Good afternoon and Welcome to Engie Brasil Energia's Conference Call, where we will discuss the potential impacts of the COVID-19 pandemic. All participants are connected as listeners only, and in doing this, we will go on to the Q&A session when further instructions will be given. Should anybody need the help of the operator, please press star zero. We should remind you that this conference is being recorded. This conference call will be simultaneously transmitted through the internet through www.engie.com.br/investors. Before proceeding, we would like to clarify that the statements made during this conference call regarding the business outlook of the company should be treated as forecasts that depend on the country's macroeconomic conditions, on the performance and regulation of the electric sector, as well as other variables. They are therefore subject to changes.
Today, we have with us Mr. Eduardo Sattamini, Chief Executive and Investor Relations Officer; Marcos Keller, Chief Regulation and Market Officer; Gabriel Mann, Energy Commercialization Officer; Gustavo Labanca, CEO of Transportadora Associada de Gás; and Mr. Rafael Bósio, Investor Relations Manager. They will all speak about the potential impacts of COVID-19. In doing this, there will be the Q&A session. We remind journalists who wish to ask questions that they can do so by email sending them to the company's press office. It is now a pleasure to turn the floor over to Mr. Sattamini. You may proceed.
Good afternoon to all of you. It is a pleasure to have you here with us, and we now have the opportunity of speaking about this new impact that has hit us recently, the COVID-19 pandemic. We're probably all at home, and I hope you are all well. Of course, we would like to inform you in terms of what we are doing and the eventual impacts that we will have in our company. We have divided our presentations today into five different topics regarding the operations and safety of our associates, the continuity of our work. We will speak about, of course, the financial aspects that are relevant and draw your attention to them, the commercial and regulatory issues. We will also speak about the impacts on an important asset of ours that we acquired midway through last year and speak about the measures that have been taken and the impacts on its operation. We will then open for questions and answers at the end. We're not going to speak about our projects.
We're going to speak about more general issues of the company, and one of the important issues is the safety of our employees for the continuity of our operations. Here we have three stages: a stage of contention, one of mitigation, and so on. The first stage is to identify the advance of contamination that we see worldwide. We see this in different geographies as well as in our own geography. We also have communication with our associates in terms of the pandemic. We're speaking about contamination, about measures, and we are using communication as a health weapon. We're also making available all of the necessary inputs to preserve the health in the company. For example, the use of alcohol, assessing temperature through thermometers. We're being very liberal with it and distributing them broadly. We're also giving them constant updates on the pandemic.
We have convened the committee three weeks ago. We set forth some procedures and protocols for our activities on the field for the continuity of our business. We have a very large number of employees, and of course, all the support activities are now working at home office. We see the great dedication of all of our employees. This is part of our strategy. Thanks to all of this, we have been able to continue on with all of our different functions, and they're all being carried out through home office. 70% of our employees are working in this fashion, and the remaining 30%, of course, there's nothing else we can do. They continue to operate on the field, and they have to continue to operate our plants.
Some, of course, are operated provincially, and this, of course, depends on each person preserving his or her safety. This is how we are working with the operation. We are segregating our professionals to ensure that the teams will not contaminate each other, and there is no physical contact. Everything is done through a conference. We make sure that one team will not contaminate another, and we're setting forth differentiated working activities. Operation and maintenance have been divided into two different teams, and they work for a fortnight. We're constantly following up medically on our teams, especially for the teams working on the field. We also have received protocols for the hygienization of the working environment. For those who work in the stations, of course, we do have a protocol for hygienization to avoid contamination. We have carried out the fast test for COVID-19.
We were able to obtain 3,000 tests that will be arriving the coming week, produced domestically, and we have another 40,000 that will be arriving in the coming weeks from China. It's a great deal of red tape to receive these tests, but what is important is to continue testing as a routine on all of our associates to be able to obtain our operations ongoing and avoid contamination. Of course, as associates, we're all wearing masks. We also purchased 120,000 masks, and this is especially for the transportation units. For our units, we had 30,000 previously, and once again, we have ordered another 120,000 masks that should be arriving very soon. We requested and we're following up on all of our plans so that they will maintain the same health standards that we are suggesting.
