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24. LOANS, FINANCING AND DEBENTURES (Tables) | 12 Months Ended
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Dec. 31, 2019
Disclosure loans financings and debentures [abstract] |
Schedule of loans financing and debentures |
|  | Principal maturity |  |  |  | Annual financial cost % |  |  |  | Currency |  | 2019 |  |  |  | 2018 |
Financing source | Current |  |  |  | Non–current |  |  |  | Total |  |  |  | Total |
FOREIGN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banco do Brasil: Various Bonds (1) (4) |  | 2024 |  |  |  | Diverse |  |  |  | US$ |  | 2 |  |  |  | 16 |  |  |  | 18 |  |  |  | 26 |
Eurobonds (2) |  | 2024 |  |  |  | 9.25% |  |  |  | US$ |  | 46 |  |  |  | 6,046 |  |  |  | 6,092 |  |  |  | 5,856 |
(–)Transaction costs |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (19 | ) |  |  | (19 | ) |  |  | (21 | )
(±) Interest paid in advance (3) |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (30 | ) |  |  | (30 | ) |  |  | (34 | )
Debt in foreign currency |  |  |  |  |  |  |  |  |  |  |  | 48 |  |  |  | 6,013 |  |  |  | 6,061 |  |  |  | 5,827 |
BRAZILIAN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Banco do Brasil S.A.(4) (11) |  | 2022 |  |  |  | 146.50% of CDI |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 503 |
Caixa Econômica Federal (4) (11) |  | 2022 |  |  |  | 146.50% of CDI |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 627 |
Caixa Econômica Federal (5) |  | 2021 |  |  |  | TJLP + 2.50% |  |  |  | R$ |  | 61 |  |  |  | – |  |  |  | 61 |  |  |  | 56 |
Caixa Econômica Federal (6) |  | 2022 |  |  |  | TJLP + 2.50% |  |  |  | R$ |  | 118 |  |  |  | – |  |  |  | 118 |  |  |  | 108 |
Eletrobrás (4) |  | 2023 |  |  |  | UFIR + 6.00% at 8.00% |  |  |  | R$ |  | 11 |  |  |  | 9 |  |  |  | 20 |  |  |  | 33 |
Large customers (4) |  | 2024 |  |  |  | IGP–DI + 6.00% |  |  |  | R$ |  | 3 |  |  |  | 2 |  |  |  | 5 |  |  |  | 5 |
Sonda (7) |  | 2021 |  |  |  | 110.00% of CDI |  |  |  | R$ |  | – |  |  |  | 49 |  |  |  | 49 |  |  |  | 46 |
Promissory Notes – 9th Issue – Single series (4) (11) |  | 2019 |  |  |  | 151.00% of CDI |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 426 |
Promissory Notes – 1st Issue – Single series (8) |  | 2020 |  |  |  | 107.00% of CDI |  |  |  | R$ |  | 875 |  |  |  | – |  |  |  | 875 |  |  |  | – |
(–) FIC Pampulha – Marketable securities of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
subsidiary companies (9) |  |  |  |  |  |  |  |  |  |  |  | (3 | ) |  |  | – |  |  |  | (3 | ) |  |  | (25 | )
(–)Transaction costs |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (13 | )
Debt in Brazilian currency |  |  |  |  |  |  |  |  |  |  |  | 1,065 |  |  |  | 60 |  |  |  | 1,125 |  |  |  | 1,766 |
Total of loans and financings |  |  |  |  |  |  |  |  |  |  |  | 1,113 |  |  |  | 6,073 |  |  |  | 7,186 |  |  |  | 7,593 |
Debentures – 3th Issue – 2nd Series (2) |  | 2019 |  |  |  | IPCA + 6.00% |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 156 |
Debentures – 3th Issue – 3rd Series (2) |  | 2022 |  |  |  | IPCA + 6.20% |  |  |  | R$ |  | 396 |  |  |  | 692 |  |  |  | 1,088 |  |  |  | 1,049 |
