November 29 – December 02, 2005November 29 – December 02, 2005

Latin American Small & Mid Cap Forum 2005Latin American Small & Mid Cap Forum 2005

• History and Shareholding Structure

• Concession Area

• Market and Operational Performance

• Tariff Adjustment

• Financial Results

• Conclusion

3

HistoryHistory

......1998 2000 -2001 2002

Privatization of Eletropaulo

(April)

AES Transgás acquired 64% of preference shares (January 2000)

CSN and Reliant sold their interests in Light and Eletropaulo

(December 2000)

Energy Rationing (June 2001)

EDF/AES ConsolidationAES took over Eletropaulo

EDF took over LightCorporate Restructuring

approved by ANEEL(February)

CVM approves public offering for AES ELPA shares

(June)

AES ELPA shares split from Light shares(November)

2003

AES Restructuring Brasiliana was

established to hold, direct or indirect,

control of Eletropaulo, Tietê and Uruguaiana

(December)

New Model of Energy Sector

Federal Government issued

new law for the Electric Energy

Sector - the “New Model” (2004)

Incorporation of AES Elpa debt

and AES Transgás debt by Brasiliana

2004-2005 Next Steps

Consolidation and rationalization of the

shareholding structure

4

Shareholding StructureShareholding Structure

20.03% ON

0.73% PN

100.00%

AESAES BNDESBNDES

BrasilianaBrasiliana

Minorities Fed. Gov./BNDES

Minorities

49.99% ON

100.00% PN50.01% ON

98.26%

1.74%

62.85% PN 77.81% ON

AES Transgás AES Elpa

7.38% PN

2.16% ON

29.05% PN

5

Concession AreaConcession Area

• Largest electricity distribution company in Latin America in terms of revenue

• Net Revenue in 2004 – R$ 7,394 million

• Density of billed energy consumption: 7,220 MWh/Km2

• Attractive concession area in Brazil• Demographic density

• Solid economic base

Brazil Eletropaulo %

Km² 8,547,403 4,526 0.05%

Population 184,434,438 16,062,101 8.71%

Energy Distributed (GWh/year) 320,772 35,341 11.02%

6

Consumer Market ProfileConsumer Market Profile

32.0%

24.7%

26.9%

9.3%7.1%

9m 2004 - GWh 9m 2005 - GWh

32.5%

21.1%

26.4%

7.3%

12.7%

40.7%

20.4%

29.9%

1.5%7.5%

41.2%

19.2%

3.3%

29.8%

6.6%

9m 2004 – R$ 9m 2005 – R$

cons

umpt

ion

reve

nue

Residential

Industrial

Commercial

Others

TUSD

Consumption- GWh

1800.0

2200.0

2600.0

3000.0

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05

7

Consumption in GWhConsumption in GWh

NOTE: Charts do not consider own consumption

2,433 1,8691,982

3,458

8,417

6,4907,064

8,819

5,7437,175

Residen

tial

Indus

trial

Commerc

ial

Other

TUSD

9m 2004 9m 2005

4.8%

-11.5%1.6%

-18.5%

24,404

27,17826,273

23,720

Market Billed Market Billedwith TUSD

9m 2004 9m 2005

85.0%

3.4%-2.8%

8

Retention of Potentially Free ConsumersRetention of Potentially Free Consumers

3.1%

13.4%

83.5%

Captive Consumers Free Consumers Potentially Free Consumers

Captive Consumers X Free% total load of concession area of 2005 (e) 36,511 GWh

Net Revenues with TUSD - R$ million

1930

3848

54

7884

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05

9

Energy SupplyEnergy Supply

2003 2004 2005

Auction

Other bilateral contracts

Bilateral contract withTietê

Initial contracts

Itaipu

2003 2004 2005

Auction

Other bilateral contracts

Bilateral contract withTietê

Initial contracts

Itaipu32%32% 32%32% 31%31%

60%60%

51%51%

19%19%

7%7%15%15%

21%21%

2%2%

27%27%

2%2%1%1%

GWhGWh

• Initial Contracts end by January 2006

10

Loss Reduction Loss Reduction –– YTD 2005YTD 2005

• 370 thousand inspections • Revenue recovery of R$ 86.8 million (billed value) • Annual recovery perspective of 320 GWh (agreements)

Losses

7.93% 7.75% 7.41%

13.01%13.35%13.53%

2004 1H05 3Q05

Commercial Total

11

Tariff AdjustmentsTariff Adjustments

Annual AdjustmentTariff Adjustment Rate

Periodic ReviewTariff Repositioning

VPA + VPB (IGPM +/- X)Revenue

(Required Revenue – Deductions from Required Revenue)Actual Revenue

Review 2003 Review 2007Review 2007Privatization 1998

Annual Adjustment (Factor X = 0 in the first 4 years)

