SUSTAINABILITY REPORT 2014 We thank the teams that supported the elaboration of this Sustainability Report: President General Secretary VP of Administration VP of Public Services and Regulation VP of Equity Portfolio and Planning VP of Special Projects VP of Finance VP of Transmission VP of Internal Auditing Subsidiaries Directorate Directorate-General of Subsidiaries SUSTAINABILITY Directorate of Subsidiaries’ Corporate Affairs Directorate of External Relations REPORT 2014 The Grupo Energía de Bogotá Foundation Edition Design and Layout Integrated Management System Management .Puntoaparte Bookvertising External Relations Directorate Empresa de Energía de Bogotá Bogotá, March 2015 www.eeb.com.co Advisors BSD Consulting Ltda. Cover design and chapters Sistole Photographs EEB’s Photobank EEB Sustainable Management Report 2014 Commitment Commitment Commitment Commitment Commitment Commitment 1 2 3 4 5 6 2.1 2.2 About EEB and the Grupo Integral Annexes Energía de Bogotá management Letter of Assurance from PwC Having a Having Provide aProvide operates. Company where the Table GRI Be a greatBe a standards. world-class Ethics, Risk sustainable service with value chain. value of life oftheof life environment. communities Table COP shareholders. sustainability. of corporative of corporative place to work. place to Understanding Human Rights. Human Table Blueprint Improve quality Improve Create value for Create value management and Good governance, Financial statements EEB Care and respectthe Consolidated financial statements Grupo Energía de Bogotá EEB Sustainable Management Report 2014 trillion, i.e. a 17.72% above the recorded at De- Bogotá during the period of peak demand in 2014; Message to our Stakeholders cember 31, 2013. (V) The adjudication to the Company of three ma- Meanwhile, stock performance reflected an in- jor UPME projects, namely: Bolívar - Termocarta- crease of 17.24% in the year, with a closing price gena (220 kV) and associated transmission lines, of COP 1,700 per share. Sogamoso – Norte – Nueva Esperanza (500 kV) The good performance of the Company, reflect- and associated transmission lines and the Rio Cor- ed in its financial strength, has enabled EEB to im- doba Project ( 220 kV) with a total investment of prove its investment grade ratings by major rating USD 321 million. Once these projects come into op- agencies: Fitch Ratings has upgraded the corpo- eration, these three projects will enable the Com- As President of the Company and its Board of Di- rate rating from ‘BBB- ‘ to ‘BBB’ with a stable out- pany to achieve a share of 14.6% in the National rectors, I present this Executive Summary of the look, Moody’s affirmed the Baa3 corporate rating Transmission System (STN). management report for 2014 which includes its and upgraded its outlook from stable to positive, most relevant indicators, for example: financial while Standard & Poor’s upgraded the debt rating performance, growth, sustainability and the major from ‘BB+’ to ‘BBB- ‘with a stable outlook. milestones of our subsidiaries. This is with the un- derstanding that the details of these and other cor- ˦ Concerning growth, the acquisition of 31.92% the porate aspects of business management, such as International Gas Transportation company (Trans- human resource management, legal issues and in- portadora de Gas Internacional, “TGI”) the main gas novation, among others, will be elaborated in the transporter in Colombia should be highlighted; this Management Report annexed to this paper and particular transaction has enabled EEB achieve own- which was elaborated under the GRI-4 guidelines ership of 99.97% of the shares of that company, fu- (sustainable global trend reports). In this regard, it ther consolidating the Group. includes the Integral Management Report of 2014, Other achievements are related to (i) The thusly, complements the Progress Report that was agreement between EEB and the Financiera de De- presented to the General Stockholders Meeting held sarrollo Nacional (the National Development Finan- on 23 December 31 of the same year and that cov- cial Institute) for the comprehensive structuring ered the period up to October 2014. of the first Bogota metro line; (ii) the entry into operation of the new Thessaly 230 kV Substation Outstanding Milestones and associated transmission lines, which guarantee Ricardo Roa Barragán the evacuation of the energy generated in the fu- President ˦ In regard to financial performance, the fig- ture El Quimbo Hydroelectricity Plant, with the re- Empresa de Energía de Bogotá S.A. ESP ures reflect a positive evolution of the Company’s quired quality, safety and reliability levels ensured; strength with a net income of USD 981 million, (iii) The putting into commercial operation of the 16.28% higher than that registered on December Alférez 220 kV Substation and associated transmis- Dear stockholders and other stakeholders of the Empre- 31, 2013, with an EBITDA of COP 1 55 billion. On sion lines; (iv) The putting into commercial oper- Gustavo Petro Urrego sa de Energía de Bogotá, (the Bogota Energy Company, a consolidated