TENDER DOCUMENT FOR AUCTION No. 01/2017-ANEEL · TENDER DOCUMENT NO 01/2017-ANEEL CASE NO. 48500.001997/2017-67 PROCURADORIA FEDERAL/ANEEL 5 de 47 VISTO 1.6 The electronic files referring

TENDER DOCUMENT NO 01/2017-ANEEL CASE NO. 48500.001997/2017-67

TENDER DOCUMENT FOR AUCTION No. 01/2017-ANEEL

HIRING OF HYDROELECTRIC POWER PLANTS CONCESSIONS UNDER THE ALLOCATION SYSTEM OF QUOTAS OF PHYSICAL GUARANTEE OF ENERGY AND POWER, PURSUANT TO LAW No. 12.783/2013, AMENDED BY LAW No. 13.203/2015.

Brasília, August 8, 2017.

(republished on August 25, 2017)


Attorney General's

Office /ANEEL

CHECK Page. 2 of 49

CONTENTS 1 GENERAL INFORMATION ................................................................................................................................ 4

I PARTICIPATION .............................................................................................................................................. 5

II OBJECT ........................................................................................................................................................... 8

III BONUS FOR THE GRANT AND MINIMUM PRICE OF THE AUCTION ................................................................... 9

2 GENERAL CONDITIONS OF THE GRANT ............................................................................................................ 9

I GENERATION FACILITIES ................................................................................................................................. 9

II OBLIGATIONS OF THE CONCESSIONAIRE ....................................................................................................... 10

III ANNUAL GENERATION REVENUE ‐ RAG ......................................................................................................... 11

IV TRANSITION RULES ....................................................................................................................................... 13

3 MEANS OF PRESENTATION OF DOCUMENTS ................................................................................................. 15

4 BIDDERS QUALIFIED TO TAKE PART IN THE AUCTION .................................................................................... 16

5 REGISTRATION TO TAKE PART IN THE AUCTION ............................................................................................ 17

6 BID BOND ..................................................................................................................................................... 18

7 AUCTION SESSION ........................................................................................................................................ 22

I CRITERIA FOR THE PREPARATION OF THE FINANCIAL BID .............................................................................. 22

II INSTRUCTIONS ON THE PUBLIC SESSION OF THE TENDER .............................................................................. 23

III GENERAL PROCEDURE FOR THE AUCTION AND SPECIFIC PROCEDURE FOR LOT A........................................... 23

IV SPECIFIC PROCEDURE FOR THE AUCTION OF LOTS B, C AND D ....................................................................... 24

V INSTRUCTIONS ON THE BID RATIFICATION OF THE WINNERS OF THE AUCTION ............................................. 24

8 QUALIFICATION ............................................................................................................................................ 24

I QUALIFICATION DOCUMENTS ....................................................................................................................... 25

II QUALIFICATION RESULTS .............................................................................................................................. 30

9 AWARD OF THE OBJECT ................................................................................................................................ 31

10 PENALTIES .................................................................................................................................................... 31

11 SIGNATURE OF THE CONCESSION AGREEMENT ............................................................................................. 32

12 APPEALS ....................................................................................................................................................... 34

13 FINAL PROVISIONS ....................................................................................................................................... 34

14 SCHEDULE .................................................................................................................................................... 35

APPENDIX A GLOSSARY

APPENDIX B STATEMENT OF AWARENESS AND ACCEPTANCE OF THE TENDER RULES

APPENDIX C FINANCIAL PROPOSAL / EXPRESSION OF NON-INTEREST IN PRESENTING A FINANCIAL PROPOSAL


PROCURADORIA FEDERAL/ANEEL

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APPENDIX D BID RATIFICATION TERM

APPENDIX E EQUIVALENCE OF QUALIFICATION DOCUMENTS FOR FOREING COMPANY

appendix F expression of INTEREST / NON-INTEREST in the ASSISTED OPERATION

APPENDIX G COST OF PARTICIPATION IN THE AUCTION, EXCLUSIVELY FOR WINNERS

ATTACHMENT 1 MINUTES OF THE CONCESSION AGREEMENT

ATTACHMENT 2 BASIC TECHNICAL FEATURES OF THE HYDROELECTRIC POWER PLANTS FACILITIES (PER LOT)

ATTACHMENT 3 INSTRUCTION MANUAL


Attorney General's

Office /ANEEL

CHECK Page. 4 of 49

1 GENERAL INFORMATION

1.1 The Brazilian Electricity Regulatory Agency (ANEEL), an authority under a special regime instituted by Law no. 9,427, of December 26, 1996, with headquarters in SGAN, Quadra 603, Módulos I and J, Brasília / DF, enrolled with CNPJ / MF under no. 02.270.669 / 0001-29, pursuant to Law No. 12,783, of January 11, 2013, as amended by Law no. 13,203, of December 8, 2015, based on the general guidelines established by MME Ordinance no.123, and in the specific guidelines of MME Ordinance no. 133, of April 4, 2017, , as well as on the Resolution of the National Council of Energy Policy - CNPE No. 12, of May 12, 2017, hereby announces that it will carry out a bidding, in the mode of an AUCTION, for hiring Hydroelectric power plants concessions under the allocation system of quotas of Physical Guarantee of Energy and Power to concessionaires and license holders of public electricity distribution service of the National Interconnected System - SIN.

1.2 To facilitate the understanding of this Tender Document, the terms written in CAPITALS are included in the glossary available in Appendix A.

1.3 The use of the definitions contained in the Tender Document, either in plural or singular, male or female, does not change the meanings attributed to it by Appendix A - GLOSSARY.

1.4 Pursuant to art. 18-A of Law no. 8,987 / 1995, this AUCTION shall be carried out with inversion of the order of phases.

1.4.1 The REGISTRATION in the AUCTION shall occur via electronic form, whose completion instructions shall be made available on ANEEL WEBSITE, in the INSTRUCTION MANUAL.

1.4.2 The submission of BID BONDS shall be made via Internet, subject to the provisions of Chapter 6 - BID BOND and the INSTRUCTION MANUAL. The rules for the submission of BID BONDS shall be published in the INSTRUCTION MANUAL.

1.4.3 The Qualification documents shall be delivered, on the date set forth in the SCHEDULE, to the Executive Secretariat of Tenders - SEL, located at SGAN, Quadra 603, Módulo J, Sala 103, Brasília-DF.

1.5 The AUCTION session shall be conducted by B3, with the participation of the BIDDERS that fulfill the requirements for REGISTRATION, submit the BID BOND and deliver the financial proposal envelope, pursuant to this Tender Document, on the date, time and place set as follows:

Date: September 27, 2017

Time: 10 AM

Place: On the premises of B3 (Brasil, Bolsa e Balcão)

Address: Rua XV de Novembro No. 275 – São Paulo – SP



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1.6 The electronic files referring to this Tender Document are available for download on ANEEL website.

1.7 For clarification on any provisions of this Tender Document, its Attachments and the procedures of the TENDER, the interested party shall contact the SPECIAL BIDDING COMMITTEE - CEL, by filling out an electronic form via System, whose link shall be made available on ANEEL WEBSITE, together with the Tender Document, and should be aware that:

a. The requests for clarification shall be formulated in written, in Portuguese, until the date set forth in the SCHEDULE;

b. The answers to the requests for clarification shall be made available until the date set forth in the SCHEDULE, on ANEEL WEBSITE, for general knowledge;

c. Clarifications, addendums or RELEVANT NOTICES shall become an integral part of this Tender Document;

d. In the absence of any requests for clarification, it is assumed that information and elements made available in the e-Data Room of each HYDROELECTRIC POWER PLANT, those eventually obtained in technical visit to the respective facilities of and contained in this Tender Document and its Attachments are sufficient to allow the preparation of the financial proposal and the presentation of the Qualification documents and, consequently, to participate in the AUCTION, for which reason no further questioning or claims shall be admitted.

1.8 If the doubts raised by the interested parties imply a change in the conditions necessary for the formulation of proposals, the Tender Document shall be republished, changing the SCHEDULE.

1.9 The INTERESTED PARTIES may perform technical visits to the HYDROELECTRIC POWER PLANTS, provided that previously scheduled up to the date indicated in the SCHEDULE.

1.9.1 The registration method, the conditions and the duration of the technical visit shall be informed by CEL.

1.10 The PARTIES INTERESTED to participate in this AUCTION shall perform the REGISTRATION and submit the BID BOND, under the conditions of Chapter 6.

1.11 The participation in the TENDER implies the tacit and unconditional acceptance of the standards established in this Tender Document.

1.12 This Tender Document and its Appendixes are also available in English and Spanish, but for all legal purposes, the Portuguese version prevails.

I PARTICIPATION

1.13 May participate in this AUCTION, as BIDDERS, if fully comply with the provisions of the Tender Document and the legislation in force:

1.13.1 Legal Entities governed by Public or Private Law, either national or foreign, and Private Equity Investment Funds (FIPs), individually or jointly in a consortium;



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1.13.2 Supplementary private pension fund, in a consortium with FIPs and / or supplementary pension entity(s), provided that the consortium has the participation of at least one Legal Entity that is characterized neither as FIP, nor as a supplementary pension entity.

1.14 The Foreign Legal Entities governed by Public or Private Law should be aware that:

1.14.1 When competing in isolation or in consortium, they shall create a Specific Purpose Company (SPE), incorporated under the Brazilian laws, on behalf of which will be signed the respective CONCESSION AGREEMENT of the winning LOT;

1.14.2 When competing in consortium with legal entities governed by Brazilian Legal Entities governed by Public or Private Law, the leadership of the consortium shall always be the responsibility of the Brazilian Legal Entity, and it is also mandatory to the constitution of the SPE, under the conditions of the previous sub-item;

1.14.3 They must have a Legal Representative in Brazil, with express powers, by proxy by public or private instrument, with a notarized signature, to receive service and respond administrative and judicial proceedings in the country, as well as represent them in all stages of the Process, which conditions shall be expressly indicated in its Legal Qualification documents.

1.15 FIP/ Supplementary Pension Fund shall be aware that:

1.15.1 If FIP, the FIP shall provide a list of its quotaholders and present a certified copy of the registration with the Securities and Exchange Commission (CVM);

1.15.2 If Supplementary Pension Fund, it shall be proved the regularity of its constitution and operation, as well as the plans and benefits managed by it, pursuant to item 8.5.7 of this Tender Document.

1.15.3 If successful, a FIP, participating individually, or the consortium comprised by a FIP and/or Supplementary Pension Fund shall constitute an SPE under the Brazilian laws, on behalf of which will be signed the respective CONCESSION AGREEMENT.

1.16 The following shall not take part in this Auction, as BIDDERS:

1.16.1 Consortium with one or more members that integrate it participating as an individual BIDDER;

1.16.2 Consortium with one or more members who are participants of another consortium;

1.16.3 The FIP(s) ), participating individually or jointly in a consortium that has in its composition the same Administrator and/or Manager of other FIP(s) participating in other Consortium (Consortia) individually or jointly.



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1.17 The participation in consortia shall be admitted upon presentation of the Consortium Constitution Contract, by public or private instrument, subscribed by the legal representatives of the consortium companies, which shall be included in specific clauses, to be verified in the qualification:

1.17.1 The indication of the percentage of participation of each company in the consortium and the appointment of the leading company, which shall be responsible before ANEEL for the fulfillment of the commitments assumed in the financial proposal, without prejudice to the joint liability from other consortium companies.

1.17.2 The commitment to, becoming the winner of the AUCTION, constitute a Specific Purpose Entity (SPE) under the terms of the Bidding Document, maintaining the same proportion of participation of the consortium companies, according to the Statement in Appendix B, in cases in which there is participation of FIP, Supplementary Pension Fund Entity or foreign Legal Entity governed by Public or Private Law in the consortium.

