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Mario Ruiz-Tagle, Neoenergia’s CEO, emphasized that, at this difficult times for the country, the economy and the electric sector, the best alternative is keeping investments so that the sector may be ready for the recovery in consumption, after the impacts of Covid-19. “The infrastructure sector, particularly the electric segment, is key for the recovery of the economic activity. We are an essential service and we will overcome this crisis”, he emphasized, during a virtual seminar promoted by XP Investimentos. 

Ruiz-Tagle highlighted that the company has a solid cash position enabling it to weather the current circumstances. However, he reiterated that Neoenergia always foster for the capital discipline and monitors the crisis evolution. According to the CEO, the company enjoys a relatively better position, since the main group’s distributors are located at the Northeast region, which is less affected by the measures of mobility restrictions. Nevertheless, the executive highlighted that the company follows all recommendations of the health authorities and supports the social distancing. 

“We are a part of a strong group, Iberdrola, that have large operations in Europe. We are experiencing the dramatic situation closely, but we must bring energy to the population, to hospitals and other basic services. We take full care of the health and safety of our employees in the field and in local communities. I take this opportunity to thank and highlight the quality and commitment of our technicians and all those in the sector at this time of combating Covid-19," said the CEO. 

The executive also highlighted the need to provide even more support to customers, such as the reinforcement of service on digital channels, and actions such as the 12-fold installment payment of the energy bill through credit card - a Neoenergia’s pioneering measure. “This is a way to avoid default in the future. This is our responsibility, as a strong company in the sector”. Other company’s action, he says, is the support to the supply chain, where many of them are small companies.  ​

A JOINT SOLUTION 

For confronting the crisis, Neoenergia’s CEO advocated a joint solution, involving all chain links (distribution, transmission and trading companies and distributed solar-generated energy operators), Aneel, the Ministry of Mines and Energy and other government entities in order to avoid a crisis and the economic and financial imbalance that may cause disruption to the sector, as occurred in 2010. 

In his words, distributors are the sector’s “cash cow”, but they retain around 20% of the income, transferring the remaining amount to further agents and, mainly, to the federal and state governments, as taxes and sector charges. “A broad agreement is required to address issues such as the deferred payment of taxes, losses generated by the ongoing crisis, the matter of heavy sector subsidies, all of which taking a toll on the account. The distribution network is the system backbone and it needs to be properly valued and remunerated given its key role in the sector”, finished Mario Ruiz-Tagle, Neoenergia’s CEO.

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This initiative is part of theIberdrola group's response to the Coronav​írus​.

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