ENEVA Corporate Presentation ? June 2014

8/12/2019 ENEVA Corporate Presentation ? June 2014

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June, 2014


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Company Overview

1


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One of the largest private sector power generators in Brazil

ENEVA currently operates 2.4GW in coal and gas-fired power plants (2.9 GW until

Integrated energy platform, with privileged access to natural resources

Only private power generator in Brazil with access to onshore gas

Ongoing restructuring initiatives

- Reorganization of the companys structure and continuous TPPs operation stabiliz

- Strengthening of the companys capital structure

Competitive greenfield portfolio

Licensed coal, gas and wind power generation projects

Company Overview


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A Brazilian thermal generator with asset exposure to energy fossil fuels (natural gas

ENEVA at a Glance

2.9GW inflation-protected, long-term PPAs

o 2.4GW in operation

o 517MW under construction

Long-term PPAs guarantee R$2.2 billion in annual inflation-adjusted

capacity payments

PPAs provide hedge against commodity price exposure

Integrated gas E&P assets supply up to 8.4MM m/day to ENEVAspower

plants

Competitive portfolio of licensed greenfield wind, coal and gas fired

capacity

Company Description

ENEVA ownership structure

Geographic Footp

Amapari EnergiaENEVA 51% / Eletronorte 49%

Diesel - 23MW

ItaqENEVCoal

Natural GasExploratory

blocksContracted production

of 8.4MM m3/day

Free Float (38.2%)

37.9%23.9%

Other

MPX / E.ONPartipaes

Joint Venture

50%

50%

BNDES

10.3%

EikeBatista

Controlling Block

27.9%

Note: 1) Ownership structure assumes future MPX / E.ON Participaes JV incorporation, as disclosed on the Material Fact Notice as of July 3, 2013


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Strong Operating Asset Base2.4 GW of Thermal Power Operating, Seeded Investments for Renewables and Innovatio

Coal

100% ENEVA

360 MW Installed Capacity

Fixed Revenue: R$316MMp.a.

Coal

50% ENEVA



Coal

100% ENEVA



Itaqui

PecmI

PecmII

ParnabaI Natural Gas

70% ENEVA



Natural Gas

70% ENEVA(3)

176 MW Insta

Fixed Revenue

Natural Gas

70% ENEVA(3)

56 MW Install

Fixed Revenue

Oil (Diesel)

51% ENEVA

23 MW Install

Fixed Revenue

Parnaba

III

Parnaba

IV

Amapari

Tau

Solar

100% ENEVA

1 MW Installed

Revenue2: R$0

Notes: (1) Fixed revenues are indexed to inflation index - IPCA (Database: Nov, 2013); (2) Based on 2013 average,;(3) Post ENEVA Par. Integration; and (4) None regulated revenues.


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Energy Source: Natural Gas

ENEVA Stake: 100%

Installed Capacity: 517MW

Sold Energy: 450MW

Fixed Revenue: R$373.7MMp.a.

Parnaba II (CCGT)

Note: 1) Fixed revenues are indexed to inf lation index IPCA (Database: Nov, 2013)

517 MW under construction


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Outstanding management capabilities

Financial strength and discipline

Sector know-how: E.ON E&P looks at a volume delivery of +170k

barrels/day and +60 licenses in GB and Norway

Tried and tested Parnaba experience, know-how of Parnaba Complex

rooted within PGN

Strong Shareholders

All Parnaba gas-fired power plants are supplied by Parnaba Gs Natural,

owner and operator of 8 onshore exploration blocks

ENEVA has a direct interest in PGN as key supplier of its TPPs

Declaration of commerciality with Development Plan for 3 gas fields:

Gavio Real, Gavio Branco and Gavio Azul

Gas supply agreements secured for 8.4MM m/day

R$250 million capital injection concluded in Feb, 2014

Highlights

Integrated Natural Gas E&PStrong competitive position in gas-fired generation

Parnaba Gs Natural

18.2%9.1% 72.7%

Geographic Foo

Note: 1) Ownership structure after execution of the sale and purchase agreement between OGP and Cambuhy, subject to approval by OGPs creditors, under its judicial recovery procedur


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Operating & Financial Performance of Power

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Operating Costs

Operational Performance (Itaqui)

EBITDA (R$MM)

Availability Variable Revenue X Variable Cos

Sources: ONS & Company

Positive EBITDA driven by improved operational performance and reduced operating

COD:Feb 5, 2013

24.2

36.1

4Q13 1Q14

63%

83% 84%87%

75%

1Q13 2Q13 3Q13 4Q13 1Q14

4Q1

Operating Costs1(R$ 000) 125,6

Gross Energy Generated (GWh)

Operating Costs per GrossEnergy Generated (R$/MWh)

19

NOTE: 1) Does not include Depreciation & Amortization.

