**Exhibit 4.14**

**FOURTH AMENDMENT TO THE CONTRACT TO ASSIGN THE OUTSTANDINGCREDIT BALANCE ON THE CRC (RESULTS COMPENSATION) ACCOUNT, SIGNED BETWEEN THESTATE OF MINAS GERAIS AND COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG.**

**THE STATE OF MINAS GERAIS,** through its State FinanceOffice, with head office at Praça da Liberdade, Belo Horizonte, Minas Gerais,CNPJ 18.715.615/0001-60, herein represented by its State FinanceSecretary Fuad Jorge Noman Filho, its State Development Secretary WilsonNélio Brumer, and its General Attorney José Bonifácio Borges de Andrada, and **COMPANHIA ENERGÉTICA DE MINAS GERAIS — CEMIG**,a company with mixed State and private-sector stockholdings, with headquartersin Belo Horizonte, Minas Gerais, at Avenida Barbacena 1200, CNPJ 17.155.730/0001-64,herein represented by its Chief Executive Officer Djalma Bastos de Morais andby its Chief Financial and Investor Relations Officer Mr. Flávio Decat deMoura (hereinafter referred to as “**CEMIG**”),the **STATE** and **CEMIG** hereinafter being referred to jointlyas “the Parties”, and each, individually, as a “Party”.

**WHEREAS —**

1.                                      Law8631 of March 4, 1993, amended by Law 8727 of November 5, 1993, inparticular the provisions of Article 5, § 4, gave authorization for theoutstanding balance on the account known as the CRC (Results Compensation)Account, after the offsetting specified in § 3 of the said Law, to be used,under agreements with the public electricity service concession holders, by thestates, the Federal District and municipalities that hold stockholding controlin the said concession holders, for the purposes of offsetting debt owed to thefederal government by the said states, Federal District and municipalities;

2.                                      on May 31, 1995, underthe above legislation, the Parties signed the Contract for Assignment of theOutstanding Credit Balance on the Results Compensation Account, by which **CEMIG** assigned to the **STATE** the remaining balance of the creditson the now-discontinued Results Compensation Account received from the FederalGovernment, in the amount of 852,851,282.9305 Fiscal Reference Units (UFIRs),corresponding, on the date of the assignment, to R$ 602,198,290.88 (six hundredand two million, one hundred and ninety eight thousand, two hundred and ninetyReais and eighty eight centavos), to be amortized by the **STATE** in 204 (two hundred and four) monthlyconsecutive installments, updated by the UFIR and remunerated at annualinterest of 6% (six per cent) after a grace period of 36 (thirty six) months,guaranteed by funds of the States’ Participation Fund (FPE) (such Contract, asamended by the three amendments referred to below, hereinafter being referredto simply as “**the CONTRACT**”);

3.                                      on February 24, 2001the Parties signed the First Amendment to the Contract for Assignment of theOutstanding Credit Balance on the Results Compensation Account, to alter themonetary correction indexor on the debtor balance, from the UFIR to the SpecialExpanded National Consumer Price Index (IPCA-E), for the period of January throughOctober 2000, and to the 

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GeneralInternal Availability Price Index (IGP-DI), in the months of November and December 2000;

4.                                      on October 14, 2002,the Parties signed the Second Amendment to the Contract for Concession of theOutstanding Credit Balance on the Results Compensation Account, to reschedulethe installments which were to become due as from January 1, 2003, andestablish the IGP-DI as the inflation indexing unit, with the possibility (atthat time) of passing through of the said credit by CEMIG to the federalgovernment or to the BNDES (National Development Bank), though this did not infact take place;

5.                                      on October 24, 2002 theParties signed the Third Amendment to the Contract to Assign the OutstandingCredit Balance on the Results Compensation Account, to reschedule andrenegotiate the Installments past due and not paid, calculated on December 31,2002, including interest and arrears charges on the overdue installments, withinterest of 12% (twelve per cent) per year and monetary updating by thevariation in the IGP-DI, to be paid in 149 (one hundred and forty nine) monthlyconsecutive Installments, from January 2003 to May 2015;

