2014 MANAGEMENT REPORT

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São Paulo, March 4, 2015.

HIGHLIGHTS OF 2014, AND SUBSEQUENT EVENTS

POWER CONTRACTS PLACEMENTS / PROJECTS

• Supply contracts for 308.0 MW average contracted in the Free Market,

corresponding to 676.2 MW of installed capacity, in a project in which Renova owns 50% and Cemig 50%.

• Development of Brazil’s first hybrid wind + solar project.

• 20.9 MW average, corresponding to 43.5 MW of wind power capacity,

contracted in the 2014 LER (reserve supply) wind power auction.

• 21.8 MW average, corresponding to 106.9 MWp of solar generating

capacity, contracted in the 2014 LER auction.

• 49.4 MW average, corresponding to 108.0 MW of installed wind power

capacity, contracted at the A–5 LEN (new build) auction of 2014. OPERATIONS

• Synchronization of contractual periods with start date of operation of

transmission lines, for the new units built to provide supply under the 2010 LER and the 2011 A–3 LEN auctions (jointly, the Alto Sertão II complex).

• Start of commercial operation of the 2009 LER (Alto Sertão I) wind farm

complex.

• Start of commercial operation of the 2010 LER complex.

INVESTOR RELATIONS

Pedro Pileggi

Vice-president for Finance, Business Development and Investor Relations

Flávia Carvalho

Investor Relations Manager

Thatiana Zago

Investor Relations Analyst

[email protected]

+55 (11) 3509-1104/1174

MEDIA OFFICE

Inês Castelo -[email protected]

(11) 3093-3600

Data at March 4, 2015: RNEW11 = R$ 33.30/Unit Market Value BM&FBOVESPA R$ 3,537.1 million

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www.renovaenergia.com.br 2

• Start of commercial operation of four wind farms of the 2011 A–3 LEN auction (subsequent event). STOCKHOLDING STRUCTURE / STRATEGIC PARTNERSHIPS • Acquisition of 51% of Brasil PCH. • Renova concludes capital increase; Cemig GT enters controlling stockholding block. • Strategic partnership with SunEdison for creation of a joint venture to build 1 GW of solar energy projects in Brazil. FINANCING • Long-term Brazilian risk rating of A(bra) maintained for Renova and its second debenture issue. • BNDES Board approves long-term financing for Alto Sertão II wind complex and partial disbursement. • Partial rollover of the Notes for the SPCs of Alto Sertão II. • First issue of Infrastructure Debentures for Alto Sertão II: R$ 146 million. • BNDES accepts Alto Sertão III Phase A wind complex for financing study. • Bridge loans for Alto Sertão III Phase A approved – first tranche received. • New R$ 500mn corporate debenture, to replace existing issue. RESULTS • Net operational revenue: up 34% in 2014 vs. 2013, at R$ 302.9mn. • Renova reports net loss of R$ 35.7 mn in 2014. • 2014 adjusted Ebitda R$ 167.4 mn, with Ebitda margin 55.3%. CONTENTS About Renova ...03

Message from Management ...04

Highlights in detail ...05

Renova’s Power Trading Company ...12

Consolidated profit and loss account ...13

Cash flow ...19

Main indicators of the financial statements ...22

Stock price performance ...23

Stockholding structure ...24

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1 – ABOUT RENOVA

Renova Energia S.A. (‘Renova’, ‘the Company’) is a company generating electric power from renewable sources, focusing on wind farms, small hydroelectric plants (SHPs) and solar energy. It is the largest company generating electricity from renewable sources in Brazil, by contracted installed capacity. It has been prospecting, developing and implementing projects to generation power from renewable sources for 13 years – having invested to build a highly qualified multidisciplinary team of experienced electricity sector professionals over this period. It has placed 1,609.1 MW of contracted wind power in Brazil’s regulated market and 901.8 MW in its free market.

¹ Contracted under the 2009 Reserve Energy Action (‘LER’’), which has been operation–ready since July 2012. ² This figure is for Renova’s 50% interest.

² This figure is for Renova’s 51% interest.

4_{Figure is for the 50% interest in this joint venture.}

190,2 190,2 190,2 190,2 190,2 190,2 462,1 1.072,6 1.297,0 1.460,8 2.154,4 2.262,4 4,8 4,8 58,3 58,3 58,3 Em operação atual 2015 2016 2017 2018 2019

eInm operação

PCH Eólico Solar

Regulated Market- Wind LER 2009 LER 2010 LEN A-3 2011 LEN A-5 2012 LER 2013 LEN A-5 2013 LEN A-5 2014 LER 2014

Complex Alto Sertão I TBD

Installed Capacity (MW) 294.4 167.7 218.4 18.9 159.0 355.5 108 43.5

Energy Sold (average MW) 127.0 78.0 103.6 10.2 73.7 178.0 49.4 20.9

Number of wind farms 14 6 9 1 9 17 5 3

Start of operation ¹ Jul-12 Oct-14 feb/mar-15 Jan-17 Sep-15 May-18 Jan-19 Oct-17

Alto Sertão II Alto Sertão III - Fase A Umburanas

Free Market- Wind Light I Light II Mercado Livre I

Mercado Livre II

Mercado

Livre III PPA Cemig²

Complex Alto Sertão

III - Fase A

Alto Sertão III - Fase B

Alto Sertão

III - Fase A Jacobina

Installed Capacity (MW) 200.7 202.8 21.6 101.4 32.4 338.1

Energy Sold (average MW) 100.2 100.2 11.0 50.0 15.0 154.0

Number of wind farms 12 12 1 8 1 TBD

Start of operation ¹ Sep-15 Sep-16 Jan-16 Jan-17 Sep-15 Sep-18

Regulated Market- SHP ESPRA Brasil PCH³

Installed Capacity (MW) 41.8 148.4

Energy Sold (average MW) 18.8 95.8

Number of wind farms 3 13

Start of operation ¹ 2008 2008/2009

Regulated Market/Free - Solar LER 20144 _Híbrido

Installed Capacity (MW) 53.5 4.8

Energy Sold (average MW) 10.9 1.0

Number of wind farms 4 1

Start of operation ¹ out-17 2016

652,3

1.262,8 1.492,0

1.709,3

2.402,9 2.510,9

Installed capacity in operation

Wind SHP

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2 – MESSAGE FROM MANAGEMENT

2014 was a very important year for the history of Renova. Following the company’s initial success in winning wind power contracts in 2009, its first wind farms began commercial operation in 2014.

The 14 wind farms that sold power contracts in the 2009 Reserve Energy (LER) auction, which comprised the Alto Sertão I complex, with 294.4 MW of installed capacity, began commercial operation in July 2014. Then, in October 2014, the wind farms that sold supply in the 2010 LER Auction, with installed capacity of 167.7 MW, also started operation. Jointly with the nine wind farms that contracted power supply in the 2011 A–3 LEN Auction, these six 2010 LER wind farms comprised the Alto Sertão II Complex, with 386.1 MW of installed capacity – located in the same region as Alto Sertão I, in the Southeast of Brazil’s Bahia state.

The generation performance of these projects so far, even in this short initial period, has proven the quality of the wind in the region, and the successful strategy in execution of the project.

In February 2015, four new wind farms contracted in the 2011 A–3 LEN auction were connected, to on the same transmission line as the 2009 and 2010 projects. The other five wind farms are awaiting the transmission line which, according to the Transmission Project Timetables (SIGET) set by Aneel, is scheduled to be ready for connection in August of this year.

Another important landmark of the year was the placement of two utility-scale solar projects. At the beginning of the year the first hybrid wind/solar generation project in Brazil was announced. It will have two wind farms with installed capacity of 21.7 MW, corresponding to 11.0 MW average, and a solar plant with installed capacity of 4.8 MWp, corresponding to approximately 1 MW average, to be installed in Bahia, in the same region as the Company’s wind farms.

