Enel Americas SA
SGO:ENELAM
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Good day, and thank you for standing by. Welcome to the Fourth Quarter 2022 Enel Américas Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.
This presentation contains statements that could constitute forward-looking statements. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of Enel Américas and its management with respect to, among other things, Enel Américas business plans, Enel Américas cost reduction plans, trends affecting Enel Américas financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere, supervision and regulation of the electricity sector in Chile or elsewhere and the future effect of any changes in the laws and regulations applicable to Enel Américas or subsidiaries. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance, and involve risks and uncertainties.
Actual results may differ materially from those in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets and increase in the market rates of interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Enel Américas annual report. Readers are cautioned not to place undue reliance on those forward-looking statements, which stay only as of their dates. Enel Américas does not undertake no obligation to release publicly the result of any revisions to these forward-looking statements, except as required by law.
I would now like to hand the conference over to your speaker today, Rafael de la Haza, Head of Investor Relations. Please go ahead.
Thank you, Victor. Good morning, ladies and gentlemen. [Foreign Language], and welcome to our fourth quarter 2022 results presentation. I'm Rafael de la Haza, Head of Investor Relations of Enel Américas. In the coming slides, our CEO, Maurizio Bezzeccheri and our CFO; Aurelio Bustilho, will be presenting the many figures of this period.
Let me remind you that this presentation will follow the slides that have been already uploaded into the company's website. Following the presentation, we will have the usual Q&A session. Please remember that questions can be made only through the telephone line.
Now let me hand over the call to Maurizio, who will start by outlining the main highlights of the period in Slide #3.
Thank you, Rafael. Good morning, everybody. During the fourth quarter, our production and the energy sales in generation had a solid growth of 7% and 6%, respectively, mainly due to better performance in Brazil and Colombia, thanks to the new renewable capacity that we have under during the year, which more than compensated the sale of [indiscernible]. In Greece, we increased our sales 2%, showing steady growth in every country, while in Enel X and retail, we saw a solid increase in all our indicators. In the fourth quarter of 2022, we reached an EBITDA of USD 1,400 million, 19% higher percent higher than the same period of last year, explained by better results in Brazil, Peru and in Argentina, thanks to a positive one-off impact that we will explain later. On a yearly basis, we were able to reach the target given on our strategic plan in 2021 reaching USD 4.8 billion, an increase of 18% compared to the previous year.
In terms of FFO, we had a solid increase of 35% on a yearly basis, thanks to better net working capital and higher EBITDA. Regarding group net income, we had a significant reduction due to negative impacts coming from asset sales and impairments that we will analyze ahead on this presentation. During 2022, we added 545 megawatts of new renewable capacity, and we continue working on another 2.5 gigawatts of capacity under construction. Our renewable capacity now represents 71% of our total capacity and 73% of our production. Let me highlight that we were confirmed among the top 5% best ESG performers globally by S&P, as we were included in each 2023-year book, 1 more year.
Finally, in terms of corporate simplification during 2022, we concluded the sale of Enel Fortaleza and Enel Goiás and we announced the sale of our thermal generation asset in Argentina as well as the analysis of the sales process of Enel Ceará. In addition to this, we successfully concluded the registration process from the Security and Exchange Commission in the United States.
Let's move to the following slide to see the main macro indicators. As shown on the left side of the table, during this quarter, currencies in Argentina and Colombia devaluated against U.S. dollar. Guatemala was flat while Costa Rica, Peru and Brazil, slightly appreciated. In terms of inflation, we can see that during this year, inflation rate increased in most of the currency in a significant level, in line with the situation that we saw across the world during 2022. However, in Brazil and Panama, we saw a reduction compared with last year. Regarding electricity distributed. During the last quarter, we saw an important increase in Argentina, while in Brazil, Colombia and Peru were some growth, but at moderate rate. In terms of collection, we continue at levels of around 100% in all the countries, leaving behind the collection problems that we had during the pandemic. Finally, regarding bad debt, we had a significant reduction of 16.1% compared to 2021.
One on the following slide, we will discuss our strategic action. As we announced on our latest strategic plan presented in November 2022, our strategy aims at establishing an integrated position across the value chain in core countries to serve our customers in their electrification journey. Toward this fall, we will implement 4 strategic actions over the next 3 years. We will continue reinforcing the development of renewable generation, supported by a strong pipeline, and adding the implementation of a stewardship model that will how us to keep a healthy financial position.
