Atiaia Energia S.A.

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The Brazilian company Atiaia Energia S.A., a partnership of Grupo Cornelio Brennand (90%) and KI Investimentos (10%), was granted authorizations by the regulatory agency ANEEL to build six small hydro power plants located in the states of Mato Grosso and Mato Grosso do Sul (162 MW in total capacity). The 30-year contracts were signed with the regulatory agency ANEEL over the years since September 2001. The first contract signed was for the Canoa Quebrada Plant, which was set to have a capacity of 28 MW. Construction works on this plant and on the PCH Garganta da Jararaca (located at Sangue river/MT and wiht 29 MW of capacity) started in 2005 and the units became operational in the end of 2006. Three other projects were implemented since then and, as of September 2008, were also operational: PCH Buriti, located at Sucuriu river (MS), with capacity of 30 MW; PCH Paranatinga II, located at Culuene river (MT), with capacity of 29 MW; and PCH Porto das Pedras, located at Sucuriu river (MS), with capacity of 28 MW. Another plant, Paranatinga I (PCH Pedra Furada) was also granted an authorization to be built, but construction had not begun, as of 2009. The power plants Canoa Quebrada and Garganta da Jararaca demanded a total investment of US$ 109.1 million (BRL 265 million), which was financed with a US$ 68.6 million (BRL 166.7 million) loan granted by BNDES in 2005. In 2006, BNDES also financed the construction of Buriti power plant with a loan of US$ 34.4 million (BRL 75 million); this project demanded US$ 53.2 million (BRL 116 million) and became operational in February 2007. The Paranatinga II power plant required an investment of US$ 70.3 million (BRL 137 million), which was financed with the sponsors own resources. It became fully operational in July 2008. In August 2007, BNDES approved another loan, this time to finance the Porto das Pedras power plant. This project demanded an investment of US$ 67.7 million (BRL 132 million) and the loan represented 71% of this value. The power plant became operational in September 2008. Most of the power plants were set to sell electricity to the national grid. The power plants either had power purchase agreements with the distribution company CEMAT or with the state-owned company Eletrobras (20-year agreements arranged through the Brazilian Federal program PROINFA, an incentive program for alternative power generating companies).