Good day, ladies and gentlemen. And welcome to amount. Enel Chile Q4 and full-year 2021 Results Conference Call. My name is Gigi, and I will be your operator for today. At this time, all participants are in a listen-only mode. After the speaker’s presentation. After the speaker’s presentation there will be a question-and-answer session.

To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please.

Press star 0 during this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 anticipated in the forward-looking statements as a result of various factors. These factors are described in Enel Chile's press release reporting its Q4 and full year 2021 results.

The presentation accompanying this conference call and Enel Chile's annual report on Form 20-F, including under risk factors. You may access our Q4 and full year 2021 results press release and presentation on our website, www.enel.cl, and our 20-F on the SEC's website, www.sec.gov.

Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates. Enel Chile undertakes no obligation to update these forward-looking statements or to disclose any development, as a result of which these forward-looking statements become inaccurate, except as required by law.

I will now like to turn the presentation over to Mrs. Isabela Klemes, Head of Investor Relations of Enel Chile, please proceed..

Good afternoon, and welcome to Enel Chile, Fourth Quarter and full-year 2021 results presentation. Thank you all for joining us today. I am Isabela Klemes, the Head of Investor Relations. Let me remind you that our presentation and related financial information are available on our website www. enel.cl in the Investor section any hour after investors.

In the sign-off the presentation, there will be an opportunity to questions via phone or webcast chat through link ask a question. Joining me this morning -- this afternoon, our CEO, Paolo Pallotti, and our CFO, Giuseppe Turchiarelli. In the following slides, Paolo will bring you the presentation with the main highlights of the call.

Our company performance and strategic update, dangers that we all go through our financial results. A replay of the call will be available and as always our IR team will continue to be available to provide you with fine detailed information you may need concerning this figures this presentation.

Let me remind you that media participants are connected only in listening mode. Thank you all for your attention and now let me hand over to Paolo..

Thank you Isabela. Good morning and I'll say good afternoon, the stages and thank you for joining us. As we have already commented during our previous calls, the Chilean electricity system has been affected by several income temporary phenomenon that put under pressure each dynamics and stability.

In terms of hydrology, the country is facing one of the driest periods of each history. Year early flow levels of 2021 has been the lower of all hydrological conditions, while the level of basin continues to be fuller. With important consequences correlated, all correlated sectors like the electric and repurchased one among others.

Furthermore, and now you have demand from commodities under consequence or largest fourth from thermal generation came in a year of increased pressure at global level and lack of liability of Argentinian natural gas doomed almost of the first nine months of 2021.

The combination of all these effects, in addition to a structural delay of renewable projects at country-level, cross trained our 2021 margins and our cash flow generation capability. The latter one also affected, by such lows as basic service low and the price stabilization.

We already mentioned the several actions we put in place since the first month of 2021, to improve gas availability. Buying additional LNG cargos to supply our plants at first, and then, to sell gas to the system, being the large importer LNG gas in the country for this year.

In this challenging scenario with tough condition posed by the duration of the pandemic, we have been able to advance with our renewable project, increasing of 900 megawatts digital capacity over the period. Additional projects are ongoing. I will recall you later. We have also started to link the issuing of new credit lines to sustainability targets.

Today, 21% stake of the total debt, linked, as we mentioned in our last strategic planned presentation, we target to achieve a 52% stake or this kind of financing by 2024. Regarding the award, we are pleased to announce that we have been included in the Bloomberg Gender Equality Index for the first time.

Also, we apply for the first time to the CDT climate change obtaining a B score. This confirms that we are taking coordinated and consistent actions on climate change. Now, let's move to Slide 4, to give you an update about the market. In 2021, the system has less water availability that in 2020.

With poor hydrology only slightly better, then the driest year recorded, that was 1998 and 1999. The effects of melting season have been very poor and very limited because of the level of the in the winter period.

In the second half of the year, some limited positive effects on the use of water resources derived from the issuing of the preventive rationing decree and the agreement that we reached with some communities.

With the lack of Argentinian gas and exports of national gas for the period fall 2020, early 2021, some players are being forced to buy in the spot market to support their generation position. Facing a significant overall increase in commodity price has a consequence of the international market situation.

