Data sources: Thomson Reuters, DataStream

Start 36,476.00
End 41,955.00
Frequency M Consumer Dis
Natural Gas Brazil Cons. BRL/CBM Natural Gas Brazil Dist. BRL/CBM2.00
11/12/2014 1.90 1.48
1.80
10/12/2014 1.90 1.43
9/12/2014 1.90 1.46 1.60
8/12/2014 1.90 1.43 1.40
7/12/2014 1.89 1.45
6/12/2014 1.88 1.44 1.20
5/12/2014 1.86 1.43 1.00
4/12/2014 1.83 1.41
0.80
3/12/2014 1.83 1.41
2/12/2014 1.83 1.41 0.60

1/

1/

1/
1/12/2014 1.82 1.30

1/

1/

1/
20

20

20
12/12/2013 1.81 1.37

06

10
08
11/12/2013 1.79 1.36
10/12/2013 1.79 1.37
9/12/2013 1.78 1.37
8/12/2013 1.78 1.38
7/12/2013 1.79 1.35
6/12/2013 1.78 1.38
5/12/2013 1.78 1.36
4/12/2013 1.78 1.36
3/12/2013 1.78 1.34
2/12/2013 1.77 1.37
1/12/2013 1.77 1.34
12/12/2012 1.76 1.34
11/12/2012 1.74 1.34
10/12/2012 1.74 1.35
9/12/2012 1.74 1.31
8/12/2012 1.73 1.30
7/12/2012 1.73 1.29
6/12/2012 1.71 1.29
5/12/2012 1.69 1.28
4/12/2012 1.63 1.23
3/12/2012 1.64 1.22
2/12/2012 1.63 1.23
1/12/2012 1.62 1.21
12/12/2011 1.61 1.22
11/12/2011 1.61 1.21
10/12/2011 1.61 1.21
9/12/2011 1.62 1.23
8/12/2011 1.62 1.22
 7/12/2011 1.63 1.21
6/12/2011 1.63 1.20
5/12/2011 1.60 1.19
4/12/2011 1.57 1.18
3/12/2011 1.56 1.16
2/12/2011 1.55 1.17
1/12/2011 1.57 1.21
12/12/2010 1.62 1.24
11/12/2010 1.62 1.23
10/12/2010 1.61 1.22
9/12/2010 1.61 1.22
8/12/2010 1.61 1.21
7/12/2010 1.61 1.20
6/12/2010 1.61 1.18
5/12/2010 1.58 1.16
4/12/2010 1.60 1.16
3/12/2010 1.58 1.15
2/12/2010 1.58 1.16
1/12/2010 1.59 1.16
12/12/2009 1.58 1.14
11/12/2009 1.57 1.14
10/12/2009 1.55 1.15
9/12/2009 1.57 1.17
8/12/2009 1.58 1.16
7/12/2009 1.61 1.20
6/12/2009 1.66 1.25
5/12/2009 1.69 1.27
4/12/2009 1.72 1.29
3/12/2009 1.73 1.31
2/12/2009 1.77 1.26
1/12/2009 1.72 1.25
12/12/2008 1.67 1.21
11/12/2008 1.66 1.21
10/12/2008 1.65 1.18
9/12/2008 1.64 1.16
8/12/2008 1.60 1.13
7/12/2008 1.56 1.04
6/12/2008 1.47 1.03
5/12/2008 1.45 1.00
4/12/2008 1.45 1.01
3/12/2008 1.45 0.98
2/12/2008 1.44 0.96
1/12/2008 1.38 0.94
12/12/2007 1.37 0.94
11/12/2007 1.37 0.94
10/12/2007 1.35 0.91
9/12/2007 1.35 0.90
8/12/2007 1.35 0.88
7/12/2007 1.35 0.87
6/12/2007 1.34 0.85
5/12/2007 1.27 0.83
4/12/2007 1.27 0.84
3/12/2007 1.27 0.83
2/12/2007 1.27 0.84
1/12/2007 1.27 0.83
12/12/2006 1.27 0.83
11/12/2006 1.27 0.84
10/12/2006 1.27 0.84
9/12/2006 1.27 0.83
8/12/2006 1.24 0.82
7/12/2006 1.25 0.82
6/12/2006 1.25 0.82
5/12/2006 1.25 0.82
4/12/2006 1.24 0.81
3/12/2006 1.23 0.78
2/12/2006 1.20 0.78
1/12/2006 1.21 0.79
12/12/2005 1.20 0.77
11/12/2005 1.19 0.76
10/12/2005 1.19 0.76
9/12/2005 1.14 0.75
8/12/2005 1.14 0.74
7/12/2005 1.14 0.73
6/12/2005 1.11 0.70
5/12/2005 1.11 0.71
4/12/2005 1.10 0.70
3/12/2005 1.10 0.70
2/12/2005 1.10 0.70
1/12/2005 1.10 0.71
12/12/2004 1.09 0.70
11/12/2004 1.15 0.81
10/12/2004 1.15 0.81
9/12/2004 1.15 0.82
8/12/2004 1.15 0.82
7/12/2004 1.14 0.82
6/12/2004 1.13 0.82
5/12/2004 1.07 0.71
4/12/2004 1.08 0.71
3/12/2004 1.08 0.71
2/12/2004 1.07 0.71
 1/12/2004 1.07 0.71
12/12/2003 1.06 0.71
11/12/2003 1.06 0.72
10/12/2003 1.06 0.71
9/12/2003 1.06 0.70
8/12/2003 1.06 0.71
7/12/2003 1.06 0.71
6/12/2003 1.07 0.72
5/12/2003 1.07 0.72
4/12/2003 1.07 0.71
3/12/2003 1.07 0.70
2/12/2003 1.03 0.64
1/12/2003 0.94 0.59
12/12/2002 0.90 0.54
11/12/2002 0.83 0.53
10/12/2002 0.83 0.51
9/12/2002 0.83 0.50
8/12/2002 0.82 0.49
7/12/2002 0.79 0.48
6/12/2002 0.80 0.49
5/12/2002 0.79 0.47
4/12/2002 0.78 0.48
3/12/2002 0.78 0.49
2/12/2002 0.78 0.51
1/12/2002 0.78 0.51
12/12/2001 0.78 0.50
11/12/2001 0.77 0.49
10/12/2001 0.74 0.49
9/12/2001 0.74 0.49
8/12/2001 0.73 0.48
7/12/2001 NA NA
6/12/2001 NA NA
5/12/2001 NA NA
4/12/2001 NA NA
3/12/2001 NA NA
2/12/2001 NA NA
1/12/2001 NA NA
12/12/2000 NA NA
11/12/2000 NA NA
10/12/2000 NA NA
9/12/2000 NA NA
8/12/2000 NA NA
7/12/2000 NA NA
6/12/2000 NA NA
5/12/2000 NA NA
 4/12/2000 NA NA
3/12/2000 NA NA
2/12/2000 NA NA
1/12/2000 NA NA
12/12/1999 NA NA
11/12/1999 NA NA
 14
20
1/
1/
12
20
1/
1/
Distributor
10
20
1/
1/