We have proceeded with all of the mandatory maintenance, and at this point in time, we're concluding phase I, and we have set forth new parameters for these assets in phase II. Now, this phase II is suppression, and it would mean the total isolation of the teams. This is what has happened in New York: 24 hours a day, seven days a week. They are confined to the areas of operation in segregated teams working in shifts, and they are living in their working environment. Of course, we need to prepare for that reality if we have a significant outside contamination to preserve our workers. We need to think about all of the necessary inputs: the bedding, the cooking, and of course, some games so that our workers can have some sort of leisure because they will be confined at a plant for 12 or 15 days.
Of course, these psychological aspects are of prime importance. We're highly concerned of when we get to that point that we will be prepared, and we are working on the front lines because we think that this is very important and highly challenging when it comes to the projects under construction. We're working with the subcontracted people. We're reducing our contingents, and this has had a significant impact. It is happening, so we're focusing strongly on the suppliers. We're reporting our communication on the virus in the community so that they will be attentive to this information. We tend to work in very poor and very remote centers from the large cities, and we're trying to properly inform them so that the situation can be under control so that we have the proper hygienization.
We're also following up medically on our teams, on the subcontracted people, and the teams are carrying out remote supervision. We had a large number of our people in the works. We have reduced the number, and we're carrying out remote follow-up on these people. This enables us to work and continue working in our work sites. When it comes to the engagement of teams, what have we done? We have the home office campaign. People have been motivated constantly to communicate. Many people with signs of loneliness, of course, people that live alone are receiving psychological support. We're offering in-house help. We have a highly engaged team, and this has given us very positive results. We carry out rather forceful dialogues and speak about this constantly with our associates.
We're also taking advantage of some moments to work with remote education, and we're stimulating people to do the same and to get prepared for the new challenges that are coming ahead. We also have a very interesting activity, which is gym. People are doing functional gym, Pilates, and other sorts of exercise so that people can maintain their physical health as well. We have reinforced our medical teams. We have a resident physician in the company that is supporting the entire medical activities. We also have a physician and a nurse, and all of this so that we can offer our associates services. We can dissipate their doubts or deal with any other condition that may appear, even an eventual contamination. We have an open channel that enables us to follow up not only with our associates but also their family members.
Now, when it comes to the communities and our community activities, along with city halls, we're working with philanthropic institutions. We're making a list of the demands that they have, and we have earmarked some investments in each region. We have made donations to hospitals, hygienization kits. We have done this in more than 10 states where we are located, and we're also carrying out campaigns with our employees, offering them a food basket. The company is going to offer the same number of food baskets that the city hall will offer for the more destitute communities in those neighborhoods. The idea, therefore, is to offer humanitarian aid and practice our social responsibility, and of course, provide for the needs of these communities.
This is extensive, almost heroic work of our associates that are in the front line of this process, and I would especially like to express my thanks to this group as they're maintaining this activity. We will now go on to the financial part. What is important is that we ended 2019 with a robust cash, BRL 3.8 billion. We, of course, do still have some debt, BRL 1.7 billion for the second semester, but some of our debts are being rolled over for those who follow up on us. We have obtained new credit lines with several banks, and we're going to end with a comfortable cash progression to be able to face a potential crisis. Now, when it comes to the resources, recently we signed an agreement, an agreement for BRL 1.5 billion, and a loan for Campo Largo 2, another BRL 2 billion.
We have carried out short-term operations to be able to roll over cash for the rest of the year and to guarantee the soundness of the company. We probably will have to obtain loans from the National Development Bank, the BNDES. One of the restrictions would be the non-payout of dividends, and if this should happen, we will be using the loans or accumulating these payments for a period of at least six months. Speaking of dividends, you know that we have a minimum. We paid a certain amount referring to 2019, something that is equivalent to 54%, and the management board will approve a payment of 100%. Of course, this meeting will be held in April, and we're going to see if we maintain this or if we have to carry out some sort of reduction, ensuring that the company will maintain adequate levels.
At any point, of course, we can carry out an extraordinary payment. Once again, all of this is being surveyed, and we will see what will happen, of course, depending on the economic situation, the company cash provision, and it is possible that we will have to reduce this through the management board, as mentioned before. When it comes to the commercial part, I would like to give the floor to Gabriel, who will refer to what we are doing in the market, and we are awaiting some solutions that are being set forth. In doing this, we will go on to the question and answer session. Therefore, I give the floor to Gabriel to speak about the commercial part, and then we will speak about the regulatory part.