Gas prices more than tripled in the fourth quarter 2020 to the second half of 2021. In addition, the delay of the or renewable projects at country-level due also to restrictions. And they mostly effect on the system that can be considered equal to the lack of production or 2 CCGTs of 350 megawatts.

All the above mentioned factors led to a strong pressure to the system with an important rising margin costs, particularly during the third quarter of 2021 and the issuing of the preventive rationing decree. The situation largely improved during the fourth quarter of last year.

Thanks in particular, to our rehabilitated of Argentinian gas in the Chilean market that has been supply on a stable manner until the end of the year. The chart in the graphic, the centre. The green areas illustrate the usage of natural gas coming from Argentina versus the usage of LNG, blue areas.

As a result, the price recovery within the fourth quarter, even if the good performance has been affected by contemporary technical outages of several internal plans in the system. Also important to notice that the 2021 elected demand has raised at 5% over 2020. We expect that this growth will continue to 2022.

Let's now review on the revolver frame of the energy sector. Let's go to Slide five. On transmission business, the expert pilot published the discrepancy reports regarding the regulatory period of 2020, 2022. Now, the process is almost at the end, already paying in the publication of the decree by deploying these.

Considering the available information, we do not expect negative effects on estimated tariffs level already predicted. The process of distribution tariffs review is still in progress. No material advances have made during the last month. And the final distribution tariff decrease is expected to be released by the end of 2022 or early 2023.

The significant review of the basic service law has been approved by the Congress and recently and republished, addressing the treatment of the debts incurred by residential client, and companies between March 2020, December 2021.

The electricity consumption 250 kilometre -- kilowatt hour per month has been established to define the customers that will be subject to the effect ordeal. Customers with consumption up to 250 kilowatt hour per month, we've scheduled the payments of their debts in 48 instalments, within the hint of 50% -- 15% of the average bill in 2021.

The government will subsidize such quarters. If an outstanding balance will be in place at the end of all the 48 instalments, this will be addressed in agreement between distribution companies and government.

On the other hand, customers with over 250 kilowatt hour monthly consumption are subjects to the standard rules already in place before the with a possibility of being cut off from the service in case of not repayment of either the existing debt or the current bill.

On December 31st, 2021, our total outstanding debt reached $210 million of which $140 million can refer to residential being $32 million below the thresholds of 250. Concerning the energy stabilization mechanism, according to the CME estimates, the fund will reach its legal top of $1,350 million U.S. by June 2022.

As of December '21, Enel Chile net accounts reached $283 million. Now, let's make a review on our discoverization process on Page Number 6. In 2021, we successfully connected 900 megawatts or renewable projects of which more than 90% are solar.

With this milestone, we have achieved a total amount of 8 gigawatts of stored capacity of which 70% is renewable. Such capacity already connected to the network, will reach the fall production within the next month, whilst all the tests are concluded. Let's go on Slide 7.

In additional to the recently connected projects mentioned before, we are advancing more than 1.4 gigawatts of additional projects. Those megawatts include projects under construction since the last year, and the new ones already announced, like the wind facility, whose construction will start in the following months.

And Campos del Sol II, and , solar plants are already under construction. Regarding our GD on green hydrogen, with the army and other partners, the for ice peaks winds recently arrived from Chile to Shanghai. We expect to start operation during this year and will be an important milestone in developmental of the green hydrogen in Chile.

Now, let's review our next on Slide number eight. We continue to deploy the digitalization of our commercial channels. In 2021 90% over our client’s interactions were executed through digital channels.

Nonetheless, the complexity introduced by the pandemic situation, we have been able to announce the quality of customer care also by, thanks to the introduction of our AGB interface. On the network side, our quality indicators continue to improve, supported by the increase of automation at any level of.

Low Voltage networks, where there's more -- the smart meters, will have an important role, we're trying it to lower figures and continue improving our overall point of service. Losses level are plain stable, and we might see some reductions in 2022.

To conclude, energy distribution improvement in 2021, reflects the easing of the sanitary restriction and the overall economic recovery, showing a 5% increase compared to 2020 and reaching pre -pandemic levels. Now, let's move to decarbonisation. Focus on the financial clients. Let's go into page Number 9.

Enel X Chile is pushing on amplification on the values of the energy, promoting the integration and development on new sustainable technologies. In January, we launched the first electro station service in Latin America, as a milestone for the growth and expansion of electro mobility in Chile.

