Who We Are

 

Equatorial Energia is the 3rd largest distribution group in the country in terms of number of customers. Founded in 1999, the Company has advanced in the consolidation of the energy distribution sector in Brazil and currently operates 7 concessionaires in the states of Maranhão, Pará, Piauí, Alagoas, Rio Grande do Sul, Amapá and Goiás, serving approximately 10 million customers in these regions.

The Company also operates in the Transmission sector and recently entered the Sanitation sector, becoming the first multi-utility company in the country, in addition to acquiring 100% of the shares of Echoenergia SA, starting a chapter in the Renewables sector and effectively becoming a an integrated player in the energy segment.

 

Operating segments:

 

 

 

Equatorial Maranhão, electricity distribution company acquired in 2004 by Grupo Equatorial. It operates in the 217 municipalities of the state, which has around 7 million inhabitants, equivalent to 3.4% of the Brazilian population. In 2022, the concessionaire distributed 7,351 GWh to 2,676,731 consumers, compared to the 7,016 GWh distributed in 2021. Investments in the distributor, which is Equatorial’s oldest asset, amounted to R$953 million, 75% more than the amount invested last year. As a result of these investments, there was a decrease in the DEC and FEC indices: in DEC the numbers decreased from 29.4 hours to 24.7 hours and in FEC the values fell from 9.8 times to 8.6 times, when comparing the years of 2021 and 2022.

 

Equatorial Pará the concessionaire operates in the 144 municipalities of Pará, which make up an area of 1,248 thousand km², around 14.7% of the Brazilian territory. In the year, the company distributed 10,032 GWh to 2,913,209 consumers, representing an increase of 6.1% compared to that distributed in 2021. Investments in the distributor, operated by the Equatorial Group since November 2012, amounted, in turn, to R$1.8 billion, growth of 61% compared to the value verified in the last year. Also in 2022, the concessionaire reduced the DEC and FEC rates: in DEC the numbers decreased from 22.1 hours to 18.7 hours, while in FEC the numbers went from 11.9 times to 9.2 times.

 

 

Equatorial Piauí, the distributor, operated since October 2018 by Equatorial, supplies energy to the 224 municipalities in the state, which covers an area of 251,000 km². It should be noted that in the fiscal year the concessionaire provided electricity to approximately 1.4 million consumers in 224 municipalities: 4,134 GWh of energy were distributed, a value that remained in line with the previous year (4,111 GWh). Investments in the distributor totaled R$732 million, a growth of 60% compared to the amount verified in the last year. The DEC and FEC indices, in turn, decreased, going from 29 hours to 24.5 hours, respectively, and from 13.9 times to 11 times, considering the years 2021 and 2022.

 

Equatorial Alagoas, the concessionaire serves approximately 1.3 million consumers in 102 municipalities in the state, covering a concession area of 27,848 km². In the year, Equatorial Alagoas distributed 4,064 GWh to 1,325,190 consumers, an increase of 2.4% compared to 2021.It should be noted that the DEC and FEC indices also suffered a significant decrease in the year: in D EC decreasing from 23.8 hours to 18.7 hours and in FEC from 10.2 times to 7.8 times. In terms of investment, the distributor, effectively operated since March 2019 by the Equatorial Group, invested R$426 million, a growth of 45% compared to the previous year.

 

Companhia Estadual de Energia Elétrica (CEEE-D), Equatorial Energia has controlled CEEE since 2021, the concessionaire responsible for distributing energy to 1.8 million consumers in 72  municipalities in the state Rio Grande do Sul. In the year, CEEE distributed 8,191 GWh of energy, an amount 4.2% higher than the amount distributed in 2021. Investments totaled R$751 million, an increase of 75% compared to the previous cycle. The DEC and FEC indices, in turn, decreased: from 18.1 hours to 17.8 hours and from 9.7 times to 8.5 times.