6.                                      there is legislativeauthorization for the **STATE** to pledgein guarantee dividends or Interest on Equity payable to it by **CEMIG**, and it may do so with the respective retention, underState Law 14247 of June 4, 2002, as amended by State Law 14384 of October 11,2002;

7.                                      the debtor balance on the **CONTRACT** on December 31, 2004 isR$ 2,941,599,110.03 (two billion, nine hundred and forty one million, fivehundred and ninety-nine thousand, one hundred and ten Reais and threecentavos);

8.                                      there is a need toregularize the payment of the installments owed by the **STATE** to **CEMIG,**and the Parties have an interest in ensuring that the debit of the **STATE** is paid in full, as calculated on December 31,2004, by means of partial or total retention, in accordance with the presentinstrument, of dividends or Interest on Equity becoming due for payment by **CEMIG** to the **STATE**;

9.                                      the draft of thiscontractual amendment, and also the terms and conditions contained in it, havebeen approved by the Board of Directors, in a meeting held on January 12,2005, as per **CEMIG** Board Decision Statement(CRCA)002/2006, duly homologated by the Extraordinary General Meeting of Stockholdersof **CEMIG** begun on December 30, 2005and completed on January 12, 2006;

10.                                through **CEMIG**Board Decision Statement (CRCA) 145./2004, of 22../11../2004, the Board ofDirectors of **CEMIG** approved the **CEMIG Strategic Plan for 2005—2035, 2004 Edition:  Bases for Renegotiation of the ResultsCompensation Account Contract **(hereinafterreferred to simply as the “Strategic Plan”), which deals with the following:

a)              the criteria and assumptionson which the forecasts made in the Strategic Plan were based;

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b)             the renegotiation of thedebtor balance of the CRC Contract, in accordance with this present instrument;

c)              the amounts of capitalexpenditure, including those necessary for the expansion planned by **CEMIG**,and also the amounts to cover current investment; and

d)             the “New Dividend Policy”,consisting of

(i)             obligatory distribution of50% (fifty per cent) of net profit as dividends and Interest on Equity,hereinafter referred to as “ordinary dividends”; and

(ii)          distribution ofextraordinary dividends or Interest on Equity, every 2 (two) years, starting in2005, whenever there is free cash available in excess of 5% (five per cent) ofannual cash flow, hereinafter referred to as “extraordinary dividends” (“theNew Dividend Policy”);

11.                                        the **STATE**will seek to exercise its power of control in**CEMIG** in such a way as to orientand allow the management of **CEMIG**to make the execution of the Strategic Plan possible;

— the Parties hereby resolve to sign this Fourth Amendment to theContract for Assignment of the Outstanding Balance on the Results CompensationAccount (hereinafter “the Amendment”), subject to the following terms andconditions:

# **CLAUSE ONE: THE DEBIT**

The **STATE**recognizes and declares, for the purposes of this instrument, subject to thematters in the Sole Paragraph of this Clause, the debit owed by itself to **CEMIG** under the **CONTRACT**, as amended, in the total amount ofR$ 2.941.599.110,03 (two billion, nine hundred and forty-one million, fivehundred and ninety-nine thousand, one hundred and ten Reais and threecentavos), base date December 31, 2004, made up of the past due and unpaidinstallments of the principal, and also the installments yet to become due, allduly updated and augmented by contractual charges up to the base date(hereinafter referred to simply as “**the DEBIT**”**)**.

**Sole paragraph:** The debtor balanceidentified in this clause is the subject of disagreement in relation to anamount limited to R$ 115,670,291.40 (one hundred and fifteen million sixhundred and seventy thousand two hundred and ninety one Reais and fortycentavos). The  **STATE**and**CEMIG**undertake to resolve this disagreement within 90(ninety) calendar days from the date of signature hereof, by means ofconciliation to be effected by the **STATE**and **CEMIG**, there being deductedany amount which comes to be recognized by the Parties as not payable, in avaluation opinion approved by the **STATE**and by the Board of **CEMIG,**withproportional reduction in the value of the Installments specified in ParagraphOne of Clause Two hereof. If the conciliation is not achieved in theabove-mentioned period, the disagreement shall be submitted by both the Partiesto the Public Audit Board of the State of Minas Gerais, through a formal, andspecific, consultation.