Dealers charging station located in a strategic investor sector of Santiago, has a total of 23 Charging Points to use through the JuicePass App. This initiative will support that the reduction of 240 tons or CO2 per year.

In cooperation with authorities, last December, Enel X presented the first at square in Chile, on services related with necessities. The security thought them, and they remained charging points.

Thanks to these collaborative project with a subsidiary of telecommunication, one, and the municipality of La Florida, inclusive technology is closer to everyone. Thank you. And now, I will end over to Giuseppe..

Thank you, Paolo. Let me start with a quick summary of our financial highlights on slides next. Full-year 2021 adjusted EBITDA reached $0.8 billion. That's percent lower than last year. And the Q4 adjusted EBITDA reached $258 million. The in line with our 2021 guidelines annually reporting..

speaker, we cannot hear you, please check your. Excuse me, this is the Operator. I apologize that there will be a slight delay in today's conference. Please hold and the conference will resume momentarily. Thank you for your patience. Please, remain on the line, your conference will resume shortly.

Please remain on the line, your conference will resume shortly. Finally, Isabela has re-joined us. You may resume with your conference..

Hello..

Yes. We can hear you, Isabela, you may continue with your conference..

Okay. Thank you very much. Sorry for it, we have a problem of connection ..

summary of our main financial highlights on Slide 11. Full year 2021 adjusted EBITDA reached $0.8 billion. A 3 % lower than last year and the Q4 adjusted EBITDA reached $453 million. The schedule is aligned with our 2021 guidance. In terms adjusted net income, our $0.2 billion full-year results are in line with our guidance for the year.

In the last quarter, payments reached $96 million. Capex $231.1 billion, 1 % higher than 2020, mostly in line with our guidance. FSL achieved $441 million, presenting a 4 % reduction year-over-year. In the following slide, we will deep dive into the main financial achievements. Now let's begin with the capex on Slide 12.

2021, capex reached $1.1 billion out of which 3 % allocated to achieve their SDG goals, particularly devoted to the construction of our new renewable. Customer capex totalled $80 million, mainly allocated to be new connection to implement our new distribution commercial systems. capex reached $141 million, 1 % higher net up 2020.

Mainly due to expansion of the new high voltage project awarded in 2021, activities to improve the quality of our work services and other digitalization projects.

The relevant capex reached net $116 million dollar, mostly driven by our renewable expansion program and development of our distribution business to contain the digitalization of our network. The development of the renewable capex was concentrated in the following expansion.

Considering the several projects under construction and relatively connected to the mid. In regarding the net worth business, 2021 capex reached $200 million, mainly for the new customer connection and improvement of deployed of degree, both in our distribution of interest mission business.

In the formulas lined up, I will show you more detail about the means, generation In Slide 13. Generation of the fourth for third was affected by full hydrology in the accounts, which reduced our average generation by $1 per hour, and increased our thermal use parts by $0.9 per hour, mainly through our CCGT facility.

Therefore, our Q4 2021 production reached 5.2 per hour, decreasing % by Q4, 2020. For the year 2021, our production reached $19 per hour slightly lower than 2020, ending with $2 per hour lower either production because of poor hydrology in the year.

Our energy sales increased 2 % as of December 2021, primarily explained by new contract with estimate including and BHP and retail clients transferred from energy same figure as part of them bundling regulation requirements. But what concern were two things, on top of the already mentioned production balances.

During 2021, we have accounted a thought an increase of of purchases, which include on the spot market and +2.3 terawatt hour from other unregulated customer’s portfolio of contract coming from the distribution business. Let's now start with the Q4 adjusted EBITDA breakdown on Slide 14, that's accounting $253 million lower versus 2020 figures.

Let me describe the main variances.

Our gains on portfolio mix resulted in a positive variation of $83million mainly related to higher PPA sales in Q4, 2021, primarily explained by the new agreement pact within 2021, with the mining company as Anglo-American and BHP, the adjustment due to indexation in the new contract coming from portfolio at the beginning of the year.

Partially offset by $56 million relating to higher thermal generation cost and. This of our portfolio by worse hydrology condition impacting in $88 million, and $99 dollar related to higher commodity prices that impacted both the stock prices and our united generation costs.