0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 9 109 10YearYear

Annual Adjustment(Factor X = 0)

2.12%2.12%

12

3.7%6.3% 4.5% 2.5% 3.6% 4.8%

7.5%7.6% 12.1%

11.8% 7.3%1.6%

-4.3%1.7%

16.9%7.1%

-10%

-5%

0%

5%

10%

15%

20%

1999 2000 2001 2002 2003 2004 2005

Parcel B Parcel A PIS/COFINS IGPM

Tariff EvolutionTariff Evolution

Adjustment

2.12%

6.4%

X Factor = 2.43%

18.6%

11.6%

14.3%17.6%

11.1%

13.8%

13

R$ 9,885R 8,275Gross remuneration base

R$ 42TOTAL

R$ 99R$ 426R$ 327Depreciation

R$ 4,771R$5,242Net remuneration base

(R$ 81)R$ 814R$ 895Remuneration

R$ 24R$ 24-Additional O&M costs

4.31%3.95%Depreciation rate

17.07%17.07%Remuneration rate

VariationPresentPreviousItem – R$ thousand

Completion of Tariff Review 2003Completion of Tariff Review 2003

• Authorized increase in adjustment rate from 10.95% to 11.65%• R$ 42 million added to the remuneration granted for tariff year 2003-2004

• The accrued value amounted R$ 106.9 million, with an impact on 2Q05 results

• Recovery of resources will take place during tariff year 2005-2006

R$ 42

R$ 106.9

14

ResultsResultsin R$ millionin R$ million

8.6499.981

7.228 8.314

2003 2004 9m04 9m05

Billed Energy Other Revenues

Gross Revenue Operating Expenses

3.851

336

1.449

5.637

4.439

555

1.398

6.391

3.231

375

958

4.564

3.607

537

1.483

5.627

2003 2004 9m04 9m05Electricity+Transp. Sector ChargesOperating Expenses

52

1.0601.272

963 827

412400

293 550

22,9% 22,6%23,5%

22,1%

2003 2004 9m04 9m05

AdjustsEBITDAAdjusted EBITDA Margin

EBITDA

1,4721,672

1,2561,377

• 18,6% average tariff adjustment in July 2004

• Conclusion of 2003 Tariff Review, which generated an additional R$ 106.9 million revenue on 2Q05

• Reversal of PIS/PASEP’s allowances in the amount of R$ 72 million in 2Q05 – accounting impact

• An allowance for doubtful debts of R$ 346.4 million based on an agreement signed with the Municipal Government of São Paulo

• 10% raise in cost of energy purchased due to increase in energy supplied by AES Tietê and payment of PIS / Cofinstaxes

• Increase of sector charges

• 41% CCC

• 46% CDE

15%

23%

10%

15

ResultsResultsin R$ millionin R$ million

Financial Result

24

(453) (434)

(319)

2003 2004 9m04 9m05

48

• Reversal of R$ 98 million in 2Q05 due to legal disputes over PIS / Pasep (accounting impact)

• Reversal of R$ 55.2 million in 3T05 resulting from the provision of credits from the Municipal Government of São Paulo

• Appreciation of 16.3% of the Real against the US dollar in 9m05, versus an appreciation of 1.1% in 9m04

Profit / Loss

86

6

(12)

(204)

2003 2004 9m04 9m05

48

• Increase in operating expenses mainly due to extraordinary and non recurring provisions

• Increase in PIS/Cofins taxes on the bilateral contract with AES Tietê

• Other impacts (see next slide)

26%

1,616%

16

Negative Impacts Negative Impacts –– 3Q053Q05

Provision - Agreement signed with MGSP R$ thousandMGSP debt balance provision (346,369)Financial Expenses - Present Value Adjustment Reversal 55,227Tax Effects (34%) - Credit 98,988Reversal of Tax Credit (36,143)

Net Effect on the Result (228,297)

increase in Pis/Cofins' taxes - Agreement with AES Tietê R$ thousandPis/Cofins payment to AES Tietê (43,692)Tax Effects (34%) - Credit 14,855

Net Effect on the Result (28,837)

Other impacts - 3Q05 R$ thousandAllowance for doubtful debts - Other Municipal Governments (23,953)Present Value Adjustment - Other Municipal Governments (9,102)IPTU tax – MGSP – Monetary Correction (9,444)Diferred Amortization - Debt downpayment (15,992)Tax Effects (34%) - Credit 19,887Reversal of Tax Credit (14,810)Net Effect on the Result (53,414)

Total - Net Effect on the Result (310,548)