Debentures – 6th Issue – 2nd Series (2) |  | 2020 |  |  |  | IPCA + 8.07% |  |  |  | R$ |  | 17 |  |  |  | – |  |  |  | 17 |  |  |  | 33 |
Debentures – 7th Issue – Single series (2) (12) |  | 2021 |  |  |  | 140.00% of CDI |  |  |  | R$ |  | 289 |  |  |  | 289 |  |  |  | 578 |  |  |  | 1,023 |
Debentures – 3th Issue – 2nd Series (4) |  | 2021 |  |  |  | IPCA + 4.70% |  |  |  | R$ |  | 568 |  |  |  | 541 |  |  |  | 1,109 |  |  |  | 1,596 |
Debentures – 3th Issue – 3rd Series (4) |  | 2025 |  |  |  | IPCA + 5.10% |  |  |  | R$ |  | 42 |  |  |  | 949 |  |  |  | 991 |  |  |  | 957 |
Debentures – 5th Issue – Single Series (4) (11) |  | 2022 |  |  |  | 146.50% of CDI |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,580 |
Debentures – 6th Issue – Single Series (4) (11) |  | 2020 |  |  |  | CDI + 1.75% |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 551 |
Debentures – 7th Issue – 1st Series (4) |  | 2024 |  |  |  | CDI + 0.45% |  |  |  | R$ |  | 275 |  |  |  | 1,890 |  |  |  | 2,165 |  |  |  | – |
Debentures – 7th Issue – 2nd Series (4) |  | 2026 |  |  |  | IPCA + 4.10% |  |  |  | R$ |  | 3 |  |  |  | 1,517 |  |  |  | 1,520 |  |  |  | – |
Debentures – 4th Issue – 1st Series (8) |  | 2022 |  |  |  | TJLP+1.82% |  |  |  | R$ |  | 12 |  |  |  | 19 |  |  |  | 31 |  |  |  | 125 |
Debentures – 4th Issue – 2nd Series (8) |  | 2022 |  |  |  | Selic + 1,82% |  |  |  | R$ |  | 5 |  |  |  | 9 |  |  |  | 14 |  |  |  | – |
Debentures – 4th Issue – 3th Series (8) |  | 2022 |  |  |  | TJLP + 1,82% |  |  |  | R$ |  | 12 |  |  |  | 22 |  |  |  | 34 |  |  |  | – |
Debentures – 4th Issue – 4th Series (8) |  | 2022 |  |  |  | Selic + 1,82% |  |  |  | R$ |  | 5 |  |  |  | 10 |  |  |  | 15 |  |  |  | – |
Debentures – 6th Issue – Single series (8) |  | 2019 |  |  |  | 116.50% of CDI |  |  |  | R$ |  | – |  |  |  | – |  |  |  | – |  |  |  | 50 |
Debentures – 7th Issue – Single series (8) |  | 2023 |  |  |  | CDI + 1.50% |  |  |  | R$ |  | 20 |  |  |  | 60 |  |  |  | 80 |  |  |  | 100 |
(–) Discount on the issuance of debentures (10) |  |  |  |  |  |  |  |  |  |  |  | – |  |  |  | (22 | ) |  |  | (22 | ) |  |  | – |
(–) Transaction costs |  |  |  |  |  |  |  |  |  |  |  | (10 | ) |  |  | (19 | ) |  |  | (29 | ) |  |  | (41 | )
Total, debentures |  |  |  |  |  |  |  |  |  |  |  | 1,634 |  |  |  | 5,957 |  |  |  | 7,591 |  |  |  | 7,179 |
Total |  |  |  |  |  |  |  |  |  |  |  | 2,747 |  |  |  | 12,030 |  |  |  | 14,777 |  |  |  | 14,772 |
(1) | Net balance of the Restructured Debt comprising bonds at par and discounted, with balance of R$ 182, less the amounts given as Deposits in guarantee, with balance of R$ 164. Interest rates vary – from 2 to 8% p.a.; six-month Libor plus spread of 0.81% to 0.88% p.a.
(2) | Cemig Geração e Transmissão;
(3) | Advance of funds to achieve the yield to maturity agreed in the Eurobonds contract.
(4) | Cemig Distribuição;
(5) | Central Eólica Praias de Parajuru;
(6) | Central Eólica Volta do Rio;
(7) | Arising from merger of Cemig Telecom.
(8) | Gasmig;
(9) | FIC Pampulha has financial investments in marketable securities issued by subsidiaries of the Company. For more information on this fund, see Note 32.
