EMAE – Empresa Metropolitana de Águas e Energia S.A. is a publicly held electric power generation company, with common and preferred shares traded on B3 under the tickers EMAE3 and EMAE4. Its origins date back to the late 19th century with the incorporation, in 1899, of The São Paulo Railway, Light and Power Company Limited in Canada, authorized to operate in Brazil by Decree No. 3,349. Throughout the first half of the 20th century, this group built a broad hydro and thermal power system associated with the urban and industrial development of the São Paulo Metropolitan Region, notably through the construction of the Parnaíba, Paula Souza, Rasgão and Porto Góes plants and, above all, the Henry Borden complex in Cubatão. In 1998, as part of the State of São Paulo’s State Privatization Program, this legacy of generation assets was carved out of Eletropaulo, giving rise to EMAE, which assumed the electricity generation concessions then held by the former distributor.

Incorporated as a publicly held corporation and headquartered in the city of São Paulo, EMAE became responsible for planning, construction, operation, maintenance and commercialization of electricity from a set of strategic plants and hydraulic structures in the State of São Paulo. Resolution No. 72/1998 of the Brazilian Electricity Regulatory Agency (ANEEL) formalized the transfer to the company of the rights to operate public electricity generation services. In 2004, Concession Agreement No. 002/2004 – ANEEL – EMAE consolidated the legal framework for exploiting hydropower assets such as Henry Borden, Rasgão and Porto Góes, with deadlines later extended through amendments to 2042 and 2043, depending on the asset. Over this period, the company also reorganized the management of its thermal power assets, such as the Piratininga Thermal Power Plant (Usina Termelétrica Piratininga), which is currently leased to Baixada Santista Energia S.A. (BSE), an arrangement that generated significant financial income until the end of the lease.

EMAE’s business model is centered on electricity generation under public concession, with a strong predominance of hydroelectric plants and, more recently, complementary solar photovoltaic generation. The company operates both as a public service generation concessionaire – in the case of plants under the physical guarantee quota regime – and as the controlling shareholder of an independent power producer, through Pirapora Energia S.A., owner of the Pirapora Small Hydroelectric Power Plant (PCH Pirapora). Its activities include operating and maintaining the plants and associated hydraulic structures, selling energy in the Regulated Contracting Environment (ACR), carrying out investments and improvements in the concession assets remunerated by regulated tariffs, as well as providing operation and maintenance services for third-party facilities. Despite having different revenue streams, management monitors results on an integrated basis, without separate reportable operating segments in the consolidated financial statements.

EMAE’s generation complex consists mainly of the Henry Borden hydroelectric complex in Cubatão, which encompasses two high-head plants – External and Underground – with 14 generating units equipped with Pelton turbines, totaling 889 MW of installed capacity for a turbine flow of 157 m³/s. This portfolio is complemented by the Rasgão hydroelectric plant in Pirapora do Bom Jesus, with 22 MW; Porto Góes in Salto, with 24.8 MW; and PCH Pirapora, with 25 MW, the latter operated by subsidiary Pirapora Energia S.A. In 2024, the company inaugurated the Araucária Floating Photovoltaic Plant (UFF Araucária), with 5 MW of installed capacity in floating solar modules on the Billings reservoir, marking its entry into solar generation and the integration of hydropower and photovoltaic sources. The long-term strategic plan calls for expanding photovoltaic capacity installed in this reservoir, reinforcing the diversification of the generation mix.

EMAE plays an important role in the National Interconnected System (SIN) by providing approximately 935.8 MW at the load center of the Southeast region, in a strategic position relative to the São Paulo Metropolitan Region and the Baixada Santista. The location of the Henry Borden plant, close to major consumer centers, contributes to the stability, restoration and reliability of power supply in areas of high economic importance. In addition to its generation role, the hydraulic system operated by the company performs a structural function in flood control in the Pinheiros and Tietê river basins, through a set of reservoirs, dams, lifting structures and canals. Pumping water from the Tietê and Pinheiros rivers to the Billings reservoir increases the generation capacity of Henry Borden and also enables volume management for flood mitigation, in line with environmental and operational rules defined by the government of the State of São Paulo.

Energy sales from plants under EMAE’s direct concessions are heavily conditioned by the legal framework of physical guarantee and capacity quotas, established by Provisional Measure 579/2012, converted into Law No. 12,783/2013. Since January 1, 2013, the plants have been remunerated by the Annual Generation Revenue (RAG), calculated and approved by ANEEL and paid in monthly installments by distributors that receive the energy and capacity quotas. This tariff is designed to cover operating, maintenance, administrative, tax and sector charge costs, as well as the remuneration of investments required for modernization and adaptation of the assets, in line with the quality standards defined in the Tariff Regulation Procedure (PRORET). Tariff review takes place in five-year cycles, with annual adjustments, and the hydrological risk of plants under the quota regime has been transferred to distributors, reducing the company’s exposure to hydrological volatility and energy market price swings.

In the regulatory and institutional sphere, EMAE is subject to oversight by the Ministry of Mines and Energy (MME), ANEEL and state environmental agencies, especially CETESB, in addition to complying with the rules of CVM, B3, the National System Operator (ONS), the Energy Research Company (EPE), IBAMA and the Electric Energy Trading Chamber (CCEE). The company maintains accounting and operational separation between regulated and unregulated activities, in line with industry legislation, covering hydroelectric concessions under public service regime and the operation of PCH Pirapora as an independent power producer. Consolidated net revenue reached R$ 621.4 million in 2024, with net income of R$ 54.7 million after a significant adjustment related to the end of the UTE Piratininga lease, reflecting the transition of this asset from a long-term lease model to a new contractual arrangement.

From an environmental, social and governance (ESG) perspective, EMAE has set up a set of practices focused on licensing and regularizing projects, waste management, restoration of canal banks and monitoring impacts on biodiversity. A significant portion of its structures were built before environmental licensing became legally required, but expansions and new projects, such as PCH Pirapora and UTE Piratininga, have gone through formal impact assessment processes, with the issuance of licenses and specific conditions. The company maintains ongoing programs for dredging and maintenance of the Pinheiros River canal, vegetation management, erosion control and environmental offset measures. In terms of climate governance, it prepares a corporate greenhouse gas emissions inventory according to the Brazilian GHG Protocol Program methodology, with independent verification by BSI Group, and publishes an annual Sustainability Report aligned with GRI standards, including a materiality matrix and social, environmental and diversity indicators. These practices complement the company’s role as a predominantly renewable energy generator, reinforcing the integration of water resources management, energy security and socio-environmental responsibility, in a context in which its EMAE3 and EMAE4 shares remain listed and traded on B3.