In October 2014 the government held the first auction in which solar power did not compete with other sources. In this auction Renova contracted 106.9 MWp, to be generated by four solar wind installations, also located in the same region of Bahia.

After this auction the Company announced the creation of a joint venture with SunEdison, a world-leading supplier of solar energy services, with the objective of building 1 GW of solar energy projects in the regulated market in Brazil. Also in 2014, in February, Renova (through a subsidiary) acquired 51% of Brasil PCH, a company that owns 13 small hydroelectric plants (SHPs), with installed capacity of 291 MW and contractual takeoff guarantee of 194 average MW. In October Renova concluded a capital increase, with Cemig GT entering its controlling stockholding block, through a stock subscription of R$ 1.550 bn. Under the Investment Agreement signed in August 2013, RR Participações, Light Energia and Cemig GT signed a new Stockholders’ Agreement. The decisions of the controlling block are taken unanimously and each one of the groups will have two members on the Board of Directors. The direct participation of Cemig GT brings to Renova one of the largest and most experienced electricity groups operating in Brazil.

During the year Renova followed its strategy of growth in the wind sector, and contracted 338.1 MW of installed capacity in the Free Market, and 151.5 MW of installed capacity in the regulated market.

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3.1. Supply contracts for 308.0 MW average contracted in the Free Market, corresponding to 676.2 MW of installed capacity, in a project in which Renova has 50% and Cemig 50%

3.2 Development of Brazil’s first hybrid wind + solar project

beginning construction of Phase A of Alto Sertão III, a complex which has PPAs of the free market and the regulated market, with total installed capacity of 411.1 MW.

Over the year of 2014, debt was contracted to continue execution of the projects with capital efficiency. The first tranche, totaling R$ 1.044 bn, of the long-term financing from the BNDES for Alto Sertão II, and bridge loans and part of the Notes were settled with this funding. A new debenture issue was made by the holding company for R$ 500.0mn, settling a prior debenture. Renova Eólica, the sub-holding company for Alto Sertão II, made an issue of Infrastructure Debentures, for R$ 146.0 mn: the first series of this issue, totaling R$ 73.0 mn, was settled in December, and the second series, for the same amount, was settled in January 2015. A tranche of the bridge loan for the Alto Sertão III – Phase A, of R$ 215.0 mn, was also released.

Looking forward in 2015, the Company continues to be optimistic on its capacity for growth and execution, and now also for operation, continuing to generate value for its stockholders and for society as a whole.

3 - HIGHLIGHTS IN DETAIL:

POWER CONTRACTS PLACEMENTS / PROJECTS

The Company contracted 308.0 MW average in the Free Market, in an auction won by Cemig GT.

This wind project will comprise 26 wind farms, with total 676.2 MW of installed capacity, in the municipality of Jacobina in Bahia.

Cemig will own 50% of the project and, for this interest, under the Investment Agreement signed, will pay up to

R$ 113.5 mn representing 50% of the advances under the contracts already signed by Renova, plus monetary adjustment by the CDI (interbank CD) rate, from the date of its disbursement by Renova to the date of payment by Cemig. As from the acquisition, Cemig and Renova will share the future investment in the wind power project.

Renova is building a hybrid solar and wind power project, in Bahia, in the same region as the Company’s wind farms that are currently operating. The solar plant will have installed capacity of 4.8 MWp, corresponding to approximately 1 MW average, from approximately 20,000 photovoltaic modules with fixed sustaining structure and four inverters. The wind farms in the project will have installed capacity of 21.7 MW, corresponding to 11.0 MW average. Construction will begin in 2015 for conclusion in an estimated 12 months.

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3.5. 49.4 average MW, corresponding to 108.0 MW of installed wind power capacity, contracted at the A–5 LEN (new build) auction of 2014

3.3. 20.9 average MW, corresponding to 43.5 MW of wind power capacity, contracted in the 2014 LER (reserve supply) wind power auction

3.4. 21.8 average MW, corresponding to 106.9 MWp of solar generating capacity, contracted in the 2014 LER auction

In the 2014 Reserve Energy (LER) Auction, Renova contracted 20.9 average MW, corresponding to 43.5 MW of installed wind power capacity, to be generated by three wind farms in the state of Bahia, in the same region as the Company’s existing wind farms.

The lots were sold for an average price of R$ 138.90 per MWh. The wind farms will have Alstom aerogenerators, and are scheduled to start operation in October 2017. The contracts are for 20 years.

Renova also contracted 21.8 MW average of solar power in the 2014 LER Auction, corresponding to 106.9 MWp of installed capacity, to be generated by four plants, also in the state of Bahia in the same region as the Company’s wind farms in operation.

The lots were sold for an average of R$ 220.30 per MWh, under 20-year contracts, for start of supply in October 2017. The equipment to build the photovoltaic solar plants will be supplied by SunEdison, with prices fixed in Brazilian Reais, qualifying for the Brazilian-content levels required by the BNDES (Finame) for long-term financings.

In the 2014 New-build Supply auction – the 2014 A–5 LEN Auction – Renova placed 49.4 MW average to be generated by five wind farms, located in Bahia, corresponding to 108.0 MW of installed capacity.

The lots were sold at an average ICB (cost-benefit index) of R$ 136.42/MWh, under 20-year contracts, with start of supply in January 2019. The project will use Alstom aerogenerators.

The wind farms are in the state of Bahia, in the region of Umburanas, 450 km from Salvador and 600 km north of the region where the Company’s existing wind complexes are installed. Also in Umburanas, Renova had already placed 355.5 MW of installed capacity in the 2013 A–5 LEN auction, bringing the total in the region to 463.5 MW, continuing the company’s strategy of developing wind complexes with scale and quality.

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3.8. Start of commercial operation of the 2010 LER complex

3.6. Synchronization of contractual periods with start date of operation of transmission lines, for the new units built to provide supply under the 2010 LER and the 2011 A–3 LEN auctions (jointly, the Alto Sertão II complex)

OPERATIONS

The contracts for the wind farms that placed supply in the 2010 LER auction and the 2011 A–3 LEN auction stated the dates for start of supply as September 2013 and March 2014, but the plants – completed on schedule – were unable to start providing supply because the transmission lines were not ready.

In March 2014 the electricity regulator, Aneel, published a dispatch changing the supply timetable for the 2011 A–3 LEN wind farms, to coincide with the startup of commercial operation of the transmission lines to which they would connect.

Aneel also gave a period of 30 days for start of commercial operation after the transmission lines were in operation, so that the Company would not be subject to contractual and/or regulatory penalties while the transmission line was not ready. The full length of the supply contract, in years, was maintained.

In April 2014, Aneel made the same concession for the 2010 LER Auction wind farms, delaying start of the contractual period to synchronize with the transmission lines starting commercial operation.

Aneel again gave 30 days from the transmission line being operational for startup of generation. As with the 2011 A-3 LEN wind farms, the Company was not subject to contractual and/or regulatory penalties during the time when the transmission line was not ready, and the full period of the supply contract was maintained.

3.7. Start of commercial operation of the 2009 LER (Alto Sertão I) wind farm complex

The 14 wind farms that placed supply contracts in the 2009 LER Auction began commercial operation on July 4, 2014. As from that date, the power from the wind farms, with installed capacity of 294.4 MW, has been accounted under the commercial contract signed between the Company and the Electricity Trading Chamber (CCEE). Prior to the start of commercial operation, the wind farms received the revenue from the energy sold, as per contract.

These wind farms placed 127.0 average MW in the auction, and are located in the interior of Bahia state.

The six wind farms that placed supply in the 2010 LER Auction began commercial operation on October 11, 2014. As from that date the power from these parks, with installed capacity of 167.7 MW, has been accounted under the commercial contract signed between the Company and the CCEE.

