we'll begin with a presentation on slide number five, where we speak about the main financial and operational indexes. Later on, Marcelo will give you a more detailed presentation. This quarter was characterized by the net operating revenues, significant ones, as you can see, 27.8% increase. The main thing that we had was a contribution. Our CapEx was increased in transmission and ended up giving us good operational results, being BRL 720 million, approximately. This is the main factor. We also had an event that hadn't happened for many years. We exported to Argentina, and this was very important for us, giving us a somewhat higher result. We go on to EBITDA, where we had a drop, greatly due to the register of the warranty that was activated against Pampa Sul of BRL 120 million.
Had we not had this in 2019, we would have had an increase of EBITDA of 14% and a significant increase of EBITDA. We had another impactful event in Pampa as well of approximately BRL 220 million, but once again, not a considerable impact on our financial situation. Most of the remunerations are up to date, and the impact, of course, is in BRL. It only had an impact on our finances for this quarter. We have had an improvement in revenues of 4.1% of BRL 200 million. Because of what is happening in Pampa Sul, we will be evaluating the situation in the coming months. This is why we had that result of 34%, and the effective result, of course, was much lower. These are the main financial highlights, and we now go on to slide number seven.
In slide number six, excuse me, in slide number six, we continue on with our initiatives for COVID-19, with a special highlight for the partnership that we did with the National Development Bank to service the public sector hospitals in the state of Paraná, with a donation of BRL 500,000. Once again, destined to all of these hospitals in Paraná, where we began with our programs at the beginning of March, and where we would like to speak about the strategy for the operation of this project. Another highlight was the settlement of the public offering of Pampa Sul, the first issue of debentures for a total of BRL 340 million. We are now analyzing the second debenture issue, amounting to BRL 582 million, which will be destined to reimbursing the cost of the installing of Pampa Sul TPP.
Of course, this second issue should be able to balance out the situation of capital distribution. Another highlight is the partnership with, well, a loan from Itaú Bank for Novo Estado Participações and Novo Estado Transmissora de Energia of BRL 500 million expected for our projects in Pará and Tocantins. We go on to slide number seven, where we see the sanctioning on September 8, 2020, of a law recognizing the right to compensation of hydroelectric generators for the financial fallout from exogenous factors. We are still awaiting the amounts that will be disclosed by ANEEL, and all of this, of course, should generate new values, and the compensations will be done going forward. We still do not feel that this has had a good solution, and once this compensation comes out, it will enable us to have a clear vision of what will be happening here.
Ensuing this, we will be able to work on our calculations made by the Electrical Trade Board. We hope to have the possibility of recording this in the first quarter of 2021. In the state of Paraná, what we have had is a partial regulation for the Gralha Azul Transmission System. Now, again, we have received an injunction order on October 15th in the form of a class action against the process that we have ongoing in Gralha Azul, in Ponta Grossa, and Ibiporã. Once again, we have carefully surveyed this implementation. We are working with a new technology that we have already put in place, and the impact and the results of this project have been reduced, impacting only 4% or 2% of the environmental areas. We are trying to overturn this injunction to convince the court that these environmental licenses are adequate.
We hope to be able to get over this injunction order and submit this for review in the state of Paraná. We should be able to obtain this in the courts of Porto Alegre and Rio Grande do Sul. Once again, we're doing whatever we can to keep within our allocated deadlines. ENGIE launched the Energy Place, its digital relationship and sales platform for clients and managers in the free energy market. This is the first platform that will simplify the management of contracts and servicing with ENGIE's clients and partners. This is a product where you can enter the platform, see the price and everything else, with an automatic registration at the Electrical Trade Board, the CIEE. Eventually, we will have more products to navigate through on this platform. Once again, this is a digital marketplace for the entire country and a very significant landmark.
We're now going to go on to slide number eight, referring to the most recent highlights. For the 11th time, the company has been awarded the Transparency Trophy, organized by Anefac, Fipecapi, and Serasa Experian. This is one of the most important trophies in our segment in Brazil. The second award refers to the energy sector champion in Época Negócios 360°, once again in the field of energy for 2020. We go on to the next slide, number 10, showing you our shareholding structure. I think that most of you are familiar with this. We remind you of our recent acquisitions in the next slide. An alteration that we have in the amount of energy that has been generated in each of our different businesses. This is the energy infrastructure that we have. Once again, very few alterations here.
