LIGT3 Light

Light S.A. – In Judicial Reorganization, whose common shares are traded on B3 under the ticker LIGT3, is a Brazilian holding company that operates in an integrated manner in the electric power sector, with a presence in the distribution, generation, transmission and trading segments. The group’s origins date back to the late 19th century, when The São Paulo Tramway was incorporated in 1899, with authorization to operate public transportation, power generation and distribution, lighting, telegraphy and telephony. In 1904, The Rio de Janeiro Tramway, Light and Power Co. was founded in Toronto, began operating in what was then the federal capital and gave rise to Light’s historic operations in Rio de Janeiro. Over the first half of the 20th century, the company expanded its hydroelectric generation asset base, incorporated plants in different municipalities in the states of Rio de Janeiro and São Paulo, and played a significant role in the urbanization and electrification of the Rio–São Paulo corridor.

In the following decades, Light underwent restructuring, nationalization and later privatization processes. In 1959, Rio Light S.A. – Serviços de Eletricidade e Carris was nationalized, and in 1967 a federal decree unified several concessionaires that operated along the Rio–São Paulo corridor, giving rise to Light Serviços de Eletricidade S.A. Under state control, the company progressively focused on the supply of electricity, discontinuing activities such as trams, gas and telephony, which were transferred to specific public companies. In 1979, its controlling stake was acquired by Eletrobras, and in 1996 the company was privatized, becoming controlled by a consortium formed by Eletricité de France (EDF), AES Corporation, Reliant Energy and Companhia Siderúrgica Nacional. From the 2000s onward, following a corporate restructuring, the company once again focused mainly on the power generation and distribution businesses.

Light S.A.’s current structure is organized as a holding company that consolidates different operating subsidiaries. At the core of the group is Light Serviços de Eletricidade S.A. (Light SESA), responsible for electricity distribution and the main source of revenue, and Light Energia S.A., dedicated to power generation and transmission based on hydroelectric sources. The trading operation is carried out by Lightcom Comercializadora de Energia S.A., which operates in the Free Contracting Environment on a nationwide scale, both for the sale of the group’s own energy and for transactions involving third-party energy. The holding company also controls firms focused on services and technology support, such as Light Conecta Ltda., focused on plant projects, operation and associated services, Light Soluções em Eletricidade Ltda., focused on consulting and electrical engineering services, and Axxiom Soluções Tecnológicas S.A., dedicated to IT solutions, especially for distribution grid management systems. Instituto Light houses the group’s institutional initiatives and social projects, while Amazônia Energia Participações S.A., jointly controlled with Cemig, holds an interest in the concessionaire of the Belo Monte HPP.

The distribution segment, concentrated in Light SESA, is Light S.A.’s main economic engine and accounted for around 90.9% of consolidated net revenue in 2024, at R$ 13.5 billion. The concession area covers 31 of the 92 municipalities in the State of Rio de Janeiro, including the entire Greater Metropolitan Area, in a territory with significant economic weight and population density. At the end of 2024, the distributor had approximately 4.3 million active contracts and served around 11.6 million people through a network of more than 104 thousand kilometers in length, making it one of the largest electricity distribution concessionaires in the country in terms of supply revenue and energy distributed. The customer base is predominantly residential, which accounted for 58.6% of captive market consumption in 2024, followed by the commercial, industrial and other segments. Light SESA’s concession contract is scheduled to expire in June 2026, which makes the renewal process and any potential redefinition of terms a central point in the group’s regulatory and operational outlook.

In power generation, Light Energia S.A. operates a portfolio entirely based on hydraulic sources, with assets located in the states of Rio de Janeiro and São Paulo. The generating system is composed of five hydroelectric power plants – Fontes Nova, Nilo Peçanha, Pereira Passos, Ilha dos Pombos and Santa Branca – in addition to the Lajes Small Hydroelectric Plant (PCH Lajes) and two pumping stations, Santa Cecília and Vigário, which also play a relevant role in the diversion of water to supply Greater Rio de Janeiro. Installed capacity totals 873 MW, with physical guarantee of 611 average MW as of 2023. In 2024, net revenue from the generation segment reached R$ 861 million, equivalent to 5.8% of Light’s consolidated revenue, and the energy generated is fully allocated to the Free Contracting Environment through the group’s trading company. Light Energia is also the controlling shareholder of Lajes Energia S.A., responsible for the operation and commercial exploitation of PCH Lajes, in operation since 2018.

Lightcom Comercializadora de Energia S.A. acts as Light Group’s trading arm in the Free Contracting Environment, with an open-ended authorization and operations throughout Brazil. Its activities include the purchase and sale of energy, brokerage of negotiations, representation of consumers before the Electric Energy Trading Chamber (CCEE) and advisory services to free and special consumers. In 2024, Lightcom traded 765 average MW and recorded net revenue of R$ 1.43 billion, which corresponded to 9.6% of consolidated net revenue. Although trading the energy produced by Light’s plants is its core function, the company also purchases energy from third parties to build a diversified portfolio, with clients that include large industrial, commercial and service consumers. Other subsidiaries, such as Light Conecta and Light Soluções em Eletricidade, complement the group’s portfolio with distributed generation solutions, engineering services and projects for low-voltage clients, while Axxiom provides critical technology services for the operation of distribution networks.

The activities of Light S.A. and its subsidiaries are governed by a specific regulatory framework for the Brazilian power sector, under close supervision by the Brazilian Electricity Regulatory Agency (ANEEL). The distribution and generation activities are operated under public concession arrangements, with defined terms and obligations to provide adequate, continuous and efficient service at reasonable tariffs, pursuant to Laws 8,987/1995 and 9,074/1995. Changes in corporate control, tariff reviews, interventions and possible forfeiture processes follow formal procedures, ensuring ample right of defense to the concessionaires. In the case of hydroelectric generation, the concessions for Light Energia’s plants went through hydrological risk renegotiation processes provided for in specific legislation, resulting in extensions of the concession terms until 2028 for facilities such as Pereira Passos, Nilo Peçanha, Fontes Nova, Ilha dos Pombos and Santa Branca. The company also maintains comprehensive insurance policies covering operational risks, civil liability, directors and officers liability, judicial guarantees and other needs associated with operating large power infrastructure.

In terms of environmental, social and governance practices, Light Energia has adopted an Environmental Management System based on ISO 14001 since 2001, aimed at monitoring and mitigating environmental impacts arising from the operation of its generating portfolio. The plants and associated structures also hold ISO 9001 quality management and ISO 45001 occupational health and safety certifications, forming an Integrated Management System. On the social front, Instituto Light concentrates educational, cultural and income-generation initiatives, focusing on communities surrounding its operations, especially in the city of Rio de Janeiro. Corporate governance is organized around the holding company listed on B3, which consolidates financial and operating information for the different segments – distribution, generation, trading and services – reflecting the performance of a group with a significant role in the power infrastructure of the State of Rio de Janeiro and a complementary presence in the national energy market.

From a sector classification standpoint, Light S.A. stands out as an integrated power company, although the distribution business concentrates most of its revenue and results. The structure composed of Light SESA, Light Energia and Lightcom, combined with its interest in projects such as the Belo Monte HPP and associated service operations, positions the group as a player that participates in several links of the electricity value chain. LIGT3 shares, traded on B3, reflect exposure to a portfolio that combines a distribution concession in a region of high operational complexity, mature hydroelectric assets, trading in the free market and initiatives in energy and technology services, in a highly regulated environment subject to concession renewal decisions and regulatory adjustments in the Brazilian power sector.