The red are the enabler in the energy transition process. Thus, we are going to continue boosting digitalization and modernization of our risk through significant investments. We will boost customer centricity, promoting and facilitating electrification, through an integrated offer and new services and products to our customers while promoting the liberalization of the energy market. Finally, we are going to concentrate our efforts on the countries we believe are more aligned with the acceleration of energy transition and our litigation and decarbonization strategy. With this in mind, we will see that our full year results are fully aligned with our strategy.
Let's begin by analyzing our investments of the period in Slide #6. During the fourth quarter of this year, our CapEx increased by 20% compared to the same period of last year, reaching USD 1,410 million. This is mainly explained by higher investment in generation business in Brazil and Peru, due to the development of renewable projects and higher investments in distribution business also in Brazil and Peru. From the total amount, 6% were invested in Brazil, while in terms of business, 54% were devoted to renewables and 37% to grids. Gross CapEx reached USD 926 million and was mainly devoted to renewable business with 77%. On a year-over basis, our CapEx amounted to USD 3.6 billion, which is 20% more than 2021.
Let's now analyze our operating highlights on Slide #7. I -- in the nation business, during the fourth quarter of 2022, we added 162 megawatts of new renewable capacity, reaching 16 gigawatts of installed capacity from which 71% is renewable. If we exclude from our perimeter, the recently sold thermal generation assets in Argentina, our total capacity is 88% renewable. Let me remind you that in Brazil, we already became a 100% renewable generation company after the sale of Enel Fortaleza. Net production in the fourth quarter reached 12.9 terawatt hours, an increase of 7% compared to the same period of last year, mainly explained by a higher generation in Brazil and Peru. From our total production of 2022, 73% is commission 3, a significant growth compared to the 67% of 2021. Energy sales increased by 9% during this quarter, reaching 2.8 terawatt hour, due to higher sales in Brazil and Peru. On a yearly basis, energy sales increased by 22%.
In Slide #8, we will follow up on the EGP Americas integration. With the 162 megawatts of new renewable capacity added during the fourth quarter, we reached 545 megawatts of new capacity and a total of 5.2 gigawatts of capacity coming from Enel Green Power Americas. From this 77% are in Brazil in terms of technology, 2.7 gigawatt of wind capacity and 1.7 gigawatt solar and finally, 0.8 -- we are currently working on additional 2.5 gigawatts of capacity under construction, mainly located in Brazil and Colombia. 1.2 gigawatts are wind project and 1.4 gigawatt of solar projects. During 2023, around 1.3 gigawatt will be in operation, while 1.2 gigawatts will enter in 2024. CapEx in EGP Americas during this quarter was USD 0.6 billion, mainly located in Brazil.
For the full year, CapEx reached USD 1.2 billion. Regarding our pipeline, we are considering 61 gigawatts of new capacity. From this amount, 3 gigawatt in early stage and 25 gigawatt RM2 stage. In addition to this, we have around 1 gigawatt of battery energy storage site. We are also considering the 2.5 gigawatts of projects under construction already mentioned. This pipeline has significantly increased compared to the 22.1 gigawatt that we announced when we incorporated a Green Power Americas assets into Enel Américas, reflecting the important group capacity of this business.
Let's continue with grids operational highlights on Slide #9. Electricity distributed reached 3.3 terawatt hour in the fourth quarter, which we represented an increase of 2% compared to the same period last year, explained by higher sales in the 4 countries where we operate. Regarding the number of customers without considering a customer coming from Enel Goiás, which was not part of our perimeter by the end of the year, we had an increase of around 420,000 customers in the last 12 months reaching 23.3 million customers among all our distribution companies. It is worth to highlight that the number of smart meter more than doubled compared to last year, reaching more than 300,000.
In terms of quality indicators, both SAIDI and SAIFI improved as an average, explained by a better performance in Colombia and Brazil in the case of SAIDI and by Brazil, Colombia and Peru for SAIFI. Finally, in terms of energy losses, it improved in Argentina and Peru remained flat in Colombia a slightly increase in Brazil, explained by Sao Paulo.