Net worth remuneration demand accounting for the positive impact of $7 million, relating to the recovery of the Q4 2021 demand in the distribution business mainly associated to the release of the lock downs measures and COVID indexation in time.

Other effect accounted for $27 million mainly related to negatively impact associated to the financial margin, energy stabilization mechanism impact on EBITDA, lower accepted inflation of difference, to the end of cost reduction of several projects.

Let's move to Slide 15, where find the summary of full-year adjusted EBITDA breakdown, accounting for $774 million, 3 % lower versus 2020. we did in Q4.

Our generation of commodities, resulted in positive variation of $35 million, mainly related to $171 million highest PPA Sales primarily explained by the new agreement started in 2021 adjustment due to indexation of the new contract coming from estimate portfolio at the beginning of the year.

Passing the sector by $136 million , highest variation costs, and highest purchases. We posted the results of our portfolio through our offset buys. While hydro condition of around two per hour impacting a total of $199 million, and $255 million really is higher commodity price that impacts both the full-prices in our unitary generation cost.

Network remuneration, and the amount accounting for a negative of $90 million related to lower network remuneration, related to the lower distribution and transmission actually affects by higher volume.

Other aspects accounted for $90 million mainly related to lower capitalization and generation business due to the end of construction of several projects, insurance reimbursement booked in 2020, and new contract agreement booked in 2021 with distribution unions. Now, on Slide 16, let's go through the main driver of our.

Many impairments, and the debt reached $388 million, $15 million lower than last year, mainly related to lower D&A in Enel and beyond due to the Bocamina 2 made in 2020, and lower D&A in energy and power assets, due to an appreciation of the 11 basis in the bill.

Next financial charges of our managed strength of $189 million, an increase $58 million mainly due to higher costs. As a result of the factoring executed in generation business on accounting receivable that's derived from the site study additional low, partially offset by higher financial expense capitalized during 2021.

Income taxes variances reflect the impact related to lower results in this year, partially offset by positive effect in 2020 because of generation business, and monitoring tax adjusted in 2021 due to And the results of the adjusted full-year 2021 Moving now to cash flow on Slide 17.

2021 FSL, reached $441 million, 4 % lower than previous year, mainly resulting too. Lower EBITDA is already explained, higher income tax during 2021 mainly related to COVID-19 measures during 2020, that postponed part of the corporate that came in 2021, in addition to lower tax reimbursements in future that was 2020.

In earlier financial expenses, mainly explained by the cost of the factoring of accounts receivables that arise from the size in relational in the cost of factoring in distribution business. These effects were partially offset by a positive impact related to the networking capital versus stream to.

, mainly explained by factoring in both generations in the solution business accounted for almost $228 million. Transmission line phase in 2020 and 2021, corresponding to with transmission lines in the phase of. This actively with a for cash in of $40 million in 2021, partially offset by lower in this phase of in 2020.

Let me now go through our on Slide 18. Our gross debt increased by $1 million amounting to $5 billion as of December 2021, due to the in-depth company loan provided by Enel Finance International to an industry that brought it down to $40 million. The bank loan for around $100 million mainly to handle Capex needs.

And also $114 million increase in leasing agreement in EGP due to the annual development. These transactions were partially offset by. Therefore, currently 2 % of our total prospects. Our plan is to continue to improve the is kind of debt in line with our sustainable business structure.

In terms of debt amortization, our schedule remains sustainable with an average of year, with the cost of such substantially aligned with the last year figures. In terms of liquidity, we continue to add a comfortable position.

We are repairing some available committed line considering the possible headwinds index to market turning from the international and in Eastern Europe. For this year we have around $100 million of our debt with AAC. It matures in December. We have already started and evaluate several opportunities in the local international market.

And now I will leave the floor to Paolo for the closing remarks..

Thank you, Giuseppe. The construction of our renewable project is advancing, improving the competitiveness and resilience of our generation portfolio, and supporting our long term ambition regarding decarbonisation. We continue to support the electrification of the energy use of our client, to accelerate the reach of our net settle ambition.

The implementation of our strategy continues to reflect the highest yield standards. For example, we have been scored by the climate changing that confirms that we are taking actions on climate change. For another year, we were included in the standards that move global yearbook 2022 as a senior class company.

