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Financial Instruments and Risk Management (Tables)
 12 Months Ended
Dec. 31, 2024
Financial Instruments And Risk Management  
Schedule of Financial Instruments and Fair Value

The financial instruments, classified in accordance with the accounting principles, are as follows:

 

 

Dec. 31, 2024

 

Dec. 31, 2023

 

Level

Balance

 

Fair value

 

Balance

 

Fair value

Financial assets

 

 

 

 

 

 

 

 

Amortized cost (1)

 

 

 

 

 

 

 

 

Marketable securities – Cash investments

 

142

 

142

 

11

 

11

Accounts receivable from Customers and traders; Concession holders (transmission service)

 

5,850

 

5,850

 

5,477

 

5,477

Restricted cash

 

235

 

235

 

31

 

31

Accounts receivable from the State of Minas Gerais (AFAC)

 

40

 

40

 

13

 

13

Concession financial assets – CVA (Parcel ‘A’ Costs Variation Compensation) Account and Other financial components

 

1,296

 

1,296

 

806

 

806

Concession grant fee – Generation concessions

 

3,098

 

3,098

 

3,031

 

3,031

 

 

10,661

 

10,661

 

9,369

 

9,369

Fair value through profit or loss

 

 

 

 

 

 

 

 

Cash equivalents – Cash investments

2

1,629

 

1,629

 

1,342

 

1,342

Marketable securities

 

 

 

 

 

 

 

 

Bank certificates of deposit (CDBs)

2

-

 

-

 

74

 

74

Financial Notes – Banks

2

279

 

279

 

475

 

475

Treasury Financial Notes (LFTs)

1

72

 

72

 

214

 

214

 

 

1,980

 

1,980

 

2,105

 

2,105

Derivative financial instruments (Swaps)

2

-

 

-

 

368

 

368

Concession financial assets – Distribution infrastructure

3

2,807

 

2,807

 

1,920

 

1,920

Indemnifiable receivable – Generation

3

871

 

871

 

784

 

784

 

 

5,658

 

5,658

 

5,177

 

5,177

 

 

16,319

 

16,319

 

14,546

 

14,546

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

Amortized cost (1)

 

 

 

 

 

 

 

 

Loans and debentures (2)

 

(12,280)

 

(11,934)

 

(9,831)

 

(9,831)

Debt with pension fund (Forluz)

 

-

 

-

 

(90)

 

(90)

Deficit of pension fund (Forluz)

 

(494)

 

(484)

 

(521)

 

(521)

Concessions payable

 

(27)

 

(27)

 

(28)

 

(28)

Suppliers

 

(2,952)

 

(2,952)

 

(3,017)

 

(3,017)

Leasing liabilities (Adjusted for remeasurements)

 

(429)

 

(429)

 

(433)

 

(433)

Sector financial liabilities

 

(16)

 

(16)

 

-

 

-

 

 

(16,198)

 

(15,842)

 

(13,920)

 

(13,920)

 

(1)

The book value represents the approximate fair value amount, except for loans, debentures and pension fund deficit equalization in relation to the amounts as of December 31, 2024.

(2)

The fair value presented is net of the transaction costs and anticipated resources presented in note 20.

 
Schedule of Derivative Instruments Contracted Realized Gain

The gains and losses realized in 2024 and 2023 are shown below:

Assets

Liability

 

Maturity period

 

Product

 

Trade market

 

Notional amount

 

Realized gain / loss

 

 

 

 

 

2024

 

2023

US$ exchange variation + Rate (9.25% p.y.)

Local currency R$ + 149.99% of CDI

 

Interest: Half-yearly Principal: Dec. 2024

 

Swap + Options

 

Over the counter

 

US$120.000

 

212

 

97

US$ exchange variation + Rate (9.25% p.y.)