## **CLAUSE TWO: MONETARY ADJUSTMENT,INTEREST AND PAYMENT CONDITIONS**

The **STATE**undertakesto amortize and pay the **DEBIT**, dulyupdated and augmented by the due interest, in accordance with the followingbasic conditions:

a)              compliance with theobligation for payment and consequent amortization and settlement of the

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**DEBIT** shall take place, aspriority, by means of retention by **CEMIG** of theamount of dividends and Interest on Equity payable to the **STATE,**asprovided for in Clause Three;

b)             the **DEBIT**shall be updated in its monetary value, based on the monthly variation,positive or negative, of the General Internal Availability Price Index (IGP-DI)of the Getúlio Vargas Foundation, taking place from January 1, 2005 and upto the date of its effective and entire settlement;

c)              on the balance of the **DEBIT**, updated, there shall be payable interest of 4.00961494016%per half-year and8.18% (eight point one eight per cent) per year, *pro ratatempore*, capitalized half-yearly, on June 30 and December 31,subject to the terms of Clause Six and other provisions of this instrument;

d)             the **STATE** shall settle the **DEBIT**, duly updated and augmented by theinterest payable, by June 30, 2035;

e)              to amortize the **DEBIT**, the **STATE** shall payto **CEMIG**(i) 61 (sixty-one)half-yearly consecutive installments, becoming due by June 30 and December 31of each year, the first starting from the first half of 2005, in accordancewith the amounts and timetable set out below (“the Installments”), until thetotal settlement of the **DEBIT**, and (ii) theentire debtor balance, if any, after the payments referred to above, on June 30,2035.

**Paragraph One:** The amortizations referredto in item (i) of sub-clause “e” of the head paragraph shall be effected, at each duedate, in accordance with the following amounts:
| **INSTALLMENTS** | ** ** | **AMOUNT OF INSTALLMENT** |
|------------------|------------|-------------------------------------|
| 1 to 5           |       | R$29,415,991.10,                    |
| 6 to 10          |       | R$30,886,790.66,                    |
| 11 to 15         |       | R$33,828,389.77,                    |
| 16 to 20         |       | R$38,240,788.43,                    |
| 21 to 25         |       | R$41,182,387.54,                    |
| 26 to 29         |       | R$44,123,986.65,                    |
| 30 to 33         |       | R$47,065,585.76,                    |
| 34 to 37         |       | R$50,007,184.87,                    |
| 38 to 41         |       | R$52,948,783.98,                    |
| 42 to 44         |       | R$55,890,383.09,                    |
| 45 to 47         |       | R$58,831,982.20,                    |
| 48 to 50         |       | R$61,773,581.31,                    |

 

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| 51 to 53  |   |   | R$64,715,180.42, |
|-----------|--------|--------|------------------|
| 54 and 55 |   |   | R$67,656,779.53, |
| 56 and57  |   |   | R$70,598,378.64, |
| 58 to 60  |   |   | R$73,539,977.75, |
| 61        |   |   | R$76,481,576.84  |

** **

**Paragraph Two:** The amount of eachInstallment shall be monetarily updated, from January 1, 2005 up to thedate of its payment, based on the General Domestic Availability Price Index(IGP-DI) inflation index of the Getúlio Vargas Foundation.

**Paragraph Three:** The maturity date of each installmentshall be automatically brought forward to the date on which **CEMIG** makes the payment of dividends and/orInterest on Equity, within the respective half-year to which the installmentrefers. In the event of there having taken place, in the said half-year, anypayment of dividends or Interest on Equity, either ordinary or extraordinary,and if the payment of these takes place on different dates, the due date shallbe that of the last payment in the half-year period. There shall, however, beretained, from each payment which comes to be made within the respectivehalf-year, in advance, the amount which, under this **CONTRACT**,is to be retained of the amount payable by **CEMIG** to the **STATE**, as provided for in Clause Three.

**Paragraph Four:** The monetary updating andthe interest payable under this Amendment shall be calculated on the dailydebtor balances of the **DEBIT**,*****pro rata tempore*,**with the monetary updating being calculated monthly and theinterest being capitalizedsix-monthly.