1.17.3 The obligation, by the other consortium members, to provide information to the leading company so that it can fulfill its responsibilities before ANEEL.

1.17.4 The joint liability of the members of the companies for the acts practiced in a consortium, both in the Qualification phase and in the execution of the CONCESSION AGREEMENT.

1.17.5 In consortiums formed between legal entities and foreigners, the leadership of the consortium shall always be the responsibility of the Brazilian legal entity.

1.17.6 The Qualification Documentation shall be presented in relation to each of the consortium companies, clarifying that:

1.17.6.1 The consortium leader shall certify, on behalf of the consortium, the statements set forth in Appendix B. These statements shall be made upon acceptance selected at the time of the online REGISTRATION (pursuant to Chapter 5 of this Tender Document).

1.17.6.2 For the purposes of economic and financial qualification, it shall be considered the sum of the amounts of each consortium company, in proportion to the respective participation.

1.18 The following BIDDERS must necessarily constitute an SPE, preferably in the form of a Corporation, on behalf of which will be signed the CONCESSION AGREEMENT resulting from this AUCTION:

a. Foreign Legal Entities governed by Public or Private Law and FIP, participating alone; b. Consortium, having in its composition FIP, Supplementary Pension Fund Entity or foreign Legal

Entity governed by Public or Private Law.

1.19 The BIDDER that participated in the AUCTION in isolation may constitute a SPE, on behalf of which the CONCESSION AGREEMENT resulting from this AUCTION will be signed. In this event, the SPE shall be its wholly-owned subsidiary, or in consortium, in cases not reached by item 1.18.



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1.19.1 The CONCESSION AGREEMENT shall be signed on behalf of the AWARDEE who, at the time of registration, has chosen to constitute SPE under the terms of item 1.19, without, however, presenting the corresponding documentation within the period established in the SCHEDULE, under the conditions established in item 11.2.

1.20 The commitment to set up SPEs, in accordance with Brazilian laws and with headquarters and administration in Brazil, to exploit the concession of generation services to be contracted, shall be certified at the online REGISTRATION.

1.21 The legal entity that has not participated in the AUCTION shall not be included in the SPE, and in the case of a consortium, the SPE shall be constituted exclusively by the consortium group originally registered and by all the members of the consortium, in proportion to their respective stakes.

1.22 The BIDDER that is successful in more than one LOT may constitute a single SPE to contract the corresponding concessions.

.

1.23 The BIDDER may use a SPE already constituted in a stage prior to the TENDER, with similar object, maintaining, in the case of a consortium, the same interest of the consortium companies.

II OBJECT

1.24 It is the object of this AUCTION the grant of the HYDROELECTRIC POWER PLANTS concession that are part of the LOTS listed in the table below, by contracting the electricity generation service, at the highest value of BONUS BY THE GRANT - BO proposed, by LOT, under the system addressed to in Law 12,783 of January 11, 2013, for a period of thirty (30) years, from the effective date of the respective CONCESSION AGREEMENT, or the date of assumption of the service, after the assisted operation period, whichever occur later, as established in Clause Four of the CONCESSION AGREEMENT.

Lot Hydroelectric Power Plant

Installed Power (MW)

Final Term of the Current

Concession Agreement

River State(s)

A São Simão 1.710,00 11/01/2015 Paranaíba GO/MG B Jaguara 424,00 28/08/2013 Grande MG/SP C Miranda 408,00 23/12/2016 Araguari MG D Volta Grande 380,00 23/02/2017 Grande MG/SP

1.25 The main features of the HYDROELECTRIC POWER PLANTS, whose concessions are the object hereof, are described in Attachment 2 of this Tender Document.



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III BONUS FOR THE GRANT AND MINIMUM PRICE OF THE AUCTION

1.26 Pursuant to article 8-A of MME Ordinance no. 123/2013, as amended by Ordinance MME no. 337/2017, the effectiveness of the respective CONCESSION AGREEMENT shall be given by means of payment of the BONIFICATION BY GRANT- BO, imposed by § 7 of article 8 of Law 12783 / 2013, added by Law no. 13203/2015.

1.27 In line with the provisions of art. 1, item II and § 4, of Resolution 12 of the National Energy Policy Council - CNPE, of May 12, 2017, with the wording given by Resolution CNPE 19, of August 22,2017, the payment of the BONUS FOR THE GRANT- BO resulting from the AUCTION shall be made in a single installment, corresponding to 100% of the amount at sight, within 20 (twenty) days counted from the signing of the CONCESSION AGREEMENT.

1.28 The amounts of the BONUS FOR THE GRANT – BO, per LOT, set forth in Attachment of Resolution 22 of the National Energy Policy Council - CNPE, of May 12, 2017, are presented in the following table:

Lot Hydroelectric power plant

Installed Power (MW)

Minimum Value of Bonus for the Grant (R$)

A São Simão 1.710,0 6.740.946.603,49 B Jaguara 424,0 1.911.252.009,47 C Miranda 408,0 1.110.880.200,23 D Volta Grande 380,0 1.292.477.165,35

TOTAL 2.922,0 11.055.555.978,54

1.29 The value of the BONUS FOR THE GRANT – BO for each LOT established in item 1.28, corresponds to the minimum bid amount to be offered, for the purposes of the provisions of item 7.2 of this Tender Document.

1.30 It shall be expected the right to celebrate the corresponding CONCESSION AGREEMENT the BIDDER who presents, per LOT, the highest amount of BONUS FOR THE GRANT - proposed for the generation of electric energy under quota system, observing the percentage of 70% (seventy percent) of the physical guarantee of the HYDROELECTRIC POWER PLANT(S) for the Regulated Contracting Environment (ACR), as established in article 1, subsection III, of CNPE Resolution 12/2017.

2 GENERAL CONDITIONS OF THE GRANT

I GENERATION FACILITIES

2.1 The information on HYDROELECTRIC POWER PLANTS, contained in the e-Data Room and previously disclosed to the interested parties pursuant to the Order no. 1383 of May 18 , 2017, and those obtained in the technical visit to the facilities of the PLANTS, in addition to the basic technical features and requirements of the GENERATION FACILITIES described in Attachment 2 of this Tender Document, shall be considered in the preparation of the proposal, per LOT.



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2.1.1 The BIDDERS acknowledge that the information available is sufficient for the formulation of their proposals.

II OBLIGATIONS OF THE CONCESSIONAIRE

2.2 The CONCESSIONAIRE shall ensure the quality and continuity of the electric power generation service of the HYDROELECTRIC POWER PLANT (S) belonging to the LOT, within thirty (30) years, counted in the form of Clause Four of the CONCESSION AGREEMENT, in compliance with the provisions of Section IV of this Chapter 2 - TRANSITION RULES. During the transition period, referred to as ASSISTED OPERATION, such obligation remains the liability of the company(s) responsible for providing the generation service, appointed in accordance with art. 9 of Law 12,783 / 2013.

2.3 The CONCESSIONAIRE shall obtain the grant(s) of right to use water resources of the PLANT(s) that are an integral part of the relevant LOT before the National Water Agency (ANA) or the state water resource management unit, according to the dominance of the river(s) where the PLANT(S) is (are) located, presented in the table below, observing the terms, conditions and procedures established by the corresponding Granting Authority.

Lot Hydroelectric power plant River Dominance of the River * State(s) A São Simão Paranaíba Federal GO/MG B Jaguara Grande Federal MG/SP C Miranda Araguari State MG D Volta Grande Grande Federal MG/SP

* Verified from the domain maps of water bodies made available by ANA at the following link: http://www.ana.gov.br/bibliotecavirtual/pesquisaSimples.asp?criterio=dominio&categoria=11&NovaPagina=1&pesquisar=Pesquisar

2.4 The SUCCESSFUL BIDDER(S) shall bear the costs related to the realization of TENDER, noting that:

2.4.1 The estimated costs for the conduction of AUCTION shall be disclosed on ANEEL WEBSITE, by means of RELEVANT COMMUNICATION, before the date established in the SCHEDULE for the submission of BID BOND.

2.4.2 The reimbursement of the expenses for the conduction of the AUCTION shall occur within five (5) business days after the publication of the Notice of Approval and Award, with a minimum maturity of 15 (fifteen) business days after the relevant collection is issued;

2.4.3 In the event of default, it shall incur on the amount payable by the SUCCESSFUL BIDDER (S) a fine of 2%, plus pro rata interest of 1% per month and the IGP-M update from the 5th business day after maturity.

2.5 The CONCESSIONAIRE shall sign the Contract for the Use of the Distribution System - CUSD with the or the Contract for the Use of the Transmission System – CUST with the National Electric System



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Operator (ONS), establishing the technical and commercial conditions related to the use of the distribution or transmission facilities, within sixty (60) days after the start of the counting of the Concession term, pursuant to Clause Four of the CONTRACT.

2.6 The CONCESSIONAIRE shall enter into a Distribution Connection Agreement or a Transmission Connection Agreement (CCT) with the relevant Distributor or Transmitter, thus constituting the technical conditions for the connection of the HYDROELECTRIC PLANT(S) and the commercial conditions related to the availability of the Distribution or transmission facilities, within 60 (sixty) days after the beginning of the Concession period, pursuant to Clause Four of the CONTRACT.

2.7 The CONCESSIONAIRE shall be associated with the Electric Energy Trading Chamber (CCEE) and participate in the Energy Reallocation Mechanism (MRE), in addition to be a member of the National Electric System Operator (ONS). The CONCESSIONAIRE must be diligent in order to make sure it will earn the revenue refferred to in Section III of this Chapter 2.

2.8 The CONCESSIONAIRE shall comply with the NETWORK PROCEDURES and other requirements and guidelines from ONS, as well as with the Distribution Procedures - PRODIST, in case of connection to the distribution network, and the TRADING PROCEDURES.

III ANNUAL GENERATION REVENUE - RAG

2.9 For the provision of the generation service, exclusively to the extend of the portion of the physical guarantee intended for the Quotas system of Physical Guarantee of Energy and Power of the HYDROELECTRIC POWER PLANT, the CONCESSIONAIRE shall be compensated through ANNUAL GENERATION REVENUE - RAG, expressed in Reais per year, composed of the MANAGEMENT COST OF THE GENERATING ASSETS - GAG and the portion of RETURN OF THE BONUS FOR THE GRANT - RBO, in addition to the charges and taxes, including the charges of connection and use of the transmission or distribution systems under its responsibility, with any such unavailability being compensated.

2.10 According to the methodology and the calculations detailed in Technical Notes no. 135/2017-SGT / ANEEL, and in Memoranda no. 43/2017-SGT no. 385/2012-SRE / SRG / ANEEL, no. 105/2015-SRG / SFR / ANEEL and no. 82/2017-SGT-SRG / ANEEL, based on the technical and economic parameters established in CNPE Resolution 12/2017, in accordance with the provisions of item XII of art. 2 of Law no. 9478, of August 6, 1997, the values of GAG and RBO, by LOT, are set out in the following table:


Management Cost of the Generating Assets – GAG (R$/year)

Portion of RETURN OF THE BONUS FOR THE GRANT -– RBO

(R$/year) GAG O&M1 GAG Improvements1 GAG Total1

A São Simão 103.491.188,64 132.040.897,89 235.532.086,53 796.629.337,25

B Jaguara 38.657.000,40 49.321.155,84 87.978.156,24 233.164.542,45

C Miranda 31.268.614,16 39.894.564,39 71.163.178,55 142.666.456,61

D Volta Grande 32.167.405,07 51.301.626,54 83.469.031,60 169.570.280,19



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Management Cost of the Generating Assets – GAG (R$/year)

Portion of RETURN OF THE BONUS FOR THE GRANT -– RBO

(R$/year) GAG O&M1 GAG Improvements1 GAG Total1

Grand Total 205.584.208,27 272.558.244,66 478.142.452,92 1.342.030.616,50 1 Prices reference: May 1st, 2017

2.11 The GAG covers the regulatory costs of operation, maintenance, administration, compensation and amortization of HYDROELECTRIC POWER PLANT, as well as investments in improvement during the term of the respective concession.

