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Loans and Debentures | 12 Months Ended
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Dec. 31, 2024
Loans And Debentures |
Loans And Debentures | 20. LOANS AND DEBENTURES
Financing source | Principal maturity |  | Annual financial cost |  | Currency |  | Dec. 31, 2024 |  | Dec. 31, 2023
|  |  | Current |  | Non-current |  | Total |  | Current |  | Non-current |  | Total
FOREING CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Eurobonds (1) | 2024 |  | 9.25% |  | U$$ |  | - |  | - |  | - |  | 1,857 |  | - |  | 1,857
(-) Transaction costs |  |  |  |  |  |  | - |  | - |  | - |  | (1) |  |  |  | (1)
(±) Interest paid in advance (2) |  |  |  |  |  |  | - |  | - |  | - |  | (2) |  |  |  | (2)
Total of loans |  |  |  |  |  |  | - |  | - |  | - |  | 1,854 |  |  |  | 1,854
BRAZILIAN CURRENCY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debentures - 3rd Issue - 3rd Series (3) | 2025 |  | IPCA + 5.10% |  | R$ |  | 334 |  | - |  | 334 |  | 331 |  | 304 |  | 635
Debentures - 7th Issue - 1st Series (3) | 2024 |  | CDI + 0.45% |  | R$ |  | - |  | - |  | - |  | 271 |  | - |  | 271
Debentures - 7th Issue - 2nd Series (3) | 2026 |  | IPCA + 4.10% |  | R$ |  | 1,026 |  | 1,023 |  | 2,049 |  | 3 |  | 1,945 |  | 1,948
Debentures - 8th Issue - 1st Series (3) | 2027 |  | CDI + 1.35% |  | R$ |  | 3 |  | 500 |  | 503 |  | 2 |  | 500 |  | 502
Debentures - 8th Issue - 2nd Series (3) | 2029 |  | IPCA + 6.10% |  | R$ |  | 1 |  | 556 |  | 557 |  | 1 |  | 529 |  | 530
Debentures - 9th Issue - Single series | 2026 |  | CDI + 2.05% |  | R$ |  | 1,030 |  | 1,000 |  | 2,030 |  | 32 |  | 2,000 |  | 2,032
Debentures - 10th Issue - 1st Series (3) | 2029 |  | CDI + 0.80% |  | R$ |  | 17 |  | 400 |  | 417 |  | - |  | - |  | -
Debentures - 10th Issue - 2nd Series (3) | 2034 |  | IPCA + 6.15% |  | R$ |  | 38 |  | 1,659 |  | 1,697 |  | - |  | - |  | -
Debentures - 11th Issue - 1st Series (3) | 2031 |  | CDI + 0.55% |  | R$ |  | 29 |  | 1,000 |  | 1,029 |  | - |  | - |  | -
Debentures - 11th Issue - 2nd Series (3) | 2036 |  | IPCA + 6.58% |  | R$ |  | 25 |  | 1,528 |  | 1,553 |  | - |  | - |  | -
Debentures - 8th Issue - Single series (4) | 2031 |  | IPCA + 5.27% |  | R$ |  | 146 |  | 880 |  | 1,026 |  | 134 |  | 958 |  | 1,092
Debentures - 9th Issue - Single series (4) | 2029 |  | CDI + 0.47% |  | R$ |  | - |  | 200 |  | 200 |  | - |  | - |  | -
Debentures - 9th Issue - 1st Series (1) | 2027 |  | CDI + 1.33% |  | R$ |  | 237 |  | 467 |  | 704 |  | 3 |  | 700 |  | 703
Debentures - 9th Issue - 2nd Series (1) | 2029 |  | IPCA + 7.63% |  | R$ |  | 1 |  | 331 |  | 332 |  | 1 |  | 315 |  | 316
(-) Discount on the issuance of debentures (5) |  |  |  |  |  |  | (3) |  | (3) |  | (6) |  | - |  | (9) |  | (9)
(-) Transaction costs |  |  |  |  |  |  | (7) |  | (138) |  | (145) |  | (2) |  | (41) |  | (43)
Total, debentures |  |  |  |  |  |  | 2,877 |  | 9,403 |  | 12,280 |  | 776 |  | 7,201 |  | 7,977
Total |  |  |  |  |  |  | 2,877 |  | 9,403 |  | 12,280 |  | 2,630 |  | 7,201 |  | 9,831
(1) | Cemig Geração e Transmissão;
(2) | Advance of funds to achieve the yield to maturity agreed in the Eurobonds contract;
(3) | Cemig Distribuição;
(4) | Debentures issued by Gasmig.
