eneva corporate presentation ? august 2014

8/11/2019 ENEVA Corporate Presentation ? August 2014

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August, 2014


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Company Overview

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One of the largest private sector power generators in Brazil

ENEVA currently operates 2.4GW in coal and gas-fired power plants (2.9 GW until

Integrated energy platform, with privileged access to natural resources

Only private power generator in Brazil with access to onshore gas

Ongoing restructuring initiatives

- Reorganization of the companys structure and continuous TPPs operation stabiliz

- Strengthening of the companys capital structure

Competitive greenfield portfolio

Licensed coal, gas and wind power generation projects

Company Overview


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A Brazilian thermal generator with asset exposure to energy fossil fuels (natural gas

ENEVA at a Glance

2.9GW inflation-protected, long-term PPAs

o 2.4GW in operation

o 517MW under construction

Long-term PPAs guarantee R$2.2 billion in annual inflation-adjusted

capacity payments

PPAs provide hedge against commodity price exposure

Integrated gas E&P assets supply up to 8.4MM m/day to ENEVAspower

plants

Competitive portfolio of licensed greenfield wind, coal and gas fired

capacity

Company Description

ENEVA ownership structure

Geographic Footp

Amapari EnergiaENEVA 51% / Eletronorte 49%

Diesel - 23MW

ItaqENEVCoal

Natural GasExploratory

blocksContracted production

of 8.4MM m3/day

Free Float (37.1%)

42.9%20.0%

Other

ENEVA ParticipaesENEVA/E.ON

Joint Venture

50%

50%

BNDES

8.6%

EikeBatista

Controlling Block

28.5%

Note: 1) Ownership structure assumes future ENEVA Participaes (JV ENEVA/E.ON) incorporation, as disclosed on the Material Fact Notice as of July 3, 2013


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Pecm I

Capacity: 720MW

Fix. Rev.: R$600.3MM /year

CVU: R$99/MWh

Auction: A-5/2007

COD: Dec, 2012

Capacity: 360MW

Fix. Rev.: R$317.3MM/year

CVU: R$103/MWh

Auction: A-5/2007

COD: Feb, 2013

Itaqui

Note: (1) Fixed revenues are indexed to inflation index IPCA (Database: Nov, 2013)

Capaci

Fix. Re

CVU: R

Auctio

COD: O

Coal Generation Portfolio Overview1.4 GW of installed capacity in full operation


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Parnaba II2 GE GTs x 168,8MW+ 1 GE ST x 181MW

Parnaba I4 GE GTs x 168,8MW

Parnaba III1 GE GT x 168,8MW

+ 1 Wrtsil GM x 7,3MWParnaba IV

3 Wrtsil GMs x 18MW

Capacity: 56MW

46% efficiency

Fix. Rev:R$54MM/year

CVU: R$69/MWh

Free market

COD: Dec, 2013

Capacity: 178MW

38% efficiency

Fix. Rev: R$98MM/year

CVU: R$160/MWh

Auction: A-5/2008

COD: Dec, 2013

Capacity: 676MW

37% efficiency

Fix. Rev: R$443MM/year

CVU: R$114/MWh

Auction: A-5/2008

COD: Apr, 2013

Parnaba IV Parnaba III Parnaba I

Notes: (1) Bertin project developed by ENEVA; (2) Fixed revenues indexed to infl ation index IPCA (Database: Nov, 2013)

Parnaba Complex OverviewA unique case in Brazil power generation sector with 910MW already in operation


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Outstanding management capabilities

Financial strength and discipline

Sector know-how: E.ON E&P looks at a volume delivery of +170k

barrels/day and +60 licenses in GB and Norway

Tried and tested Parnaba experience, know-how of Parnaba Complex

rooted within PGN

Strong Shareholders

All Parnaba gas-fired power plants are supplied by Parnaba Gs Natural,

owner and operator of 8 onshore exploration blocks

ENEVA has a direct interest in PGN as key supplier of its TPPs

Declaration of commerciality with Development Plan for 3 gas fields:

Gavio Real, Gavio Branco and Gavio Azul

Gas supply agreements secured for 8.4MM m/day

R$250 million capital injection concluded in Feb, 2014

Highlights

Integrated Natural Gas E&PStrong competitive position in gas-fired generation

Parnaba Gs Natural

18.2%9.1% 72.7%

Geographic Foo

Note: 1) Ownership structure after execution of the sale and purchase agreement between OGP and Cambuhy, subject to approval by OGPs creditors, under its judicial recovery procedur


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Operating & Financial Performance of Power

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Operating Costs

Operational Performance (Itaqui)

EBITDA (R$MM)

Availability Variable Revenue X Variable Cos

Sources: ONS & Company

Higher unavailability offset lower operating costs

1Q14

Operating Costs1(R$ million) 121.0

Gross Energy Generated (GWh) 583

Operating Costs per GrossEnergy Generated (R$/MWh)

207.7

NOTE: 1) Does not include Depreciation & Amortization.