You can observe our growth in the energy operation and the very clear leadership that we hold in the market. There is a significant market share in most of our operations. Once again, we continue to grow our market share. In slide number 13, we speak about the TAG company that we have, the natural gas market. When it comes to transmission, we have a significant new project that is foreseen for 2020. We are working, of course, with several interconnection points that are represented here in the slide, as you can see, for this transmission of natural gas. Here in distributed solar generation, we are trying to, of course, always come closer to the final consumer. We worked with some solar installations that we ourselves operate. We are working on this business model with 9 MW of installed capacity.
Of course, this is a growing activity. All of this has been set forth to create a new business model in which we are investing with our clients to have a very long-lasting relationship with them. We go on to slide number 17, the energy market in Brazil. We are at a moment where we have the settlement of price differences because of the hydrology situation. As you can see to the left, we are looking at the theoretical supply versus demand. There have been some structural problems. What we are showing you here is not only our commercial capacity, but also the reduction that we have had because of the generation scaling factor. There is an excess of supply. What you see is the commercial capacity that we would have.
Once again, we seem to have a greater supply than what the market needs at present. We go on to slide number 19 to speak about our sales and energy trading strategy and show you our very diversified portfolio. In slide number 20, you can see the diversification that we have been able to achieve among the free customers' portfolio. All of this is based on the consumption of our customers. As you can see, our sales volume, this has enabled us to go through the period of pandemic without significant impacts and with an evolution of free customers. As you can see in the next slide, the significant growth that we have had is because of our commercial strategy and the importance that we have in terms of the market in general. We go on to slide 21 once again without great alterations.
Once again, speaking about the uncontracted energy as of September 30th, 2020, and our marketing strategy and how we are able to service our customers. Of course, always facing the great price variation that we have year after year. In the next slide, which is slide number 22, we're going to look at our energy balance that we have. This is a very important tool. We are presenting to you this quarter what would be our average contracting period. Now, if we bring together all of our capacity and we weigh this based on the years of contracting, we have approximately 18 years of contracting at the Trade Board with an average term of approximately 13 years, I believe. That's exactly the figure, 13 years.
This shows the great resilience that we have and the guarantee that we will be able to continue on with this diversified contracting. To speak about expansion, we have Edson Silva, which is our Market Regulation Manager. We speak about our project, Gaviao Real . As you can see, the situation is quite calm. This project will continue to proceed with the arduous work of our company. Here we are simply referring to all of the data that is important for this. We go on to slide number 26, our Campo Largo Wind Complex project, phase II, where we have progress to approximately 40% of the work so far. What we can foresee now is a commissioning of this project in the month of November. We will have the first commercial operation for the fourth quarter of 2020.
The average date for the operation of generators will be only in February. November, December, January, and February, it will be in operation, but the full operation will only take place in the second quarter of 2021. We had a slight delay. We mentioned this in the call the last quarter, but once again, we are trying to make up with this delay with greater activity in terms of the assembly of all of this. We will now speak about the transmission line under construction, the Gralha Azul Transmission System. I will give the floor to speak about this, and then I will return to continue to speak about other projects.
Good morning, everybody. The Gralha Azul Transmission Project is doing very well. Of course, we have faced some difficulties, as mentioned by Sattamini.
At the beginning of November, we had 77% of uptime, which is a relevant number, and we're one step ahead in terms of what had been foreseen. We should conclude the full supply of this project until the end of the year. This is a critical step. Despite the pandemic, we have been able to anticipate the process vis-à-vis what had been planned. We have 10 substations, 5 new substations, and 5 expansions, all following a very interesting pace. We are now going into the mechanical assembly phase to energize the first part of this phase until May of 2021, which means that at the beginning of September, we can have a complete commercial operation. The project is made up of 15 transmission lines, all at a very high rate of progress.
