REDE3

Rede Energia Participações S.A. (Rede Energia), issuer of the REDE3 shares traded on B3, is an electric power holding company with roots in a century-long history. The group’s origins date back to 1903, with the founding of Empresa Elétrica Bragantina S.A. in Bragança Paulista (SP), followed in 1929 by the incorporation of Caiuá Serviços de Eletricidade S.A., which would later become the core entity of the current company. Throughout the 1980s and 1990s, what was then Grupo Rede consolidated and expanded its operations through acquisitions of regional distribution concessionaires in several states, including São Paulo, Tocantins, Paraná, Mato Grosso and Pará, in line with the privatization and restructuring process of the Brazilian power sector. In 2005, after the sector’s unbundling process, Caiuá stopped operating directly in distribution and generation, becoming exclusively a holding company for energy companies, a move that paved the way for Rede Energia’s current structure.

The company went through a series of corporate and name changes over the years. In 2006, Caiuá Serviços de Eletricidade S.A. was renamed Rede Empresas de Energia Elétrica S.A., and in 2008 it became Rede Energia S.A. From 2014 onward, the company’s trajectory was marked by its integration into Grupo Energisa, which took direct and indirect control of 21 companies from the former Grupo Rede, including eight distributors then under ANEEL intervention. This step was made possible by a court-supervised reorganization plan approved by creditors and by a recovery and remediation plan for operational failures approved by the regulator. In 2017, the company adopted its current name, Rede Energia Participações S.A., reflecting its primary role as a holding company for equity interests in electric power distributors within Grupo Energisa’s structure.

Rede Energia’s business model is based on holding and managing interests in power distribution concessionaires, which form the basis of its revenue and earnings. According to the Reference Form, the company’s corporate purpose encompasses the production, transmission, transformation and distribution of electric power, but in practice its activities are focused on distribution through subsidiaries. As of December 31, 2024, the company controlled four distributors: Energisa Mato Grosso (EMT), Energisa Mato Grosso do Sul (EMS), Energisa Sul-Sudeste (ESS) and Energisa Tocantins (ETO), as well as one services company and two non-operating holding companies. The economic relevance of distribution is clear: in 2024, Rede Energia reported net revenue of R$ 17,876.8 million, virtually all of which came from distribution operations, with only R$ 65.2 million classified as holding and other revenue.

From an operational standpoint, Rede Energia closed 2024 with a base of approximately 4.4 million captive consumers and 3,153 free-market customers, spread across 437 municipalities and a concession area of around 1.54 million km², equivalent to roughly 18% of Brazil’s territory. This area serves an estimated population of 9.7 million inhabitants. Consolidated energy consumption in the captive and free markets in 2024 reached 25,689.5 GWh, up 7.7% year-over-year, driven by growth in the residential, industrial, commercial and rural classes. Regionally, 68.5% of sales in GWh occurred in the Center-West region, concentrated in Mato Grosso and Mato Grosso do Sul, 19.2% in the South-Southeast region and 12.3% in the North region, reflecting the company’s strong exposure to state economies with expanding agribusiness and services.

The distributors controlled by Rede Energia operate under federal public concession contracts and follow the regulatory framework of the electric power sector. Distribution consists of receiving power acquired in regulated auctions and bilateral contracts and delivering it in a highly dispersed manner to end users, at high and low voltages, with individual metering through meters installed at homes and consumer units. Power procurement by distributors takes place mainly through Regulated Market Power Purchase Agreements (CCEAR), entered into in auctions organized under ANEEL’s supervision, supplemented by quotas from specific projects such as Itaipu, PROINFA, the Angra nuclear plants and distributed mini and microgeneration contracts. The company also highlights the implementation of preventive and corrective maintenance policies coordinated by engineering departments, aimed at ensuring continuity and quality of supply.

Rede Energia operates in a highly regulated environment, with the Agência Nacional de Energia Elétrica (ANEEL) and the Ministério de Minas e Energia (MME) playing a central role in defining tariffs, requiring investments, overseeing quality and setting contractual rules. Distribution tariffs are defined by ANEEL with the aim of preserving the economic and financial balance of concessions, and are subject to annual adjustments and periodic reviews. The sector’s regulatory framework was deeply reshaped from the 1990s onward, with the Concessions Law, the creation of the Câmara de Comercialização de Energia Elétrica (CCEE) and the Operador Nacional do Sistema (ONS), as well as the 2004 New Power Sector Model Law, which created the Regulated Contracting Environment (ACR) and the Free Contracting Environment (ACL). The Reference Form notes that the sector is undergoing a modernization phase, with debates over the gradual opening of the free market to new consumer profiles and adjustments to subsidies and tariff-setting mechanisms.

From a market standpoint, Rede Energia’s revenue is spread across millions of consumers in different classes, with no material concentration in individual customers. In 2024, no single customer accounted for more than 10% of net operating revenue, which reduces dependence on large specific contracts. The consumption base covers the residential, industrial, commercial, rural and other segments, with particular emphasis on industrial and residential consumption growth in states such as Mato Grosso, Mato Grosso do Sul and Tocantins, influenced by the pulp and paper, food and mining chains, as well as the expansion of agribusiness and services activities. All of the company’s net revenue is generated in Brazil, with no exposure to foreign markets, and its operations are fully subject to Brazilian regulation and jurisdiction.

In terms of environmental, social and governance (ESG) practices, Rede Energia is aligned with Grupo Energisa’s guidelines. The group publishes an annual Sustainability Report in accordance with Global Reporting Initiative (GRI) standards and ANEEL’s socio-environmental reporting manual, and also links its reporting to the UN Global Compact Communication on Progress and to the Sustainable Development Goals (SDGs). This reporting framework is intended to provide transparency on the environmental, social and governance performance of operations, as well as to support internal management of sustainability-related risks and opportunities. For investors tracking REDE3 on B3, these elements reinforce the regulated, infrastructure-intensive nature of the business and its formalized governance, which are characteristic of power distribution activities in Brazil.