Consumer
08
20
1/
1/
Data source:
Federal Reserve Economic Data
Link: http://research.stlouisfed.org/fred2
Help: http://research.stlouisfed.org/fred2/help-faq
Economic Research Division
Federal Reserve Bank of St. Louis

DEXBZUS Brazil / U.S. Foreign Exchange Rate, Brazilian Reais per U.S. Dollar, Semiannual, Not Seasonally Adju

Frequency: Semiannual
2.5
observation_date DEXBZUS
7/1 1.8
1/1 1.8 2.0
1.8 2.0
7/1 1.7
1.8 1.9
1/1 1.6 1.7 1.7
7/1 1.7 1.5 1.6
1/1 1.9
7/1 2.0
1.0
1/1 2.0
7/1 2.3
1/1 2.3 0.5
7/1 #N/A

0.0
7/1
10
1/1
4/1
7/1
1 0/
1/1
4/1
7/1
10
1/1
4/1
7/1
10
/1

/1

/1
1
U.S. Dollar, Semiannual, Not Seasonally Adjusted

2.3 2.3
2.0 2.0
1.8 1.9
1.7 1.7
1.6
1/1
4/1
7/1
1 0/
1/1
4/1
7/1
10
1/1
4/1
7/1
10
1/1
4/1
7/1
10
1/1
0/1

/1

/1

/1
1
Macroeconomic Variable Forecast 2013 2014 2015 2016 2017 2018 2019

FX Rate - EOY (BRL/USD)

- Base Case 2.34 2.40 2.64 2.72 2.81 2.88 2.93
- Optimistic Scenario 2.16 2.38 2.45 2.53 2.59 2.64
- Pessimistic Scenario 2.64 2.90 2.99 3.09 3.17 3.23
IPCA (Brazil’s CPI)
- Base Case 6% 6.5% 6.0% 5.5% 5.4% 5.2% 5.2%
- Optimistic Scenario 5.9% 5.4% 5.0% 4.9% 4.7% 4.7%
- Pessimistic Scenario 7.2% 6.6% 6.1% 5.9% 5.7% 5.7%

Henry Hub* - $/MMBtu $3.43 $3.85 $4.09 $4.31 $4.43 $4.56 $4.65

*Henry Hub is a natural gas distributor.