We did have an injunction that brought these activities to a standstill, more specifically the four lines of 500 kV. To avoid impacts in this project, we were able to relocate all of our teams to other work fronts so that we can evolve and anticipate the other fronts to then return to the 525 kV lines. We're, of course, taking all possible measures to be able to overcome this injunction to avoid impacts on the commercial operation foreseen for September 2021. We have developed several projects jointly with the communities from the environmental viewpoint. There are 27 municipalities. There are several projects associated to fighting the pandemic. As was mentioned, a partnership with the BNDES. We're also developing projects to ensure that we will have longevity of the Araucaria trees and to the preservation of the environment.
As was mentioned, the suppression of vegetation has been extremely low thanks to the adoption of measures such as drones for the towers. This project, of course, has had some hindrance, but it should come into operation in September 2021. Once again, we are ahead of our contractual schedule. Should you have any questions, I can respond to them later.
Thank you, Marcio. Perhaps I can add some significant information. We have a proposal for the compensation of Araucaria trees. For each tree that is extracted in the process of reforestation, we will plant three additional trees. This is an idea that came up. To give you an idea, last week, we planted 2,000 Araucaria trees on a single day. The impact of this is equivalent to more than 1/3 of the Araucaria trees that we had to impact through the project.
Of course, the environmental impact of this project is minor when compared to the benefit that it will bring in terms of supplying energy to the state of Paraná. The energy that is generated in Itaipu and the state itself will flow within the state without having to be transmitted through São Paulo and then return to Paraná. This is a project of supreme importance for the state, therefore, and in general. The next project that we would like to refer to is the Novo Estado Transmissora de Energia in the state of Pará and Tocantins. We had contacts for the financing with BNDES and Banco da Amazônia S.A. for the installation of the project. We have already set up the transmission lines, the towers, and we have begun the import for the expansion of the existing substations. The date forecast remains the same, December 2021.
We have had very few problems. Of course, the CapEx has been foreseen as part of our investments in the coming years. Now, when it comes to projects under development, we would like to work with renewable energy on several fronts. As you can see, we're developing new plants, both solar and photovoltaic, most of which are concentrated in the state of Bahia and in the north of the country. We're still analyzing the Santo Agostinho project in Rio Grande do Norte with an installed capacity of 800 MW. We should begin very soon, as soon as we are able to fully negotiate conditions with the vendors. I would now like to give the floor to our CFO, who will speak about the financial performance for this quarter. You have the floor, Mr. Malta. He's mute, Marcelo Malta.
Thank you, Sattamini.
A good day to all of you. On slide number 31, we can show you the evolution of our net operating revenue for the quarter, as has already been mentioned. We have had a variation of almost 29% between quarters. Once again, as mentioned by Sattamini, due to the recognition of revenues and the transmission assets. Because of the class action in EBITDA, we had a reduction of 9.4% due to the recognition of that recurring effect that is caused by the indemnization that we had in the third quarter of 2018. Net income, besides this impact of the indemnization, and as commented by Sattamini, an important impact in the monetary restatement and some of the concessions that we need to pay.
On slide number 32, in the top graph, we see the distribution of effects on the net operating revenue of the company, variations between quarters and years, which normally occur because of non-recurring effects and also due to the coming into operation of some assets. Now, this behavior can also be seen in the evolution of EBITDA and net revenue in the graph below. The positive effect of the transmission assets of BRL 718 million. All of this will increase as we are able to use our CapEx in these projects. Here we see the increase in the average sales price with a positive effect on the CPE and the export of energy to Energia that we carried out this quarter. We would like to underscore that the increase of the average price was of approximately 3.8%.
As a counterpart, we also had a reduction in the volume of energy of 4%, mainly due to the reduction of consumption, once again, because of the impacts of the pandemic. In slide number 33, the result of our equity income and the result of TAG and our share on this profit of BRL 102 million with a positive impact on our EBITDA. In slide number 34, in the graph below, we see that non-recurring effect of the indemnization of BRL 320 million. We had a positive impact in terms of the TAG equity income, a reduction in the purchase of energy volumes in the portfolio, and in terms of revenues, a positive impact at the Electrical Trade Board and the export of energy to Argentina. We had a negative impact due to that combination of a price increase and a reduction in the energy volumes.
