Companhia Paranaense de Energia (CPLE6) Investor update summary

Strategic significance and hydropower advantages

• Secured major wins in the 2026 Reserve Capacity Auction, expanding Foz do Areia and Segredo to 2,536 MW and 2,526 MW, making them the 8th and 9th largest hydro plants in Brazil.

• Hydropower assets provide low cost, tariff affordability, flexibility, frequency control, and zero carbon emissions, supporting sustainability goals.

• Equipment is primarily manufactured domestically, supporting local industry.

• Auction results align with long-term Strategy 2035 and open a new chapter in capital allocation focused on sustainable value generation.

• Both plants provide significant physical guarantees, supporting system reliability.

Financial and investment outlook

• Total estimated investment is BRL 4.9 billion (BRL 1.3 billion for Foz do Areia, BRL 3.6 billion for Segredo), with CapEx disbursement spread from 2026 to 2030.

• CapEx allocation: ~15-16% in 2026, 30-40% in 2027-2028, and remaining 5-22% in 2029-2030 for both projects.

• Funding structure targets 70% debt and 30% equity, leveraging strong market access and recent funding benchmarks.

• Both plants have 15-year generation terms starting August 2030, with contracted gross prices of R$1,395.00 thousand/MW/year.

• No expected changes to minimum 75% dividend payout policy due to the timing and structure of investments.

Operational and regulatory considerations

• Both plants scheduled to begin operations in August 2030, with potential for earlier delivery if system demand justifies it.

• Anticipation of project delivery possible, especially for Foz do Areia, depending on state power needs and regulatory approval.

• PMSO costs are low, close to 3% of total cost, with TUST as the most significant cost component; transmission system usage fees are indexed and updated annually.

• Tariff review in June expected to enhance cash generation and support future investment capacity.