ENEVA Investor Day

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  • ENEVA Investor Day July 3, 2014

  • Agenda

  • Agenda

    9:00

    9:10 1

    10:00

    11:00 3

    Introduction and Management Presentation

    Fabio Bicudo, CEO / Frank Possmeier, Executive Vice President

    Operations

    Roel van der Stok, COO / Frank Possmeier, Executive Vice President

    Financial Stabilization and Cost Reduction Strategy

    Ricardo Levy, CFO / Frank Possmeier, Executive Vice President

    Closing Remarks & Growth Opportunities

    Fabio Bicudo, CEO / Frank Possmeier, Executive Vice President

    Coffee break

    9:10

    10:00 2

    Regulatory Update

    Fabio Bicudo, CEO

    11:30

    12:30 pm 4

    11:00 to 11:30

    3

    12:30

    1:00 5

  • Introduction and Management Presentation

    1

  • 5

    Frank Possmeier, Executive Vice President

    o Former CFO and Deputy CEO of E.ON International Energy.

    Also served as Senior VP and Global Head of M&A at E.ON

    group

    o Holds a Masters degree and a PhD in business and economics

    Fabio Bicudo, CEO

    o Former Co-head of investment banking at Goldman Sachs and

    responsible for Brazilian utilities sector coverage. Prior was MD

    at Citi investment banking.

    o Holds an MBA from Columbia Business School with prior

    studies at HEC in Paris and FGV in So Paulo

    Ricardo Levy, CFO

    o Former CFO of BHG and held executive positions at Light

    o B.A. in economics and in business administration by PUC-Rio

    and holds an MBA from Coppead/UFRJ

    Michael Moser, Chief Development & Compliance Officer

    o Worked at E.ON as VP and Global Head of Legal M&A. Also

    part of Baker & McKenzie and Agio Invest AG

    o Holds master degrees in business, economics and law and

    also a PhD in law

    Alexandre Americano, Chief Legal & Regulatory Officer

    o Previously worked as Legal Manager of Brasil Ecodiesel and of

    BBM Bank and BBM Holding

    o Graduated in law by PUC-Rio and holds an MBA in Finance

    and Capital Markets and a specialization in Corporate Law,

    both from FGV

    Roel van der Stok, Chief Operating Officer

    o Former COO of E.ON Anlagenservice. Also served for E.ON as

    power plant group manager in Germany and head of asset

    management in Benelux

    o Holds a MsC in Engineering as well as an MBA

    Management Team

  • 6

    Management Structure

    Chief Executive Officer Investors Relations Officer

    Fabio Bicudo

    Executive Vice President Chief Administrative Officer

    Frank Possmeier

    Chief Development and Compliance Officer

    Michael Moser

    Director of Engineering & Construction

    Matthias Fricke

    Director of Business Development

    Pedro Litsek

    Chief Legal and Regulatory Officer

    Alexandre Americano

    Chief Operating Officer

    Roel van der Stok

    Chief Financial Officer

    Ricardo Levy

    o Investors Relations

    o Human Resources

    o Communication

    o Institutional Relations

    o Internal Audit

    o HSSE

    o Treasury

    o Accounting

    o Planning & Reporting

    o Capital Markets

    o E&F Trading

    o Information Technology

    o Legal

    o Regulatory

    o Licensing

    o Engineering & Construction

    o Asset Management

    o Operations

    o M&A

    o Business Development

    o Compliance

    o Tax

    o Procurement

  • Regulatory Update

    2

  • 8

    Ongoing Regulatory Discussions (1) Parnaba II Delay

    Average CVU (ENEVA without Parnaba II): R$ 111/MWh

    Average CVU (ENEVA with Parnaba II): R$ 101/MWh

    0

    50

    100

    150

    200

    250

    300

    350A

    verag

    e C

    VU

    (R

    $/M

    Wh)

    SIN wo/ ENEVA SIN w/ ENEVA

    Avg. CVU Reduction: R$12/MWh

    Parnaba II CVU: R$59/MWh

    ENEVA w/ Parnaba: R$101/MWh

  • 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 (2) Parnaba II Delay

    9

  • 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 (3) ADOMP / Unavailability Charges

    Notes: 1) Consider hourly-based methodology for unavailability charges until June, 2014; 2) Does not consider amounts paid since injunction effectiveness.

