COLOMBIA - Energy & Mining
Having studied civil engineering at the Universidad de los Andes, Luis Fernando Alarcón Mantilla attended graduate school in Economics at the same university and has a Master’s of Science in Civil Engineering-Hydraulic Resources Systems from MIT. In 1995 he took part in the Advanced Management Program at Oxford University. Before being appointed as General Manager of ISA in 2007, he presided over the Asociación de Administradoras de Fondos de Pensiones y Cesantias, and during the Presidency of Virgilio Barco served as Minister of Finance. During his professional career he has additionally occupied the following positions: Colombian Representative as Executive Director of the Inter-American Development Bank, and President of Flota Mercante Grancolombiana, as well as being member of the Board of Directors of Banco de Bogotá, Colombian Securities Exchange, Petrocolombia S.A., ISA, CTEEP, and INTERNEXA.
ISA is the main transmission company in Colombia. We are the owners and operators of something like 75% of all the transmission capacity of Colombia. For 30 years, we have been in the process of locating investment opportunities outside Colombia, and the company has been very successful. First, we started our international business in Peru and we have two transmission companies there. We also operate approximately 70% of the Peruvian transmission network. ISA has won most of the bidding processes put in place by the Peruvian agency in charge of grid expansion. So at this moment we are making investments in new transmission lines in Peru that are worth close to $700 million. ISA is developing a vision of becoming the most important transmission company in Latin America. We been able to enter into the Brazilian market, and right now we are the transmission company in the state of Sío Paolo through our subsidiary. ISA is also making huge investments in Chile. We were awarded two projects two years ago and we are now in the process of building those transmission lines. We are investing a little over $1 billion in Chile. We also have investments in transmission lines in Bolivia, and we are in the process of developing the electricity connections between Colombia and Panama. In this way, ISA is connecting the Isthmus of Panama and Central America. So what you find here is a Colombian company that has been able to become the main player in the electricity transmission business in the region.
In 2012, we began a process of reviewing our strategy in finding new ways to generate value for the company. We found out that in the last 20 years that ISA was very successful at entering new markets in the region. During this review of our strategy, we arrived at the conclusion that the main priority was now to capitalize on that experience and to try to make those assets more profitable. We defined several strategic focuses. Firstly, we want to continue growing in a very profitable way. That is a simple statement. We had to become careful in our investments. We prioritized efforts to become more efficient, and in that way made our investments more profitable. ISA today is a world-class company in terms of asset size, and our regional geographical presence. We found that we still could have made some improvements in our operational practice in order to become one of the most efficient companies not only in Latin America—we know that we are the best in the region—but to become one of the best in the international arena.
The important thing is that in Colombia, the expansion of the transmission system is done through a system of public bidding, in which the government offers potential investors the possibility to build these new infrastructure projects. In Colombia, we have three main companies interested in competing for these projects. ISA is one of these, of course, but there is also EEB and EPM. Sometimes we are responsible for building these projects. In other cases, we have EEB or EPM doing this. In 2014, we are going to put into operation the transmission line to connect the new Hidrosogamoso hydroelectric power station in the region of Santander, to connect the hydro-station to the national grid. This is a central station of ISA, but the line to connect the hydropower generation to the national system is our responsibility. And in the near future, the government is opening up for tender several projects estimated at some $1.5 billion in size that are important for the development of the national grid. ISA is participating in all of those tenders, and hopes to win a number of them.
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