RNEW3

Renova Energia is a Brazilian company dedicated to the generation and trading of electric power from renewable sources, with shares traded on B3 under the tickers RNEW3 and RNEW4. The group’s origins go back to the formation, in 2001, of Enerbrás Comercializadora de Energia Ltda., later Enerbrás Centrais Elétricas S.A., which began operating in hydroelectric projects. In 2003, Enerbrás structured a consortium to implement three small hydropower plants (PCHs) in the far south of Bahia, which in 2004 was converted into Energética Serra da Prata S.A. (Espra). Renova Energia S.A. was formally incorporated in December 2006 as part of a corporate reorganization, with its corporate purpose focused on the generation and trading of electric power, fuels from renewable sources, and related services. In the same year, the company acquired control of Enerbrás, consolidating hydro generation assets in its portfolio.

Throughout the 2000s and 2010s, the company built its presence in the capital markets and expanded its shareholder base. Registration as a publicly held company was granted by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários) in August 2008, and in 2010 Renova carried out a primary public offering of units, with its shares being listed on B3’s Level 2 of Corporate Governance. The entry of strategic investors marked its corporate trajectory, particularly the capital injection by Light Energia, a subsidiary of Light S.A., in 2011, and by BNDES Participações S.A. (BNDESPAR) in 2012, through capital increases that strengthened its investment capacity in renewable generation projects. The company was also a key player in asset recycling transactions, such as the agreement signed in 2015 with TerraForm Global and SunEdison, which involved the sale of wind farms and PCHs and the swap of stakes in projects for shares abroad, as well as the sale of the Alto Sertão I Wind Complex, completed in 2015.

Renova Energia’s business model combines its role as an independent power producer with the trading of electricity in both the regulated market and the free market. The company develops, builds, operates, and trades energy from wind and solar sources, having in the past held PCHs and biomass plants in its portfolio, hydro assets that were sold in 2022. The company positions itself as an integrated energy services platform, capable of operating from project prospecting and development, inventory and engineering studies, through to the construction, operation and maintenance of plants, and the structuring of power purchase agreements. Its corporate purpose also covers activities such as trading carbon credits, consulting on energy solutions, manufacturing and selling equipment for power generation and transmission, and operating in distributed generation through solar systems.

Renova Energia’s reported operating segments reflect the diversification of sources and the separation by activities. In the Wind segment, the company is responsible for the design, development, implementation, operation, and commercialization of the energy generated by wind farms, an activity that has historically concentrated a large part of its investments. The main current asset is the Alto Sertão III Wind Complex – Phase A, made up of 26 wind farms, 155 turbines and 432.6 MW of installed capacity, located in the interior of Bahia. This complex began commercial operations in December 2022 and allocates its energy to both the Regulated Contracting Environment and the Free Contracting Environment, with approximately 53.3% of the energy sold in the free market and 46.7% in the regulated market, including contracts from the 5th and 6th Reserve Energy Auctions. In the Solar segment, the main project is the Caetité Solar Complex, in the southwest of Bahia, with around 4.8 MWp of installed capacity in distributed generation, composed of thousands of photovoltaic modules and inverters, aimed at serving local consumers.

The Energy Trading segment represents another relevant front in Renova Energia’s operations and accounted, in 2024, for the largest share of consolidated net revenue. The company sells energy in the regulated market through public auctions, in which it competes with other qualified generators, and in the free market through bilateral contracts with free and special consumers. Throughout its history, it has traded significant blocks of energy in reserve energy auctions and new energy auctions organized by the federal government, linked to wind complexes in Bahia such as Alto Sertão I, II and III and projects in Umburanas. In the free market, it has entered into long-term contracts with counterparties such as Light Energia and Cemig, the latter appearing among the main clients of the trading segment in 2024. Trading allows the company to optimize the dispatch of energy from its assets and manage its contractual portfolio, including decisions to cancel or adjust projects when necessary to mitigate financial and implementation risks.

From a geographical standpoint, Renova Energia’s operations are concentrated in Brazil, with a focus on the Northeast region, especially the state of Bahia, where its current wind farms and solar projects are located. The Alto Sertão wind complexes, in different phases, and the Caetité Solar Complex reinforce the company’s focus on harnessing the region’s high wind and solar resource potential, characterized by capacity factors above international standards. All of the company’s reported net operating revenue is attributed to customers in Brazil, with no record of revenue from other countries. The selection of assets in areas with strong natural resources, access to transmission lines and sectoral tax incentives is part of the strategy for making projects economically viable.

Renova Energia’s operations are embedded in the specific regulatory framework of the Brazilian power sector, with strong oversight by the National Electric Energy Agency (Agência Nacional de Energia Elétrica – ANEEL) and the Ministry of Mines and Energy (Ministério de Minas e Energia – MME. Renewable generation projects are structured as independent power producers or self-producers, operating under authorizations granted by the granting authority, typically for 35-year terms, renewable at the agency’s discretion. For wind farms and solar plants, the company must demonstrate land availability, wind or irradiation studies, environmental licensing, connection feasibility via a Transmission System Usage Agreement, and other technical requirements to obtain registration or authorization. Legislation provides for discounts on transmission and distribution system usage tariffs for alternative sources, which influences the competitiveness of the energy generated, in addition to incentive schemes such as REIDI and specific state tax programs. Trading in regulated market auctions is subject to technical qualification rules by the Energy Research Company and price caps defined by the MME.

In environmental, social and governance matters, Renova Energia has built its trajectory around the expansion of renewable sources and the diversification of the Brazilian power mix. The wind and solar projects, as well as the PCHs it has held in the past, are classified as lower greenhouse gas emission sources compared with fossil-fuel thermal plants, with the potential to generate carbon credits through international incentive mechanisms. The company takes out insurance for its assets and civil liabilities, in line with the capital-intensive nature of generation projects, and structures its operations through special purpose entities for each project. Listing on B3’s Level 2 of Corporate Governance entails additional commitments on transparency, shareholder rights and governance practices that are more rigorous than the traditional segment, in an environment marked by long-term contracts, exposure to regulatory risks and the need for discipline in capital allocation to renewable energy infrastructure.