Equity interest in the Belo Monte Hydroelectric Plant

October 26, 2011

Disclaimer
Certain statements and estimates in this material may represent expectations about future events or results that are subject to risks and uncertainties that may be known or unknown. There is no guarantee that the events or results will take place as referred to in these expectations. These expectations are based on present assumptions and analyses from the point of view of our management, in accordance with their experience and other factors such as the macroeconomic environment, market conditions in the electricity sector, and expected future results, many of which are not under the control of Cemig and Light. Important factors that can lead to significant differences between actual results and the projections about future events or results include the business strategy of Cemig and Light, Brazilian and international economic conditions, technology, Cemigs financial strategy, changes in the electricity sector, hydrological conditions, conditions in the financial and electricity markets, uncertainty on our results from future operations, plans, objectives, and other factors. Because of these and other factors, the real results of Cemig and of Light may differ significantly from those indicated in or implied by such statements. The information and opinions herein should not be understood as a recommendation to potential investors and no investment decision should be based on the veracity, currentness or completeness of this information or these opinions. No professional of Cemig or of Light, nor any of their related parties or representatives, shall have any liability for any losses that may result from the use of the content of this presentation. To evaluate the risks and uncertainties as they relate to Cemig and to Light, and to obtain additional information about factors that could give rise to different results from those estimated by either of those two companies, please consult the section on Risk Factors included in the Reference Form filed with the Brazilian Securities Commission (CVM) and in the 20-F Form filed with the U.S. Securities and Exchange Commission (SEC).

Cemig and Light together reach nationwide

Profound knowledge of the whole electricity chain: Generation, Transmission, Distribution, Trading, Sales.
Chile

RR

The investment is consistent with the strategy of both companies in business growth Generation: The first steps have been taken to Santo Antnio and Renova
AP

AM

PA

MA PI

CE

Distribution

RN PB PE AL SE

Generation
Transmission Cemig Free Clients

AC

RO MT GO MS PR SC

TO BA
DF

MG ES

Generation under construction

SP

RJ

Wind power generation

Transmission under construction Distribution of gas Electricity purchase contracts
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RS
RS

Expansion in hydroelectric generation: now includes the Amazon

RR

AP

AM

PA

MA PI

CE

RN PB PE AL

Hydro Inventory at December 2010 (MW)

Region Operation Inventory Total

AC RO MT GO

TO BA DF MG MS SP PR SC RS RJ ES SE

North Northeast

14.696 11.584

82.557 13.385

97.252 24.968

Southeast Center-West South

TOTAL

25.156 11.375 24.725

87.536

18.813 23.849 17.224

155.828

43.970 35.224 41.950

243.364

Mato Grosso

1.893

14.914

16.807

Source: Eletrobrs (SIPOT).

The Amazon Region:

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Hydroelectric potential surveyed = 63% of Brazilian total

Belo Monte: a project evolved over 35 years

1975 First studies of the hydroelectric inventory of the Xingu River Basin 1980 Report finalized on energy potential of the Xingu River Basin

1989 First Meeting of the Indigenous Peoples of the Xingu

1994 Presentation of new project. Reservoir area reduced from 1,225 km to 516 km 2001 Ministry publishes plan to increase Brazils electricity supply:

includes construction of 15 hydro plants, including Belo Monte

2010 Norte Energia Consortium wins auction held on April 20 2011 Installation Licence granted on June 1

Summary of the Transaction

Cemig GT and Light S.A. have jointly created the special-purpose company Amaznia Energia Participaes S.A. (Amaznia Energia), to acquire 9.77% of Norte Energia S.A. (NESA), the company holding the concession for the Belo Monte Hydroelectric Plant. It will buy the following equity interests:
(i) (ii) (iii) (iv) (v) (vi) Construtora Queiroz Galvo S.A.: 2.51%; Construtora OAS Ltda.: 2.51%; Contern Construes e Comrcio Ltda.: 1.25%; Cetenco Engenharia S.A.: 1.25%; Galvo Engenharia S.A.: 1.25%; and J. Malucelli Construtora de Obras S.A.: 1%.
49.0% ON 100.0% PN 51.0% ON 0.0% PN 25.5% of total stock

74.5% of total stock

Amaznia Energia Participaes S.A 9.77% Norte Energia S.A (Belo Monte)

The amount to be paid by Amaznia Energia will be in reimbursement of the capital injections made up to the present moment by the vendors, updated by the IPCA inflation index, resulting on a total of R$ 118.9 million.
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Overview of: Norte Energia S.A.

Amaznia Energia 9.77%

Self prod. 10,00%

Public Sector holding

Eletronorte Chesf Eletrobras Total public sector 19,98% 15,00% 15,00% 49,98%

Others privates 30,25%

Public sector 49,98%

Private Sector
Petros Belo Monte Part. (Neoenergia) Amaznia Energia 10,00% 10,00% 9,77% 9,00% 5,00% 5,00% 1,00% 0,25% 50,02%

Amaznia Energia is entitled to appoint one member and alternate to the Board, one member of each Committee of the Board, the Director of Management and a member of the Audit Committee on a rotating basis with other shareholders.
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Vale Funcef Caixa FIP Cevix Sinobras J Malucelli Energia Total private sector

Overview of: Norte Energia S.A.