    10

  • Applicability

    Dispatch > 80% (during at least 6

    consecutive months) 1

    Installed capacity > 100MW 2

    Variable cost below R$200/MWh 3

    Differentiated treatment to thermal plants with low variable cost and significant impact on reservoir levels

    Similar to the MRE, which was created to mitigate hydrological risks

    Terms of the request

    Additional Regulatory Studies Potential discussion to restructure PPA

    11

    Coal: [up to 3 months/year]

    Gas: [up to 1 month/year]

    Additional Maintenance

    5 years duration; or

    Full duration of the PPA

    Temporary reduction of contractual

    volume

    PPA extension; and/or

    Reduction of fixed revenue Compensation

  • Operations

    3

  • Parnaba Gs Natural

    3.1

  • Cambuhy/E.ON Investment in Parnaba Gs Natural Securing ENEVAs power plants gas supply

    In 2H2013, ENEVA and E.ON led efforts to rescue PGN from

    OGPs judicial recovery process and secure the gas supply for

    ENEVAs power plants

    o Cambuhy Investimentos was brought onboard to replace OGP in

    the shareholding structure of PGN

    o Reinforcing its commitment to Brazil, E.ON agreed to join the

    control group of PGN

    In Feb, 2014, Cambuhy and E.ON carried out a Capital

    Increase at PGN amounting to R$250MM, guaranteeing funds

    to cover PGNs capex needs in 2014

    o Additional R$750MM in LT financing were secured

    Cambuhy also entered into a share purchase agreement to

    buy OGPs remaining stake at PGN for R$200MM

    o This last step of the transaction will be completed as part of

    OGPs judicial recovery process

    ENEVA and E.ON have the right for a 2-year term to increase

    their joint participation at PGN to 33.3%

    After execution of the sale and purchase agreement

    18.2%

    Parnaba Gs Natural

    9.1% 72.7%

    Controlling Block (100%)

    18.2%

    PGN

    36.3% 9.1% 36.4%

    Controlling Block (63.7%)

    Current

    OGP

    Successful rescue plan of PGN

    Gas blocks

    70%

    BTG 30%

    Shareholding Structure

    14

  • Only part of Parnaba Basin is yet licensed and explored

    Declaration of commerciality for 3 gas fields: Gavio Real, Gavio

    Azul and Gavio Branco

    o Santa Vitria discovery in Jan, 2014 (well OGX-121)

    New management team led by Pedro Zinner (ex-BG director)

    o New COO Hubert Mainitz (E.ON E&P)

    Challenges

    o High dispatch scenario increases draw on existing wells, requiring

    analysis on optimization of reservoir management

    o Additional investment may be required to keep production levels

    Overview

    Parnaba Gs Natural (PGN) 3 commercial gas fields fully committed to supply ENEVA power plants

    15

  • Parnaba Generation

    3.2

  • 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

    17

  • All gas turbines in continuous operation for over 10,000 hours with high availability

    o Parnaba I historical avg. availability: 96%

    o Parnaba III historical avg. availability: 91%

    First inspections executed by GE with no major findings

    Maintenance interval extended from 16,000 hours to 32,000 hours

    o Maintenance costs savings of approx. R$25MM for the duration of the PPA (100% dispatch)

    Ongoing project to improve the reliability of Parnaba IV Wrtsil engines

    o Implementation concluded by 2014YE, depending on assessment results

    Overview of gas plants operations

    18

  • Coal Fleet Itaqui, Pecm I and Pecm II

    3.3

  • 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

    20

  • Availability Main issues and action plan

    Equipment Cause Action Plan Status

    Boiler fans bearing Manufacturing problems

    Exchanged

    Mills Wear Design modification and executing overhauls

    FGD system (desulphurization)

    Clogging Installation improved and online cleaning procedure developed

    Auxiliary equipment Design and installation

    Replacement, modifications

    1

    2

    3

    4

    Technical improvements and additional spares totaling up

    to an estimated R$40MM will allow for reduced downtime

    Maintenance shut down planned for 3Q14

    Itaqui (1)

    Note: (1) Based on Company and ONS data.