In slide number 35, the change in our net income, as has already been mentioned, we had that impact of the injunction for Pampa Sul in the third quarter 2018, leading to a negative variation. This has already been mentioned. Without this impact, we would have had an increase of EBITDA of 14% and a significant impact in the variation on concessions to pay, which have significantly impacted our financial result. We also had a reduction in the social charges, as you can see in slide number 36, an increase in our return on equity thanks to the reduction of net revenues and an increase in equity. In terms of return on invested capital, a reduction mainly due to that increase in capital invested during the quarter.
On slide number 37, we show you the variation of our debt, which is of approximately BRL 3 million, thanks to the financing of Campo Largo, Gralha Azul, and Novo Estado. Our leverage ratios, as you can see, are very well-behaved. We can mention the prepayment of a debt that was 3.5 x EBITDA net debt. It is important to mention that this prepayment was done in more favorable conditions because of the cost of the debt that we had with BNDES. What we expect is to be able to incorporate this to ensure that we will have no debt. This incorporation will, of course, lead to a reduction of S&G and a cost and simplify our company structure. We ended the quarter with a robust cash, and our total debt EBITDA is of BRL 11.2 million in slide number 38.
The evolution of our net debt, the main impact has been the operational cash generation and the variation of working capital and the acquisition of TAG in the quarter. In slide number 39, we show you our debt profile and the maturity of our debt. We have a concentration in the coming 12 months, and this results from the maturity of some loans and, to a lower degree, the maturity and amortization of some contracts with the BNDES. In 2022, we will have a significant parcel of the debt amortization and amortization of debts with the BNDES. We also have a significant concentration of some of our debts with BNDES. Now, we have novelty when it comes to the breakdown of our debt. What we did this quarter was to swap part of our debts in CDI.
We assessed this as being a significant opportunity, an opportunity offered by the market. We're referring to a debt of approximately BRL 8 billion with maturity in 2021-2022, with an average contracted rate of 9.2%. The nominal cost of the debt continues to be low for the quarter and stands at 6.8%. In slide number 40, we show you the evolution of our CapEx. In 2020, we highlight investments in Gralha Azul and Campo Largo, and we will continue on with investments, perhaps not in the same amount in Campo Largo and Novo Estado. In slide 41, we refer to our dividend policy. In the first quarter of 2020, we proposed a payout of 55%. This is because of the uncertainties that we were faced with at that moment and the impact of the pandemic.
In the coming quarter, we will better define which will be the payout for the year 2020. This is what I had to share with you. Once again, I am at your entire disposal to respond to your questions or doubts.
Ladies and gentlemen,
You can continue, ma'am.
Thank you. We will now go on to the question and answer session. Should you wish to pose a question over the phone, please press star one. The first question comes from Francisco from XP Investimentos.
A good morning to all of you. I have two questions. First of all, congratulations for your results. I would like to first ask about the payout of dividends.
It was mentioned that in this type of scenario and in a scenario of uncertainty in the capital markets, there could be a revision in your payout practice or perhaps even a reversion, a callback, as this would have been more prudent. Now it seems that the scenario has improved. The second question, if you could speak a bit more about your long-term strategy, if we keep in mind that approval of that law of compensation, and this has several implications, of course, especially when we speak about the TAG consortium transportation, and what will happen with the approval scenario in this format, and which will be the strategy of the company with natural gas going forward. Thank you very much. These are my questions.
Francisco, thank you very much for your questions. The first question, it's easier to respond to, as has already been mentioned.
The payout reduction was meant to be a protective measure. You know that whenever we are able to, we distribute the full percentage. At present, we have quite a robust cash. It will enable us to comply with our obligations, and it is very possible that we will reevaluate this and have a more generous payout at the end of the year. This decision should be made the coming year after the presentation of results for the year 2020. Of course, there is a better outlook. We have seen that the economy has resumed. We have gone back to some of the consumption levels of electrical energy last year. If we continue to have the impact of the pandemic, we will have to reassess the payout for the first semester of the coming year. Now, the second question about our strategy.