(5) | Discount on the sale price of the 2nd series of the Seventh issue of Cemig Distribuição.
The debentures issued by the subsidiaries are non-convertible, there are no agreements for renegotiation, nor debentures held in treasury. The nominal and real costs of the Company's debt are 12.64% p.a. and 7.66% p.a. on December 31, 2024, respectively, and 11.98% p.a. and 6.65% p.a. on December 31, 2023, respectively. a) Settlement of Eurobonds In December 2017 and July 2018, funds were raised outside Brazil by issuance of Eurobonds, in the amounts of US$1 billion and US$500 million, respectively, with six-monthly payments of interest, and settlement of the principal in December 2024. At the same time, for protection against exchange rate variation, a hedge transaction was contracted through a combination of derivatives. Over the period from 2021 through 2023, Cemig GT executed repurchases, for a total amount of US$1,119 million. Cemig GT settled its debt securities issued in the international market (‘the Eurobonds’) on December 5, 2024, in accordance with their maturity date. The net effect on the Company’s cash position was R$1,866, comprising the payment of R$2,309 (US$381 million, at the exchange rate of US$1=R$6.0585), less the effect of R$443 arising under the hedge transaction. b) Debentures issues On September 27, 2024, Cemig D concluded the financial settlement of its 11 th debenture issue, in two series, with a surety guarantee from Cemig. 2.5 million debentures were issued, characterized as ‘sustainable ESG debentures’, with total value of 2.5 billion Reais, which were subscribed as follows:
Series | Quantity | Amount | Remuneration | Maturity | Amortization
First Series | 1,000,000 | R$1,000,000 | CDI + 0.55% | 7 years | 72 th e 84 th months
Second Series | 1,500,000 | R$1,500,000 | IPCA + 6.5769% | 12 years | 132 th e 144 th months
|  | Entry Date |  | Principal maturity |  | Annual financial cost |  | Value
BRAZILIAN CURRENCY |  |  |  |  |  |  |  |
Debentures – 11th Issue – 1st Series |  | September, 2024 |  | 2031 |  | CDI + 0.55% |  | 1,000
Debentures – 11th Issue – 2nd Series |  | September, 2024 |  | 2036 |  | IPCA + 6.5769% |  | 1,500
(-) Transaction costs |  |  |  |  |  |  |  | (64)
Total |  |  |  |  |  |  |  | 2,436
Gasmig’s 9th debenture issue Gasmig concluded the financial settlement of this 9th issue of debentures, in a single series, on December 27, 2024. The issue was of 200 thousand debentures, with nominal unit value of one thousand Reais, for a total of R$200, as follows:
Series | Quantity | Amount | Remuneration | Maturity | Amortization
Single | 200,000 | R$200 | CDI + 0.47% | 5 years | 36 th , 48 th e 60 th months
Financing source | Entry Date |  | Principal maturity |  | Annual financial cost |  | Value
BRAZILIAN CURRENCY |  |  |  |  |  |  |
Debentures – 9th Issue – Single Series | December, 2024 |  | 2029 |  | CDI + 0.47% |  | 200
Total |  |  |  |  |  |  | 200
We note, additionally, that Fitch Ratings allocates a credit risk of AA+(bra) to this Issues. c) Guarantees The guarantees of the debt balance on loans and debentures, on December 31, 2024, were as follows:
|  | Dec. 31, 2024
Promissory notes and sureties |  | 334
Guarantee and receivables |  | 2,042
Sureties |  | 8,694
Unsecured |  | 1,210
Total |  | 12,280
