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July, 2014
Company Overview
1
One of the largest private sector power generators in Brazil
ENEVA currently operates 2.4GW in coal and gas-fired power plants (2.9 GW until the end of year)
Integrated energy platform, with privileged access to natural resources
Only private power generator in Brazil with access to onshore gas
Ongoing restructuring initiatives
- Reorganization of the companys structure and continuous TPPs operation stabilization
- Strengthening of the companys capital structure
Competitive greenfield portfolio
Licensed coal, gas and wind power generation projects
3
Company Overview
A Brazilian thermal generator with asset exposure to energy fossil fuels (natural gas and coal)
ENEVA at a Glance
2.9GW inflation-protected, long-term PPAs
o 2.4GW in operation
o 517MW under construction
Long-term PPAs guarantee R$2.2 billion in annual inflation-adjusted
capacity payments
PPAs provide hedge against commodity price exposure
Integrated gas E&P assets supply up to 8.4MM m/day to ENEVAs power
plants
Competitive portfolio of licensed greenfield wind, coal and gas fired
capacity
Company Description
4
ENEVA ownership structure
Geographic Footprint
Parnaba I ENEVA 70% / Petra 30% Natural Gas - 676MW
Amapari Energia ENEVA 51% / Eletronorte 49% Diesel - 23MW
Itaqui ENEVA 100% Coal - 360MW
Natural Gas Exploratory
blocks Contracted production
of 8.4MM m3/day
Pecm I ENEVA 50% / EDP 50% Coal - 720MW
Pecm II ENEVA 100% Coal - 365MW
Parnaba II ENEVA 100% Natural Gas - 517MW
Parnaba III ENEVA 70% / Petra 30%
Natural Gas - 176MW
Parnaba IV ENEVA 70% / Petra 30% Natural Gas - 56MW
Free Float (38.2%)
37.9% 23.9%
Other
MPX / E.ON Partipaes Joint Venture
50%
50%
BNDES
10.3%
Eike Batista
Controlling Block
27.9%
Solar Tau ENEVA 100% Solar - 1MW
Note: 1) Ownership structure assumes future MPX / E.ON Participaes JV incorporation, as disclosed on the Material Fact Notice as of July 3, 2013
Pecm I
Capacity: 720MW
Fix. Rev.: R$600.3MM /year
CVU: R$99/MWh
Auction: A-5/2007
COD: Dec, 2012
Capacity: 360MW
Fix. Rev.: R$317.3MM/year
CVU: R$103/MWh
Auction: A-5/2007
COD: Feb, 2013
Itaqui
Note: (1) Fixed revenues are indexed to inflation index IPCA (Database: Nov, 2013)
Capacity: 365MW
Fix. Rev.: R$284.9MM /year
CVU: R$108/MWh
Auction: A-5/2008
COD: Oct, 2013
Pecm II
Coal Generation Portfolio Overview 1.4 GW of installed capacity in full operation
5
Gas Treatment
Unit
Parnaba II 2 GE GTs x 168,8MW + 1 GE ST x 181MW
Parnaba I 4 GE GTs x 168,8MW
Parnaba III 1 GE GT x 168,8MW
+ 1 Wrtsil GM x 7,3MW Parnaba IV
3 Wrtsil GMs x 18MW
Capacity: 56MW
46% efficiency
Fix. Rev: R$54MM/year
CVU: R$69/MWh
Free market
COD: Dec, 2013
Capacity: 178MW
38% efficiency
Fix. Rev: R$98MM/year
CVU: R$160/MWh
Auction: A-5/2008
COD: Dec, 2013
Capacity: 676MW
37% efficiency
Fix. Rev: R$443MM/year
CVU: R$114/MWh
Auction: A-5/2008
COD: Apr, 2013
Capacity: 517MW
51% efficiency
Fix. Rev: R$374MM/year
CVU: R$59/MWh
Auction: A-3/2011
Completion: est. 4Q14
Parnaba IV Parnaba III Parnaba I Parnaba II
Notes: (1) Bertin project developed by ENEVA; (2) Fixed revenues indexed to inflation index IPCA (Database: Nov, 2013)
Parnaba Complex Overview A unique case in Brazil power generation sector with 910MW already in operation
6
Outstanding management capabilities
Financial strength and discipline
