**Exhibit4.18**

# ANNOUNCEMENT OF COMMENCEMENT OF PUBLIC DISTRIBUTION OFNON-CONVERTIBLE UNSECURED DEBENTURES

Unibanco (União de BancosBrasileiros S.A.) as Lead Manager hereby announces the commencement ofdistribution for public subscription of the 1st Issue, in a Single Series, of23,042 (twenty three thousand and forty two) debentures not convertible intoshares, without guarantee, being nominal and of the book-entry type, withnominal unit value of R$ 10,871.6048 (ten thousand, eight hundred andseventy one point six zero four eight Reais) (“the Offering” or “the Issue”,and “the Debentures”), issued by

**Listed company**

**CNPJ n° 06.981.180/0001-16**

**AvenidaBarbacena, 1200, A1 Wing, 17th Floor,**

30190-131 Belo Horizonte, Minas Gerais, Brazil.

ISIN: BRCMGDDBS009

In the amount of:

**R$250,503,517.80**

**RISKRATINGS**

| **Fitch**     |   | **Moody’s** |
|---------------|--------|------------------|
| **A+  (bra)** |   | **Baa2.br**      |

 

### I               INFORMATION ON THEISSUER AND DISTRIBUTION OF THE DEBENTURES

**1.****             Full name andprincipal place of business**

CEMIGDistribuição S.A. (“the Issuer”), a corporation with head office in thejurisdiction of the city of Belo Horizonte, Minas Gerais State, Brazil, atAvenida Barbacena 1200, 17th Floor, A1 Wing, registered in the CNPJ/MF undernumber 06.981.180/0001-16, with its Articles of Association filed at theCommercial Board of the State of Minas Gerais, under NIRE No. 31300020568.

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**2.****                     ****Decision and Deed of the Issue**

2.1.          Corporate decisions: TheOffering was approved at the meeting of the Board of Directors of the Issuerheld on January 25, 2006, the minutes of which were ratified by the meeting ofthe Board of Directors of the Issuer held on June 29, 2006, and of CEMIG, heldon January 25, 2006.

2.2           Issue Deed: Theterms and conditions of the Debentures are contained in the “Private Deed ofthe 1st Public Issue of Debentures Not Convertible Into Shares in a SingleSeries Without Guarantee of Cemig Distribuição S.A.”, entered into on August24, 2006 (“the Issue Deed”). The Issue Deedwas filed at the Commercial Board of the State of Minas Gerais on September 1,2006, under No. ED000033-7/000.

**3.****             Characteristics ofthe Debentures**

3.1.                             Totalamount of the Issue: R$ 250,503,517.80(two hundred and fifty million, five hundred and three thousand, five hundredand seventeen Reais and eighty centavos)

3.2         Issue Date:June 1, 2006.

3.3         Nominal unit value:R$ 10,871.6048 (ten thousand, eight hundred and seventy one point six zerofour eight Reais), on the Issue Date.

3.4         Series number: TheIssue is effected in a Single Series.

3.5         Numberof Debentures: 23.042 23,042(twenty three thousand and forty two) Debentures.

3.6         Supplementary LotOption: The Issuer has not given the Lead Manager the option to increasethe number of Debentures to be distributed through a Supplementary Lot, asprovided for by Article 24 of CVM Instruction 400.

3.7         Form: TheDebentures are of the simple, non-convertible, nominal, book-entry type,without issue of deposits or certificates.

3.8         Type: TheDebentures are without guarantee or preference (unsecured).  The Debentures of this Issue have a corporateguarantee issued by CEMIG in accordance with item 8 below.

3.9         Use of proceeds:By reason of the Obligatory Exchange, the Issuer will not receive the netproceeds of this Offering, since the Debentures will be paid up by theDebentures issued under the “Private Deed of the 3rd Public Issue ofNon-Convertible Simple Debentures Without Guarantee or Preference in a SingleSeries of Companhia Energética de Minas Gerais – CEMIG” (“the 3rd CEMIG Issue”).The proceeds of the 3rd CEMIG Issue were allocated to amortization of the debtsof CEMIG contracted for the carrying out of investments in distribution ofelectricity, which became due in 2004, as described in Clause 3.4 of the IssueDeed.