Of course, there is the strategy that this law will be enacted. The only measure that we have is that we already have a company to commercialize gas. Now, preventively, we had already registered this, and this trading company will operate pending the approval of the agency. This discussion can also be taken to a regulatory sphere, a legal sphere, so that within specific conditions, companies will have to comply with certain rules when operating in other links of the chain. This is what we expect. This is an investment that we did in the field of gas transportation. It remains fully contracted and has been for many years, with an average contracting of 11 years of operation and with a satisfactory return according to our expectations because of the reduction of the interest rate and some fiscal gains because we were able to recover some credit.
This operation continues to be a robust one, and everything will depend on the release in the market. We do have some opportunities for expansion, and this could lead to additional growth of our operation. Obviously, we are still active. We will continue to be active. We are in the gas segment through transmission. We're there to stay. We, of course, would not like to have that many restrictions, but we do understand that there is a very dynamic gas market, and this will be propitious for our business in general.
Excellent. That was very clear. If you allow me a follow-on question for the gas. One of the gas pipelines comes from Manaus, and the asset that supplies it that belongs to Petrobras is undergoing a phase of disinvestment. Now, would you have the ability to perhaps work with this gas pipeline?
I would like to gain a better understanding of your outlook if you would consider assessing this, or if there's still too much uncertainty in terms of tariffs and rates, and if you would not be willing to proceed. Once again, this is my last question. Thank you for taking it.
This last question, we're going to look in the presentation on slide number 45, and you can see that the gas pipeline in Manaus has been contracted until November of 2030, which means that until 2030, our revenues are guaranteed with Petrobras for the full capacity of this gas pipeline. Now, if there is any availability of capacity because of the deactivation or decommissioning of this gas pipeline of Petrobras, and if there are other parties interested in operating and transporting through this gas pipeline, the regulator will set forth the way in which this will be done.
For us, this will be excellent news. If there is the need for specific investments in the gas pipeline for that, of course, we will consider this. I think it is normal, natural that this will happen, and we will be there as the responsible operator to support the gas market and to support new entrants.
Thank you, Sattamini. Very clear. Thank you for taking my questions.
Thank you, Francisco. Our next question comes from Carolina Carneiro from Credit Suisse.
Thank you for the call, and I have two questions relating to the commercialization. First of all, if you could speak a bit more about your new platform, which is the idea, which is your target audience so that we can better understand the strategy of the company.
Are you going to work with this platform based on the certain size of your customers, or are there specific customers that will be serviced through this platform? Therefore, if you could give us more color in terms of this platform and which is your strategy. The second question, I looked at your balance, and it seems that sales have been concentrated more in the long term going forward compared to the balance of the second quarter. Therefore, if I could better understand the sales because the scenario is somewhat different to the one that we had before, where the sales were concentrated more in the short term. If you could give us an indication of the average price going forward, and if all of this will be in accordance with what we have seen before. Thank you.
Thank you, Carol.
The first question, we have four different tables for sales in the commercial area. All of this is segmented, and we're segmenting based on the size of the consumer. Of course, it's natural that a more electrical-intensive customer will tend to request special attention, a more tailor-made service based on their needs. As the consumer has less relevant consumption as part of their cost structure, of course, perhaps they will have less interest or they will require a more practical solution. This is very broadly the structure that we have, these tables based on the volume per customer. This platform, in truth, will service all segments because initially, at this phase of the inception, we are not paying attention to the size of the customer. It's something that is much easier to operate for very short-term operations.
You record the operation, you take the payment, and everything is done automatically. Of course, when we speak about products with a longer term, the situation will change. Customers with greater volumes will want to negotiate their contracts, and we will offer these customers a differentiated treatment. When it comes to a specific demand or a standard product, they can do this through the platform, and the platform has been set up for that. Now, if you are a private client at your bank, for example, and your bank is all private, it is not a retail bank, the private will want special treatment when it comes to purchasing energy. This is very broadly how the platform works. You refer to pricing in the longer term. What happens is that our portfolio basically is completely sold out until 2022, and we're now focusing on 2023 as well.