This reflects our solid performance regarding the sustainability of our operations. We are advancing in the development and deployment of over asset to support the implementation of our commercial strategy, strengthening sound leveraged structure.

As you may be aware today, we announced my departure from Enel Chile to assume another position within an Enel Group.

I would like to take this opportunity to thank all the colleagues in Enel Chile, the Management Team, that worked together with me for all the support during these intense years, where all of us are being called for a very strong effort to manage the business in a turbulent environment.

Also, I would like to thank you for all the interesting interaction during our calls and our meetings. I hope things can come soon to normalcy, in order to be with regular businesses. And not we ended demand in the situation that we are hearing is going on in Ukraine. By tomorrow, Fabrizio Barderi is going to step in as the new CEO of Enel Chile.

I wish to Fabrizio all the success for the years to come. Now, let's open the Q&A section..

Many thanks Paolo for your words. Thank you for all your. As anticipated, we will receive questions via phone and check in the webcast. The Operator, please you may start..

. Our first question comes from the line of Enrico Bartoli from Stifle. Your line is now open..

All right. Good evening, and thanks for taking my questions. I have three actually, the first one is regarding Slides 23 of the presentation, where you write the evolution of EBITDA in the macro business from distribution and transmission.

So if you can guide us a bit in the relative movements of the two-components transmission and distribution, with distribution going down '21 and about recovery in Q4. And the transmission contribution is that going down in the full quarter? And if you can guide us on how we expect these two companies to move along to 2022.

Second question is related to the -- an update on the outlook, what you spent in terms of hydrology, considering the first two months of the year for 2022, and if you can update us on the guidance for EBITDA for the whole year.

And the third one is regarding your dimensional on asset to patient in Slide 19, if you can give some flavour on what kind of assets you will be considering to be transferred in asset rotation transactions. Thank you very much..

Thank you Eric for your questions. Let me take the last two questions and then I'll leave the first one to Joseph (ph). Regarding technology, I would like to share the larger view on this. Just to consider, which is the evolution of the sector in terms or resources.

Because if we look at just the contribution of water resources, cleaning is not increasing so much. The effect over demands in the season was low, because of the low level was more accumulated during winter time and the positive effect on this is that during the last quarter of 2021, we defect on, also we benefit from gas coming from Argentina.

And so these are allowed to have, let’s say a management of their resources that allow to let say limit the use of water resources into the basic. If we look at how we close the years and how we are opening in terms of availability of resources in , we are in line with the expectation.

And just to consider these is totally different from what happened end of 2020, beginning of 2021, when left off our lack of Argentinian gas required to coordinate of the breed of the networks to call for additional use of water. And so we reached the end of 2021. Early 2021 with a low level of but also without gas because of electro Argentinian gas.

So these -- from this point of view, the situation is, let's say, in only more clinical sort of data even if we focus on hydrology, nothing has changed really. The other important point is that in the first four months of 2022, there continued to be availability of Argentinian gas.

And so this allow first to let's say, to manage proper EBITDA sources and secular to optimize also the user of LNG that has been planned since the end of last year to deliver within 2022. So just to make the long story short, water availability is still to be very low.

Additionally, our resources are improving within our situation even if we look adjusted the price market, the level is still under pressure, continue to be a little bit high because of some outages that we research in the sector between the end of 2021 and this early stage in 2022.

Regarding rotation, let me make a general statement here, sell some non-core assets. And we are working also to address a larger part of the debt. At this stage is due to be , I like to describe the content or the action that we are improving the way we are performing, but let me say that we are advancing to our targets. And to set for the first.

EBITDA, let's move on to slide 16, just for a checkout. In terms of as we've said, we are an important impact as far as concerns the sales of EBITDA. As I said before we have a new agreement in placing 2021, that accounts for around $110 million.

The remaining part to $151 million are placed to the readjustments due to the indexation, so this is the breakdown of $451 million. And for what concern that $451 million that we see there in terms of variable costs., I'm it's almost 50/50.

We have around $70 million that is coming from the higher thermal costs in the remaining part because of high export. If for what concern,. That hydrology, as I said, have an impact that is around $200 million, in this case these impact -- you can see part one is the other one is the impact of lower hydrology on the off-price.

So let me say, that this $200 million include for loss. And for what concern the $255 million, also in this case, we are that -- it states that you can $100 million on the stock side and -- the remaining part for the development costs. Network. Network As I said, we have $19 million lower than last year.

