ISAGEN, S.A. E.S.P.

We expect the pandemic to pose the following main challenges to ISAGEN in the upcoming months: Lower electricity demand in Colombia because of an economic slowdown during the quarantine period; and Consumers may try to renegotiate their electricity bills' payments with the generators. We believe that ISAGEN partially mitigates the demand risk in Colombia because it sells a significant portion of its electricity output through longer term take-or-pay contracts, guaranteeing a predictable and resilient cash flow stream. The remaining portion is either exposed to demand risk or available for sale. Because of lower demand and favorable hydrological prospects, spot prices are currently dropping. They've been about COP200 per kilowatt hour (kWh), which could result in lower revenues from sales in

...COVID-19 could moderately affect ISAGEN. The Colombian government has considered the electricity generation activity as critical, so ISAGEN's hydro and thermal plants have stayed operational since the quarantine period started. The social distancing measures, which caused some industries to temporarily stop their activities, combined with a significant number of people working from home, caused demand to drop 10.7% and 6.7% in April and May 2020, respectively, when compared to the same months in 2019. We expect the pandemic to pose the following main challenges to ISAGEN in the upcoming months: + Lower electricity demand in Colombia because of an economic slowdown during the quarantine period; and + Consumers may try to renegotiate their electricity bills' payments with the generators. We believe that ISAGEN partially mitigates the demand risk in Colombia because it sells a significant portion of its electricity output through longer term take-or-pay contracts, guaranteeing a predictable...

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