2.12 In the calculation of the portion of RETURN OF THE BONUS FOR THE GRANT – RBO, technical and economic parameters established in CNPE Resolution 12/2017 were used, including WACC of 8.08% (eight point zero eight percent), per year, less taxes.

2.12.1 In the calculation of the RBO portion, the amount of BONUS FOR THE GRANT - BO resulting from this AUCTION that exceeds the minimum amount stipulated in item 1.28 was not considered, and this amount was not passed on to RAG, pursuant to § 1 B of article 5 of MME Ordinance no. 123/2013.

2.12.2 The values set forth in item 2.10 consider the percentage of 100% of the physical guarantee of each POWER PLANT for the quota system. At the beginning of the counting of the Concession(s) term, only 70% of the physical guarantee of each POWER PLANT will be destined to quota system and the values set forth in item 2.10 will be lowered in 30%. From that momento n the CONCESSIONAIRE will be allowed the free trading of 30% of the energy and power physical guarantee of each POWER PLANT

2.13 The CONCESSIONAIRE shall be entitled to the RAG from the date of the beginning of the counting of the term of the Concession(s), considering the transition rules set forth in Section IV of this Chapter 2 - TRANSITION RULES

2.13.1 During the transitional period, the SUCCESSFUL BIDDER / Contractor shall be exclusively entitled to the portion of Return of Bonus for the Grant (RBO), an integral part of the RAG, pursuant to the provisions of the sole paragraph of article 6 of MME Ordinance no. 123/2013, complemented by MME Ordinance no. 429/2015, according to the values set forth in item 2.10

2.14 RAG shall be subject to readjustments and revisions, in accordance with the legislation, the CONCESSION AGREEMENT and the ANEEL regulations.

2.15 The payment of RAG shall be made in duodecimal installments being GAG subject to discount for unavailability or generation performance, per HYDROELECTRIC POWER PLANT, in accordance with the regulatory parameters established by ANEEL.



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2.16 The payment guarantees shall be given by the Distributors benefiting from the Quota System, within the CCEE, pursuant to the provisions of Normative Resolution no. 514, of October 30, 2012.

2.17 The costs related to the Financial Compensation for the Use of water resources for Hydroelectric Generation - CFURH associated to the HYDROELECTRIC PLANT(S) will be charged to the CONCESSIONAIRE, , by ANEEL, and shall be reimbursed by the Distributors proportionally to the respective energy quotas received from the PLANT(S), as defined in the CCG.

IV TRANSITION RULES

2.18 The transfer of ownership to the SUCCESSFUL BIDDER(S) of the HYDROELECTRIC PLANT(S) object hereof shall take place as follows:

2.18.1 The CONCESSION AGREEMENT shall be signed on the date provided for in the SCHEDULE.

2.18.2 The CONCESSION AGREEMENT may, at the SUCCESSFUL BIDDER's discretion, start the counting of the Concession period within 180 (one hundred and eighty) days from the date of its signature.

2.18.3 The SUCCESSFUL BIDDER shall be responsible to communicate to ANEEL and to the company responsible for providing the generation service, appointed under the provisions of art. 9 of Law no. 12783/2013, its interest in using or not, according to prerogative of item 2.18.2, as well as, if interested, to inform the required time period for the Transfer of ownership or responsibility for the provision of the service, per HYDROELECTRIC POWER PLANT. The following table indicates the companies appointed for the temporary provision of generation services in the HYDROELECTRIC POWER PLANTS object of this AUCTION:

Lot Hydroelectric power plant Company Appointed Designation Act

A São Simão Cemig Geração e Transmissão S.A. Prt. MME nº 432/2015 B Jaguara Cemig Geração e Transmissão S.A. Prt. MME nº 158/2017 C Miranda Cemig Geração e Transmissão S.A. Prt. MME nº 157/2017 D Volta Grande Cemig Geração e Transmissão S.A. Prt. MME nº 79/2017

2.18.4 The interval shall be fixed in days.

2.18.5 The communication provided for in paragraph 2.18.3 shall be made within 2 (two) working days from the award of the object of this AUCTION, by means of document consistent with the model in Appendix F.



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2.18.6 The period between the date of signature of the CONCESSION AGREEMENT and the effective assumption of the generation service by the future CONCESSIONAIRE shall be designated as the ASSISTED OPERATION period.

2.18.7 During the ASSISTED OPERATION, the future CONCESSIONAIRE shall assist the operation of the HYDROELECTRIC POWER PLANT(S) by the company responsible for providing the generation service, appointed under the provisions of art. 9 of Law no. 12783/2013, and shall obtain all the information necessary for the assumption of the services that awarded to it.

2.18.8 For all purposes, during the period corresponding to the ASSISTED OPERATION, the company designated pursuant to art. 9 and paragraphs of Law no. 12783/2013 shall continue being responsible for the provision of generation services and concession assets, in addition to the only beneficiary of RAG established by the Granting Authority, and the future CONCESSIONAIRE shall be only responsible for receiving the RBO portion, under the terms of item 2.13.1 of this Tender Document.

2.18.9 At the beginning of the counting of the term of the relevant Concessions resulting from this AUCTION, it shall occur the assumption of the generation service by the BIDDER awarded the object of AUCTION, and cease the responsibility of the current Concessionaire or the company designated to guarantee the continuity of the generation service, under the terms of art. 9 of Law no. 12783/2013.

2.19 During the ASSISTED OPERATION period, SUCCESSFUL BIDDER or future CONCESSIONAIRE shall:

2.19.1 Have access to the HYDROELECTRIC POWER PLANT(S) facilities assured at times deemed necessary, meeting the general safety requirements, as well as having space to set up an office, store materials, park vehicles, etc. in order to gather all the physical and material conditions necessary for its imminent assumption of the service;

2.19.2 Have access to the information necessary for the operation of the HYDROELECTRIC POWER PLANT(S);

2.19.3 Access to the telephony system and information systems of direct interest to the transition;

2.19.4 Formulate technical inquiries to the management of the company responsible for providing the generation service, designated pursuant to art. 9 of Law no. 12783 / 2013, as well as interviewing its employees in order to be aware of the information of interest for the transition;

2.19.5 To have the support of the company responsible for providing the generation service, designated pursuant to art. 9 of Law 12783/2013, in the accounting and physical survey of materials, equipment and other assets of the concession.



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3 MEANS OF PRESENTATION OF DOCUMENTS

3.1 The documents contained on the envelopes delivered by the BIDDERS shall be written in Portuguese, typed or printed electronically on A4 paper, without any amendments, erasures, blurs, additions, initialed in all pages by the Legal Representative, with all pages of the numbered set, and each of them contain the sequential number and total pages of the set. All documents produced by the BIDDERS shall be signed by the Legal Representative, with a notarized signature, dated and signed on the last page, with the legible name of the signatory. It is hereby waived the acknowledgment of signature in the financial proposal and the bid ratification term, which is delivered and / or signed in the public session of TENDER.

3.1.1 It is considered as legal representative the person legally accredited by the BIDDER to speak on its behalf and sign the required documentation, in accordance with the provisions of its articles of incorporation, in the minutes of the election of the current administrators and of the council that elected them, or, if applicable, if it is so permissible, the attorney-in-fact appointed by these administrators, by public or private instrument, provided that with a recognized signature.

3.2 The foreign BIDDERS shall submit, both for the individual and consortium participation, the documents equivalent to the "Qualification Documents", authenticated by the Brazilian consular authority of their country of origin and translated by sworn translator, pursuant to the provisions of § 4 of art. 32 of Law 8666/1993.

3.2.1 The foreign BIDDERS shall present a certificate issued by the Embassy in Brazil of the country of origin, certifying the correlation between the legal administrative documents and their validities, normally required in biddings in Brazil, and the corresponding ones in the country of origin.

3.2.2 The equivalent qualification documents shall be presented in order to allow the analysis on its validity, enforceability and effectiveness. Appendix E provides for the guidance on how these documents are presented.

3.2.3 In the event of non-existence of documents equivalent to those requested in this Tender Document and / or of body(s) in the country of origin that authenticates them, it shall be presented a statement, informing such fact.

3.2.4 If the document is issued by a signatory country to the Convention Abolishing the Requirement of Legalization for Foreign Public Documents (The Apostille Convention) - promulgated by Decree no. 8.660/2016 -, the apostille established in art. 4 of this Convention, issued by the competent authority of the State in which the document originates, shall be submitted, without prejudice to the need for translation of the document by sworn translator, being exempted the authentication by Brazilian consular authority.



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3.2.5 It is considered a legal representative of the foreign BIDDER the legally accredited person, with express powers, by public or private instrument proxy, with notarized signature, in order to receive summon and respond administratively and judicially in Brazil, as well as to represent it in all stages of the process, conditions which shall be expressly stated in their legal qualification documents.

3.3 All documents delivered shall be in a envelope sealed and marked as follows:

TO THE SPECIAL BIDDING COMMITTEE OF ANEEL

AUCTION Nº 01/2017 – ANEEL

LOT(S): [it shall be indicated the LOT(S)]

BIDDER: [it shall be informed the business name of the BIDDER]

SUBJECT: [it shall be informed the content of the envelop]

3.4 The qualification documents shall be deemed accepted if valid on the date of delivery set in the SCHEDULE. If the validity term is not stated in the document, it shall be accepted those issued with a date of up to 30 (thirty) calendar days prior to the delivery of the qualification documentation.

3.5 It shall not be considered reasons for disqualification any simple omissions or material irregularities (typographical errors, verbal agreement etc.) in the documentation submitted, provided that they are irrelevant, thus not affecting the processing of the AUCTION and the understanding of the documentation.

3.6 It shall be considered accepted the documents that bear the seal of the competent body or certified copies as provided by law.

4 BIDDERS QUALIFIED TO TAKE PART IN THE AUCTION

4.1 It shall be qualified to participate in the AUCTION, the BIDDERS who, under the terms of the Tender Document, individually or in a consortium:

4.1.1 Meet all participation requirements;

4.1.2 Meet all the REGISTRATION requirements;

4.1.3 Submit the BID BOND.

4.2 The access to the AUCTION environment and the method of delivery of the envelopes for the submission of the proposal are described in the INSTRUCTION MANUAL.



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5 REGISTRATION TO TAKE PART IN THE AUCTION

5.1 The AUCTION REGISTRATION shall be made, by completing an electronic form on-line, whose link shall be available on ANEEL WEBSITE together with the Tender Document.

5.1.1 There will be a single REGISTRATION for the AUCTION, by BIDDER, encompassing all LOTS, regardless of the BIDDER's interest to submit a proposal for each LOT.

5.2 The REGISTRATION form shall be available for completion during the period indicated in the SCHEDULE.

5.3 The REGISTRATION shall be confirmed until the date and time stated in the SCHEDULE. After this period, the information typed shall not be kept or accepted by the System.

5.4 Instructions for operating the REGISTRATION System:

5.4.1 When accessing the REGISTRATION System, the INTERESTED party shall first select the method that it wishes to participate in the AUCTION:

5.4.2 Legal Entity governed by Public or Private Law (Isolated);

5.4.3 Consortium, in which REGISTRATION shall inform:

a. The percentage share of each participant; b. The leader of the consortium, which shall be responsible before ANEEL for the fulfillment

of the commitments arising from the AUCTION, and the leader is the sole responsible for the relationship with ANEEL.

5.5 The System shall indicate the fields required, so it will not be possible to complete the REGISTRATION if detected a missing filling.