Basically, before was all remuneration that changed at the end of 2020, as you remember, the news type of at least that provision was being retarded. We've started in November 2020, so we have around $90 million earning from the solution and less than $10 million from the side that has been offset by the higher volume.

Because last year -- because of the start of COVID the whole world's price is lower than 2021. So these are the main effector for what we monitor in the business.

And now that the other effect already discussed on timing from low-rate of the revision of insurance reimbursement that has been booked in 2020 and new contract agreement in distribution in 2021..

Thank you very much. Very, very clear. Just a follow-up on -- regarding the hydrology.

That means that since the volumes are in line respectively with your forecast, also the guidance that you provided for the full-year in terms of BDA is confirmed is in line with how things are going on?.

Regarding the volumes that are within our forecast, let me say to just to have a look at January, that the -- means of the level of measurement of capability of production, our plan is, let's say very high. So there is not going to. But let me say that there is quite usual that phasing that can support our solutions.

So I cannot say that if the first month can be line with our expectation, if we look at just one month for , there's a difference of approximate 100. The part of this discrepancy is arrived by the user -- the way in which the plant has been dispatched by the.

And so there is this gap that is very limited, and is based on , on the way in which the plant has to dispatched..

Thank you very much. Very helpful..

Thank you. As a reminder, to ask a question,. Our next question comes from the line of Sara Piccinini from Mediobanca. Your line is now open..

Hi, and thanks for taking my questions and congratulations for your opportunity. However, I have a first question on renewable, if you can just clarify how much the level of capacity that you have secured for the coming year, and how much is the level of Capex invest you have contracted.

So if you see an increasing on this Capex that are related to higher commodity prices or inflation, or you'll feel comfortable with that? The second question is on the level of working capital. If you can please explain again the level of factoring that includes an eases working capital, and how the stabilization mechanism work.

So, how much is the level of working capital that we can expect for 2022? And also if you see an improvement in collection activities? Then just two clarifications, in regarding the PPA, it seems that the highest consideration from the PPA is in this fourth quarter, correct? How -- why they increasing the PPA maybe because the indexation has been particularly favourable in the fourth quarter? And finally regarding the tariffs for the distribution and transmission business.

So can we say that the regulatory review for the transmission business expects -- we expect that the outcome is likely to be confirmed while in the distribution business, the discussion is still ongoing and when we will have on the process to be or not complete area? Thank you very much..

Thank you Sara. There are a lot of question now that I didn't catch all of them, maybe that you can, let’s say, something. Let's start from. So let me give you a highlight on the growth-oriented framework. And then, I'll leave to separate to let's say, to go through the numbers. There are -- plus and minus, recent developments.

Plus, in terms of tightness in tagging at least is that for new transmission tariff schema, let's say should be at a very final stage. The panel of experts, already defined the position nor the discrepancy that submitted to them. Now, we are waiting for the shrink of the tariff decrease -- increase.

So we should let -- even if we ask you all to consider that we are in a situation considering that by the 11th of March, the new government will enter, which take place, so maybe that with this discontinuity may add some delay in important decision in whichever sector including energy. So the process is ongoing.

There is no big debate -- showing transmission, let's say I would not see major problem. Regarding distribution is a different story because we are in the third or the fourth issuing of technical report by the consultant over the regulator and deploying here.

The points you are sending with amid our record comments and reports, but certain we have not advanced. So maybe this is another item that is a real item that can go under , the scrutiny on the new government. Let's say that -- let me call it positive, advanced, is only a basic service loan.

Because after many months of cash a law been approved by the Congress and signed and , that is trying to fix certain elements and also to allow the company to come back to the normal. In the sense that for one side it would appear a simple definition of all clients that needs the support. And support in this case is coming from the state.

So clients with the consumption below $250 hour per month and has a debt created during the convenient period, can pay their debt in 48 instalments, with the capital. Hence such instalments are going to be paid by the state. The important point here is that the clients are in-charge to pay their current bill.

If they stop paying also the current bills, they will go under the cut-off scheme. They are the ones that we're going to apply directly to the clients and the consumption above 250. Then can be cut off if they do not repay the existing debt arising into the year period, or they're not paying their current bills.

