Issue 20. August 2016

As allies we are united by our convictions and passion to contribute to the world through our work.

Let’s make a pact on well-being

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EWater, essential resource of life and central axis our

business, must be protected. Contrary to what is commonly

thought, water suitable for human consumption is not

an abundant resource and we must protect it against waste

and contamination.

SDG 6. Clean water and sanitation

Therefore, at ISAGEN we are always committed to protect this resource and in 2015 we joined the corporate strategy of Sustainable Development Goal 6: “Clean water and sanitation”. This outlines the need of ensuring water availability, sustainable management and sanitation for everyone.

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New Business Ethics System. Ethics, our core value, which we share with everyone

Maximum effort to fulfill minimum commitment

Updating of Information for Suppliers and Materials. Knowing each other better is the main input to build trust relations

To know each other better. Supplier Management Model: momentum for our allies and for the country

This is how we are doing at ISAGEN• Programs open to

Suppliers• ISAGEN in Encounters

for Water

In contact with ISAGEN

Work as a chain to improve every day

Occupational Health and Safety. Enjoy what we do and go back home safely

Suppliers confidence in view of arrival of Brookfield. We continue to strengthen trust with our suppliers

Also discover

We all have a commitment with the planet’s sustainability and with our future. Therefore, let us work on protection of water resources; each of us from the company and from home can take small actions that in the aggregate will contribute to complying with SDG 6.

That is why we protect water sources in the areas of influence of our power plants and generation projects. We do this through reforestation on watersheds feeding the reservoirs and through various education programs with the communities.

Further, we undertake various initiatives to encourage administration of water resources. We, therefore, encourage work groups and meetings of different stakeholders who are involved in the care and protection of water. Government, decentralized bodies, Regional Autonomous Corporations, other industry companies and communities have established dialogues focused on identifying needs and opportunities related to water sustainability.

Nevertheless, this endeavor must involve all company stakeholders. Therefore, it is very important that each one, from their roles, work on acquiring habits for protecting water and thus manage it properly. Checking for water leaks in toilets, using water savers in taps or implementing rain water utilization systems are some of the strategies that may be implemented to reduce water resource losses.

Similarly, deeper and industrial scale strategies may be implemented through Energy Integral Management that, along with our Technological Partners, contributes solutions to reduce water and electric energy use, considering that the latter is generated from water at the reservoirs.

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Ethics, our core value, which we share with everyone

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to ISAGEN’s conception as a human group devoted to the service of other human beings.

New Business Ethics System

Thus, different organizations all over the world have established strategies, policies and actions plans, encouraging ethical behavior, as they have realized that in modern times any company intending to exist over time must act correctly.

ISAGEN does not ignore this truth and, therefore, we have made ethics our core value. It is the pillar on which we have built our corporate culture, in collaboration with all our stakeholders.

Oscar Cifuentes, Corporate Audit professional, explains that three fundamental components have been identified in-house:

• Doing things correctly, with most rigor from any perspective, that is, doing what is best and in good faith.

Currently it is necessary to focus on social values,

particularly on ethics. Companies are aware of

such reality and, therefore, have agreed on the need

to define guidelines aimed at transparency and good practices in the day to day

activity of the company and its workers.

• Being coherent, doing what we think and acting in accordance with our principles.

• The last component, perhaps the most relevant, is preferring common good over particular, collective over individual, and public over private interests.

This is how, pursuant to these principles, the Business Ethics System has been established, relying on three components: first, focused on its promotion, determining guidelines and instructions; second, permanent assessment, as the company is aware of how important is is to continuously assess every aspect

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We remind you of the importance of reporting events or irregularities committed by our workers or by third parties that affect or may affect the interests of the Company or its stakeholders. These can be reported anonymously through the Ethics Channel.

The Anti-Bribery, Anti-Corruption and Anti-Fraud Policy, applicable to all suppliers who act on behalf of our company, strictly prohibits fraud in any manner and, therefore, promotes transparency and ethics in business management.

Thus, we all contribute to the consolidation and proper functioning of our Business Ethics System, promoting building of trust and confidence relations with you who are our suppliers.

where it is possible to impair this value. Lastly, the third component is continuous improvement, inasmuch as any System can be enhanced and so much so when it involves our foundations.

One of the most relevant aspects in the System is the Anti-Bribery, Corruption and Fraud Policy - PASCF, which is aimed at defining rigorous actions and procedures framework to prevent such actions that attempt against ethics and transparency. Moreover, it complies with requirements of the London, New York, and Toronto Stock Exchanges, where the new majority shareholder, Brookfield is listed.

