INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP

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INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
INTEGRAL MANAGEMENT OF BIODIVERSITY
IN ISA ENERGY TRANSMISSION BUSINESS GROUP

Connections with sustainable value

            © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Integral Management of Biodiversity – IMB –
Our Manifesto

• If we recognize that our planet is fragile and needs our
  care, there is a connection

• If we understand that our actions, no matter how small,
  have an impact, there is a connection

• If we realize that in each of us lies the change that we
  want for the world, there is a connection

• Knowing and protecting the diversity of ecosystems
  each country where we are present is a privilege that goes
  hand in hand with the nature of our daily work

                                 © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.   2
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Focus of our Integral Management of
Biodiversity
                                                                                                               Designs that
                                                                                                               minimize the
                                                                                                              impacts on the
                                                                                                             environment and
                                                                                                                biodiversity
ISA and its subsidiaries have a clear and
determined intention towards the conservation
of biodiversity, through legal and voluntary                                          IMB
actions directed to manage the possible impacts                                  Environmental                        Portfolio of
on biodiversity during the entire assets life cycle, as                            Corporate                        compensations
well as to contribute to its conservation.                                           Policy

                                                                                                                “Jaguar
                                                                                                              Connection”
                                                                                                               Program

                                   © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                           3
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
PROCESS OF BIODIVERSITY
                                   MANAGEMENT
                                     As part of the strategies for the management of
                                     biodiversity, we implement responsible actions in favor
                                     of the environment, avoiding the affectation of
                                     sensitive species and ecosystems, mitigating and
                                     compensating the impacts that our activities cause on
                                     ecosystems and biodiversity. Therefore, we combine
                                     efforts and create strategic inter-institutional alliances
                                     with environmental authorities and key actors, allowing
                                     us to explore and motivate synergies aimed at the
                                     conservation and protection of biodiversity in
                                     accordance with national and regional priorities.

© TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                      4
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Biodiversity
Management in
Assets Life Cycle
In ISA and its companies,
biodiversity management is
a material issue and
therefore is an integral
part of environmental
management in the life
cycle of the asset.

                             © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.   5
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Internal Procedures for Biodiversity
Management
                                                                                MANUAL FOR LEGAL ENVIRONMENTAL
SIPOC                                                                           MANAGEMENT IN ASSETS LIFE CYCLE
It is a tool in tabular format to characterize the
process of execution of environmental                                           Its objective is to establish the regulatory
management in the projects, from the                                            requirements and voluntary commitments,
identification of key elements in the domains of                                such as the activities that must be fulfilled to
suppliers - inputs - process - output – customers.                              carry out environmental legal management
                                                                                during the life cycle of the projects, in order
                                                                                to ensure the obtaining of licenses, permits
This tool contains the instructions for the                                     or corresponding environmental
development of the necessary processes in the                                   authorizations.
environmental management of the projects.
These processes include the preparation of a
work plan, the presentation of the Evironmental                                 This manual applies to the activities of
Management Plans (PMA) including control and                                    supply, design, construction, operation and
monitoring, the making of ICAs reports and the                                  maintenance and decommissioning and
elaboration of the social management plan.                                      modification of electrical infrastructure

                                  © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                          6
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Tools for Mitigation Hierarchy

                                                                                                               ARPEX and ARA
In the planning stage of the projects, biodiversity-restricted areas included in                              Restrictions Analysis of the
                                                                                                             Expansion Plan and Analysis
the ARPEX are identified. The ARPEX aims to contribute to the selection and                                  of Environmental Restrictions
prioritization of the offerings of the group business portfolio, through the
analysis of environmental, social and property issues of future projects, using
the technology of GIS, in order to generate mitigation actions; and it is
performed for all projects of the Expansion Plan of the countries where ISA is
                                                                                                                        DAA
present.
                                                                                                              Environmental Diagnosis of
                                                                                                                     Alternatives
During the ARA, a preliminary route of a project is selected for the
preparation of an offer, considering environmental, engineering and property
issues. These processes contribute to the prioritization of those projects that
minimize impacts on biodiversity.                                                                                EIA and PMA
                                                                                                                 Environmental Impact
                                                                                                             Assesment and Environmental
                                                                                                                   Management Plan