d) Composition and consolidated changes on loans and debentures The company's debt has an average repayment period of 2.8 years. The consolidated breakdown of loans and debentures, by currency and index, considering their maturities, is as follows:
| 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | 2030 onwards |  | Total
Index |  |  |  |  |  |  |  |  |  |  |  |  |
IPCA (1) | 1,571 |  | 1,155 |  | 139 |  | 423 |  | 761 |  | 3,498 |  | 7,547
CDI (2) | 1,315 |  | 1,233 |  | 800 |  | 300 |  | 233 |  | 1,000 |  | 4,881
Total by index | 2,886 |  | 2,388 |  | 939 |  | 723 |  | 994 |  | 4,498 |  | 12,428
(-) Transaction costs | (7) |  | (7) |  | (4) |  | (11) |  | (12) |  | (105) |  | (146)
(-) Discount | (3) |  | - |  | (3) |  | - |  | - |  | - |  | (6)
Overall total | 2,876 |  | 2,381 |  | 932 |  | 712 |  | 982 |  | 4,393 |  | 12,276
(1) | Expanded National Customer Price (IPCA) Index.
(2) | CDI: Interbank Rate for Certificates of Deposit.
ANNUAL REPORT AND FORM 20-F | 2024 | F-91
Table of Contents The index used for monetary updating of Loans and debentures had the following variations:
Indexer |  | Accumulated change on 2024 (%) |  | Accumulated change on 2023 (%)
IPCA |  |  | 4.83 |  |  | 4.62
CDI |  |  | 10.83 |  |  | 13.04
The changes in loans and debentures are as follows:
Balance at December 31, 2021 |  | 11,364
Loans and financing obtained |  | 2,000
Transaction costs |  | (19)
Financing obtained, net |  | 1,981
Monetary variation |  | 167
Exchange rate variation |  | (338)
Accrued financial charges |  | 975
Premium on repurchase of debt securities (Eurobonds) |  | 47
Amortization of transaction cost |  | 7
Financial charges paid |  | (1,010)
Amortization of financing |  | (2,613)
Balance at December 31, 2022 |  | 10,580
Loans and financing obtained |  | 2,000
Transaction costs |  | (12)
Financing obtained, net |  | 1,988
Monetary variation |  | 148
Exchange rate variation |  | (277)
Accrued financial charges |  | 1,083
Amortization of transaction cost |  | 14
Financial charges paid |  | (1,026)
Amortization of financing |  | (2,679)
Balance at December 31, 2023 |  | 9,831
Loans and financing obtained |  | 4,700
Transaction costs |  | (118)
Financing obtained, net |  | 4,582
Monetary variation |  | 248
Exchange rate variation |  | 464
Accrued financial charges |  | 1,066
Amortization of transaction cost |  | 20
Financial charges paid |  | (956)
Amortization of financing |  | (2,975)
Balance at December 31, 2024 |  | 12,280
e) Borrowing costs, capitalized Borrowing costs directly related to the acquisition, construction or production of an asset that necessarily requires substantial time to be completed for its intended use or sale are capitalized as part of the cost of the corresponding asset. All other borrowing costs are expensed in the period in which they are incurred. Borrowing costs comprise interest and other costs incurred by the Company related to Loans and debentures. The subsidiaries CEMIG D and Gasmig considered the costs of loans and debentures linked to construction in progress as construction costs of intangible and concession contract assets, as follows:
|  | 2024 |  | 2023 |  | 2022
Costs of loans and financing |  | 1,066 |  | 1,083 |  | 975
Financing costs on intangible assets and contract assets (1) |  | (77) |  | (70) |  | (47)
Net effect in Profit or loss |  | 989 |  | 1,013 |  | 928
(1) | The average capitalization rate in 2024 was 11.13% (11.75% in 2023).