Sector know-how: E.ON E&P looks at a volume delivery of +170k
barrels/day and +60 licenses in GB and Norway
Tried and tested Parnaba experience, know-how of Parnaba Complex
rooted within PGN
Strong Shareholders
All Parnaba gas-fired power plants are supplied by Parnaba Gs Natural,
owner and operator of 8 onshore exploration blocks
ENEVA has a direct interest in PGN as key supplier of its TPPs
Declaration of commerciality with Development Plan for 3 gas fields:
Gavio Real, Gavio Branco and Gavio Azul
Gas supply agreements secured for 8.4MM m/day
R$250 million capital injection concluded in Feb, 2014
Highlights
7
Integrated Natural Gas E&P
Strong competitive position in gas-fired generation
Parnaba Gs Natural
18.2% 9.1% 72.7%
Geographic Footprint
Note: 1) Ownership structure after execution of the sale and purchase agreement between OGP and Cambuhy, subject to approval by OGPs creditors, under its judicial recovery procedure, and authorization by ANP
Operating & Financial Performance of Power Plants
2
Operating Costs
9
Operational Performance (Itaqui)
EBITDA (R$MM)
Availability Variable Revenue X Variable Cost (R$/MWh)
Sources: ONS & Company
Positive EBITDA driven by improved operational performance and reduced operating cost/MWh
COD: Feb 5, 2013
24.2
36.1
4Q13 1Q14
63%
83% 84% 87%
75%
1Q13 2Q13 3Q13 4Q13 1Q14
4Q13 1Q14 1Q14/ 4Q13
Operating Costs1 (R$ 000) 125,668 121,005 -3.7%
Gross Energy Generated (GWh) 660 583 -12%
Operating Costs per Gross Energy Generated (R$/MWh)
190.5 207.7 9.0%
NOTE: 1) Does not include Depreciation & Amortization.
261
232
144 159
128 149
112
141
108 103 115 121
126 129
107 106 103 102 102 100 104 108 107 113 116 119 120 112
Variable Cost Variable RevenueAvailability reduction in 1Q14 due to mainly maintenance in coal mils, fan equipment and emissions control systems
10
Operational Performance (Pecm II)
Variable Revenue X Variable Cost (R$/MWh) Availability
Sources: ONS & Company
EBITDA positively impacted by high availability and recurring positive margin on dispatch
EBITDA (R$MM)
COD: Oct 18, 2013
N.A. N.A. N.A.
85%
97%
1Q13 2Q13 3Q13 4Q13 1Q14
55.4
46.3
4Q13 1Q14
92 99 111 99 106 101
114 118 122 125 125 118
Variable Cost Variable Revenue
NOTE: 1) Does not include Depreciation & Amortization.
Operating Costs
4Q13 1Q14 1Q14/ 4Q13
Operating Costs1 (R$ 000) 92,446 99,414 7.5%
Gross Energy Generated (GWh) 558.1 720.8 29%
Operating Costs per Gross Energy Generated (R$/MWh)
165.7 137.9 -17%
11
Operational Performance (Parnaba I)
EBITDA (R$MM)
Availability Variable Revenue X Variable Cost (R$/MWh)
Sources: ONS & Company
OBS: Dispatch margin captured by Parnaba Gs Natural
Growth in operating costs per MWh justified by increase in Henry Hub prices and offset by
increase in variable revenues
COD: Feb 1st, 2013 to
Apr 12, 2013
96% 91%
96% 96% 99%
1Q13 2Q13 3Q13 4Q13 1Q14
32.0
44.8
4Q13 1Q14
77 74 65 75 80
68 77 78 74 79 90 77 79 77
80 82 94 99 100 96 93 99 95 92
104 121
152 134
Variable Cost Variable Revenue
NOTE: 1) Does not include Depreciation & Amortization.
Operating Costs
4Q13 1Q14 1Q14/ 4Q13
Operating Costs1 (R$ 000) 183,576 221,902 21%
Gross Energy Generated (GWh) 1,370 1,411 3.0%
Operating Costs per Gross Energy Generated (R$/MWh)
134.0 157.2 17%
Operating Costs
12
Operational Performance (Pecm I)
Availability
NOTES: 1) Figures consider 100% of Pecm I; 2) Does not include Depreciation & Amortization.
