ENEVA Corporate Presentation ? October 2014

October, 2014
1
Company Overview
Company overview
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 the end of year)
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 stabilization
- Strengthening of the companys capital structure
Competitive greenfield portfolio

Licensed coal, gas and wind power generation projects
ENEVA at a glance
A Brazilian thermal generator with asset exposure to energy fossil fuels (natural gas and coal)
Company Description
Geographic Footprint
2.9GW inflation-protected, long-term PPAs

Amapari Energia
2.4GW in operation
518MW under construction
ENEVA 51% / Eletronorte 49%

Diesel - 23MW
Itaqui
Long-term PPAs guarantee R$2.2 billion in annual inflation-adjusted
ENEVA 100%
Coal - 360MW
capacity payments
Pecm I
ENEVA 50% / EDP 50%

Coal - 720MW
PPAs provide hedge against commodity price exposure

Integrated gas E&P assets supply up to 8.4MM m/day to ENEVAs power
plants
Competitive portfolio of licensed greenfield wind, coal and gas fired
Natural Gas
Exploratory
blocks
Contracted production
of 8.4MM m3/day
capacity
Pecm II
ENEVA 100%
Coal - 365MW
Solar Tau
ENEVA 100%
Solar - 1MW
ENEVA ownership structure

Free Float (37.1%)
Parnaba I
ENEVA 70% / Petra 30%

Natural Gas - 676MW
Controlling Block
Other
BNDES
Eike
Batista
28.5%
8.6%
20.0%
Parnaba II
42.9%
50%
ENEVA 100%
Natural Gas - 517MW
Parnaba III
50%
ENEVA Participaes
ENEVA/E.ON
Joint Venture
Note: 1) Ownership structure assumes future ENEVA Participaes (JV ENEVA/E.ON) incorporation, as disclosed on the Material Fact Notice as of July 3, 2013

Natural Gas - 176MW
Parnaba IV

Natural Gas - 56MW
Coal generation portfolio overview

1.4 GW of installed capacity in full operation
Itaqui
Pecm II
Pecm I
Capacity: 360MW
Capacity: 720MW
Capacity: 365MW
Fix. Rev.: R$317.3MM/year
Fix. Rev.: R$600.3MM /year
Fix. Rev.: R$284.9MM /year
CVU: R$103/MWh
CVU: R$99/MWh
CVU: R$108/MWh
Auction: A-5/2007
Auction: A-5/2007
Auction: A-5/2008
COD: Feb, 2013
COD: Dec, 2012
COD: Oct, 2013
5
Note: (1) Fixed revenues are indexed to inflation index IPCA (Database: Nov, 2013)
Parnaba Complex overview

A unique case in Brazil power generation sector with 910MW already in operation
Parnaba III
Parnaba IV
3 Wrtsil GMs x 18MW
1 GE GT x 168,8MW
+ 1 Wrtsil GM x 7,3MW
Parnaba II
Parnaba I
2 GE GTs x 168,8MW
+ 1 GE ST x 181MW
4 GE GTs x 168,8MW
Gas
Treatment
Unit
Parnaba III
Parnaba IV
Parnaba I
Parnaba II
Capacity: 56MW
Capacity: 178MW
Capacity: 676MW
Capacity: 517MW
46% efficiency
38% efficiency
37% efficiency
51% efficiency
Fix. Rev: R$54MM/year
CVU: R$69/MWh
CVU: R$160/MWh
CVU: R$114/MWh
CVU: R$59/MWh
Free market
Auction: A-5/2008
Auction: A-5/2008
Auction: A-3/2011
COD: Dec, 2013
COD: Dec, 2013
COD: Apr, 2013
Completion: est. 4Q14
6
Notes: (1) Bertin project developed by ENEVA; (2) Fixed revenues indexed to inflation index IPCA (Database: Nov, 2013)
Cambuhy/E.ON investment in Parnaba Gs Natural

Securing ENEVAs power plants gas supply
Successful rescue plan of PGN
Shareholding Structure
Current
In 2H2013, ENEVA and E.ON led efforts to rescue PGN from