On Slide #10, we will see Enel X and Retail business. In Enel X business, we had a very solid growth in all our businesses, especially in charging station distributed generation and maintenance and retail concept. Regarding Retail business, the number of customers increased by 11%, reaching more than 5,000, and the energy sold amounted to 24.4 terawatt hour in 2022, means a 20% increase compared to 2021.
On the following slide, we will discuss our ongoing corporate simplification. During 2022, we concluded the sale process of Central Fortaleza in August and Enel Goiás in December. Along with this, we recently announced the sale of our thermal generation assets in Argentina, Costanera and Dock Sud. These sales are already committed, and we already received the payment for Costanera and expect to receive the payment for Dock Sud in the next 2 months. These sales represent a very important step towards our goal of moving ahead in energy transition, where we are aiming to be a fully renewable generation company and to boost electrification in the cities where we operate. As Abe mentioned, after the disposal of Argentinian assets, our generation metric will be 88% renewable.
During 2022, we also concluded the listing and deregistration of Enel Américas of the U.S. market. For 2023, we are working on the sales process that we announced on our strategic plans, which are Peru and the remaining asset in Argentina, along with Enel Ceará in Brazil, which as we recently announced already began its sales process. At the same time, we are looking for investments partner to implement the fewer ship model in renewable generation projects.
Now let me comment on our ESG positioning in the coming slide. First, the Carbon Disclosure Project or CDP highlighted for the second time the company's leadership in mitigating the risk posed by climate change and sizing opportunities by promoting renewable energy development and reducing the renounced data emission. This time, the company improved its ratings from D to A-. We were recognized once again for integrating the 3 categories of down-drill Sustainability Index. -- emerging markets, integrated market of the Pacific Alliance and Chile after having obtained the highest score of 87% over 100 since we have participated. Also, we were confirmed in the sustainability year book, an annual study comparing the sustainability performance of listed company based on a demanding and competitive evaluation.
The company has been part of this selection since 2019. This year was distinguished for the first time in the top 5% S&P Global ESG core category, ranking among the most sustainable companies in the electricity industry worldwide. And finally, we are delighted to receive the result of the first business and human rights in gains by the Chilean Catholic University of school. As Enel Américas, we obtained the highest score among these companies with 21.5 points out of the maximum of 24. This results in line with the other evaluation in this area show our ongoing commitment to a just transition.
Now Aurelio will comment on the financial results of the period in the coming slides.
Thank you, Maurizio. EBITDA in the fourth quarter reached $1,400 million, 19% higher than the same period of last year. This better result is mainly explained by distribution business in Brazil and in Argentina. In the case of Brazil, we have higher revenues due to the tariff adjustments that we had during the year. While in the case of Argentina, we had an extraordinary effect related to the waiver of some debt that we had with CAMMESA. Currency exchange had a negative impact of minus $198 million in this quarter, explained by devaluations in Argentina and Colombia. If we isolate these effects and the extraordinary impact in Argentina just mentioned, EBITDA would have increased by 17.1%. OpEx increased by 11.7% due to higher inflation in the region.
Net financial results improved by 43.3% due to higher financial revenues, mainly explained by the actualization of sector assets and liabilities in Brazilian distribution companies, partially offset by higher financial expenses. Group net income in the fourth quarter reached $59 million, reflecting the negative impact of the impairments in connection with the sales of [indiscernible] and Argentinian thermal assets. If we exclude these effects, along with the positive one-off in distribution business in Argentina, net income would have reached EUR 253 million, an increase of more than 100% compared to fourth quarter of 2021. Funds from operations in this period reached $1,062 million, while net debt increased by 17%, reaching $6.9 billion. We will analyze in detail cash flow and debt later in this presentation.
On Slide 15, we'll see EBITDA evolution and breakdown. Starting from -- starting from $1,177 million of EBITDA of fourth quarter of 2021, we see that all business -- all our business lines have positive results, except for thermal generation, mainly driven by the sale of Enel Fortaleza. Grids business had a significant growth, mainly driven by tariff adjustments in Brazil and an extraordinary effect in Argentina. Renewables business grew by $49 million, while Retail and Enel X grew by $47 million and $4 million, respectively.
Currency devaluation plus other impacts had a negative effect of $208 million, reaching a final EBITDA of $1,400 million, 19% higher than the same period of last year. On a country basis, we see that the main contributor for consolidated EBITDA was Brazil with 51%, while Colombia represented 20% 11%; Central America, 4%; and Argentina, 14% due to the already mentioned one-off effect. In terms of business lines, grids represents 59% of our EBITDA and renewable generation 29%. Thermal generation, Retail and Enel X contribute with 3%, 7% and 2%, respectively.