3.10   Maturity: The period ofmaturity of the Debentures of this Offering is 96 (ninety six) months from thedate of issue, with final maturity on the first business day of June 2014.

3.11   Obligatory Exchange: Thepresent Offering is carried out for the purposes of the Obligatory Exchange ofthe Debentures of the 3rd CEMIG Issue for the Debentures, with the consequentcancellation of the Debentures of the 3rd CEMIG Issue. 

3.12   Programmed amortization:The Debentures will not be the subject of programmed amortization before thematurity date.

**4.****             Remuneration**

The debentures shallcarry the right to the following Remuneration (“the Remuneration”):

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4.1. Updating

TheDebentures shall have their nominal value updated, from the Issue Date, by theIGP-M Inflation Index, calculated and published by the Getúlio VargasFoundation. This updating will be calculated pro rata temporis, on the basis ofbusiness days, according to the following formula (“Updating of the Debentures”):

where:
| *** *** | ***VNa***         | *is the updated nominal value calculated to 6  (six) decimal places, without rounding;*                                                                                                            |
|--------------|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *** *** | ***VNe***         | *is the nominal amount or remaining nominal  balance calculated to 6 (six) decimal places, without rounding;*                                                                                      |
| *** *** | ***C***           | *is the accumulated factor of the monthly  variations of the indices used, calculated to 8 (eight) decimal places,  without rounding;*                                                             |
| *** *** | ***NI******0***   | *is the index number of the month prior to the  month of the beginning of updating;*                                                                                                               |
| *** *** | ***NI******1***   | *is the amount of the index number of the month of  start of updating;*                                                                                                                            |
| *** *** | ***NI******2***   | *is the amount of the index number of the month  subsequent to the month of commencement of updating;*                                                                                             |
| *** *** | ***NI******n***   | *is the amount of the index number of the month  prior to the month of updating up to the anniversary date. After the  anniversary date, the amount of the index number of the month of updating;* |
| *** *** | ***NI******n-1*** | *is the amount of the index number of the month  prior to month “n”;*                                                                                                                    |
| *** *** | ***dup***         | *a whole number– is the number of business days  between the previous base date and the date of updating; and*                                                                                |
| *** *** | ***dut***         | *a whole number – is the number of business days  between the prior base date and the next base date.*                                                                                        |

 

Themonth between two consecutive anniversary dates of the Debentures in questionshall be considered as a month of updating.

Theanniversary date is the date of the first business day of each month.

Theanniversary date is the date of the first business day of each month.

Theindex number of the IGP-M shall be used based on an identical number of decimalplaces to that used by the body responsible for its calculation.

TheIGP-M shall be applied annually, or in any shorter period permitted by thelegislation from time to time in force, in which case this shall be without theneed for adjustment to the Issue Deed or any other formality.

4.1.2.If on the date of maturity of any of the Issuer’s pecuniary obligations theIGP-M is not published, the last prior IGP-M index number published shall beapplied, calculated pro rata temporis, and no financial compensation shall bedue or payable between the Issuer and the holders of the Debentures upon thesubsequent publication of the IGP-M which would be applicable.

4.1.3. In the event ofthe abolition, absence of calculation and/or publication of the IGP-M for morethan 10 (ten) consecutive days after the date expected for its calculationand/or publication, or legal impossibility of application of the IGP-M to theDebentures, the Fiduciary Agent shall, within 30 (thirty) calendar days fromthe event, hold a General Meeting of Debenture Holders (subject to theprovisions of Clause VII of the Issue Deed), for decision, by common accordwith the Issuer, subject to the applicable regulations, on a new parameter forthe remuneration of the Debentures to be proposed by the Issuer. Up to thedecision on this parameter, the last IGP-M officially disclosed, plusremuneratory interest (as defined below), up to the date of the decision of theGeneral Meeting of Debenture Holders, shall be used to calculate the updatedvalue of the Debentures.

4.1.4. If there is noagreement on the new Remuneration between the Issuer and the Debenture Holdersrepresenting, at least, 2/3 (two-thirds) of the total of the Debentures incirculation (even if by reason of absence of quorum to decide on the matter),the Issuer shall redeem the totality of the Debentures in circulation, within30 (thirty) calendar days from the date of holding of the respective GeneralMeeting of Debenture Holders, for the amount of their nominal unit value, plusthe remuneration due up to the date of the actual redemption, calculated prorata temporis, from the Issue Date of the last prior date of payment of theremunatory interest, as the case may be, using the last IGP-M officiallypublished. No premium of any nature shall be added to the redemption referredto in this item.

