Exhibit
4.16





ANNOUNCEMENT
OF COMMENCEMENT OF PUBLIC DISTRIBUTION 


OF
THE FIRST ISSUE OF COMMERCIAL PAPER SECURITIES


BY





CEMIG
DISTRIBUIÇÃO S.A. 


CNPJ n.o
06.981.180/0001-16


Av. Barbacena, 1200, 17th Floor, A1 Wing, Bairro
Santo Agostinho


Belo Horizonte, Minas
Gerais, Brazil


ISIN: BRCMGDNPM001


Lead Manager:





In the amount of


R$
300,000,000.00


1. CORPORATE DECISIONS


The First Issue of
Commercial Promissory Notes (“the Offering”, “the Issue”, and “the Securities”)
was approved by the Board of Directors of Cemig Distribuição S.A. (“Cemig D”, the “Issuer” or “the
Company”) at a meeting held on June 29, 2006. 


2. INFORMATION ABOUT THE ISSUE


2.1. Total amount of the Issue











The total amount of the issue is R$ 300,000,000.00
(three hundred million Reais).


2.2. Quantity of Securities 


The issue is made up of 30 (thirty) Commercial Paper
Securities (Promissory Notes).


2.3. Nominal unit value


The par value (“the Nominal Unit Value”) of the Securities
is R$ 10,000,000.00 (ten million Reais).


2.4.  Series


The Securities will be issued in a single series.


2.5. Remuneration


Remuneration interest shall be due, at the rate of
103% (one hundred and three per cent) of the average daily rate for interbank
deposits known as the “DI over extra-grupo Rate”,
on the Nominal Unit Value, expressed in the form of an annual rate in per cent,
on the 252 (two-hundred-and-fifty-two)-business-day, calculated and published
daily by the CETIP (Custody and Settlement Chamber) in its daily bulletin
available on its Internet page (http://www.cetip.com.br) (“The DI Rate” and “the
Remuneration”). The Remuneration shall be calculated exponentially and
cumulatively pro rata tempore per business
day, applicable to the Nominal Unit Value from the date of the actual
subscription and paying-up (“Issue Date”) of the Securities up to the Maturity
Date, in accordance with the following formula:


J = VNe x (InterestFactor–1),


Where:











J =                                unit
value of the remuneration interest, calculated to 6 (six) decimal places,
without rounding, payable at the end of the Capitalization Period.


VNe
=             the Nominal Value of
the issue, published/calculated to 6 (six) decimal places, without rounding.


InterestFactor  =   product of the DI Rates, summed exponentially with a
percentage factor, from the start date of the Capitalization Period, inclusive,
up to the date of termination of Capitalization Period exclusive, calculated to
8 (eight) decimal places, without rounding, as found by the following formula:





Where:


n =                              the
total number of days of the DI Rate used in the updating of the asset, where “n”
is a whole number.


P =                             103%
(percentage applied to the DI Rate).


TDIk
=         the DI Rate, expressed by
day, calculated to 8 (eight) decimal places, with rounding, as follows:





Where:


DIk
=                 The DI Rate
published by CETIP, valid for 1 (one) business day (“overnight”), used to 2
(two) decimal places.


“Capitalization
Period”:       This is the
time interval starting on the Issue Date, inclusive, and ending on the date of
payment of the Nominal Unit Value of the Security, exclusive, plus the
Remuneration.


If at any time during the
period of validity of the Securities the DI Rate is not published, the last
previous available DI Rate shall be applied, and in this event no offsetting
between the Issuer and the holders of the Securities shall be payable when the
DI Rate that would be applicable is subsequently published. 


If the DI Rate
ceases to be published for a period of more than 10 (ten) days, or if it is
abolished or if there is a legal 
impossibility of application of the DI Rate to the Securities, the legal
parameter which is established, if any, shall be used in substitution of it. If
there 











is not a
substitute legal parameter for the DI Rate, then the weighted average rate of
remuneration of Brazilian short-term federal public securities with maturity of
90 (ninety) days traded in the prior 30 (thirty) days, at the time of the
occurrence, shall be used.