Alignment with the business conception

“This system is inspired on our business conception, centered on human beings and, given the way it is structured, it enables us to materialize ethics in the various business activities performed within the organization. More than a Conduct Code or a number of rules to follow, it is the shaping of people’s judgment with respect to ethical dilemmas faced day after day”, explains Cifuentes.

All of the foregoing responds specifically to ISAGEN’s conception as a human group devoted to the service of other human beings. Therefore, we have the ethical mandate of obtaining good results in terms of the well-being of our stakeholders and society, promoting transparency and working on building trust relationships.

What is so special about those

minimum facts?

Minimum sustainability,

a good bet for everyone.

At ISAGEN, we want all our suppliers to contribute to environmental, social and economic sustainability; therefore, we encourage their following initiatives such as Sustainability Minimum Facts that, from their daily activity, contribute to the preservation of the environment and the economic growth.

Rosita, I have received a message from ISAGEN reminding us that we have a scheduled visit to talk about sustainability minimum facts, and

we should move it because I have a lot of things to do.

They are very special as they encompass ethics,

work, human rights and environmental issues;

therefore, we are invited to improve each of these areas and thus comply with such guidelines.

Further, even though they are not mandatory by

ISAGEN, why not contributing to a better

planet?

No, Máximo, we already moved it once

and, sustainability minimum facts are equally important.

Why?

Because that way we learn and gradually acquire good practices in everything we do; that will be

very good for all of us in the company, for ourselves and for

the planet at large.

All right, I will meet with them and review what we're doing right and

what can be improved; it is true that we can together contribute for this place to be better for everyone.

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We continue to strengthen trust with our suppliers

Suppliers confidence in view of arrival of Brookfield

“It is the same today” were the words conveyed by our CEO at ISAGEN, Luis Fernando Rico Pinzón, in a message to all of our suppliers as related to the recent acquisition of the State’s holding by Brookfield, the Canadian investment fund.

We, therefore, wish to extend to all of our suppliers an invitation to consolidate networks for growth and strengthening or our activity, to become allies working hand in hand for a better country, to meet our prosperity goals with society

At ISAGEN, we are aware that this type of changes may generate uncertainty among our stakeholders; however, trust and transparency have been two pillars of our engagement with others, and the situation is not different with our suppliers.

Hence, showing respect for our practices, the new majority shareholder has listened to the various programs and initiatives we have with those we relate with and has decided to uphold them, requesting some adjustments that are required in view of the new reality associated with the international and private nature of Brookfield.

We will, therefore, uphold principles that govern our contracting and sustainability principles, which will only change in relation with strengthening anti-corruption, anti-bribery and anti-fraud practices pursuant to the new PACSF policy, which was implemented to comply with the requirements of the London, New York and Toronto Stock Exchanges, where the new majority shareholder, Brookfield is listed.

Similarly, we will keep on reinforcing our work from the ethics and good practice perspective, striving to uphold development programs with suppliers and collaborative networks, and will focus our efforts on implementing initiatives for the prevention of work-related accidents and achieving the goal set by the new shareholder of zero high risk work related accidents.

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Enjoy what we do and go back home safely

Occupational Health and Safety

At ISAGEN we are convinced that workers are the core of our company, clients are important, financial issues are relevant, innovation is fundamental these days; however, all of the foregoing is possible thanks to a human group that devotes good part of their time in cooperating with the building, growth and consolidation of our company.

It is therefore necessary to create strategies focused on improving the life quality of our workers, not only within the organization but also beyond the work day, namely, their families, likes, and aspirations.

Ana Cristina Sierra, Working Environment Coordinator at ISAGEN, explains that Colombian law has set forth a number of basic guidelines that every organization, regardless of its size, must meet to ensure minimal work quality requirements on which the Social Protection Ministry, accordingly, sanctioned a decree on Occupational Health and Safety, which is intended to encourage good work related practices among employers.

Hence, themes are included in relation with physical health, that is, ergonomics and quality of work station: proper lighting, temperature, chairs, postures that do not compromise, either now or in the future, muscle-skeletal health, among other themes.

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Additionally, thorough attention is now given to mental and emotional health. Therefore, companies have started to analyze the psychosocial conditions and risks for their workers to identify at-risk situations and opportunities for the creation of spaces and situations to offer more favorable conditions from this human being perspective, which was ignored in the past.

Nevertheless, all of the foregoing should not be limited to legal compliance, but rather it should be a permanent motivation.

“At ISAGEN we want our workers and contractors to feel well, enjoy what they do and go back home safely, that is the purpose of our work”, states Ana Cristina.

At ISAGEN, our conception of company translates into: we are aware that we are a human group devoted to the service of other human groups and our management is focused on human beings; therefore, we are convinced of the importance of generating well-being for our workers.