4.1.5. Theupdating of the Debentures shall be paid by the Issuer jointly with the nominalunit value of the Debentures, on the respective maturity date.

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4.2. RemuneratoryInterest of the Debentures

Interest at 10.5% (tenpoint five per cent) per year, calculated per business day, based on a year of252 (two hundred and fifty two) days shall apply to the nominal unit value plusthe updating of the Debentures, starting from the Issue Date (“the RemuneratoryInterest”). The Remuneratory Interest shall be calculated according to thefollowing formula:

where:

**J**                                                   isthe amount of interest payable at the end of each capitalization period (asdefined below), calculated to 6 (six) decimal places, without rounding;

**VNa**                                 is the nominal unitvalue or balance of the nominal value updated, calculated to 6 (six) decimalplaces, without rounding;

**Fj**                                              factorcalculated to 9 decimal places with rounding;

**Rate**                                equal to 10.5;

**N**                                                 equalto 252;

**n**                                                   awhole number, being the number of business days between the date of the nextpayment of interest and the date of the prior payment of interest;

**DT**                                         a wholenumber, being the number of business days between the date of the next paymentof interest and the date of the prior payment of interest; and

**DP**                                         a wholenumber, being the number of business days between the prior and present datesof payment of interest.

4.2.1. The Remuneratory Interest shall be paid by theIssuer annually, the first payment to be made 12 (twelve) months after theIssue Date, that is to say, on the first business day of June 2007, and theother payments on the first business day of June of the subsequent years up tothe maturity date, calculated in a regime of capitalization made up, *pro rata temporis*, of business days.

4.3. -        **Limit of the Issue**

The Issue complies with the limit specified in Article60 of the Corporate Law, since the registered capital of the Issuer, on theIssue Date, was R$ 2,061,997,787.64 (two billion, two hundred and sixtyone million, nine hundred and ninety seven thousand, seven hundred and eightyseven Reais and sixty four centavos).

4.4.-         **Right of preference**

There shall be no right of preference for the presentstockholders of the Issuer for subscription of the Debentures.

5.             **Conditionsof subscription and paying up**

5.1. Subscription price: The price ofsubscription of the Debentures shall be their nominal unit value, plus theremuneration, calculated *pro rata temporis*from the Issue Date up to the date of paying up, in accordance with item 4above.

5.2. Manner of paying up: The Debentures shallbe paid up at sight, by exchange for the Debentures of the 3rd CEMIG issue, under the 

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terms of the Obligatory Exchange, and each Debentureof the 3rd CEMIG Issue shall correspond to 1 (one)Debenture of this Issue.

5.2.1. Due to the allocation to the Issuer of therights and obligations arising from the Debentures of the 3rd CEMIG Issue, as provided for in the PrivateInstrument of Assignment of Rights, the Debentures of the 3rd CEMIG Issue received by the Issuer inpaying-up of the Debentures shall be cancelled.

5.3. Place of payment: The payments to whichthe Debentures are entitled shall be made using, as the case may be: (i) theprocedures adopted by CBLC, for the Debentures registered in the BOVESPAFIXSystem, administered by the Bovespa (São Paulo Stock Exchange) (“the BOVESPAFIXsystem”); or (ii) the procedures adopted by CETIP (Custody and SettlementChamber) for the Debentures registered in the SND (National Debentures System);or (iii) for the holders of Debentures of this Issue who are not linked to thesesystems, through the Mandated Bank and Clerk of the Issue.

5.4. Immunity of Debenture Holders: If anyDebenture Holder has any type of tax immunity or exemption, such holder mustdeliver to the Mandated Bank and Clerk of the Issue within 10 (ten) businessdays prior to the date set for receipt of amounts relating to the Debentures,documentation of proof of this tax immunity or exemption.