261232

144159

128149

112

141

107 106 103 102 102 100 104 108

Variable Cost VarAvailability reduction in 1Q14 due to mainly maintenance in coal

mils, fan equipment and emissions control systems


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Operational Performance (Parnaba I)

EBITDA (R$MM)

Availability Variable Revenue X Variable Cost

Sources: ONS & Company

OBS: Dispatch margin captured by Parnab

Growth in operating costs per MWh justified by increase in Henry Hub prices and offseincrease in variable revenues

COD:Feb 1st, 2013 to

Apr 12, 201396%

91%96% 96% 99%

1Q13 2Q13 3Q13 4Q13 1Q14

32.0

44.8

4Q13 1Q14

77 74 65 7580

68 77 78

80 8294 99 100 96 93 99

Variable Cost Var

NOTE: 1) Does not include Depreciation & Amortization.

Operating Costs

4Q1


Gross Energy Generated (GWh) 1,3


13


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Operating Costs

Operational Performance (Pecm I)

Availability

NOTES: 1) Figures consider 100% of Pecm I; 2) Does not include Depreciation & Amortization.

Variable Revenue X Variable Cos

EBITDA negatively impacted by high unavailability costs due to outage of Turbine #1

Sources: ONS & CompanyIn Jan, 14, Turbine #1 was 744 hours unavailable primarily due toshaft maintenance and hydrogen seal replacement, started in

4Q13

COD:Dec 1st, 2012May 10, 201372%

41%

66%

51%

71%

1Q13 2Q13 3Q13 4Q13 1Q14

61.7

48.8

4Q13 1Q14

151127 118

318

154

117139 138

109

111 105 104 100 99 99 97 102 105

Variable Cost Vari

4Q1


Gross Energy Generated (GWh) 6


38

EBITDA1(R$MM)


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Operating Costs

Operational Performance (Parnaba III)

NOTES: 1) Figures consider 100% of Parnaba III; 2) Does not include Depreciation & Amortization.

Availability Variable Revenue X Variable Cost

Sources: ONS & CompanyOBS: Dispatch margin captured by Parnab

EBITDA margins negatively impacted by energy acquisition costs as full capacity was only in February 2014

COD:Oct 22, 2013

N.A. N.A. N.A.

100%

96%

1Q13 2Q13 3Q13 4Q13 1Q14

1.1

14.4

4Q13 1Q14

75 71 69

161 161 161

Jan-13...Out-13 Nov-13 Dec-13 Jan-1

Variable Cost Var

4Q1

Operating Costs2(R$ 000) 124,

Gross Energy Generated (GWh)


EBITDA1(R$MM)


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Ongoing Restructuring Initiatives

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R$1.5 billion Capitalization and Debt Measures

Capitalization and Debt Maturity Profile Extension

Private capital increase in two steps, amounting up

to R$1.5 billion:

o Phase I

Amount: up to R$316.5 million

Price: R$1.27/share (closing price May 9, 2014)

E.ON commitment: R$120 million

o Phase II

Amount: R$1,500 million minus funds raised in Phase I

E.ON commitment: up to R$450 million (potentially

partially by injecting Pecm II)

Sale of Pecm II

o ENEVA will dispose of 50% or 100% of Pecm II in a

structured bidding process

o In parallel to Phase I of the Capital Increase

o E.ON to backstop sale of 50% of Pecm II at a

maximum price of R$400 million

Capital Increase and Sale of Pecm II

HoldCo financing banks to provid

bridge of R$100 million in para

Capital Increase

Push-down of R$600-700 m

operating subsidiaries/projects

5-year maturity extension of rem

with amortization starting only in

Financing banks to issue LT financo Banks to provide additional Pe

amounting to R$150 million in par

of the sales process of Pecm II

ENEVA committed to reduce Hold

sustainable level of R$80 million/

Debt Measures & Cost Reduction


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Consolidated Debt (end of 1Q14)Significant reduction of short-term indebtedness secured by agreement with banks si

Total GrossDebt

R$6,099MM

Consolidated Gross Debt Profile (R$MM)

Gross Short-Term DebtR$2,478MM

Consolidated Short-Term Debt (R$MM)