**Paragraph Five:**In the event of the IGP-DIbeing abolished, the index which replaces it shall be applied, or anotherofficially recognized monetary updating index which best reflects the loss ofpurchasing power, or any other index which may be agreed between the Parties.

**CLAUSE THREE: RETENTION OF DIVIDENDS AND INTEREST ON EQUITY**

For payment of the **DEBIT**,in accordance with Clause Two, the Parties recognize that the **STATE**:

a)                  currently has a stockholdingof 22.23% (twenty two point two three per cent) in **CEMIG** which, based on distribution of 50% (fifty per cent) ofthe net profit as dividends or Interest on Equity and retention of thepercentage specified in Paragraph Two, sub-clause “a” below, corresponds, ontoday’s date, to a percentage of 7.23% (seven point two three per cent) on netprofit; and

b)                 intends to use the amountsarising from the flow of dividends or Interest on Equity to which it isentitled as a stockholder of **CEMIG**,taking into account the New Dividend Policy and the changes to the Bylaws of **CEMIG**, to guarantee the payment of theInstallments and of the balance of the **DEBIT**.

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**Paragraph One:** By means of this Amendment,and for the full purposes of law, the **STATE**hereby irrevocably authorizes **CEMIG**to retain amounts from the **STATE’s**entitlement to dividends and/or Interest on Equity receivable from **CEMIG** for the payment of the Installmentsand the balance of the **DEBIT**, plusthe interest owed and duly adjusted, subject to the provisions of thisinstrument.

**Paragraph Two:** Of the distribution, asordinary dividends and Interest on Equity, of 50% (fifty per cent) of netprofit, **CEMIG** shall, unlessotherwise provided for in this instrument, proceed as follows:

a)                   **  CEMIG**shall retain 65% (sixty five per cent) of the total ofthe ordinary dividends and Interest on Equity to which the **STATE** is entitled (hereinafter “the AmountRetained”) and apply the entire Amount Retained as follows:

a.1) for settlement of any Installment past due andnot fully paid, in order of the past chronological order of due dates;

a.2) for settlement of the Installment relating to thehalf-year in which the ordinary distribution of profit or Interest on Equitytakes place;

a.3) for anticipated settlement of up to a maximum of2 (two) Installments, being those immediately subsequent to the half-year inwhich the ordinary distribution of earnings or Interest on Equity takes place,subject to the provisions of Clause Four; and

a.4) for the amortization of the balance of the **DEBIT**, augmented by the interest due and duly adjusted,without there being any change to the amount or due date of the Installmentsyet to become due, or subsequent ones, which shall continue to be owed inaccordance with the terms of Clause Two, except those referred to in item a.3above.

b)                 **CEMIG** shall pay to the **STATE** the remaining 35% (thirty five percent) of the amount of the ordinary dividends and Interest on Equity.

**Paragraph Three:**Without prejudice to theretention of the Amount Retained under Paragraph Two, if the retention of theordinary dividends and Interest on Equity is insufficient to settle therespective Installment, **CEMIG**shall proceed to retain, starting on January 1, 2008, up to 65% (sixtyfive per cent) of all and any amount of extraordinary dividends or Interest onEquity to which the **STATE**may beentitled, for the settlement of any Installment, up to the amount necessary forits settlement, after due monetary correction.

**Paragraph Four:** If the retention of theordinary and extraordinary dividends and/or Interest on Equity in the mannerspecified in Paragraphs Two and Three above is insufficient for totalsettlement of any Installment, **CEMIG**  shall proceed automatically to retain thetotality of all and any dividends and Interest on Equity, ordinary orextraordinary (including the percentage specified in Paragraph Two, sub-clause “b”),to which the **STATE** is entitled, starting fromthe six-month period immediately following that of the Installment which ispast due and has not been fully settled, up to the full settlement of suchInstallment, duly adjusted in monetary terms, and the interest due on anydebtor balance shall be added to the total of the **DEBIT**.