So it is a step ahead in trying to reach the regularities even if clearly 2022 year we consider a year of recalling.

So, we're going to recall our, first of all, for the payment of substance coming from the state, but also we are starting during this weeks, through these days, to put in place a cut-off scheme for the better years that are not aligned and are not going to putting on the non-mesh situation their position. So this is, let's say, move step ahead.

Regarding the other pending elements, I will mention also something that you just mentioned. So there's no real or formal action going regarding the stabilization tax mechanism, because all the players in the sector are expecting that the farms will be covered by June, next June. And so everybody is, let's say, thinking, talking about what next.

I think that this is something that needs to be addressed by the new growth or the new ministry going when will be in place. Because clearly it's something that has impact on the generation sector, and at the same time also, on the tariff to the clients. And separately for the exponential number. I don't know if you catch all the questions..

Yeah, at least some. So for networking capital, let me say that for 2021 was an important year in terms of factoring for both generation and distribution. If you can infer for what concerned receivables coming from the addition price mechanism where we made more than $200 million in terms of factoring, in terms of.

All-in-all, factoring building generation and distribution we reach around $300 million in 2021. So something like $230 million higher than last year. Of course, how much the receivable coming from this loss is going to be during 2022 is dependent of the exchange rate.

So we don't know right now, I mean, , but as of today there's law where once the receivable reached the top, you should be an adjustment in debt with the ties in order to recover the additional with ..

What's concerned the level of collection? Yes, we wish to improve a little bit in comparison to 2020. Of course, 2020 was a first year of the so-called layoffs at B-cells, Mexico.

So clearly we had an impact now in 2021, through normal we've reached to improve the person in terms of relation, but of course the impact in demonstrating capital was significantly more than $100 million. I believe the last question was about level of capacity. I didn't get -- very well this question -- this..

Yeah, I can repeat if you want..

Yeah. Thank you..

Thank you. It's about the capacity additions to that you ever for renewables in the coming years. And if you have already contracted the Capex, for these new capacity or you expect some higher Capex due to their commodity price? Thank you..

Yes. In general, some projects are more than other, depending on the complexity. Let me say this, I would say more than 5 %. I can find out or maybe in a one-by-one. income in some detail in terms of contract deal. But in general, yes. We are putting a plan in the conceptualization of the truckers..

Many thanks..

Thank you. Our next question comes from the line of Andrew McCarthy from Credicorp Capital. Your line is now open..

Good afternoon. Many thanks, Paolo, Giuseppe, Isabela for the presentation. My first question is a follow-up on the Peck stabilization -- tariff stabilization mechanism. Apologies if you may have already answered that.

The line is not the best today, but just trying to understand what the alternatives are for going past June when we reached the limit of the $1.35 billion, what your conversations are being so far with authorities, and what you're seeing is the likely outcome there.

That's the first question, then the second question, it's just a question on the retirement of Bocamina 2. There's been some press reports about that maybe being delayed. Just wanted to understand your take on that -- your thoughts on that.

Whether that is now likely and if so until when and what your contingency plans are for making coal purchases with it.

That was second question, and then the third question is, and again apologies if you may have already answered it, but just trying to understand how you're -- ever today, three months off of the strategic plan presentation, how you're feeling about the 2022 EBITDA target that you published at the very end of November and start of December.

Just trying to get a handle on whether that now you failed or should maybe be adjusted already? Those are my three questions. Paolo, thanks..

Okay. Thank you, Andrew. Let me take the first two and leave the third to Giuseppe. Okay. Regarding the price stabilization mechanisms, honestly, which -- what are the alternatives? It's we can be creative here, or at least there are some solution that can be implemented. Honestly, I cannot be in the shoes of who will take this decision.

What I can say is that according to the evolution of the , it means the laser reference price of the energy. What we've seen the end of 2022 is like the effect of increase number established by the authority. The very more increase in terms of, in terms of price energy.

But what are the expectation for is that debt increase if reflected to the final tariff for declines should be very huge. So the fund the , and then , any gap should be managed in a different way. And I think that the schemes there -- I don't know if there is the possibility to implement additional very different solution.

I think that we have to work. We have to leave it to improve a little bit because of we -- let's say at a lot of efforts to manage in this situation from the generation point of view. So I can anticipate, I don't have let's say, an answer for this question.