5.5. Extension of maturity periods: The periodsrelating to the payment of any obligation by any of the parties, including theDebenture Holders, in relation to the payment of the subscription price, shallbe considered extended up to the first subsequent business day if the maturitycoincides with a day on which there is not a commercial or banking business dayin the cities of São Paulo and/or Belo Horizonte, in the States of São Pauloand Minas Gerais respectively, without any addition to the amounts to be paid,with the exception of cases whose payments are to be realized by the CETIP orby the CBLC, in which event there shall only be postponement when the date ofpayment is a national holiday, a Saturday or a Sunday.

5.6. Arrears fine and charges: Withoutprejudice to item 11 below, in the event of non-punctuality in the payment ofany amount owed to the holders of the Debentures, the debits in arrears shallbe added to the respective remuneration applicable to the Debentures, and shallalso be subject to an arrears penalty payment of 2% (two per cent) on theamount owed and arrears interest calculated from the date of non-compliance, upto the date of actual payment, at the rate of 1% (one per cent) per month, onthe amount owed, independently of notice, advice or Court or extrajudicialaction of any sort, as well as the expenses incurred for collection.

5.7. Expiry of the right to increases: Withoutprejudice to the terms of the previous item, non-appearance by the DebentureHolder to receive the amount corresponding to any of the pecuniary obligationsof the Issuer, on the dates specified in the Issue Deed, or in a noticepublished by the Issuer, shall not give it the right to receive RemunerationInterest and/or arrears charges in the period corresponding to the date onwhich the funds were made available for payment and the actual date ofappearance of the Debenture Holder for their receipt, but in any event acquiredrights shall be guaranteed up to the date of the respective maturity.

6.             **Distribution placement and procedure**

6.1. The Obligatory Exchange of the Debentures shallcommence only after concession by the CVM of registry of the Offering, afterthe Final Prospectus of the Offering has been placed at the disposal of theinvestors and after publication of this Announcement of Commencement, and themaximum period for realization of the Obligatory Exchange of the Debenturesshall be 5 (five) business days, from the date of publication of thisAnnouncement of Commencement.

6.2. Best Efforts: The Debentures shall be thesubject of public distribution, under the best efforts distribution regime,with intermediation of financial institutions that are part of the SecuritiesDistribution System, through the SDT (Securities Distribution System),administered by CETIP, based on policies and guidelines fixed by ANDIMA (theNational Association of Financial Market Institutions), and through theBOVESPAFIX System, with settlement and custody at the CBLC, and target publicof this present Issue shall be the holders of the Debentures of the 3rd CEMIGIssue, as specified in item 5.2. above.

6.3. The mechanism of Obligatory Exchange shall becarried out as provided for by Clause VII of the Issue Deed of the 3rd CEMIG Issue, and the paying-up of theDebentures shall be at sight, by exchange for the Debentures of the 3rd CEMIG Issue, in the terms of the ObligatoryExchange, and each Debenture of the 3rd CEMIG Issue shall correspond to 1 (one)Debenture of this Issue.

6.4. Secondary market: TheDebentures shall be registered for trading in the secondary market: (i) throughthe SND, managed by the CETIP, based on the policies and guidelines set byANDIMA, the Debentures with settlement and custody at the CETIP; and (ii)through the BOVESPAFIX system, with settlement and custody at the CBLC.

**7.****             Renegotiation**

The Debentures of this Issue shall not be subject toprogrammed renegotiation.

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**8.****             Guarantee**

The Debentures of this Issue, and the obligationsassumed by the Issuer under the Issue Deed, are guaranteed by means of aguarantee given by Companhia Energética de Minas Gerais — CEMIG (“the Guarantee”)which assumes the condition of and undertakes to be joint debtor and principalpayer of all the obligations arising from the Issue Deed, up to its finalsettlement, with express waiver of the benefits provided by Articles 366, 827,834, 835, 837, 838 and 839 of Law 10406 of January 10, 2002, as amended (“theCivil Code”), and Articles 77 and 595 of Law 5869 of January 11, 1973, asamended (“the Code of Civil Procedure”) for the obligations assumed in theIssue Deed.

**9.****             Optionalacquisition**

The Issuer may, at any time, acquire the Debentures incirculation in the market, for a price not greater than their nominal valueplus the remuneration, subject to Article 55 of the Corporate Law. TheDebentures that are the subject of such acquisition may be cancelled, remain inthe Issuer’s Treasury, or be placed once again in the market.