                                   © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                             7
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
PROCESS OF BIODIVERSITY MANAGEMENT
Mitigation Hierarchy
                                                                                                               ARPEX and ARA
The purpose of the DAA is to evaluate and compare the different options of the                                Restrictions Analysis of the
devolopment of a project presented by the company.                                                           Expansion Plan and Analysis
                                                                                                             of Environmental Restrictions

These options must take into account the geographical environment, the biotic,
abiotic and socioeconomic characteristics, the comparative analysis of the effects
and risks of the project; as well as the possible solutions and control and mitigation
measures for each of the alternatives.                                                                                  DAA
                                                                                                              Environmental Diagnosis of
                                                                                                                     Alternatives
For the physical-biotic characterization of the area of influence of the project,
databases of threatened species of national and regional order are consulted such as
Red Books of the IUCN and checklist of CITES species
                                                                                                                 EIA and PMA
The above provides the elements required to select the alternative that optimize and                             Environmental Impact
rationalize the use of natural resources and avoid or minimize the risks, effects and                        Assesment and Environmental
negative impacts that may be generated.                                                                            Management Plan

                                   © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                             8
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
PROCESS OF BIODIVERSITY MANAGEMENT
Mitigation Hierarchy
Once the environmental authority selects the best alternative for the project, the EIA
is elaborated. ISA and it companies have manuals, procedures and instruments to                                ARPEX and ARA
manage the impacts identified in the EIA, which is the basic instrument for decision                          Restrictions Analysis of the
making in projects that require an environmental license and is publicly available for                       Expansion Plan and Analysis
                                                                                                             of Environmental Restrictions
anyone. In general, this study includes:
1. Project location, infrastructure and activities.
2. Characterization of abiotic, biotic and socioeconomic media of the ifluence area.
3. Demand of natural resources by the project
                                                                                                                        DAA
4. Environmental impacts and risk analysis.
                                                                                                              Environmental Diagnosis of
5. Economic evaluation of the positive and negative impacts of the project.                                          Alternatives
6. PMA and its implementation costs. The PMA describes the activities aimed at
    preventing, mitigating, correcting and compensating environmental and social
    effects of the project.
7. Monitoring programs for abiotic, biotic and socioeconomic media (ICAs). These                                 EIA and PMA
    monitoring are performed periodically and presented to the environmental                                     Environmental Impact
    authority for its aproval.                                                                               Assesment and Environmental
                                                                                                                   Management Plan
8. Contingency plan for the construction and operation of the project.
9. Biodiversity offset plan with the objective of not having a net loss of biodiversity
                                   © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                             9
INTEGRAL MANAGEMENT OF BIODIVERSITY IN ISA ENERGY TRANSMISSION BUSINESS GROUP
Mitigation of impacts on biodiversity
Forestry Optimization – Business Case
ISA and its companies incorporate the concept of Ecoefficiency and minimization of environmental impacts
and risks, especially on biodiversity. We established indicators to reduce the intervention on the vegetation
cover through the whole lifecycle of the assets. After calculating the baseline and the achievements of the
initiatives we established the target to reduce by 10% the area of plant cover cleared for the construction
of projects.

•   Lower costs in the lifecycle of       •    Manages business risks and                            •    Improves the opportunity at the entrance of
    the asset                                  interest groups                                            the projects
•   Saving time in the process            •    It contributes to social                              •    Improves quality
•   Avoid fines, penalties or                  acceptance by community                               •    Increase the use of assets (Availability, usage
    compensation                                                                                          rate)
•   Applies to financial assistance                                                                  •    Improving the effectiveness of the operation
    from the state grant, bond,                                                                           and maintenance
    incentive for investment                                                                         •    Decreases impact or contamination
•   Decreasing applied tax                                                                           •    Minimizes waste and consumption of resources
•   Early warning of risks                                                                                and energy
•   Reputation                                                                                       •    Friendly products with the environment
                                                                                                     •    Open green market or qualified
                                      © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                                     10
APPLICATION OF THE MITIGATION HIERARCHY
Regulation
We abide by and respect the legislation established in every country in which we operate, as well as all relevant covenants,
agreements and treaties and voluntary commitments acquired by ISA and its companies. These regulations establish the
procedure and mechanisms to obtain No Net Loss or Net Improvement. In addition, we go further with the protection of
biodiversity with our voluntary program “Jaguar Connection”

