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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Tables) | 12 Months Ended
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Dec. 31, 2022
IfrsStatementLineItems [Line Items] |
Schedule of financial instruments and fair value |
Schedule of financial instruments and fair value |  |  |  |  |
|  | 2022 | 2021
| Level | Book value | Fair value | Book value | Fair value
Financial assets |  |  |  |  |
Amortized cost |  |  |  |  |
Marketable securities - Cash investments |  | 380 | 380 | 1,095 | 1,095
Receivables from Customers |  | 4,812 | 4,812 | 4,482 | 4,482
Restricted cash |  | 16 | 16 | 19 | 19
Accounts receivable from the State of Minas Gerais (AFAC) |  | 13 | 13 | 13 | 13
Concession financial assets - CVA (Parcel ‘A’ Costs Variation Compensation) Account and Other financial components |  | 944 | 944 | 2,148 | 2,148
Reimbursement of tariff subsidies |  | - | - | 291 | 291
Escrow deposits |  | 1,207 | 1,207 | 47 | 47
Concession grant fee - Generation concessions |  | 2,950 | 2,950 | 1,155 | 1,155
Agreement between FIP Melbourne and AGPar |  | 161 | 161 | 2,792 | 2,792
|  | 10,483 | 10,483 | 12,042 | 12,042
Fair value through income or loss |  |  |  |  |
Cash equivalents - Cash investments | 2 | 1,346 | 1,346 | 708 | 708
Marketable securities |  |  |  |  |
Bank certificates of deposit (CDBs) | 2 | 191 | 191 | 101 | 101
Financial Notes - Banks | 2 | 906 | 906 | 705 | 705
Treasury Financial Notes (LFTs) | 1 | 402 | 402 | 178 | 178
|  | 2,845 | 2,845 | 1,692 | 1,692
Derivative financial instruments (Swaps) | 3 | 703 | 703 | 1,219 | 1,219
Concession financial assets - Distribution infrastructure | 3 | 1,407 | 1,407 | 718 | 718
Schedule of changes in value of options |
Schedule of changes in value of options |
Balance on December 31, 2019 | 483
Adjustment to fair value | 53
Balance on December 31, 2020 | 536
Adjustment to fair value | 100
Balance on December 31, 2021 | 636
Adjustment to fair value | 36
Balance on December 31, 2022 | 672
Schedule of derivative instruments contracted Realized gain |
Schedule of derivative instruments contracted Realized gain |  |  |  |  |  |
Assets | Liability | Maturity period | Trade market | Notional amount | Realized gain / loss
2022 | 2021
US$ exchange variation + Rate (9.25% p.y.) | R$ 152.01% of CDI | Interest: Half-yearly Principal: Dec.2024 | Over the counter | US$250 | 185 | 1,019
US$ exchange variation + Rate (9.25% p.y.) | R$125.52% of CDI | Interest: Half-yearly Principal: Dec.2024 | Over the counter | US$500 | (54) | 155
US$ exchange variation higher than R$5.0984 | US$ exchange variation lower than R$5.0984 | August 03, 2021 December 16, 2022 | Over the counter | 2021: US$600 2022: US$280 | 32 | 24
| 163 | 1,198
Schedule of derivative instruments contracted |
Schedule of derivative instruments contracted |  |  |  |  |  |  |  |
Assets (1) | Liability | Maturity period | Trade market | Notional amount (2) | Notional amount 2022 | Fair value 2022 | Notional amount 2021 | Fair value 2021
US$ exchange variation + Rate (9.25% p.y.) (1) | R$ + 152.01% of CDI | Interest: Half-yearly Principal: Dec. 2024 | Over the counter | US$250 | 428 | 273 | 873 | 706
US$ exchange variation + Rate (9.25% p.y.) (1) | R$ + 125.52% of CDI | Interest: Half-yearly Principal: Dec. 2024 | Over the counter | US$500 | 568 | 339 | 578 | 507
| 996 | 612 | 1,451 | 1,213
Current asset |  |  |  |  |  | 703 |  | 1,219
Current liabilities |  |  |  |  |  | (91) |  | (6)
(1) | For the US$1 billion Eurobond issued on December 2017: (i) for the principal, a call spread was contracted, with floor at R$3.25/US$ and ceiling at R$5.00/US$; and (ii) a swap was contracted for the total interest, for a coupon of 9.25% p.a. at an average rate equivalent to 150.49% of the CDI. For the additional US$500 issuance of the same Eurobond issued on July 2018 a call spread was contracted for the principal, with floor at R$3.85/US$ and ceiling at R$5.00/US$, and a swap was contracted for the interest, resulting in a coupon of 9.25% p.a., with an average rate equivalent to 125.52% of the CDI rate. The upper limit for the exchange rate in the hedge instrument contracted by the Company for the principal of the Eurobonds is R$5.00/US$. The instrument matures in December 2024. If the USD/BRL exchange rate is still over R$5.00 in December 2024, the company will disburse, on that date, the difference between the upper limit of the protection range and the spot dollar on that date. The Company is monitoring the possible risks and impacts associated with the dollar being valued above R$5.00 and assessing various strategies for mitigating the foreign exchange risk up to the maturity date of the transaction. The hedge instrument fully protects the payment of six-monthly interest, independently of the USD/BRL exchange rate.
