Confindustria Seminar

ENEL experience on developing investments in Northeast Brazil

Rome, 20th November 2019

1

2

Thermal Generation

2014 2015 2016 2017

1,62,9

5,5

1,3

1,6

1,5

4,07

2,60,90,7

4,0

DistributionRenewable

2018

2017

2018

Investments EvolutionBillion BRL +2,2 bi R$

Enel Goiás’ acquisition

+1,4 bi R$Volta Grande’s acquisiton

+4,5 bi R$Renewable’s auctions (A-4 and A-6)

Enel Commitment to Brazil

3,1

2019-2021 Estimation

0,9

17

5,3

2,6

0,1

+7,1 bi R$Eletropaulo’s acquisition

1

Enel X

9

BS

O

BS

OB

SO

Enel Green Power participation in Northeast

3

MARANHÃO

PIAUÍ

CEARÁ RIO GRANDE DO NORTE

PARAÍBA

PERNAMBUCO

ALAGOAS

SERGIPEBAHIA

Total NE: 3.575 MW(In Operation + Under Construction)

Total Brazil: 4.847 MW | Northeast share: 74%In operation 1.691 MW

Total Brazil: 2.963 MW | Northeast share: 57%

872 MW 819 MWp

Delfina - BA180 MW

Modelo – RN56,4 MW

Cristal – BA89,7 MW

Curva –BA56,4 MW

Fontes – PE79,9 MW

Serra Azul - BA118 MW

Cristalândia – BA*90 MW

Morro do Chapeu - BA172 MW

Fontes Solar – PE11 MWp (10 MWac)

Ituverava - BA254 MWp (196 MWac)

Nova Olinda – PI*292 MWp (210 MWac)

Lapa Cluster – BA*158 MWp (120 MWac)

Horizonte – BA103 MWp (77,1 MWac)

São Gonçalo - PI475,7 MWp(437 MWac)

São Gonçalo II - PI133,1 MWp(138 MWac)

Lagoa do Ventos - PI595,2 MW

Morro do Chapéu II - BA352,8 MW

Delfina VIII - BA29,4 MW

Lagoa do Ventos II - PI121,4 MW

Cumarú – RN205,8 MW

*Assets under EGP operation over a BSO contract

609 MWp

Under construction 1.884 MWTotal Brazil: 1.884 MW | Northeast share: 100%

1.275 MW

Bahia1.260 MWp

Piauí1.800 MWp

5.000 MWp

Under development 8.900 MWTotal Brazil: 10.200 MW | Northeast share: 87%

3.900 MW

Ceará220 MWp

Pernambuco620 MWp

Rio Grande do Norte1.100 MWp

Bahia2.200 MW

Sergipe700 MW

Paraíba600 MW

Piauí400 MW

+

Enel Green Power participation in Northeast

4

MARANHÃO

PIAUÍ

CEARÁ RIO GRANDE DO NORTE

PARAÍBA

PERNAMBUCO

ALAGOAS

SERGIPEBAHIA

Total 3.575 MW(In Operation

+ Under Construction)

JOBSCREATED ≈14K

TOTALINVESTIMENT* +14Billion (in BRL)

AVOIDEDCO2 EMISSION** ≈3,4MillionTon/year

ICMSDUE TAX ≈2,5Billion (in BRL)

*Considers operational + under construction projects**Considers only operational projects

From 2010 till 2021:

Challenges Faced and Opportunities for EGP in Northeast Brazil

Limitation in connection availability Delays in works for transmission extension

New Opportunities

Infrastructure improvement and general logistics

Staff availability in environmental agencies

Standardization of tax benefit rules between States

Environmental agencies processes too long Infrastructure needed to be improved

Unqualified and unexperienced Local companies with technology expertise

Precarious documentation of ownership and long time for regularization

Better understanding of processes Reduction of regularization lead time

Current ScenarioIn Beginning of activities

Reduced lead times and better processunderstanding

New investments and improved connection availability in the best resource areas

Construction delays considerably decreases

Permitting

Labor

Land Regularization

Connection

5

SustainabilityEnel Green Power

Bahia

29 social, cultural and environmental

projects

96.675 benefited people since 2017

Focus:• Social and economic development• Education

Piauí

11 social, cultural and environmental

projects

19.434 benefited people since 2017

Rio Grande do Norte

6 social, cultural and environmental

projects

2.194 benefited people since 2017

Pernambuco

5 social, cultural and environmental

projects

9.460 benefited people since 2017

Until oct/196

Sustainability is key factor for EGP Brazil

7

Promoting access to safedrinking water for domesticconsumption and providingtechnology for reuse in familyfarming.

New employment and incomeopportunities for communities,especially in E&C phase, withtraining and improving the skills oflocal labor. 50% of the workforcecomes from local communities.

Contribution to theimprovement of teachingthrough the training of teachersand students of public schools tostimulate reading and theknowledge about renewableenergy and other environmentalissues.

Support for the preservation ofendangered species in theCaatinga biome in Bahia,through monitoring, introductionof new individuals andenvironmental education incommunities.• Arara-Azul-de-Lear

(Anodorhynchus leari)• Onça-parda (Puma concolor)• Onça-pintada (Panthera onca).

9,304 benefited people(BA, PI, PE and RN)

14,000 new jobs (E&C)BA (48%), PI (46%), PE(3%) and RN (3%)

254 benefited families(BA)

PA

MT

TO

GO

DF

RS

SC

PR

SP

MG

RJ

ES

BA

PI

CE

PE

AM

AC

MS

MA

PB

SE

RN

AL

Distribution4 Distributors17 millions of clients

Transmsision2.200 MWInterconection Brazil-Argentina

Geração Renovável2.963 MW in Operation*1.884 MW under Construction

23 States and Federal District

~5.174 MW of installed capacity

521 Stores (CE, RJ, SP e GO)

Thermal Generation

327 MW in Operation

Trading390 clients** 4.8 GWH comercialized** *2018

Enel XEnergy SolutionsPresent in 14 states

8

*ConsidersBSO assets

9