LIGT3

Light S.A. – Under 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 end of the 19th century, when The São Paulo Tramway was incorporated in 1899, with authorization to operate public transport, power generation and distribution, lighting, telegraphy, and telephony. In 1904, The Rio de Janeiro Tramway, Light and Power Co. was founded in Toronto, which began operating in what was then the federal capital and gave rise to Light’s historical operations in Rio de Janeiro. Over the first half of the 20th century, the company expanded its base of hydroelectric generation assets, added plants in different municipalities in the states of Rio de Janeiro and São Paulo, and played a relevant role in the urbanization and electrification of the Rio–São Paulo axis.

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 operating along the Rio–São Paulo axis, creating Light Serviços de Eletricidade S.A. Under state control, the company progressively focused on supplying electric power, dropping activities such as streetcars, gas, and telephony, which were transferred to specific public companies. In 1979, Eletrobras acquired the controlling stake, 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 returned to focusing especially 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 power 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 nationwide, both for selling the company’s own energy and for third-party energy transactions. The holding company also controls firms focused on services and technological support, such as Light Conecta Ltda., dedicated to plant projects, operations 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 the distribution grid management system. 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 the main economic driver of Light S.A. and accounts for about 90.9% of consolidated net revenue in 2024, totaling R$ 13.5 billion. The concession area covers 31 of the 92 municipalities in the State of Rio de Janeiro, including the entire Metropolitan Region, in a territory with significant economic weight and population density. At the end of 2024, the distributor recorded approximately 4.3 million active contracts and served about 11.6 million people through a network of more than 104,000 kilometers in length, making it one of the largest power 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, making 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 hydro sources, with assets located in the states of Rio de Janeiro and São Paulo. The generation system is composed of five hydroelectric 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 water transfer for the supply of the Rio de Janeiro Metropolitan Region. Installed capacity totals 873 MW, with a 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. operates as Light Group’s trading arm in the Free Contracting Environment, with an open-ended authorization and activities across the entire country. Its activities include buying and selling energy, brokering transactions, representing consumers at the Câmara de Comercialização de Energia Elétrica (CCEE), and providing advisory services to free and special consumers. In 2024, Lightcom traded 765 average MW and posted net revenue of R$ 1.43 billion, corresponding to 9.6% of consolidated net revenue. Although marketing energy from Light’s own plants is a core function, the company also purchases third-party energy to form a diversified portfolio, with customers 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 customers, while Axxiom provides technology services that are critical to 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, with strong oversight by the Agência Nacional de Energia Elétrica (ANEEL). Distribution and generation activities are operated under public concession regimes, with defined terms and obligations to provide adequate, continuous, and efficient service at reasonable tariffs, in accordance with Laws No. 8,987/1995 and 9,074/1995. Changes in corporate control, tariff reviews, interventions, and any forfeiture proceedings follow formal procedures, ensuring broad rights of defense for concessionaires. In the case of hydroelectric generation, the concessions for Light Energia’s plants underwent hydrological risk renegotiation processes provided for in specific legislation, resulting in extensions of concession terms until 2028 for projects 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, D&O risks, judicial guarantees, and other needs associated with operating large-scale 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 operation of the generation 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 focuses on educational, cultural, and income-generation initiatives targeting 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 from 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 electric utility company, although the distribution business concentrates most of its revenue and earnings. The structure composed of Light SESA, Light Energia, and Lightcom, together with interests 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. The LIGT3 shares traded on B3 reflect exposure to a portfolio that combines a distribution concession in a region with 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.