Capital Expenditure

    Capital Expenditure

    In 2018, CEMIG invested R$ 1.858 million towards expansion of its generation system, its transmission assets and to extend its distribution system.

    R$ million 2018 Realized
    GENERATION 268
            Investment program 32
            Capital injections 236
            Aliança Norte 44
            SPE - Guanhães 60
            SPE - Amazônia Energia Participações (Belo Monte) 71
            Usina Hidrelétrica Itacoara S.A. 5
            Madeira Energia - Mesa 25
            Madeira Energia - SAAG 26
            Cemig GT wind farms 5
    TRANSMISSION 99
           Investment program 99
    CEMIG D 823
           Investment program 823
    HOLDING COMPANY  
    Capital injections 668
            Rio Minas Energia - RME 659
            Efficientia - Geração Distribuída 9
    TOTAL 1,858

    Aims of capex planned for the next three years:

    • Increased reliability in the transmission network.
    • Reduced number and duration of outages.
    • Reduced power losses.
    • Investment in line with specifics of regulation.
     
    Multi-year Investment plan for 2019-23 (Excludes acquisitions)
    R$ million
    Business 2019-2023

    Generation and Transmission (Cemig GT)

    1,876

    Distribution (Cemig D)

    6,458

    Cemig holding company

    100
    TOTAL 8,434

    Expansion of Generation Capacity

    The Cemig group is currently involved in the construction of the Belo Monte hydroelectric plant and four small hydroelectric plants (SHPPs): Dores de Guanhães, Senhora do Porto, Fortuna II and Jacaré. The (equity-proportional) addition to generation capacity provided by these plants will increase the Cemig Group’s total hydroelectric installed generation capacity by 1,335 MW.

    Below is a brief description of some of these projects:

    Assets Proportional generation capacity (MW)
    Belo Monte (through Amazônia Energia) 818
    Belo Monte - (through Aliança Norte Energia) 495
    Guanhães 22
    Total 1,335

    Total investments in 2018 in these plants were: R$60 million in Guanhães, R$51 million in Santo Antônio, and R$102 million in Belo Monte.

    Belo Monte project: Norte Energia S.A. (Nesa) is a special-purpose company holding the concession to build, operate and maintain the Belo Monte hydroelectric plant on the Xingu River in the Amazon region in the north of Brazil. Cemig GT has an indirect interest of 11.69% in Nesa, through the companies Amazônia Energia S.A. (in partnership with Light) and Aliança Norte Energia Participações S.A. (in partnership with Vale), which are both shareholders of Nesa. Cemig GT has so far invested approximately R$1.6 billion in this project.

    The first generation unit began operating in 2016, and 18 units are now generating commercially. When completed in 2020, Belo Monte will have a total capacity of 11,233 MW.

    Guanhães project: Guanhães Energia S.A. (‘Guanhães’) was formed in June 2006 to build and operate four small hydro plants in the state of Minas Gerais with total capacity of 44 MW. Cemig GT has invested approximately R$249 million in this project.

    Construction work was interrupted in 2015. Work was resumed in November 2017, and the first generating unit began commercial operation in May 2018. The ninth and last is planned to start commercial operation in April 2019.

    Expansion of Transmission Capacity

    In the transmission business, the decision on rules for reimbursement of assets in previous years has ensured that we had a stable flow of cash for the coming year, making it possible to expand the multi-annual Program of investments for Cemig GT from R$1.1 billion to R$1.45 billion – which will make it possible in the future to add new revenues arising from these investments, and mitigate important risks for operation of the system.

    Expansion of distribution capacity

    Cemig D is the largest electricity distributor in Latin America – with more than 500,000km of distribution networks, and more than 8 million consumers, located in the 774 municipalities of its concession area.

    To meet the needs of urban and rural consumers, Cemig D invested R$ 823 million in its distribution system in 2018 – adding or expanding 10 substations, and connecting more than 200,000 consumer units to the electricity system.

    Cemig now plans to invest more than R$ 6 billion in works on its high, medium and low voltage infrastructure in 2019–23, to expand and upgrade its network, replace equipment, connect new users, combat fraud and improve reliability of the system, and public safety.

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