    21

    78% 80%

    74%

    00%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Feb-1

    3

    Mar-

    13

    Apr-

    13

    May-1

    3

    Jun-1

    3

    Jul-

    13

    Aug-1

    3

    Sep-1

    3

    Oct-

    13

    Nov-1

    3

    Dec-1

    3

    Jan-1

    4

    Feb-1

    4

    Mar-

    14

    Apr-

    14

    May-1

    4

    Jun-1

    4

    Monthly Energy Availability Historical Avg.

    1-year Avg. Last 6 Months Avg.

    1 2

    3

    4 Declared: 95%

  • Variable Cost x Variable Revenue

    (R$/MWh) Problem Consequence Action Plan

    Coal conveyor design problems

    Higher truck transportation costs of approx. R$15/MWh

    Simplify engineering by splitting the very long belt into several sections

    Status: New engineering project underway

    Time estimate: 6-12 months

    Cost: claim will be presented to manufacturer (Technometal) to cover costs

    Itaqui Port coal berth draft

    Ship capacity restriction with higher freight cost of ~US$5/ton / R$5/MWh

    Increase berth draft to allow use of Panamax ships (75k ton), instead of the current Supramax ships (35-40k ton)

    Status: Local government finalizing tender phase

    Time estimate: 2014YE

    Variable generation cost inflated by high coal logistics cost

    Variable costs should be reduced to match variable

    revenue with improved coal logistics

    Itaqui (2)

    261

    232

    144

    159

    128

    149

    112

    141

    108

    103

    115 121

    126 129

    118 127 124

    107 106 103 102 102 100 104

    108 107

    113

    116 119 120

    112 108 106 103

    Variable Cost Variable Revenue

    22 Note: (1) Preliminary data for Jun, 2014.

  • Availability Main issues and action plan

    Equipment Cause Action Plan Status

    Turbine fire Oil leakage Oil pipes improved, fire extinguisher system commissioned

    Hydrogen seal Material failure Exchanged

    Boiler leakage Construction failure Repaired

    Electrical air fan motor

    Construction failure New motor installed, old motor under repair for spare

    Auxiliary equipment Design and installation

    Replacement, modifications

    1

    2

    3

    4

    5

    Technical improvements and additional spares totaling up

    to an estimated R$30MM will allow for reduced downtime

    Pecm I (Unit #1)

    Note: (1) Based on Company and ONS data.

    23

    59%

    52%

    75%

    00%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Jan-1

    3

    Feb-1

    3

    Mar-

    13

    Apr-

    13

    May-1

    3

    Jun-1

    3

    Jul-

    13

    Aug-1

    3

    Sep-1

    3

    Oct-

    13

    Nov-1

    3

    Dec-1

    3

    Jan-1

    4

    Feb-1

    4

    Mar-

    14

    Apr-

    14

    May-1

    4

    Jun-1

    4

    Monthly Energy Availability Historical Avg.

    1-year Avg. Last 6 Months Avg.

    1

    2

    3

    5

    4

    Declared: 90%

  • Availability Main issues and action plan

    Equipment Cause Action Plan Status

    Generator cooling fan Assembly failure Reassembled

    Bag filters Cleaning system Valves exchanged

    Turbine control valve Oil leakage Repaired

    Auxiliary equipment Design and installation

    Replacement, modifications

    1

    2

    3

    4

    Technical improvements and additional spares totaling up

    to an estimated R$30MM will allow for reduced downtime

    Maintenance shut down planned for 3Q14

    Pecm I (Unit #2)

    Note: (1) Based on Company and ONS data.

    24

    76% 74%

    85%

    00%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Monthly Energy Availability Historical Avg.