OGPs judicial recovery process and secure the gas supply for
Controlling Block (63.7%)
ENEVAs power plants

o Cambuhy Investimentos was brought onboard to replace OGP in
the shareholding structure of PGN
OGP
9.1%
18.2%
36.4%
PGN
o Reinforcing its commitment to Brazil, E.ON agreed to join the

control group of PGN
In Feb, 2014,
Cambuhy and E.ON carried out a Capital
Increase at PGN amounting to R$250MM, guaranteeing funds
36.3%
70%
BTG
Gas blocks
30%
to cover PGNs capex needs in 2014

o Additional R$750MM in LT financing were secured
Cambuhy also entered into a share purchase agreement to
After execution of the sale and purchase agreement

Controlling Block (100%)
buy OGPs remaining stake at PGN for R$200MM

o This last step of the transaction will be completed as part of
OGPs judicial recovery process
9.1%
18.2%
72.7%
ENEVA and E.ON have the right for a 2-year term to increase
their joint participation at PGN to 33.3%
Parnaba Gs Natural
Parnaba Gs Natural (PGN)

3 commercial gas fields fully committed to supply ENEVA power plants
Overview
Only part of Parnaba Basin is yet licensed and explored
Declaration of commerciality for 3 gas fields: Gavio Real, Gavio

Azul and Gavio Branco
o
Santa Vitria discovery in Jan, 2014 (well OGX-121)
New management team led by Pedro Zinner (ex-BG director)

o
New COO Hubert Mainitz (E.ON E&P)
Challenges
o
High dispatch scenario increases draw on existing wells, requiring

analysis on optimization of reservoir management
Additional investment may be required to keep production levels
2
Operating & Financial Performance of Power Plants
Operational performance (Itaqui)

Higher unavailability offset lower operating costs
EBITDA (R$MM)
Operating Costs
-22.1
36.1
Operating Costs1 (R$ million)
0.6
5.5
Gross Energy Generated (GWh)
20.1
EBITDA 1Q14
Net Operating
Revenues
Operating
Costs
Operating
Expenses
EBITDA 2Q14
Availability
Operating Costs per Gross

Energy Generated (R$/MWh)
1Q14
2Q14
2Q14/
1Q14
121.0
115.5
-4.5%
583
462
-20.7%
207.7
249.9
20.3%
Variable Revenue X Variable Cost (R$/MWh)

83%
84%
87%
261
75%
63%
232
62%
144
159
128
149
141
112
121 126 129 118 127 124

108 103 115
119 120 112

108 106 103
107 106 103 102 102 100 104 108 107 113 116
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Sources: ONS & Company
Availability reduction in 2Q14 due to mainly fan equipment and

emissions control systems
NOTE: 1) Does not include Depreciation & Amortization.
Variable Cost
Gross Variable Revenue
10
Operational performance (Parnaba I)

Operating costs per MWh followed Henry Hub prices decrease and reflected lower unavailability
costs
EBITDA (R$MM)
Operating Costs
1Q14
2Q14
2Q14/
1Q14
221.9
196.6
-11.4%
1,411
1,412

157.2
139.3
-11.4%
0.7
25.3
-20.6
50.3
44.8
EBITDA 1Q14
Net Operating
Revenues
Operating
Costs
Operating
Expenses
EBITDA 2Q14
Availability
91%

97%
96%
99%
98%
152
80
82
77
74
94
99
100
65
75
80
96
93
99
95
92
68
77
78
74
79
104
90
121
77
79
134 124 125

120
77
83
73
70
N.A.
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Variable Cost

NOTE: 1) Does not include Depreciation & Amortization.
OBS: Dispatch margin captured by Parnaba Gs Natural
11
Operational performance (Pecm I)

Lower Operating Costs per MWh mainly offset by higher fuel and unavailability costs
EBITDA1 (R$MM)
Operating Costs
1Q14
2Q14
2Q14/
1Q14
230.2
256.3
11.3%
1,014
1,186
17.0%

227.1
216.1
-4.8%
9.6
-26.1
0.3
48.8
32.5
EBITDA 1Q14
Net Operating
Revenues
Operating
Costs
Operating
Expenses
EBITDA 2Q14
Availability

83%3
72%
66%
77%
71%
151
127
51%
41%
1Q13
2Q13
118
136
111 105 104

100
3Q13
4Q13
1Q14
154
139 138
117
99
99
109
97
119
134
107
117 107 110 105 102 108
114 106 118 110

102 105 106 110
95
93
100
2Q14
Variable Cost
NOTES: 1) Figures consider 100% of Pecm I; 2) Does not include Depreciation & Amortization; 3) 1Q14 unavailability figure considers ONS review (previously 71%).
12
Operational performance (Pecm II)