       COLOMBIA                                PERU                                                CHILE                       BRAZIL
                                                                                         According to Supreme
                                                                                                                             Federal Decree
                                                                                       Decree No. 40 of 2012,
  The Resolution 0256 of                                                                                                4,340/2002 establishes
                                    The General Law of the                           compensation measures can
 2018 approves de update of                                                                                              that for purposes of the
                                     Environment (Law N°                               only be applied when it is
 the Manual of Compensation           28611), in its article 6,                                                       environmental compensation
                                                                                       not possible to mitigate or
   of the Biotic Component,               establishes that                                                               (defined in Law 9,985 /
                                                                                      repair a significant impact.
   which allows us to design       environmental management                                                                2000), environmental
                                                                                       Biodiversity compensation
   measures to manage the          has as priority objectives to                                                       authority will establish the
                                                                                        requires the execution of
     negative impacts of a          prevent, monitor and avoid                                                         degree of impact from the
                                   environmental degradation.                            measurable actions that
      project: preventing                                                                                              EIA made in the process of
                                     When it is not possible to                       offset residual impacts of a
    environmental impacts,                                                                                             environmental licensing. It
                                     eliminate the causes that                       project on biodiversity (after
   minimizing and correcting                                                                                          considers the negative, non-
                                   generate it, the appropriate                      having established mitigation
     those that can not be                                                                                                 mitigable impacts and
                                        mitigation, recovery,                        and repair measures), aimed
    avoided and, ultimately,       restoration or compensation                                                            possible risks that may
                                                                                      at producing an alternative
  carrying out the necessary          measures are adopted.                                                            compromise the quality of
                                                                                         and equivalent positive
   compensation measures.                                                                                                life of a region or cause
                                                                                      effect to obtain no net loss
                                                                                                                      damage to natural resources
                                                                                      or a net gain of biodiversity
                                          © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                              11
Avoid possible impact on
                biodiversity (Articulation
                                                                   Integral Management of
                    engineering and                                Biodiversity, in the framework of
                     environment)
                                                                   high-voltage electric power
                                                                   transmission
   Integral
Management of
 Biodiversity

                   Offset portfolio with
                 integral and long-term                                                              Synergies aimed at the
                          vision                                          Inter-institutional
                                                                          strategic alliances           conservation and
                                                                                                    protection of biodiversity

                          © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                          12
IMB, in the framework of high-voltage
electric power transmission
Important strategic alliances in Colombia

                                                               • Prioritize compensations in National Natural Parks
               National Natural Parks                          • Exchange of information
                                                               • Training

               Regional System of Protected                    • Identification of potential compensation areas
               Areas in the Caribean

               Terrasos - Company dedicated
                                                               • Structuring of the first Tropical Dry Forest Habitat Bank
               to the implementation of
               compensation and
               environmental investment
               strategies
                                © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                 13
Offset Portfolio - Colombian Case
• Strategy aimed at positively impacting and with guarantees of permanence over time, hand in hand
  with communities and regions. These compensations are close to giving the order to start the contract for
  the preparation and structuring of a portfolio that will be part of the basic inputs for the specific plans of each
  project.

                                                                                                                                           Conservation of
    Identification of                                                                                                                      protected areas
         areas

                                                                                                                 Compensation strategies
                               Offset Portfolio                           Protection of biodiversity
                               10.872 ha                                                                                                   Payments for
                                                                                                                                           environmental services
                                                                          Potentialize conservation
                               In compensation for                        / restoration initiatives in
                               the intervention of                                                                                         Habitat banks
                                                                          coordination with
                               1,273 ha of natural                        communities, authorities
   Identification of           coverages                                  and other stakeholders
     efficient and
                                                                                                                                           “PeaceForests”
      sustainable
    compensation
   mechanisms over
          time                                                                                                                             Acquisition of
                                                                                                                                           properties
                                       © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                                                  14
AREA (HA)                ACTION                                                    STATE OF PROGRESS                                                             TIME

