The transaction, valued in about BRL 1.2 billion, includes the assets Jalapão, Santa Luzia, Dourados, Atibaia, Biguaçu, Sobral, Narandiba and Rio Formoso, as well as a framework agreement for joint participation in future auctions

Neoenergia entered into an agreement, on this Tuesday (25), with GIC, a leading global institutional investor, for the sale of 50% of equity interest in eight power transmission assets that are in operation. The assets – Jalapão, Santa Luzia, Dourados, Atibaia, Biguaçu, Sobral, Narandiba and Rio Formoso – have a total of 1,865 kilometers of transmission lines. The purchase price is estimated at around BRL 1.2 billion, subject to customary price adjustments. A transmission holding company will be formed to hold the operational assets.

GIC will also have a right of first offer in connection with the potential future sale of 50% of equity interest in the power transmission assets under construction by Neoenergia – Itabapoana, Guanabara, Vale do Itajaí, Lagoa dos Patos, Morro do Chapéu, Estreito, Alto do Parnaíba and Paraíso – which cover 6,089 kilometers of lines. The same rights shall also apply to Potiguar Sul, totaling 6,279 kilometers of lines.

Pursuant to the agreement, the assessment of 100% of the company’s assets would be approximately BRL 2.4 billion. It is worth mentioning that Neoenergia will no longer consolidate the operational assets’ debt, considered within the transaction scope.

Following closing of the transaction, Neoenergia will continue to provide operation and maintenance services, as well as other corporate services to the operational assets.

In addition, Neoenergia and GIC executed a framework agreement for the joint participation in the upcoming power transmission auctions in Brazil, including the auction expected to occur on June 30^th.

“For Neoenergia, it is a great pride to enter into this partnership with an internationally recognized partner such as GIC. This transaction confirms Neoenergia's operational excellence and recognizes the company's good allocation of capital in recent years. It also reinforces our commitment to our strategy of recycling assets and optimizing results for our shareholders,” says Eduardo Capelastegui, Neoenergia’s Chief Executive Officer.

“GIC is pleased to invest in Brazil's growing power transmission market, an essential part of decarbonization and electrification efforts in the country. We look forward to working alongside Neoenergia's strong management team and leveraging their deep knowledge and local capabilities to build on the platform's considerable growth opportunities over the long term,” says Ang Eng Seng, GIC’s Chief Investment Officer for Infrastructure.

The transaction is still subject to customary conditions precedent, which include prior approval of governmental authorities and certain third parties and is expected to be concluded in the second half of this year.

Assets:

The eight operational assets have Annual Permitted Revenues (RAP) of approximately BRL 430 million and an average concession term of 25 years.

In addition to the operational assets, GIC will have certain rights in connection with the potential sale of another eight assets under construction and Potiguar Sul. The total RAP of these assets is equivalent to approximately BRL 1.3 billion.