(10) | Discount on the sale price of the 2nd series of the Seventh issue of Cemig Distribuição.
(11) | The funds incorporated into the cash position of Cemig D as a result of the distribution of its Seventh Issue of non-convertible debentures, on July 22, 2019, enabled full prepayment of the debtor balances of: the Ninth Issue of Promissory Notes, with final maturity in October 2019; the Sixth Issue of Non- convertible Debentures, with final maturity in June 2020; the Fifth Issue of Non-convertible Debentures, maturing at the end of June 2022; and Bank Credit Notes with final maturities in June 2022. These prepayments, made on July 24, 2019, total R$3,644 including principal, interest and charges. These initiatives have balanced the cash flow and improved the Company’s credit quality. The changes in the new debt profile consisted of extinction of existing contracts and signature of new contracts. The accounting effects of the transactions are reflected in accordance with IFRS 09.
(12) | On July 24, 2019 Cemig GT made extraordinary amortization of its Seventh Issue of Non-convertible ventures, in the amount of R$125, with final maturity in December 2021.
Schedule of consolidated totals of funds raised | This table provides the totals of funds raised in 2019, 2018 and 2017:
Financing source 2019 | Signature date |  | Principal maturity |  |  |  | Annual financial cost % |  | Amount |
BRAZILIAN CURRENCY |  |  |  |  |  |  |  |  |  |
Debentures – 7th Issue – 1st Series (1) | July, 2019 |  | 2024 |  |  |  | CDI + 0.454% |  | 2,160 |
Debentures – 7th Issue – 2nd Series (1) | July, 2019 |  | 2026 |  |  |  | 4.10% of IPCA |  | 1,500 |
Promissory Notes – 1st Issue (2) | September, 2019 |  | 2020 |  |  |  | 107.00% of CDI |  | 850 |
(-)Transactions costs |  |  |  |  |  |  |  |  | (10 | )
(-)Discount on the issuance of debentures (3) |  |  |  |  |  |  |  |  | (23 | )
Total raised |  |  |  |  |  |  |  |  | 4,477 |
(1) | Cemig Distribuição
(2) | Gasmig
(3) | Discount on the sale price of the 2nd series of the debentures issued by Cemig Distribuição.
Financing source 2018 | Signature date |  | Principal maturity |  |  |  | Annual financial cost % |  |  |  | Amount |
FOREIGN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |
Eurobonds (1) | July, 2018 |  | 2024 |  |  |  | 9.25% |  |  |  | 1,946 |
(-) Transactions costs |  |  |  |  |  |  |  |  |  |  | (8 | )
(±)Interest paid in advance (2) |  |  |  |  |  |  |  |  |  |  | 10 |
|  |  |  |  |  |  |  |  |  |  | 1,948 |
BRAZILIAN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |
Promissory Notes – 9th Issue - Single Series (3) | May, 2018 |  | 2019 |  |  |  | 151% of CDI |  |  |  | 400 |
(-)Transactions costs |  |  |  |  |  |  |  |  |  |  | (4 | )
Debentures |  |  |  |  |  |  |  |  |  |  | – |
Debentures (4) | August, 2018 |  | 2023 |  |  |  | CDI + 1.50% |  |  |  | 100 |
Debentures – 6th Issue – Single Series (5) | December, 2018 |  | 2020 |  |  |  | CDI + 1.75% |  |  |  | 550 |
(-)Transactions costs |  |  |  |  |  |  |  |  |  |  | (4 | )
|  |  |  |  |  |  |  |  |  |  | 1,042 |
Total raised |  |  |  |  |  |  |  |  |  |  | 2,990 |
(1) | In July 2018, Cemig GT completed financial settlement of an additional tranche to its initial Eurobond issue completed on December 5, 2017. The new tranche, of US$ 500, which brought the total of the issuance to R$ 1.946 billion, has half-yearly coupon of 9.25% p.a., with maturity of the principal in 2024.
(2) | Advance of funds to achieve the yield to maturity agreed in the Eurobonds contract.
(3) | In May 2018 Cemig D made its 9th Promissory Note issue, with maturity at 18 months, annual remuneration of 151% of the CDI rate, and single bullet amortization on October 24, 2019.
(4) | In August 2018 Gasmig completed its 7th debenture issue, with maturity at 5 years, paying CDI + 1.50%, with annual amortization from August 2019.
