REN signs contract for the purchase of an electricity transmission company in Chile

REN signed a contract with COMPAÑÍA GENERAL DE ELECTRICIDAD S.A. and NATURGY INVERSIONES INTERNACIONALES, S.A. for the acquisition of 100% of EMPRESA DE TRANSMISIÓN ELÉCTRICA TRANSEMEL S.A. ('Transemel'), for USD 167M.

The contract foresees that the conclusion of the transaction and respective acquisition of Transemel by the REN Group will take place in the beginning of October 2019.

Transemel owns and operates 92 km of electricity transmission lines and five substations, located mainly in northern Chile. This region is characterized by the strong presence of the mining industry, with one of the substations being located near the largest copper mine in the world, in Calama, and by the growing predominance of renewable energy production projects, due to the great solar potential in this area of the country.

The vast experience and know-how that REN and its operational teams have of the electricity transmission sector in Portugal, as well as the company's high levels of efficiency and quality of service, which place it among the best transmission network operators in the world, were determining to the materialization of this investment opportunity. This is REN's second investment in Chile, where it holds, since 2017, a stake in Electrogás, SA, which operates the gas pipeline that supplies some of the main electricity plants in the country as well as the residential distributers in the country's capital, Santiago.

The operation is aligned with REN's strategic plan, which is based on a conservative growth strategy, favoring projects in the sectors in which the company has a vast experience, and in markets with economic stability and predictable regulatory frameworks.

This acquisition also abides to REN's financial discipline criteria, guaranteeing not only a sustainable profitability but also the maintenance of investment grade ratings.

The investments made in Chile match REN's strategic requirements. A larger presence in this country allows the company to focus on a single geography, already known to REN, where it has had a good experience and where the company can leverage its highly reputed technical expertise.

Despite remaining attentive to investment opportunities abroad, Portugal is REN's main focus and natural market, where it will continue to invest to ensure the long-term needs of the electricity and natural gas infrastructures, with a permanent focus on improving performance and quality of service, to provide a reliable, safe and efficient service at the lowest possible cost to the country and to the consumers. The energy transition program underway in Portugal poses very significant challenges, for which REN is totally prepared. REN's growth outside of the country, although a modest one, enhances its work capacity and creates good opportunities for the future of the company.