Thank you, Mr. Sattamini. Good afternoon to all of you. I would like to begin by underscoring or reminding you that today we have a highly balanced portfolio when it comes to types of customers. 51% of our portfolio for 2020 is being marketed directly with commercial and industrial clients. We have 9% being commercialized with other generators or traders, and 40% with distributors in the regulated environment. Similarly, the portfolio is highly balanced when we look at industrial and commercial segments that we service. I think it is important to remember this because it helps us to mitigate, to attenuate the impact of the consumption reduction. I would also like to remind you that our contracts in the free contracting environment, in general, do have flexibility linked to consumption, a flexibility that is of approximately 10% to 15%.
Therefore, at moments such as this one, what we expect is a reduction of consumption because of the impact of COVID-19, and this flexibility helps us to accommodate the reduction that has taken place in this segment of commercial and industrial clients. We have received requests for a review of loads from our customers, some of these pegged to the force majeure that was set forth in the contract. We, of course, have analyzed these requests and notifications very cautiously. The large majority are not well-founded notifications, and to characterize force majeure is not something simple, trivial. This has to be properly characterized to be able to enforce it. We're analyzing case by case, responding to these notifications, and evidently, in this well-balanced portfolio that we have in terms of the industrial and commercial segments that we service, we have a certain benefit.
We have some sectors that have been impacted by this event, but there are other segments that have not had any impact, and some have even been benefiting from this. They're consuming more to be able to face the increase in production. I'm referring to segments such as food, beverages, the pharmaceutical segment, among many others. What is also important to mention is that we have just gone through the invoicing cycle of the month of March, a reduction, of course, of invoicing. This when the problem began, two-thirds throughout the month. What we have observed, and by looking at the portfolio of clients and consumption, our client portfolio is well accommodated within those levels of flexibility that are on the contracts. Some segments are somewhat below, of course, but this is within the levels of flexibility that we are able to grant in our contract.
In the commercialization and generation segment, where we have 9% of our energy, in principle, we have no concern. This risk of variation of consumption, of load, is a risk that is implicit in the commercialization and generation activity. This risk has been properly priced in the contract, as we do with the free contracting clients. Therefore, we expect to have no problem with these contracts with traders and generators in the distribution sector. The contracts that we have are generally in the regulated segment. The issue here is more regulatory. You must be familiar with this, and this has been spoken about in the market. We had three distributors that have notified their contracts in the regulatory environment, stating that they were facing force majeure, Equatorial and Light. We have contracts only with Light. They have also received this notification.
[Foreign language]
Good afternoon. This is Marcos Keller, the Regulation Officer. Once again, we also had a request from ANEEL alleging force majeure. This, of course, is natural in our segment, and the entry into the sector is through the distributors. Now, this is an emergency solution, but we can observe that the sector is significantly united when we speak about ANEEL and other operations. What is more short-term, what is truly a case of emergency, is being resolved. They are offering help to these companies, ensuring that this will not contaminate the rest of the chain. I think that there's a full union around this concept, and all the necessary and mitigating measures are being adopted. There was a reserve fund that is presently being utilized. What I would like to mention is that it is important to respect the contracts, and there will be a solution for the distributors.
Now, what is worth mentioning is the impact on the GSF. There has been a reduction in consumption, and there's a pressure that things will become even more exacerbated. We do have lower costs in terms of the GSF as a whole. I think we're only in the middle or at the beginning of these effects, and it is rather difficult to quantify the exposure to the GSF volume. We will see what will happen. These are the main issues that I wanted to remark, and we are at your entire disposal for any questions.
Gustavo is going to speak about the impact of COVID-19 on TAG.
Thank you, and good afternoon to all of you. Before I begin, I would like to perhaps test my audio if you allow me. Okay. I would like to thank Rafael, Eduardo Sattamini, and all the others for allowing me to take the floor. I'm going to divide this conversation into three very important items: contingencies, and the impacts in the gas market. When it comes to our contingency plan, we immediately set up a crisis committee, and we have set forth two fundamental goals: to preserve the health of our associates, and of course, to ensure consumption. When it comes to the health of our associates, we're coming up with proactive attitudes and activities. We have approximately 100 people, all of which are working in home office. We have also completely cut down on traveling in the country or outside of the country, of course, unless there is an emergency.
