Slides
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December 19th, 2024 Update on Colombian wind projects
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222 La Guajira projects characterized by good wind resources, but timely execution was blocked by unforeseen Transmission Line permit delays Beta Alpha Historical context 53% Net capacity factor 2.5 TWh Annual expected generation 81 Km Transmission Line 504 MW Total capacity Good location regarding wind resources, with a load factor over 50%... …but requiring 81 Km of Transmission Line to connect to the Colombian energy system WTGs Transmission Line 1. “LC” stands for Local Communities | 2. “WTG” stands for Wind Turbines Generator 10/23 Government decree judicially annulled 02/19 EDPR enters in Colombia 08/19 Wind farms environmental license obtained Agreement with 15 LC1 10/19 15y PPAs awarded 09/21 Beginning of WTGs transportation 2H’22 New Government Transmission line permitting - New LC1 consultations Government decree suspending PPA obligations 08/23 Covid 19 lockdowns – Delay on Transmission line LC consultations 09/24 Transmission line permit: 100% of LC protocolized Start of energy delivery commitments 02/24 Resolution allowing changes in PPA contracts 09/20 WTGs contracted
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333 Significant costs following unforeseen Transmission permitting delays (supply chain renegotiation, PPA energy delivery costs, financial costs and other) EDPR has decided not to proceed with the investment in these wind projects These projects would make a decisive contribution to Colombia's energy diversification goals, but no longer fit into EDPR’s risk return profile …EDPR considers that, in the current context, it no longer fits its risk return profile Given the status of the projects… PPA contracts renegotiated (80.7% of committed energy suspended for more than 2 years) Colombian COP local currency: Increase of interest rates and devaluation vs. USD 90 Vestas V162-5.6MW turbines stored in port infrastructure in La Guajira No visibility on the improvement of regulated revenues, such as the “Reliability Charge” mechanism Wind farm projects permitted, and Transmission Line environmental license delayed and now expected in February 2025 with 100% of communities protocolized Government approval of some adverse legislative changes impacting the economics of the projects Strong capex inflation on construction since 2019, and additional ~€0.4bn needed for projects completion
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444 Divestment decision implies a potential non-recurring loss of up to €0.7bn in 2024, not impacting EDP/EDPR’s recurring net profit and dividends …without implying any impact on dividend distributions to EDPR and EDP shareholders EDPR will account for losses associated to the total impairment of these projects in 2024 accounts… > Out of the total estimated losses of €0.7bn: €0.5bn Incurred items, related to turbines and historical development costs €0.2bn Current estimated liabilities still to be paid. This amount could increment net debt beyond 2024 0.5 EDPR Items to be incurred Already incurred items 0.7 0.2 The impairment will be treated as a non-recurring event, having no impact on recurring net profit No expected impact on either EDPR and EDP’s dividend distribution policy Impact on 2024 Net Profit, €bn At EDP level, €0.5bn net profit impact net of minorities