 

Companhia de Energia do Amapá (CEA), in operation since November 2021, the distributor took energy in 2022 to 198,000 consumer units in the 142,000 km² of the state of Amapá. The DEC and FEC indicators ended 2022 at 44 hours and 19.6 times, respectively, when in 2021 they were 36.5 and 19.1. It is worth noting that due to the standardization of measurement and calculation of indicators, the data reported for 2022 are not comparable to those for 2021, since the indicator consolidates the last 12 months of operation under Equatorial management, concluded at the end of the year. Investments in the concessionaire totaled R$388 million in the year.

 

Equatorial Goiás, in December 2022, Grupo Equatorial Energia acquired share control of the distributor in Goiás, becoming the holder of 99.964% of the voting share capital of Equatorial Goiás.

The Company is responsible for distributing electricity to 237 municipalities in the State of Goiás, in an area of 337,000 km². The Company’s commercial base covers approximately 3.3 million consumer units, and involves a population of approximately 7.2 million inhabitants.

With the purchase of Equatorial Goiás, the Equatorial Energia Group now expands its operations in the energy distribution segment to the Midwest and now operates concessions in 31% of the national territory. The Concessionaire becomes the group’s biggest asset, incorporating 3.3 million customers.

 

Equatorial Transmissão, Grupo Equatorial entered the energy transmission segment in 2016, when it won seven lots in the ANEEL 013/2015 2nd Stage auction in the states of Pará, Piauí, Bahia and Minas Gerais. In 2017, he won another lot at auction 005/2016, in the state of Pará. In 2018, the company became the owner of INTESA – Integração Transmissora de Energia, located in the states of Tocantins and Goiás. Today the company has eight transmission SPEs, in addition to INTESA, which together account for more than 3,000 km of transmission lines. The Allowed Annual Revenue (RAP) for 2022 of the eight SPES totaled R$1.1 billion.

 

INTESA, in 2018 Equatorial Energia acquired all the shares owned by Eletrobrás, becoming the owner of INTESA – Integração Transmissora de Energia S.A. and assuming, therefore, the responsibility of managing and complying with the contractual milestones for the operation and maintenance of the transmission facilities and substations associated with – LT 500 kV Interligation North – South III – Lot B, located in the States of Tocantins and Goiás. The start date of the commercial operation of the enterprise was May 30, 2008. In 2022, the RAP was R$196 million reais

 

Echoenergia Participações, which develops, implements and operates clean energy generation projects, was acquired in March 2022 There are ten wind power operating complexes that were incorporated into Equatorial’s assets, totaling 1.2 GW of installed capacity. In addition, the company has a pipeline of 1.2 GW of operational projects and 573 MW of projects under construction.

 

Enova, Equatorial owns the share control of Enova Installation and Maintenance, a company of distributed generation of solar energy operating in the Northeast of Brazil. The company has three of its own plants in operation and nine in the pipeline.

 

Companhia de Saneamento do Amapá (CSA), worked as a Specific Purpose Company (SPE), CSA is controlled by Equatorial with a stake in SAM Ambiental. The sanitation company formally entered the Group’s asset portfolio in July 2022, when the Company also started its definitive operation. Serving a population of more than 800,000 inhabitants, CSA operates in 16 cities in Amapá. The concession has as its goal the universalization of water supply and sewage treatment.

 

 

Equatorial Telecom, is a company of the Equatorial Energia Group dedicated to the telecommunications market. Established as a joint-stock company, it provides broadband, internet and telephony services. In 2022, it had 4,094 customers in its base.

 

Equatorial Serviços, it operates through several companies with call center, sales and back office solutions, among others, for customers in Maranhão, Pará, Piauí, Alagoas and Rio Grande do Sul.

 

SOLenergias, controls Helios Energia, Grupo Equatorial’s commercialization and services company, which operates in specialized consultancy for customers in the free energy market and provides services for the purchase and sale of conventional energy, biomass, SHPs and wind energy, in addition to offering operations customized. SOLenergias is in the process of integration with the Echoenergia supplier, a process that started in March 2022 and is expected to be completed in the first half of next year.