17

186

370

203

297

33

3236

2003 2004 YTD 2005 2005

Capex Self Financed

Total 203

Total Recorded 239

Capex – YTD05

88

23

Loss Recovery 12

Personnel 53

Others 26

Customer Service and System Expansion

Maintenance

Self Financed 36

CAPEX CAPEX –– YTD 2005 YTD 2005 R$ millionR$ million

18

Consolidated IndebtednessConsolidated IndebtednessR$ millionR$ million

71%

23% 26%

29%

77% 74%

0%

50%

100%

2003 2004 3Q05

ST LT

1,424.51,778.8 1,992.6

762.5

1,102.0 948.6

2,338.62,402.73,090.8

2003 2004 3Q05

FCESP CVA/RTE Private Creditors

5,278 5,284 5,280 5,278 5,284 5,280

ST ST vsvs LTLT Debt EvolutionDebt Evolution

19

Hedging StrategyHedging Strategy

0%10%20%30%40%50%60%70%80%90%

100%

2000 2001 2002 2003 2004 3Q05

Local Currency Hedge Foreign Currency

41%

41%

18% 14%

61%

25%

42%

4%

54%

3%

35%

62%

17%

83%

86% of foreign currency debt is

hedged, considering the financial costs

R$3,473 R$4,490 R$5,902 R$5,278 R$5,284

million

8%

90%

R$5,2802%

20

469

70335

522367

1,972

159

132

905

506

474

144

444

43

99

56

158285

9349

Downpayments** YTD05 4Q05 2006 2007 2008 2009 2010-17

R$ BNDES US$ *

Amortization ScheduleAmortization ScheduleR$ millionR$ million

Effective payments

* Conversion rate on 09/30/2005 US$ 1,00 = R$2,2222

** Amortization of debts with creditors included in the Company’s Debt Reprofile Agreement, paid on 01/12/2005 with the third tranche of the rationing loan

Amortization of debts with creditors included in the Company’s Debt Reprofile Agreement, paid in two installments: R$ 175.9 million on 06/29/2005, plus US$ 25.6 million on 07/28/2005 using 50% of the proceeds from the R$ 474.1 million bond issue

Amortization of debts with creditors included in the Company’s Debt Reprofile Agreement, paid in two installments: R$ 550.1 million paid on 09/27/2005, and US$ 75.2 million paid on 10/27/2005 using 90% of the proceeds from the R$ 800.0 million issue of debentures.

21

BONDS (June 2005)

• Principal: R$ 474 million

• Tenor: 5 years

• Interest rate: 19.125% p.a.

• Interest and Amortization:

• bullet

• semiannual interest

Debentures (September 2005)

• Principal: R$ 800 million

• Tenor: 5 years

• Interest rate: CDI +2.90% p.a.

• Interest and Amortization:

• Semiannual interest

• Grace period: 23 months

• Annual payments

• Down payments made to creditor banks:

• Bonds: 50% R$237,030,000

• Debentures: 90% R$720,000,000

2005 Issues2005 Issues

2.75 years1.58 yearsAverage Life

126% CDI128% CDIAverage Cost

After issues

Before issues

Private Creditors debt

Basis: September 2005

22

Financial StrategyFinancial Strategy

D2003

B2005

Ratings – International Scale

B –2004

• Successful issues

• Estimates of growth in operating revenues and cash flow

• Expected decrease in debt servicing

• Better outlook for the electric sector

S&PFitch Ratings

23

ConclusionConclusion

• Affected by extraordinary events, the company had a loss of R$ 204 million on the 9 months of 2005

• The R$ 474 million bonds and R$ 800 million debentures allowed:

• A down payment of R$ 957 million to private creditors (most expensive debt), reducing the average cost of debt from 128% CDI to 126% CDI and increasing the average life of debt from 1.58 years to 2.75 years, as of September 2005

• A reduction of 36% of the total foreign currency debt from March 2005 to September 2005

• Fitch Ratings raised Company’s international scale credit rating from “B-” to “B” and national scale credit rating from “BB” to “BB+

• Tariff Adjustment of 2.12%, effective as of July 4, 2005 and conclusion of Tariff Review 2003

Financial Strategy:

• Increase duration and decrease costs of debt

November 29 – December 02, 2005November 29 – December 02, 2005Latin American Small & Mid Cap Forum 2005Latin American Small & Mid Cap Forum 2005

The statements contained in this document relative to the Company’s business prospects, operating and financial result projections, and growth potential are mere forecasts based on the expectations of Company Management about the future. Such expectations are highly dependent on market shifts and on the performance of Brazil’s economy, the electricity sector and the international market. They are therefore subject to change.