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3.10. Acquisition of 51% of Brasil PCH

The timetable for operational startup of these units has been synchronized with the start of commercial operation of the transmission line. The power supply contracted is 78.0 MW average. These units are also in the interior of Bahia, in the same region as the 2009 LER wind farms.

3.9. Start of commercial operation of four wind farms of the 2011 A–3 LEN auction (subsequent event)

Of the total of nine wind farms that sold power supply in the 2011 A–3 LEN auction, four began commercial operation on March 04, 2015.

These four – Ametista, Pilões, Maron and Dourados – with installed capacity of 117.6 MW, were connected to the same transmission line that serves the wind farms contracted under the 2009 LER auction and the 2010 LER auction (Igaporã II).

The other five wind farms will be connected to the Igaporã III line, which according to the Transmission Project Timetables (SIGET) figure published by Aneel is scheduled to start operating on August 12, 2015.

The nine wind farms contracted under the 2011 A–3 LEN auction are still contractually synchronized: the contract will start in up to 30 days after the operational startup of the transmission line. From March 04, 2015 (start of commercial operation) until the operational start date of the contract, these wind farms, according to a technical note issued by Aneel, will receive revenue for the energy actually generated at the contract price.

STOCKHOLDING STRUCTURE AND STRATEGIC PARTNERSHIPS

In August 2013 Renova announced the Investment Agreement signed with Cemig Geração e Transmissão S.A. (Cemig GT), in which Chipley, a subsidiary of the Company, would acquire 51% of Brasil PCH, and Cemig GT would enter the controlling stockholding block of Renova, through subscription of newly issued shares.

In February 2014 Chipley in fact acquired 51% of Brasil PCH, for R$ 739.9 mn.

Brasil PCH has 13 small hydroelectric plants (SHPs), with installed capacity of 291 MW and physical takeoff guarantee of 194 MW average. All the SHPs have long-term (20-year) contracts for sale of their supply under the Proinfa program.

The acquisition is strategic for Renova, which added operational assets to its base, improving the balance between assets in operation and assets under construction or in development. Brasil PCH contributed to the Company’s cash generation, providing cash able to be used for the growth of Renova, both in projects already contracted and in new

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3.11. Renova concludes capital increase; Cemig GT enters controlling stockholding block

3.12. Strategic partnership with SunEdison for creation of a joint venture to build 1 GW of solar energy projects in Brazil

projects.

On September 29, as specified in the Investment Agreement announced on August 8, 2013, Cemig GT subscribed 87,186,035 common shares in Renova, by realization of the Advances against Capital Increase (AFACs) previously made, in the total amount of R$ 1,550,071,797.66. As well as Cemig GT, other stockholders exercised first refusal rights, on a total of 10,866 common shares, resulting in a total of 87,196,901 common shares subscribed, for a total of R$ 1,550,264,983.19.

After the subscription and payment, a new Stockholders’ Agreement was signed between Cemig GT, RR Participações and Light Energia. On October 27 the Company’s Board of Directors homologated the capital increase.

Stockholding ownership of Renova on December 31, 2014 was as follows:

* Holding of RR Participações outside the controlling block.

In November 2014, Renova and SunEdison Brasil announced the creation of a joint venture for development of 1 GW of solar energy projects in Brazil.

RENOVA ENERGIA ON shares PN shares Total Shares

Controlling stockholder block 188.309.629 79,6% - 0,0% 188.309.629 59,1% RR Participações 50.561.797 21,4% - 0,0% 50.561.797 15,9% Light Energia 50.561.797 21,4% - 0,0% 50.561.797 15,9% Cemig GT 87.186.035 36,8% - 0,0% 87.186.035 27,3% Other stockholders 48.535.763 20,4% 81.810.030 100,0% 130.345.793 40,9% RR Participações* 8.260.093 3,5% 1.300.000 1,6% 9.560.093 3,0% BNDESPAR 9.311.425 3,9% 18.622.850 22,8% 27.934.275 8,8% InfraBrasil 11.651.467 4,9% 23.302.933 28,5% 34.954.400 11,0% FIP Caixa Ambiental 5.470.293 2,3% 10.940.586 13,4% 16.410.879 5,1% Others 13.842.485 5,8% 27.643.661 33,7% 41.486.146 13,0% Total 236.845.392 100,0% 81.810.030 100,0% 318.655.422 100,0%

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3.13. Long-term Brazilian risk rating of A(bra) maintained for Renova and its second debenture issue

3.14. BNDES Board approves long-term financing for Alto Sertão II wind complex and partial disbursement

The joint venture was created as the exclusive vehicle of the two companies to operate and sell solar energy supply projects in the Brazilian regulated market. It will be 50% owned by Renova and 50% by SunEdison, and will initially build and operate four solar plants contracted under the 2014 LER auction, with installed capacity of 106.9 MWp. SunEdison Brazil is part of the SunEdison, Inc Group, a world leader in the supply of solar energy services, with expertise in global projects and leadership in the solar energy industry in Latin America. The partnership strengthens Renova’s strategy in the solar energy market, and makes it more competitive in development of this source in Brazil. Renova believes in the development of solar energy in Brazil – a country where the source is abundant, and which has a history of preference for renewable generation. Brazil has recently created the regulatory framework for development of solar power and definitively included solar energy in its planning for the country’s domestic supply. The companies will transfer projects they currently have under development to the joint venture.

FINANCING

In September 2014, Fitch Ratings restated its Brazilian Long Term Rating of A(bra), with outlook Stable, for Renova and its R$ 300.0mn second debenture issue. That issue was paid in full from the proceeds of the new debenture issue by the holding company, as reported in item 3.19.

Fitch said its rating for Renova is based on the strength of its operational assets and of its projects under development. It highlighted the acquisition of Brasil PCH, which in its assessment will strengthen the flow of dividends received, and its robust liquidity position following the entry of R$ 1.55bn in capital from Cemig GT. Fitch also sees the participation of Light Energia and Cemig GT in the controlling block of Renova as positive, since it believes the presence of these stockholders will assure greater financial flexibility.

In May 2014 the Board of Directors of Renova approved application to the Brazilian Development Bank (BNDES) for financing of R$ 1.044bn for Alto Sertão II – comprising the wind farms that placed supply in the 2010 LER auction and the 2011 A–3 LEN auction, with total installed capacity of 386.1 MW.

The Board of the Brazilian Development Bank (BNDES) approved this financing in June 2014. It was contracted by Renova Eólica Participações S.A., a subsidiary of the Company. Its repayment period is 16 years.

Also in June 2014, R$ 647.9mn of this financing was received and used to settle the bridge loans contracted with the BNDES. In August 2014 another tranche, of R$ 155.0mn, was received and used to settle part of the earlier issue of Notes. The rest of the financing will be released in 1Q15 and used to settle the remaining balance of the Notes.

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3.16. First issue of Infrastructure Debentures for Alto Sertão II – R$ 146.0mn 3.15. Partial rollover of the Notes for the SPCs of Alto Sertão II

3.17. BNDES accepts Alto Sertão III Phase A wind complex for financing study

3.18. Bridge loans for Alto Sertão III Phase A approved – first tranche received.

In October 2014 the third issue of commercial promissory notes of eight of the Company’s indirect subsidiaries was approved – these are the companies that won the 2011 A–3 LEN auction, for a total of up to R$ 251.2 mn. The funds raised were used for payment of the principal of the second note issue of the subsidiaries. The second issue was for R$ 400.0 mn, and had been partially settled using funds from part of the long-term financing.

Part of these notes contracted in October had already been settled with part of the long-term financing.

In September 2014 the Board of Renova approved the first issue of debentures by the indirectly-controlled subsidiary Renova Eólica Participações S.A., for a total of R$ 146.0mn. The issue is of non-convertible debentures, for public distribution, with physical guarantee and additional surety, in two series.