EBITDA negatively impacted by higher outsourced services and unavailability costs
EBITDA (R$MM)
Operating Costs
1Q14
2Q14
2Q14/
1Q14
99.4
105.4
6.0%
720.8
736.7
2.2%

137.9
143.1
3.8%
-7.1
-6.0
0.3
Operating Costs (R$ million)
46.3
33.5
EBITDA 1Q14
Net Operating
Revenues
Operating
Costs
Operating
Expenses
EBITDA 2Q14
Availability
85%
N.A.
N.A.
N.A.
1Q13
2Q13
3Q13
4Q13
97%
1Q14
96%
114
118
92
99
122
111
125
125
118
113
99
106
101
101
111
88
108
99
2Q14

NOTES: 1) Figures consider 100% of Pecm II; 2) Does not include Depreciation & Amortization.
Variable Cost
13
Operational performance (Parnaba III)

Operational dispatch adjustment impacted Operating Costs
EBITDA1 (R$MM)
14.4
Operating Costs
-19.6
-8.4
-3.3
EBITDA 1Q14
Net Operating
Revenues
0.04
Operating
Costs
Operating
Expenses
1Q14
2Q14
2Q14/
1Q14
61.9
65.1
5.3%
344
266
-22.9%
179.6
245.1
36.5%

EBITDA 2Q14
Availability

100%
99%
161
161
161
161
161
75
71
69
69
61
161
161
161
58
66
77%
N.A.
N.A.
N.A.
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
Variable Cost
73
OBS: Dispatch margin captured by Parnaba Gs Natural

NOTES: 1) Figures consider 100% of Parnaba III; 2) Does not include Depreciation & Amortization.
14
3
Regulatory Update
Successful regulatory achievements (1)

Parnaiba II PPA restructuring
Parnaba II Agreement with Aneel
Parnaba Gas Optimization
Background: Delayed 450MW PPA, with initial supply date as of
Gas optimization of Parnaba Thermoelectric Complex approved
Mar, 2014
by Aneel: Parnaba III and 2 gas turbines of Parnaba I
Successful 6-month negotiation with Aneel, preserving plants

PPA and mitigating potential high regulatory/contractual penalty
temporally substituted by Parnaba II, as soon as it becomes

available.
Agreement main conditions:

o
Conclude plants construction in Dec, 2014
20-year PPAs start date postponed to Jul, 2016
Penalty amounting to R$333MM, to be paid:

In installments as of 2022
Through the partial reduction in annual fixed revenues over the
term of PPAs
Commitment to close the cycle of Parnaba I OCGT in next 5 years
All plants PPAs terms and conditions fulfilled with a restricted

gas
production,
as
recommended
by
ANP
until
further
development of other gas areas (4.4-4.8 million m/day)
(renewable for +5 years by Aneel), subject to certain conditions

precedent, such as:
Pecm II and Parnaba I & III
Sale of energy in the regulated market
Secure long-term financing for the project
16
Successful regulatory achievements (2)

Unavailability charges (ADOMP) now paid as provided for in PPAs
Unavailability charges were being paid on an hourly-based methodology, while PPAs provided for a 60-month rolling average
In Jan, 2014 and Sep, 2014, Federal Justice ruled in favor of ENEVA, in line with PPAs terms and conditions
All operating plants currently protected to hourly-based unavailability charges
Unavailability costs paid amount to +R$315MM1, 2
Plant
100%
Ownership adjusted
Itaqui
R$100.6MM
R$100.6MM
Pecm I
R$247.4MM
R$123.7MM
Pecm II
R$61.0MM
R$30.5MM
Parnaba I
R$61.9MM
R$43.3MM
Parnaba III
R$39.6MM
R$20.8MM
R$510.5MM
R$318.9MM
Total
In Sep, 2014, Aneel granted to Pecm I and Itaqui reimbursement of unavailability charges overpayment, amounting to approx. R$335MM
Pecm II, Parnaba I and Parnaba III will request to Aneel to be also reimbursed of overpayment
17
Notes: 1) Consider hourly-based methodology for unavailability charges until August, 2014; 2) Does not consider amounts paid since Federal Court decisions.
4
Financial Stabilization Update
Financial Stabilization on course
May 12, 2014
4Q14
2Q14 / 3Q14
Signing of term-sheet with banks for:
R$100MM short-term bridge financing