Local currency R$ + 125.54% of CDI

 

Interest: Half-yearly Principal: Dec. 2024

 

Swap + Options

 

Over the counter

 

US$261.110

 

302

 

87

US$ exchange variation higher than R$5.1110

US$ exchange variation higher than R$5.1110

 

April 13, 2023 December 05, 2023

 

NDF

 

Over the counter

 

US$392.344

 

-

 

(79)

US$ exchange variation higher than R$4.9675

US$ exchange variation higher than R$4.9675

 

December 05, 2023 December 19, 2023

 

NDF

 

Over the counter

 

US$376.550

 

-

 

(38)

 

 

 

 

 

 

 

 

 

 

 

514

 

67

 
Schedule of Derivative Instruments Contracted

The net exposure to exchange rates is as follows:

Exposure to exchange rates

Dec. 31, 2024

 

Dec. 31, 2023

 

 

 

 

 

 

 

 

 

Foreign currency

 

R$

 

Foreign currency

 

R$

US dollar

 

 

 

 

 

 

 

Loans and financing (note 20)

-

 

-

 

(384)

 

(1,857)

Suppliers (Itaipu Binacional)

(34)

 

(210)

 

(50)

 

(240)

 

(34)

 

(210)

 

(434)

 

(2,097)

Net liabilities exposed

 

 

(210)

 

 

 

(2,097)
Schedule of Fair Value of Derivative Hedge Instrument One

The Company has prepared a sensitivity analysis of the effects on the Company’s net income arising from depreciation of the Real exchange rate considering an adverse scenario in relation to the probable scenario.

Risk: foreign exchange rate exposure

 Dec. 31, 2024

 

Dec. 31, 2025

Book value

 

Probable' scenario

 

Adverse scenario

 

Dollar R$5.7

 

Dollar R$6.48

US dollar

 

 

 

 

 

Suppliers (Itaipu Binacional)

(210)

 

(194)

 

(220)

Net liabilities exposed

(210)

 

(194)

 

(220)

Net effect of exchange rate fluctuation

 

 

 16

 

 (10)
Schedule of Net Assets Exposure to Exchange Rates

This exposure occurs as a result of net assets indexed to variation in interest rates, as follows:

 

Dec. 31, 2024

 

Dec. 31, 2023

Assets

 

 

 

Cash equivalents – Cash investments – CDI

 1,629

 

 1,342

Marketable securities – CDI / Selic

493

 

774

Generation indemnity revenue

 871

 

784

Restricted cash – CDI

235

 

31

CVA and in tariffs (Note 12.d) – Selic

1,296

 

806

 

4,524

 

3,737

Liabilities

 

 

 

Loans and debentures (Note 20) – CDI

 (4,882)

 

 (3,508)

Sector financial liabilities (note 12.d)

 (16)

 

-  

 

 (4,898)

 

 (3,508)

Net liabilities exposed (1)

 (374)

 

229

Schedule of Exposure to Exchange Rates

The Company made a sensitivity analysis of the effects on results considering an adverse scenario in relation to the probable scenario, as shown in the table below. The CDI rate follows the Selic rate.

 

Risk: Increase in Brazilian interest rates

Dec. 31, 2024

 

Dec. 31, 2025

Book value

 

Probable' scenario

 

Adverse scenario

 

Selic 15%

 

Selic 15.25%

 

TJLP 7.94%

 

TJLP 8.26%

Assets

 

 

 

 

 

Cash equivalents

1,629

 

1,873

 

1,877

Marketable securities

493

 

566

 

568

Generation indemnity revenue (nota 12.b)

871

 

1,001

 

941

Restricted cash

235

 

270

 

271

CVA and Other financial components – SELIC (Note 12.d)

1,296

 

1,490

 

1,493

 

4,524

 

5,200

 

5,150

Liabilities

 

 

 

 

 

Loans and financing (Note 20) – CDI

(4,882)

 

(5,614)

 

(5,627)

CVA and Other financial components – SELIC (Note 12.d)

(16)

 

(18)

 

-

 

(4,898)

 

(5,632)

 

(5,627)

 

 

 

 

 

 

Net liabilities exposed

(374)

 

(432)

 

(477)

Net effect of fluctuation in interest rates

 

 

(58)

 

(103)
Schedule of Risk of Increase in Inflation

This table presents the Company’s net exposure to inflation index:

 

Exposure to increase in inflation

Dec. 31, 2024

 

Dec. 31, 2023

Assets

 

 

 

Concession financial assets related to Distribution infrastructure - IPCA

2,807

 

1,920

Concession Grant Fee – IPCA (Note 12.c)

3,098

 

3,031

 

5,905

 

4,951

Liabilities

 

 

 

Loans and debentures – IPCA and IGP-DI (Note 20)

(7,547)

 

(4,522)

Debt with pension fund (Forluz) – IPCA

-

 

(90)

Deficit of pension plan (Forluz) – IPCA

(494)

 

(521)

Leasing liabilities

(429)

 

(433)

 

(8,470)

 

(5,566)

Net liabilities exposed

(2,565)

 

(615)

(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 The Company has prepared a sensitivity analysis of the effects on its net income arising from reductions in rates in an adverse scenario.