The issue has the status of Infrastructure Debentures, since the projects in which the proceeds will be invested have been qualified, in Mining and Energy Ministry Ministerial Orders, as priority projects of that Ministry. Proceeds of these debentures were allocated to Alto Sertão II to complement the long-term financing from the BNDES.

Both series were for R$ 73.0mn. The first was disbursed in December 2014, the second in January 2015.

Phase A of the Alto Sertão III complex, comprising the wind farms of the projects Mercado Livre III, LER 2013, Light I and LEN A–5 2012, was admitted for analysis of financial support feasibility by the Qualification, Credit and Capital Markets Committee of the BNDES.

These wind farms have aggregate installed capacity of 411.1 MW, for planned delivery between 2015 and early 2017. Renova awaits BNDES analyses and approvals, to confirm the amount and to itself approve the financing.

Bridge loans totaling R$ 700mn for Alto Sertão III Phase A were approved with the BNDES in December 2014. A tranche of R$ 215mn was released before the end of December, with a further R$ 85mn scheduled for released by the end of first quarter 2015, and disbursement of the rest as from second quarter 2015. The loans will be settled on the date of disbursement of the long-term financing from the Brazilian Development Bank (BNDES).

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3.19. New, R$ 500mn corporate debenture, to replace existing issue

On December 30, 2014 a new corporate debenture was issued in the amount of R$ 500.0mn. Proceeds were used for pre-payment of the existing debenture in the amount of R$ 370.8 mn, generating additional cash of R$ 129.2mn. This new debenture has the same remuneration as the one it replaces, tenor of 10 years, and three months’ grace period for payment of the principal, thus lengthening the Company’s debt profile.

4 – RENOVA’S POWER TRADING COMPANY

Renova created its energy trading company in 2012, to manage its portfolio and mitigate risks.

In full-year 2014 RC generated revenues of R$ 17.0mn, spent R$ 13.4mn on purchase of electricity and other costs, and reported a net loss of R$ 1.5 mn.

Renova Comercializadora (R$’000) 2014 2013 Change Net Revenue 17.032 - - Energy purchase (13.397) - - Other costs (5.181) (38) 13534,2% Financial results 4 - - Results (1.542) (38) 3957,9%

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5.1. Net operational revenue: up 34% in 2014, at R$ 302.9mn

5- CONSOLIDATED PROFIT AND LOSS ACCOUNTS

Net operational revenue in the year was R$ 302.9 mn, 34.0% higher than in 2014. The difference mainly reflects revenue from the generation capacity contracted in the 2010 LER Auction, after those plants came into commercial operation, on October 11, 2014.

During the period of test of the wind farms of the 2010 LER auction contract, the power generated was sold for the

spot price (Preço de Liquidação da Diferença, or PLD), generating revenue of R$ 41.2 mn. Between October 11 and

the end of the month, the power generated was sold at contract price, generating revenue of R$ 4.7 mn. The contract under the 2010 LER, with the CCEE, began to be accounted as from November 1.

Renova Energia S.A.

(R$’ 000) 2014 2013 Change

Net revenue – Small Hydro Plants 22.565 40.525 -44,3%

Net revenue – Wind farms 263.169 185.349 42,0%

Net revenue – Solar 101 137 -26,3%

Net revenue – Energy Trading 17.032 - -

Net operational revenue (NOR) 302.867 226.011 34,0%

R$ ’000 2014 2013 Change

Gross operational revenue 315.534 234.545 34,5%

(–) Taxes – PIS, Cofins and ICMS (12.667) (8.534) 48,4%

Net operational revenue (NOR) 302.867 226.011 34,0%

Non-manageable costs (14.220) (11.437) 24,3% Non-manageable costs (46.413) (18.154) 155,7% Depreciation (80.380) (68.449) 17,4% Operational profit 161.854 127.971 26,5% Administrative expenses (90.201) (38.392) 134,9% Administrative depreciation (1.808) (1.077) 67,9% Administrative expenses (60.060) (72.261) -16,9% Equity income (1.620) - -

Amortization of value added (23.222) - -

Gain / Loss on investments (5.259) - -

Income tax and Social Contribution tax (15.407) (9.970) 54,5%

Net profit (35.723) 6.271 -669,7%

Net margin -11,8% 2,8% -14,6 p.p.

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www.renovaenergia.com.br 14 In spite of the significant increase in the revenue from wind power, as mentioned above, there was a negative effect on total revenue as a result of the lower revenue coming from the SHPs (this effect does not include Brasil PCH). Two of Renova’s SHPs are part of the Energy Reallocation Mechanism (MRE), which makes an accounting reallocation of the total volume of electricity generated in the country, transferring the excess of those who generated more than their physical guarantee to those that generated less. Since the MRE generated less than the total physical guarantee in 4Q14, Renova made a provision for its share in the accounting adjustment of the amounts of the MRE and, since the Spot Price is high, the provision had a negative effect on the final profit/loss. There were also adjustments for the Colino II SHP, which is outside the MRE. The financial settlement of these amounts takes place only in the following year, after the accounting of the whole of the current year.

The net value of the financial adjustment for generation, which was negative for the SHPs and received a positive effect from the wind farms, was R$ 19,848 negative in the year. As mentioned above, every quarter a provision is made of the amount sold and the amount in fact generated, the difference being accounted as an item reducing or increasing revenue.

The revenue from trading in power supply in the year was R$ 17.0 mn.

5.2. Consolidated costs

Electricity production costs are separated into manageable, and non-manageable, components.

Non-manageable costs are: (i) The tariff for use of the distribution system (TUSD), for the use of the distribution system of Coelba, the concession holder to which the SHPs are connected, and the tariff for use of the transmission system (TUST), for the transmission lines and substations of the wind farms; and (ii) the inspection charge made by Aneel. These costs are related to the small hydro plants and the wind plants that are in operation.

Manageable costs are the costs of operation and maintenance of the SHPs of the subsidiary Energética Serra da Prata S.A. (‘ESPRA’) and of the wind farms in operation.

In the full year, non-manageable costs totaled R$ 14.2 mn, 24.3% more than in 2013, mainly reflecting the commercial startup of the 2010 LER wind complexes.

Manageable costs totaled R$ 46.4mn in the full year. Main factors in the higher figures than the previous year were:

• Payment for outsourced services R$ 19.8mn higher in the year, mainly reflecting: (i) payment of operation

and maintenance services for the rotors and the electrical balance of plant (BOP) of the 2009 LER auction, after expiry of the grace period of two years following delivery of the completed wind farms; and (ii) payment of services of preservation of machines in the wind farms of the 2010 LER and 2011 A–3 projects for the period in which they were not operating.

• Rentals and leasing costs R$ 3.9mn higher in the year, reflecting leasing of sites for the Alto Sertão III

complex, costs that did not exist in 2013.

(15)

• Other costs R$ 8.9mn lower in the year, principally due to reversal in 2014 of the provisions of R$ 4.6mn made in 2013 (R$ 1.3mn in 3Q13 and R$ 3.3mn in 4Q13), for a fine that could formally have applied to the 2010 LER wind farms. That provision was reversed after the approval by the regulator, Aneel, in April 2014, of synchronization of the generation contract with the awaited date of startup of the transmission lines.

Depreciation was R$ 80.4 mn in the year, vs. R$ 68.5 mn in 2013. The increase in the amounts reflects the start of operation of the 2010 LER wind farms.

5.3. Administrative expenses – consolidated

R$ ’000 2014 2013 Change

Personnel and managers 29.741 12.178 144,2%

Outsourced services 39.171 19.093 105,2%

Rentals and leasing 2.183 482 352,9%

Travel 4.937 1.594 209,7%

Projects discontinued 3.832 1.405 172,7%

Insurance 292 111 163,1%

Telephony and IT 4.339 1.694 156,1%

Materials for use and consumption 1.607 572 180,9%

Others 4.099 1.263 224,5%

Total (*) 90.201 38.392 134,9% *Excludes administrative depreciation.

