Green Bond Fact Sheet

Neoenergia

Date: 27/07/2019

Issue date: 23-07-2019 Maturity date: 15-06-2029 Tenor: 10
Issuer Name

Neoenergia

Amount Issued

BRL1.294bn (USD343m)

Country of risk

BrazilCBI Database

Included

Issuer Type1

Non-financial
corporate

Bond TypeSenior unsecured

Green Bond Framework

N/A

Second party opinion

N/A

Certification Standard

Not certified

Assurance report

N/A

Certification Verifier

N/AGreen bond rating

N/A☒ Energy☐ Solar☒ Onshore wind
☐ Offshore wind
☐ Geothermal☒ Hydro☐ Tidal☐ Biofuels☐ Bioenergy☐ District heating☒ Electricity grid

☐ Energy storage☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Buildings☐ Certified Buildings☐ HVAC systems☐ Energyperformance☐ Water performance☐ Energy storage/meters☐ Other energy related☐ Industry: components☐ Adaptation & resilience☐ Transport☐ Electric vehicles☐ Low emission
vehicles☐ Bus rapid transit☐ Passenger trains☐ Urban rail

☐ Freight rolling stock☐ Coach / public bus☐ Bicycle infrastructure☐ Energy performance☐ Transport logistics☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Water & wastewater☐ Water distribution☐ Water treatment☐ Wastewatertreatment☐ Water storage☐ Storm water mgmt
☐ Flood protection☐ Desalinisation plants☐ Erosion control☐ Energy performance☐ Infrastructure☐ Industry: components☐ Adaptation & resilience☐ Waste management☐ Recycling☐ Waste prevention☐ Pollution control☐ Landfill, energy capture☐ Energy performance☐ Infrastructure☐ Waste to energy☐ Industry: components☐ Adaptation & resilience

Use of Proceeds☐ Land use & agriculture☐ Afforestation/parks☐ FSC Forestry☐ FSC Cellulose &paper☐ Land remediation☐ Energy/water efficiency☐ Sustainable agriculture☐ Adaptation & resilience☐ Other☐ Adaptation &resilience☐ ICT☐ Industry: process

Issue details
Reporting

The issuer will confirm the allocation of proceeds (as expected and disclosed at issuance)
annually until these are fully allocated. It will also report annually on the environmental
impacts of the projects, including on energy generation and GHG emissions avoidance, until
maturity. These reports will be provided to the fiduciary agent (not specified).

Company information

Neoenergia is Iberdrola’s subsidiary in Brazil. It is an integrated energy company operatingin the four segments of the electricity sector: generation, transmission, distribution andtrading. It operates in Brazil since 1997, currently in 18 states. With four distributors Coelba (BA), Celpe (PE), Cosern (RN) and Elektro (SP) – the company serves 14m customers(34m people), making it the second largest energy provider in Brazil by number ofconsumers.

Firsts, records andcertificationsFirst issuance from Brazil in H2 2019! Also the largest issuance in BRL this year.

Proceeds descriptionThe proceeds will be used to finance and refinance investments in several projects,
including hydro and onshore wind power as well as energy transmission (from renewablesources). 1 hydro, 15 wind and 10 transmission projects are planned to be funded,
respectively representing 32%, 16% and 52% of proceeds. Some are under construction,others planned, and others already operational.

Climate Bonds viewAs the most funded use of proceeds category, we are not surprised to see further issuancein the sector. Not many transmission projects have been funded in Latin America, so it isespecially positive to see some investment to green the grid in the region (although asignificant share of these has been in Brazil, e.g. Taesa’s earlier in the year).
Furthermore, this deal signals Iberdrola’s commitment to expanding its green investments
outside of Europe, which is also positive. Curiously, no solar projects were funded. Perhaps
Iberdrola will issue more bonds under the Neoenergia subsidiary, as well as in othercountries in which it operates – we certainly hope so. As a final point, the disclosure
channel(s) for post-issuance reporting on the use of proceeds and impacts is not clear. We
would encourage the issue to provide reporting clearly and publicly, if possible on its
website.

Underwriters
Deal comments
Credit Rating
Pricing summary
Investors summary

1Issuer categories: ABS, development bank, financial corporate, government-backed entity, loan, local government, non-financial
corporate, sovereign