Letter from the Chairwoman of the Board of Directors and the CEO of Promigas.
We are pleased to present the 2021 Integrated Management Report of Promigas, in which we share the achievements and goals of our management, the positive results that were accompanied by challenges that prompted us to find new and better paths to adapt to the realities and demands of the energy sector we belong to.
2021 was a complex year during which the health emergency caused by the COVID-19 pandemic continued, and adverse climate and public order situations took place. Despite this, we managed to maintain the safe and reliable operation of the gas transportation and distribution services in Colombia and Peru, and of distribution of electric power in the department of Cauca in Colombia, performing our activities with a high level of commitment from our human talent. We have over 5.4 million users, including 3,684 new beneficiaries of household gas service through the early start-up of operations in 2021 of the new concession in the region of Piura, in northern Peru.
People are the main focus of our actions. At the employee level, we reduced accident rates by 18 % and improved work environment indicators by 8%. We will continue to work on diversity and inclusion and investing in our human talent to strengthen creativity and competencies, in order to be better prepared in upcoming years to face the challenges of the energy transition.
In 2021, we achieved satisfactory results thanks to the resilience, innovation and operating capacity of our human talent and the implementation of activities and initiatives, reporting net profits of COP 1.15 trillion, equivalent to 109% of the budgeted amount.
We began the year with the deployment and implementation of the new 2030 Corporate Strategy defined by our Board of Directors. Some early results are reflected in some of the Company’s activities. In the case of the non-bank financing business model of Brilla, the digital strategy was structured, credit risk capabilities were strengthened and a franchise relations model was implemented, initially at related companies, which enables more expedite response and a better service experience for our customers. This business closed the year with accounts receivable of COP 1.36 trillion, a 35% increase. Regarding sustainable energy, we successfully concluded solar energy projects, ending the year with 17.5 MWp, of which 11.4 MWp are in operation and 6.1 MWp are under construction. In terms of sustainable gases, we began our first hydrogen pilot.
We moved forward in our corporate governance model with the implementation of a bi-annual management cycle that will enable us to continue consolidating the strategic challenges set by the Company, as well as the commitment of incorporating good governance measures and best practices. We highlight the implementation of the Gender Policy at the boards of directors of our affiliates. 60% of the Board members of Promigas and 34% of affiliate Board members are female.
We will continue to diversify our business through plans and projects aimed at reducing our carbon footprint, including planned investments for approximately COP 100 billion in cleaner and more efficient energy, in order to move forward on the path towards the decarbonization of our businesses.
In 2021, we were once again included in the S&P Global Sustainability Yearbook, a publication that grants recognition to the top 15% of companies with best performance in social, environmental and corporate governance policies. Based on an assessment of nearly 7,500 organizations in 61 industries, S&P included Promigas among the 700 members, which include another six companies from the gas industry worldwide. Promigas received an outstanding environmental score of 83 points, compared to the overall average of 40, and its overall score was 73, a 10-point increase since it was first included in the Yearbook.
We also once again received recognition for Good Sustainable Development Practices, granted by the Chamber of Commerce of Bogotá and the Global Compact Network for the Program ‘+ Calidad de Vida, + Seguridad’, in the operating processes.
With the aim of promoting socioeconomic progress in the regions where we provide our services, we invested close to COP 35,600 million in social management. Also, in view of the direct and indirect impact of the global health situation on the operations and its economic impact on the communities, we consolidated and transformed Fundación Promigas, which now has a corporate-wide scope, with presence in 12 departments of Colombia and 13 districts in Peru. The new focus of Fundación Promigas is aligned with the corporate sustainability strategy, based on the pillar of education for work, productivity and employability and sustainable projects, mainly for the communities in our area of influence.
In regulatory matters, we highlight the issuance of the natural gas transportation tariff methodology for the next five years, through which the variables that define the tariffs will be updated. The tariff request will be presented to the CREG (in its Spanish acronym), awaiting a prompt definition by the Commission.
In the gas distribution business in Colombia, we replied in a timely manner to requests for information from CREG for the approval of final distribution rates, and it is estimated that the rates will be published in the first half of this year. We continue await the Commission’s approval of the commercialization methodology, in order to request updating of rates in 2022. Regarding Electric Power Distribution, in April we began to implement the updated investment plan approved by CREG. In Peru, while the final regulations are still pending, we made progress on regulations to accelerate the massive use of natural gas, which will enable more users to benefit from this service. Additionally, the rate-setting process began at Cálidda, which will enable updating rates in the first semester.
Dedicated and thorough planning and monitoring of the variables identified as critical for facing the challenges of the pandemic, and the continuous simulation of potential scenarios, continue to be tools to achieve the planned objectives for the new year.
In 2022, with an investment plan approved by our Board of Directors for over COP 930 billion, we will continue to strengthen our current businesses with projects that will allow us to grow and consolidate, while at the same time venturing into new initiatives that will help diversify our portfolio.
We will continue to diversify our business through plans and projects aimed at reducing our carbon footprint, including planned investments for approximately COP 100 billion in cleaner and more efficient energy, in order to move forward on the path towards the decarbonization of our businesses. Self- and co-generation systems, solar farms, hydrogen pilots and the promotion of cargo transportation using dedicated natural gas vehicles are some of the proposed strategies to continue growing through innovation, technology and the digital transformation in our road map to the energy transition.
We will also allocate jointly with our companies COP 30 billion to strategic social investment, with a focus on education for employability, productivity, entrepreneurship and sustainable production projects, in order to continue contributing to the economic reactivation of the regions and the sustainable development of the communities where we carry out our activities in Colombia and Peru.
We will also continue to work on the training, competencies and progress of our human talent. As a company, we have always been present for all our employees and stakeholders, and we are aware of our great responsibility and the impact we have on society. Consequently, we ratify through our actions our commitment to the United Nations Global Compact and its principles, and with the Sustainable Development Goals.
We thank our shareholders and investors for their trust and permanent support, our Board of Directors for its strategic vision and valuable contribution in business management, Promigas human talent and the leaders of our subsidiaries, for their commitment and professionalism to achieve the challenges outlined, to our clients for motivating us to be better every day, to our suppliers for complementing the efforts carried out in our activities, to the national and local authorities, and unions for always promoting spaces for dialogue and understanding.
Today we present our 2021 Integrated Management Report, which shows the good results achieved by Promigas and its affiliates.