Variable Revenue X Variable Cost (R$/MWh)
EBITDA negatively impacted by high unavailability costs due to outage of Turbine #1
Sources: ONS & Company
In Jan, 14, Turbine #1 was 744 hours unavailable primarily due to shaft maintenance and hydrogen seal replacement, started in 4Q13
COD: Dec 1st, 2012 May 10, 2013
72%
41%
66%
51%
71%
1Q13 2Q13 3Q13 4Q13 1Q14
61.7
48.8
4Q13 1Q14
151 127 118
318
154
117 139 138
109 119 107
134
106 107
110
111 105 104 100 99 99 97 102 105 106 110 114
117 118
110
Variable Cost Variable Revenue
4Q13 1Q14 1Q14/ 4Q13
Operating Costs2 (R$ 000) 265,301 230,220 -13%
Gross Energy Generated (GWh) 693 1,014 46%
Operating Costs per Gross Energy Generated (R$/MWh)
382.7 227.1 -41%
EBITDA1 (R$MM)
Operating Costs
13
Operational Performance (Parnaba III)
NOTES: 1) Figures consider 100% of Parnaba III; 2) Does not include Depreciation & Amortization.
Availability Variable Revenue X Variable Cost (R$/MWh)
Sources: ONS & Company
OBS: Dispatch margin captured by Parnaba Gs Natural
EBITDA margins negatively impacted by energy acquisition costs as full capacity was reached
only in February 2014
COD: Oct 22, 2013
N.A. N.A. N.A.
100% 96%
1Q13 2Q13 3Q13 4Q13 1Q14
1.1
14.4
4Q13 1Q14
75 71 69 69 61
161 161 161 161 161
Jan-13...Out-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
Variable Cost Variable Revenue
4Q13 1Q14 1Q14/ 4Q13
Operating Costs2 (R$ 000) 124,329 61,880 -50%
Gross Energy Generated (GWh) 0 344 -
Operating Costs per Gross Energy Generated (R$/MWh)
- 179.6 -
EBITDA1 (R$MM)
Ongoing Restructuring Initiatives
3
Financial Stabilization
3.1
May 12, 2014 May 20, 2014 Jun 30, 2014
Signing of term-sheet with banks for:
R$1.5Bi capital increase
o Phase I: R$316.5MM cash-only (in place); and
o Phase II: R$1.5Bi minus funds raised on Phase I
(cash or asset capitalization or debt conversion)
HoldCo. Debt renegotiation
o R$600-700MM debt drop-down to ENEVAs
subsidiaries/projects
o 5-year maturity extension of remaining HoldCo.
debt (approx. R$1.5Bi), with amortization starting
only in Jun, 2017
Sale of Pecm II
o Backstop guarantee by E.ON of up to R$400MM
for 50% of the asset
R$100MM short-term
bridge financing from
lending banks disbursed
R$120MM from E.ON
subscription commitment
on 1st Capital Increase
R$150MM of fresh cash expected to
be raised during Initial Preemptive
Right Period
o R$120MM by E.ON (already disbursed);
o R$30MM by minorities; and
o Additional funds might be raised during
preemptive right periods
Indicative shareholding structure:
44.0% 20.4%
Free Float
Eike Batista
Controlling Block
35.6%
Financial Stabilization on Course
16
Selected key achievements
ICB Online for Pecm II
Progress with Aneel on Parnaiba II (deadline: July 18)
Launch of Capital Increase I and E.ON subscription
Remaining key steps
o Waivers from BNDES for Pecm II closing and disbursement
of funds (E.ON) and LT finance (banks)
o Final solution on Parnaiba II
o Implementation of Capital Increase II and potential asset
contributions
Main recent achievements / Critical points
ENEVA working alongside following priorities:
1. Pecm II sale / Backstop execution
2. Solution for Parnaiba II and key regulatory challenges
(e.g. final ADOMP agreement)
3. Implementation of the stabilization plan, most
importantly
o Capital increases;
o Pecm II long term finance;
o Debt dropdown; and
o Extension of HoldCo debt maturity
Process update
Process and Roadmap of Stabilization (1)
17
Conclusion of sale of Pecm II
o Payment of at least R$400M (50% of Pecm II)
Parnaiba II Aneels final decision
Pecm II long term finance
o Agreement on final documentation
o Disbursement of funds
Shareholders meeting
o Authorization of capital increase
o Authorization of asset contribution
Board of Directors approve Capital Increase II
Beginning of Capital Increase II
Agreement of main terms of debt drop down
Execution / Effective of Debt Drop Down/Roll over
July, 2014 August-October, 2014
Process and Roadmap of Stabilization (2)
18
Cost Reduction Strategy
3.2
Cost reduction strategy based upon top-down (target of
R$80MM) and bottom-up (optimal organizational design),
supported by external consultants
Cost reduction program will build upon three key drivers:
o Implementation of quick wins
o Streamlining the organization
o Outsourcing and relocation of specific functions
125MM
65%
35%
FY2014 Streamlining the
organization
Relocation & outsourcing
Target 2015
Quick wins
80MM
10%
45MM
Elements of Cost Reduction (R$)
Cost reduction of 35%40% is achievable by 2015
Key elements of ENEVA cost reduction strategy Three key drivers to maintain cost control
20
Office layout and services
o Change of office layout and reduction from 6 to 3 rented floors