(2) | In thousands of US$.
Schedule of fair value of derivative hedge instrument One |
Schedule of fair value of derivative hedge instrument One |  |  |
|  | Probable' scenario | Adverse scenario
Risk: foreign exchange rate exposure | Base scenario | US$1 = R$5.10 | US$1 = 6.00
US dollar |  |  |
Loans (Note 22) | (3,975) | (3,885) | (4,571)
Suppliers (Itaipu Binacional) (Note 20) | (274) | (267) | (315)
| (4,249) | (4,152) | (4,886)
Net liabilities exposed | (4,249) | (4,152) | (4,886)
Net effect of exchange rate fluctuation |  | 97 | (637)
Schedule of Exchange rate risk |
Schedule of Exchange rate risk |  |  |  |
| 2022 | 2021
Exposure to exchange rates | Foreign currency | R$ | Foreign currency | R$
US dollar |  |  |  |
Loans (Note 22) | (762) | (3,975) | (1,008) | (5,623)
Suppliers (Itaipu Binacional) (Note 20) | (52) | (274) | (59) | (331)
| (814) | (4,249) | (1,067) | (5,954)
Net liabilities exposed |  | (4,249) |  | (5,954)
Schedule of exposure to exchange rates |
Schedule of exposure to exchange rates |  |
Risk: Exposure to domestic interest rate changes | 2022 | 2021
Assets |  |
Cash equivalents - Cash investments (Note 6) - CDI | 1,345 | 708
Marketable securities (Note 7) - CDI / SELIC | 1,878 | 2,078
Restricted cash - CDI | 16 | 19
CVA and in tariffs (Note 14) - SELIC | 944 | 2,148
Assets | 4,183 | 4,953
Liabilities |  |
Loans and debentures (Note 22) - CDI | (2,041) | (1,458)
Loans and debentures (Note 22) - TJLP | - | (21)
Sector financial liabilities (Note 14) | - | (51)
Liabilities | (2,041) | (1,530)
Net assets exposed | 2,142 | 3,423
Schedule of exposure to exchange rates |
Schedule of exposure to exchange rates |  |  |
Risk: Increase in Brazilian interest rates | 2022 | 2023
Book value | Probable' scenario | Adverse scenario
Selic 12.5% | Selic 9.75%
TJLP 7.2% | TJLP 5.96%
Assets |  |  |
Cash equivalents (Note 6) | 1,345 | 1,513 | 1,476
Marketable securities (Note 7) | 1,878 | 2,113 | 2,061
Restricted cash | 16 | 18 | 17
CVA and Other financial components - SELIC (Note 14) | 944 | 1,062 | 1,036
Assets | 4,183 | 4,706 | 4,590
Liabilities |  |  |
Loans and debentures - CDI (Note 22) | (2,041) | (2,296) | (2,240)
Liabilities | (2,041) | (2,296) | (2,240)
Net assets exposed | 2,142 | 2,410 | 2,350
Net effect of fluctuation in interest rates |  | 268 | 208
Schedule of risk of increase in inflation |
Schedule of risk of increase in inflation |  |
Exposure to increase in inflation | 2022 | 2021
Assets |  |
Concession financial assets related to Distribution infrastructure - IPCA (1) | 1,407 | 718
Receivable from Minas Gerais state government (AFAC) – IGPM (Note 11 and 30) | - | 13
Concession Grant Fee - IPCA (Note 14) | 2,950 | 2,792
Assets | 4,357 | 3,523
Liabilities |  |
Loans and debentures - IPCA and IGP-DI (Note 22) | (4,630) | (4,322)
Debt with pension fund (Forluz) - IPCA (Note 24) | (251) | (385)
Deficit of pension plan (Forluz) - IPCA (Note 24) | (545) | (539)
Liabilities | (5,426) | (5,246)
Net assets exposed | (1,069) | (1,726)
(1) | Portion of the concession financial assets relating to the Regulatory Remuneration Base of Assets ratified by the grantor (ANEEL) after the 4th tariff review cycle.