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

2.97 3.00 3.04 3.08 3.12 3.16 3.21 3.23 3.42 3.43
2.67 2.70 2.74 2.77 2.81 2.85 2.89 2.91 3.08 3.08
3.26 3.30 3.34 3.39 3.43 3.48 3.53 3.55 3.76 3.77

5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7%
5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7%

$4.76 $4.87 $4.98 $5.09 $5.21 $5.32 $5.44 $5.56 $5.68 $5.81
2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

3.62 3.63 3.83 3.85 4.05 4.08 4.29 4.32 4.54 4.58
3.26 3.27 3.45 3.46 3.65 3.67 3.86 3.89 4.09 4.12
3.98 3.99 4.21 4.23 4.46 4.49 4.72 4.75 5.00 5.04

5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7% 4.7%
5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7%

$5.93 $6.06 $6.20 $6.33 $6.47 $6.62 $6.76 $6.91 $7.06 $7.22
2040 2041 2042 2043 2044 2045

4.81 4.81 4.81 4.81 4.81 4.81

4.33 4.33 4.33 4.33 4.33 4.33
5.29 5.29 5.29 5.29 5.29 5.29

5.2% 5.2% 5.2% 5.2% 5.2% 5.2%

4.7% 4.7% 4.7% 4.7% 4.7% 4.7%
5.7% 5.7% 5.7% 5.7% 5.7% 5.7%

$7.38 $7.54 $7.70 $7.87 $8.05 $8.22

Description Unit #

Operational Assumptions
Installed Capacity MWh 500
Number of Hours/Year hours 8,760
Capacity Factor % 90%
Dispatch/Year % 50%
Total Energy/Year MWh/Year 1,971,000
Pricing Assumption
Bidding Price/MWh BRL/MWh 50

(+)Required Capacity Revenue BRL/MWh 219,000,000

(+)Revenues − Pass Through (Gas Costs) BRL/MWh To be calculated
1

(+)Revenues − Pass Through (Variable O&M)

BRL/MWh
1
To be calculated
(−)Revenue Tax BRL/MWh To be calculated
1
Markup of 15% for base case, 20% for optimistic scenario, and 5% for pessimistic scenario.
 Bidding Price in BRL/MWh, adjusted for inflation

Bidding Price × Installed Capacity × Number of Hours/Year

Gas Costs + Markup ÷ (1 − Revenue Tax − COFINS)
Variable Costs + Markup ÷ (1 − Revenue Tax − COFINS)
9.25% PIS/COFINS rate applied to all gross revenue streams

and 5% for pessimistic scenario.

Assumption Unit # 2013 2014 2015 2016 2017 2018

Key Projections
CPI (IPCA) %/year 5.91% 6.5% 6.0% 5.5% 5.4% 5.2%
FX BRL/USD 2.34 $ 2.40 $ 2.64 $ 2.72 $ 2.81 $ 2.88
Natural Gas Price USD/MMBtu 3.43 3.85 4.09 4.31 4.43 4.56

Bidding Price BRL/MWh (available) 50

Markup over variable costs % 15%

Operations Date
Beginning of Operations 2019
PPA Duration 25
End of Operations 2043
Construction Period
Capex Schedule 100% 30% 30% 20% 20%
Total Capex 1,200 0 360 360 240 240
Depreciation (in years) 25
Operational Assumptions

Installed Capacity MW 500

Number of Hours/Year hours 8,760
Capacity Factor % 90%
Dispatch/Year % 50%
 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
$ 2.93 $ 2.97 $ 3.00 $ 3.04 $ 3.08 $ 3.12 $ 3.16 $ 3.21 $ 3.23 $ 3.42
4.65 4.76 4.87 4.98 5.09 5.21 5.32 5.44 5.56 5.68
 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
$ 3.43 $ 3.62 $ 3.63 $ 3.83 $ 3.85 $ 4.05 $ 4.08 $ 4.29 $ 4.32 $ 4.54
5.81 5.93 6.06 6.20 6.33 6.47 6.62 6.76 6.91 7.06
 2039 2040 2041 2042 2043

5.2% 5.2% 5.2% 5.2% 5.2%

$ 4.58 $ 4.81 $ 4.81 $ 4.81 $ 4.81
7.22 7.38 7.54 7.70 7.87
 Operational Assumptions
Installed Capacity 500
Number of Hours/Year 8,760
Capacity Factor 90%
Dispatch/Year 50%
Total Energy/Year ###