Let's see EBITDA breakdown on a cumulative basis on Slide 16. Starting from $4,102 million of EBITDA of 2021, we see that as on the previous slides, all our businesses had positive operational results during this period, except for thermal generation, which decreased by $77 million. Renewables grew by $330 million, mainly explained by Brazil and Peru. Grids grew by $647 million, explained by better results in the 4 countries, while Retail and Enel X grew by $157 million and $44 million, respectively. Currency devaluation plus other impacts had a negative effect of $290 million, reaching a final EBITDA of $4,825 million, 18% higher than the same period of last year and fully aligned with the guidance that we gave on our strategic plan back in 2021. On a country basis, we see that the main contributor for consolidated EBITDA was Brazil with 49%, while Colombia represented 29%, 13% Central America, 4%; and Argentina 5%. In terms of business line, grids represents 49% of our EBITDA and renewable generation 34%. Thermal generation, retail and Enel X contributed with 7 percentage and 2%, respectively.
Let's now see Generation business on Slide 17. EBITDA in generation business decreased by 14% compared to fourth quarter of 2021, reaching $475 million. This result is mainly explained by the lower results in Colombia due to FX devaluation and lower sales price and in Brazil due to the sale of Enel Fortaleza. This was partially offset by growth in renewables and higher EBITDA in Peru and Central America. On the right-side chart, you can see that Colombia was the main contributor to total EBITDA with 35%, followed by Brazil and Peru with 33% and 19%, respectively. Central America and Argentina reached 8% and 5%, respectively.
Let's see Grids business in the next slide. EBITDA in grids business increased by 50% compared to the fourth quarter of last year, reaching $956 million. These numbers include the extraordinary effect of Argentina and the impact of both years of the actualization of distribution concessions, [indiscernible]. If we exclude this effect, EBITDA in Grid business would have increased by 25%, reaching $698 million. This better result is mainly explained by Brazil due to the tariff adjustment that we had during 2022 and lower energy purchase cost in a lower extent, Peru due to the higher sales. This was partially offset by a lower EBITDA in Colombia explained by currency devaluation. On the cumulative period, we reached $2,801 million EBITDA, an increase of 26% compared to 2021. Brazil represents 63% of these amounts, followed by Colombia and Peru with 23% and 9%, respectively.
On Slide 19, we'll focus on the cash flow of our case. Starting from an EBITDA of $4,835 million, we see that net working capital amounted to $455 million, a significant improvement compared to last year, mainly explained by improvements in the CVAs in Brazil due to better hydrology. Tax paid during the period amounted to $583 million. While net financial expenses amounts to minus $622 million, higher than last year, mainly due to the consolidation of Enel Green Power Americas and higher interest rates. With this, funds from operations amounted to 3,196 million in 2022. After investments of $3,569 million, including $1,861 million of growth CapEx, we get to a free cash flow of minus $373 million, a significant improvement compared to last year.
Let me now analyze the debt of our company in the following slides. Gross debt amounted to $8 billion, an increase of 9% compared to December 2021. This increase is mainly explained by increase in no Brazil and Americas Holding and Enel Ceará, partially offset by the deconsolidation of Enel Goiás debt. Net debt reached $6.9 billion, which considers free cash flow of minus $373 million, net dividends paid for $693 million, financial receivables and extraordinary operation of $136 million and FX impact of minus $68 million. In terms of currency and country, we see that Brazil remains as the largest contributor, while the debt at holding level represents 10% of the total. Finally, regarding the cost of debt, we can see an increase for this period going from 6.1% to 9.8%, mainly explained by higher interest rates in Brazil and Colombia, partially offset by a lower cost of debt in Enel Américas Holding.
In Slide 21, we'll see our financial position. Our liquidity amounts to $2.4 billion, from which 49% corresponding to cash and cash equivalents and 51% are committed credit lines. The average maturity of our debt is 3.5 years. For 2023, we have matured for $1.8 billion, and most of our debt matures after 2025. This so the liquidity position allows us to support our growth strategy.
On the next slide, Maurizio will conclude this presentation with some closing remarks. Maurizio, please proceed.