5.6 The System shall ask the INTERESTED PARTY to check the data filled in: (i) if any need for correction is verified, the user may return to the filling screen; or (ii) if it is verified that its data has been correctly informed, the user shall choose to send the completed form.

5.7 The System shall make available to the INTERESTED PARTY a "Declaration of Awareness and Acceptance of the AUCTION Rules" (whose text is presented for reference in Appendix B), which should be read and accepted. Otherwise (if not accepted), the System shall not accept the REGISTRATION and, therefore, not store the data filled.

5.8 After completing the data, the System shall send to the INTERESTED PARTY an email, containing a link that shall be accessed to confirm and complete the REGISTRATION. Only after the confirmation and completion through the link provided, the REGISTRATION shall be confirmed.



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5.9 A Unique Identification Code (Locator) shall be generated by the System, to be sent in another email along with the extract of the confirmed data. The INTERESTED PARTY shall print and save this document.

5.9.1 The submit of the BID BOND shall only be made upon presentation of the Unique Identification Code (Locator). For this reason, only after the REGISTRATION it shall be possible to make the submission.

5.10 The modification of the REGISTRATION after the closing of the procedure, either for rectification of incorrect data or for the inclusion or exclusion of consortium members, can only be made through a new REGISTRATION.

5.10.1 In this case, the INTERESTED PARTY shall keep the Unique Identification Code (Locator) of the REGISTRATION considered correct, to which it shall attach its BID BOND submission.

5.11 In the event of a consortium, from the date of REGISTRATION until the beginning of the concession term established in Clause Four of the CONCESSION AGREEMENT, there may be no changes in the composition neither in percentage shares of the consortium members.

5.12 The foreign company that is a member of the consortium shall inform, in the field of the CNPJ of the consortium company, the CNPJ of the leading company.

6 BID BOND

6.1 The submission of the BID BOND may take place via Internet, as provided in the INSTRUCTION MANUAL, to be published on the ANEEL WEBSITE.

6.2 Even making the online submission, the original copies of the BID BONDS that do not have digital certification or require additional documents shall be delivered on the date and in the place provided for in the SCHEDULE, subject to the rules defined in the INSTRUCTION MANUAL.

6.3 B3 shall be responsible for confirming the submission and subsequent validation of the BID BONDS, in advising CEL. The participation of the INTERESTED PARTY shall be conditioned to the validation of compliance of the BID BOND by B3.

6.4 The INTERESTED PARTIES shall submit the BID BOND in the amount of R$ 55.000.000,00 (fifty five million reais), corresponding to 0.50% (fifty hundredth t percent) of the minimum value of the Bonus for the Grant for each LOT set forth in item 1.28:

6.5 THE BID GARANTEES, under the terms of art. 56 of Law 8666/1993, shall be provided under one of the following modalities:

a. Cash Surety Deposit (R$);



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b. Guarantee Insurance;

c. Bank guarantee;

d. Securities of the Public Debt.

6.6 In the event of a cash surety deposit, the deposit shall be made in a branch of Caixa Econômica Federal defined by the INTERESTED PARTY, based on art. 82 of Decree no. 93872/1986 and the Decree-Law no. 1737/1979, and the proof of deposit shall be delivered to B3, on the date of receipt of the BID BONDS, according to the SCHEDULE.

6.7 The BID BONDS may not be issued by a company of the same ECONOMIC GROUP, parent company, subsidiary or affiliate of BIDDER.

6.8 In the event of Insurance Guarantee, these shall be accompanied by:

6.8.1 Data File from the relevant Board of Trade which states the power of the legal representatives of the Insurance Company and information about its last bylaw, or documents proving the status of the legal representative(s) of the insurer:

a. Bylaws;

b. Minutes of the Election of the Board of Directors;

c. Power of attorney;

d. Authenticated copy of the documents of the representatives (CPF and RG).

6.8.2 Reinsurance made by an enterprise authorized by the Superintendence of Private Insurance (SUSEP), accompanied by the documents evidencing the status of legal representative(s) of the reinsurer.

a. Bylaws;

b. Minutes of the Election of the Board of Directors;

c. Power of attorney;

d. Authenticated copy of the documents of the representatives (CPF AND RG).

6.9 In the case of a bank guarantee, it shall be rejected those issued by financial institutions that are not classified between the first and second floors, that is, between "A" and "B", in the long-term rating scale of two of the rating agencies Fitch Ratings, Moody's and Standard & Poor's.

6.9.1 The Bank Guarantee shall be accompanied by either by Data File from the relevant Commercial Board which states the power its legal representatives and information about its last bylaw, or the following documents evidencing the status of the legal representative(s) of the Guarantor :



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a. By-Laws;

b. Minutes of Election of Board of Directors;

c. Power -of attorney;

d. Authenticated copy of the documents of the representatives (CPF and RG).

6.10 In the case of public debt securities, these shall be issued under book-entry form, through register in centralized system of liquidation and custody authorized by the Central Bank of Brazil and evaluated by the economic values, as defined by the Ministry of Finance.

6.11 The modalities that shall be electronically submitted are:

a. Federal Public Securities;

b. Insurance Guarantee, provided that the policies have digital certification.

6.12 The modalities that should be directly submitted to B3, through physical means are:

a. Surety cash deposit: it shall be forwarded a copy of the beneficiary's receipt of the deposit of the

Escrow Account

b. Insurance-Guarantee, of policies that do not have digital certification;

c. Bank guarantee.

6.13 The BID BOND SHALL NOT contain any exclusion clause of any liability assumed by the holder of the guarantee related to the participation in this AUCTION.

6.14 In the event of Insurance Guarantee, the policy shall be in accordance with SUSEP Circular no. 477, of September 30, 2013.

6.14.1 The Insurance Guarantee policy must discriminate the hypotheses listed in item 6.18, whose incidence, by the BIDDER or AWARDEE, will imply the total loss of the guaranteed value and indicated in table of item 6.4, in favor of the beneficiary.

6.15 The BID BOND shall have ANEEL as beneficiary and the INTERESTED PARTY as borrower and shall be in force for a term equal to or greater than 360 (three hundred and sixty) days, counted from the date of its contribution, and shall be maintained under the conditions defined in this Tender Document and be Extendable for a further 180 (one hundred and eighty) days.

6.15.1 For BIDDERS who participate in the AUCTION in consortium, the BID BOND may be on the name of one or more consortium companies (holders), provided that the sum of the guarantees presented is equal to or greater than the value indicated in Item 6.4 of this Tender Document, and shall expressly indicate the name of the consortium and all the consortium members.



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6.15.2 In the case of a consortium, each member may opt for one of the guarantee modalities, without prejudice to the choice of the other consortium members for a different modality.

6.15.3 In case of FIP, the BID BOND shall be on the name of the Fund Administrator/Manager (holder) and expressly indicate the name of the FIP.

6.15.4 The BIDDERS who do not maintain the BID BONDS under the conditions set forth in this Tender Document shall be subject to the penalties provided for in Chapter 10 of this Tender Document, in addition to the applicable administrative and judicial sanctions.

6.16 The BID BONDS will be available to be returned under the following conditions:

6.16.1 In case of revocation or cancellation of the AUCTION, to all BIDDERS, from 5 (five) business days after the act of revocation or cancellation.

6.16.2 To BIDDERS who submitted financial bid and were not awarded the AUCTION, within five (5) business days after the publication of the Approval of the result and Award of the AUCTION object.

6.16.3 To the BIDDERS who presented a non-interest statement, at the time of delivery of the proposal envelope, within five (5) business days after the AUCTION.

6.16.4 To the SUCCESSFUL BIDDER(S) or Contractor(s), within five (5) business days after the signing of the CONCESSION AGREEMENT or after the payment of the Bonus for the Grant – BO, whichever occurs last .

6.17 There shall be no return of BID BOND executed by determination of ANEEL, in the hypotheses indicated in item 6.18 of this Tender Document.

6.18 The AUCTION BID BONDS shall be executed in favor of the Beneficiary, in case the BIDDER or AWARDEE who, in respect of each LOT:

6.18.1 Fails to deliver the 4 (four) envelopes containing the bid or statement of non-interest in submitting financial proposal for the LOT, according to the sample in Appendix C.

6.18.2 Fails to ratify its valid proposal.

6.18.3 Withdraws its bid within the validity period.

6.18.4 Fails to present the Documentation for Qualification, pursuant to the terms and deadlines described in this Tender Document.

6.18.5 Fails to submit, within the established deadlines, the documents required for hiring the concession, as described in this Tender Document.

6.18.6 Fails to keep a BID BOND under the conditions set forth in this Tender Document.



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6.18.7 Fails to extend the BID BOND with, at least fifteen (15) days before its maturity, whenever this occurs before the signing of the CONCESSION AGREEMENT.

6.18.8 Fails to perform payment of the BONUS FOR THE GRANT resulting from the AUCTION or refuse to sign the CONCESSION AGREEMENT within the term provided for in this Teder Document or in the call proceedings.

6.18.9 Practice act(s) aimed at frustrating the objectives of the contest.

6.19 In the event of execution of the BID BOND, the SPE or any of its quotaholders or the winning GENERATION CONCESSIONAIRE of this AUCTION shall not be exempt from the obligation of indemnification for damages caused to the Public Administration, as well as the penalties provided for in Chapter 10 of this Tender Document and other sanctions provided by law.

6.20 In any of the cases provided for in item 6.18 of this Tender Document, in addition to the execution of the BID BOND, if the object of this AUCTION has already been adjudicated, ANEEL may revoke the Award, without prejudice to the imposition of any penalties provided for in Chapter 10 of this Tender Document and in the applicable law.

7 AUCTION SESSION

I CRITERIA FOR THE PREPARATION OF THE FINANCIAL BID

7.1 The BIDDERS qualified to participate in the AUCTION shall be required to submit 4 (four) proposal envelopes regarding each lot, containing the bid or the statement of non-interest in submitting a financial bid for the respective LOT, according to the model in Appendix C.

7.2 The financial bid shall be greater than or equal to the minimum value of the Bonus for the Grant - BO for for each Lot, according to the values established in item 1.28 of this Tender Document

7.3 Subject to the procedure set out in Section 7.2 of this Chapter 7 - Instructions on the Public Session of the AUCTION, it shall be considered the successful BIDDER of the AUCTION, for each LOT, the BIDDER that offers the greatest value of BONUS FOR THE GRANT - BO.

7.4 It shall be unqualified the BIDDER that submits a financial bid in violation to the provisions of the Tender Document, that fails to ratify it or to communicate to CEL, prior to the REGISTRATION, any and all corporate restructuring, change or transfer of BIDDER's corporate control, including of consortium member(s).

7.5 The financial bid constitutes an irrevocable and irreversible obligation by BIDDER to sign the CONCESSION AGREEMENT, which shall be valid for a period of one hundred and eighty (180) days from the date of completion of the AUCTION, which may be extended for an equal period.



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II INSTRUCTIONS ON THE PUBLIC SESSION OF THE TENDER

7.6 On the date, place and time as indicated in this Tender Document, the Session Director , by the time of the call for the first LOT, shall simultaneously receive the 4 (four) closed envelopes of each one of the BIDDERS qualified to participate in the AUCTION, containing the bids or expressions of non-interest in submitting a financial bid, according to the following items:

7.7 The LOTS shall be tendered in the sequence indicated in the following table:

Order Lot Hydroelectric power plant 1rst A São Simão 2nd B Jaguara 3rd C Miranda 4th D Volta Grande

7.8 The opening of the envelopes of LOT B shall only occur after the announcement of the result of the AUCTION of LOT A; the opening of the envelopes C, after the announcement of the result of the AUCTION of Lot B; and the opening of the envelopes D, after the announcement of the result of the AUCTION of Lot C.