What we did was to anticipate the flu vaccination campaign to last week, and we have offered medical and psychological assistance for our employees so that people perhaps can diminish their anxiety and their anguish. We're carrying out regular activities through teams with very good results. We had a conversation with the CEO, some digital training to ensure that people will increase their productivity and, of course, eliminate that problem of loneliness. When it comes to the guarantee of the continuity of our operations, I would like to truly congratulate the team. They have deployed enormous efforts for this to materialize. The first thing we did, it's perhaps a very small attitude, but an important one, was an enhancement in the system.
The associate is working from home, and we have been able to enhance our mobile network to ensure that we have the right backup, and of course, to improve and enhance communication. We are focusing on what is a priority. We do have some works in our network. We are focusing on them, and we are working on them and ECAPU and others. There has been a decree from the ministry stating that gas, of course, is one of the essential activities, and we are displacing some teams and third parties throughout the country. We are attempting to daily follow up on our contingency plan, and we are, of course, working with contention, and we are ensuring that these works do not have any impact. Once again, not all of these activities are our own, so we have to follow up on what is being done by others.
Now, these are the actions to ensure the continuity of our activity. Not to speak about the financial issues. We have robust liquidity. We ended 2019, and I'm going to give you a figure for the entire year with the entry of TAG in June of BRL 5.2 billion, with an EBITDA margin that is 35%. The net debt is BRL 23 billion, and we have a very strong cash generation. The financing of this acquisition means that in the year 2020, we're going to be paying 70% and more than 90% going forward. Some of it divided between 2022 and 2029 will give significant comfort to the company. The last item is to speak about gas and the price of gas, as this is important as it is in the power sector. There is a fundamental difference between the two sectors.
The number of players in the electricity sector is much larger than in the gas sector. The number of generators and others, there is no dominant player, differently from the gas sector, where there is a certain dominance throughout the entire chain. 100% of the chain is in the hands of some, and we additionally have the exporters with a certain percentage. Therefore, this is the great difference between the electrical sector and gas. The gas sector does have a concentration on the dominant player. We are following up on the reduction of consumption. We are working with an alignment between exporters and gas distributors. We have held meetings organized by the ministry as well as other associations working with gas. In the specific case of TAG, a relevant point is that the market of Petrobras, to whom we deliver gas, is approximately one-third. Of course, this is an average. One-third used by distributors and the other two-thirds for thermal uses and the Petrobras system, the refineries, and much more.
When we think about the transportation, this has remained practically constant when we compare January with February and when we compare this with the year 2019 or with the quarter. The message here, therefore, is that we are very attentive to the market discussions. We're holding conversations with Petrobras and other sector stakeholders to ensure that we will have the lowest possible impact when it comes to gas.
Very well. We can now go on to the question and answers, and I return the floor to Eduardo Sattamini. [Foreign language] thank you. There are a few issues that we would like to highlight. We're quite comfortable when it comes to our ability of coming out of the crisis with the lowest possible impact. We will now go on to the Q&A session, and I will now give the floor to the coordinator.
Thank you, ladies and gentlemen. We will now go on to the question and answer session. Should you wish to pose a question, please press star one. If you would like to withdraw your question from the list, press star two. Our first question comes from Gabriel Francisco from XP Investments. You may proceed.
A good afternoon to all of you, and thank you very much for the call and for the clarity of the information. My question, and I don't know if you will be able to answer this, refers to the free contracting environment. We understand that the contract perhaps will require a negotiation. Which are the paths that you can resort to to avoid greater impact on the company? Is this a timely reduction in consumption? Is it a price issue? Are some of these contracts about to be canceled? Is there any way that you could reconciliate this? Along these same lines, I would like to understand if you see other opportunities arising in sectors such as agro or the rural sector. This is my first question. Thank you very much.
Thank you very much for your question. This is Gabriel Mann speaking. What is happening is that we do have a contract, and of course, the energy will continue to be contracted. We are taking on the risk of a reduction of consumption. Now, if the consumption goes down below a certain level, there are two situations. Either we will charge for this, and the buyer of energy will have to settle or transfer this to somebody else. What we can do is to eventually take on the loss of that situation, but of course, with the flexibility of a future recovery. Evidently, we cannot finance everybody. We do not have sufficient financing capacity. What we have to do is to preserve what we have at present. Evidently, if we get to a situation where the client is forbidden to operate, we will have to work with a higher flexibility and perhaps rollover our obligation.