During the fourth quarter of 2022, we saw solid operational results across all our businesses despite a challenging macroeconomic context. We had a solid FFO generation this period. And despite we are executing a significant amount of CapEx, our net debt remained stable. We are strongly delivering and executing the new party coming from renewable sources in line with our strategy. At the same time, we continue boosting the retaliation and digitalization of our belief. Finally, we are moving ahead on our corporate simplification, concluding sales processes of terminal assets advancing in the [indiscernible] disposal and focusing our [indiscernible] country more committed with the energy transition.
Well, thank you, Maurizio, Aurelio, very clear presentation. I open the call to the operator for the Q&A session, starting with the questions received from the telephone line. Victor, please proceed.
[Operator Instructions] Our first question will come from the line of Henrique Peretti from JPMorgan.
Thank you Maurizio and Aurelio for the presentation. I have 2 questions. The first one is about the news in Colombia. There are some developments in the Congress, a potential proposal for changing our profit in the country. So I wanted to know your initial analysis of the proposal, what could be the potential impact for Enel Américas stemming from these changes? And the second question would be on the asset sales and capital recycling strategy. So we are seeing that the company is advancing with the asset sales announced in the end of last year. But my question would be, has the company decided how the capital is going to be recycled because as I understand, the target is to finish the year of 2023, refunded debt of 0 and we still don't have clarity on how the company plans to releverage and have a more optimized capital structure.
You're welcome, let's say, I will reply to the first one, and I will leave Aurelio reply to the second one. It's through in the congress discussion of the green, and we are analyzing the different topics of the degree that is not yet fully clear. So as you know, we are in the stage of receiving comments and we will see exactly what will be the final tax evolution. So here, for the time being, it's not complicated just to make a valuation of the impact. We just record the fact that already last year, as you remember, we operate a different mechanic tuition of the tariff in generation sector and we parted from EPP EPC with no major impact, but with a relevant decrease of the tariffs in the -- for the end customer.
We see that this new decrease in the line of reduced the pressure, especially for the less needed customer of the type of public services like electricity, we strongly believe that this process will go ahead. We have no doubt that the process will be not stopped. We will finalize. And once they wouldn't see the final structure of the tree will communicate what kind of impact from Enel Américas will be on in Colombia, in particular. Regarding your second question on Aurelio?
Yes. Regarding the capital structure, yes, we -- of course, if we -- all the plan that we are pushing -- will be our [indiscernible] to be completed by the end of this year. Yes, we'll reduce the level of debt by the end of this year. And by -- at this moment, our focus is to -- since the capital costs are higher, so our best alternative is to reduce our debt. And for -- I mean, the second step probably will be capturing more opportunities in terms of focus our activity in distribution in a more urban areas, right?
And that's why we are leaving the rural areas. That's why we'll have the asset of Goiás and we are working in the process of Enel Ceará and be concentrated in our current distribution companies, Rio and Sao Paulo, mainly with the more, I mean, digitalization in all this process in the urban areas. I mean our focus is to capture opportunities in renewables, growing in renewables and in the grids in our current tariffs. Of course, our plan -- I mean, for the time being, the best alternative that we have today is to reduce debt and concentrate our efforts in investments in these operations that we have today, especially considering that we are in times that we have higher -- very high interest rates and of course, cost of capital. So that's the main -- the best alternative for us.
Can I have a follow-up quickly?
Yes, sure.
Thank you so much. So yes, because the company plans to concentrate in Rio and Sao Paulo, and we know that these concessions expire before 2030 between 25 and 2030, do you have any views or any taking out from the set or going about what's going to happen to the concessions if the base case for the company that concessions going to -- there is much to be an automatic expansion? What is the current view here?
We are working, of course, on the process we are analyzed. We are following that. As you know, for the time being, we are busy in negotiating the new tariff scheme. We have done already this for Enel Rio. We are finalizing in April for Enel Ceará, and we will do later on Sao Paulo. So for the time being, our focus is on tariffs' recognition. Regarding the concession, of course, we are following the process together with an end to understand the principle that will be used for this concession renewal and analyzing the impact not only because this is not just the case of Sao Paulo Rio de Janeiro, but it's the case of the entire distribution sector in Brazil. And of course, we are working together with the other distribution company we done and just to understand and to be fine. The better criteria for the benefit of the Brazilian customers.
Our next question comes from the line of Francisco Paz from Santander.