basis, EBITDA reached COP 2.57 ation of the Static Reactive Power Compensation President of the Board of Directors or “EEB”), the headquarters of the Grupo Energía de Bo- trillion, reflecting a growth of 44.83%, while con- - SVC Tunal Project, which reduces the risk not be- Empresa de Energía de Bogotá S.A. ESP gotá (the Bogota Energy Group or “GEB”): solidated operating income amounted to COP 2.3 ing able to meet electricity demand in the city in 6 7 About EEB and 1 the Grupo Energía 2 3 EEB Sustainable Management Report 2014 de Bogotá Our model of Global Responsibility is moving to- On the other hand, the relevant results of our inter- Bogotá (EMB, or the “Bogota Mobility Compa- “2015 will be a year in which we wards strengthening social fabric, initiatives, the national subsidiaries can be summarized as follows: ny), was created with the aim of participating in focus on a better execution of our promotion of conservation and the preservation the execution of mass public transportation proj- of biodiversity, support for culture and generat- ˦ Contugas, on April 30, 2014, put its infrastruc- ects for both passengers and cargo which require investment planes and projects, as ing opportunities through the GEB Foundation (la ture into operation, in compliance with the BOOT electrical infrastructure to operate. well as the implementation of in- Fundación Grupo Energía de Bogotá (in terms of contract, which was signed with the Peruvian ternal management strategies that culture, health, education, access to basic ser- state. By the end of the year, it had 29,283 con- In short, we have focused our efforts on furthering our encourage further consolidation and vices, etc.). nected users. consolidation as one of the leading energy groups in ˦ With regard to the milestones of our do- ˦ Cálidda continues to consolidate its growth in Colombia and Latin America, working with high qual- recognition of the Business Group mestic subsidiaries, we can highlight: (i) the Peru. By the end of 2014, it had 255,005 regis- ity standards and good business practices, thus con- we represent” strengthening the transportation of natural gas tered clients, 55.6% more that those reached by tributing to the development and quality of life in the by the entrance into operation of the Sabana the end of 2013. communities where we operate and fulfilling our com- natural gas compression station by TGI, which ˦ EEBIS Perú currently contributes providing en- mitments to our various stakeholders. Ricardo Roa Barragán guarantees fulfilling the Capital District and the gineering, supervision, supervision and back of- As we are a company with a majority public share- surrounding municipalities’ growth of demand fice services to companies that are part of GEB. holding (headed by the Capital District), this impos- until 2022, not to mention TGI’s acquisition of ˦ Trecsa put into the operation part of the infra- es an even greater challenge to generate economic, a 7.78% stake in the Pacific Pipeline project structure of the Transmission Expansion Plan social and environmental value for the benefit of our ˦ In the area of sustainability, we highlight two which aims to transport heavy petroleum from PET-01-2009 by powering the San Agustin, La stakeholders and society at large. very representative landmarks: (i) the inclusion of the Eastern Plains to Buenaventura to markets Vega II, El Rancho and Pacific substations. Also, We cordially invite you to know the details of our the Company for the third consecutive year in the in the Asian Pacific and the west coast of North in December, the first 100 km transmission line, management. Dow Jones Sustainability Index (DJSI) in the cat- America; (ii) Given the activity distribution of located between the Chixoy II plant and substa- egory of emerging markets, thus positioning the electric energy, the Cundinamarca Energy Com- tion Augustine, was energized. Regards, Company among the leading companies in regard pany (La Empresa de Energía de Cundinamarca, ˦ EEBIS Guatemala is focusing its activities on to the sustainability of its business management “EEC”) continues to fulfill its investment plan to the implementation of three fundamental proj- and activities; and (ii) the Investor Relations rec- improve the quality and reliability of its distri- ects for the development of the country’s electri- ognition by the Bolsa de Valores de Colombia (the bution system, giving greater emphasis to the cal system such as: South Pacific Ring, Cempro “BVC” or the Colombian Stock Exchange), during recovery of energy losses This investment is re- and Genor with an estimated investment of USD the implementation of best practices in investor re- flected in the substantial improvement of com- 130 million. lations and the disclosure of information required pliance with the target loss metric, which stands ˦ EEB Energy RE, a GEB subsidiary that allows Ricardo Roa Barragán by the BVC, which facilitated the Company’s en- at 9.93% as of December 2014, the lowest lev- direct access to the global reinsurance market; President trance into the BVC’s COLIR Index.