**Paragraph Five:**Without prejudice to theretention of the Amount Retained, in accordance with the Paragraphs above andany other provision hereof, and provided that default has not yet beencharacterized 

 

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under Clause Seven, after the settlement of all theInstallments that are past due and have not been fully settled, the retentionspecified in Paragraphs Three and Four shall be immediately suspended, and shallagain be applied only to the 65% (sixty five per cent) of the ordinarydividends and Interest on Equity, in accordance with Paragraph Two, sub-clause “a”.

**Paragraph Six:** If there is a reduction in the shareheld by the **STATE**in theregistered capital of **CEMIG** and,as a result, in the ordinary dividends and/or Interest on Equity to be paid by **CEMIG** to the **STATE**,the percentage defined in Paragraph Two, sub-clause “a” shall automatically beadjusted upward (withthe corresponding reduction of the percentage specified in Paragraph Two,sub-clause “b”), in such a way that the “Amount Retained” shall correspond atall times to at least 7.23% (sevenpoint two three per cent) of the net profit of **CEMIG**.

**Paragraph Seven:** If **CEMIG**assigns the credits made up of theInstallments payable by the **STATE**,which may also be an assignment to oneor more Credit Receivables Investment Funds, provided that all the terms andconditions of this instrument are preserved, the  **STATE** hereby authorizes **CEMIG** to make the payment of theInstallments, in the proportion of the credit assigned, directly to theassignee, using amounts retained in accordance with this Clause Three.

**CLAUSE FOUR: EARLY AMORTIZATION ANDOTHER AMORTIZATIONS**

The Parties agree that early amortization of anInstallment or Installments may only take place in the following events andprovided there is no Installment which is past due and has not been fullysettled:

a)              the **STATE** may effect early amortization of upto a maximum of 2 (two) Installments, by application of the balance of theAmount Retained in excess of the amount of the Installments that are past due,as specified in Paragraph Two, sub-clause “a.3”, of Clause Three, provided thenumber of installments thus amortized early does not exceed, at any time, a totalof 2 (two) Installments; or

b)             the **STATE** may carry out early amortization ofup to a maximum of 3 (three) Installments, with its own funds, not arising fromthe retention of ordinary or extraordinary dividends and/or Interest on Equity,provided that the number of Installments thus amortized early does not exceedat any time a total of 3 (three) Installments.

**Sole paragraph:** In theevent that **CEMIG** carries out anyamortization, redemption or repurchase of shares, any reduction of capital orany other transaction which results in distribution or payment to stockholders,other than distribution of dividends or payment of Interest on Equity, thetotality of the amounts to which the **STATE**is entitled shall be wholly and automatically used in the amortization of thebalance of the **DEBIT**, in the manner specified in Clause Three, Paragraph Two,sub-clauses “a.1”, “a.2”, “a.3” and “a.4”, subject also to the provisions ofsub-clause “b” of this Clause.

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**CLAUSE FIVE: COMPLIANCE WITH THE STRATEGICPLAN AND THE CONTRACT**

For the purposes of ensuring the total payment of the **DEBIT**to **CEMIG**,under the terms of this Amendment, and as part of its obligations hereunder,the **STATE**undertakes, subject to the legislation in force, to exercise its power ofcontrol in  **CEMIG** in such away as:

a)                  to propose the maintenanceof, and maintain, in the bylaws of the wholly-owned subsidiaries of **CEMIG**, the distribution and payment to **CEMIG**, as dividends and/or Interest on Equity,of the total of the net profit made by the said subsidiaries, after theretention of the amounts allocated to the legal reserves and to the capitalexpenditure approved under the Strategic Plan, subject to the availability offree cash in the respective subsidiary;

b)                 to propose the maintenanceof, and to maintain, in the Bylaws of **CEMIG, (i) **thedistribution and payment of 50% (fifty per cent) of net profit, as dividends orInterest on Equity, in 2 (two) six-monthlyparts, the first by June 30 and the second by December 31, of eachyear; and (ii) the provisions in relation to the management of **CEMIG** contained in Clause 11 of the Bylaws,with the drafting approved by the Extraordinary General Meeting of Stockholdersbegun on December 30, 2005 and completed on January 12, 2006.