Expenses in the full year were R$ 90.2 mn, an increase of R$ 51.8 mn from 2013, mainly on the following factors:

• Personnel and administration: The increase mainly reflects a larger number of employees – 281 on

December 31, 2014 compared to 223 a year before; and a larger provision and bonus payment.

• Outsourced services: R$ 20.1mn more than in 2013, reflecting higher expenses on consultants, including

consultancy in HR and sustainability; higher spending on legally-required advertising; and also higher institutional expenses – non-recurring.

• Rentals and leasing: Higher, due to new rentals for the São Paulo and Salvador offices.

• Travel: Higher mainly because of operational startup of the 2009 and 2010 LER wind farms, and events.

• Discontinued projects: The Company revises its portfolio of basic projects and inventories of SHPs quarterly

and in 2014 there were more write-offs than in 2013.

• Others: The higher figure mainly reflects the costs of Renova Comercializadora, primarily personnel

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5.4. Consolidated financial revenue (expenses)

R$ ’000 2014 2013 Change

Financial revenues 53.082 32.426 63,7%

Revenue from cash investments 52.871 32.070 64,9%

Other financial revenues 211 356 -40,7%

Financial expenses (113.142) (104.687) 8,1%

Costs of debt (103.959) (98.034) 6,0%

Other financial expenses (9.183) (6.653) 38,0%

Financial revenue (expenses) (60.060) (72.261) -16,9%

For the whole year, Renova reports net financial expenses of R$ 60.1 mn, 16.9% less than in 2013. This arises from the higher cash balance than in the previous, year, partially offset by the higher total of financings, and by the operational startup of the 2010 LER projects, causing financing costs to cease to be capitalized.

5.5. Equity gain (loss) in subsidiaries – Brasil PCH

Renova made the acquisition of 51% of Brasil PCH with the funds from the advance against future capital increase (AFAC), through a subsidiary, Chipley. Up to September 30, 2014 the Company owned 60% of Chipley – and after that date, 100%.

In 2014, Brasil PCH (100%-owned) reported net profit of R$ 4.9 mn. Chipley owns the right to 51% of the profit of Brasil PCH.

The total goodwill premium on the acquisition was R$ 656.7 mn. The Company identified and measured the fair value of the existing assets and liabilities of Brasil PCH based on the best existing estimate, and began to post the amount of the monthly amortization of goodwill in the month of the acquisition. The amortization of goodwill accounted in the full-year result (February to December) was R$ 32.6mn, in Chipley.

The following shows the effect of the acquisition of Chipley:

Brasil PCH (R$ ’000) Feb–Dec. 2014 Net revenue 202,325 Costs (38,464) Expenses (16,089) Depreciation (39,525)

Financial revenue (exp.) (94,321)

Income tax and Social

Contribution tax (9,041)

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Feb a Dec

Equity gain(loss) in subsidiary 2.491

Amortization of value added (32.592)

Operational result (72)

Financial result 211

IR e CSLL (33)

Results (29.996)

In Renova the effect of the acquisition is as shown in the table below.

Up to the end of September the Company consolidated 60% of Chipley, and in 4Q14 began to consolidate 100%

Feb a Dec

Equity gain(loss) in subsidiary (1.620)

Amortization of value added (23.222)

Results ¹ (24.843)

Gain / Loss on investments (5.259)

¹ Until September, Renova consolidated only the result of Chipley, which was R$ 7.9mn negative for the period February through September.

The loss on holdings in investments reflects the increase in ownership in the subsidiary Chipley, in which Renova owned 60% on September 30, and 100% as from October. Since the stockholders’ equity of Chipley on September 30, 2014 was R$ 13,145 negative, Renova recognized 40% of that amount as a loss on holding in an investment, generating an expense of R$ 5.3 mn.

5.6. Income tax, Social Contribution tax, Net profit/loss

Renova’s revenues from generation are taxed by the Presumed Profit method of tax reporting. Under this regime, the amount on which the tax is calculated is the sum of 8% of gross revenues arising from electricity generation and 100% of financial revenues. To this amount, Income Tax is applied, at the regular rates: 15% basic rate plus an additional 10% over a threshold figure. The Social Contribution tax is calculated, at its regular rate of 9%, on: 12% of gross revenues from electricity generation, plus 100% of financial revenues.

In 2014, income tax and the Social Contribution tax totaled R$ 15.4mn, compared to R$ 10.0mn in 2013.

This mainly reflected the change in the taxation of the SPCs of the 2010 LER projects, which began to be accounted by the Presumed Profit method, and as a result had their financial revenues taxed; also, they started commercial operation in 4Q14.

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5.7. EBITDA

R$ ’000 2014 2013 Change

Net operational revenue (NOR) 302.867 226.011 34,0%

Net profit (35.723) 6.271 -669,7%

(+) Income tax and Social Contribution tax 15.407 9.970 54,5%

(+) Depreciation 105.410 69.526 51,6% (+) Financial expenses 113.142 104.687 8,1% (–) Financial revenues (53.082) (32.426) 63,7% Ebitda 145.154 158.028 -8,1% Ebitda margin 47,9% 69,9% -22, p.p. (+) Equity income 1.620 - -

(+) Gain / Loss on investments 5.259

(+) SHPs financial adjustments 19.848 2.674 642,3%

(+) LER 2010 provision (4.464) 4.644 -

Adjusted Ebitda 167.417 165.347 1,3%

Adjusted Ebitda margin 55,3% 73,2% -17,9 p.p.

Adjusted Ebitda in full-year 2014 was R$ 167.4mn, with margin of 55.3%. The difference from 2013 mainly reflects: (i) higher administrative expenses due to higher expenditure on outsourced services, especially consultants, lawyers and personnel; (ii) higher manageable costs on purchase of electricity for resale and expenses on maintenance and operation; (iii) negative equity contribution from subsidiaries, due to amortization of goodwill for the acquisition of Brasil PCH; and (iv) the financial adjustment in generation – both the latter being reversed in adjusted Ebitda.

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6 – CASH FLOW

* In the cash flow statements, cash investments are classified as investing activities.

In full-year 2014 the Company’s cash was reduced by R$ 46.0 mn, on the following main elements:

• Net outflow of R$ 32.9mn from operations .

• Net inflow of R$ 1.242bn in financing activities, mainly comprising:

• inflow of R$ 810.4mn (updated value) in the capital increase;

• inflow of R$ 215mn, the first tranche, of the BNDES bridge loan;

• entry of R$ 73.0mn – the 1st_{series of the Renova Eólica Infrastructure Debenture (for Alto Sertão II); and}

• net inflow of R$ 129.2mn from the new corporate debenture that replaced the previous issue.

• Cash investments of R$ 7.4mn, in investment funds.

• R$ 1.262bn invested in construction of the Company’s wind farms.

132,598 (32.925) 1.242.176 7.417 (1.262.667) 86,599 509,018 595,617

Initial cash Operational Financing Cash Investments

(4Q14)*

Investments Final Cash Cash Investments

(total)

Availabilities (total)

2014 Cash Flow

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7.1. Main variations in assets

7 - MAIN INDICATORS FROM THE FINANCIAL STATEMENTS

On December 31, 2014, the total cash position (cash and cash equivalents + cash investments) was R$ 595.6mn. The difference in the cash balance from December 31, 2013 mainly comprised: net inflow of cash from the capital increase; inflow of cash from new financings, mainly the BNDES bridge loan for Alto Sertão III, the corporate debenture, and settlement of the first series of debentures of Renova Eólica (Alto Sertão II) – partially absorbed by conclusion of the works of Alto Sertão II, advances to suppliers for the projects already contracted, and progress on Alto Sertão III.