We cannot offer too much of an opening at present. There were some companies already operating at their lower limits. About the average price in January and February, the price was approximately BRL 300, and there was a huge difference between the price being charged and the contractual price. What is happening is that there are many requests for review, and we have to be extremely careful with the clients.
Of course, each client legitimately is defending his or her own interest, but we have to ensure that we work in those cases that require greater sensitivity. I think you said it all, but what I would like to underscore is that the great concern is to ally the issue of the impact of the COVID-19 event. We have had an increase or, I'm sorry, a decrease in the spot prices of the market. Regardless of whether the segment has had an impact or not, all companies are requesting a review, a contractual review, or they are requesting some sort of release. Because of this, we have to be very careful when assessing each case. I am convinced that if we become more flexible, the idea will be to use flexibility, but with a certain counterpart in the future. This is the stance that we have adopted. Once again, we will carefully assess each case separately.
Very well. That was very clear. If you allow me a follow-up, if there has been an impact on your contribution margin when it comes to purchasing energy from third parties, and is there any flexibility there?
Because of the price, the energy purchase contracts normally do include some sort of flexibility, especially when it comes to the seasonality of energy, as these are contracts that are not normally fed to consumption, as we see with the clients. It is an operation between traders and generators with other traders. This is based on a flat contracting. As I mentioned, there is no risk or no request for force majeure in the contracts with generators and traders. We are not following that direction at present. We're fully honoring the contracts that we have at present. Of course, we're going to gear our energy to fulfill the needs of our portfolio.
Very good. Thank you very much.
The next question is from Marcelo Satt from Itaú Bank. You may proceed.
Thank you for the call. We spoke quite a bit about the impact for the free contracting environment. I would like to understand the impact for the regulated market, if there is any risk, and if it would be possible to attenuate these risks, especially with distributors or not.
Once again, I will give you the answer. We must understand that the entire system is based on the needs of the consumer. We participate in an auction. We sell energy. There is a contract for a certain volume that is guaranteed, and then there is no flexibility from thereon. The idea is to service consumers. Of course, we have no reduction of quantity in this case. Now, from the viewpoint of a distributor that has had a reduction in consumption, we need to find a solution for their tax situation. They are not receiving anything. They have to pay the generator, and they will be left with an energy that has a very low price.
Some time ago, this would not be a problem. What is our understanding to unify the sector? We cannot allow that the distributor remain in that situation, but we can allow for this for the entire chain, the generator and others. This would lead to a default in the situation of consumption, and the entire energy chain would suffer from this, and there would be a total failure of the system.
Once again, we need to fulfill the needs of the consumer, and it is the consumer that will have to pay for this. The government, as a policy, could attenuate this effect through the use of the treasury. Some consumers have already been able to be granted this. This is what we're debating with the government, that the solution has to come through the regulated market itself. This would alleviate the impact on the consumer, of course, but we have to isolate this issue only for distributors to avoid the impact on the chain. We do not transfer the responsibility to the generator. These are completely different situations.
There are some that are beginning their operation. Some have negative cash. Of course, we have to see what is going to happen when we implement these contention plans.
The idea is not to contaminate other players in the sector. This is what we are working on. Perhaps there is no unanimity in terms of this. If the consumer has to pay for the bill, they will, of course, complain. The system only exists the way it is to be able to service the consumer. Keller, would you like to complement the response?
Yes, of course. I think your response was quite encompassing. The generators, not all have the same situation that we have. In the case of a default of transmission, some generators would no longer have the capacity to continue working. We would have a cascaded effect. Now, in the regulated sector, what is natural is to literally circumscribe the problem.
What is more promising that might happen is to ensure that the regulated contracting environment will operate better than it did last year. This would be a solution. This is what the government is showing. This is the action that they will take. Also, there could be contributions from treasury. This might happen. It will depend on the amount of the loan made. If you allow me to complement this, the situation of the distributor is something that should not happen. We're running a risk with the amount of energy, and this doesn't make any sense. The streamlining of the sector is looking for new projects in the Senate and the House of Representatives. We're going to have to make adjustments in this distortion. We're taking away the responsibility of distributors in this case.