**10.****          Obligatoryearly acquisition**

The issuer shall be obliged to acquire the Debenturesin circulation, as defined in item 7.2.2 of the Issue Deed, at the option ofthose Debenture Holders who do not agree to remain as holders of the Issueafter a change in stockholding control, in the event that there is a change inthe direct or indirect stockholding control, or the stockholding control ofCEMIG. The Debenture Holders shall be advised of the purchase offer by aspecific notice published within 15 (fifteen) calendar days from the actualdate of change of stockholding control, with a period not less than 60 (sixty)days for the Debenture Holders interested to state their position, counted fromthe date of publication of the notice and in the terms of the proceduresdescribed in this advice. The acquisition of the Debentures by the Issuer musttake place on the 30th (thirtieth) calendar day from the last day ofthe period for making of statement of position by the Debenture Holders, at thenominal value, plus the Remuneration, as provided in Clause 4 above. For thepurposes of this item, the following events shall be considered to be “changein stockholding control”: (i) if the present direct controlling stockholder ofthe Issuer, CEMIG, directly or indirectly ceases to hold the equivalent to atleast 50% (fifty per cent) plus one share of the total of the sharesrepresenting the voting capital of the Issuer; (ii) if the present indirectcontrolling stockholder of the Issuer, the Government of the State of MinasGerais, ceases directly or indirectly to hold the equivalent of at least 50%(fifty per cent) plus one share of the total of the shares representing thevoting capital of CEMIG; or (iii) if the present controlling stockholder ofCEMIG, the Government of the State of Minas Gerais, directly or indirectlyceases to hold the equivalent of at least 50% (fifty per cent) plus one of thetotal of the shares in the voting capital of the Issuer.

**11.****          Earlymaturity**

Subject to items 11.1, 11.1.1 and 11.2 below, thefiduciary agent shall declare all the obligations relating to the Debenture tobecome due for payment immediately and demand immediate repayment by the Issuerof the debtor balance of the nominal unit value of the Debentures, plus theRemuneration, due up to the date of actual payment, calculated *pro rata temporis*, and other charges, independently ofadvice, contestation or notification within or outside the Courts, in any ofthe following events:

(a) application forjudicial or extra-judicial recovery, or application for bankruptcy made by theIssuer, by CEMIG, or by any of its subsidiaries or affiliated companies;

(b) extinction,liquidation, dissolution or declaration of the bankruptcy of the Issuer, ofCEMIG, or of any of its subsidiaries or limited companies;

(c) absence offulfillment by the Issuer or by CEMIG of any pecuniary obligation related tothe Debentures;

(d) early maturity of anydebt of the company, or CEMIG, or of any of its subsidiaries or affiliatedcompanies, in an amount of R$ 50,000,000.00 (fifty million Reais), ormore, due to any non-compliance, contractual or otherwise;

(e) termination, for anyreason, of any of the concession contracts to which the Issuer is a partyrepresenting separately or jointly an amount equal to 30% (thirty per cent) ormore of the net operational revenue of the Issuer as stated in its last priorfinancial statements;

(f) termination, for anyreason, of any of the concession contracts to which CEMIG is a partyrepresenting separately or jointly an amount of 30% (thirty per cent) or moreof the consolidated net operational revenue of CEMIG as shown in its last priorfinancial statements at the time;

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(g) legitimate protest ofsecurities against the Issuer, or CEMIG, or any of their subsidiaries oraffiliated companies, in an amount exceeding R$ 50,000,000.00 (fiftymillion Reais), unless made in error or bad faith of a third party validlyproven by the Issuer, by CEMIG or by any of its subsidiaries or affiliatedcompanies as the case may be, or unless suspended or cancelled, or unless aguarantee for the security(ies) be given in Court, under any circumstances,within a maximum of 30 (thirty) calendar days from the date on which thewritten notice sent by the Fiduciary Agent is received;

(h) absence of complianceby the Issuer or by CEMIG with any non-pecuniary obligations specified in theIssue Date, not cured in 30 (thirty) calendar days from the date on which thewritten notice sent by the Fiduciary Agent is received;

(i) if the Issuer, orCEMIG, or any of their subsidiaries or affiliated companies omits to pay on thematurity date, or does not take the legal or judicial measures required fornon-payment in relation to, any debt or any other obligation payable by theIssuer, by CEMIG, or by any of their subsidiaries or affiliated companies,under any agreement or contract to which it is a party as a lender, borrower,or guarantor, involving an amount of R$ 50,000,000.00 (fifty millionReais) or more; and/or

(j) privatization, merger, liquidation, dissolution,extinction, split and/or any form of stockholding reorganization which resultsin reduction of the registered capital of the Issuer and/or of CEMIG.

