Corporate Profile and Background
Neoenergia is a publicly yield company with shares (NEOE3) traded on the São Paulo Stock Exchange. Controlled by the Spanish group Iberdrola, the company is an integrated energy company that operates in three strategic segments: (i) Networks – distribution and transmission; (ii) Renewables – wind, hydroelectric and solar generation and (iii) Liberalized – thermal generation and energy trading. It operates in 18 states and in Distrito Federal, with a strong presence in the Northeast Region, one of the fastest growing regions in the country in terms of GDP and population.
Covering a concession area of about 841 thousand square kilometers and with approximately 15.8 million consumer units served by 5 Discos – Neoenergia Coelba (BA), Neoenergia Pernambuco (PE), Neoenergia Cosern (RN), Neoenergia Elektro (SP/MS) and Neoenergia Brasília (DF) – Neoenergia is responsible for supplying electric power to 37 million people, being the second largest distribution player in Brazil in terms of number of consumers and RAB.
Neoenergia also operates in the transmission of electric power, which includes the operation and maintenance of transmission lines and substations with a voltage equal to or greater than 230 kV and which are part of SIN – National Interconnected System. The remuneration of these assets is made through a Permitted Annual Revenue (PAR), result of the Transmission Auctions and/or of authorizing resolutions. Among assets in operation and under construction, the Company has a portfolio of 18 assets (8.6 thousand km of lines and 26 substations), which 9 are operational (2.3 thousand km and 11 substations) and 9 lots under construction (6.3 thousand km and 15 substations).
In the Generation segment, between assets in operation or under construction, the group has an installed capacity of 5.2 GW, in addition to a greenfield pipeline of 4.8 GW of potential installed capacity. The total installed capacity is divided as follows: (a) 3 GW of hydro (b) 1.6 GW is related to wind power, (c) 0.1 GW of solar parks and (d) 0.5 GW of thermal plant -Thermopernambuco.
Our generation platform is based on a clean-source matrix, with a significant share of renewable resources, having long-term concessions and long-term trading agreements in the regulated market (CCEAR`s). We believe that the matrix diversity together with our presence in the distribution, transmission, generation and trading segments allow us consistency in producing results and mitigating risks.
Founded in 1997, following the privatization of the distribution concessionaires of the States of Bahia (Neoenergia Coelba) and Rio Grande do Norte (Neoenergia Cosern), and having acquired Neoenergia Pernambuco in 2000, Neoenergia is one of the largest integrated companies in the Latin America electricity sector.
Our growth has been essentially organic, driven by major investments in quality improvement, universalization of access to energy in our concession areas and the development of Greenfield generation projects, primarily from clean sources, in addition to transmission lines.
The incorporation of Neoenergia Elektro, in August 2017, consolidated Neoenergia as a leading integrated electric energy company in Latin America with a distribution presence in São Paulo, the most developed state in Brazil.
With the acquisition of the distribution company Neoenergia Brasília (old CEB-D), in March 2021, Neoenergia starts to assume the energy distribution to customers in Distrito Federal, with the commitment to expand investments and adopt an efficient management model that ensures the availability of the service and the respect of the human and natural resources. The incorporation of Neoenergia Brasília provides an opportunity to gain synergy with the other concessionaires in the group.
The Company started investing in the energy distribution sector in 1997 with the purchase, at the privatization auction by the Guaraniana consortium, of Neoenergia Coelba, the largest distribution company in the northeast.
- Purchase of Neoenergia Coelba (COELBA – Companhia de Eletricidade do Estado da Bahia).
- Purchase of Neoenergia Cosern (COSERN – Companhia Energética do Rio Grande do Norte), both with a 30-year state concession.
- Grant of the concession for the use of public assets to exploit the Itapebi HPP on the Jequitinhonha River (installed capacity 462 MW).
- Purchase of Neoenergia Pernambuco (CELPE – Companhia Energética do Estado de Pernambuco), at a privatization auction, for the minimum tender price of R$1.8 billion.
- The deal included a commitment to build a thermoelectric plant in the State, and a start was made on constructing Termopernambuco TPP (installed capacity 532 MW).
- Construction of Termoaçu TPP started, a thermoelectric plant located in the State of Rio Grande do Norte in partnership with Petrobras (installed capacity 368 MW).
- Creation of the trading company NC Energia.
- Purchase of 42% of the shares of Itapebi that previously belonged to Neoenergia Coelba.
- Restructuring and creation of a holding company that was named Neoenergia.
- Start of commercial operation of Termopernambuco TPP.
- Restructuring and creation of a holding company. Name changed to Neoenergia.
- Termopernambuco TPP starts commercial operations.
- Concession auction for the construction of Baguari HPP (installed capacity of 140 MW, 51% Neoenergia) and SHPP’s Goiandira (installed capacity – 27 MW) and Nova Aurora (installed capacity – 21 MW).