Everything will depend on the demand for energy. This is very important. This is an evolution that we're seeking in the new projects that are being proposed. This is even a better reason to continue on with these projects to eliminate distortions in the sector.
Thank you very much.
A last question. I participated at a meeting with some executives in the sector, and one of the executives gave a suggestion on how to share this bill, this account, a loan. Of course, this will eventually be transferred to the consumers. The final rate for the consumer, of course, will have an increase. What this executive suggested was a way of dividing this bill with the generator.
The generator would cease to receive part of the revenues of distributors to cover their cash. They would receive contributions from BNDES, and they would have the right of an extension of concession to offset this. This would reduce the impact on the tariff for the consumer. I don't know. Do you think this makes sense? Is it worth thinking about?
Marcelo, thank you for the question.
Yes, we have spoken about this. I know who the executive is. Now, if we do this selectively, it will work, of course. Some generators, if the return is appropriate, very well. It's as if they were acquiring a part of a concession. This will work for some, but not for others. For others, this makes no sense due to the generation scaling factor. They don't have enough to pay for their bill. Once again, we need to be highly selective.
Those who want to enter this competition and finance this would reduce their load and take advantage of the benefit. If some generators are interested, if the rates are attractive, perhaps they will choose to do this. There could be an auction. Those who have less cash will help in this adjustment. Eventually, this will become a good return for those who opted to do this. Once again, this is simply a possibility, and it would have to be done in a voluntary way. This cannot be imposed on the generator because I do not know if they will be able to survive with this condition. Thank you.
Thank you very much.
The next question comes from HSCT. You may proceed.
Good afternoon, and thank you for the call and for taking my question. I would like you to remark on what happens with the sale of the 10% of TAG. If this process is still underway, or if you have some changes that you will make, if you're going to postpone this so as to not impact the interest of potential buyers. Thank you.
Thank you, Vinicius. I will give your question to Gustavo. Gustavo, perhaps you could help us in the response to this question.
A good afternoon, and thank you, Vinicius, for the question. It's a very difficult answer. If we have a seller that is interested in a competitive market in a moment of crisis, if they proceed, we could work with reduced numbers or only work with those who already have the assets and the right to preference.
So far, there hasn't been any show of interest, and we continue on with the plan that was foreseen and what surprised many of us in this interim. On the 31st, there was that official announcement of the sale of 10% of TAG. Now, given the difficulties of Petrobras to address this crisis and because of the speed of this process, it makes sense on the one hand, but on the other hand, it simply increases complexity.
Now, when we speak about the shareholders, we might need more time to be able to make a decision for investment at this point in time and to see if it makes sense. Now, on the other hand, we know the asset, and there is nobody in the market that would be able to set forth a proposal in the short term.
Evidently, as soon as we make a decision, we will inform you. Now, simply to complement this on the part of the shareholders, this is not the best moment to sell, and perhaps Petrobras will find a more difficult market compared to the market a few weeks ago. Perhaps selling at this point would be interesting.
Our next question comes from Carolina Carneiro from 3DC. You may proceed.
A good afternoon, and my question is more legal. In the case of the gas distributors and in the contract for the payment of the trench and on the part of the distributors for the regulated environment, what would happen and which would be the discussion and process if distributors decide to continue on with this issue of force majeure? I do apologize. I know that you spoke about this. Unfortunately, I did not have any sound. I would like to understand how this type of payment operates for gas. Do you receive from TAG the payment from the distributor directly, or is there another mechanism similar to force majeure as has been used in the electrical sector?
Thank you, Carlo, for your question. I would like to ask Keller and Gabriel to respond to this question as they're working on this, on the commercial part as well. Perhaps it would be best to begin with Marcos Keller. Very well. The point, Carolina, is that what is foreseen is that force majeure has to be acknowledged by email, and the notification sent by distributors shows us that, yeah, this is happening because of COVID-19. This could lead the distributors to a limited situation. In some cases, this has been preventive. The request has to be done by email.
Legally, there could only be a non-payment, a full non-payment, after the union acknowledges that this is a case of force majeure. Once again, this has not been touched upon by the ministry or ANEEL. Of course, we do need to find a solution to this.