Schedule of exposure to exchange rates Risk |
Schedule of exposure to exchange rates Risk |  |  |
Risk: increase in inflation index | 2022 | 2023
Book value | ‘Probable scenario’ | ‘Adverse scenario’
IPCA 5.3% | IPCA 7.9%
IGPM 3.49% | IGPM 6.9%
Assets |  |  |
Concession financial assets related to Distribution infrastructure - IPCA (1) | 1,370 | 1,442 | 1,478
Concession financial assets related to gas distribution infrastructure - IGPM | 37 | 38 | 39
Concession Grant Fee - IPCA (Note 14) | 2,950 | 3,107 | 3,184
Assets | 4,357 | 4,587 | 4,701
Liabilities |  |  |
Loans and debentures - IPCA and IGP-DI (Note 22) | (4,630) | (4,875) | (4,996)
Debt agreed with pension fund (Forluz) - IPCA (Note 24) | (251) | (265) | (271)
Deficit of pension plan (Forluz) (Note 24) | (545) | (574) | (588)
Liabilities | (5,426) | (5,714) | (5,855)
Net liabilities exposed | (1,069) | (1,127) | (1,154)
Net effect of fluctuation in IPCA and IGP-M indexes |  | (58) | (85)
(1) | Portion of the Concession financial assets relating to the Regulatory Remuneration Base of Assets ratified by the grantor (ANEEL) after the 4th tariff review cycle.
Schedule of financial instruments at interest rates |
Schedule of financial instruments at interest rates |  |  |  |  |  |
| Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total
Financial instruments at interest rates: |  |  |  |  |  |
- Floating rates |  |  |  |  |  |
Loans and debentures | 55 | 536 | 1,244 | 10,439 | 618 | 12,892
Onerous concessions | - | 1 | 3 | 13 | 17 | 34
Debt with pension plan (Forluz) (Note 23) | 15 | 30 | 136 | 93 | - | 274
Deficit of the pension plan (FORLUZ) (Note 23) | 6 | 13 | 60 | 352 | 412 | 843
| Up to 1 month | 1 to 3 months | 3 months to 1 year | 1 to 5 years | Over 5 years | Total
| 76 | 580 | 1,443 | 10,897 | 1,047 | 14,043
- Fixed rate |  |  |  |  |  |
Suppliers | 2,626 | 206 | - | - | - | 2,832
Total | 2,702 | 786 | 1,443 | 10,897 | 1,047 | 16,875
Schedule of net liabilities and its equity |
Schedule of net liabilities and its equity |  |
| 2022 | 2021
Loans and debentures | 10,579 | 11,364
(-) Cash and cash equivalents | (1,441) | (825)
(-) Marketable securities | (1,878) | (2,078)
(-) Derivative hedge instrument | (1) | (1,213)
Net debt | 6,648 | 7,248
Adjusted EBITDA | 6,928 | 5,932
Net debt / Adjusted EBITDA | 0.96 | 1.22
Schedule of consolidated net liabilities |
Schedule of consolidated net liabilities |  |
| 2022 | 2021
Total liabilities | 31,888 | 32,584
(-) Cash and cash equivalents | (1,441) | (825)
(-) Restricted cash | (16) | (19)
Net liabilities | 30,431 | 31,740
Total equity | 21,783 | 19,462
Net liabilities / equity | 1.40 | 1.62
Schedule of credit exposure |
Schedule of credit exposure |  |  |  |  |
Group | Equity | Limit per bank (% of equity) (1) (2)
AAA | AA | A | BBB
Federal Risk | - | 10% | 10% | 10% | 10%
A1 | Equal or over R$10 billion | 9% | 8% | 7% | 6%
A2 | Between R$5 billion and R$10 billion | 8% | 7% | 6% | 5%
A3 | Between R$2 billion and R$5 billion | 7% | 6% | 5% | 4%
A4 | Between R$800 million and R$2 billion | 6% | 5% | 4% | -
1. | The percentage assigned to each bank depends on individual assessment of indicators, e.g. liquidity, and quality of the credit portfolio.
2. | When the institution has different ratings from different risk rating agencies, the rating that is most favorable for the institution is taken into account.
Fair value hedges [member] |
IfrsStatementLineItems [Line Items] |
Schedule of fair value of derivative hedge instrument One |
Schedule of fair value of derivative hedge instrument |  |  |
| Base scenario 2022 | Probable' scenario 2023 Selic 12.75% Dollar 5.10 | Adverse scenario 2023 Selic 15.75% Dollar 6.02
Swap (asset) | 2,865 | 2,793 | 2,790
Swap (liability) | (2,976) | (2,872) | (2,897)
Option / Call spread | 723 | 745 | 855
Derivative hedge instrument | 612 | 666 | 748

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