What we do is to carry out sales with a somewhat longer profile beginning in 2023, 2024. This is a trend that we have observed in the market because of the more favorable price that we have in the long-term market, reduction in the future price, and we see that consumers have a greater appetite for this compared to the traditional system that we had in the market four or six years ago. This may be a one-time event, but this is what we have observed in the last two years in the energy market. It's a feature that I don't know if it will continue on. We do attempt not to make very long-term contracts or to fully supply a customer to be able to have this amortization in terms of market movements. We have a problem with a hydrological situation in Brazil. The prices go down.
They then increase once again. The market at present is working with a high spot price at present, and the market for 2021 has had an increase of 10%-15% and a slight increase in the market in 2022. We have these impacts that have to be amortized through several contracts, through several terms, once again, avoiding those long-term contracts unless the price is so inviting that we have, well, offers of non-conventional renewable energy because of the extension of a fixed tariff. We will have a greater volume of those projects in the market with a surplus of supply. Perhaps this will be the moment for the consumer to capture longer terms. This is what we imagine in terms of movements at this point in time.
Thank you. Thank you very much.
Our next question comes from Marcelo Sa from Itaú Bank.
Thank you for the call. Good morning to all. I have two questions. On slide 17, you showed us the theoretical demand, and you're trying to eliminate the impact of the GSF. In practice, that surplus of supply we have is not that great. We have to think of the auctions that the government will be holding going forward. What is your expectation for the auction considering supply and demand and the fact that most of your energy has already been contracted? Thank you.
I'm sorry. The microphone for Sattamini is muted.
Very well. Let's begin again. It will depend on the type of demand. If we have powerful demand, it is our understanding that this will not be necessary very soon.
As you can observe, despite having the GSF, when we have power or potency, we're speaking about the power of the installed plates and we have a surplus of installed capacity visibly until 2026. This is what is mentioned according to the studies of APR. When it comes to the energy per se, we may have demand for energy for 2025, 2026 going forward as well. We do not see a need to have an auction because the free contracting market has offered a great deal of opportunities offering new capacity for purchase in corporate public-private agreements. That topic of the auction will be something that will be ever more frequent, less frequent, because we already have the contracting of distributors.
At present, the distributor with a release of captive customers to the free contracting market will end up being overcontracted, and they're going to have to find a solution for their portfolio. Marcelo, I don't think there's a great expectation for auctions soon unless there are auctions in a very specific context, regional development, or the development of energy sources. We have heard a great deal about inflexible thermoelectric plants. Now, if this is done, if you don't have displacement of the electrical energy, you're going to be embarking in that bill for the development of the gas segment, which doesn't make sense to us.
We have observed enormous resistance on the part of authorities, at least on behalf of the electrical sector of the country, of accepting these inflexible thermal plants that are literally being shoved or pushed and that have companies from the gas market showing interest in this. Of course, it's positive to have development in the gas market. We are part of that, but we do have to be very cautious so that this gas market is not developed at the cost of the electrical sector or agents who have nothing to do or do not provide any benefits in terms of development. If something of that sort could be done, yes, of course it could. Once again, you would have to set up a specific system for these inflexible thermal plants. The electrical sector would have to be compensated for this.
All of this will end up in the consumer's pocket and will subsidize the gas consumer. These are situations that, of course, we would like to fully avoid, those cross-subsidies where we begin to cause friction between agents. Formerly, there were agents for the electrical sector, and now the discussion is with agents working in different sectors. We need to be extremely cautious with this. This is the message. We do not need the auctions. The market is adjusting. We are creating elements for a power auction to guarantee that there will not be a lack of supply. We have to decrease regulations to ensure that the market will become ever more free and that the allocation of resources will be rational. The use of subsidies certainly are not helpful to the sector.
Thank you. A second question referring to the free contracting market.
You have shown us the preliminary calculations. I remember that there was the request of some companies to select the plant that you will gear your extensions to. Now, which would be the impact of this? If you could remark on which would be your view and if you could allocate this to specific plants.
Thank you, Marcelo. A very pertinent question. Yes. We did present a request directly to ANEEL. All of this is very important because we have several aspects. If you look at the calculations, you will see that you have plants with several different conditions. One takes five months. The other one takes 10 or 15 months. You will have to work with multiple contracts of concession practically every day.