Key dates
Date of Auction Concession contract signed License to open worksite Final Installation License Service Order Planned date for Operational License Commercial startup 1st Unit April 2010 August 2010 February 2010 June 2010 July 2011 November 2014 February 2015

Technical data on the concession

Concession period 35 years

End of concession

August 25, 2045

Technical data on the project

Installed capacity Main engine room 11,233 MW 11,000 MW 233 MW

Commercial startup last Unit

First revenue Period of supply contract End of supply contract

January 2019
January 2015 30 years January 2045

Auxiliary engine room

Assured energy (Average MW)

Reservoir Reservoir area per MW

4,571 MW
516 Km 0.04 km/MW Altamira, Anapu, Brasil Novo, Senador Jose Porfrio, Vitria Xingu

Suppliers
Contracts for building works and equipment signed in Feb. 2011:
Construction Consortium, of leading Brazilian companies in the sector, includes Andrade Gutierrez (Leader), Camargo Corra, Odebrecht. Equipment (rotors) supplied by Alstom, Andritz, Voith and Impsa.
Counties affected

Estimated project cost (April 2010)

Forecast employment creation

R$ 25.8 billion

Jobs created directly

Jobs created indirectly

18,000
80,000

The Transaction: rationale

Amaznia Energia will own 9.77% of the enterprise.
Construction works estimated to take 9 years. Transaction does not effect dividend flows of Cemig Holding Company and Light S.A.

BNDES loan ensures leverage at low cost on favaorable terms.

Tenor 30 years, fixed installments, 85% of items financiable, PSI line.

Amaznia Energias equity in the project estimated at R$ 600 million (Apr. 2010), to be disbursed over 6 years. Expansion of generation portfolio: Cemig: Acquisition will add 818 MW to Cemigs total generation. Light: Increases Lights total generation portfolio by 280 MW

Terms for sale of electricity generated already agreed. Increased knowledge of the project reduces the associated risks: Considerable mitigating factors for principal risks. Contracts for building works and equipment signed at fixed price. Environmental conditions now quantified.

Region is strategic: More than 60% of hydroelectric expansion is concentrated in the Amazon region.
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Differences from April 2010 auction

More favorable financial conditions inclusion in the PSI (1):
Special financing line for plants with capacity of more than 10,000 MW.
Value of PSI for Belo Monte: R$ 3.7 billion. Interest rate 5.5% nominal. Tenor: 30 years.

Bridge loan released, with possibility of renewal

Environmental costs already defined for the implementation phase:

Installation Licence already granted.

Better corporate governance:

New stockholding structure.

Terms for sale of electricity generated already set.

Regulated Market: 70%; Free Market: 20%; Self-producers: 10%.

Greater security on cost of works:

Principal contracts (construction, supply) already signed. Reduction of technical uncertainties.
(1) PSI = BNDES Program to Sustain Investments.
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Differences from April 2010 auction

Technical uncertainties reduced:
The Installation License was issued by Ibama on June 1, 2011, making it possible to precisely

evaluate the economic impact of the social/environmental conditioning factors, and value the
various environmental management actions. Construction of the canal: The original project called for two canals. The present solution with only one is cheaper and

consistent with the studies made by Cemig at the time of the auction.
Construction of the canal for unit prices, backed by more precise and detailed geological knowledge, has made possible better allocation of risks between the entrepreneur company and the construction consortium, reducing the parties provisions for contingencies.

With the Basic Project consolidated, there is now better precision on the scope contracted,
especially excavation volumes for the works on the transfer channel and the intermediate reservoir.

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Environmental aspects
Initial project was for 18,000 MW, reservoir of 1,225 km:
present project reduces installed capacity to 11,233 MW and reservoir area to 516 km. Reservoir area/generation ratio of 0.05 km/MW, is one of the lowest for any large plant. Indigenous lands will not be flooded. This will be the only plant built on the Xingu River. Urban population to be relocated will occupy new areas with appropriate infrastructure. Real estate properties, families and resident population in the area directly affected: Location Altamira Rural areas Properties 4,747 1,241 Families 4,362 824

Total
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5,988

5,186

Engineering excellence
Excellence of engineering translates into increase in projects profitability: Irap Hydro Plant:
- Installed capacity increased from 360 MW to 396 MW.

Baguari Hydro Plant:

- Early startup of commercial operation increased IRR of original business plan.

Santo Antnio Hydro Plant:

- Increase in Assured Energy. Basic complementary project approved by Aneel with addition of up to 6 rotors (Assured Energy of approx. 250 average MW). - Commercial startup brought forward from Dec. 2012 to Dec. 2011. Operational license issued (social and environmental conditions complied with). Works delivered within the budget agreed in the business plan.

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Impacts of the Transaction for Cemig and Light

Increase in generation capacity of Cemig MW
6.955

315

147

818 (1)

8.205

Capacidade Present capacity existente

(+) (+) Santo Sto Antnio (+) Others (+) Outros Antnio

(+) BeloBelo Capacidade (+) Monte Capacity after Monte expansion aps expanso

Increase in generation capacity of Light MW

855 288 96 280 1,519

Present Capacidade capacity existente

(+) Renova (+) Renova (+) Others (+) Outros

(+) Belo (+) Belo Monte Capacity after Capacidade Monte expansion aps expanso

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Direct Cemig stockholding.

(+5531) 35065024 ri@cemig.com.br http://ri.cemig.com.br

(+5521) 22112682 ri@light.com.br http://www.light.com.br/ri

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