Engie Energia Chile S. A.

In this context, the company started to decommission 171 MW of coal-based capacity in June 2019 and announced its intention to retire additional 268 MW by the end of 2021, demonstrating its alignment with the government's clean power goals. Moreover, to follow market trends and to remain competitive, Engie launched a strategy to replace fossil fuel sources with new renewable capacity, resulting in up to 1 gigawatt (GW) capacity of renewable sources in the next five years. As part of this plan, the company acquired the Los Loros and Andacollo solar parks with installed capacity of 55 MW for $35 million, which the company financed with its cash flows. Engie is also using cash flows to develop three greenfield projects:

...Engie will likely continue posting robust profitability based on its high level of contracted capacity. Engie Energia Chile S.A.'s (Engie) main strengths include power purchase agreements (PPAs) with an average term of 12 years, which generate about 90% of total revenue, and a sale pricing mechanism to pass through fuel costs to its customers at least until 2021. Since 2022, some of Engie's PPAs will start adjusting to the CPI that reflects the company's intention to gradually migrate to a cleaner energy matrix by expanding its renewable capacity, which would reduce the need for coal-price adjustments in contracts. Therefore, we expect the company to rely on its renewable energy projects to re-contract its PPAs starting after 2026, when some existing contracts start maturing. These strengths bolster the profitability's predictability and stability, with an expected EBITDA for the next two years of more than $450 million and a margin of about 30%. Afterwards, we expect EBITDA to rise gradually...

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