 

Distribution and Transmission Concessions

 

 

Histórico

2004 – The Creation of Equatorial Energia

Equatorial Maranhão was created in 1958 with the purpose of distributing electricity throughout the state of Maranhão. In 2001, Equatorial Maranhão began to experience economic and financial problems, posing a risk to the adequate provision of electricity distribution in Maranhão state. On August 21, 2002, the Agência Nacional de Energia Elétrica (“ANEEL”) ordered the administrative intervention of CEMAR for 180 days, which was later extended until May 3, 2004.

ANEEL coordinated the sale of Equatorial Maranhão control as part of its restructuring process. Between October 2002 and April 2004, GP Investimentos Ltda (“GP Investments”) negotiated with Equatorial Maranhão main creditors, which included Eletrobrás and Eletronorte, a restructuring plan for CEMAR that featured capitalization and debt renegotiation. This restructuring plan was approved by ANEEL on February 2, 2004 and was implemented on April 30, 2004, when GP Investments acquired the controlling stake at Equatorial.

2005 – PCP acquires a co-controlling stake

In the second quarter of 2005, GP Investments initiated negotiations with PCP Latin America Power Fund Ltd., a private-equity fund owned by the former partners of Banco Pactual, for investment in Equatorial. On March 6, 2006, ANEEL approved the implementation of the corporate-restructuring plan proposed by GP Investments involving Equatorial and Equatorial Maranhão, which allowed the sale of shares representing 46.25% of Equatorial’s capital and the transfer of 50% of its voting shares to PCP Latin America Power Fund Ltd.

2006 – IPO

On March 30, 2006, Equatorial’s Initial Public Offering was held on the São Paulo Stock Exchange (“B3”). After the offering, Equatorial’s free float stood at 56.8% of its total capital.

2007 – PCP becomes the sole controlling shareholder

In November 5, 2007, Equatorial presented a restructuring plan consisting of 3 stages. The first stage concerned the transaction between GP Investments and PCP Latin America Power Fund, through which all shares held by GP Investments in Equatorial Holdings, LLC which indirectly controlled Equatorial, were transferred to PCP Latin America Power Fund.

This transfer of shares was approved by ANEEL on December 18 and concluded on December 21, 2007. This concentration eliminated the geographical restrictions on Equatorial’s growth strategy, which – previously limited to the North, Northeast and Midwest of Brazil – now encompassed all of Brazil and Latin America.

2008 – Consolidation of a stake in Light

The second stage consisted of the incorporation of PCP Energia Participações by Equatorial Energia, which was approved at the Extraordinary General Meeting held on February 12, 2008. Following the incorporation, Equatorial held an indirect interest of 13.03% in Light through Rio Minas Energia Participações (RME) and, through a shareholders’ agreement, it began to share control of Light. As a result, PCP Latin America Power Fund consolidated in Equatorial its investments in the electric energy sector.

Adherence to the Novo Mercado

The last stage, concluded on April 23, 2008, involved the migration of Equatorial Energia’s shares from the Level 2 Special Corporate Governance Listing Segment of the São Paulo Stock Exchange (“B3”) to the exchange’s Novo Mercado listing segment, seeking the company’s adoption of corporate governance best practices and demonstrating the commitment to transparency in its relationship with investors and shareholders. As a result, the shares ceased to trade as Units and began to trade under the stock symbol EQTL3.

On July 10, 2008, the controlling shareholders of Equatorial carried out the company’s corporate restructuring, which comprised of the successive dissolutions of the following companies: (i) PCP Power LLC; (ii) PCP Latin America Power Fund Limited; (iii) Equatorial Energia Holdings LLC; and (iv) Brasil Energia I LLC. The restructuring did not result in any changes in Equatorial’s ownership structure, since PCP Latin America Power S/A, which already indirectly held a 55.5% interest in Equatorial, maintained the same interest, only now through direct ownership. Equatorial’s outstanding shares continued to represent 44.5% of the Company’s total capital.

Investment in Geramar

In October 2008, Equatorial Energia concluded the acquisition of a 25% stake in Geradora de Energia do Norte S.A. (“Geramar”). The consortium that retains control of Geramar comprises Equatorial Energia S.A. (25%), Fundo de Investimento em Participações Brasil Energia (25%) and GNP S.A. (“GNP”) (50%). GNP S.A., in its turn, comprises Servtec Investimentos e Participações Ltda. (50%) and Companhia Ligna de Investimentos (50%). Geramar’s control is shared and governed in accordance with the Shareholders’ Agreement.