III GENERAL PROCEDURE FOR THE AUCTION AND SPECIFIC PROCEDURE FOR LOT A

7.9 For LOT A and for the specific conditions of LOTS B, C and D, it will be declared the winner of the LOT the BIDDER that offers, in a closed envelope, the highest BONUS FOR THE GRANT, provided that the values proposed by the other BIDDERS, for the LOT, are less than 95% (ninety-five percent) of that highest amount of BONUS FOR THE GRANT presented in a sealed envelope..

7.10 In each LOT, the AUCTION session will proceed with successive live bids, in case there are:.

7.10.1 Difference between the values of the highest financial bid and other offers from the BIDDERS equal to or less than 5% (five percent); or

7.10.2 Draw between the highest values of the bids offered in the envelopes.

7.11 The live bids shall be of a higher value than the highest bid assessed in the envelopes for each LOT.

7.12 In AUCTION with live bids, at the discretion of the Session Director, it may be established minimum intervals of values to be observed by the BIDDERS between the bids.

7.13 . The successful bidder of the AUCTION with live bids of each LOT shall be the bid presenting the highest value, in accordance with the requirements of this Tender Document.

7.14 In the event that no live bids are made for the LOT being tendered, the successful bidder shall be the one offering the highest financial proposal in a closed envelope.



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7.15 If there is a draw between the highest value proposals presented in the envelopes, and if no live bids are being placed for the LOT, the successful BIDDER shall be defined by the tie-break criteria established in art. 15 (§ 4) of Law no. 8987/1995 and in arts. 3 (§ 2) and 45 (§ 2) of Law 8666/1993, and, if such equality persists, by drawing lots, promoted by the Session Director.

IV SPECIFIC PROCEDURE FOR THE AUCTION OF LOTS B, C AND D

7.16 Prior to the opening of the envelopes relating to LOTS B, C and D, in this order, the Session Director will request a statement of the winner (s) of the previous LOT (s) regarding the disposal or not of the envelope corresponding to the LOT being auctioned.

7.16.1 The disposal of the envelope implies the disregard of the bid for purposes of proposal classification for the corresponding LOT

7.17 Once the procedure specified in item 7.16 has been completed, the Session Director will proceed with the AUCTION of the respective LOT, in accordance with the provisions of Section III of this Chapter 7.

7.18 After Lot D has been auctioned, at the discretion of CEL, live bids may be received, from BIDDERS eligible to participate in the AUCTION, for the LOT(S) that did not have proposal (s), in ascending order of LOTS.

V INSTRUCTIONS ON THE BID RATIFICATION OF THE WINNERS OF THE AUCTION

7.19 Immediately after the termination of the AUCTION, the successful BIDDER of each LOT shall ratify its bid, upon the signature of Bid ratification term containing the winning bid.

7.20 The successful BIDDER(S) shall bear the expenses of the AUCTION, in the form and in the amount set forth in the INSTRUCTION MANUAL.

8 QUALIFICATION

8.1 Once the AUCTION session is completed and the successful bid for each LOT declared, the successful BIDDER(s) shall submit the Qualification documents on the date established in the SCHEDULE, at the Executive Secretariat of Auctions - SEL, at the headquarters of ANEEL, in Brasília - DF.

8.2 The Qualification documents shall be delivered in two copies, one printed and the other in digital form, of identical content, in the order that they are listed in this Tender Document.

8.2.1 The winning BIDDER(s) shall deliver only one (1) complete set of Qualification documents in two counterparties (one printed and one digital), even if successful BIDDDER(s) in more than one LOT, stating on the opening page the relevant LOT(s).

8.2.2 Consortium BIDDERS shall deliver the documents of each one of the consortium members and only 1 (one) full set of Qualification documents, even if they are the Successful Bidders of the AUCTION in more than one LOT.



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8.3 The Qualification documents shall be delivered by the successful BIDDER of each LOT or by its Representative, by means of correspondence containing the name of BIDDER, the CNPJ/MF enrollment number and the address of its headquarters. In the case of a consortium, the correspondence shall include the name of the consortium, as well as the CNPJ/MF enrollment number and the address of the headquarters of the consortium leader.

8.4 On the last page, it shall have a Closing Statement, with the legible name of the signatory (Legal Representative), the corporate name or denomination of the BIDDER, the full address of its headquarters and the number of this AUCTION, indicating the total number of pages presented.

I QUALIFICATION DOCUMENTS

8.5 LEGAL QUALIFICATION:

8.5.1 Articles of Incorporation, Bylaws or Articles of Association, duly registered with the Board of Trade of the competent Registry Office, Data File from the relevant Board of Trade, and proof of the powers of the Legal Representative(s), with the last acts of election of the directors and the board of directors, as the case may be.

8.5.2 If the Legal Representative belongs to the directors, the proof of his/her powers shall be checked in the Bylaws and / or Articles of Association and in the last acts of election of the directors and of the board of directors that elected the last board, as the case may be.

8.5.3 If the Legal Representative does not belong to the board of directors, it shall be necessary to present a power of attorney, by public or private instrument, duly notarized, granting powers thereto, without prejudice to the presentation of the Bylaws and / or Articles of Incorporation and the last acts of election of the directors and of the board of directors that elected the last board, as the case may be.

8.5.4 In the case of a Foreign BIDDER operating in the country, without prejudice to the presentation of the articles of incorporation and the proof of the legal representative's powers, it shall present a certified copy of the authorization decree and registration or authorization act issued by the competent body, in both cases when so required by the activity carried out.

8.5.5 In the case of FIP, the articles of incorporation of the FIP and the entire contents of its regulations shall be presented, duly initialed and signed, accompanied by a certificate attesting its registration with a notary office; The Minutes of the Quotaholders' General Meetings that elected the Administrator and the Manager of the FIP; The Minutes of the Quotaholders' General Meeting that elected the Board of Directors of FIP; and the Registries of distribution offer and operation with the Brazilian Securities and Exchange Commission (CVM), as well as statement evidencing that it is not in the period of analysis by CVM; Investment commitment and / or statement that the FIP's Investment Commitment is in line with the provisions of the Tender Document.



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8.5.6 The foreign FIP shall present a document similar to the registration with the CVM, of the country of origin, in accordance with art. 32, § 4, of Law 8666/1993, and proof of equivalence.

8.5.7 The open or closed entity of supplementary pension shall present:

a. Proof of specific authorization regarding its constitution and functioning, issued by the respective supervisory body;

b. Statement issued by the National Superintendence of Complementary Pensions of the Ministry of Social Security stating that the plans and benefits under its management are not under liquidation or intervention.

8.5.8 In the event of consortium, it shall be delivered the Consortium Constitution Contract, by public or private instrument, subscribed by the legal representatives of the consortium companies, in compliance with the provisions of this Tender Document, in the form established in art. 33 of Law 8666/1993.

8.5.9 Diagram of the ECONOMIC GROUP corporate control at the 5% level, depicting its holding companies and subsidiaries, indicating their corporate names and relevant controllers.

8.6 TECHNICAL QUALIFICATION:

8.6.1 Proof of registration and regularity of the technical representative(s) of the BIDDER in the Regional Council of Engineering and Agronomy - CREA, for the purposes of proving professional qualification.

8.6.2 Proof that the BIDDER, its subsidiary, or the CONTRACTOR, is linked to professional(s) with university degree who hold certificate issued by a public or private entity, licensed by CREA, for the operation or maintenance of HYDROELECTRIC POWER PLANT(s) with installed power equal to or greater than 100 MW.

8.6.2.1 In the event the BIDDER, or its subsidiary, operates HYDROELECTRIC POWER PLANT(s) in Brazil, the proof of operation or maintenance of HYDROELECTRIC POWER PLANT(s) mentioned in item 8.6.2 Erro! Fonte de referência não encontrada. may be met with the presentation of the ongoing grant(s).

8.6.2.2 In the event the BIDDER, or its subsidiary, operates HYDROELECTRIC POWER PLANT(s) overseas, the proof of operation or maintenance of HYDROELECTRIC POWER PLANT(s) mentioned in item 8.6.2 may be met with the presentation of documents issued by an institution or body with powers analogous to those of ANEEL and / or ONS of its country attesting to this condition.



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8.6.2.3 If the proof mentioned in item 8.6.2 is met by the subsidiary of the BIDDER, documents attesting that condition of controller shall be presented.

8.6.3 The professional (s) referred to in item 8.6.2 may be bound to the BIDDER, or its subsidiary, or CONTRACTOR:

a. by employment relationship or as administrator; b. by service contract

8.6.4 In the event the CONTRACTOR is responsible to meet the previous items, the BIDDER shall present the agreement or the Term of Commitment set between the BIDDER and the CONTRACTOR, for the services of operation or maintenance of HYDROELECTRIC PLANT(s).

8.7 ECONOMIC AND FINANCIAL QUALIFICATION:

8.7.1 Clearance Civil Certificate of Bankruptcy, Composition and Judicial and Extrajudicial Recovery or Clearance in Civil Insolvency Certificate, issued by the distributor notary of the BIDDER, within a maximum of 30 (thirty) days from the date of its issue, which shall be accompanied by a document certifying the complete list of registries responsible for the subject, except in the case of supplementary pension entities, which are subject only to extrajudicial liquidation, under the terms of Complementary Law no. 109, of May 29, 2001, and art. . 2, item II, of Law no. 11,101, of February 9, 2005. In the case of FIP, the documents required shall be presented in the name of the Administrator and the FIP Manager.

8.7.2 Financial statements of the last financial year, already payable and presented in accordance with the Law, thus being forbidden its replacement for balance sheets or interim balance sheets, and may be updated by the IPCA, when closed for more than 3 (three) months from the date defined in this Tender Document for reception of the envelope containing the Accreditation Documents, which will allow to verify the BIDDER’s financial standing and the Minimum Shareholders' Equity required.

8.7.3 The financial statements required by law, according to the types of company indicated below, shall be considered accepted if BIDDER was not created in the same calendar year of the AUCTION:

I. Publicly held company – financial statements published in the Official Gazette or in a newspaper of great circulation in the country or certified copy of the statements extracted from the Daily Record registered in the competent body and the Independent Auditors' Report and the Supervisory Board;

II. Privately held company – Financial statements published in the Official Gazette or in a newspaper of great circulation in the country or certified copy of the financial statements extracted from the Daily Record registered in the competent body;



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III. Limited Company - certified copy of the financial statements extracted from the Daily Record registered in the competent body; and

IV. FIP – financial statements accompanied by proof of compliance with the provisions of CVM Instructions 578 and 579/2016, in relation to the payment of quotas, before the Brazilian Securities and Exchange Commission. For FIPs that have not yet paid their equity, the Investment Commitment instruments of the Funds and the Capital Contribution instruments, accompanied by the financial statements of the respective quota holders, shall be accepted for economic and financial qualification purposes up to a limit of 5% in the fund.

8.7.4 The BIDDER constituted in the same financial year in which the qualification takes place and that does not have accounting statements presented and required by law, shall present a copy of the opening balance sheet, extracted from the Daily Book stamped by the corresponding Board of Trade, or certified by the Public System of Digital Accounting (SPED).

