Parnaiba III and Parnaiba IV Thermal Power Plants

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The Brazilian Group EBX (26%), the German company E.on (31%) and the Brazilian company Petra Energia (30%) were granted authorizations to build and operate natural gas fueled power plants located in the state of Maranhao (212 MW in total capacity). The 35-year contracts were signed with the regulatory agency ANEEL in November 2009 (UTE Parnaiba III) and in July 2013 (UTE Parnaiba IV). The sponsors created the following special purpose companies to manage the power plants: UTE Parnaiba III, formerly known as UTE MC2 Nova Venecia (176 MW) - UTE Parnaiba III Geracao de Energia S.A. UTE Parnaiba IV (56 MW) - Parnaiba Geracao e Comercializacao de Energia S.A. Investment values of these projects were not available. In 2008, UTE Parnaiba III took part in a competitive bidding process and won the right to supply electricity in the regulated market starting in 2013 (for a 15-year period). Commercial operations of this unit commenced in October 2013. As of December 2013, UTE Parnaiba IV had not signed any power purchase agreement in the regulated markets. Both power plants 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, they were allowed to use accelerated depreciation methods of accounting for construction expenditures. In September 2013, EBX sold part of its ownership in MPX, the subsidiary of EBX Capital Partners responsible for managing the group's energy projects. MPX changed its name to Eneva, and its ownership structure was established as follows: EBX, 20%; the German company E.ON, 42.9%; free float, 37.1%. In the restructuring process, the ownership of UTE Parnaiba III and UTE Parnaiba IV was established as follows: Petra (30%), Eneva (35%) and Eneva/E.ON joint venture (35%). In July 2014, the sponsors were granted a US$ 51 million (BRL 120 million) 1-year term loan by Banco Bradesco.