    1-year Avg. Last 6 Months Avg.

    1

    2 3

    4 Declared: 90%

  • Variable generation cost already at recurring levels with positive margin on dispatch

    Variable generation cost already at recurring levels

    o Diesel costs reduced by ~50% with more stable

    operations after Jan, 2014 maintenance outage

    o Coal inventory costs in line with values declared as basis

    to determine variable revenues

    Pecm I

    151

    127 118

    136

    154

    117

    139 138

    109 119

    107

    134

    106 107

    110

    95 93

    108

    111 105 104 100 99 99 97 102

    105 106 110 114

    117 118

    110

    105 102 100

    Variable Cost Variable Revenue

    25 Note: (1) Preliminary data for Jun, 2014.

    Variable Cost x Variable Revenue (R$/MWh)

  • Improved commissioning resulted in more stable operations,

    incorporating lessons learned from other plants

    Monitoring of auxiliary equipment to keep good performance

    Variable Cost x Variable Revenue (R$/MWh) Availability

    Pecm II

    93%

    96%

    00%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

    Monthly Energy Availability Historical Avg. Last 6 Months Avg.

    92 99

    111 99

    106 101 101 88

    99

    114 118 122 125 125 118 113 111 108

    Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

    Variable Cost Variable Revenue

    Note: (1) Based on Company and ONS data.

    26

    Declared: 95%

  • Main remaining risks

    o Continued high dispatch scenario with reduced maintenance time

    o Auxiliary equipment design and installation

    Improvement plan for coal plants

    o Optimization of organizational structures to reduce costs and improve team performance

    o Experience exchange between power plants and with E.ON and EDP

    o Implementation of asset management processes (risk management, failure analysis)

    o Technical improvements (approx. R$60MM over 3 years, mainly focused on Itaqui and Pecm I)

    o Contractors: establishing a network of reliable providers of critical goods and services

    o Spare parts: acquire strategic spare parts (approx. R$40MM over 3 years for spare parts pool)

    Summary of coal operations improvements

    27

  • Financial Stabilization and Cost Reduction Strategy

    4

  • Financial Stabilization

    4.1

  • 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

    30

  • 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)

    31

  • 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)

    32

  • Cost Reduction Strategy

    4.2

  • 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

    34

  • 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

    35

    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

    37

    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

    38

    One time costs associated with cost reduction program

  • Closing Remarks and Growth Opportunities

    5

  • Bottoming of open cycle gas turbines from Parnaiba I

    power plant provides extra 360MW

    Competitive project as no additional gas needed

    Installation Environmental License issued

    Plug and Play: 500kV electrical substation and water

    supply already built

    Known technology, original design of Parnaiba

    Generation Complex done to enable modular expansion,

    leading to efficient implementation and operation

    o ENEVA recent experience in Parnaba II combined-cycle

    plant at neighboring site

    Cost sharing efficiency (O&M, administrative, HSSE,

    spare parts etc.) with Parnaba Generation Complex

    make the project even more competitive

    Highlights Parnaba Site

    Bottoming #1 Bottoming #2

    Note: (1) To enable expansion additional fuel mainly for PPA/contract harmonization and internal consumption

    Parnaba I: Closing of the cycle (1) Highly competitive expansion to existing site

    40

  • Net power output: 352,8 MW

    Plants upside efficiency: 51% (previously 37%)

    Additional gas consumption: zero

    Contractor: TBD (first phase performed by Duro Felguera)

    Implementation schedule: 36 months

    CAPEX: approx. R$1.75 billion

    Target capital structure: 70/30, with BNDES financing

    Target IRR: 15% real

    Main equipment/delivery time

    o Steam Turbine + Generator: 18 months

    o Heat Recovery Steam Generator (boilers): 14 months

    o Cooling Tower: 13 months

    o Pumps (feed water, condensate, cooling water): 13 months

    Existing facilities

    New equipment

    Parnaba I: Closing of the cycle (2) Highly competitive expansion to existing site

    41

  • 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.

    Disclaimer

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