Sao Clemente Wind Complex

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Ventos de Sao Clemente Holding S.A., a subsidiary of the Brazilian company Salus Fundo de Investimento e Participacoes, was granted authorizations to build eight wind power plants located in the state of Pernambuco (220 MW in total capacity). The wind farm was named Sao Clemente Wind Complex, and the sponsors created different special purpose companies to manage each power plant, as described below. * EOL Ventos de Sao Clemente 1 (30 MW) - Ventos de Sao Clemente I Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 2 (30 MW) - Ventos de Sao Clemente II Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 3 (30 MW) - Ventos de Sao Clemente III Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 4 (30 MW) - Ventos de Sao Clemente IV Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 5 (30 MW) - Ventos de Sao Clemente V Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 6 (26 MW) - Ventos de Sao Clemente VI Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 7 (24 MW) - Ventos de Sao Clemente VII Energias Renovaveis S.A. * EOL Ventos de Sao Clemente 8 (20 MW) - Ventos de Sao Clemente VIII Energias Renovaveis S.A. The 35-year contracts were signed with the regulatory agency ANEEL in November 2014. In June 2014, the company took part in a competitive bidding process to sell electricity to the regulated wholesale market (power purchase agreements were signed guaranteeing the sale of electricity to the national grid). The sponsor submitted the winning bids of US$ 39 /MWh (BRL 130/MWh) for all power plants. The total investment committed to the power plants was estimated at US$ 226.2 million (BRL 754.7 million). In December 2015, the state-owned bank BNDES approved a US$ 197.3 million (BRL 658.3 million) loan to the project. The remaining investment cost was set to be equity financed. The company was 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 was not subject to sector taxes.