- Incorporation of Afluente Geração e Transmissão de Energia Elétrica S.A. (installed capacity 18 MW) to meet deverticalization guidelines in the distribution segment pursuant to Law No. 10,848/2004, and take over the generation and transmission assets of Neoenergia Coelba.
- Purchase of the authorization of Corumbá III HPP (installed capacity 96.4 MW , 70% Neoenergia)
- Concession auction of the Dardanelos HPP (installed capacity 261 MW, 51% Neoenergia)
Authorization for construction and operation of Pirapetinga SHPP (installed capacity 20 MW), Pedra do Garrafão (installed capacity 19 MW)
- Commercial operation of Termoaçu TPP.
- Concession auction for Baixo Iguaçu TPP (installed capacity 350 MW, 70% Neoenergia).
- Authorization for construction of Sítio Grande SHPP (installed capacity 25 MW).
- Inauguration of SHPPs Pirapetinga and Pedra do Garrafão, and HPPs Baguari and Corumbá.
- Authorization obtained for the construction, operation and maintenance of Narandiba Substation.
- Purchase of 10% interest in Belo Monte HPP (installed capacity 11,233 MW), on the Xingu River (PA).
- Concession auction for construction and exploitation of Teles Pires HPP (installed capacity 1,819 MW, 51% Neoenergia).
- 2nd alternative sources Auction: purchase of nine wind farms (installed capacity 258 MW, 50% Neoenergia)
- Start of the construction of 10 wind farms, nine purchased at auction, and Caetité 1 at the ACL – Free Market (total installed capacity 30 MW, 50% Neoenergia).
- Execution of the Concession Agreement of Afluente Transmissão de Energia Elétrica S.A. and the plants of Afluente Geração de Energia Elétrica S.A.
- Start of commercial operations of SHPPs Sítio Grande, Goiandira and Nova Aurora.
- Execution of Purchase and Trading Agreement with Iberdrola for the acquisition of cogeneration companies Energyworks and Capuava Energy (91 MW).
- Narandiba substation start of operation.
- Start of commercial operation of Dardanelos HPP.
- Acquisition of the concession for constructing, operating and maintaining substation Extremoz.
- Concession obtained for construction, operation and maintenance of Brumado II substation.
- Execution of concession agreement for Baixo Iguaçu, by SPE Geração Céu Azul S.A., for a 35-year period, with the issue of installation license No. 17033, after a long environmental licensing process.
- Baixo Iguaçu works start.
- Wind farms Mel and Arizona 1 start commercial operations.
- Completion of works of wind farms Caetité 2 and 3, and Calango 1, 2, 3, 4 and 5 with the status of “fit for commercial operation” recognized by ANEEL.
- ANEEL transmission auction 001/2013 with the purchase of lot G for the construction, operation and maintenance of a 500kV Transmission Line extending for approximately 196 km, with connection bays at substations Campina Grande III, in Paraiba and Ceará-Mirim II in Rio Grande do Norte.
- Completion of the sale of Termoaçu HPP to Petrobras, with the transfer of a 23% equity interest to Neoenergia.
- Amendment to the shareholders’ agreement governing the partnership between Iberdrola and Neoenergia in FEB (Força Eólica do Brasil). The original parent company, Força Eólica do Brasil, underwent a spinoff from which three companies were formed. In addition to the original company, which remained under joint control, two others were formed, each under the control of one of the partners; Neoenergia became controlling shareholder of FEB I, the parent company of wind farms Caetité 1 and 2 and Calangos 1, 4 and 5. Thus, FEB 1 became a subsidiary of Neoenergia, which started to consolidate its accounts according to the global method of accounting.
- Acquisition of six new wind farms, three of which in Rio Grande do Norte and three in Paraíba (installed capacity 178.5 MW, 50% Neoenergia).
- Commercial operation and expansion of Brumado II Substation.
- Commercial operation of Caetité 1, Caetité 2 and Caetité wind farms.
- Neoenergia completes the purchase of Iberdrola’s equity interest of 8.5% and 7.01% in Neoenergia Coelba and Neoenergia Cosern, respectively.
- Extremoz II substation starts commercial operations.
- Completion of construction of 4 GUs, recognized as “fit” by ANEEL. The first two starting to operate with the completion of the provisional transmission line at the end of the year.
- Transmission Line Potiguar Sul starts commercial operation.
- Teles Pires HPP starts full commercial operation.
- Five wind farms (Calango 1, 2, 3, 4 and 5) start commercial operation.
- Calango 6 and Santana 1 and 2 start test operation.
- Geração CIII S.A. purchases the shares issued by Energética Corumbá III S.A., which belonged to Strata Construções e Concessionárias Integradas S.A. and Energ Power S.A.
- Neoenergia starts the process of selling to Contour all its equity interest in: (i) Afluente Geração de Energia Elétrica S.A.; (ii) Bahia SHPP I S.A.; (iii) Goiás Sul S.A.; (iv) Rio SHPP S.A.; and (v) EnergyWorks do Brasil Ltda., with Capuava Energy Ltda.