(5) | In December 2018 the 6th Debenture Issue was placed, with maturity at 18 months, annual remuneration of CDI +1.75%, and monthly amortization in 12 payments from July 3, 2019.
Financing source 2017 | Signature date |  | Principal maturity |  |  |  | Annual financing cost – % |  |  |  | Amount (*) |
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |
Eurobonds | 12/05/2017 |  | 2024 |  |  |  | 9.25% |  |  |  | 3,252 |
(–) Transaction costs (*) |  |  |  |  |  |  |  |  |  |  | (16 | )
Interest paid in advance (*) |  |  |  |  |  |  |  |  |  |  | (48 | )
Brazilian currency |  |  |  |  |  |  |  |  |  |  |  |
Debentures (1) | 11/04/2013 |  | 2022 |  |  |  | CDI + 0.74% |  |  |  | 34 |
Debentures (2) | 04/22/2017 |  | 2019 |  |  |  | 128.50% of CDI |  |  |  | 26 |
Debentures – 5th Issue, single series (3) | 12/14/2017 |  | 2022 |  |  |  | 146.50% of CDI |  |  |  | 1,575 |
(–) Transaction costs (3) |  |  |  |  |  |  |  |  |  |  | (11 | )
Total raised |  |  |  |  |  |  |  |  |  |  | 4,812 |
(*) | Includes taxes without cash effect, of R$ 10.
(1) | Subscription by BNDESPar of Gasmig’s 4th debentures Issue, in June 2017, to support the plan for investment in expansion of the gas distribution network.
(2) | Cemig Telecom (merged into Company in 2018) completed its second issue of non-convertible debentures in May 2017 with real guarantees and additional surety, in a single series, to roll over debt and strengthen cash position.
(3) | On December 14, 2017 CemigTelecom made its 5th issue of non-convertible debentures, with maturity 4.5 years, annual remuneration of 146.50% of the CDI, to be amortized in 36 monthly installments due as from July 2019. Payment for subscription of the Debentures of the 5th issue was made with debentures of the 4th issue – thus there was no cash effect.
Schedule of guarantees of the debtor balance on loans and financings | The guarantees of the debt balance on loans and financing, on December 31, 2019, were as follows:
|  | 2019 |
Promissory notes and Sureties |  | 9,247 |
Guarantee and Receivables |  | 3,652 |
Receivables |  | 310 |
Shares |  | 609 |
Unsecured |  | 959 |
TOTAL |  | 14,777 |
Schedule of consolidated composition of loans, financings and debentures, by currency and indexor, with the respective amortization | The composition of loans, financing and debentures, by currency and index, with the respective amortization, is as follows:
|  | 2020 |  |  |  | 2021 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2024 |  |  |  | 2025 |  |  |  | 2026 |  |  |  | Total |
Currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
US dollar |  | 48 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 6,062 |  |  |  | – |  |  |  | – |  |  |  | 6,110 |
Total, currency denominated |  | 48 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 6,062 |  |  |  | – |  |  |  | – |  |  |  | 6,110 |
Index |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IPCA (1) |  | 1,027 |  |  |  | 881 |  |  |  | 588 |  |  |  | 237 |  |  |  | 237 |  |  |  | 996 |  |  |  | 759 |  |  |  | 4,725 |
UFIR/RGR (2) |  | 11 |  |  |  | 3 |  |  |  | 3 |  |  |  | 3 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 20 |
CDI (3) |  | 1,465 |  |  |  | 907 |  |  |  | 570 |  |  |  | 560 |  |  |  | 271 |  |  |  | – |  |  |  | – |  |  |  | 3,773 |
URTJ/TJLP (4) |  | 202 |  |  |  | 21 |  |  |  | 21 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 244 |
IGP-DI (5) |  | 2 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 5 |
Total by index |  | 2,707 |  |  |  | 1,813 |  |  |  | 1,183 |  |  |  | 801 |  |  |  | 508 |  |  |  | 996 |  |  |  | 759 |  |  |  | 8,767 |
(-)Transaction costs |  | (11 | ) |  |  | (10 | ) |  |  | (1 | ) |  |  | (1 | ) |  |  | (19 | ) |  |  | (3 | ) |  |  | (3 | ) |  |  | (48 | )
(±)Interest paid in advance |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (30 | ) |  |  | – |  |  |  | – |  |  |  | (30 | )
(-) Discount |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (11 | ) |  |  | (11 | ) |  |  | (22 | )
Overall total |  | 2,744 |  |  |  | 1,803 |  |  |  | 1,182 |  |  |  | 800 |  |  |  | 6,521 |  |  |  | 982 |  |  |  | 745 |  |  |  | 14,777 |
(1) | Expanded National Customer Price (IPCA) Index.