IPCA 5.91% 6.50%

Base Natural Gas Price 2.34 2.40
FX 3.43 3.85

Period 2013 2014

Base 0 1
1 Capital investment and disposal - -
2 Change in working capital - -
Capacity Revenue
GC Revenue
VOM Revenue
3 (=) Gross Revenue - -
(-) Revenue Tax (9,25%) - -
4 (=) Net Revenue - -
(-) GC
Variable Costs
(-) VOM
5 (=) Gross Revenue - -
(-) Personnel, Materials, Services
Fixed Costs (-) Regulatory Costs
(-) Depreciation
6 (=) Profit/(Loss) - -
7 Corporate Tax (34%) - -
8 Operating cash flow (6 - 7) - -
9 Net cash flow (1 + 2 + 8) - -
10 Present value at 11,57% - - 1
11 Net Present Value -46
Pricing Assumption WACC USD 9.27%
Bidding Price/MWh 50 BRL/MWh WACC BRL 11.57%
(+)Required Capacity Revenue ### BRL/MWh Pmt 1
(+)Revenues − Pass Through (GC)1 - BRL/MWh VOM - BRL/MWh 3.9
(+)Revenues − Pass Through (VOM) 21,646,612 BRL/MWh
1
PIS/Cofins 9.25%
(−)Revenue Tax 22,259,812 BRL/MWh (1) Mkup 15%

6.00% 5.50% 5.40% 5.18% 5.18% 5.18% 5.18% 5.18%

2.64 2.72 2.81 2.88 2.93 2.97 3.00 3.04
4.09 4.31 4.43 4.56 4.65 4.76 4.87 4.98

2015 2016 2017 2018 2019 2020 2021 2022

2 3 4 5 6 7 8 9
- 360 - 360 - 240 - 240 - - - -
- - - - - - - -
219 230 242 255

22 23 24 25
- - - - 241 253 266 280
- - - - - 22 - 23 - 25 - 26
- - - - 218 230 242 254
- - -

- - - - 218 230 242 254

-46.00
- 20
- - -
- - - - 152 230 242 254
- - - - 52 78 82 86
- - - - 101 152 159 168
- 360 - 360 - 240 - 240 101 152 159 168
- 291 - 262 - 158 - 142 48 66 61 57
5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18% 5.18%
3.08 3.12 3.16 3.21 3.23 3.42 3.43 3.62 3.63 3.83 3.85 4.05 4.08 4.29 4.32
5.09 5.21 5.32 5.44 5.56 5.68 5.81 5.93 6.06 6.20 6.33 6.47 6.62 6.76 6.91

2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
- - - - - - - - - - - - - - -
- - - - - - - - - - - - - - -
268 282 297 312 328 345 363 382 401 422 444 467 491 517 544

26 28 29 31 32 34 36 38 40 42 44 46 49 51 54
295 310 326 343 360 379 399 419 441 464 488 513 540 568 597
- 27 - 29 - 30 - 32 - 33 - 35 - 37 - 39 - 41 - 43 - 45 - 47 - 50 - 53 - 55
267 281 296 311 327 344 362 381 400 421 443 466 490 515 542

267 281 296 311 327 344 362 381 400 421 443 466 490 515 542

267 281 296 311 327 344 362 381 400 421 443 466 490 515 542
91 96 101 106 111 117 123 129 136 143 151 158 167 175 184
176 186 195 205 216 227 239 251 264 278 292 307 323 340 358
176 186 195 205 216 227 239 251 264 278 292 307 323 340 358
53 50 46 43 40 37 34 32 29 27 25 23 21 19 18
5.18% 5.18% 5.18% 5.18% 5.18% 5.18%
4.54 4.58 4.81 4.81 4.81 4.81
7.06 7.22 7.38 7.54 7.70 7.87

2038 2039 2040 2041 2042 2043

25 26 27 28 29 30
- - - - - -
- - - - - -
572 601 632 665 700 736

57 59 63 66 69 73
628 661 695 731 769 809
- 58 - 61 - 64 - 68 - 71 - 75
570 600 631 663 698 734

570 600 631 663 698 734

570 600 631 663 698 734

194 204 214 226 237 250
376 396 416 438 461 484
376 396 416 438 461 484
16 15 13 12 11 10
 Period
- 1 2 3 4
1 Capital investment and disposal - 10,000 - - - -
2 Change in working capital - 550 - 739 - 1,972 - 1,629
3 Sales 523 12,887 32,610 48,901
4 Cost of goods sold 837 7,729 19,552 29,345
5 Other costs 4,000 2,200 1,210 1,331 1,464
6 Tax - 1,400 - 1,434 828 3,550 5,778
7 Operating cash flow (3 - 4 - 5 - 6) - 2,600 - 1,080 3,120 8,177 12,314
8 Net cash flow (1 + 2 + 7) - 12,600 - 1,630 2,381 6,205 10,685
9 Present value at 20% - 12,600 - 1,359 1,652 3,589 5,150
10 Net Present Value 3503
 Wacc 0.2
5 6 7 Pmt 1
- - 1,442
1,307 1,581 2,002
35,834 19,717
21,492 11,830
1,611 1,772
3,902 1,586
8,829 4,529 -
10,136 6,110 3,444
4,070 2,043 958