In non-current assets: the account of deposits was R$ 36.5mn higher than at December 31, 2013, reflecting the special reserve account, O&M, and service of debt under the contract with the BNDES, principally for the 2009 LER wind farms. The purpose of the reserve is to guarantee full payment of installments and principal of the long-term debt to the BNDES.

The Investments line refers to the investment in Chipley, the subsidiary that acquired the 51% equity interest in Brasil PCH.

12/31/2014 12/31/2013 12/31/2014 12/31/2013

Current Assets 692,655 441,615 Current Liabilities 517,165 1,380,939

Ca s h a nd ca s h equi v. 86,599 132,598 Loa ns a nd Fi na nci ng 355,442 1,100,134

Inves tments 509,018 241,449 Debentures 884 11,239

Cl i ents 68,627 20,923 Suppl i ers 100,200 242,418

Other 28,411 46,645 Others 60,639 27,148

Long-term Assets 4,849,587 3,230,564 Long-term Liabilities 2,515,436 1,290,640

Ca uções e Depós i tos 160,487 123,981 Loa ns a nd Fi na nci ng 1,917,051 953,855

Others 8,745 1,098 Debentures 572,315 325,028

713,312 - Other 26,070 11,757

Shareholder´s Equity 2,509,641 1,000,600

Ca pi ta l Stock 2,526,240 981,585

Fi xed As s ets i n Us e 2,175,130 1,459,662 Ca pi ta l Res erve 55,176 55,067

Fi xed As s ets i n Progres s 1,791,913 1,645,823 Reta i ned Los s es (71,775) (36,052)

Sources for future ca pi ta l

i ncrea s e - -

Total Assets 5,542,242 3,672,179 Total Liabilities 5,542,242 3,672,179 Balance Sheet

Amounts in R$ thousands

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Fixed assets in service was R$ 715.5mn higher than at December 31, 2013, due to the operational startup of the 2010 LER projects. During construction, Fixed assets under construction are accounted in Fixed assets in progress; after a wind farm starts operation it is accounted in Fixed assets in service.

7.2. Main variations in liabilities

At December 31, 2014 the balance was R$ 755.1mn lower than at December 31, 2013, due to settlement of the bridge loans and part of the Notes raised for Alto Sertão II, following the release of the long-term financing. This amount was, thus, removed from current liabilities to noncurrent liabilities.

In non-current liabilities, the Loans, financings and debentures line, in the full year, increase was R$ 1.211 bn, including both the effects of the fourth quarter and also the disbursement of the long-term financing for Alto Sertão II. In Stockholders’ equity, the main variation in the quarter was the transfer of the Advances against Capital Increase, paid in by Cemig GT, to Share capital. In the full year, the change of R$ 1.50.9bn was principally due to the increase in capital, detailed above in item 3.11.

7.2.1. Financings

The total of short and long-term loans and financings and debentures at the end of 2014 was R$ 2.859 bn¹, comprised as shown in this table, which gives tenors and rates:

Contract Tax R$ millin

BNDES Salvador Eólica TJLP + 1,92% 583,145

BNDES (subcrédito social) TJLP 4,258

BNDES Bahia Eólica TJLP + 2,18% 285,231

BNDES Renova Eólica TJLP + 2,45% 674,010

BNDES Renova Eólica TJLP + 2,60% 159,071

BNDES - Ponte I TJLP + 3,65%/2,50% 215,094

Itaú (NP - ponte) 100% CDI + 0,98% 256,598

BNB² 9,5% a.a. 96,635

Debêntures - 3ª emissão Holding 123,45% CDI 500,269

Debêntures 1ª Série - Renova Eólica IPCA + 7,60% a.a. 74,343

Finep - CEOL Itaparica 3,5% a.a. 6,356

Total debt 2,859,032

Funding cost (13,340)

End. líquido dos custos 2,845,692

Availabilities 509,018 357.179 336.687 124.457 196.332 194.133 1.650.244 2.859.032 until 12 months 2016 2017 2018 2019 After 2019 Total

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¹ The total represents the amount accounted, plus the interest generated, without considering the funding costs of the transactions. ² The financings have interest rates of 9.5% p.a. (which may be reduced to 8.08% under a 15% non-default bonus).

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8 - STOCK PRICE: RNEW11 ON THE BM&FBOVESPA

This chart compares the stock price of RNEW11, the Bovespa index and the Brazilian electricity index, in the last 12 months. Source: Bloomberg. 10,00 20,00 30,00 40,00 50,00

Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

RNEW11

100,00 200,00 300,00 400,00 500,00 Ju l-1 0 Se p -1 0 N o v-1 0 Ja n -1 1 M a r-1 1 M a y-1 1 Ju l-1 1 Se p -1 1 N o v-1 1 Ja n -1 2 M a r-1 2 M a y-1 2 Ju l-1 2 Se p -1 2 N o v-1 2 Ja n -1 3 M a r-1 3 M a y-1 3 Ju l-1 3 Se p -1 3 N o v-1 3 Ja n -1 4 M a r-1 4 M a y-1 4 Ju l-1 4 Se p -1 4 N o v-1 4 Ja n -1 5

RNEW11 x IBOVESPA x IEE

RNEW11 IBOV IEE

R$ 34.90 30/01/15

(24)

www.renovaenergia.com.br 24 With the tools of the Company’s website and the constant relationship with stockholders and potential investors at public events and events organized by investment banks, Renova’s Investor Relations Department seeks to operate in a transparent relationship with the market, updating investors on its positioning, its projects under development and its outlook.

The company’s information and publications can be accessed on our website (www.renovaenergia.com.br), which also carries leading news on the sector that could be relevant to our business plan.

9 – STOCKHOLDING STRUCTURE

Base date: January 31, 2015.

¹ Shares held by RR Participações outside the controlling block.

On January 31, 2015 the share capital of Renova was constituted as follows:

RENOVA ENERGIA ON shares PN shares Total shares

236,845,392 81,810,030 318,655,422

For calculation of market share the total number of shares of Renova is divided by three (due to its trading in units – one common share and two preferred shares), and multiplied by the price of the security RNEW11 on the date in question.

RNEW11¹ In R$

IPO (July 2010) 11.67

Close of January 30, 2015 34.60 Highest price since IPO: 50.00 Appreciation since IPO 221.2%

Appreciation, LTM –23.5% Appreciation in 2014 –23.5% Controlling Block 79.6% ON shares 59.1% total shares RR

Participações Light Energia Cemig GT

RR

Participações1 BNDESPAR FIP InfraBrasil

FIP Caixa Ambiental Others 21,4% ON 0,0% PN 15,9% total 3,9% ON 22,8% PN 8,8% total 4,9% ON 28,5% PN 11,0% total 2,3% ON 13,4% PN 5,1% total 5,8% ON 33,7% PN 13,0% total 3,5% ON 1,6% PN 3,0% total 21,4% ON 0,0 % PN 15,9% total 36,8% ON 0,0% PN 27,3% total

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10 - GLOSSARY

Alto Sertão I 14 wind farms owned by Renova in the interior of Bahia State, with installed capacity of 294.4 MW, which contracted electricity sales in the 2009 Reserve Energy auction (LER).

Alto Sertão II 15 Renova wind farms in the interior of Bahia State, with installed capacity of 386.1 MW, which contracted electricity sales in the Reserve Energy (LER) Auction of 2010 and the A–3 Auction of 2011.

Alto Sertão III 40 Renova wind farms in the interior of Bahia, which sold supply in the 2012 (A–5) LEN Auction, in the 2013 LER auction, and in the Free Market, with total installed capacity of 736.8MW.

Alto Sertão III Phase A 23 Renova wind farms in the interior of Bahia with installed capacity of 411.0MW, which sold power supply in the 2012 (A–5) LEN auction, the 2013 LER auction, and in the Free Market.