to Pecm II disbursed
R$1.5Bi capital increase

o
Phase I: R$316.5MM cash-only; and
Phase II: R$1.5Bi minus funds raised on

Phase I (cash or asset capitalization or
Pecm II approved by BNDES
Capital Increase Phase I concluded,

raising R$174MM (R$120MM by E.ON)
Shareholding Structure after CI I
debt conversion)
Controlling Block
HoldCo. Debt renegotiation

o
R$600-700MM
debt
drop-down
to
Free
Float
Eike
Batista
37.1%
20.0%
debt
(approx.
R$1.5Bi),
comprising of
o
Cash;
Debt conversion; and
Asset capitalization
Execution/effective of debt drop
down/roll over
5-year maturity extension of remaining

HoldCo.
Launch of Capital Increase Phase II,
42.9%
ENEVAs subsidiaries/projects
o
R$300MM long-term credit facility to
with
amortization starting only in Jun, 2017
Pecm II partial sale by executing

E.ON backstop guarantee (R$408MM)
Sale of Pecm II
o
Backstop guarantee by E.ON of up to
R$400MM for 50% of the asset
Successful regulatory outcomes

o
Parnaba II Agreement with Aneel
All plants protected from hourly-based

unavailability charges
19
5
Brazilian Power Market and Greenfield Portfolio
Brazilian energy matrix

Brazil is highly dependent on hydro generation with increasingly faster depletion of reservoirs
Brazils Generation Capacity: 136 GW
Southeast Reservoirs
Breakdown by source April, 2014
~70% of total storage capacity

90%
19.8%
80%
76%
70%
67%
2.2%
1.5%
2.5%
56%
60%
50%
10.5%
63.5%
40%
40%
35%
36%
39%
43%
38%
29%
30%
Hydro
Gas
Coal
Nuclear
Wind
Others
20%
Jan
Dry Season
Feb
Mar
Apr
May
Average 2007-2011
Source: ANEEL
Jun
Jul
2012
Aug
Sep
2013
Oct
Nov
Dec
2014
21
Electric system reliability

New thermal plants are necessary to guarantee reliable power supply
Water storage capacity has stagnated,
Economic growth will boost power demand
leading to decreased system autonomy
leading to a supply deficit in 2016
30
90
86
85
20
GWavg
80
Current reservoir
autonomy ~6 months
15
78
75
10
70
65
60
2013
ENERGY DEMAND
Autonomy = Storage Capacity / (Load Thermal Generation)
Source: ONS
2012
2013
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
65
1970
Reservoirs Autonomy (Months)
25
PHYSICAL GUARANTEE
(with signed PPAs)
65
2014
2015
2016
2017
2018
2019
2020
2016-on: New generation required

~8 GWavg required until 2020
22
ENEVAs greenfield portfolio

Attractive licensed greenfield projects in various development stages
Power
supply-demand
unbalanced
Parnaba
Complex
Hydropower
concentrated
matrix
Spot prices at
historical highs
Demand for baseload generation
Integrated to natural gas resources
Opportunities
for ENEVAs
growth
Solar Tau
1 MW
Located in a tax-advantaged region
Ventos Wind
Complex
600 MW
Located in one Brazils best wind resource areas
Ventos Wind
Complex
Attractive load factor

Just 30km from grid connection
Land ownership assured
Au
(Coal + Gas)
Parnaba
Complex
2,166 MW
Au
2,100 MW Coal
3,300 MW Natural Gas
Located at a port with a regasification terminal build

license
Seival Mine
150km from Campos Basin natural gas accumulations
License granted
152 M ton in proven reserves
Environmental licensed to both coal and gas operations
Sul & Seival
Integrated to the Seival Mine (proven reserves: 152 M ton)

Low operation costs
Sul
727 MW
Seival
600 MW
23
Parnaba I: Closing of the cycle (1)

Highly competitive expansion to existing site
Highlights
Parnaba Site
Part of Parnaba II Agreement settled with Aneel in Sep, 2014

Bottoming of open cycle gas turbines from Parnaiba I power
plant provides extra 360MW
Competitive project as no additional gas needed
Installation Environmental License issued
Plug and Play: 500kV electrical substation and water supply
Bottoming #1
Bottoming #2
already built
Known technology, original design of Parnaiba Generation
Complex done to enable modular expansion, leading to
efficient implementation and operation
o
ENEVA recent experience in Parnaba II combined-cycle plant at

neighboring site
Cost sharing efficiency (O&M, administrative, HSSE, spare

parts etc.) with Parnaba Generation Complex make the project
even more competitive
24
Note: (1) To enable expansion additional fuel mainly for PPA/contract harmonization and internal consumption
Parnaba I: Closing of the cycle (2)