c)                  to submitto prior approval by the Board of Directors of **CEMIG** and, subsequently, to approval by the General Meeting ofStockholders of **CEMIG**, anyalteration to the **CONTRACT**, asamended by the present Amendment;

**Paragraph One:** The Parties recognize that the renegotiationof the **DEBIT** in the form of thisAmendment took into account the Strategic Plan and the New Dividend Policytherein specified, and also the establishment of targets for the management of **CEMIG**, in accordance with the provisions ofthe bylaws referred to in sub-clause “b” of the head paragraph of this Clause.In this respect, and as long as the State has fulfilled its commitmentsspecified in this Clause Five, if an extraordinary event occurs that isunpredictable and beyond the control of the Parties, and results in reductionof the profit of **CEMIG**andconsequent reduction of the payment of dividends and Interest on Equity, insuch a way that 100% (one hundred per cent) of the retention by **CEMIG**of the ordinary and/or extraordinarydividends and interest on equity which are payable to the **STATE**, in accordance with the provisions ofParagraph Four of Clause Three, is insufficient for the full payment of theInstallments, the Parties, in a spirit of mutual cooperation and in obedienceto the final period for settlement of the **DEBIT**and the financial charges originally agreed, hereby agree to negotiate in goodfaith the rescheduling of the Installments affected by the respective events,taking into account the Strategic Plan. When the existence of the circumstancesreferred to in this Paragraph One has been characterized, unless the partiesreach an agreement about the rescheduling of the Installments affected, all theprovisions hereof shall remain valid and in full effect (including theretention of all the dividends and interest on equity payable to the State),except that the number of Installments provided for in the head paragraph ofClause Six and in sub-clause “b” of Clause Seven shall be, for the specificpurposes of such an eventuality, and without the possibility of accumulation(even if a new event occurs), augmented by 1 (one) Installment, increasing to 4(four) and 6 (six) Installments, respectively.

**Paragraph Two:**Theprovisions relating to the management of **CEMIG**contained in the bylaws referred to in sub-clause (b), sub-item (ii), of thisClause Five, which aim to ensure compliance with the guidelines and targetsnecessary for adequate generation of the profits of **CEMIG** and the payment of the **DEBIT**in the form specified in this Amendment, shall not be changed, other than in anextraordinary situation arising from a future situation in the economy whichclearly justifies and calls for alteration of any of these provisions, as andwhen such situation is identified by the Board of Directors of **CEMIG** in terms of this Paragraph Two andprovided that the alteration of any of these provisions, in such a situation, (i) islimited to what is strictly necessary for adaptation to the new situation, (ii) maintainsand makes possible 

 

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maintenance of the projections of **CEMIG**’s profits in such a way as to ensurethe conditions for the full payment of the **DEBIT**by the **STATE** in the mannerspecified in this Amendment, (iii) obeys the principles that support therenegotiation of the **DEBIT** in theform of this Amendment and, cumulatively, (iv) is approved by the Board ofDirectors of **CEMIG**, after hearingof the opinions of an independent audit, and also of **CEMIG**’s independent auditors, as a condition for submission ofthe change to the general meeting of stockholders of **CEMIG**.

# **CLAUSE SIX — INCREASE IN THEINTEREST RATE**

In the event that the **STATE**does not pay on time and in full 3 (three) successive Installments, whether ornot there has been retention of the totality of all or any ordinary andextraordinary dividends and/or Interest on Equity due to the **STATE** under Paragraph Four of Clause Three,or if its default becomes characterized under Clause Seven, the interest rate applicableto the balance of the **DEBIT**shall be changed, automatically, to 0.797414 per month, corresponding to aneffective rate of 10% (ten per cent) per year, in replacement of the interestrate specified in sub-clause “c” of the head paragraph of Clause Two.

**Sole paragraph:** Theincrease in the interest rate shall be in effect as from the first day of thesix-month period following the six-month period to which the third Installmentnot fully paid refers and may be reduced again to the interest rate specifiedin sub-clause “c” of the head paragraph of Clause Two (without prejudice to theamount of interest accumulated at the higher rate in the period in which it isin effect) if the **STATE**settles all and anyInstallment that is past due and unpaid in full before its default has beencharacterized in accordance with Clause Seven.