o Reduction of office services
Travel policies
o Implementation of restrictive travel policy
o Restriction of flights change to videoconferences
Administrative
o Reduction of consultancy services
o Reduction of company events
o Streamlining of ongoing corporate projects
4.5MM
1MM
1MM
2MM
Quick wins
Office & Services
Travel Expenses
Administration Other
0.5MM
Quick wins as lighthouse projects to drive the change Several measures addressed for quick improvement
21
Quick Wins Overview (R$)
Rethinking organizational size and reduction of
duplications & inefficiencies
Restructuring responsibilities, reportings and
processes
Clear targets for 2014
o Reduction of personnel cost by R$30MM
o Reduction of headcount by minimum 65 employees
o Reduction of hierarchies and thereby reduction of
number of middle-managers
Today Tomorrow
2 EC members and 7 Directors Up to 6 levels of hierarchy 175 employees end of 2013
2 EC members and 4 Directors Max 4 levels of hierarchy
Only HoldCo functions with clear control tasks must be
located in Rio de Janeiro
Clearly defining and differentiating between Control and
Support Functions
Action plan for support functions
o Implementation of shared service centers bundling certain
activities
o Centralization of key functions (e.g. procurement)
o Relocation to lower cost locations (e.g. operations)
o Outsourcing (e.g. IT)
Current HoldCo
Functions
Control Functions
Support Functions
Bundle, create shared service
center and relocate
Bundle and Outsource
Clear HoldCo tasks
Increasing efficiency by outsourcing & relocation Focusing on real HoldCo functions
23
Optimizing HoldCo Functions
Schematic
Ramp-up
Phase I
Structure program + realize quick
wins
Phase II
Implement streamlining +
structural changes
Phase III
Increasing efficiency by
outsourcing and relocation
Phase IV
Continuous cost control and
improvement
Quick wins
Streamlining & Structural changes
Efficiency by Outsourcing & Relocation
R$45MM
2Q14 3Q14 4Q14 2015
Full effect on cost reduction realized beginning of 2015 Main part of savings realized in 3Q14 and 4Q14
24
One time costs associated with cost reduction program
Regulatory Update
3.3
Part of 1.4GW Parnaba Thermoelectric Complex, a unique gas
to wire case in Brazil
450MWavg sold in the 2011 A-3 Auction. PPA started in March,
2013
Lowest variable cost (R$59/MWh) among gas-fired projects in
Brazil
Investments of up to R$1.4 billion
All gas turbines already commissioned. Steam turbine to be fully
tested on the coming 4 months
Plants construction and gas supply infrastructure delayed
o Lack of LT financing due to PPA signature difficulties
o OGX Maranho restricted financial capabilities before rescue plan
captained by Cambuhy Investimentos and E.ON
Project Overview Discussion with Aneel over the last 2 months to reach a balanced
solution for Parnaba II
o Regulatory penalties related to COD delay
o PPA termination cost
Proposal presented to Aneel on Jun 18, 2014, consisting in:
o Parnaba II construction conclusion until Dec, 2014
o Temporary suspension of start dates of the PPA until Dec, 2015
Parnaba II steam turbine (154MWavg) online since Dec, 2014,
partially complying with the PPA
o Reduction of the Plants fixed annual revenue for the remaining term
of the PPA
o Letter of commitment to close the cycle of Parnaba I, adding 360MW
of installed capacity, upon certain conditions
Aneel suspended payments of penalties until Jul 18, 2014
ENEVA Proposal to Aneel
Ongoing Regulatory Discussions (1) Parnaba II Delay
26
Filed in Jan, 2014 a lawsuit against Aneel questioning
hourly-based unavailability charges
On Jan 24, 2014, a Federal Court granted an injunction
halting unavailability charges as measured, establishing
the methodology provided for in PPAs (60-month rolling
average)
The lawsuit also claims the reimbursement of amounts
paid since PPAs beginning
Petition for revision of ADOMP methodology presented to
Aneel
o A technical note has already been released considering
Companys contractual understanding
Itaqui and Pecm I
On Jun 26, 2014 filed a request for an injunction with a
Federal Court aiming to get the same methodology
presented to Aneel
Pecm II and Parnaba I & III
Plant 100% Ownership adjusted
Itaqui R$105.2MM R$105.2MM
Pecm I R$250.2MM R$125.1MM
Pecm II R$38.9MM R$38.9MM
Parnaba I R$52.2MM R$36.5MM
Parnaba III R$6.9MM R$4.8MM
Total R$453.3MM R$310.5MM
+R$310MM already paid for unavailability costs
Ongoing Regulatory Discussions (2) ADOMP / Unavailability Charges
Notes: 1) Consider hourly-based methodology for unavailability charges until June, 2014; 2) Does not consider amounts paid since injunction effectiveness.