                                                                                 INTERCOLOMBIA

                                                                                                                                               Maintenance carried out in 2016 and
  38.6      Plantation                       Finished
                                                                                                                                               2017
            Acquisition of properties of
                                                                                                                                               The properties were given to the
   158      strategic importance for         Finished
                                                                                                                                               Municipality of Yacopí in 2017
            conservation

            Voluntary protection for GHG
  1230                                       Finished. Protection of tropical humid forest with degraded land by mining and livestock          2017
            compensation

            Pending Biodiversity             Next to give order to start the contract by the environmental authority for the preparation
  10872                                                                                                                                        2022
            Compensation                     and structuring of a portfolio
                                                                                         REP
                                             Pending approval by the national authority. In the initial permit, 200 ha of compensation
            Plantation for biodiversity
                                             were envisaged, however the actual impact was 30 ha thanks to the optimization of                 Start planting at the end of 2018 and do
   30       compensation of MAMO
                                             vegetation cutting. Most projects in Peru cross through desert areas where there was no           annual monitoring for 30 years
            project
                                             vegetation damage and compensation activities did not have to be done.
                                                                                        CTEEP
            Plantation for biodiversity
  50.4      compensation of CTEEP and it     Finished. These areas were delivered and closed by the competent environmental agency             2018
            subsidiaries
                                                                                                                                               It will be monitored in accordance with
            Plantation for biodiversity
    2                                        Monitoring stage                                                                                  SMA 32/2014 and it is expected to
            compensation of CTEEP
                                                                                                                                               address all indicators in up to 20 years

                                                                                    INTERCHILE

                                             This compensation is due to forest intervention of the Polpaico project. The Encuentro-
                                                                                                                                               2020 to complete the implementation
   150      Reforestation                    Lagunas project has EIA but because it is located in the desert it has no impacts on the flora,
                                                                                                                                               and 10 years of monitoring
                                             fauna management is done, especially birds, using flight deviators
                                                                                                                                               The establishment is during the
            Voluntary planting of arboreal
   290                                       Approximately 80% progress has been made in the rescue of succulents and shrub species            construction phase of the project and
            and shrub species.                          © TODOS LOS DERECHOS RESERVADOS POR INTERCONEXIÓN ELÉCTRICA S.A. E.S.P.                                                  15
                                                                                                                                               the monitoring is for 10 years
Jaguar Connection is our voluntary
sustainability program, a corporate
initiative aimed at contributing to
biodiversity conservation and climate
change mitigation, by implementing
forestry projects for reducing greenhouse
gas emissions, in priority areas for the
protection, recovery, connection of natural
habitats and corridors of the Jaguar in
Latin America.

Jaguar Connection is the legacy of ISA and
its companies for the planet and new
generations, the way in which we reaffirm
our commitment towards sustainability.
OUR ROL
“Jaguar Connection” Program
                       We create and lead the implementation of the Jaguar
                       Connection program and provide the resources for its
                       development. We ensure the sustainability of the Program and
                       its permanent growth to increase coverage in the Jaguar
                       Corridor.

                       For the integral development of Jaguar Connection, we have
                       the technical support of the South Pole Group and Panthera,
                       two world leaders in climate change, sustainability and
                       conservation of big cats.
OUR TECHNICAL ALLIES
“Jaguar Connection” Program
                      Develops projects and activities that contribute to mitigation and
                      adaptation to climate change. It is a leader in the voluntary carbon
                      bond market. In the last 7 years, it has sold more than 28 million
                      carbon credits, many of them under the Verified Carbon Standard
                      (VCS), the Climate, Communities and Biodiversity Standard (CCBS),
                      and the Gold Standard (GS).

                      Within the program our ally focuses on:
                      Analyze the proposed projects and develop their carbon cycle.
                      Issue carbon credits certified under standards.
                      Commercialize the carbon credits of the program.
OUR TECHNICAL ALLIES
“Jaguar Connection” Program
                      Is the leading organization worldwide, which is dedicated
                      exclusively to the conservation of the 38 existing species of big
                      wild cats and their ecosystems, with focus on the largest and
                      threatened, including the jaguar and the puma.