2.6. Date of Issue and form of paying-up


For all intents and purposes, the Date of Issue of the
securities shall be the date of their actual subscription and paying-up (“the
Issue Date”). The securities shall be subscribed for Nominal Unit Value, in
Brazilian currency, at sight, on the date of subscription


2.7. Subscription Price


The securities shall be subscribed for their Nominal
Unit Value (“the Subscription Price”).


2.8. Period of subscription and paying-up


The Securities must be subscribed and paid-up within 8
(eight) business days from the date of publication of this Announcement of
Commencement of Distribution of Commercial Paper Securities (“the Commencement Announcement”), subject to the
provisions of item 4.2 below. 


2.9. Form


The Security shall be nominal,
and issued in physical form, and shall be held on deposit with an institution
qualified to provide the services of custody. The Securities shall be nominal
and shall be transferred by nominal endorsement, resulting in simple transfer
of ownership.


2.10. Guarantee


The Securities are guaranteed by a guarantee given by
Companhia Energética de Minas Gerais – Cemig (“Cemig”, or “the Guarantor”).











The Lead Manager warrants that the guarantee by CEMIG
was duly constituted by signature of its legal representatives on the reverse
side of the physical issued form of each of the Securities, guaranteeing the
totality of the debt represented by them, and the guarantee in question was
duly approved by a meeting of the Board of Directors of CEMIG held on June 29,
2006, and is, thus, fully enforceable against CEMIG.


2.11. Use of proceeds


The proceeds from the public distribution of the
Securities shall be used to strengthen the Company’s cash position in relation
to debt becoming due since January 2006, and for payment of debt becoming due
during the rest of the year.


2.12. Early redemption  


The Company may effect
early redemption of the Securities, at its exclusive option, provided that the
holders thereof are in agreement, in accordance with the applicable
legislation. In the event of partial early redemption, this shall take place by
lottery, in accordance with Paragraph one of Article 55 of Law 6404 of December
17, 1976. 


2.13. Period of Maturity


The maturity period of the Promissory Notes shall be
90 (ninety) calendar days from the date of subscription (“the Maturity Date”).


2.14. Early maturity events  


The holders of the Securities may declare automatic
early maturity of all the obligations arising from the Securities that they
hold and demand immediate payment by the issuer of the Nominal Unit Value of
the Securities plus the Remuneration and charges calculated pro rata tempore, from the Issue Date, by letter formally
delivered or with advice of receipt addressed to the head office of the Issuer,
in any of the following events:   


(i)            decree of bankruptcy
of the Issuer and/or the Guarantor; or dissolution and/or liquidation of the
Issuer and/or Guarantor; or application for judicial or out-of-Court recovery
or bankruptcy formulated by the Issuer and/or Guarantor; or further, any
analogous event which may characterize a state of insolvency, including
agreement with creditors, in accordance with the 











applicable legislation;


(ii)           legitimate and
reiterated protest of securities against the Issuer with individual or
aggregate value unpaid exceeding R$ 50,000,000.00 (fifty million Reais),
unless the protest shall have been filed in error of due to bad faith of third
parties, and provided this is validly proven by the Issuer, or if it is
canceled or, further, validly contested in the Courts, in any event, within a
maximum period of 30 (thirty days) calendar days from the date of maturity of
the obligations; 


(iii)          early maturity of any
pecuniary obligation of the Issuer and/or the Guarantor, arising from default
on an obligation to pay any individual or aggregate amount in excess of
R$ 50,000,000.00 (fifty million Reais);


(iv)          change, transfer or
direct or indirect assignment of the stockholding control of the Issuer and/or
Guarantor, other than by legal order, without the prior consent of the holders;



(v)           absorption of the
Issuer by another company, split or merger of the Issuer and/or of the
Guarantor, unless by legal orders; 


(vi)          privatization of the
Issuer and/or Guarantor; 


(vii)         termination, for any
reason whatsoever, of any of the concession contracts held by the Issuer and/
or Guarantor; or


(viii)        unjustified default by the
Issuer and/ or Guarantor, or absence of legal and/or Court measures required
for the non-payment of any debt or any obligation to pay, under any agreement
in which either or both are lender or guarantor, with individual or aggregate
amount exceeding R$ 50,000,000.00 (fifty million Reais).