63%

83% 84% 87%

75%

62%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Availability reduction in 2Q14 due to mainly fan equipment and

emissions control systems

36.1-22.1

5.50.6

20.1

EBITDA 1Q14 Net OperatingRevenues

OperatingCosts

OperatingExpenses

EBITDA 2Q14

261

232

144159

128149

112

141

108 10

107 106 103 102 102 100 104 108 10711

Variable Cost Gross


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Operational Performance (Parnaba I)

EBITDA (R$MM)

Availability Variable Revenue X Variable Cost


OBS: Dispatch margin captured by Parnab

Operating costs per MWh followed Henry Hub prices decrease and reflected lower unacosts

NOTE: 1) Does not include Depreciation & Amortization.

Operating Costs

1Q14


Gross Energy Generated (GWh) 1,411


157.2

N.A.

91%97% 96% 99% 98%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

44.8

-20.625.3

0.7

50.3


OperatingCosts

OperatingExpenses

EBITDA 2Q14

77 74 65 7580

68 77 78 7479

80 8294 99 100 96 93 99 95 92

Variable Cost Gross V


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Operating Costs

Operational Performance (Pecm I)

Availability

NOTES: 1) Figures consider 100% of Pecm I; 2) Does not include Depreciation & Amortization; 3) 1Q14 unavailability figure considers ONS review (previously

Variable Revenue X Variable Cos

Lower Operating Costs per MWh mainly offset by higher fuel and unavailability costs


1Q14


Gross Energy Generated (GWh) 1,014


227.1

EBITDA1(R$MM)

72%

41%

66%

51%

83%3

77%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

48.8

9.6

-26.1

0.3

32.5


OperatingCosts

OperatingExpenses

EBITDA 2Q14

71% 151127 118

136154

117

139 138

109119

107

111 105 104 100 99 99 97 102 105 106110

Variable Cost Gross Va


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Operational Performance (Pecm II)

Variable Revenue X Variable CostAvailability


EBITDA negatively impacted by higher outsourced services and unavailability costs

EBITDA (R$MM) Operating Costs

1Q14

Operating Costs (R$ million) 99.4

Gross Energy Generated (GWh) 720.8


137.9

N.A. N.A. N.A.

85%97% 96%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

46.3

-7.1

-6.0 0.3

33.5


OperatingCosts

OperatingExpenses

EBITDA 2Q14

NOTES: 1) Figures consider 100% of Pecm II; 2) Does not include Depreciation & Amortization.

92 99111

99 106

114 118 122125 125



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Operating Costs

Operational Performance (Parnaba III)

NOTES: 1) Figures consider 100% of Parnaba III; 2) Does not include Depreciation & Amortization.

Availability Variable Revenue X Variable Cost


OBS: Dispatch margin captured by Parnab

Operational dispatch adjustment impacted Operating Costs

1Q14


Gross Energy Generated (GWh) 344


179.6

EBITDA1(R$MM)

N.A. N.A. N.A.

100% 99%

77%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

14.4 -19.6

-3.30.04

-8.4


OperatingCosts

OperatingExpenses

EBITDA 2Q14

75 71 69 69

161 161 161 161



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Regulatory Update

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Part of 1.4GW Parnaba Thermoelectric Complex, a unique gas

to wirecase in Brazil

450MWavg sold in the 2011 A-3 Auction. PPA started in March,

2013

Lowest variable cost (R$59/MWh) among gas-fired projects in

Brazil

Investments of up to R$1.4 billion

All gas turbines already commissioned. Steam turbine to be fully

tested on the coming 4 months

Plantsconstruction and gas supply infrastructure delayed

o Lack of LT financing due to PPA signature difficulties

o OGX Maranho restricted financial capabilities before rescue plan

captained by Cambuhy Investimentos and E.ON

Project Overview

Adjusted proposal presented to Aneel,

o Completion of the construction of Parna

o Postponement of PPAs start date to J

whichever occurs first;