2,47841%

3,62159%

Short Term Long Term

1,60665%

87235%

Hold Co. Project Related

March 31, 2014 After Financial Restructuri

Consolidated Gross Debt P

Consolidated Short-Term

~15%

~85%

Short Term Long T

100%

Hold Co. Project


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Financial Restructuring

Additional funding secured

o Minimum R$570 million of fresh cash guaranteed by E.ON commitment

o Significant upside of additional take up in the capital increases by minority shareholders

o Additional R$150 million in new financing guaranteed on project level by HoldCo financing banks

Adequate capital structure to allow ENEVA to fulfill working capital and CAPEX nee

conclusion of:

o Ongoing plant stabilization efforts;

o Implementation of cost reduction initiatives; and

o Pending regulatory discussions

ENEVA enabled to pursue new business development/growth opportunities


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Ongoing Regulatory Discussions

Pecm I and Itaqui filed in Jan, 2014 a lawsuit against

Aneel questioning hourly-based unavailability charges;

On Jan 24, 2014, a Federal Court granted an injunction

halting unavailability charges as measured, establishing

the methodology provided for in PPAs (60-month rolling

average);

The lawsuit also claims the reimbursement of amounts

paid since PPAsbeginning;

Request for revision for ADOMP methodology is being

discussed with Aneel

Unavailability Charges

Parnaba II sold 450MWavg in the 2

PPA started in March, 2013;

Construction of power plant and gas

are delayed;

On May 20, Aneel responded to

suspending the payment of penalties

In this timeframe, ENEVA is disc

balanced solution to address the mat

Parnaba II


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Brazilian Power Market and Greenfield Por

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Southeast Reservo

~70% of total storage ca

Source: ANEEL

Brazils Generation Capacity: 136 GW

Breakdown by source April, 2014

Brazil is highly dependent on hydro generation with increasingly faster depletion of re

Brazilian Energy Matrix

63.5%10.5%

2.5%

1.5%

2.2%

19.8%

Hydro Gas Coal Nuclear Wind Others

Dry Sea

67%

76%

38%

40%

35%36%

39%

20%

30%

40%

50%

60%

70%

80%

90%

Jan Feb Mar Apr May Jun Jul

Average 2007-2011 2012

l l b l


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Source: ONS

Autonomy = Storage Capacity / (Load Thermal Generation)

Economic growth will boost

leading to a supply defi

Water storage capacity has stagnated,

leading to decreased system autonomy

65

65

60

65

70

75

80

85

90

2013 2014 2015 2016 201

GWavg

2016-on: New generatio~8 GWavg required un

Electric System ReliabilityNew thermal plants are necessary to guarantee reliable power supply

0

5

10

15

20

25

30

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Reservoi

rsAutonomy(Months)

2013

Current reservoirautonomy ~6 months

ENEVA G fi ld P tf li


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ParnabaComplex

Integrated to natural gas resources

Located in a tax-advantaged region

Ventos WindComplex

Located in one Brazilsbest wind resource areas

Attractive load factor

Just 30km from grid connection

Land ownership assured

Au(Coal + Gas)

Located at a port with a regasification terminal buildlicense

150km from Campos Basin natural gas accumulations

Environmental licensed to both coal and gas operations

Sul & Seival Integrated to the Seival Mine (proven reserves: 152 M ton)

Low operation costs

Power

supply-demand

unbalanced

Hydropower

concentrated

matrix

Spot prices at

historical highs

Demand for base-

load generation2 3 4 51

Sul727 MW

ParnabaComplex

2,166 MW

Se600

Solar 1 MW

ENEVAs Greenfield PortfolioAttractive licensed greenfield projects in various development stages


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Disclaimer

The material that follows is a presentation of general background information about ENEVA S.A. and its subsidiaries (collectively, ENE

the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty,

concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information.

This presentation may contain certain forward-looking statements and information relating to ENEVA that reflect the current view

Company and its management with respect to its performance, business and future events. Forward looking statements include, with

that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like may, p

expect, envisages, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a numb

assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, object

and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents o

placement agents shall be liable before any third party (including investors) for any investment or business decision made or ac

information and statements contained in this presentation or for any consequential, special or similar damages.

This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities.

Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever.

Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients shou

in this regard.

The market and competitive position data, including market forecasts, used throughout this presentation were obtained from intern

publicly available information and industry publications. Although we have no reason to believe that any of this information or these

material respect, we have not independently verified the competitive position, market share, market size, market growth or other dat

by industry or other publications. ENEVA, the placement agents and the underwriters do not make any representation as to the accurac

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or i

written consent.


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Thank you.www.eneva.com.br

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ENEVA Corporate Presentation ? June 2014