AFLT3 Afluente Transmissão de Energia Elétrica

Afluente Transmissão de Energia Elétrica S.A. is a publicly traded company incorporated on August 18, 2008, originally under the name Imanisse Participações S.A. Its creation is directly linked to the unbundling process of the Brazilian electricity sector, structured by Law No. 10,848 of March 15, 2004, which mandated the segregation of generation, transmission and distribution activities that had previously been concentrated within vertically integrated companies. In this context, the transmission assets of Companhia de Eletricidade do Estado da Bahia (Coelba) were separated and allocated to a specific structure, initially in Afluente Geração e Transmissão de Energia Elétrica S.A., and then spun off, giving rise to the current Afluente Transmissão de Energia Elétrica S.A. The corporate reorganization and the transfer of concessions were authorized by the Brazilian Electricity Regulatory Agency (ANEEL) through specific resolutions, culminating in the execution of Concession Contract No. 001/2010, which governs the provision of public electricity transmission services by the company until August 2027.

The capital stock of Afluente Transmissão de Energia Elétrica, whose common shares are traded on B3 under ticker AFLT3, is majority-owned by Neoenergia S.A., which consolidated a controlling stake of over 90% after corporate moves involving Caixa de Previdência dos Funcionários do Banco do Brasil (Previ) and Eletronorte. The remaining interest is held by Iberdrola Energia S.A. and the free float on the stock exchange. Its recent trajectory includes share purchase and swap transactions aimed at simplifying the corporate structure within the Neoenergia group and the Eletrobras group, all subject to the consent of regulatory bodies such as ANEEL and the Administrative Council for Economic Defense (CADE), as well as creditors and other relevant stakeholders. These transactions reinforce Afluente T’s role as a regional transmission vehicle within a larger electric utility conglomerate.

Afluente Transmissão de Energia Elétrica’s core activities are entirely focused on high-voltage electricity transmission. Its corporate purpose covers studies, planning, design, construction, operation, maintenance and operation of transmission systems, including lines, substations and control centers, as well as associated infrastructure. The company is compensated through an Allowed Annual Revenue (RAP), defined in the concession contract and regulated by ANEEL, with annual adjustment by the IGP-M inflation index and periodic tariff reviews every five years. The financial statements show that 100% of net revenue comes from the transmission segment, with no material diversification into generation, distribution or trading of electricity. The business model is based on regulated assets, with low exposure to the volume of energy transported and greater revenue predictability derived from the availability of facilities.

Afluente T’s operating infrastructure is entirely located in the state of Bahia, integrated into the Basic Network of the National Interconnected System (SIN). The company operates eight 230 kV substations – including Tomba, Funil, Brumado II, Itagibá, Ford, Pólo and Camaçari – with total installed capacity of approximately 600 MVA. In addition to the substations, it manages about 489 km of 230 kV transmission lines, interconnecting points such as Itagibá, Funil, Brumado II, Ford, Pólo, Camaçari IV, Tomba, Governador Mangabeira and Poções II. Over the years, these assets have been expanded and upgraded, as approved by ANEEL through authorizing resolutions, including busbar reconfiguration at substations, implementation of new circuits and voltage uprating of specific sections, with incremental impacts on the company’s RAP.

From an economic and operational standpoint, Afluente Transmissão de Energia Elétrica operates in a segment characterized as a natural monopoly, in which each concession covers a specific area and set of assets, with no direct competition between transmission companies along the same stretch of the grid. Access to transmission facilities is regulated and guaranteed to all agents that produce or consume energy, by means of standardized contracts managed by the National Electric System Operator (ONS), such as Transmission Service Agreements (CPST), Transmission System Usage Agreements (CUST) and connection agreements. The company’s remuneration is composed of transmission system usage charges and connection charges, paid by distributors, generators, free consumers and other users connected to the Basic Network, in accordance with tariff rules and procedures established by ANEEL and implemented by ONS and by the Electric Energy Trading Chamber (CCEE).

Afluente T’s client base is concentrated in a few regulated agents, reflecting the very structure of the transmission sector. There is a record of a single client accounting for more than 10% of annual net revenue, with a share ranging from about one quarter to one third of revenue in recent fiscal years. Despite this concentration, revenues arise from regulated and standardized contracts, in which the counterparty is typically a key player in the interconnected electricity sector, such as distributors or large consumers connected to the high-voltage grid. There is no exposure to foreign markets, with 100% of revenue generated from operations in Brazil, and the company is not subject to foreign regulation in its activities.

The regulatory environment in which Afluente Transmissão de Energia Elétrica operates is complex and involves multiple state institutions. The Ministry of Mines and Energy (MME) sets policies and guidelines for the electricity sector, while ANEEL regulates and supervises concessions, revenues, quality standards and investments in upgrades and improvements. ONS coordinates the operation of the National Interconnected System, non-discriminatory access to the grid and the contracting of transmission services. The National Council for Energy Policy (CNPE), the Electric Sector Monitoring Committee (CMSE), the CCEE and the Energy Research Company (EPE) also play structural roles in planning, supply security, commercialization and the expansion of the generation matrix and transmission grid. Afluente T’s activity is therefore strongly influenced by regulatory decisions, periodic tariff reviews, access rules and system planning.

On environmental, social and corporate governance (ESG) topics, Afluente Transmissão de Energia Elétrica is included within Neoenergia’s reporting structure. Sustainability performance is disclosed annually in a report that consolidates financial and non-financial information, prepared in accordance with Global Reporting Initiative (GRI) standards, Sustainability Accounting Standards Board (SASB) standards for the electric utilities sector, Dow Jones Sustainability Index recommendations and ANEEL guidelines for social and environmental reports. Since 2021, the report has also incorporated the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), later aligned with IFRS S1 and S2 standards issued by the International Sustainability Standards Board (ISSB). The document is subject to internal governance processes, including internal audit, with independent assurance provided by Deloitte Touche Tohmatsu Auditores Independentes, as well as review by sustainability and audit committees and by the board of directors. The ESG strategy prioritizes topics such as climate change, system efficiency and reliability, working conditions, relationships with local communities, corporate culture, supplier management and cybersecurity, in alignment with the UN Sustainable Development Goals, especially SDGs 7 and 13.

Afluente T’s activities in power transmission do not involve electricity generation, but depend on integration with various types of generation, such as hydroelectric, thermal, wind, solar and biomass plants that inject energy into the SIN. The company’s role is to enable, at high voltage, the flow of large blocks of energy between generation areas and consumption centers, contributing to the balance between regions with different hydrological regimes and demand profiles. After the lines and substations are commissioned, operating activity focuses on operation and maintenance, involving engineering services, electromechanical materials and equipment, as well as spare parts and specialized inputs. The company states that, together with suppliers, it seeks more efficient operation and maintenance solutions, without, however, presenting critical dependence on a narrow group of providers, within a supply context under the integrated logic of the Brazilian electric system.

AFLT3 shares, traded on B3, represent an interest in a transmission utility whose operations are concentrated in basic-grid assets in Bahia, focused on long-term concession contracts and regulated revenues based on Allowed Annual Revenue. The combination of strong sector regulation, revenue concentration in the transmission segment and integration into a larger economic group shapes the business’s risk and return profile within the structure of Brazil’s post-unbundling electricity sector.