# **CLAUSE SEVEN: DEFAULT**

Any of thefollowing events shall characterize default by the **STATE**, independently of any advice or notification:

a)                   if the **STATE** at its initiative and without beingobliged to comply with any new rule of federal legislation (i) allowsthe reduction of the distribution and payment to **CEMIG** of dividends or interest on equity of the wholly-ownedsubsidiaries of **CEMIG,**asspecified by sub-clause “a” of Clause Five, (ii) reduces the distributionand payment of 50% (fifty per cent) of the net profit of **CEMIG** as dividends and Interest on Equity,or (iii) ceases to obey the provisions of Paragraph Two of Clause Five inrelation to the commitment and matters specified in sub-clause “b”, item (ii) ofClause Five;

b)                  if the **STATE** ceases to make the payments in timelyfashion and in full of 5 (five) consecutive Installments, independently ofwhether or not either of the following has occurred: (i) retention of thetotality of all and any ordinary or extraordinary dividends or interest onequity payable to the **STATE**, inaccordance with Paragraph Four of Clause Three; or (ii) increase in theinterest 

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rate under Clause Six; or

c)                   if the **STATE** ceases to make full payment of anyamount due under this instrument and the sum of the amount owed is equal to ormore than 4 (four) times the value of the first Installment not aid in full,adjusted in accordance with Paragraph Two of Clause Two, or

d)                  the STATEfails to comply with the provisions of Clause Five, sub-clause “c”, or in anyway prevents **CEMIG** from making the retentionsspecified in Clause Three or in the Sole Paragraph of Clause Four.

# **CLAUSE EIGHT: MEASURES IN THEEVENT OF DEFAULT; EARLY MATURITY; CHANGE IN FINANCIAL CHARGES**

In the event that the **STATE**defaults, under Clause Seven,independently of whether **CEMIG**takes any steps at any time, the following shall be obeyed, without prejudiceto any other right of **CEMIG**or action:

a)              the amountof the **DEBIT**, including the Installments,shall continue to be updated by the positive or negative variation of theGeneral Domestic Availability Price Index (IGP-DI) and to suffer the effect ofinterest, in the manner specified herein, subject to sub-clause “b” below;

b)             insubstitution of the remunerative interest rate specified in Clause Six, arrearsinterest of 0.948879% per month shall automatically come into effect,corresponding to an effective rate of 12% (twelve per cent) per year, startingfrom the date of characterization of the default;

c)              **CEMIG** shall continue to retain the Amount Retained, and also thetotality of all and any ordinary or extraordinary dividends or Interest onEquity, or other amounts resulting from amortization, redemption or repurchaseof debentures, shares or reduction of capital payable to the **STATE**, until the full payment of the totality of the **DEBIT**,****augmented by the interestpayable, and duly corrected in monetary terms. The retention shall not underany circumstances cover amounts relating to revenues of the **STATE** of a tax nature;

d)             **CEMIG** may declare early maturity of the totality of the **DEBIT**, augmented by the interest payable, duly updated in monetaryterms, and also demand, charge and collect from the **STATE**, through the courts orotherwise, the amounts payable by the **STATE**,including the total of the debtor balance.

# **CLAUSE NINE: PERIOD OFVALIDITY**

The **CONTRACT**shall be valid until June 30, 2035, and may be settled early, if the valueof the Amounts Retained which exceed the amount of the respective Installments,plus any other amount which becomes payable to **CEMIG**under this instrument, have been sufficient for the early settlement of the 

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balance of the **DEBIT**,****plus the interest payable and due monetary correction.

**Paragraph One:** If theconcession contracts for provision of public electricity distribution serviceof the respective wholly-owned subsidiary of **CEMIG**are not extended from 2016, the Parties shall renegotiate the balance of the **DEBIT**, subject to preservation of the limit-date of June 30,2035 for its full payment.

**Paragraph Two:** If forany reason the **CONTRACT** is terminated orextinguished without the debtor balance owed by the **STATE**having been settled in full, for as long as the settlement of the debtorbalance, including the interest due and monetary correction, is notrenegotiated between the Parties, **CEMIG** shallretain the totality of the ordinary or extraordinary dividends and/or Intereston Equity payable to the **STATE,**independently of notice or any other measure.