o Penalty amounting to approx. R$310MM

the term of Plants PPAs, through th

revenues; and

o Renewal of execution guarantees of R$6

ENEVA proposed to Aneel to run a Parnaba Thermoelectric Complex byParnaba III and 2 gas turbines from

from Parnaba II, as soon as it becomes

Additionally, ENEVA commits to close up to 5 years, subject to certain condit

o Sale of energy in the regulated market

and

o Availability of long-term financing for the

ENEVA Proposal to Aneel

Ongoing Regulatory Discussions (1)Parnaba II Delay


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Filed in Jan, 2014 a lawsuit against Aneel questioning

hourly-based unavailability charges

On Jan 24, 2014, a Federal Court granted an injunction

halting unavailability charges as measured, establishing

the methodology provided for in PPAs (60-month rolling

average)

The lawsuit also claims the reimbursement of amounts

paid since PPAsbeginning

Petition for revision of ADOMP methodology presented to

Aneel

o A technical note has already been released considering

Companyscontractual understanding

Itaqui and Pecm I

On Jun 26, 2014 filed a request f

Federal Court aiming to get tpresented to Aneel

Pecm II and Parnaba I & III

Plant 100%

Itaqui R$105.2M

Pecm I R$250.2M

Pecm II R$38.9M

Parnaba I R$52.2M

Parnaba III R$6.9MM

Total R$453.3M

+R$310MM already paid for un

Ongoing Regulatory Discussions (2)ADOMP / Unavailability Charges

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


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Brazilian Power Market and Greenfield Por

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Southeast Reservo

~70% of total storage ca

Source: ANEEL

Brazils Generation Capacity: 136 GW

Breakdown by source April, 2014

Brazil is highly dependent on hydro generation with increasingly faster depletion of re

Brazilian Energy Matrix

63.5%10.5%

2.5%

1.5%

2.2%

19.8%

Hydro Gas Coal Nuclear Wind Others

Dry Sea

67%

76%

38%

40%

35%36%

39%

20%

30%

40%

50%

60%

70%

80%

90%

Jan Feb Mar Apr May Jun Jul

Average 2007-2011 2012


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Source: ONS

Autonomy = Storage Capacity / (Load Thermal Generation)

Economic growth will boost

leading to a supply defi

Water storage capacity has stagnated,

leading to decreased system autonomy

65

65

60

65

70

75

80

85

90

2013 2014 2015 2016 201

GWavg

2016-on: New generatio~8 GWavg required un

Electric System ReliabilityNew thermal plants are necessary to guarantee reliable power supply

0

5

10

15

20

25

30

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

ReservoirsAutonomy(Months)

2013

Current reservoirautonomy ~6 months


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ParnabaComplex

Integrated to natural gas resources

Located in a tax-advantaged region

Ventos WindComplex

Located in one Brazilsbest wind resource areas

Attractive load factor

Just 30km from grid connection

Land ownership assured

Au(Coal + Gas)

Located at a port with a regasification terminal buildlicense

150km from Campos Basin natural gas accumulations

Environmental licensed to both coal and gas operations

Sul & Seival Integrated to the Seival Mine (proven reserves: 152 M ton)

Low operation costs

Power

supply-demand

unbalanced

Hydropower

concentrated

matrix

Spot prices at

historical highs

Demand for base-

load generation2 3 4 51

Sul727 MW

ParnabaComplex

2,166 MW

Se600

Solar 1 MW

ENEVAs Greenfield PortfolioAttractive licensed greenfield projects in various development stages


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Disclaimer

The material that follows is a presentation of general background information about ENEVA S.A. and its subsidiaries (collectively, ENE

the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty,

concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.

This presentation may contain certain forward-looking statements and information relating to ENEVA that reflect the current view

Company and its management with respect to its performance, business and future events. Forward looking statements include, with

that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like may, p

expect, envisages, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a numb

assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, object

and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents o

placement agents shall be liable before any third party (including investors) for any investment or business decision made or ac

information and statements contained in this presentation or for any consequential, special or similar damages.

This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.

Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.

Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients shou

in this regard.

The market and competitive position data, including market forecasts, used throughout this presentation were obtained from intern

publicly available information and industry publications. Although we have no reason to believe that any of this information or these

material respect, we have not independently verified the competitive position, market share, market size, market growth or other dat

by industry or other publications. ENEVA, the placement agents and the underwriters do not make any representation as to the accurac

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or i

written consent.


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Thank you.www.eneva.com.br

eneva corporate presentation ? august 2014

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