Geramar is the company responsible for implementing and operating the Tocantinópolis and Nova Olinda thermoelectric plants, in the municipality of Miranda do Norte, in the state of Maranhão, with a joint installed capacity of 330 MW, which provides energy for the National Interconnected System. The authorization for the construction and operation of Tocantinópolis and Nova Olinda plants was obtained in the A-3 Auction, held in July 2007. In this auction, 240 MW (120 MW from each plant) were sold, ensuring a total fixed annual revenue of approximately R$136.2 million (around R$68.1 million for each plant) in 2007’s figures, yearly adjusted by inflation (IPCA index). The plants began commercial operations in February 2010.

2009 – Sale of the stake in Light

In December 2009, RME, the holding that controls Light S.A, was spun off in three parts, where the shares of Light that belonged to RME were transferred to CEMIG, Andrade Gutierrez and Luce Empreendimentos e Participações (company controlled by Luce Brasil Fundo de Investimentos em Participações). Equatorial remained as the unique shareholder of RME, whereas its interest in Light became 13.03%.

Still in December 2009, Equatorial informed that its controlling shareholder, Fundo de Investimento em Participações PCP (“FIP PCP”), PCP Latin America Power S.A.’s controlling shareholder, celebrated an Agreement for Share Purchase with CEMIG, intending to sell its indirect interest in Light S.A. As part of the operation, Equatorial was spun off on April 29, 2010 and its participation in RME was transferred to a new company – Redentor Energia S.A. (“Redentor Energia”), which was listed in the Novo Mercado segment of B3 under the stock symbol RDTR3. Equatorial kept its stakes in Equatorial Maranhão, Geramar and Equatorial Soluções S.A (“Equatorial Soluções”). In the spin-off process, each one of the Company’s shareholders received one share of Redentor Energia S.A. for each share held in Equatorial.

2011 – Equatorial Energia’s Spin-off

In May 2011, FIP PCP sold its stake in Redentor Energia to Parati S.A. (“Parati”), a company owned by Cemig and Redentor FIP (“FIP Redentor”), for an amount equivalent to approximately R$6.87 per share. Subsequently, Parati made a public offering to acquire the minority interest of Redentor Energia.

Investment in Sol Energias

In November 2011, Equatorial Energia has expanded its operations through the indirect acquisition, by its wholly owned subsidiary Equatorial Soluções, of 51% of the capital of Sol Energias Comercializadora de Energia S.A. (“Sol Energias”). Sol Energias is an electricity trading company, authorized by ANEEL and Agente da Câmara de Comercialização de Energia Elétrica – CCEE.

2012 – Equatorial Pará Acquisition

On September 25, 2012, in the context of the Judicial Recovery Plan of Equatorial Pará, former Centrais Elétricas do Pará S.A. – CELPA (“CELPA”), the Company signed with Equatorial Pará’s controlling shareholders a Share Purchase and Sale Agreement and Other Convenants (“Share Purchase and Sale Agreement”). The consummation of the acquisition occurred on November 1, 2012, when Equatorial Pará became controlled by the Company.

Equatorial Energia’s Follow-on

In December 2012, Equatorial completed its capital increase operation (follow-on) in which obtained a net inflow of R$ 1.1 billion of net proceeds through the issuance of new shares priced at R$ 16.00 each. Thus, the Company’s free float amounted to 77% of its total capital.

2015 – Equatorial becomes a full corporation

In the first half of 2015, through two operations in the stock market, the Company‘s free float was increased to 100% of its capital and its main shareholder became Squadra Investimentos, which had a 15% ownership, approximately.

On June 16, 2015, the Equatorial Pará Board of Directors approved its capital increase, through which Equatorial now holds 96.5% of Equatorial Pará total capital.

