1. Brazilian Power Sector - Current Issues - Pedro G. Seraphim pseraphim@tozzinifreire.com.br

2. Confidential Information – Property of TozziniFreire Advogados Agenda   Brazilian Power Sector Facts   Sector’s Greenhouse Gas Emissions   Brazilian Power Sector Model   Wind Power Auction   Belo Monte Project   Renewal of Concessions

3. Confidential Information – Property of TozziniFreire Advogados Brazilian Power Sector Facts  Brazilian Energy Matrix => 46% renewable –World average is 12%  Power Sector Installed Capacity –Now: about 103 GW (91% hydro) –Planned for 2030: 130 GW (78% hydro)  only 2% of all carbon emissions in Brazil

4. Confidential Information – Property of TozziniFreire Advogados Power Sector GHGs Emissions per capita Brazil 1 Argentina 10 EU 40 USA 100

5. Confidential Information – Property of TozziniFreire Advogados Power Sector Model (Law No. 10,848)  Brazilian - Expansion centrally controlled by the Government  LDCs: Yearly declarations of power needs for 5 years  Auctions for projects to meet such needs  PPA with LDCs (ACR) or “reserve energy”  Preliminary Environmental License  Free consumers => 25% of the power market (ACL)

6. Confidential Information – Property of TozziniFreire Advogados Exclusive Auction for Wind Power (Nov / 2009)  Estimated potential: 140 GW (or 300 GW?)  Reserve energy auction in Nov/2009  441 registered projects: ~14,000 MW  Transmission through ICGs (Shared Facilities)  20-year PPAs  Will it attract equipment manufacturers?  Is it really the best alternative at the moment?

7. Confidential Information – Property of TozziniFreire Advogados Belo Monte Project  Installed capacity: 11,300 MW  Capacity factor (assured energy): ~ 5,000 MW –virtually no reservoir  Challenges: –Valuation (R$16 or R$30 billion?) –Transmission (distance from load centers) –Market (ACR / ACL / Self-Producers) –Environmental licensing…

8. Confidential Information – Property of TozziniFreire Advogados Belo Monte Project Location

9. Confidential Information – Property of TozziniFreire Advogados Renewal of Concessions