11.1. The occurrence of any of the events indicated insub-items (a) to (d) above shall result in automatic early maturity of theDebentures, independently of any consultation of the Debenture Holders.

11.1.1. In any of the events in sub-items (e) to (j)above, the Fiduciary Agent shall call, within 48 (forty eight) hours of thedate on which it becomes aware of such event, a meeting of Debenture Holders todecide on declaration of early maturity of the Debentures, subject to theprocedure for convocation specified in Clause VII of the Issue Deed and thespecific quorum established in item 11.2 below.

11.2. After the General Meeting of Debenture Holdersmentioned in  item 11.1.1 above has beenheld, the Fiduciary Agent shall declare early maturity of all the obligationsarising from the Debentures and demand immediate payment by the Issuer of theNominal Unit value of the Debentures, plus the Remuneration and charges up tothe date of actual payment, in accordance with item 11 above, unless DebentureHolders representing at least 2/3 (two-thirds) of the Debentures in circulationof the Issue opt not to declare early maturity of the obligations arising fromthe Debentures.

11.2.1. If the Debenture Holders of the present Issueopt not to declare early maturity of the obligations arising from theDebentures, under item 11.2 above, the Debentures held by the Debenture Holderswho do not agree with that decision shall be redeemed by the Issuer o theearlier of the two following dates: (i) within a maximum of 30 (thirty)calendar days from the date of the holding of the meeting of Debenture Holders;or (ii) in the same period in which the Debentures issued under the “PrivateDeed of the 1st Public Issue of Non-Convertible Debentures inTwo Series Without Guarantee nor Preference of Companhia Energética de MinasGerais – CEMIG” entered into on October 4, 2001, as amended (“the 1st CEMIG Debenture Issue”), or the Debentureswhich come to substitute the said debt for a reason similar to that providedfor the redemption of the Debentures as established in item 11.2.1, are in factredeemed. The Debentures shall be redeemed for their nominal unit value plusthe remuneration owed, calculated *pro rata temporis*.

**12.****          Optionalearly maturity**

The Issuer shall not have any option for earlyredemption of this Issue.

**13.****          Investortarget public of the Offering**

This present Issue may only have, as target public,the holders of the Debentures of the 3rd CEMIG Issue.

**14.****          Inappropriatenessof investment in the Debentures**

The Debentures that are the subject of the presentOffering **are not** appropriate forinvestors who need considerable liquidity in relation to the securitiesacquired, since trading of Debentures in the Brazilian secondary market isrestricted.

Investors should read the “*Risk Factors*”section of the Final Prospectus, which is available to investors as stated initem VII below.

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**15.****          Additional obligationsof the Issuer**

15.1. Subject to the other obligations specified inthe Issue Deed the Issuer also undertakes as follows:

15.1.1.                            To supply to the FiduciaryAgent:

(a)                                  withina maximum of 45 (forty five) days after termination of its first half businessyear a copy of its complete financial statements in relation to that period;

(b)                                 withina maximum of 90 (ninety) days after the end of each business year, a copy ofits complete financial statements in relation to that business year accompaniedby an opinion of the independent auditors, and a copy of any communication madeby the independent auditors to the Issuer, or to its management, and therespective answers, with reference to the system of accounting, management orthe accounts of the Issuer;

(c)                                  acopy of the periodic and occasional information demanded by CVM Instruction 202of December 6, 1993 (as amended), within the period therein specified and,within a maximum of 45 (forty five) days after termination of the quarters of ayear completed on March 31, June 30 and September 30 of each year, a copy ofits Quarterly Information (ITRs), accompanied by an opinion of the independentauditors;

(d)                                 noticeof the convocation of any General Meeting, with minimum prior notice of 3(three) business days, and promptly to supply copies of all the minutes of allthe General Meetings, and also the date and agenda of the General Meeting to beheld and of all the meetings of the Board of Directors, the Executive Board andthe Audit Board;