I think that is something that should be managed starting from next month in order to reach lending point before the June, when the and the closer it could be, something that can kind be affordable in the sense that the increase or the cost of the energy to the.

I'm sorry I did not show comprehensive in the answer, but I don't have a precise question please. Regarding our core brands, Bocamina 2, it wasn't expressed since a few weeks. We always express our position. We announced the required the closing of the plant by May 2020, had been approved.

And we have planned -- we are implementing a plan to close the facility. Means to managed properly the call, the commodity, to manage properly also with big attention and our people, the contracting company that are working -- the contracting companies that are working there and also rushing with the communities.

Any decision that may be taken by should be done in a very sure way. This is what we have all said because everything has an effect on the way in which we are managing this process and if the decision of postponing the closing of the plant will be taken, we have to sit down and to define well the condition for this -- to postpone.

But for the time being, our story to take it in charge to take this decision has not yet taken a position. So this is the important form. Time is running and we cannot react properly at the very last moment.

Giuseppe?.

Yes. What concerns 2020. We confirmed the guidance that we presented in the last EBITDA between $1 million and $1.1 million. Of course, today that the projection that we see it expected EBITDA. Clearly, any had me thinking it looks today, we would begin to keep the guidance. We don't see any issue..

Great. Thank you very much for all the additional colour..

Thank you. At this time. I'm showing no further questions over the phone line. I would like to turn the call back over to Isabela Klemes..

Hi. Thank you, G.D. Actually, we have two questions from the shag, so the first one is, Rosales from BTG. And the question is, if hydrology again full this year, full when it's plus price remain high for the second half, a new as acute, your coverage slammed fully. Where do you see the leverage by then just three years? Thank you for your questions..

Let’s start with segment..

Segment..

Segment. Okay. These we are defining another. Let's say We said that there is a possibility that is poor. Again, yes there is. There is no, let’s say possibility to predict precisely what can happen. Previously the 2021 was exceptional compared to all the previous years, but we have to cope with the situation.

The difference for this year for 2022, is that there is larger availability of Argentinian gas. That is supporting a position we're LNG gas has been readily. There is most flexibility of taxation from the gas point-of-view.

There is also the extension of the all the that should fix certain routes, managing properly the infrastructure, and the use of water. So, the current view cannot be so optimistic. We see that there will be more rain. Clearly, we are also in the summertime here. It's difficult to see the effect of the hydrology , that is starting in April.

So the situation may evolve starting from April and see if there'll be rain or not. In this framework clearly, we see that the situation can more under control.

already add to the system 900 megawatts of renewable capacity, from the effect of lake water and effect of commodity Megawatt have to come are developing the projects to store may changes from the perfect storm that we. And then for our deleverage. We are also working to let's say, to strengthen our financial position with.

So we think that , the situation is not so easy. We must put in place action plan that allow us to give more leverages to manage the distributors..

Okay. Thank you, Paolo.

And then we have a second question from Romania Carlos and he's asked please provide explanation on how this ration growth share would in fact affect an achieved call?.

My first reaction here is to start monitoring what we are doing, the evolution, of the commodities and how this resolution can affect our current position.

The first review, gives us -- it's already proceeding, because you know that the situation is ongoing and especially with Russia, the first element that can affect the commodities, particularly gas and core. From the perspective of our contracts, we have not any direct or indirect link with European gas.

So the source is more on Atlantic and the other base. And so we don't see a direct impact in terms of volumes, we're very early stage of the situation.

But the -- in terms of effects, in terms of price, the contracts -- the indexes in our contract is limited enough in terms of even if you mean considering this week, largest wing of the brands for instance. So for the time being, we see very limited impact on gas and our gas situation.

In terms of coal, really, we're going to shut down on our coal facility by May. If something may change, may be that we have to face additional material, forced to find coal, the spot market in a quite complex situation. This is something that should be addressed very soon just properly within the framework of the extension mechanism for the plant..

Okay. Thank you, Paolo. And as there is on more questions, I now conclude our results conference call. Let me remind you that Investor Relations team is available for any doubt you may have. Many thanks for your patience..

Thank you. Bye-bye..

Bye-bye..

Bye..

This concludes today's conference call. Thank you for participating, you may now disconnect..