In order to further improve the efficiency of accounting activities, the organization of the area was restructured, and the project to merge Statkraft Perú S.A. and Empresa de Generación Eléctrica Cheves S.A. was started to optimize the tax shield through the accelerated depreciation of the new assets of the new Cheves Hydropower Plant.

Additionally, in 2014, the formalities for the early recovery from the government of more than USD 21 million (exchange rate: PEN 2.8 = USD 1) for VAT of Empresa de Generación Eléctrica Cheves S.A. were continued.

Finally, as from the second quarter of 2014, a new work attendance control system (CAS) was implemented by the Accounting area. By year end, this process generated significant savings for the company in terms of man-hours spent to perform this activity.

In 2014, the fourth and fifth disbursement of the loan granted by the International Finance Corporation (IFC) were completed for a total sum of USD 65.4 million to finance the construction of the Cheves Hydropower Project, these being the two last tranches of the total loan with the IFC. Additional loans were requested to the head office for USD 22.7 million.

In the last quarter of 2014, the Finance area led a team comprising several areas to carry out the project for the merger of Statkraft Peru and Empresa de Generación Eléctrica Cheves S.A., in order to profit from the accelerated depreciation of the latter and restructure the debt of the new company, thus improving its financial conditions.

With regards to the treasury management, during the middle part of the year, the Finance area promoted the setting up of the Collection Committee (composed of the Finance and Commercial areas) in order to implement improvements to the company’s collection processes. Collection times were thus significantly reduced.

Moreover, at the beginning of 2014, the administration and control of personal insurance was incorporated into the duties of the Treasury area in order to improve this process. With regards to corporate insurance, a reduction of USD 400 k in the global policy was obtained by changing the premium scheme.

In 2014, the Logistics area was focused on improving service quality, generate efficiencies in the processes and the administration of allocated resources in order to optimize the communication with users and to increase the wellbeing and quality of life of employees based outside Lima.

In the Procurement area, worth noting are the publication and training on the new procedure for the procurement of goods and services, which reformulated the criteria for processing requisitions in order to organize and optimize the service. 48 critical and recurring suppliers were approved in accordance with the standard required by the head office on environmental and occupational safety. With a more stringent control of the new process, invoicing was reduced by 35% with a manual purchase order, with which the service provided was systematized.

During this period, savings for USD 371,000 were obtained through the effective negotiation by purchasers and timely support in major projects for the company, such as the overhaul phase II of the Cahua Hydropower Plant, the turbine replacement in the Gallito Ciego Hydropower Plant, and the implementation and moving into the new administrative offices in Lima.

With respect to the General Services area, in 2014, the new vehicle fleet, composed of 21 own vehicles, was distributed and operated in eight locations across the country. An agreement was entered into for the preventive and corrective maintenance of the fleet. The monitoring via GPS was also implemented, which contributed to the reduction of accident rates.

In August, the moving into the new administrative offices was successfully completed under the supervision of the General Services area. In parallel, the furniture from the old office was sold to Odebrecht, which represented extraordinary and significant revenues for USD 350,000.

Finally, the phase II of the camp improvement project was started, Cahua HPP being the first to benefit from these improvement activities, which included the demolition of the old dining area and the construction of a new one, as well as the construction of a training room and restrooms for the personnel. These facilities are scheduled to be completed in the first quarter of 2015.