Aneel Brazil’s electricity regulator (Agência Nacional de Energia Elétrica – National Electricity Agency).

A–3 or A–5 Auctions “New-build auctions” – to contract supply starting respectively 3 and 5 years ahead.

CCEE The Electricity Trading Chamber (Câmara de Comercialização de Energia Elétrica): Brazil’s

Wholesale Electricity Market.

ESPRA The company Energética Serra da Prata S.A., indirect subsidiary of Renova and holder and

operator of Renova’s three Small Hydro Plants.

Free Market Contracting environment in which prices are freely negotiated between the consumer and

the generating agent or trader.

ICB Cost-Benefit Index(Índice Custo Benefício) calculated by Aneel for new-build auctions.

ICSD Debt servicing coverage index (Índice de Cobertura do Serviço da Dívida).

LEN ‘New-build’ auction: Auction to contract energy supply to be provided by facilities yet to be built (Leilão de Energia Nova – ‘New Electricity Auction’).

LER A “Reserve Capacity” auction (Leilão de Energia de Reserva – Reserve Energy Auction).

Mercado Livre I A Renova wind farm with installed capacity of 21.6MW, in the interior of Bahia State, which sold power supply in the Free Market.

Mercado Livre II A group of eight Renova wind farms in the interior of Bahia, with installed capacity of 101.4MW, which sold power supply in the Free Market.

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GLOSSARY (Page 2 of 2)

Mercado Livre III A Renova wind farm in the interior of Bahia with installed capacity of 32.4 MW, which sold power supply in the Free Market.

MCPSE “Electricity Sector Assets Property Management Manual” (Manual de Controle Patrimonial

do Setor Elétrico).

MRE Electricity Reallocation Mechanism (Mecanismo de Realocação de Energia).

O&M Operation and maintenance.

P50 An estimate of average electricity output for which the possibility of its being exceeded in the long term is estimated at 50%. Regarded as an average estimate for electricity production.

P90 An estimate of average electricity output for which the possibility of its being exceeded in the long term is estimated at 90%. Regarded as a conservative estimate for electricity production.

PCHs SHPs – Small Hydroelectric Plants (Pequenas Centrais Hidrelétricas, in Portuguese).

PLD The Spot Market Price (Preço de Liquidação das Diferenças – ‘Differences Settlement Price’), published weekly by the CCEE.

PPA Power Purchase Agreement – contract to buy power supply.

Proinfa The Program to Encourage Alternative Sources of Electric Power (Programa de Incentivos

às Fontes Alternativas de Energia).

Regulated market Contracting environment in which the tariffs practiced are laid down by the regulator, Aneel.

SHPs Small Hydro Plants – In Portuguese, ‘PCHs’ (q.v.)

SPC Special-purpose company (in Portuguese, Sociedade de Propósito Específico or ‘SPE’).

In accordance with CVM Instruction 381 (of January 14, 2003), the Company reports that it has signed a contract with Deloitte Touche Tohmatsu Auditores Independentes (‘Deloitte’) to provide services of auditing of the accounting and financial statements of the Company and its subsidiaries.

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Individual and Consolidated

Financial Statements

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2

CONTENTS

(Page)

Balance sheets ... 3 Income statements ... 5 Statements of comprehensive income ... 6 Statements of changes in equity ... 7 Statement of cash flows ... 8 Statements of value added ... 9

NOTES TO THE FINANCIAL STATEMENTS

1. General information ... 10 2. Basis of preparation ... 17 3. Basis of consolidation ... 25 4. Authorizations ... 26 5. Power sale ... 27 6. Segment reporting ... 28 7. Cash and cash equivalents and short-term investments ... 30 8. Trade receivables ... 30 9. Recoverable taxes ... 31 10. Advances to suppliers ... 31 11. Collaterals and restricted deposits ... 31 12. Deferred taxes ... 33 13. Investments ... 34 14. Property, plant and equipment ... 47 15. Trade payables ... 54 16. Borrowings, financing and debentures ... 55 17. Taxes payable ... 62 18. Accounts payable / receivable - CCEE/Eletrobras ... 63 19. Provision for civil, tax and labor risks ... 64 20. Provision for environmental costs ... 65 21. Equity and shareholders’ compensation ... 65 22. Net revenue ... 69 23. Costs and expenses ... 70 24. Finance income (costs) ... 71 25. Income tax and social contribution ... 72 26. Related-party transactions ... 73 27. Financial instruments and risk management... 77 28. Earnings per share ... 86 29. Insurance coverage ... 86 30. Commitments ... 87 31. Non-cash transactions ... 88 32. Events after the reporting date ... 88

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BALANCE SHEETS

As of December 31, 2014

In thousands of Brazilian reais - R$

ASSETS Note 12/31/2014 12/31/2013 12/31/2014 12/31/2013

CURRENT ASSETS

Cash and cash equivalents 7 86,599 132,598 28,598 110,686

Short-term investments 7 509,018 241,449 171,027

-Trade receivables 8 68,627 20,923 - 1

Accounts receivable - CCEE 18 199 - -

-Recoverable taxes 9 15,064 10,751 8,476 7,327

Prepaid expenses 721 2,338 219 1,480

Collaterals and restricted deposits 11 40 27,231 40 40

Dividends receivable 13.4 - - 539 20,452

Advances to suppliers 10 8,575 5,065 6,033 3,261

Other receivables 3,812 1,260 4,118 1,260

Total current assets 692,655 441,615 219,050 144,507

NONCURRENT ASSETS

Accounts receivable - CCEE 18 6,100 - -

-Related parties 26 - - 55,063 26,589

Collaterals and restricted deposits 11 160,487 123,981 - 451

Deferred taxes 12 2,495 948 -

-Other receivables 150 150 115 115

Investments 13 713,312 - 1,973,507 982,779

Property, plant and equipment 14 2,175,130 1,459,662 30,285 14,614

Construction in progress 14 1,791,913 1,645,823 758,554 193,086

Total noncurrent assets 4,849,587 3,230,564 2,817,524 1,217,634

TOTAL ASSETS 5,542,242 3,672,179 3,036,574 1,362,141

The accompanying notes are an integral part of these financial statements.

Parent Consolidated

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4

BALANCE SHEETS

As of December 31, 2014

EQUITY AND LIABILITIES Note 12/31/2014 12/31/2013 12/31/2014 12/31/2013 CURRENT LIABILITIES

Trade payables 15 100,200 242,418 10,989 2,273 Borrowings and financing 16 355,442 1,100,134 - -Debentures 16 884 11,239 217 11,239 Taxes payable 17 17,561 7,549 3,002 1,450 Payroll and related taxes 13,974 8,465 13,974 8,465 Accounts payable - CCEE/Eletrobras 18 22,339 8,936 - -Provision for social and environmental costs 20 6,686 2,016 - -Other payables 79 182 33 12 Total current liabilities 517,165 1,380,939 28,215 23,439 NONCURRENT LIABILITIES

Borrowings and financing 16 1,917,051 953,855 - -Debentures 16 572,315 325,028 498,639 325,028 Deferred taxes 12 424 - - -Accounts payable - CCEE/Eletrobras 18 15,627 11,670 - -Related parties 26 - - - 12,987 Provision for social and environmental costs 20 9,940 - - -Provision for civil, tax and labor taxes 19 79 87 79 87 Total noncurrent liabilities 2,515,436 1,290,640 498,718 338,102

EQUITY 21

Capital 2,567,997 1,017,697 2,567,997 1,017,697 (-) Costs on issuance of shares (41,757) (36,112) (41,757) (36,112) Capital reserve 55,176 55,067 55,176 55,067 Accumulated losses (71,775) (36,052) (71,775) (36,052) Total equity 2,509,641 1,000,600 2,509,641 1,000,600