8.7.5 The evidence of the good financial situation of the BIDDER shall be assessed based on the values obtained by applying the following formulas, resulting in the General Liquidity (LG) and Current Liquidity (LC) ratios equal to or greater than 0.2 (two tenths):

Current Assets + Long-Term Receivables LG = ----------------------------------------------------------- Current Liabilities + Long-Term Liabilities

Current Assets LC = ------------------------- Current Liabilities

8.7.5.1 For the consortia, the quotients shall be calculated as follows:

LG (consortium) = LG1 x P1 + LG2x P2...+ LGn x Pn

LC (consortium) = LC1 x P1 + LC2x P2...+ LCn x Pn

where: LGn = General Liquidity Ratio of the consortium company (n) Pn = Relative share of the consortium company (n) LCn = Current Liquidity Ratio of the consortium company (n)

8.7.5.2 The BIDDER that presents a result lower than 0.2 (two tenths) in any of the defined liquidity indexes shall have Minimum Equity in the amount indicated in the table below, for each LOT, to be proved upon presentation of financial statements, pursuant to Law 6404/1976:

Sub-lot Minimum Equity (R$)



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Sub-lot Minimum Equity (R$) A 103.216.142,38 B 32.114.269,87 C 21.382.963,52 D 25.303.931,18

8.7.5.3 In the case of consortium, it shall be considered the sum of the quotaholders' equity values of each consortium, weighted by the relevant participation:

∗

Where; PLCO = Net Equity of the consortium; PLCA = Net Equity of the consortium company; QCA = quota of participation of the consortium company; i = each of the consortium company n = number of the consortium companies

8.7.5.4 Each consortium company shall prove Net Equity greater than or equal to the proportion of the Minimum Net Equity, equivalent to its share of the consortium:

∗

Where; PLMIN = Minimum Net Equity for the LOT; PLCA = Net Equity of the consortium company; QCA = Participation quota of the consortium company;

8.7.5.5 For FIP, it shall be considered Net Equity of FIP (i) the sum of the Net Equity of each quotaholder integrating it or (ii) the value of Net Equity of FIP informed to the Brazilian Securities and Exchange Commission, in accordance with the provisions of item I, art. 46 of CVM Instruction no. 578/2016.

8.8 FISCAL AND LABOR REGULARITY:

8.8.1 Certificate of Regularity of FGTS (Government Severance Indemnity Fund for Employees) – CRF.



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8.8.2 Joint Clearance Certificate relating to Federal Taxes and to the Active Debt of the Union or Joint Liability Certificate with clearance effects, relating to Federal Taxes and to the Active Debt of the Union

8.8.3 Clearance Certificate, or Liability Certificate with clearance effects, relating to State/Municipal/District taxes, including with respect to Active Debt, of the domicile or headquarters of the BIDDER.

8.8.4 Labor Clearance Certificate (CNDT), according to the provisions of law no. 12440/2011.

8.8.5 In the case of FIP, the required documents shall be presented in the name of its Administrator and its Manager, if the latter participates in decisions that imply risk to FIP's assets.

8.8.6 If the economic activity developed by the BIDDER exempts it from the State or Municipal registration, as taxpayer, such situation shall be proven by the submission of documents issued by the competent bodies, expressly stating that it is exempt from said Registration or presenting the Documents proving the unenforceability of the Registration.

8.8.7 The BIDDER who is a concessionaire, license holder or authorized public-utility company in Brazil shall comply with the sector obligations, especially those established in Laws 8631/1993 and 9427/1996, which shall be verified by CEL when analyzing the qualification documents.

8.8.8 The tax compliance, evidenced by the documents required in this Tender Document, shall be maintained until the beginning of the respective CONCESSION AGREEMENT.

II QUALIFICATION RESULTS

8.9 CEL shall proceed with the analysis of the Qualification documents of the successful BIDDER of the AUCTION, and shall prepare the analysis report of the documentation, which shall be published on the ANEEL WEBSITE together with a copy of the publication, in the DOU (Union Official Gazette), of the qualification result, to be made through Dispatch.

8.10 During the analysis of the Qualification documents, CEL shall initiate proceedings aimed to clarify or complement the instruction of the process, in accordance with the provisions of § 3 of art. 43 of Law 8666/1993.

8.11 In the event of the disqualification of the successful BIDDER of each LOT, it may be convened, within the convenience of the public interest, to present the Qualification documents, within a period of up to 5 (five) business days from the call notice, the other BIDDERS, successively and in ascending order of the values of the bids offered in the AUCTION, until one meets the qualification conditions set forth in this Tender Document.

8.11.1 The BIDDER that as may be convened to present the documentation for qualification, in the event of disqualification of the successful BIDDER in the public session of AUCTION,



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shall, together with the delivery of the Qualification documents, sign the Bid ratification term under the economic conditions it offered in the AUCTION.

8.11.2 Once received the documentation from the BIDDER convened, CEL shall proceed with the analysis and prepare a report with its decision, thus disclosing the result of the qualification in the Union Official Gazette and ANEEL WEBSITE.

8.12 The qualification documents shall be made available to the interested parties, at ANEEL, for a period of five (5) business days from the publication of the qualification result, and the requests for review shall be preferably sent by e-mail to CEL at the e-mail address [email protected], which shall arrange for the scheduling of the interested parties.

8.13 Any appeals against the result of the qualification shall be processed under Chapter 12 of this Tender Document.

9 AWARD OF THE OBJECT

9.1 The Board of Directors of ANEEL shall deliberate on the homologation of the result and the award of the object of AUCTION to the successful BIDDER(S), and the Director General shall publish in the Official Gazette the corresponding Tender Document.

10 PENALTIES

10.1 Without prejudice to the execution of the Guarantees, the breach of any condition established in this Tender Document or the CONCESSION AGREEMENT, shall allow ANEEL, pursuant to Articles 81, 86 and 87 of Law 8666/1993, once guaranteed the right of full defense and adversary procedure, to apply to the BIDDER, the SUCCESSFUL BIDDER or the contractor, the following penalties:

10.1.1 warning;

10.1.2 fine;

10.1.3 temporary suspension of the right to contract or to participate in bids promoted by ANEEL for up to two (2) years; and

10.1.4 bad standing statement to bid or hire with the Public Administration for as long as the reasons for the penalty last or until its correction before ANEEL.

10.2 The fine will be from 0.001% to 10% of the amount of the BONUS FOR THE GRANT resulting from the AUCTION for the respective LOT.

10.2.1 If the fine applied exceeds the value of the guarantee provided, in addition to the loss of such, the bidder shall be responsible for the difference.



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10.3 The penalties provided for in sub-items 10.1.3 and 10.1.4 shall also apply to the companies belonging to the ECONOMIC GROUP to which the BIDDER, the SUCCESSFUL BIDDER or the contractor belongs.

10.4 Failure to comply with any condition precedent and necessary to the signature of the CONCESSION AGREEMENT, particularly those related to the submission of guarantee within the established term, shall constitute a refusal of the BIDDER or the SUCCESSFUL BIDDER to sign the CONCESSION AGREEMENT, thus representing total noncompliance with the assumed obligation and subject to the penalties established in this Chapter, without prejudice to other penalties provided by law.

11 SIGNATURE OF THE CONCESSION AGREEMENT

11.1 The HYDROELECTRIC POWER PLANTS concessions resulting from this AUCTION shall be governed by the CONCESSION AGREEMENT, per HYDROELECTRIC POWER PLANT, according to the attached minutes of Attachment 1 to this Tender Document, Laws no. 8666/1993; no. 8987/1995; no. 9074/1995; no. 9427/1996; no. 9448/1998, no. 10848/2004 and no. 12783/2013, as amended, whose allegation of unawareness shall not be recognized for any purpose.

11.1.1 The effectiveness of the CONCESSION AGREEMENT for each LOT shall be given upon payment of BONUS FOR THE GRANT resulting from the AUCTION, under the conditions of items 1.26 to 1.30 of this Tender Document.

11.1.1.1 The payment of the BONUS FOR THE GRANT resulting from the AUCTION shall be made either by the AWARDEE or by the SPE, on behalf of which the CONCESSION AGREEMENT will be signed.

11.2 For the signing of the respective CONCESSION AGREEMENT, in the cases described in items 1.18 and 1.19, the following SPE (SPECIFIC PURPOSE COMPANY) documents must be sent, according to the deadline established in the SCHEDULE, in the name of which the concession will be contracted:

I. Bylaws, Articles of Association or Articles of Incorporation, and proof of the powers of the Legal Representative(s), with the last acts of election of the directors and the board of directors that elected the last management board, as the case may be;

II. Certificate of Regularity of FGTS (Government Severance Indemnity Fund for Employees) – CRF;

III. Joint Clearance Certificate Relating to Federal Taxes and to the Active Debt of the Union or joint liability certificate with clearance effects, of debts related to the Federal Taxes and the Active Debt of the Union;

IV. Clearance Certificate, or liability certificate with clearance effects, of tax compliance before the Local / State Revenue Office, including with regards to the Active Debt. If the economic activity developed exempts it from Registration as a taxpayer, such situation shall be proven by submission documents issued by the competent bodies, expressly stating that it is exempt from the said Registration or presenting the documents evidencing the unenforceability of the Registration; and



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V. Certificate of tax compliance with the Municipal Revenue Office. If the economic activity developed exempts it from Registration as taxpayer, such situation shall be evidenced by submission of the documents issued by the competent bodies, expressly stating that it is exempt from said Registration or presenting the documents evidencing the unenforceability of the Registration.

11.2.1 The certificates presented shall be considered accepted, provided that valid on the date of delivery of the documentation established in the SCHEDULE. If the expiration date is not stated in document, it shall be accepted those issued with up to thirty (30) calendar days prior to the delivery of the documentation constituting the SPE.

11.2.2 The SPE constituted in calendar year prior to the year of the AUCTION shall present a Certificate of Nothing on record in a Civil Certificate of Bankruptcy, Composition and Judicial and Extrajudicial Recovery or Nothing on record in a Civil Insolvency Certificate.

11.3 SUCCESSFUL BIDDER of the AUCTION, or its SPE, shall be convened to celebrate the CONCESSION AGREEMENT on the date indicated in the SCHEDULE.

11.4 The representatives of the quotaholders or controlling quotaholders of SPE or the GENERATION CONCESSIONAIRE, demonstrably vested with special powers, according to the respective articles of incorporation, shall sign the CONCESSION AGREEMENT as intervening parties, with the guarantees provided for in its Clause Twelve.

11.5 The signature of the CONCESSION AGREEMENT imposes to the CONCESSIONAIRE the obligations and charges related to the provision of the generation service, which shall be carried out with regularity, continuity, efficiency, safety, generality, courtesy of service and tariff modicity, as established in Specific legislation and in the CONCESSION AGREEMENT.

11.6 If the SUCCESSFUL BIDDER refuses to sign the CONCESSION AGREEMENT within the period established, ANEEL may, pursuant the convenience of the public interest, convey the other BIDDERS successively and in ascending order of the values of the bids offered in the AUCTION.

11.6.1 The SUCCESSFUL BIDDER that incurs in the conduct described above shall be subject to the sanctions provided for in this Tender Document and in the legislation.

11.6.2 The BIDDER, convened according to the ascending order of bid values offered in the AUCTION, shall take the measures referred to in item 8.11.1 of this Tender Document and undertake to:

I. collect the respective BID BOND, with a validity period equal to or greater than three hundred and sixty (360) days;

II. Make the payment of the BONUS FOR THE GRANT offered by the defaulting BIDDER and sign the CONCESSION AGREEMENT, within the deadlines set in the notice;



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12 APPEALS

12.1 The CEL's acts shall be subject to administrative appeal, to be filed within five (5) business days of its publication, pursuant to art. 109 of Law 8666/1993.

12.2 Once the CEL act is published, the records of the process shall be available for consultation, and the requests for review should preferably be sent by e-mail to CEL, at the electronic mail address [email protected], which shall arrange for the corresponding scheduling.

12.3 CEL shall give notice, on ANEEL WEBSITE, to the other bidders, of the appeals filed so that, if they wish to, they may present counterarguments within five (5) business days, from the end of the deadline for filing an appeal.

12.4 The appeals shall be sent to the CEL, presented in writing and supported by the documents demonstrating the reasons alleged, which were timely filed in the General Protocol of ANEEL, at SGAN 603, Modulo I, Asa Norte - Brasília / DF - CEP: 70.830 -030.

12.5 The appeals filed after the legal deadlines shall not be considered by CEL.

12.6 The appeals and counter-arguments that are sent by digital protocol or e-mail shall have their originals forwarded within 5 (five) days after the submission thereof, under penalty of not being acknowledged by CEL.

