Aug 30, 2012

• Resources will enable the company’s Investment Plan for 2012-2014

The BNDES approved R$ 1.135 billion in financing for Companhia de Gás de São Paulo (Comgás). The resources, which represent 56% of the total investments the company will make over the period, will be used to expand the natural gas distribution network between 2012 and 2014.

The project is part of Comgás’ efforts to expand the use of natural gas in its concession area. Since 2006, after reaching a high number of clients in the industrial segment, the company has been focused on the strategic expansion of residential and commercial markets.

These markets have a higher number of customers, but gas consumption volume per customer is lower. On the other hand, they allow the company to obtain higher and more stable margins per client.

Comgás’ strategy is based not only on expanding into municipalities with high consumption potential, but also on its strong performance in the new segment of vertical residential condominiums.

Implementing this strategy translates into investments in building new networks for distribution of piped gas, and other investments in maintenance, relocation, replacement, renewal and the remote sensing for the existing network, in order to ensure the reliability of the distribution system. Furthermore, it requires investment in information technology to provide support for such expansion.

To sustain large investments required for the network expansion, Comgás’ financial strategy is based on long-term fundraising through third parties. In this context, the BNDES will play an important role.

The Bank has been supporting the company's strategy since the first projects to expand the network to industrial customers were designed. This is the sixth operation for financial support that the BNDES has granted Comgás.

The current project will allow the company to continue with the strategy adopted in recent years, aiming to expand its client base and to reduce its oscillating cash flow. The plan also makes it possible to increase the safety in the supply to the Metropolitan Region of São Paulo, by reinforcing the Anel Metropolitano of São Paulo.

The project also includes other investments, such as the modernization of IT systems required to help the expansion of the residential market and the client service bases. Finally, social investments will be made in the community served by the company.