CPLE3

Companhia Paranaense de Energia – Copel is a widely held corporation structured as a holding company, with shares traded on B3 under the ticker CPLE3. Formally created in 1954 from initiatives by the State of Paraná government to organize the state electrification plan, the company has over the decades consolidated a central role in Paraná’s energy infrastructure. In 1994, it went public on the then Bovespa and, in 1997, became the first Brazilian power company listed on the New York Stock Exchange, expanding access to international investors. In 2002, it was also included in Latibex, in Madrid, and over time gradually adhered to higher corporate governance standards on B3, culminating in its migration to Level 2 in 2021. In 2023, it completed a capitalization process that resulted in its transformation into a corporation with no controlling shareholder, keeping the State of Paraná as an important shareholder but without formal control.

Copel operates in an integrated manner across the power generation, transmission, distribution and trading segments, in addition to acting as a holding and providing corporate services. The company operates a broad electric system, with its own generation fleet made up mainly of hydroelectric plants and wind complexes, transmission lines in several states and an extensive distribution network that covers practically the entire state of Paraná. The business model combines regulated revenues, typical of distribution and transmission, with generation and trading revenues in the regulated market (ACR) and in the free market (ACL). In the fiscal year ended December 31, 2024, the main operating segments were power generation, transmission, distribution and trading, as well as a gas segment that was divested in 2024 but still contributed to revenues until the sale was completed.

In the generation segment, Copel has a predominantly renewable portfolio, with 100% of its installed capacity coming from hydro and wind sources as of the 2024 base date. Considering wholly owned plants and interests in consortia, proportional installed capacity reached around 6.9 GW, distributed among 20 hydroelectric plants, dozens of small hydro plants, generating plants and 43 wind farms, in addition to a residual stake in thermal plants undergoing divestment or concession expiry. The main hydro plants in the portfolio include large projects in Paraná, such as Governador Bento Munhoz da Rocha Netto (Foz do Areia), Governador Ney Aminthas de Barros Braga (Segredo) and Governador José Richa (Salto Caxias), which, after concession renewals and grant payments, remain relevant assets for long-term cash generation. In wind power, the company has built a strong position especially in Rio Grande do Norte, with several complexes contracted in new energy and reserve energy auctions.

In power transmission, Copel builds, operates and maintains a network of lines and substations that integrates the Paraná electric system into the National Interconnected System. On December 31, 2024, the transmission system totaled more than 9,600 km of lines in eight to nine states, including owned assets and interests in special purpose entities, as well as dozens of substations. Remuneration in this segment is based on Allowed Annual Revenue (RAP), defined by ANEEL in regulatory cycles, which provides greater predictability for transmission revenues. The transmission concession portfolio still has a long average remaining term, around two decades, supporting a long-term revenue stream associated with asset availability and compliance with regulatory performance indicators.

Power distribution is Copel’s main operational interface with Paraná’s economy. Subsidiary Copel Distribuição holds the concession to serve 394 of Paraná’s 399 municipalities, plus the municipality of Porto União in Santa Catarina, representing around 5.2 million consumer units as of December 31, 2024. The concession area covers approximately 195,000 km², with a network of more than 214,000 km of urban and rural lines and networks, operating at low, medium and high voltage levels. Supply continuity indicators, such as DEC and FEC, are monitored according to ANEEL criteria and in 2024 remained within regulatory limits, reflecting ongoing investments in modernization and expansion of the network. The served market is diversified across residential, commercial, rural, industrial and other classes, with recent growth in consumption in the captive market and in total distributed energy (wire market), which includes free consumers connected to the distributor’s grid.

The trading segment also plays a relevant role in Copel’s integrated strategy. Through its trading subsidiary, the company is an active participant in the Free Contracting Environment, buying and selling energy for large consumers and other sector agents. In 2024, the company traded more than 23,000 GWh in this segment, serving a base of around 1,700 clients in 22 Brazilian states. In generation, Copel operates in both contracting environments, with approximately 60% of the energy contracted in 2024 allocated to the ACL and a smaller share to the ACR through regulated auctions, which increases commercial flexibility and allows the contract portfolio to be adjusted to market conditions and the risk profile desired by management.

From a geographic standpoint, Copel maintains a predominant presence in the State of Paraná, where most of its distribution assets, a relevant group of hydro plants and part of its transmission facilities are concentrated. At the same time, expansion in generation and transmission assets has led the company to operate in several other states, including Rio Grande do Norte, Mato Grosso, Rio Grande do Sul, Maranhão, Bahia, Goiás, Minas Gerais, São Paulo and Santa Catarina. This regional diversification reduces dependence on a single market and allows the company to capture opportunities in federal generation and transmission auctions, as well as to expand its free-market client base through commercial activities in almost all regions of the country.

Copel operates in a heavily regulated environment, under the supervision mainly of the Brazilian Electricity Regulatory Agency (ANEEL) and the Ministry of Mines and Energy. Distribution, transmission and generation concessions are governed by long-term contracts that establish quality targets, tariff review rules, terms of validity and investment obligations. Indicators such as DEC and FEC in distribution, and availability and regulated revenue parameters in transmission, are key to maintaining revenues and enabling concession renewals. In generation, the company is subject to sector mechanisms such as the Short-Term Market, the Energy Reallocation Mechanism (MRE) and regulations relating to contracts in the ACR and ACL. In parallel, Copel has been integrating environmental, social and governance practices, with emphasis on the predominance of renewable sources in its generation mix and on adherence to higher levels of governance on B3—factors that have gained greater relevance following its transformation into a corporation and the dispersal of CPLE3’s shareholding structure.

This combination of integrated operations in generation, transmission, distribution and trading, based on mostly renewable assets and long-term concessions, positions Copel as one of the main electric power companies listed on B3, with significant presence in the domestic energy market and additional exposure to international capital markets through its foreign listing programs.