12.7 After analysis of the appeals and counter-arguments, the CEL shall appear in reconsideration judgment on the issues raised in the appeals, through decision to be published in the Union Official Gazette and made available on ANEEL WEBSITE.

12.8 The Board of Directors of ANEEL shall judge, in final administrative proceedings, appeals brought against the acts of CEL, when it maintains, totally or partially, the challenged decision, proceeding with the publication of the corresponding decisions in the Union Official Gazette and publishing them on ANEEL WEBSITE.

13 FINAL PROVISIONS

13.1 At its on discretion, ANEEL may:

13.1.1 Revoke this AUCTION if it is deemed inappropriate or inconvenient to the public interest, without implying, to any interested party, the right to reimbursement or compensation.

13.1.2 Change the conditions of participation or contracting, promoting the republishing of the Tender Document and setting a new date for the conduction of the AUCTION.

13.1.3 Cancel the award and disqualify the successful bid, if become aware of any fact, before or after the AUCTION, demonstrating willful misconduct or bad faith by the bidder, or, further, compromising its technical, financial or administrative competence.



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13.2 This AUCTION shall be canceled if any illegality is proven, as provided for in art. 49 of Law 8666/1993.

13.3 The BIDDERS shall maintain an electronic address for any communications regarding the various stages of the AUCTION, as informed in the REGISTRATION act, and it is its responsibility to update such address.

13.4 Omitted cases that are not provided in this Tender Document, shall be submitted to CEL, which shall express on this regard.

13.5 The acts of the bidding process, which present faults that can be remedied and do not cause damage to the public interest or harm to third parties, may be validated.

13.6 ANEEL may, at any stage of the AUCTION, implement due diligence, including with BIDDERS, for the remedy of faults, complements of deficiencies or formal corrections. In this case, the BIDDERS shall be convened to appear at the headquarters of ANEEL or to provide written clarifications, as determined by the Agency.

13.7 All financial obligations provided for in this Tender Document, if fulfilled after the established periods, shall be monetarily corrected by the Extended National Consumer Price Index (IPCA), proportionally to the period of delay.

13.8 The BIDDERS shall observe the dates contained in the SCHEDULE, which is subject to the achievement and success of the various stages of the bidding process.

14 SCHEDULE

EVENTS DATE

Publication of the Convening Tender Document of the TENDER and provision of the Tender Document and the relevant Attachments on ANEEL website

August 9, 2017

Publication of instructions on the technical visits to the HPPs, with monitoring by ANEEL

August 14, 2017

Provision of the INSTRUCTION MANUAL August 14, 2017

Period of technical visits to the HPPs(1) August 22 to 25, 2017

Term for requesting clarifications regarding the Tender Document(2) By September 3, 2017

Deadline for answer the requests for clarification on the Tender Document* September 18, 2017

Deadline for withdrawal, at ANEEL, of DVDs with information on the HPP (e-data room)

September 18, 2017



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REGISTRATION (on-line) (from 8AM on 09/19 to 4PM on 09/20/17)

September 19 to 20, 2017

Submission of BID BOND (on-line) from 8AM on 09/19 to 4PM on 09/20/2017)

September 19 to 20, 2017

Delivery, at B3, of guarantees of the INTERESTED PARTIES that do not have digital certificate; and delivery, at ANEEL, of guarantees under surety account, according to the details in the INSTRUCTION MANUAL: until 4PM

September 20, 2017

Deadline for objection of the Tender Document September 20, 2017

Deadline for the decision on the objection of the Tender Document September 26, 2017

Public session of the AUCTION, at 10AM, conducted by B3, at BM&FBOVESPA, located at Rua XV de Novembro, 275 - São Paulo - SP September 27, 2017

Date for receiving the documents for qualification of the successful BIDDER(S), from 8AM to 6PM, at ANEEL, in Brasília / DF

October 10, 2017

Estimate date for publication of the qualification result by the Special Bidding Committee of ANEEL October 17, 2017

Deadline for submission of Appeals in view of the results of the qualification October 24, 2017

Term for submission of Counter-arguments to the appeal(s) filed October 31, 2017

Deadline for submission of SPE documents. November 1st, 2017

Estimate date for publication of the reconsideration Appeal(s) November 6, 2017

Forecast for approval of the result and award of the object of the AUCTION in Public Meeting of the Board of Directors of ANEEL

November 7, 2017

Date for the payment of the BONUS FOR THE GRANT resulting from the AUCTION and for the signature of the CONCESSION AGREEMENT November 10, 2017

(1) ANEEL may, at its own discretion, concede a new period for technical visits, provided there is a formal request. (2) Provided the question does not concern a questioning already answered by CEL, the request for clarification on the Tender Document shall be exceptionally admitted within five (5) business days before the public session of the AUCTION, in which case the answers to the Requests for clarification shall be disclosed within four (4) days after the formalization thereof.

Brasília, August 25, 2017.



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ROMÁRIO DE OLIVEIRA BATISTA

Executive Manager of the Executive Secretariat of Auctions and Chairman of the Special Bidding Committee

Agreed,

REIVE BARROS DOS SANTOS Director

ROMEU DONIZETE RUFINO Director General



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A P P E N D I X A

GLOSSARY

Apply to this AUCTION the definitions set out bellow:

I. SUCCESSFUL BIDDER, AWARDEE: the BIDDER who, after winning the AUCTION, has received award of the object pursuant to this Tender Document.

II. ANEEL – BRAZILIAN ELECTRICITY REGULATORY AGENCY: Federal authority established by Law no. 9427, of December 26, 1996, whose purpose is to regulate and supervise the production, transmission, distribution and trade of electricity, in accordance with the policies and guidelines of the federal government;

III. B3 S.A. Brasil, Bolsa, Balcão: in charge of the activities defined in the INSTRUCTION MANUAL;

IV. BONUS FOR THE GRANT – BO: Payment for granting the concession referred to in section II of art. 15 of Law no. 8897, of February 13, 1995, established by § 7 of art. 8 of Law no. 12783, of January 11, 2013, with wording given by Law no. 13203, of December 8, 2015;

V. CCEE – ELECTRIC ENERGY TRADING CHAMBER: non-profit legal entity governed by private law acting under the authorization of the Granting Power and regulation and inspection by ANEEL, aimed at enable the electric energy purchase and sales operations between the CCEE agents restricted to the SIN, whose creation was authorized pursuant to Law no. 10848, of march 15, 2004, and Decree no. 5177, of August 12, 2004;

VI. CEL – SPECIAL BIDDING COMMITTEE: appointed by Ordinance No. 4.177, of September 13, 2016, chaired by the Executive Manager of the Executive Secretariat of Auctions and constituted with the task of receiving, analyzing and judging the documents received for registration and qualification, and the proposals presented on electric energy purchase and Sale AUCTIONS and/or the grant of concessions and authorizations of electric energy services performed by ANEEL;

VII. CFURH – FINANCIAL COMPENSATION FOR THE USE OF WATER RESOURCES FOR HYDROELECTRIC GENERATION: percentage that the hydroelectric generation concessionaires pays for the use of water resources;

VIII. RELEVANT NOTICE: information regarding the AUCTION that, after its publication on ANEEL WEBSITE, becomes part of the Tender Document;

IX. GENERATION CONCESSIONAIRE: legal entity delegated by the GRANTING POWER to exploit the generation service;

X. CONCESSION AGREEMENT: Document signed between the GRANTING POWER and the CONCESSIONAIRE establishing the rules regarding the tariff, regularity, continuity, security, timeliness and quality of services provided. Likewise, it defines the penalties where irregularities are determined by ANEEL;

XI. SCHEDULE: schedule provided in the Tender Document, containing the dates for the accomplishment of the stages of the AUCTION;

XII. EPE – COMPANY OF ENERGY RESEARCH: created by Decree no. 5184, of August 16, 2004, based on the authorization given by Law no. 10847, dated March 15, 2004, is a public company with legal nature governed by private law, linked to the Ministry of Mines and Energy, and has the purpose of providing services in the area of studies and research aimed at financing the planning of the energy



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sector;

XIII. GAG – MANAGEMENT COST OF THE GENERATING ASSETS: portion of the RAG related to the regulatory costs of operation, maintenance, administration, remuneration and amortization, as well as to the investments in improvements of the HYDROELECTRIC POWER PLANT;

XIV. BID BOND: Value to be deposited by the PARTICIPANTS enrolled, for the purposes of participating in the AUCTION;

XV. ECONOMIC GROUP: it is formed by affiliated companies, being understood as a company affiliated to the other company that:

a) it is, directly or indirectly, controlled by the other company;

b) controls, directly or indirectly, the other company;

c) holds, directly or indirectly, any equity interest in the other company equal to or greater than 5% (five percent) of the voting capital; or

d) in the same way as the other company, has 5% (five percent) or more of its voting capital held, directly or indirectly, by the same natural or legal person.

For the purposes of calculating the percentage referred to in points "c" and "d", if there is successive participation in several legal entities, the final percentage of participation will be calculated by means of the composition of the percentage fractions of participation in each person In the chain line.

XVI. REGISTRATION: Act of delivery by the INTERESTED PARTIES of the documents to be submitted to CEL, prior to the opening phase of the LOTS, which aims to record the interest in participating in the AUCTION;

XVII. GENERATION FACILITIES: Set of electrical and non-electrical installations, land, buildings and diverse equipment integrating the HYDROELECTRIC POWER PLANT;

XVIII. INTERESTED PARTY: The legal entity governed by public or private law, whether national or foreign, or the investment fund in shares (constituted pursuant to CVM Instructions no. 578 of August 30, 2016) or the supplementary pension entity, which alone or in consortium, performs the REGISTRATION to participate in this AUCTION, in accordance with the rules of this Tender Document;

XIX. TENDER: The type of bidding adopted for the hiring of the concession for the provision of the generation service, including the operation and the maintenance and performance of improvements in the GENERATION FACILITIES;

XX. LOT: each one of the concessions to be tendered, which include specific HYDROELECTRIC POWER PLANTS.

XXI. INSTRUCTION MANUAL: Document attached to the Tender Document, prepared by B3 S/A (Brasil, Bolsa, Balcão) and approved by ANEEL, describing all operational procedures inherent to the AUCTION, from the access of participants, rules for deposit of financial guarantees to the participation in the public session of AUCTION;

XXII. MRE – ENERGY REALLOCATION MECHANISM: a mechanism designed to share the hydrological risk among its members;

XXIII. ONS – NATIONAL OPERATOR OF THE ELECTRICAL SYSTEM: non-profit legal entity governed by private law, established by Authorization of the Granting Power, supervised and regulated by ANEEL, according to Law no. 9648, of May 27, 1998, as amended by Law no. 10848, March 15, 2004, responsible for the coordination, supervision and control of the operation of the generation and transmission of electric energy in the SIN, integrated by holders of Concession, Permit, Authorization



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and by consumers;

XXIV. GRANTING POWER: The Union, according to art. 21, item "b", and art. 175, of the Federal Constitution, and the terms of art. 4 of Law 9074 of 1995;

XXV. NETWORK PROCEDURES: A document prepared by ONS with the participation of agents that, provided that approved by ANEEL, establishes the procedures and technical requirements necessary for the planning, implementation, use and operation of the National Interconnected System, as well as the responsibilities of the ONS and the agents;

XXVI. BIDDER: the INTERESTED PARTY that has received the confirmation of its REGISTRATION, meets the requirements of participation and has submitted the BID BOND and obtained the validation thereof aimed to participate in this AUCTION, in accordance with the rules of this Tender Document;

XXVII. RAG – ANNUAL GENERATION REVENUE: Value in Reais per year (R$/year) to which CONCESSIONAIRE shall be entitled due to the provision of the physical guarantee of energy and power of the HYDROELECTRIC POWER PLANT under quota system, composed by the GAG and the portion of RETURN OF BONUS FOR THE GRANT resulting from the AUCTION, in addition to charges and taxes, including charges of connection and use of the transmission or distribution systems of the CONCESSIONAIRE;

XXVIII. TRANSITION RULES: Rules establishing rights and obligations of the CONCESSIONAIRE, as well as the company responsible for providing the generation service, appointed pursuant to art. 9 of Law no. 12783/2013, or the current holder of the generation concession, until the end of the term thereof;

XXIX. RETURN OF BONUS FOR THE GRANT: Portion of the tariff or revenue referred to in § 10 of art. 15 of Law no. 12783, of January 11, 2013, instituted by Law no. 13203, of December 8, 2015, which integrates RAG, pursuant to art. 5, §1, II, and §4, of Ordinance MME no. 123, of April 17, 2013, with the wording given by Ordinance MME no. 384, of August 18, 2015;

XXX. SIN – NATIONAL INTERCONNECTED SYSTEM: It is made up by the set of facilities and equipments responsible for supplying electric power to all regions of the country which are electrically interconnected;

XXXI. ANEEL WEBSITE: electronic address of ANEEL, in the Global Computer Network, where the information about the AUCTION is available: http://www.aneel.gov.br (entrepreneur area / generation notices).