First of all, thanks, Maurizio, Aurelio for the presentation. My questions are the following. The first one is regarding the agreements announced for Enel Costanera and Central Dock Sud, where you established that some conditions must be fulfilled for the agreement to materialize? What would that conditions be? And the other is the estimated deadlines for the materialization of this agreement. And in line with that, if the process of sale of assets, such as in Argentina, Peru or the Enel Ceará are faster than previously announced in these plans. How the projections you published on the strategic plan could change? That would be my 2 questions.
Yes. I think that of course, you can imagine when we define the plan, we are ready to support the possibility of this mission. So we will not see any major change in the plan already announced in November. Regarding the -- but of course, I will let Aurelio integrate, if any. Regarding the first question, as I said before, we already materialized and finalized the payment of Enel Costanera that means the deal is already done. Regarding Dock Sud, there is a right of first refusal from IPC, and we will wait the final exit of this right of first refusal in the next couple of months.
[Operator Instructions] Our next question will come from the line of Fernan Gonzalez from BTG Pactual.
I have 3 questions. The first one is, how do you see the generation segment in Brazil? Do you see that there is a renewable overcapacity there? Are you concerned at all about perhaps the medium- to longer-term outlook for energy prices in Brazil? What are your thoughts on this? And my second question is a follow-up on the capital allocation issue. Have you analyzed perhaps buying out your partners in Colombia? I know this is not part of the strategic plan, but is this something you might consider eventually, perhaps over the next strategic plan? And my third question is about Central America because your strategy is to focus on countries with more advanced in the energy transition and the electrification of the economies, does it fit Central America in this strategy at all?
Okay. I will start with the last one. As you recall, when we made the creation of Enel Colombia, we included, of course, in the creation of Enel Colombia as well as the take down risk of Central America. Why? As you know, we are a shareholder of the central interconnection line, okay, we participate in the Mercator electric product Regional. We are the shareholder of the [indiscernible] that is the connection, interconnection line in Central America.
And right now, for example, we are selling our energy of Guatemala, -- just to make an example, we are selling energy from Guatemala to Ecuador, El Salvador and to Panama, just compensate the differences in terms of hydrology that we meet in this different country. And then there is -- there was a consideration of another strategic project ongoing since many years, but it looks like we are having some important steps forward that is the project of interconnection between Panama and Colombia. This, of course, will open up an interesting market, considering as well the present situation of Guatemala exporting to Mexico -- for this reason, this means reparation of more integrated market.
And this was the reason why we decided just to put together Colombia with Central America. If you see on the other side, Panama has got a lot of renewable energy and electrification of the transport right now is one of the key projects of the 3 countries we are in. That is Panama, Costa Rica and Guatemala. Recently, we signed with the ISE, a contract in which a PPA for 2 of our hydro power panel good price in Costa Rica. Of course, this market is a very small market that combine altogether and the possibility to be between 2 big markets that is Colombia and South America and Mexico. This makes a lot of sense from a strategic point of view.
So I think I have replied to 2 of your questions that in Central America and the buyback. The buyback of the shares, you know that the shares is combined between us and [indiscernible], they consider as well this participation in the company strategic participation. So I don't see any possibility in the short term to sell this participation to any just to increase our share participation in Colombia. For the time being, we are one that we overcome the contract that was typical of the past year. I think we are going in a very good cooperation altogether considering as well the step forward we are doing together with the [indiscernible]. And as a consequence, for heavy in terms of the public transportation in the city and all projects related to the circular city, we are promoting all over Latin America.
Regarding generation in Brazil and the concept towards capacity, I think many things are going on in Brazil that we need to take into account before to make a judgment on overcapacity in Brazil. First of all, as you know, we will go in 2024 for the full viralization of customer connected in medium high voltage. This will be an open up of the 3 markets in which we are -- as you know, we are constantly growing. Second -- and then the process we receive will go with the prioritization with the open of the market for the low commercial customer, low pension commercial customer and then 2028 with the final. So we fomented in the in the presentation, we strongly believe we strongly push 3 market opening in the next first consider second consideration.