 

 

Dec. 31, 2024

 

Dec. 31, 2025

Book value

 

Probable' scenario

 

Adverse scenario

 

IPCA 4.5%

 

IPCA 8.08%

 

IGPM 3.76%

 

IGPM 9.47%

Assets

 

 

 

 

 

Concession financial assets related to Distribution infrastructure – IPCA (1)

2,715

 

2,837

 

2,934

Concession financial assets related to gas distribution infrastructure – IGPM

92

 

96

 

101

Concession Grant Fee – IPCA (Note 12.c)

3,098

 

3,238

 

3,349

 

5,905

 

6,171

 

6,384

Liabilities

 

 

 

 

 

Loans, financing and debentures – IPCA and IGP-DI (Note 20)

(7,547)

 

(7,887)

 

(8,157)

Deficit of pension plan (Forluz)

(494)

 

(516)

 

(534)

Leasing liabilities

(429)

 

(449)

 

(464)

 

(8,470)

 

(8,852)

 

(9,155)

Net liability exposed

(2,565)

 

(2,681)

 

(2,771)

Net effect of fluctuation in IPCA and IGP–M indexes

 

 

(116)

 

(206)

 

(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

The flow of payments of the Company’s obligation to suppliers, debts with the pension fund, Loans and debentures, at floating and fixed rates, including future interest up to contractual maturity dates, is as follows:

 

Up to 1 month

 

1 to 3 months

 

3 months to 1 year

 

1 to 5 years

 

Over 5 years

 

Total

 

Principal

 

Interest

 

Principal

 

Interest

 

Principal

 

Interest

 

Principal

 

Interest

 

Principal

 

Interest

 

Financial instruments at interest rates:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- Floating rates (*)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and debentures

-

 

-

 

324

 

216

 

2,414

 

706

 

5,354

 

2,217

 

5,902

 

1,513

 

18,646

Onerous concessions

-

 

-

 

1

 

-

 

3

 

-

 

14

 

-

 

15

 

-

 

33

Deficit of the pension plan (FORLUZ)

5

 

2

 

10

 

5

 

45

 

21

 

304

 

81

 

207

 

15

 

695

 

5

 

2

 

335

 

221

 

2,462

 

727

 

5,672

 

2,298

 

6,124

 

1,528

 

19,374

- Fixed rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Suppliers

2,787

 

-

 

163

 

-

 

2

 

-

 

-

 

-

 

-

 

-

 

2,952

Total

2,792

 

2

 

498

 

221

 

2,464

 

727

 

5,672

 

2,298

 

6,124

 

1,528

 

22,326

 

(*) The lease payment flow is presented in note 17.
Schedule of Credit Exposure

Banks that exceed these thresholds are classified in three groups, in accordance with their equity value, plus a specific segment comprising those whose credit risk is associated only with federal government, and within this classification, limits of concentration by group and by institution are set:

 

 

 

Limit per bank (% of equity) (1) (2)

Group

Equity

 

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.

 
Schedule of measures arising from non-compliance of quality criteria and parameters for economic and financial sustainability

As of 2021, the contract established that failure to meet the quality criteria for three consecutive years or the minimum parameters for economic and financial sustainability for two consecutive years will result in the opening of forfeiture proceedings. This rule was regulated by Normative Resolution 948/2021, summarized as follows:

Indicator

Criteria

Measures arising from non-compliance

Economic and financial management

In the base year

Capital contribution (1)

Limitation on the distribution of dividends and interest on own capital

Restrictive regime for contracts with related parties

Economic and financial management

2 consecutive years

Expiry of the concession

Quality of supply

In the base year

Results plan (2)

Quality of supply

2 consecutive years or 3 of the previous 5 calendar years

Limitation on the distribution of dividends and interest on own capital (3)

Quality of supply

3 consecutive years

Expiry of the concession

 

(1)

Within 180 days of the end of each financial year, for the total insufficiency that occurs in reaching the Minimum Parameter for Economic and Financial Sustainability.

(2)

Failure to comply with any of the DEC or FEC limits for one year makes it compulsory for the concessionaire to present a Results Plan, which must be submitted for Aneel's prior acceptance and monitored in its execution by the inspection areas.

(3)

This limitation will come into effect on January 1st of the calendar year following the year in which the indicator was not met.