XXXII. CONTRACTOR: company with which the BIDDER has celebrated a Agreement or Term of Commitment to provide one or more operation and maintenance services, as well as to fulfill the technical capacity, aiming at the fulfillment of the object of this AUCTION.



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A P P E N D I X B

STATEMENT OF AWARENESS AND ACCEPTANCE OF THE AUCTION RULES (This statement shall be accepted upon the online REGISTRATION)

We hereby declare to know and accept, in full and without any restriction, the rules and conditions established in the Tender Document no. 01/2017-ANEEL and the Attachments thereof, and specifically that:

I. We have all the qualification documents and we fulfill the conditions for participating in the AUCTION with regards to the liquidity indices and minimum Net Equity, pursuant to the Tender Document ;

II. We hereby undertake to, in the cases required under the Tender Document or at the discretion of the BIDDER, constitute a Specific Purpose Entity (SPE) to exploit the concession of the generation service to be hired under the Brazilian laws, and with head office and administrative seat in Brazil, within the deadline established in the SCHEDULE;

III. We are fully aware of the requirements set forth in the Tender Document no. 01/2017-ANEEL and that these were considered in the preparation of the financial proposal presented for the LOT or Sub-lot of our interest and, if we are the successful BIDDER hereof, are committed to strictly comply with the obligations and requirements provided for in Attachment 2 - BASIC TECHNICAL FEATURES OF THE GENERATION FACILITIES of the HYDROELECTRIC POWER PLANT(S), thus being subject, due to the noncompliance with this commitment, to the penalties provided for in the legislation and the CONCESSION AGREEMENT;

IV. We do not employ people under eighteen years in night shift, dangerous or unhealthy work, and we do not employ people under sixteen years, as provided for in item V of art. 27 of Law no. 8666 of June 21, 1993, added by Law no. 9854, of October 27, 1999, except for the condition of under-age apprentice, whose contracting is permitted by law;

V. We are fully aware of the current situation of the GENERATION FACILITIES tendered herein, which shall be under our responsibility, if we are the successful BIDDER hereof, and other local conditions necessary to the provision of generation service that may affect the term and cost of services; and we undertake to carry out the visit and inspection of said GENERATION FACILITIES;

VI. The assets, rights and values of the company [of the companies integrating the Consortium] are not covered by Law 9613, of March 3, 1998, with wording given by Law 12683 of July 9, 2012;

VII. We timely and satisfactorily received all information and clarifications deemed necessary for the preparation of the Qualification documents and the Financial Proposal that shall be presented, which we assume fully responsibility for.



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A P P E N D I X C

FINANCIAL PROPOSAL / EXPRESSION OF NON-INTEREST IN PRESENTING FINANCIAL PROPOSAL

AUCTION Nº 01/2017-ANEEL LOT ___ THE BIDDER ______________________________________ hereby declares that: IS NOT INTERESTED IN PRESENTING FINANCIAL PROPOSAL FOR SAID LOT

IS INTERESTED IN PRESENTING THE FINANCIAL PROPOSAL BELOW: 1. The proposal of BONUS FOR THE GRANT regarding the Hydroelectric Power Plant

______________integrating LOT ____ is R$_______________________________________________________________________________ (value in words).

2.The proposal presented in item 1 is valid for a period of 180 (one hundred and eighty days) from the date of

AUCTION, and may be extended for equal period.

________________________________ place and date

________________________________

(legal representative)



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A P P E N D I X D

BID RATIFICATION TERM

AUCTION NO. 01/2017-ANEEL LOT ___ The BIDDER ______________________________________ hereby declares that: 1. The proposal of BONUS FOR THE GRANT regarding the Hydroelectric Power Plant

_______________integrating LOT ___ is R$_____________________________________________________________ (value in words).

2. The proposal presented in item 1 is valid for a period of 180 (one hundred and eighty days) from the date of AUCTION, and may be extended for equal period.

________________________________

place and date

________________________________ (legal representative)



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A P P E N D I X E

EQUIVALENCE OF QUALIFICATION DOCUMENTS FOR FOREING COMPANY

LEGAL QUALIFICATION DOCUMENT REQUIRED UNDER THE TENDER

DOCUMENT EQUIVALENT DOCUMENT IN THE COUNTRY OF ORIGIN

EXPIRATION DATE

RELEVANT CLARIFICATIONS

Articles of Incorporation, Bylaws or Articles of Association, and proof of the legal representative(s) powers, with the last acts of election of directors and the board of directors that elected the last management, as applicable.

Diagram of the ECONOMIC GROUP, promoting the opening of the shareholder / quotaholder framework up to the final shareholding, and must include all direct and indirect holdings above 5%, indicating the business name and respective controllers

TECHNICAL QUALIFICATION Proof of registration and regularity of the technical responsible, the BIDDER or the CONTRACTOR in the Regional Council of Engineering, and Agronomy - CREA, for the purposes of proving the professional qualification.

Proof that the BIDDER, or the CONTRACTOR, has, at its higher-education permanent professional staff, professional(s) holding certificate issued by a public or private person, certified by CREA, for the operation and maintenance of hydroelectric power plants with installed capacity equal to or greater than 100 MW

FINNANCIAL AND ECONOMIC QUALIFICATION Nothing is contained in Civil Certificate of Bankruptcy, Composition and Judicial and Extrajudicial Recovery or nothing is contained in Civil Insolvency Certificate, issued by the distributor from the domicile of the BIDDER. In the case of FIP, the documents required shall be presented in the name of the Administrator and the FIP Manager.

Financial statements of the last financial year, already payable and presented in accordance with the Law, thus being forbidden its replacement for balance sheets or interim balance sheets, and may be updated by the Broad Consumer Price Index - IPCA, when closed for more than three (3) months from the date defined in this Tender Document for the receipt of the envelope containing the qualification documents, which allow to verify the financial condition of the BIDDER and the required minimum net equity. The financial statements required by law, according to the types of company indicated below, shall be considered accepted if BIDDER was not created in the same calendar year of the AUCTION: Publicly held company – financial statements published in the Official Gazette or in a newspaper of great circulation in the country or certified copy of the statements extracted from the Daily Record registered in the competent body and the Independent Auditors' Report and the Supervisory Board; Privately held company – Financial statements published in the Official Gazette or in a newspaper of great circulation in the country or certified copy of the financial statements extracted from the Daily Record registered in the competent body; Limited Company - certified copy of the financial statements extracted from the Daily Record registered in



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the competent body; and FIP – Shall present financial statements accompanied by proof of compliance with the provisions of CVM Instructions 578 and 579/2016, in relation to the payment of quotas, before the Brazilian Securities and Exchange Commission. For FIPs that have not yet paid their equity, the Investment Commitment instruments of the Funds and the Capital Contribution instruments, accompanied by the financial statements of the respective quota holders, shall be accepted for economic and financial qualification purposes up to the limit of 5% of participation in the fund The BIDDER constituted in the same financial year in which the qualification takes place and that does not have accounting statements presented and required by law, shall present a copy of the opening balance sheet, extracted from the Daily Book stamped by the corresponding Board of Trade. Proof of Minimum Net Equity required by the Tender Document.

TAX AND LABOR QUALIFICATION Enrollment with the National Registry of Legal Entity - CNPJ / MF issued by the Ministry of Finance, and, in the case of FIP, its own CNPJ / MF and the CNPJ / MF of its Administrator.

Enrollment with the State / District and Municipal Taxpayer Registry, related to the respective tax domicile. If FIP, the documents required shall be presented on behalf of its Administrator.

Certificate of Regularity of FGTS – CRF. If FIP, the documents required shall be submitted on behalf of its Administrator.

Joint Clearance Certificate Relating to Federal Taxes and to the Active Debt of the Union or joint liability certificate with clearance effects related to the Federal taxes and the Active Debt of the Union. If FIP, the documents required shall be submitted on behalf of its Administrator.

Clearance Certificate, or liability certificate with clearance effects, of tax compliance before the Local / State Revenue Office, including with regards to the Active Debt. If FIP, the documents required shall be submitted on behalf of its Administrator.

certificate of tax compliance before the Municipal Revenue Office. If FIP, the documents required shall be submitted on behalf of its Administrator.



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A P P E N D I X F

EXPRESSION OF INTEREST / NON-INTEREST IN THE ASSISTED OPERATION

AUCTION NO. 01/2017-ANEEL The successful BIDDER of the AUCTION, OF LOT_______________________________________, hereby declares that: IS NOT INTERESTED IN REQUIRING THE ASSISTED OPERATION PROVIDED FOR IN CHAPTER 2 –

TRANSITION RULES OF THE TENDER DOCUMENT IS INTERESTED IN USE THE ASSISTED OPERATION PERIOD, IN THE FORM OF THE PROVISONS

OF CHAPTER 2 – TRANSITION RULES OF THE TENDER DOCUMENT, FOR THE PERIOD OF______________ [up to 180 (one hundred and eighty) days].

1. The BIDDER hereby declares to be aware that during the ASSISTED OPERATION period it shall not be the

owner of the project and shall not be entitled to receive the portion rearding the Management Cost of Generation Assets (GAG).

2. The BIDDER hereby declares to be aware of the obligations relating to item 2.18 of the Tender Document

and agrees to present the present communication, duly completed by its legal representative, to ANEEL and the company responsible for the provision of the generation service, indicated in accordance with art. 9 of Law no. 12783/2013, within two business days from the award of the object of this AUCTION.

________________________________ place and date

________________________________ (legal representative)



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A P P E N D I X G

COST OF PARTICIPATION IN THE AUCTION, EXCLUSIVELY FOR WINNERS

The remuneration to which B3 is entitled shall be paid exclusively by the successful bidders for the LOTS tendered, and shall be composed of two installments:

Installment I (Fixed), in the amount of R$ 215.556,89 (two hundred fifteen thousand, five hundred fifty six, eighty nine centavos of real);

Installment II (PERFORMANCE) in the amount of R$ 17.956,66 (seventeen thousand, nine hundred fifty six, sixty six centavos);

The remuneration to which B3 is entitled shall be calculated as described below, consisting of two installments, namely PI (Fixed) and PII (Performance);

Compensation to be paid by the successful BIDDER of the LOT:

ViR = (PI/ N. of Lots ) + PII

Where:

ViR = Individual value of compensation for each successful BIDDER of the LOT;

PI = INSTALLMENT I (FIXED); N. of Lots = number of LOTS bidded and awarded;

PII = INSTALLMENT II (PERFORMANCE)