2.15. 
Placement regime


The Lead Manager shall carry out the distribution of
the Securities on the Firm Guarantee of Subscription basis.


2.16 Trading


The Securities shall be traded in the over-the-counter
market, through the NOTA system.


2.17. Place of payment 


The payments relating to the Securities shall be
carried out in accordance with the procedures of CETIP, for the Securities
registered on the NOTA, or, for the holders of the Securities who are not
linked to the third system, at the head office of the Issuer.


2.18. Charges for arrears


If there is a failure of punctuality in the payment of
any amount payable to the holders of the Securities, the overdue units shall be
subject to: (a) arrears interest calculated from the day of default to the date
of actual payment, at the rate of 1% (one
per cent) 











per month, on the amount owed, independently of the
price, or notification or action in or outside the Courts; and (b) a
conventional arrears penalty payment, irreducible and of a compensatory nature,
of 2% (two per cent) on the amount due and unpaid.


2.19. Target public


The Offering shall be
destined solely and exclusively to qualified investors, as defined by Article
109, sub-item (i) of CVM Instruction 409 of 18 August 18, 2004 (“Qualified
Investors”). 


Any other investors who are not Qualified Investors
should be fully aware that the present offering is not appropriate, since it is
destined exclusively for Qualified Investors who have sufficient specialization
and knowledge to take an independent investment decision on the proper grounds.


3.  STATEMENT BY THE COMPANY AND THE
LEAD MANAGER


3.1. Under the applicable regulations, the Issuer is
responsible for the veracity of the information contained in the Commencement
Announcement and warrants that that information is true, correct, consistent
and sufficient, in accordance with a statement given by the Issuer pursuant to
Article 56 of CVM Instruction 400, of December 29, 2003 (“CVM Instruction
400/03”), which was signed by its statutory Directors Mr. Djalma Bastos de
Morais and Mr. Flávio Decat de Moura.


3.2. The Lead Manager warrants that it has taken all
the measures of care and acted with high standards of diligence to ensure that
all the information provided to the market on the occasion of the registry and
the public distribution is true, consistent, correct and sufficient, in
accordance with the statement given by the Lead Manager pursuant to Article 56
of CVM instruction 400/03, which was signed by its Managing Director Mr.
Francisco Cláudio Duda.


4.  DISTRIBUTION
PROCEDURE


4.1. The Securities shall
be the object of a public distribution, intermediated by financial institutions
that are part of the Securities Distribution System. The sharing criterion
shall be of proportionality to the volume of orders placed by investors. There
shall be no prior reserves nor setting of maximum or minimum lots. No contract
for stabilization of the price of the Securities shall be signed. No fund to
sustain liquidity for the Securities shall be constituted. No type of discount
shall be granted by the Lead Manager to investors interested in requiring the
Securities.  


4.2. The placement of
Securities shall begin, in accordance with Article 3 of CVM Instruction 429 of
March 22, 2006, only 5 (five) business days after: (i) filing of the
application with the CVM; (ii) publication of the Commencement Announcement of
the Offering; 











and (iii) availability of
this document (“Automatic Registry”). The placement of the Security shall be
carried out in accordance with the procedures of the Promissory Note System (“NOTA”),
operated by the CETIP.


4.3. If the CVM does not
grant Automatic Registry, the terms and conditions of this present Issue shall
remain in force, but the period of 5 (five) days referred to in item 4.2 shall
be replaced by the periods referred to by CVM Instruction 134, and the term “Automatic
Registry” shall be replaced by “Registry”, which shall have the following
meaning: “concession of registry of the issue by the CVM”. 


