Alupar has the following competitive advantages:
Strong cash flow and revenue predictability. Alupar’s transmission segment concession contracts have a duration of 30 years and some are perpetual in Latin America and provide for an extremely stable flow of revenues that provide a predictable source of resources to support its future investments. Alupar’s transmission revenues are not dependent on the volume of electricity transmitted in its network and are adjusted annually, based on inflation, measured by the IGP-M, IPCA and PPI. The regulation of the electricity transmission segment establishes mechanisms to protect against default and against tax changes, factors that provide security and predictability of revenues. In the generation segment, except for some characteristics inherent to the segment, most of the characteristics mentioned above also apply, and the Company began to benefit from this flow of resources due to the start of operations of the energy generators that have been taking place since 2010. This means that Alupar currently has high credit ratings on the national scale (AAA (bra) and BB+ on the international scale, classified by Fitch Ratings, one of the three main international credit rating companies, being very close to the sovereign ratings attributed to Brazil.
Experience in the identification, development and execution of energy-related infrastructure projects. The members of Alupar’s top management have, on average, more than 25 years of experience in the Brazilian infrastructure sector, particularly in the development of energy-related greenfield projects. Alupar believes that this experience puts it in a privileged position in regard to identifying and executing new projects, as well as contributing to ensuring profitability and the creation of value to the shareholders. Its capacity to plan and execute projects, the result of the experience and commitment of its professionals, is translated into efficient operations, the high availability of its transmission grids and investments that comply within ANEEL’s budgets and deadlines.
Modern installations allowing greater operating efficiency. All the Company’s transmission lines and substations began operations as of 2002 and all its generation facilities as of 2010. Alupar believes its installations will continue to present one of the sector’s highest levels of availability for several years, requiring low investments in operating maintenance to preserve current revenue levels and permitting investments in new projects that will contribute to its growth, in addition to minimizing the risk of reduction in revenue.
Competitiveness and profitability through strategic partnerships. Alupar has experience in identifying strategic partners that complement its expertise in order to develop new projects. The Company believes these partnerships allow it to (i) improve its operational knowledge through the sharing of experience; (ii) mitigate the risks associated with large projects by dividing investments and ensuring improved access to financing sources; and (iii) gain competitiveness for the development of new businesses through partnerships in concession auctions in which Alupar and its partner use their complementary know-how to maximize project returns.