Engie to increase focus on renewables, infrastructure

French energy firm Engie will sharpen its focus on renewable generation and infrastructure projects, while it will revise its services activities and consider divestments, which could influence its business in Chile, Peru, and Mexico but not in Brazil.

“The idea is that the group will sell assets that are not in its core activities to free resources to continue increasing investments in renewables and infrastructure. This is already what we do in Brazil, so this will not impact us,” Engie Brasil Energia CEO Eduardo Sattamini said during a conference call with analysts.

Almost 90% of Engie’s 10.2GW installed capacity in Brazil is coming from renewable sources while the firm increased investments in infrastructure such as transmission lines in recent years. The acquisition of Petrobras’ TAG gas transport unit is also in line with the strategy. Still, assets such as the 228MW Pampa Sul thermopower plant, in Rio Grande do Sul state, could be divested.

“We continue seeking solutions for Pampa Sul. We are making adjustments to improve its operations and we should start a sale process. We are still evaluating the options and we have been talking with possible interested buyers, but we haven’t found a satisfactory solution so far,” Sattamini said.

The strategy could impact business in Chile, where Engie operates several combined-cycle and coal-fueled power plants, and in Mexico, where it provides energy services to commercial, industrial and residential customers through MaxiGas Natural unit. In Peru, its thermoelectric assets include ChilcaUno (852MW), ChilcaDos (11MW), ILO41 (610MW), ILO21 (135MW) and ILO31 (500MW).

RESULTS

Engie Brasil Energia posted a nearly 766mn-real (US$147mn) Q2 net profit, up 98.7% year-on-year. Revenues amounted to 2.68bn reais, up 23.4%.

The firm is Brazil’s largest private sector electricity generator and average generation in the quarter totaled 2.19GW, down 50.7%.