Legally, what can be done is to send the notification. Once again, this has not been acknowledged by ANEEL at this point in time. All of them are working and working in the regulated environment. Let us imagine that we receive this request and ANEEL interprets that this is not force majeure and there is an impact on the generator. It is very probable that there will be a reaction, a legal, a judicial reaction to preserve the interpretation. We will have another complication in that case. This applies to generators, to gas distributors. Of course, this issue will have to be surveyed to avoid one more problem.
If I could refer to the part about gas, Carolina, I will be very brief, and then please contact me so that we can speak about this in more detail. The payment goes from the consumer to the distributor and the distributor to Petrobras. In the contract between the distributor and Petrobras, there is a clause, and there is a transfer by Petrobras for the transportation contract. The distributor, once again, pays everything to Petrobras, and then Petrobras carries out a transfer. What is being negotiated with Petrobras is differently from the electrical sector. A mail needs to define this. Gas distribution is a monopoly in each state. Each state has its own regulation. There is no ANEEL for the gas sector.
There is the AMP that regulates the upstream, but nothing to regulate downstream, the transportation. Petrobras is negotiating with distributors of putting aside this clause for payment, and the distributor will pay only for what it is consuming. This is a negotiation between Petrobras and the distributor.
What is the relationship of transporters with distributors?
No relationship. The relationship is only with Petrobras.
We need to have these transporters to transport gas for our client that is Petrobras. We understand that there is no force majeure, and we're negotiating with Petrobras to see which are the measures that we can adopt, once again, honoring the contract and, of course, debating this issue. This is a momentary situation.
Thank you. Thank you very much.
Our next question comes from Marcelo Brito from Citi. You may proceed.
A good afternoon to all of you, and thank you for taking my question and for the explanation. I would like to ask about the presentation last year in November when you highlighted the go-to-market project as if you were working with retailers. I would like to know what is the status of the project, if you have begun working with the client, and what is happening with this rather violent economic retraction, which is the behavior.
Thank you, Marcelo, for the question. I will send the question to Gabriel, who was a leader of this project.
This is all very recent. Once again, this is a very recent event, and what I can remark is that this is a segment that has continued to grow in our portfolio. Now, this segment in general has a standard contract with a higher flexibility level than the average flexibility that I remarked on. This, of course, helps us to attenuate the impact on smaller consumers. As with larger clients, we have different portfolios for different segments. We have those that have been more affected and those who have been completely unaffected or have increased their consumption. It's too early to say anything. This is the present-day status. The invoicing for March was within the limits of flexibility. We had one-third during the month of events. This month, the impact will be lower, but I do think that we will be able to work with the contractual flexibility. When this does not work, we will carry out a timely assessment. My expectation is that the small clients [Foreign language] are quite good about paying what they owe.
They do not take advantage of the situation. At least this is my expectation. Now, we are going to have to work with our accounts to have a better idea of what is happening among the smaller clients. At least this is my expectation, and we will see if it fulfills itself. Sattamini is also important. To recall that this segment in general is something we do not have yet, but they do have a risk. This risk was priced when they did the deal based on the price that was part of the contract. We have tried to put a price to this type of risk.
Another very important question, perhaps going forward, not for the present, when we imagine a growth of the market, the event per se and the present situation of lower prices in the market leads us to imagining that going forward, there will be a new wave of migration of clients, a migration, especially from smaller clients to the free client that could favor the movement of our project.
Thank you. Thank you for the response.
We would like to end the question and answer session, and we return the floor to Mr. Eduardo Sattamini for the closing remarks. You may proceed, sir.
Once again, we would like to thank you for your presence and participation. We hope that this conversation clarified some issues. Of course, we will be back to speaking to you once we have more clarity. At present, the situation is rather uncertain.
We don't know when isolation will end, if we will have a more definite solution for this black swan. Once again, we would like to thank you once again for your comprehension, for your support. We are trying to gain better understanding, but unfortunately, this situation goes on. We are trying to mitigate our risk to minimize the impact on our company, and we are helping our associates and preserving the health of all of our employees. Thank you very much to all of you.
Thank you. The Engie Brasil Energia Conference Call ends here. We would like to thank all of you for your participation. Have a good afternoon, and thank you for using VoiceTel.