**Paragraph Three:** If the **STATE**decides****to dispose of shares that represent thecontrol of **CEMIG**, it mustinclude in the respective public offer, or equivalent, and in all the otherinstruments of disposal, a Clause which obliges the acquiring Party to settle,at sight, the balance of the **DEBIT**,augmented bythe due interest and duly corrected in monetary terms, as a condition for theacquiring Party to acquire control, and in this event the balance of the **DEBIT**shall be considered to have matured early, without requirement for any adviceor notice.

**Paragraph Four:** The Parties state and acknowledge that,between the Parties, the effects of this Amendment shall be backdated to governthe first half of 2005.

# **CLAUSE TEN: BUDGETARYALLOCATION**

The expenses arising from this Amendment shall be borne bygeneral budget funding allocation General StateExpenses - 1911 28 843 002 7 886 0001, of the budget of the **STATE** currently in force, Law 15460 of January 15,2005, and those of the subsequent business years by the budget allocationswhich are set in the respective budgets.

**CLAUSEELEVEN: TRANSITORY PROVISIONS RELATIVE TO THE DEDUCTIONS**

In 2005, there shall be deducted from the respective AmountsRetained funds to be allocated for the subscription, by the **STATE**, of non-convertible debentures in **CEMIG**, the purpose of which is to financeconstruction of the Irapé hydroelectric plant, under Article 1 of StateLaw 13954 of July 20, 2001, plus an additional subscription ofR$ 30,000,000.00 (thirty million Reais) in 2 (two) six-monthlyInstallments of R$ 15,000,000.00 (fifteen million Reais) each, in the yearof 2006, the addition of which shall depend on legislative authorization.

**Sole paragraph:** All the amounts, includingprincipal and/or interest, payable to the **STATE**under the above-mentioned debentures shall, at the date of their respectivematurity, redemption or payment, be applied totally and automatically in theamortization of the balance of the **DEBIT**, in theform specified in Clause Three, Paragraph Two, Sub-clauses “a.1”, “a.2”, “a.3”and “a.4”, subject also to the provisions of Sub-clause “b” of Clause Four.

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**CLAUSE TWELVE: IRREVOCABILITY**

The present Amendment has been duly authorized and signed bythe Parties, and constitutes a perfect legal transaction and is irrevocable.Any alteration to the **CONTRACT**, asamended by this Amendment, must obey the provisions of this instrument.

**CLAUSE THIRTEEN: SUCCESSION AND ASSIGNMENT**

The **CONTRACT**, asamended by this Amendment, is signed and agreed irrevocably, and binds theParties and those who for any reason are their successors. None of the Partiesmay assign its rights or obligations under the **CONTRACT,**asamended by this Amendment, by means of stockholding reorganization orotherwise, other than in the circumstances provided for by Paragraph Seven ofClause Three.

# **CLAUSE FOURTEEN: RATIFICATION**

All the clauses, items and conditions ofthe **CONTRACT** which have not beenaltered by the present Amendment and which do not conflict with the terms ofthis Amendment remain in full force and effect.

# **CLAUSE FIFTEEN — NOVATION**

**Omission or delay by any of the Parties in exercising anyof their rights shall not constitute waiver or novation, nor prejudice futureexercise of the same right.**

# **CLAUSE SIXTEEN — JURISDICTION**

**Theplace of jurisdiction of the**CONTRACT**is the legal district of Belo Horizonte, in theBrazilian State of Minas Gerais, any other being hereby waived.**

Being agreed and contracted the Partiessign this present Amendment in 3 (three) copies of equal form and content, fora single legal effect, in the presence of the witnesses named below, who alsosign.

Belo Horizonte, January 23, 2006

**(Signedby)**

**STATE OF MINAS GERAIS;**
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**COMPANHIA ENERGÉTICA DE MINAS GERAIS —CEMIG;**
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**WITNESSES: Name —Identity Card Number; Name — Identity Card Number;**
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| Name:  |   |   |   | Name:  |   |   |
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| RG:    |   |   |   | RG:    |   |   |

 

 

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