STRATEGIC DIVESTING

Colombia 2017 | ENERGY & MINING | INTERVIEW

TBY talks to Astrid Álvarez Hernández, President of Grupo Energía de Bogotá (GEB), on democratization of corporate governance, restructuring, and new strategies.

 Astrid Álvarez Hernández
BIOGRAPHY
Astrid Álvarez Hernández has been President of the GEB since January 2016. She has a degree in civil engineering from the Pontificia Universidad Javeriana and a master's in international relations from the University of Ohio. In recent years, she has worked in energy and supply chain sectors while continuing her support to social endeavors in Fundación Servicio Juvenil. She held senior positions at Cemento Samper and a management position at Ecogestión consulting firm. She has worked as General Manager at Empresa de Acueducto de Bogotá, as an advisor to the Minister of Housing, and as administrative manager at Ecopetrol. She was the campaign manager for Bogotá’s current mayor, Enrique Peñalosa Londoño.

What are your expectations for the 20% “democratization” process of the company, and how will this impact your future strategy?

In September 2016 we launched the strategic plan for the company that will guide the entire Group for the next decade, in which one of the main elements will be reinforcing our corporate governance. In late 2016, the District of Bogotá was authorized by the City Council to divest 20% of Empresa de Energía de Bogotá (EEB) to fund the city's infrastructure program, while retaining the District's majority share with a stake of 56%. This divestment, or democratization, which is governed by Law 226, implies that the asset should first be offered to the solidarity sector: EEB employees, labor unions, pension funds, and government workers, among others. Our expectation for this democratization process is for the citizens of Bogotá as well as Colombian investors that value the position and great potential of GEB to buy shares in the company. The democratization will allow the company to strengthen its corporate governance and provide additional disclosure of information of the company. This process, along with other investments and our strategic geographic expansion plan, will allow us to become the largest non-mining company in Colombia and one of the largest companies within the energy sector in Latin America.

How is your strategy shifting to focus on the major urban areas in Latin America?

Our main strategy is to focus on big metropolitan areas. We currently serve the megacities of Bogotá and Lima, because we love to attain markets with high density population and a high demand of electricity and natural gas. Our experience from Bogotá has taught us how to do business in major cities. It is not only about bringing gas and electricity to people, but also improving urban energy solutions as a whole.

How do sustainability and renewable energies factor into your new strategic restructuring?

There are several areas where sustainability will give us strength as a company. One of them is what we call a genuine relationship with the community. All companies have a relationship with the community and a social responsibility toward it, but we want to really change our relationship with the community. A company has to be willing to get to know its community and be a part of it, which is one of the biggest changes we are making. We have been forced to make changes with the community, especially in Guatemala, and have learned to understand how to really work with the people from the start of the project. The relationship with the community is crucial to the longevity and success of this company. Another area we would like to expand in is renewables, by seeking new opportunities in countries where the energy matrix is transitioning to this sustainable and low-emission generation source. We want to grow our assets in distribution and transportation of gas, renewable energy, and transmission. Regarding energy generation, we will concentrate our efforts in non-conventional renewable energy sources. The regulation in Colombia is changing and will boost investment in cleaner energy production.

What are the next steps for GEB's restructuring?

We have teams working on three strategic business units: urban energy solutions, interconnecting for market development, and low emission generation. The entire company will be restructured around these three strategic units, and our effort will be on growing these markets. All the assets will be restructured as well. We are also divesting our none-core assets: Promigas, ISA, Nutresa, and Banco Popular, something that will give us more resources to invest in our three strategic business units. We are also developing 12 transmission line projects in Colombia. Over the next four years we are investing around USD700 million in transmission projects. Our main focus of 2017 will be on these projects.