The amounts of the capitalized borrowing costs have been excluded from the statement of cash flows, in the additions to cash flow of investment activities, as they do not represent an outflow of cash for acquisition of the related asset. f) Restrictive covenants There are early maturity clauses for cross-default in the event of non-payment by CEMIG GT or by the Company, of any pecuniary obligation with individual or aggregate value greater than R$50 (‘cross default’). The Company has contracts with financial covenants as follows:
Title - Security |  | Covenant |  | Ratio required - Issuer |  | Ratio required CEMIG (guarantor) |  | Compliance required
8th Debentures Issuance Gasmig |  | Ebitda/Debt servicing Net debt / Ebitda (2) |  | 1.3 or more 3.0 or less |  | - |  | Annual Annual
9th Debentures Issuance Gasmig |  | Ebitda/Net financial income 'Net debt / Ebitda |  | 1.3 or more 3.0 or less |  | - |  | Annual
9th Debenture Issue CEMIG GT (3) |  | Net debt / Adjusted Ebitda (1) |  | 3.5 or less |  | 3.0 from Dec. 31, 2022 to June 30, 2026 and 3.5 from Dec. 31, 2026 onwards |  | Semi-annual and annual
7th and 8th Debentures Issuance CEMIG D |  | Net debt / Adjusted Ebitda (1) |  | 3.5 or less |  | 3.0 or less |  | Semi-annual and annual
9th Debentures Issuance CEMIG D |  | Net debt / Ebitda |  | 3.5 or less |  | 3.0 or less |  | Semi-annual and annual
10th Debentures Issue CEMIG D |  | Net debt / Ebitda |  | 3.5 or less from June 30, 2024 to June 30, 2029 4.0 or less from June 30, 2029 onwards |  | 3.0 or less up to June 30, 2026 3.5 or less from July 1, 2026 to June 30, 2029 4.0 or less from June 30, 2029 onwards |  | Semi-annual and annual
11th Debentures Issue CEMIG D |  | Net debt / Ebitda |  | 3.5 or less from December 31, 2024 to June 30, 2029 4.0 or less from June 30, 2029 onwards |  | 3.0 or less up to June 30, 2026 3.5 or less from July 1, 2026 to June 30, 2029 4.0 or less from June 30, 2029 onwards |  | Semi-annual and annual
(1) | Adjusted Ebitda corresponds to earnings before interest, income taxes and social contribution on net income, depreciation and amortization, calculated in accordance with CVM Resolution 156, dated June 23, 2022, from which non-operating income, any credits and non-cash gains that increase net income are subtracted, to the extent that they are non-recurring, and any cash payments made on a consolidated basis during such period in respect of non-cash charges that were added back in the determination of Ebitda in any prior period, and increased by non-cash expenses and non-cash charges, to the extent that they are non-recurring.
(2) | Non-compliance with financial covenants implies non-automatic early maturity. If early maturity is declared by the debenture holders, Gasmig must make the payment upon receipt of the notification.
(3) | Non-compliance with financial covenants implies early maturity resulting in the immediate enforceability of payment by CEMIG GT of the Unit Nominal Value or Updated Unit Nominal Value of the Debentures, as the case may be, plus remuneration, in addition to the other charges due, regardless of judicial or extrajudicial notice, notification or interpellation.
Management monitored these covenants to ensure that the conditions outlined in the table above were met, and confirmed that the Company was in compliance with those as of December 31, 2024. Linked funds under a debenture issue On December 31, 2024, the company had a balance of R$235 relating to restricted funds (R$31 on December 31, 2023). This growth is essentially associated with Cemig D's 7th issue of debentures. Under a Fiduciary Assignment contract of its seventh debenture issue, Cemig D is required to retain, monthly, in a linked account, during the six months prior to maturity of each installment, an amount equal to 1/6 of the projected value of the installment, on average R$181. These guarantee deposits began in December 31, 2024, and at December 31, 2024 the amount held totaled R$185. In the Financial Statements for 2024, the total of tied funds is shown under a specific heading in the Balance Sheet. In order to maintain comparability, the balance as of December 31, 2023, which was presented under “Other” in the Balance Sheet, has been highlighted on a specific line.

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