AXIA3 Axia Energia

Axia Energia, whose shares are traded on B3 under the tickers AXIA5, AXIA7, AXIA6 and AXIA3, corresponds, in the context of the Reference Form analyzed, to the corporate and operational structure of Centrais Elétricas Brasileiras S.A. – Eletrobras. The company was created based on a proposal made in 1954 and was officially incorporated on June 11, 1962, initially as a mixed-capital company. Since its inception, it has been tasked with studying, designing, building and operating power plants, transmission lines and power distribution assets, as well as carrying out the commercial activities resulting from these operations. Over the decades, it has played a central role in implementing the country’s electric power policy, especially after the 1960s, when several sector laws reinforced its responsibility for expanding energy supply. Among its historical milestones are the creation of regional subsidiaries, participation in Itaipu Binacional and the subsequent entry into the distribution segment through the federalization of state-owned concession holders, which were later privatized between 2018 and 2019 under the National Privatization Program.

The recent trajectory of the company linked to Axia Energia has been marked by a broad corporate reorganization process and a change in control. In 2017, the Ministry of Mines and Energy expressed its intention to privatize Eletrobras, resulting in the submission to the National Congress of Bill No. 5,877/2019. In 2022, the capital increase transaction via a public offering of common shares and ADRs was approved at a shareholders’ meeting, carried out simultaneously in Brazil and in the United States, with registration with the CVM and the SEC. The offering led to a dispersed shareholding structure, so that the company ceased to be a mixed-capital corporation and began to have widely held private capital. This process was accompanied by internal reorganizations, such as the creation of CGT Eletrosul in 2020, the transfer and merger of generation and transmission assets, the merger of Furnas as of July 2024 and the approval, in April 2025, of the merger of Eletropar, with the goal of simplifying the corporate structure and unlocking value levers. There was also the decision to delist the shares from Latibex in 2025, concentrating trading mainly on B3 and the NYSE.

The business model associated with Axia Energia is based on three major fronts: power generation, transmission and commercialization, with some activities related to administration and equity management. The company conducts studies, projects, construction and operation of power plants and extensive high- and extra-high-voltage transmission networks, and it enters into power purchase and sale agreements in the regulated environment and, increasingly, in the free market. It also promotes and supports research in the energy sector, focusing on alternative generation sources, rational and sustainable energy use and the implementation of smart grids. In the fiscal year ended December 31, 2024, consolidated net operating revenue reached R$ 40.18 billion, of which 59.69% came from the generation segment and 42.07% from the transmission segment, with a small share attributed to administrative services and intersegment eliminations. This revenue split highlights the simultaneous relevance of generation and transmission within the group, which positions itself as an integrated electric infrastructure platform.

In generation, the company behind the tickers AXIA5, AXIA7, AXIA6 and AXIA3 is the largest power generator in Brazil, according to ANEEL data, with an installed capacity of 44,246 MW, representing about 21% of the country’s total installed capacity. In 2024, it operated 87 generation projects – hydro, wind, solar and thermal – across 20 states and the Federal District, including wholly owned plants and interests in special purpose entities. Approximately 97% of installed capacity comes from low-greenhouse-gas-emission sources, reflecting a strong predominance of hydropower generation. This segment alone accounted for R$ 23.98 billion in net revenue in 2024. The company has been adjusting its asset base, selling specific wind and thermal assets and bringing new wind farms into operation, resulting in a net reduction of 408.8 MW of installed capacity in 2024. Hydropower accounts for most of the energy produced, with 47 hydroelectric plants totaling 42,293.49 MW of capacity and accounting for 95.8% of the energy generated.

In the transmission segment, the company associated with Axia Energia operates the largest transmission line network in the country, with 74,013 km in operation, considering both owned assets and SPE partnerships. Of this total, 69,482 km belong to the Basic Grid (voltages equal to or above 230 kV), corresponding to 36.89% of the National Interconnected System. In addition to the lines, the company is responsible for 264,535 MVA of transformation capacity at its corporate facilities, playing a crucial role in integrating regional systems and evacuating energy generated at large plants such as the Tucuruí hydropower plant in Pará. Transmission activities are highly regulated and based on long-term concessions, with strong revenue predictability, which is reflected in the 42.07% share of this segment in consolidated net operating revenue for 2024, equivalent to R$ 16.9 billion.

The company is also an active player in power trading, both in the regulated environment and in the free market. In 2024, 7,353 average MW were traded in the Free Contracting Environment, with the portfolio expanding to 751 clients, 660 of which operating in the free market. The gradual removal of quotas from its hydropower plants allows the company to direct an increasing portion of its energy to market contracts, including the retail segment, following a bylaws amendment approved at a 2025 shareholders’ meeting that detailed its activities as a retail power supplier. This has been accompanied by strategic partnerships to expand its presence in the free market, in line with the strategy of being a comprehensive platform for renewable energy solutions. The company also provides administrative services, including group cash management and business administration in SPEs, although this front represents a minor portion of total revenue.

From a geographic and corporate standpoint, Axia Energia reflects an organization with a presence in all regions of Brazil through operating subsidiaries such as Eletronorte, CGT Eletrosul and Chesf, in addition to an extensive network of equity interests. As of December 31, 2024, it held interests in 63 special purpose entities – 62 in Brazil and one abroad – grouped into clusters of transmission and hydro, wind and solar generation, in addition to 18 associates. Even so, all of the 2024 net operating revenue of R$ 40.18 billion was attributed to Brazil, with no material revenue from abroad. In 2025, shareholders approved the merger of Eletropar, reinforcing the strategy of consolidation and corporate simplification, with a focus on efficient capital allocation and the reduction of intermediate structures.

The company’s activities are heavily shaped by government regulation of the Brazilian electric power sector. Its generation, transmission and trading activities depend on concessions, authorizations and licenses granted by the conceding authority, with the Ministry of Mines and Energy and the Brazilian Electricity Regulatory Agency (ANEEL) playing central roles. The company is subject to the General Concessions Law, Law No. 9,074/1995 and Law No. 10,848/2004, which structured the current model for the sector, separating the Regulated Contracting Environment and the Free Contracting Environment. Bodies such as the National Council for Energy Policy, the National Electric System Operator, the Electric Energy Trading Chamber, the Energy Research Company and the Electric Sector Monitoring Committee complement the institutional framework. Concessions may be subject to interventions, tariff reviews and penalties, including fines of up to 2% of net operating revenue, making regulatory management a critical factor for operations and earnings predictability.

Regarding environmental, social and governance (ESG) aspects, Axia Energia is associated with a structure that annually discloses a consolidated Annual Report covering the holding company, operating subsidiaries and certain wholly owned SPEs. The report follows international transparency and sustainability standards, such as GRI guidelines, the IIRC Integrated Reporting framework, World Economic Forum metrics, SASB guidelines, TCFD recommendations, UN Global Compact principles and ANEEL’s Electric Sector Accounting Manual. Both the Annual Report and the GHG Emissions Inventory have been assured by independent auditors since 2010 and 2012, respectively. The company uses a materiality matrix updated every two years based on stakeholder consultations, applying the concept of double materiality to identify material topics such as climate change and the energy transition, biodiversity, water resource management, relationships with communities and customers, ethics and compliance, occupational health and safety, innovation, attraction and retention of talent and government relations. These topics guide ESG performance indicators, including safety metrics that directly impact variable compensation for leadership, reinforcing the integration of social and environmental risk management with corporate governance.