Guarani Thermal Power Plants

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The company Guarani S.A., a parnership of Tereos Internacional S.A. (60.44%), a subsidiary of the French Group Tereos, and the state-owned company Petrobras Biocombustivel S.A. (39,56%), was granted authorizations to build and operate five sugar-cane-residue fueled power plants located in the states of Sao Paulo (275.2 MW in total capacity). The 30-year contracts were signed with the regulatory agency ANEEL over the years starting in November 2000 (only the Guarani-Tanabi 2 unit signed a 35-year contract). The power plants were named as follow: * UTE Guarani (9.4 MW) - this captive unit started operations in 1977 * UTE Guarani-Andrade (14 MW) - this captive unit started operations in 2009 * UTE Guarani-Cruz Alta (64.8 MW) - a 8 MW unit commenced operations in 1997, initially as a captive unit; 22 MW unit commenced commercial operations in June 2003 (with the electricity generated being sold to the unregulated market); a 10 MW unit commenced operations in 2009 (still with the electricity generated being sold to the unregulated market); a 25 MW unit commenced operations in January 2013 (this expansion took place so that the company would be to able to attend the contracts signed in 2014 for the sale of electricity in the regulated market, as described below). * UTE Guarani-Tanabi (38 MW) - commenced commercial operations in May 2014 (electricity sold to the regulated market) * UTE Guarani-Tanabi 2 (34 MW) - under construction, as of December 2014 (electricity to be sold to the regulated market) The investment directed to the 25 MW unit of UTE Guarani-Cruz Alta was US$ 26.4 million (BRL 62.1 million), to UTE Tanabi was US$ 39.9 million (BRL 93.8 million) and to UTE Tanabi II was US$ 36.3 million (BRL 85.7 million) The government periodically runs public bidding for the sale of energy to the country´s distribution companies. The UTE Guarani-Tanabi and UTE Guarani-Tanabi 2 won the public bidding that took place in 2013, by offering an average tariff of US$ 57.2/MWh (BRL 134.4/MWh). The UTE Guarani-Cruz Alta won the public bidding that took place in 2014, by offering a tariff of US$ 84.4/MWh (BRL 198.5/MWh). UTE Guarani-Tanabi and UTE Guarani-Tanabi 2 signed 25-year power purchase agreements with several electricity distribution companies, while UTE Guarani-Cruz Alta 2 signed 30-year agreements. UTE Guarani-Tanabi and UTE Guarani-Tanabi 2 committed to start supplying to the market in 2018, while UTE Guarani-Cruz Alta 2 committed to start supplying the market in 2019.