2016-2017 – Entrance in the Transmission segment

In October 2016 and April 2017, Equatorial enters in the transmission segment by participating in 2 Transmission Auctions and winning 8 blocks to build and operate approximately 2,500 kilometers of lines and 7 substations covering the States of Pará, Piauí, Bahia and Minas Gerais. Total Annual Revenues from these blocks amount to R$ 850 million (as of October, 2016) and total capex forecast by ANEEL reaches R$ 4.6 billion. According to the conditions set by the Auction bylaws, operational start-up should happen by February and August 2022.

In August, 2017, the Company acquired 51% of Intesa – Integração Transmissora de Energia S.A., an operating transmission line, covering 695 km running through the States of Tocantins and Goiás.

In July 2018, Equatorial won the auction to privatize Equatorial Piauí, former Cepisa, Piauí’s energy distribution company, which used to be owned by Eletrobrás. Equatorial has acquired Cepisa’s controlling stake through the payment of R$ 95 million in Grant Bonus to the Federal Government and injected R$ 721 million in Equity in Equatorial Piauí. The deal was concluded by October, 2018.

In September 27, 2018, Equatorial Energia acquired, through an auction, the remaining stake of Integração Transmissora de Energia S. A. (“Intesa”), representing 49% of the capital stock, and became owner of 100% of Intesa’s capital stock.

On December 28, 2018, Equatorial won the bidding auction to privatize Companhia Energética de Alagoas S.A. (current, “Equatorial Alagoas”). Equatorial has increased the capital of Equatorial Alagoas in R$ 546 million and the deal was finished in March 18, 2019.

2021 – Expansion of operations and entry into the Sanitation Sector

Committed to its growth agenda, in 2021 the group made progress in the distribution segment with the acquisition of two energy distributors, in the states of Rio Grande do Sul and Amapá, and started a new chapter in its trajectory, starting with its entry into the sector. of sanitation, with the acquisition of the Amapá sanitation concession.

In March 2021, Equatorial Energia won the privatization auction of CEEE-D, an energy distributor in Rio Grande do Sul, which until then was controlled by the State of Rio Grande do Sul, and completed the acquisition process in July.

In June 2021, Equatorial Energia won the privatization auction of CEA, an energy distributor in Amapá, which until then was controlled by the State of Amapá.

In September 2021, Equatorial Energia, through the Marco Zero Consortium, won the auction of the Amapá sanitation concession, which until then was controlled by the State of Amapá. The concession serves more than 800 thousand people, and is a full concession (Expansion, Operation and Maintenance of Water and Sewage Systems and Commercial Management), with a 35-year term. The operation is scheduled to start in July 2022.

E-Nova Acquisition

In June 2021, the Equatorial Group, through its subsidiary Equatorial Geração Distribuída SPE SA, acquired 100% of the shares of E-Nova Instalação e Manutenção Ltda., which will be transformed into a joint stock company, with the consequent conversion of all the shares in shares and its conversion into a wholly owned subsidiary. The amount involved in this operation was R$7.5 million.

2022 – Entry into the Renewables segment

On March 3, Equatorial Energia concluded the acquisition of Echoenergia, a company that develops, implements and operates projects for generating electricity from renewable sources. Founded in early 2017, the company is headquartered in São Paulo and has operational activities in the states of Pernambuco, Ceará, Rio Grande do Norte and Bahia. The company currently operates 10 wind farms that together add up to 1.2GW in installed capacity. The most recent assets, Echo 8, 9 and 10, started operating in February 2022. Additionally, Echoenergia has a portfolio of projects under development focused mainly on solar energy, which will add another 1.2 GW to its capacity.

Follow on from Equatorial

In February 2022, Equatorial concluded its capital increase operation (follow on) in which it obtained a net funding of R$2.8 billion in net resources through the issuance of new shares priced at R$23.50 each.

Acquisition of Equatorial Goiás

In December 2022, the Equatorial Energia Group acquired the controlling interest in the distributor Equatorial Goiás, from Goiás. With the purchase of Equatorial Goiás, the Equatorial Energia Group expands its operations in the energy distribution segment now to the Midwest, demonstrating its appetite for restructuring companies and being a development agent for the states in which it operates. Adding more than 3.3 million customers to the base, the concessionaire becomes the group’s biggest asset.