Highly competitive expansion to existing site
Net power output: 352,8 MW
Plants upside efficiency: 51% (previously 37%)
Additional gas consumption: zero
Contractor: TBD (first phase performed by Duro Felguera)
New equipment
Implementation schedule: 36 months

CAPEX: approx. R$1.75 billion
Target capital structure: 70/30, with BNDES financing
Target IRR: 15% real
Main equipment/delivery time
Existing
facilities
o Steam Turbine + Generator: 18 months

o Heat Recovery Steam Generator (boilers): 14 months
o Cooling Tower: 13 months
o Pumps (feed water, condensate, cooling water): 13 months
25
Disclaimer
The material that follows is a presentation of general background information about ENEVA S.A. and its subsidiaries (collectively, ENEVA or the Company) as of
the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made
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 views and/or expectations of the
Company and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement
that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like may , plan , believe , anticipate ,
expect, envisages, will likely result, or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and
assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates
and intentions expressed in this presentation. In no event, neither the Company, any of its affiliates, directors, officers, agents or employees nor any of the
placement agents shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the
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 should consult their own advisors
in this regard.
The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research,
publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any
material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or
by industry or other publications. ENEVA, the placement agents and the underwriters do not make any representation as to the accuracy of such information.
This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without ENEVAs prior
written consent.
Thank you.
www.eneva.com.br

ENEVA Corporate Presentation ? October 2014

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ENEVA Corporate Presentation ? October 2014

Uploaded by

Copyright:

Available Formats

October, 2014

One of the largest private sector power generators in Brazil

Integrated energy platform, with privileged access to natural resources

Ongoing restructuring initiatives

Competitive greenfield portfolio

2.9GW inflation-protected, long-term PPAs

518MW under construction

ENEVA 51% / Eletronorte 49%

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

ENEVA 50% / EDP 50%

PPAs provide hedge against commodity price exposure

ENEVA ownership structure

ENEVA 70% / Petra 30%

ENEVA 70% / Petra 30%

ENEVA 70% / Petra 30%

Coal generation portfolio overview

Fix. Rev.: R$317.3MM/year

Fix. Rev.: R$600.3MM /year

Fix. Rev.: R$284.9MM /year

COD: Feb, 2013

COD: Dec, 2012

COD: Oct, 2013

Parnaba Complex overview

3 Wrtsil GMs x 18MW

Fix. Rev: R$54MM/year

Fix. Rev: R$98MM/year

Fix. Rev: R$443MM/year

Fix. Rev: R$374MM/year

COD: Dec, 2013

COD: Dec, 2013

COD: Apr, 2013

Completion: est. 4Q14

Cambuhy/E.ON investment in Parnaba Gs Natural

In 2H2013, ENEVA and E.ON led efforts to rescue PGN from

Controlling Block (63.7%)

ENEVAs power plants

o Reinforcing its commitment to Brazil, E.ON agreed to join the

Cambuhy and E.ON carried out a Capital

Increase at PGN amounting to R$250MM, guaranteeing funds

to cover PGNs capex needs in 2014

Cambuhy also entered into a share purchase agreement to

After execution of the sale and purchase agreement

buy OGPs remaining stake at PGN for R$200MM

Parnaba Gs Natural (PGN)

Declaration of commerciality for 3 gas fields: Gavio Real, Gavio

Santa Vitria discovery in Jan, 2014 (well OGX-121)

New management team led by Pedro Zinner (ex-BG director)

New COO Hubert Mainitz (E.ON E&P)

High dispatch scenario increases draw on existing wells, requiring

Additional investment may be required to keep production levels

Operational performance (Itaqui)

Operating Costs1 (R$ million)

Gross Energy Generated (GWh)

Operating Costs per Gross

Variable Revenue X Variable Cost (R$/MWh)

121 126 129 118 127 124

119 120 112

Sources: ONS & Company

Availability reduction in 2Q14 due to mainly fan equipment and

Gross Variable Revenue

Operational performance (Parnaba I)

Operating Costs1 (R$ million)

Gross Energy Generated (GWh)