This way we are concerned not only on complying with the regulations, but we have established a model encompassing different human dimensions. This has implied significant efforts from the Company, due to the size of the organization, but it is not an exclusive project of large companies; ideally, each organization should have its human management model according to their individual reality, complying with the law but also adding value to their workers.

The Social Protection Ministry issued Decree 1702, which provides for all companies in the country, regardless of their size, to have an Occupational Health and Safety policy in place. This implementation must be ready by January 2017.

Ana Cristina Sierra, suggests the convenience of applying the PHVA cycle to determine clearly the OHS program and its effective follow up.

Planning work to identify existing risks, analyzing applicable regulations, and defining the objectives and achievements of the Occupational Health and Safety Policy.

Implement in practice all that defined during planning.

Constantly ensure that guidelines are respected and those defined actions executed.

Maintain a constant improvement attitude, always ensuring each step of the procedure and reviewing improvement options.

Planning

What to do

Verify

Adjust

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Knowing each other better is the main input to build trust relations

Updating of Information for Suppliers and Materials

One of our main commitments is to build trust relations for which mutual knowledge is fundamental. As ISAGEN, we have made and are supported by our suppliers who, as our allies, help us solve problems and perform with success projects undertaken as a company.

Therefore, the Production Management supply team started tracking the company’s databases regarding the status of information on products purchased and suppliers, not only those who currently have contracts in force, but also those who have been contractually associated before with the organization.

This tracking is not only limited to contact data, as we are trying to update data on items provided before in order to determine if there are still valid, have been updated or, on the contrary, are no longer commercialized. In this manner, we build historical records of products, with updated costs and references.

For this purpose, it is important that all suppliers, current and old, provide us with information that will be requested by telephone or via email by the Electric Energy Production Corporate Supply Team. This does not mean that ISAGEN has a specific interest for immediate purchase order contracting, but it is interested in knowing in detail the products that we can purchase and who has them available. This will contribute to being more efficient when purchasing the

materials required for our operations and we will work with those with whom we have had some type of relationship in the past.

Today, ISAGEN needs each of you, as altogether we will continue to be committed to establishing long term relations, framed within trust, because suppliers are the support to what we do, as our allies and that is why their involvement is so important.

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Work as a chain to improve every day

One of our commitments to the country and wholesale clients is to provide them with electric energy in a reliable manner. Therefore, it is essential to be alert in relation with two core business processes: production of electric energy and maintenance of operating power plants.

The foregoing activities require much care, as they involve various technical aspects, of both low and high complexity; however, this process is not performed only by ISAGEN, as we are assisted by a group of suppliers of materials and services to meet the needs derived from our operations and maintenance of our power plants.

Hence, in order to improve efficiency related to procurement of products and engagement with suppliers, as of 2014 we decided to create the Supply Management Electric Energy Production, an area that is aimed at designing the supply chain of the Electric Energy Production Management, in addition to centralizing part of the operation that used to be managed by other areas of the organization.

“The electric energy supply chain is intended for the provision of goods and services necessary for the proper operation of power plants. Supply implies purchases, but to get to that point it is necessary to complete previous actions and anticipate the steps to follow; that is why it is a chain. The final aim is for the in-house client to have its needs met immediately”, explains Julio Tenorio, Director of Electric Energy Production Supply at ISAGEN.

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This implies implementing a cultural change, both in-house at ISAGEN and with the suppliers. Thus, Goods and Services Management will not be the only area in charge of procurement for the Electric Energy Production Management, as now the electric energy supply team is responsible for meeting some of the requirements, depending on the level of knowledge required.

Goods have been divided in strategic and non-strategic. The latter are purchased frequently and do not require material technical efforts; therefore, they will continue to be managed and purchased by the Goods Management team. In turn, the strategic one are specialized equipment units that will, therefore, be purchased by the new electric energy production supply area.

Future

One of the main tasks of the electric energy production Supply Management is planning. The team must determine well in advance the needs of processes as regards goods and services so that these are received at the right time, preventing any operation setbacks.

This is to be done in the short and medium run, that is, management will plan the next year, but will make forecasts for five years. To such end, it is necessary to work with suppliers who are knowledgeable of the business and supply part of the strategic goods to the Energy Generation Operations Officer.

Therefore, we will continue working on doing things correctly, improving every process through close engagement with each of our suppliers. We realize that we do not work on our own, but together with other organizations, because if we work hand in hand with them, we may all grow more steadily, planning for the future.

“They are experts in their own fields and, thus, we would like to compensate them. Providers are an active part of this process and that is why, when they propose an initiative, growth will be shared and not exclusive of ISAGEN”.