- Start of the generating units 1,2,3 and 4 of the Pimental site (Belo Monte).
- Start of generating units 1,2 and 3 of Belo Monte site.
- Completion of sale of an SHPP and Cogeneration assets to Contour Global do Brasil Participações Ltda., on March 17, 2017.
- Merger of Neoenergia Elektro (Elektro Holding S.A.) in August.
- Start of commercial operation of 3 wind farms (Canoas, Lagoa 1 and Lagoa 2).
- Start of the generating units 5 and 6 of the Pimental site of Belo Monte HPP.
- Start of generating units 4, 5, 6, 7 and 8 of the Belo Monte site of the Belo Monte HPP.
- Participation in Transmission Auction No. 05/2016-ANEEL, in which Neoenergia won 4 lots.
- Participation in the Generation Auction, nº 05/2017, denominated “A-6” of 2017.
- Participation in the Auction for Concession of Public Service of Electric Power Transmission No. 02/2017, in which Neoenergia won two lots.
- Start of operation of the generating units 9, 10, 11 and 12 of the Belo Monte site of the UHE Belo Monte.
- In August 2018, the auction for sale of energy related to the Baixo Iguaçu HPP Project was carried out in quantity product modality, by the owner Geração Céu Azul, as summarized below:
- Contracted lots: 234
- Total (MWh): 6,154,012.800
- Reference Price (R$/MWh): 151.68
- Selling price (R$/MWh): 151.68
- Amount (R$): 933,440,661.50
- Participation in the Transmission Auction n. 004/2018-ANEEL, in which Neoenergia took 4 lots.
- Start of operation of the Baixo Iguaçu HPP.
- Lifting of the first transmission towers of April / 17 auction lots
- Participation in the 003/2019 Generation Auction named “A-4” of 2019, in which Força Eólica do Brasil S.A. (“FEB”), controlled by Neoenergia, traded 30% of energy of 2 Wind Farms, Oitis 1 and Oitis 8, in a total of 74 MW of installed capacity.
- Neoenergia Elektro’s 5th Periodic Tariff Review, with average effect perceived by the consumer of (-8.32%) on the tariff, resulting from a lower Parcel A and a 5.2% Parcel B increase. The highlight was the recognition of 97.9% of investments in RAB (R $ 3.9 billion) and the higher recognition of Regulatory Losses in 8.03% (vs. 6.6%).
- Conclusion of the construction of Lot 20 from Auction nº 05/2016, which took place on April 2017, with 14 months in advance when compared to Aneel Contractual Term (February 2021).
- Participation in the 02/2019 Transmission Auction, in which Neoenergia bought lot 9, that comprise 1 transmission line of 210 km in length and 2 substations.
- Approved the construction of all 12 wind farms of the Oitis Complex, located in the states of Piauí and Bahia
- Participation in the Brazil 100 index (IBrx100).
- Accession to Covid Account.
- Participation in the Electric Utilities Index (IEE).
- Participation in the FTSEGood Index.
- Pipeline Purchase and Sale Agreement with PEC Energia.
- Beginning of construction at Oitis Wind Complex.
- Participation in the B3`s Corporate Sustainability Index for 2021 (ISE 2021).
- Participation in the B3`s Efficient Carbon Index for 2021 (ICO2 2021).
- Board of Directors approves construction of Luzia II and III solar energy generation farms.
- Auction for the privatization of energy distributor CEB Distribuição S.A. (Neoenergia Brasília).
- Participation in the Transmission Auction 01/2020-ANEEL, in which Neoenergia won 1 lot.
- Start of Operation of the 3rd, 4th and 5th tranches of Dourados.
- Approval of the 7th issue of debentures.
- Effectiveness of the CEB Distribuição S.A. (“CEB-D”) Auction.
- Neoenergia starts commercial operation of the Chafariz Wind Complex.
- Agreement for the Sale of Previ’s Interests in Neoenergia Coelba, Neoenergia Cosern and Afluente.
- Start of Operation of the 1st and 2nd tranches of Santa Luzia.
- 1st Neoenergia Investor Day.
- Contract of Equity Swap for the repurchase of shares with the objective to use for the long-term incentive program – ILP. The approved Program has a term of six years divided as follows: (1) Period for evaluating the performance level of the Objectives: January 1, 2020 to December 31, 2022; and (2) Settlement period: annual payment in 3 installments in the years 2023 to 2025.
- Participation in the Transmission Auction 02/2021-ANEEL, in which Neoenergia won lot 4.
- Obtaining, for the 4th consecutive time, the Pro Ethics Seal, granted by the “Controladoria Geral da União”.
- Participation in the Capacity Reserve Auction | Termopernambuco sells all its disponible available capacity of 498MW.