Right now, with this extraordinary [indiscernible], we have, as you know, the price at the bottom of the price we know as well that we had years 2 years ago, a stable growth as well in 2014. So we think that this will change and we will come back to a normal situation. This is an extraordinary one. And for this reason, I think needs for new capacity into the market. And then I think there is another factor that right now is not very much considered in the analysis on Brazil, it reduces generation impact. Somebody is talking about 14 gigawatts of capacity coming in the next years. And this, of course, will make a pressure, but we need to follow up a pressure not only on generation, but as well on distribution, we can -- for this reason, I think we need to follow up this evolution of the market.
Substantially, how we react to these 3 impacts, we reacted with the integrated margin. Within the integrated margin, we are focusing on our commercial strategy. And for this reason, we are looking at the possibility just to serve this commercial aspiration of directly through our power plant or buying PPR from third parties of reducing, of course, our market expectation is that we don't consider that this will contribute to the increase of our integrated margin. So we are doing -- we are approaching now not just from the size of generation, but from the side of commercial strategy. Why? Because of course, our -- our task is to increase the hardest value for the company. So we are following carefully the revelation of the market. We are carefully following the distributor generation dynamic.
And of course, we know altogether that this variable conditions on the weather situation that changed the situation rapidly in all countries. And in Brazil, we had a very dramatic expansion in the last 2 years ago. And our reaction for the time being, is going for integrated market approach me priorities from industrial at.
I don't know if we have more questions from the telephone line. Okay. Now we move to the ones we see in the email. The first one comes from Scotiabank, Tomas Gonzalez -- and the question is the following one. This is the regional of selling renewables controlling stakes when all generators around the world are developing these technologies.
Just to recall that, as you know, AML is a leader in renewable generation, and we were among the first companies entering and developing this technology, believing that the mine move for a decarbonized economy into the direction of renewable energy. The -- as we said during the presentation, while we are using a stewardship -- stewardship because we believe that this will allow a better discipline, a sound discipline resilient, disciplined from the financial point of view for our development. Just to recall, the integrated marketing that I mentioned before, what we do during the process of stewardship is just to sell assets and having a buyback of the PPA related to this asset. Why because our focus is the integrated strategy and market. And for this reason, it's not just the ownership of megawatt.
We want just to focus on in the energy we sell to power customers the possibility of the election of our customers for new electrification of final use. So this is the focus of our strategy a company selling electricity coming from renewable sources that will help decarbonization together with, of course, the electrification of final use. And of course, to do that, we need a very stable bridge. So regarding the strategy on renewable, as you can recall, we were among the first developing this strategy among the utilities. And now we will focus especially on the integrated margin growth. Just to recall that the share in Brazil will not include all the renewable assets we have in the country. We are still developing, as we said before, we have a big, huge pipeline, so we will just fulfill this pipeline, we are looking for a partner in which we will can allow a faster growth of decarbonization of the Brazilian consumption.
Well, thank you, Maurizio. And the final question comes from [ Moneda ] Asset Management [indiscernible]; and the question relation to the current status of the concession in [indiscernible] Argentina.
Today, I saw this news regarding the nationalization of the Argentina and gas. As you know, [ Rodrigo ], the concession of [indiscernible] will aspire on August 2023. That means this year, expiring the concession. Then we follow other concessions that are in the area. Right now, just to represent what is the situation over there, the situation is that already to international company that has assets in the area of [ Matan ] are going in the process to [ China ] against the Argentinian government due to the change that has been performed during this year on the concession.
On our side, as we usually do, we are proposing to the Ministry of Energy, the secretary of energy solution that can solve easily in a win-win situation, the concession in American -- and of course, we will -- even though we are -- we announced the exit from the country, as we usually do, we -- up to the end of the story, we will continue to be our contribution for a better service, a better solution for the Argentine and Argentinian. So this is the status of our work in -- regarding the concession of [indiscernible] and some [indiscernible], they are combined. They are more or less the same hydropower plant. As you know as well, there is a possibility of extension of 1 year move up to almost 2024 of the concession.
And meanwhile looking for a possible solution or the same concession. And we recall that we are in the election year in October, there would be the election for the new government. We will -- and of course, I think whatever decision is quite complicated. And for this reason, I think may be the most reasonable solution is just to pro launch 1 year more has allowed already in the concession expiring, I recall on 23 of August.
Thank you, Enrico. It seems that we're going to have more questions. So we conclude the end of results conference call. But first of all, let me remind you that the Investor Relations team is [indiscernible]. Thanks for your attention, and have a nice evening.
This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.