TOTAL LIABILITIES AND EQUITY 5,542,242 3,672,179 3,036,574 1,362,141

Parent Consolidated

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INCOME STATEMENTS

As of December 31, 2014

Note 12/31/2014 12/31/2013 12/31/2014 12/31/2013

NET OPERATING REVENUE 22 302,867 226,011 101 136 COST OF SERVICES

Depreciation 14 (80,380) (68,449) (2,305) (1,536) Operating costs (46,413) (18,154) (54) (137) Charges on use of distribution system (14,220) (11,437) - -Total 23 (141,013) (98,040) (2,359) (1,673) GROSS PROFIT (LOSS) 161,854 127,971 (2,258) (1,537) INCOME (EXPENSES)

General and administrative (87,529) (38,306) (72,058) (29,764) Depreciation and amortization 14 (1,808) (1,077) (1,796) (1,070) Other expenses (2,672) (86) (1,436) (1,300) 23 (92,009) (39,469) (75,290) (32,134) Share of profit (loss) of subsidiaries 13.3.1 (24,842) - 42,288 43,733 Loss on gain of equity interest 13.3.1 (5,259) - (5,259) -Total (122,110) (39,469) (38,261) 11,599 PROFIT (LOSS) FROM OPERATIONS BEFORE

FINANCE INCOME (COSTS) 39,744 88,502 (40,519) 10,062 FINANCE INCOME (COSTS)

Finance income 53,082 32,426 33,640 21,713 Finance costs (113,142) (104,687) (28,844) (26,247) Total 24 (60,060) (72,261) 4,796 (4,534) (LOSS) PROFIT BEFORE

INCOME TAX AND SOCIAL CONTRIBUTION (20,316) 16,241 (35,723) 5,528 Income tax and social contribution - current (15,925) (9,994) -

-Income tax and social contribution - deferred 12 518 24 -

-Total 25 (15,407) (9,970) -

-(LOSS) PROFIT FOR THE YEAR (35,723) 6,271 (35,723) 5,528

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6

STATEMENTS OF COMPREHENSIVE INCOME

As of December 31, 2014

12/31/2014 12/31/2013 12/31/2014 12/31/2013

(Loss) profit for the year (35,723) 6,271 (35,723) 5,528

Other comprehensive income - - -

-TOTAL COMPREHENSIVE INCOME FOR THE YEAR (35,723) 6,271 (35,723) 5,528

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STATEMENTS OF CHANGES IN EQUITY

As of December 31, 2014

Reserve of benefits to

employees Funds

Cost on settled with for future Total Reversal of Total issuance equity Accumulated capital parent´s deferred consolidated Note of shares instruments Goodwill losses increase equity charges equity

BALANCES AT DECEMBER 31, 2012 1,017,557 (36,112) 52,274 1 (41,580) - 992,140 (743) 991,397 Capital increase - issuance of shares 21.b 140 - - - - - 140 - 140 Recognition of share-based payment 26.4 - - 2,792 - - - 2,792 - 2,792 Profit for the year 2.2 - - - - 5,528 - 5,528 743 6,271

BALANCES AT DECEMBER 31, 2013 1,017,697 (36,112) 55,066 1 (36,052) - 1,000,600 - 1,000,600

Funds for future capital increase 21.b - - - - - 1,550,072 1,550,072 - 1,550,072 Capital increase - issuance of shares 21.b 228 - - - - - 228 - 228 Recognition of share-based payment 26.4 - - 109 - - - 109 - 109 Loss for the year - - - - (35,723) - (35,723) - (35,723) Costs on issuance of shares 21.c - (5,645) - - - - (5,645) - (5,645) Capitalization of funds for future capital increase 21.b 1,550,072 - - - - (1,550,072) - -

-BALANCES AT DECEMBER 31, 2014 2,567,997 (41,757) 55,175 1 (71,775) - 2,509,641 - 2,509,641

Capital Capital reserve

(34)

STATEMENT OF CASH FLOWS

As of December 31, 2014

Note 12/31/2014 12/31/2013 12/31/2014 12/31/2013 CASH FLOWS FROM OPERATING ACTIVITIES

(Loss) profit for the year (35,723) 6,271 (35,723) 5,528 Adjustments to reconcile (loss) profit to

cash (used in) provided by operating activities:

Depreciation 14, 23 82,188 69,526 4,100 2,606 Finance charges on intragroup loans (net) 24 - - (670) (1,019) Residual value of fixed assets disposed of 14 4,008 1,418 4,008 1,418 Interest on debentures and borrowings 16.4 110,012 98,034 27,314 24,588 Recognition of costs on debentures and borrowings 16.4 1,061 1,030 406 414 Interst on short-term investments and collaterals (33,435) (12,071) (13,047) -Provision CCEE/Eletrobras, net 18.1 15,212 7,863 - -Deferred taxes 12 (1,123) (42) - -Expense on share-based payment 26.4 109 - 109 -Accrued bonuses 10,594 6,643 10,594 6,643 Loss (gain) on equity interests 13.3 5,259 - 5,259 -Share of profit (loss) of subsidiaries 13.3 24,842 - (42,288) (43,733) (Increase) decrease in operating assets:

Trade receivables (47,704) 386 1 156 Recoverable taxes (4,313) (3,656) (1,149) (691) Advances to suppliers (3,510) (755) (2,772) (515) Prepaid expenses 1,617 (194) 1,261 (1,302) Contas a receber - CCEE - - - -Other receivables (2,560) (351) (2,866) (350) Increase (decrease) in operating liabilities:

Trade payables 20,998 12,071 8,716 (3,342) Taxes payable 18,021 11,035 1,552 (549) Payroll and accrued vacation (5,085) 276 (5,085) 276 Accounts payable - CCEE / Eletrobras 18.1 (4,151) (2,909) - -Other payables (95) 174 29 (8) Payment of income tax and social contribution (8,009) (9,925) - -Payment of interest on borrowings and financing 16, 31 (192,624) (62,086) (81,183) -Indeminities paid 19 (8) - (8) -Dividends received 13.4 11,494 - 35,879 11,920 Net cash (used in) provided by operating activities (32,925) 122,738 (85,563) 2,040

CASH FLOWS FROM INVESTING ACTIVITIES

Capital contribution in investees 13, 31 - - (180,645) (184,159) Short-term investments (244,474) (235,174) (157,981) -Collaterals and restricted deposits 7,417 (33,450) 452 -Purchase of property, plant and equipment 14, 31 (776,572) (980,965) (620,389) (136,289) Payment of property, plant and equipment purchased in prior years (226,657) (153,685) - -Intragroup loans - granted - - (56,458) (707) Intragroup loans - received - - 29,082 45,997 Net cash used in investing activities (1,240,286) (1,403,274) (985,939) (275,158)

CASH FLOWS FROM FINANCING ACTIVITIES

Payment of shares 21.b 810,357 140 810,357 140 Costs on issuance of shares 21.c (5,645) - (5,645) -Borrowings and financing 16, 31 958,525 1,152,752 500,000 -Costs on debentures and borrowings 16 (3,149) (171) - (171) Borrowings repaid 16, 31 (517,912) (347,709) (301,883) -Intragroup loans - receivable - - 64 119 Intragroup loans - payable - - (13,479) (290) Mútuo com partes relacionadas - concedidos - - - Net cash provided by (used in) financing activities 1,242,176 805,012 989,414 (202) Effect on cash and cash equivalents

due to increase in equity interest in investee 13.3.1 (14,964) - - -DECREASE IN CASH AND CASH EQUIVALENTS (45,999) (475,524) (82,088) (273,320) Cash and cash equivalents at beginning of year 132,598 608,122 110,686 384,006 Cash and cash equivalents at end of year 86,599 132,598 28,598 110,686 DECREASE IN CASH AND CASH EQUIVALENTS (45,999) (475,524) (82,088) (273,320)