(e)                                  thenotices to the Debenture Holders, material announcements and minutes of GeneralMeetings which in any way involve the interests of the Debenture Holders, onthe same date as they are published;

(f)                                    immediately,any information relevant to the Issue which may be requested from it at anytime;

(g)                                 acopy of any correspondence or Court or extrajudicial notification received bythe Issuer in relation to the Debentures or the Issue Deed, immediately afterits receipt;

(h)                                 theproofs of compliance with its obligations in relation to the Debenture Holdersin a period of up to 5 (five) calendar days from the respective date of theirmaturities;

(i)                                     informationon the occurrence of any of the events indicated in item 11 above, as rapidlyas possible, within the earlier of the following time limits: (i) a maximum of10 (ten) calendar days from the date on which it becomes aware of the event’soccurrence, or (ii) the same period in which CEMIG informs the Fiduciary Agentof the 1st CEMIG Debenture Issue of the occurrence of anyof the events leading to early maturity in relation to that issue, or to theissue of Debentures which come to substitute it. This information should beaccompanied by a report of the Issuer containing the description of the occurrenceand of the measures which the Issuer intends to take in relation to such event.If this information arises from an event, act or fact which gives rise topublication of a material announcement by the Issuer, under CVM Instruction358, of January 3, 2002 (“CVM Instruction 358”), the disclosure of such event,act or fact to the Fiduciary Agent should take place concomitantly with itsdisclosure to the market, in accordance with the said CVM Instruction 358,subject to the maximum period here specified.

15.1.2.                                    Togive adequate publicity to the economic-financial data, in the terms demandedby the Corporate Law, and publishing its annual financial statements.

15.1.3.                                    Tokeep its accounts up to date and make the respective registries in accordancewith accounting principles generally accepted in Brazil, and allowrepresentatives of the Fiduciary Agent (or of an independent auditor contractedby the Fiduciary Agent, at the Issuer’s expense) to have unrestricted access tothe books and other accounting records of the Issuer.

15.1.4.                                    Tocall, in accordance with item 7.1 of the Issue Deed, a General Meeting ofDebenture Holders to decide on any of the matters which directly or indirectlyare related to the present Issue if the Fiduciary Agent does not do so.

15.1.5.                                    Tocomply with all orders issuing from the CVM, with sending of documents, andproviding all the information requested of it.

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15.1.6.                                  Tosubmit, in accordance with the law, its accounts and financial statements toexamination by an independent auditing company registered with the CVM.

15.1.7.                                    Tokeep the listed company registry updated at the CVM, and to supply to itsDebenture Holders the financial statements prepared and approved, specified inArticle 176 of the Corporate Law, when requested.

15.1.8.                                  Tokeep an organized body or department in appropriate working conditions to dealefficiently with the Debenture Holders, or to contract financial institutionsauthorized for the provision of this service.

15.1.9.                                  Notto carry out operations outside its objects as declared in its By-laws, subjectto the provisions of the By-laws, laws and regulations in force.

15.1.10.                           Tonotify the Fiduciary Agent about any act or fact which could cause interruptionor suspension of the activities of the Issuer, within a maximum period of 30(thirty) days from the occurrence of the even.

15.1.11.                           Tomaintain its assets appropriately insured, in accordance with currentpractices.

15.1.12.                           Not tocarry out any acts that are contrary to the By-laws and the Issue Deed,especially those which could directly or indirectly compromise punctual andfull compliance with the obligations assumed by the Issuer in relation to thecommunity of Debenture Holders.

15.1.13.                             Tokeep all the operating licenses, licenses, authorizations, concessions orapprovals necessary for the regular functioning of the company in a validstatus, making all and every payment necessary for this purpose.

15.1.14.                           To payon time all the taxes payable to the federal, state or municipal tax authorities.

15.1.15.                             Tomaintain, conserve and preserve all its assets (tangible and intangible) suchas are necessary or useful for the due conduct of its activities in good orderand functioning condition, with the exception of normal wear and tear.

15.1.16.                           Not tomake any material alteration, while the Debentures exist, in the nature of itsbusiness, as conducted on the present date, and not to make any alteration inthe legal form of its businesses, as they may exist on the present date, exceptwhen and if demanded by the legislation in force or by the regulations issuedby the Concession-Granting Power.