                      Within the program our ally is responsible for:
                      • Provide scientific information on identification of areas that
                        serve as Jaguar Corridor
                      • Perform the monitoring of biodiversity in the areas of the
                        projects with emphasis on large vertebrates.
                      • Accompany the implementation of good practices of coexistence
                        and conflict management between humans and jaguars or
                        pumas.
                      • Evaluate the effectiveness of the conservation measures of the
                        Jaguar and its associated biodiversity.
Mitigation of
                                                                         climate change

                                                                         Development of rural
                                                                         communities

                                                                         Conservation of
                                                                         biodiversity

                                                                         Ecosystemic
                                                                         services

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Advances and Contribution
    of the “Jaguar Connection”
    Program

     Mitigation of climate                                               Ecosystemic services
     change

•   Emission reduction potential                                    •   Improvement of soil and water
    of 278,569.82 tCO2                2017 in                           conditions.
                                      Colombia
     Conservation of                                                     Development of rural
     biodiversity                                                        communities
                                                                    •   Sensitization and
•   Protection of about 400                                             environmental education to
    hectares of forests and water                                       communities.
    sources                                                         •   Reduction of poverty and
•   Recovery of about 2,200                                             improvement of the quality
    hectares of degraded land                    Presence of ISA        of life (improvement of
•   Contribution to the recovery of                                     infrastructure, roads, health
                                                 Jaguar Corridors
    the connectivity of the jaguar                                      centers, among others).
    corridor.                                                       •   Empowerment of women,
•   Protection of endemic species                                       through the generation of
                                                                        employment.
                                                                                                21
Highlights of the “Jaguar Connection” Program
• Sighting of endemic species and critically endangered species

     Paujil de pico azul (Crax alberti)                    Tití cabeciblanco (Saguinus oedipus)

                                                                                             22
Presence of the
“Jaguar Connection”
Program
                        Mitigation of Climate
2018 in Latin America   Change

                             Mitigación del
Stage I                      cambio of
                        Conservation climático
• COL - Cimitarra       Biodiversity
• COL - Tierralta
Stage II
• 2 in Colombia         Ecosystemic Services
• Chile
• Perú
• Brasil                Development of rural
                        communities

                                                23
TARGETS
    “Jaguar Connection” Program

            TARTGET                 TARGET YEAR                        ADVANCES IN 2017
Three projects implemented in                     Two projects in implementation of the carbon technical cycle
                                       2017
Colombia                                          and one project for the purchase of carbon credits
Three (3) projects implemented in                 Convocatory process, selection and prioritization of projects.
                                       2018
Peru, Chile and Brazil                            Pre-selection of three projects in Latin America
ISA and its Energy Transmission
                                       2020       ISA, XM and INTERCOLOMBIA are carbon neutral since 2016.
companies will be Carbon Neutral
Offset of 100,000 tCO2                 2020       Offset of 5,161 tCO2e of 2016.
12 projects implemented                2020       Two projects in implementation of the carbon technical cycle
                                                  Protection of about 400 ha of forests and water sources.
180,000 hectares of protected                     Recovery of about 2,200 ha of degraded land. Contribution to
                                       2020
jaguar corridors                                  the recovery of the connectivity of the jaguar corridor.
                                                  Improvement of soil and water conditions.
Challenges of our Integral Management of
Biodiversity
• Continue with the articulation of engineering and the environment,
  seeking to avoid as much as possible the impact on biodiversity
  (designs that minimize interventions on natural resources and the
  environment)
• Prevent, minimize and compensate the impacts on biodiversity during
  assets life cycle (implementation of good practices in the construction and
  operational stage)
• Identify areas and compensation mechanisms that are more
  efficient and sustainable over time
• Strengthen in a continuous manner the synergies with public and
  private entities
• Involve and strengthen relationships with communities in the
  framework of compensation, generating great benefits for them
• Advance in the development of the “Jaguar Connection” Program
  and achieve its autonomy and sustainability

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