OREANDA-NEWS. ENEVA - the largest private thermal energy generator in Brazil - informs that it will present to the National Electric Energy Agency (Aneel), in the coming days, a revised proposal to adjust power supply obligations of the ParnaЁЄba II.

The company considers that the parameters indicated by Aneel on the board meeting today are close to the minimum conditions needed to maintain the economic feasibility of the ParnaЁЄba II project. The agency rejected the previous proposal submitted by ENEVA and provided the company the possibility to present an adjusted proposal.

The terms and conditions proposed by Aneel comprise the following items:

The completion of the construction of ParnaЁЄba II until December, 2014;

The postponement of the start date of the Power Purchase Agreements (PPAs) in the Regulated Market to July 1st, 2016, or the date when the plant is granted authorization for commercial operation, whichever occurs first;

A penalty amounting to a total of BRL 310 million to be paid in instalments through the reduction in annual fixed revenues over the term of plant's PPAs; and

Renewal of execution guarantees in the amount of BRL 60 million until July, 2016.

Additionally, the company should commit to close the cycle of the four gas turbines of the ParnaЁЄba I thermal power plant in up to five years, subject to certain conditions precedent, including the sale of energy in the regulated market and the ability to secure long-term financing for the project.

Ratification of a final agreement with Aneel will also consider a satisfactory development of ongoing commercial discussions with ParnaЁЄba GЁўs Natural (PGN) in the next few days.

ENEVA and PGN are working together in order to optimize the natural gas production considering the current high thermoelectric dispatch scenario in Brazil, including, among other measures, managing existing wells, drilling additional ones and accelerating production at other discovered fields, which approved for commercial production by ANP - Brazil's National Oil, Gas and Biofuels Regulatory Agency.

ParnaЁЄba II

ParnaЁЄba II will have capacity to generate 518 MW from natural gas. When the plant becomes operational, it will offer to the Brazilian electric system the cheapest thermoelectric power in Brazil, with Unit Value Cost (CVU) of BRL 59/MWh.

The ParnaЁЄba Complex, which is a pioneer in Brazil by integrating natural gas production to power generation, comprises the thermoelectric plants ParnaЁЄba I, ParnaЁЄba II, ParnaЁЄba III and ParnaЁЄba IV. The plants ParnaЁЄba I (676 MW), ParnaЁЄba III (176 MW) and ParnaЁЄba IV (56 MW) are currently in operation, providing 908 MW to the country.

ABOUT ENEVA

ENEVA is a power generation and trading company, with complementary businesses in natural gas exploration and production. The Company currently has approximately 2.4 GW of gross installed capacity in operation and is building over 518 MW of additional capacity, which places it among the largest private power generation companies in Brazil. ENEVA also owns an interest in natural gas onshore blocks in the ParnaЁЄba Basin.