15.1.17.                           Tocomply, in all aspects, with all the applicable laws, rules, regulations andorders, in any jurisdiction in which it carries out business or owns goods.

15.1.18.                           To causethe respective risk rating agency or agencies to maintain updated ratings ofthis present public offering during the period of validity of the Debentures,supplying the Fiduciary Agent with a copy of annual reviews of ratings within 5(five) business days after their disclosure.

**II.****            THE COMPANY**

**CEMIG Distribuição S.A.**

Avenida Barbacena 1200, 17th Floor, A1 Wing,

30190-131 Belo Horizonte, MG, Brazil.

Tel: (31) 3299-4903

Fax: (31) 3299-3832

Internet: www.cemig.com.br

**III-****           THE LEAD MANAGER**

**UNIBANCO – União de BancosBrasileiros S.A.**

Office of the Capital Markets Director

Att: Rogério Assaf Freire

Avenida Eusébio Matoso 891,

05423-180 São Paulo, SP, Brazil

Tel: (11) 3097-4396

Fax: (11) 3097-4127

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E-mail:rogerio.freire@unibanco.com.br

Internet: www.unibanco.com.br

**IV.****           MANDATED BANK AND CLERK OF THE ISSUE**

**Banco Itaú S.A.**

Av. Eng Armando de Arruda Pereira707, 9th Floor,

São Paulo, SP, Brazil.

CEP: 04344-902

Att. Luiz Loureiro

Tel: (11) 5029-1905

Fax: (11) 5029-1917

E-mail: luiz.loureiro@itau.com.br

**V.****          ****FIDUCIARYAGENT**

**Pavarini Distribuidora deTítulos e Valores Mobiliários Ltda.**

Rua Sete de Setembro 99, 24th Floor,

20050-050 Rio de Janeiro, RJ,Brazil.

CEP: 20050-050

Att. Mr. Carlos Alberto Bacha /Mr. Rinaldo Rabello Ferreira

Tel: (21) 2507-1949

Fax: (21) 2507-1773

E-mail: pavarini@pavarini.com.br

Internet: www.pavarini.com.br

**VI.****           REGISTRYOF THE OFFERING WITH THE CVM**

**THIS OFFER WAS REGISTERED WITH THE BRAZILIANSECURITIES COMMISSION (CVM) UNDER NUMBER CVM/SRE/DEB/2006/041, ON OCTOBER 26, 2006.**

**VII.****         DATEOF COMMENCEMENT OF PUBLIC DISTRIBUTION**

The date of commencement of public distribution isNovember 1o, 2006.

**VIII.****        PROSPECTUS,ADDITIONAL INFORMATION AND SERVICE TO THE DEBENTURE HOLDERS**

The Final Prospectus of the present Offering is availablein the offices and on the websites of the Lead Manager and the Issuer of thisIssue, and of the Brazilian Securities Commission (CVM), and also at the CETIP.

More information may be obtained from the Lead Managerof this Offering or at the CVM.

As well as the addresses of the Lead Manager, and theMandated Bank and Clerk of the Issue, the following are other relevantaddresses:
| **CBLC – Companhia Brasileira  de Liquidação e** |       | **CETIP –  Câmara de Custódia e de Liquidação** |
|-----------------------------------------------------------------|------------|--------------------------------------------------------------------------|
| **Custódia**                                               |       | Rua Líbero  Badaró 425, 24th Floor,                       |
| Rua XV de  Novembro 275,                                        |       | 01009-00 São  Paulo, SP, Brazil.                                    |
| 01013-001 São  Paulo, SP, Brazil.                          |       | Tel: (11)  3111-1596                                                     |
| Att. Charles  Mann de Toledo                                    |       | Fax: (11)  3115-1564                                                     |
| Tel: (11)  3233-2720                                            |       | E-mail: gr.debentures@cetip.com.br                                       |
| Fax: (11)  3233-2051                                            |       |                                                                     |
| E-mail: ctoledo@bovespa.com.br                                  | ** ** | ** **                                                               |

 

**BOVESPAFIX – BOVESPA**

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Rua XV de Novembro 275,

São Paulo, SP, Brazil

www.bovespa.com.br

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