ISA Energia has been advancing a different model for constructing power lines than usual. Instead of overhead towers, the company is implementing a system of underground lines in the Brazilian market.
In this regard, the company, which owns 30% of the transmission system in Brazil and 95% in São Paulo, has just completed an investment cycle of R$ 1.1 billion in the largest underground transmission line project in Brazil.
The system, a kind of "underground ring road," is 44.6 kilometers long and connects the Cambuci neighborhood in the city of São Paulo to the municipality of São Caetano do Sul, in Greater ABC.
Unlike the traditional model, in which large towers are installed in extensive areas requiring significant land for their implementation, underground towers are used in more densely populated areas with limited available land, such as metropolitan regions.
“The model is useful when it is necessary to overcome significant obstacles or when we have urban occupation problems. In the city of São Paulo, today it is very difficult to imagine a transmission line cutting through the city. That is why we use underground lines, with modern and safe cables,” says Rui Chammas, CEO of ISA Energia Brasil, in an interview with NeoFeed .
The Rio Grande project, completed at the end of March this year, increases the security of energy supply for approximately two million residents of the São Paulo Metropolitan Region. In addition to the underground power line, the system also includes nine kilometers of overhead lines.
Although it represents a slightly higher cost than aerial operation, the executive states that, in some situations, it is the only viable solution for advancing electricity supply. The auction for this line took place in January 2020, with a discount of 57.9%.
The underground system still represents a small portion of ISA Energia's operations in Brazil. However, the trend is towards growth, even though it may represent a slightly higher cost than a traditional tower.
Today, the company's electrical system consists of more than 23,000 kilometers of overhead circuits, 153 kilometers of underground transmission lines, and 26 kilometers of underwater lines.
“It’s a long underground line, born from a project to bring greater robustness to the metropolitan region. Part of these lines are in radial circuits, and the project allows these loops to be closed, ensuring greater safety and handling a higher load. In the end, all these lines connect,” says Chammas.
Underground
In practice, the system began operating in October, five months ahead of the deadline set by the National Electric Energy Agency (Aneel), but it was not yet at full capacity – full utilization depended on a distributor connecting to its system, which occurred earlier this year.
The project involves an annual revenue of R$ 93.1 million for the company, taking into account the 2025/2026 tariff cycle. In addition to the underground line, ISA Energia also delivered a new substation with 800 megavolt-ampere (MVA) of power in São Caetano do Sul, as well as the expansion of two existing ones in the city of São Paulo.
According to the CEO, the need to implement this model is also directly related to the growing demand for energy, stemming from the region's economic growth, the increasing need for electromobility through electric vehicles, and the implementation of data centers.
In addition to underground expansion, the company has other investment plans for the coming years. By 2030, the company is working with a pipeline of R$ 12.3 billion in investments. Of this total, R$ 6 billion is for four greenfield projects from concessions won in auctions, and another R$ 6.3 billion for the renovation of already installed parks.
The four projects under construction - Piraquê (Minas Gerais and Espírito Santo), Jacarandá (São Paulo), Serra Dourada (Bahia and Minas Gerais) and Itatiaia (Minas Gerais and Rio de Janeiro) - involve the expansion of overhead transmission lines and a combined annual revenue of R$ 826 million, as they become operational.
According to Chammas, with the increased energy transition towards a more sustainable model in Brazil in recent years, stemming from auctions of renewable energy sources, mainly in the connection between the Northeast and the Center-South, there has been a need for more investment to meet this increased national demand. This explains the billion-dollar investment in improvements.
Last year alone, the company invested R$ 5.1 billion to improve the security of the National Interconnected System (SIN), managed by the National Electric System Operator (ONS). Of this amount, R$ 1.7 billion went to improvement projects in the state of São Paulo.
Between 2013 and 2026, the company's portfolio more than doubled, growing from 15 to 34 concessions in Brazil. However, according to the CEO, this does not mean that ISA Energia's focus is exclusively on quantity.
“Many people think that winning an auction is what makes the company grow. But that’s not the case. What makes a company grow is studying the lot very well, winning, and then competitively delivering the project,” he explains.
The company, which did not participate in the last transmission auction held in March, with more than 38,000 kilometers of transmission lines planned in Brazil by 2034, sees three rules to justify its presence in the bidding processes: that the projects are profitable, that financial discipline is respected, and that they do not affect the practice of paying the dividends foreseen to shareholders.
“We need to be very careful with the company's leverage in the coming years. With a volume of R$ 12.3 billion by 2030, our leverage should reach close to 4 times, and we don't want to exceed that mark,” he says. By the end of 2025, ISA Energia's net debt to EBITDA ratio reached 3.63 times.
With this growth outlook, Bank of America (BofA) reported, in a report published on Monday, April 13, an upgrade in its rating for the company's shares, changing from sell to buy. Analysts also projected an increase in the 12-month target price, from R$ 26 to R$ 35.
Battery storage
Therefore, according to the executive, the company has "no passion," in his words, for any specific type of technology. For him, what's important is that the model can be profitable for the company.
In this sense, for the ISA executive, there is no concern about 2026 being an election year because, according to him, the rules for the Brazilian electricity sector are very well established, with established legal certainty.
In any case, Chammas acknowledges that ISA Energia is paying close attention to the likely auction for energy reserves via batteries, which should have its bidding rules published later this month.
“I understand that this could be an important solution to our need for power at the end of each day. We strive to be pioneers, because those who are pioneers end up learning faster,” says the CEO.
In this respect, ISA Energia has a competitive advantage over its potential clients. The company implemented a pilot project for battery-powered transmission in the city of Registro, in the Ribeira Valley, São Paulo. It is the first large-scale energy storage project of this type in Brazil.
"Batteries can play a role in meeting the increased demand, especially in the late afternoon. Therefore, this reserve capacity is necessary. I welcome the study of battery use to solve this problem in the country."
The electrification process began in November 2022, with investments of R$ 146 million. The project serves approximately two million residents of the southern coast of São Paulo.
In 2025, ISA Energia's revenue was R$ 4.35 billion, a 4.5% decrease compared to the previous year. Net profit was R$ 1.62 billion, a 21.7% decrease. However, capital expenditure (capex) for the year grew by 40.4%.
Over the past 12 months, ISA Energia's shares on the B3 stock exchange have appreciated by 41.4%. By 2026, the increase is projected at 17.2%. The company has a market capitalization of R$ 21.7 billion.