(2) | Fiscal Reference Unit (Ufir / RGR).
(3) | CDI: Interbank Rate for Certificates of Deposit.
(4) | Interest rate reference unit (URTJ) / Long-Term Interest Rate (TJLP)
(5) | IGP-DI (‘General – Domestic Availability’) Price Index.
Schedule of the principal currencies and indexors used for monetary updating of loans and financings | The principal currencies and index used for monetary updating of loans and financings had the following variations:
Currency |  | Accumulated change in 2019, % |  |  |  | Accumulated change in 2018, % |  |  |  | Indexer |  | Accumulated change in 2019, % |  |  |  | Accumulated change in 2018, % |
US dollar |  | 4.02 |  |  |  | 17.13 |  |  |  | IPCA |  | 4.31 |  |  |  | 3.75 |
|  |  |  |  |  |  |  |  |  | CDI |  | 5.97 |  |  |  | 6.40 |
|  |  |  |  |  |  |  |  |  | TJLP |  | (20.20 | ) |  |  | (0.29 | )
Schedule of changes in loans, financings and debentures | The changes in loans, financing and debentures are as follows:
Balance at December 31, 2016 |  | 15,179 |
Loans and financing obtained |  | 3,363 |
(–) Transaction costs (1) |  | (16 | )
(–) Interest paid in advance (1) |  | (48 | )
Financing obtained, net |  | 3,299 |
Transaction costs (2) |  | (11 | )
Monetary variation |  | 109 |
Exchange rate variation |  | 59 |
Financial charges provisioned |  | 1,537 |
Amortization of transaction cost |  | 67 |
Financial charges paid |  | (1,749 | )
Amortization of financing |  | (4,131 | )
Subtotal |  | 14,359 |
FIC Pampulha: Marketable securities of subsidiary companies |  | 39 |
Balance at December 31, 2017 |  | 14,398 |
Liabilities arising from business combination |  | 163 |
Initial balance for consolidation purposes |  | 14,561 |
Loans and financing obtained |  | 2,996 |
(–) Transaction costs |  | (16 | )
Interest paid in advance |  | 10 |
Financing obtained, net |  | 2,990 |
Monetary variation |  | 134 |
Exchange rate variation |  | 582 |
Financial charges provisioned |  | 1,287 |
Amortization of transaction cost |  | 33 |
Financial charges paid |  | (1,290 | )
Amortization of financing |  | (3,527 | )
Subtotal |  | 14,770 |
FIC Pampulha: Marketable securities of subsidiary companies |  | 2 |
Balance at December 31, 2018 |  | 14,772 |
Loans and financing obtained |  | 4,510 |
(–) Transaction costs |  | (10 | )
Discount in the issues of securities |  | (23 | )
Financing obtained, net |  | 4,477 |
Monetary variation |  | 142 |
Exchange rate variation |  | 226 |
Financial charges provisioned |  | 1,250 |
Amortization of transaction cost |  | 38 |
Financial charges paid |  | (1,265 | )
Amortization of financing |  | (4,883 | )
Subtotal |  | 14,757 |
FIC Pampulha: Marketable securities of subsidiary companies |  | 20 |
Balance at December 31, 2019 |  | 14,777 |
(1) | Includes taxes with no cash effect, of R$10.
(2) | Transaction costs arising from the 5th issue of debentures by Cemig D, which was subscribed by transfer of the debentures of the 4th issue – thus there was no cash effect in the Company.