While in truth, this is a regulatory asset, and this regulatory asset can be allocated to a specific plant that will be selected by the hydroelectric generator. Now, this would generate an incredible amount of red tape for the agency, for the agents. Additionally, it would have a positive factor. You have some plants where you have partners in different situations, partners that sell energy in the regular contracting market like we do and that have no right whatsoever over GFOM and other partners or consumers that would have a right because of that GFOM, and they themselves are responsible for the process. Now, what happens? There would have to be a very complex commercial agreement for this. On the other hand, you have the contrary situation. We are entitled to some credits because of plants where we have partners, but these partners do not run any risk.
These issues can be addressed very simply if you could ensure that this will be a regulatory asset and if this regulatory asset would fall under the criteria of a generator. Now, this is not a specific issue for this. We see this in several companies that generate electricity. It could also impact some state companies with restrictions. Cemig, for example, is entitled to some values, is entitled to this regulatory asset that is now in the hands of other agents. Another case that we can observe is the expectation of privatization of some of the plants of state players that could only make this option, even though the state would like to capitalize or resolve the problem of the asset, to be able to invest the proceeds in activities more connected to social well-being, for example. I think the idea is very interesting.
I support the idea, and we believe that there is no obstacle, no impediment for this. I think there is interest in all of the stakeholders without harming any of the interested parties.
That is very clear. Thank you. A point that you just mentioned that I find curious is the idea of Cemig and the ISS compensation account that is active since 2013.
The plant should be entitled to this compensation. Even though you have returned that plant, you would still be entitled to that compensation because of the period in which you were managing that plant. Yes, that would be what would have to happen.
Thank you. Thank you very much.
We would now like to give the floor to Mr. Rafael Bósio.
We have some questions from the chat. Unfortunately, we will not be able to respond to all of them.
We have already had an hour and 20 of a call. The first question for the coming years, which is the area in the company that is fundamental to increase investments? This was made by Tiago.
Tiago, thank you for the question. Now, in truth, we already have a significant investment for transmission, another for generation. We are attempting to increase the share of transmission as well as gas in our portfolio to reach a more balanced situation. Of course, without leaving generation aside, we have been in generation for many years. Since 1988, generation has been our main business, but it is also our understanding that we need to diversify to other segments like transmission and gas. This is important for resiliency and to generate growth opportunities.
We remind you that our decision to enter the area of transmission arose from the lack of opportunity for profitable investments in the generation segment at that time. We did find an opportunity in transmission. We would like to have a more balanced portfolio when it comes to our results of our portfolio. We will probably allocate priority to investments in some areas without, of course, excluding investments in what is our core business. One more question, and the rest that have not been answered will be answered from the IR team. The question is, with the present-day scenario, would it not make more sense to capture more resources based on CDI and not inflation? Yes. Yes, if we find a market to contract based on CDI. We have a reasonable volume of our debt in CDI, but it tends to be a short-term debt.
In our contracts, in most of our contracts, the debt is linked to inflation in CDI. Our main index is IPCA, the broader consumer price index. Of course, it would be reasonable if we were able to find a market for longer-term securities in CDI. We truly cannot foresee that market. Now, if we look at our structure, debt structure, most of the loans are on CDI. We did work with a debt from four to five years a few years ago. What we were able to do, we did. It is not simple to finance a project with a debt of 10-15 years based on CDI, especially at present.
Thank you, Sattamini.
I think that with this, we will conclude the call. I return the floor to the company for closing remarks.
Once again, I would like to thank all of you for your presence. We hope that we will be able to come out of this pandemic stronger than before, thanks to all of the adjustments that we have made in our company. As a company, we're all united. In a way, of course, I think that now by using this video conference, we are all together. This is much better than before. I believe this is happening in all segments and all activities. The entrepreneurial area will doubtlessly enhance its efficiency. This will enable us to have that jump in terms of quality. It is important to overcome this pandemic and return to our normal life with greater efficacy and productivity. Thank you very much.
Thank you. The ENGIE Brasil video conference ends here.
We would like to thank all of you for your participation. Have a good afternoon. Thank you.