4.4. Subject to
compliance with the applicable regulations, the Lead Manager shall carry out
the public distribution of the Promissory Notes, in such a way as to ensure:
(i) that the treatment given to investors is fair and equitable; and (ii) the
investment is adapted to the risk profile of its clients.


4.5 In accordance with the option provided for in
Article 1 of CVM Instruction 155 of August 7, 1991, for the purposes of this
Issue no prospectus nor any advertising material intended for public disclosure
shall be used, other than this Announcements of Commencement and Closing of the
Distribution and the Summary of Information on the Issue as specified in
Appendix I of CVM Instruction 155.


5.  LOCATIONS
FOR ACQUISITION OF THE SECURITIES


Those interested
in acquiring the Securities may contact the Lead Manager of the Offering at the
following address:


BB Banco de Investimento S.A.


Rua Senador Dantas, 105 – 36th Floor


Rio de Janeiro - RJ


Att: Sra. Marília de Oliveira Carmo


Telephone: (21) 3808-3556


Fax: (21) 3808-3239


Email:
marilia@bb.com.br/gemec@bb.com.br


6.
ADDITIONAL INFORMATION


A full
presentation of the details of this Offering is available on the web pages of
the Lead Manager (www.bb.com.br), the Issuer ( www.cemig.com.br), the CVM
(www.cvm.gov.br) and Cetip ( www.cetip.com.br).


For more
information in relation to the Offering and the Securities interested parties
should visit the head office of the Lead Manager at the address indicated in item
5 above, or at the CVM, at the CETIP or at the head office of the Issuer, at
the addresses indicated below:











 


	
  CVM (Comissão de Valores Mobiliários –

  	
   

  
	
  Brazilian
  Securities Commission)

  	
   

  
	
   

  	
  Rua Cincinato
  Braga, 340 – 2nd,
  3rd and 4th Floors

  
	
  Rua Sete de
  Setembro 111, 5th Floor

  	
   

  
	
   

  	
  São Paulo – SP

  
	
  Rio de Janeiro –
  RJ

  	
   

  



 


CETIP (Câmara de Csutódia e Liquidação - Custody and Settlement Chamber)


Rua Líbero Badaró,
425, 24th Floor


01009-000 – São
Paulo - SP


www.cetip.com.br


Headquarters
of the Issuer: 


Cemig Distribuição S.A.  


Av.
Barbacena, 1200, 17th Floor, A1 Wing, Bairro Santo Agostinho


Belo Horizonte, Minas Gerais, Brazil 



Att: Cristiano Corrêa de Barros


Telephone: (31) 3299-4810


Fax: (31) 3299-3790 

Email: cbarros@cemig.com.br


Date of commencement of the
Offering: 5 (five) business days after the publication of this Commencement
Announcement, that is to say on July 26, 2006, as stated in item 4.2.  The application for registry with the CVM was
made on July 14, 2006, in accordance with Article 3 of CVM Instruction 429 of
March 22, 2006.


The registration of this
distribution with the Securities Commission (CVM) aims only to guarantee access
to the information that will be given by the Issuer at the request of the
subscribers in the location mentioned in this notice, and does not constitute a
guarantee by the CVM of the truthfulness of the information, nor any judgment
in relation to the quality of the Issuing Company or in relation to the
Securities to be distributed.


	
  

  	
  This public offering was prepared in accordance with
  the Self-Regulation Code of ANBID for Public Offerings for Distribution and
  Acquisition of Securities, approved by a General Assembly of ANBID, and which
  is an integral part of the Minutes registered with the Fourth Notary’s Office
  for Registry of Legal Entities of the City of São Paulo, São Paulo State,
  under number 510718, and this present Public Offering thus meets the minimum
  standards of information contained in the code, and ANBID shall not have any
  responsibility for the said information, nor for the quality of the Issuer,
  the Offering Parties, the participation institutions or the Securities that
  are the subject of the Public

  Offering.