Schedule of transferred to intangible assets the costs of loans and financings linked to working in progress | The subsidiaries Cemig D and Gasmig considered the costs of loans and financing linked to construction in progress as construction costs of intangible and concession contract assets , as follows:
|  | 2019 |  |  |  | 2018 |  |  |  | 2017 |
Costs of loans and financing |  | 1,250 |  |  |  | 1,287 |  |  |  | 1,604 |
Financing costs on intangible assets and contract assets (1) (Note 17 and 20) |  | (23 | ) |  |  | (30 | ) |  |  | (71 | )
Net effect in Profit or loss |  | 1,227 |  |  |  | 1,257 |  |  |  | 1,533 |
(1) | The average capitalization rate p.a. in 2019 was 6.79% (9.64% in 2018 and 14.28% in 2017).
Schedule of restrictive covenants | The Company has contracts with financial covenants as follows:
Title - Security |  | Covenant |  | Ratio required – Issuer |  | Ratio required Cemig (guarantor) |  | Ratio required – Parajuru and Volta do Rio |  | Compliance required
7th Debentures Issue Cemig GT (1) |  | Net debt / (Ebitda + Dividends received) |  | The following or less: 4.5 in 2019 3.0 in 2020 2.5 in 2021 |  | The following or less: 3.5 in 2019 3.0 in 2020 2.5 in 2021 |  | — |  | Semi-annual and annual
Eurobonds Cemig GT (2) |  | Net debt / Ebitda adjusted for the Covenant |  | The following or less: 4.5 on Dec. 31, 2019 4.5 on June 30, 2020 3.0 on Dec. 31, 2020 3.0 on June 30, 2021 2.5 on/after Dec. 31, 2021 |  | The following or less: 3.5 on Dec. 31, 2019 3.5 on June 30, 2020 3.0 on Dec. 31, 2020 3.0 on June 30, 2021 3.0 on/after Dec. 31, 2021 |  | — |  | Semi-annual and annual
7th Debentures Issue Cemig D |  | Net debt / Ebitda adjusted |  | The following or less: 3.8 on Dec. 31. 2019 3.5 on June 30. 2020 |  | The following or less: 3.5 on December, 31, 2019 3.5 on June, 30, 2020 3.0 on December, 31, 2020 |  | — |  | Semi-annual and annual
Debentures GASMIG (3) |  | Overall indebtedness (Total liabilities/Total assets) |  | Less than 0.6 |  | — |  | — |  | Annual
Ebitda / Debt servicing |  | 1.3 or more |  | — |  | — |  | Annual
Ebitda / Net finance income (expenses) |  | 2.5 or more |  | — |  | — |  | Annual
Net debt / Ebitda |  | The following or less: 4.0 on Dec, 31.2019 2.5 on/after Dec, 31.2020 |  | — |  | — |  | Annual
Financings Caixa Econômica Federal (CEF) Parajuru and Volta do Rio (4) |  | Debt servicing coverage index |  | — |  | — |  | 1.20 or more |  | Annual (during amortization)
| Equity / Total liabilities |  | — |  | — |  | 20.61% or more (Parajuru) 20.63% or more (Volta do Rio) |  | Always
| Share capital subscribed in investee / Total investments made in the project financed |  | — |  | — |  | 20.61% or more (Parajuru) 20.63% or more (Volta do Rio) |  | Always
(1) | 7th Issue of Debentures by Cemig GT, as of December 31, 2016, of R$ 2,240.
(2) | In the event of a possible breach of the financial covenants, interest will automatically be increased by 2% p.a. during the period in which they remain exceeded. There is also an obligation to comply with a ‘maintenance’ covenants – that the consolidated debt, shall have a guarantee for debt of 1.75x Ebitda (2.0 as of December 31, 2017); and a ‘damage’ covenant, requiring real guarantee for debt at Cemig GT of 1.5x Ebitda.
(3) | If Gasmig does not achieve the required covenants, it must, within 120 days from the date of notice in writing from BNDES or BNDESPar, constitute guarantees acceptable the debenture holders fbyor the total amount of the debt, subject to the rules of the National Monetary Council (CMN), unless the required ratios are restored within that period. Certain contractually specified situations can cause early maturity of other debts (cross-default).
(4) | The financing contracts with Caixa Econômica Federal for the Praias de Parajuru and Volta do Rio wind power plants have financial covenants with compliance relating to early maturity of the debt remaining balance. Compliance with the debt servicing coverage index is considered to be demandable only annually and during the period of amortization, which begins in July 2020.

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