Julio Tenorio - Supply Director of electric energy production, Electric Energy Production Management.

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Supplier Management Model: momentum for our allies and for the country

At ISAGEN, when contracting with trust and make sure the company’s excellence in performance of their specific work, although recognizing that there may be weaknesses on financial, accounting, human management and other managerial aspects; it is there where we participate actively to establish or strengthen good practices leading to improvement of their organizational capacity.

“In the past, as company, we proposed solutions according to needs identified among suppliers; nonetheless, upon implementation of the model, we now structure actions to be undertaken by the suppliers in a more systematic manner, aimed at improving their productivity and competitiveness, according to their business maturity level”, explains Jaime Alberto Ospina, ISAGEN’s supplier coordinator.

Thus, the model has three stages:

• The first one is to assess supplier processes. The current business condition to thus validate its maturity level.

To know each other better

• The second one consists in a feedback process by the area in charge of suppliers.

• The last step is defined as a specific intervention for the supplier, although framed within the model’s general aspects.

This is, additionally, supplemented with the implementation of tool that have been enhanced with experience and have proved to be more assertive in supplier management processes.

Consequently, as organization, we have better tract processes with suppliers, following app on their learning and maturity level by analyzing progress in the implementation of business management routines aimed at improving performance. The more progress in such routine, the greater business maturity level. Thus, Through momentum to two companies that are part of our supplier group, we are contributing to the country’s gross as we encourage dignified, fair employment and business strengthening that translates into general economic and social benefits.

At is at hand we bet to the country’s growth and have, therefore, committed to the development of our suppliers because, if companies grow, Colombia also grows. To such end, we have implemented the Supplier Management Model, a program intended to foster growth and consolidation of our suppliers through business formation initiatives.

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This is how we are doing at ISAGEN

Programs open to Suppliers

ISAGEN in Encounters for Water

No. of SuppliersSuppliers evaluated 100

Development Program - Northern Caldas 6

Development Program - Eastern Antioquia 5

Development Program - Santander 14

School - Business Environmental Planning 15

School - Business Strategic Management 15

Suppliers receiving feedback due to poor performance 36

Risk-rated suppliers 486

Improvement plans requested 26

At ISAGEN, we are committed to the protection and care of water resources and, therefore, have actively participated in Encounters for Water, an initiative of El Espectador and WWF, which are intended to gather different government, social and business actors who are in contact with this valuable resource and thus work for a streamlined governance and ensure its protection and recuperation.

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In contact with ISAGEN

Fluid communication with our suppliers and their opinions and ideas to generate new proposals for general benefit are valuable for us. In this regard, we encourage participation by providing discussion spaces to build trust relations by means of different strategies.

Write to Us

Physical correspondenceCarrera 30 No. 10 C - 280, Medellín - Colombia

Matters related to provisions of goods or services Direct client in ISAGEN, your contract administrator

General doubts as potential supplier solicitudesbienesyservicios@isagen.com.co

Matters related to the Supplier Development ProgramJaime Ospina Gallo Coordinator of Supplier Management Group jaospina@isagen.com.co

Supplier Development Program pdp@isagen.com.co

Let’s Talk

Let’s Navigate

Interacting directly with our workers is the main form of communication between our suppliers and the Company. Effectiveness, clarity and trust in this communications is a condition for the successful provision of goods or services and the long term relationship built.

Participation in pilot programs, workshops and meetings of the Supplier Development Project are also spaces in which the face to face interaction promotes trust and mutual learning.

In the Contact section of our web site www.isagen.com.co, you may send requests, claims and complaints, which will be addressed in timely manner. Furthermore, in ISAGEN’s Facebook page, Energía Productiva and its Youtube channel ISAGEN/videos, you may ask questions and make comments, which will also be addressed opportunely.

We also have the Supplier section in our web site, containing information on our policies, contractual relations, dialogues and meetings with you.

Physical and electronic correspondence is a key means of communications between suppliers and the Company. For us it is a serious commitment to provide timely response.

Ethics Channel

Our productive energy is based on transparency.Should you wish to report on events or irregularities committed by ISAGEN employees or representatives, use the channels we provide for such purpose:

Telefax: 01 8000 41 00 27 / +57 (4) 361 53 20Monday to Saturday from 6 a.m. to 10 p.m. e-mail: lineaetica@isagen.com.co

This mechanism is managed by an independent third party available to the general public, where it is possible to report events or irregularities committed by ISAGEN workers or representatives that affect or may affect the interests of the Company or its stakeholders; if preferred, such queries may be anonymous.

Further information on our Business Ethics System in: www.isagen.com.co