Areia Branca Wind Farm

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Voltalia Energia do Brasil, a subsidiary of the French company Voltalia, was granted authorizations to build seven wind power plants located in the state of Rio Grande do Norte (200 MW in total capacity, municipalities of Sao Miguel do Gostoso, Touros and Areia Branca). The partners established ten companies to lead the projects: * Usina de Energia Eolica Sao Joao Ltda. - EOL Sao Joao (28.8 MW) * Usina de Energia Eolica Carnauba Ltda - EOL Carnaubas (27.2 MW) * Usina de Energia Eolica Carcara I Ltda - EOL Carcara I (28.8 MW) * Usina de Energia Eolica Carcara II S.A. - EOL Carcara 2 (28.8 MW) * Usina de Energia Eolica Terral S.A. - EOL Terral (28.8.8 MW) * Usina de Energia Eolica Reduto Ltda - EOL Reduto (28.8 MW) * Usina de Energia Eolica Santo Cristo S.A. - EOL Santo Cristo (28.8 MW) The 35-year contracts were signed with the regulatory agency ANEEL starting in March 2012. The total investment in the power plants was estimated at US$ 527 million (BRL 860 million). The seven power plants won the public bidding for the sale of energy to the country´s distribution companies run by the government that took place in July2011 and in December 2011, by offering an average tariff of US$ 60.7/MWh (BRL 99/MWh) and US$ 65.6/MWh (BRL 107/MWh) , respectively . The project companies signed 20-year power purchase agreements with the several electricity distribution companies , and the agreements included the annual adjustment of the tariff to the inflation rate. The sponsors committed to start supplying the market in 2014 and 2016 (for EOL Carcara 2 and EOL Reduto). As of March 2013, the environmental licenses had been issued, but construction works had not commenced. In May 2013, Voltalia sign an agreement with Acciona Windpower for the supply of wind turbines that were set to be installed in the wind farms located in the state of Rio Grande do Norte. The projects were granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures. Finally, the electricity sold by the company is not subject to sectoral taxes. Financial closure of the projects EOL Carcara I, EOL Carcara II and EOL Terral was achieved in December 2013, when the state-owned bank BNDES granted a US$ 67 million (BRL 157.7 million) loan to these projects. These three power plants required an investment of US$ 147.1 million (BRL 346.3 million). In May 2014, BNDES approved an additional loan of US$ 131.5 million (BRL 309.2 million) for these power plants. In August 2014, financial closure was achieved for the other power plants: EOL Reduto, EOL Carnauba, EOL Santo Cristo e EOL Sao Joao. The four power plants were granted 1-year bridge loans arranged by the banks Santander and Itau Unibanco amounting to US$ 162.5 million (BRL 382 million). The remaining cost was set to be financed with equity (US$ 65.5 million or BRL 154 million). Total investment on these power plants was estimated at US$ 228 million (BRL 536 million). EOL Carcara II commenced commercial operations in December 2014. In July 2014, the state-owned company Copel acquired a 49% stake in the project. In August 2015, the state-owned bank BNDES approved a US$ 85.7 million (BRL 286 million) to the project companies responsible for developing the power plants EOL Reduto, EOL Carnauba, EOL Santo Cristo e EOL Sao Joao. In March 2016, the sponsors issued US$ 15.53 million worth in long-term bonds. Credit Agricole acted as sole bookrunner and DCADV acted as legal adviser to the sponsors.