27
Brazilian Power Market and Greenfield Portfolio
4
Southeast Reservoirs
~70% of total storage capacity
Source: ANEEL
Brazils Generation Capacity: 136 GW
Breakdown by source April, 2014
Brazil is highly dependent on hydro generation with increasingly faster depletion of reservoirs
Brazilian Energy Matrix
29
63.5% 10.5%
2.5%
1.5%
2.2%
19.8%
Hydro Gas Coal Nuclear Wind Others
Dry Season
67%
56%
76%
29% 38%
43%
40%
35% 36%
39%
20%
30%
40%
50%
60%
70%
80%
90%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average 2007-2011 2012 2013 2014
Source: ONS
Autonomy = Storage Capacity / (Load Thermal Generation)
Economic growth will boost power demand
leading to a supply deficit in 2016
Water storage capacity has stagnated,
leading to decreased system autonomy
65
86
65
78
60
65
70
75
80
85
90
2013 2014 2015 2016 2017 2018 2019 2020
GW
avg
ENERGY DEMAND
PHYSICAL GUARANTEE
(with signed PPAs)
2016-on: New generation required ~8 GWavg required until 2020
30
Electric System Reliability
New thermal plants are necessary to guarantee reliable power supply
0
5
10
15
20
25
30
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Reservo
irs A
uto
no
my (
Mo
nth
s)
2013
Current reservoir autonomy ~6 months
Parnaba Complex
Integrated to natural gas resources
Located in a tax-advantaged region
Ventos Wind Complex
Located in one Brazils best wind resource areas
Attractive load factor
Just 30km from grid connection
Land ownership assured
Au (Coal + Gas)
Located at a port with a regasification terminal build license
150km from Campos Basin natural gas accumulations
Environmental licensed to both coal and gas operations
Sul & Seival Integrated to the Seival Mine (proven reserves: 152 M ton)
Low operation costs
Power
supply-demand
unbalanced
Hydropower
concentrated
matrix
Spot prices at
historical highs
Demand for base-
load generation
Opportunities
for ENEVAs
growth 2 3 4 5 1
Sul 727 MW
Parnaba Complex 2,166 MW
Seival 600 MW
Au 2,100 MW Coal 3,300 MW Natural Gas
Solar Tau 1 MW
Ventos Wind Complex 600 MW
Seival Mine License granted 152 M ton in proven reserves
ENEVAs Greenfield Portfolio
31
Attractive licensed greenfield projects in various development stages
Disclaimer
The material that follows is a presentation of general background information about ENEVA S.A. and its subsidiaries (collectively, ENEVA or the Company) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made
concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.
This presentation may contain certain forward-looking statements and information relating to ENEVA that reflect the current views and/or expectations of the
Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement
that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like may, plan, believe, anticipate, expect, envisages, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates
and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or employees nor any of the
placement agents shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the
information and statements contained in this presentation or for any consequential, special or similar damages.
This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.
Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.
Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors
in this regard.
The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research,
publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any
material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or
by industry or other publications. ENEVA, the placement agents and the underwriters do not make any representation as to the accuracy of such information.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without ENEVAs prior written consent.
Thank you. www.eneva.com.br
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