**Exhibit4.16**

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ANNOUNCEMENTOF COMMENCEMENT OF PUBLIC DISTRIBUTION 

OFTHE FIRST ISSUE OF COMMERCIAL PAPER SECURITIES

BY

**CEMIGDISTRIBUIÇÃO S.A.**

CNPJ n.o06.981.180/0001-16

Av. Barbacena, 1200, 17th Floor, A1 Wing, BairroSanto Agostinho

Belo Horizonte, MinasGerais, Brazil

ISIN: BRCMGDNPM001

# ***Lead Manager:***

In the amount of

## R$300,000,000.00

**1. CORPORATE DECISIONS**

The First Issue ofCommercial 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 “theCompany”) at a meeting held on June 29, 2006. 

**2. INFORMATION ABOUT THE ISSUE**

**2.1. Total amount of the Issue**

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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 PaperSecurities (Promissory Notes).

**2.3. Nominal unit value**

The par value (“the Nominal Unit Value”) of the Securitiesis 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 of103% (one hundred and three per cent) of the average daily rate for interbankdeposits 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 publisheddaily by the CETIP (Custody and Settlement Chamber) in its daily bulletinavailable on its Internet page (http://www.cetip.com.br) (“The DI Rate” and “theRemuneration”). The Remuneration shall be calculated exponentially andcumulatively *pro rata tempore* per businessday, applicable to the Nominal Unit Value from the date of the actualsubscription and paying-up (“Issue Date”) of the Securities up to the MaturityDate, in accordance with the following formula:

J = VNe x (*InterestFactor–*1),

Where:

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

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

InterestFactor  =   product of the DI Rates, summed exponentially with apercentage factor, from the start date of the Capitalization Period, inclusive,up to the date of termination of Capitalization Period exclusive, calculated to8 (eight) decimal places, without rounding, as found by the following formula:

Where:

n =                              thetotal 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 byday, calculated to 8 (eight) decimal places, with rounding, as follows:

Where:

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

“CapitalizationPeriod”:       This is thetime interval starting on the Issue Date, inclusive, and ending on the date ofpayment of the Nominal Unit Value of the Security, exclusive, plus theRemuneration.

If at any time during theperiod of validity of the Securities the DI Rate is not published, the lastprevious available DI Rate shall be applied, and in this event no offsettingbetween the Issuer and the holders of the Securities shall be payable when theDI Rate that would be applicable is subsequently published. 

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

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is not asubstitute legal parameter for the DI Rate, then the weighted average rate ofremuneration of Brazilian short-term federal public securities with maturity of90 (ninety) days traded in the prior 30 (thirty) days, at the time of theoccurrence, shall be used.

**2.6. Date of Issue and form of paying-up**

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

**2.7. Subscription Price**

The securities shall be subscribed for their NominalUnit 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 ofCommencement of Distribution of Commercial Paper Securities (“the Commencement Announcement”), subject to theprovisions 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 institutionqualified to provide the services of custody. The Securities shall be nominaland shall be transferred by nominal endorsement, resulting in simple transferof ownership.

**2.10. Guarantee**

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

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The Lead Manager warrants that the guarantee by CEMIGwas duly constituted by signature of its legal representatives on the reverseside of the physical issued form of each of the Securities, guaranteeing thetotality of the debt represented by them, and the guarantee in question wasduly 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 theSecurities shall be used to strengthen the Company’s cash position in relationto debt becoming due since January 2006, and for payment of debt becoming dueduring the rest of the year.

**2.12. Early redemption **

The Company may effectearly redemption of the Securities, at its exclusive option, provided that theholders thereof are in agreement, in accordance with the applicablelegislation. In the event of partial early redemption, this shall take place bylottery, in accordance with Paragraph one of Article 55 of Law 6404 of December17, 1976. 

**2.13. Period of Maturity**

The maturity period of the Promissory Notes shall be90 (ninety) calendar days from the date of subscription (“the Maturity Date”).

**2.14. Early maturity events **

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

(i)            decree of bankruptcyof the Issuer and/or the Guarantor; or dissolution and/or liquidation of theIssuer and/or Guarantor; or application for judicial or out-of-Court recoveryor bankruptcy formulated by the Issuer and/or Guarantor; or further, anyanalogous event which may characterize a state of insolvency, includingagreement with creditors, in accordance with the 

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applicable legislation;

(ii)           legitimate andreiterated protest of securities against the Issuer with individual oraggregate 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 thirdparties, and provided this is validly proven by the Issuer, or if it iscanceled or, further, validly contested in the Courts, in any event, within amaximum period of 30 (thirty days) calendar days from the date of maturity ofthe obligations; 

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

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

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

(vi)          privatization of theIssuer and/or Guarantor; 

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

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

**2.15. Placement regime**

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

**2.16 Trading**

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

**2.17. Place of payment**

The payments relating to the Securities shall becarried out in accordance with the procedures of CETIP, for the Securitiesregistered on the NOTA, or, for the holders of the Securities who are notlinked 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 ofany amount payable to the holders of the Securities, the overdue units shall besubject to: (a) arrears interest calculated from the day of default to the dateof actual payment, at the rate of 1% (oneper cent) 

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per month, on the amount owed, independently of theprice, or notification or action in or outside the Courts; and (b) aconventional 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 bedestined solely and exclusively to qualified investors, as defined by Article109, sub-item (i) of CVM Instruction 409 of 18 August 18, 2004 (“QualifiedInvestors”). 

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

**3.****STATEMENT BY THE COMPANY AND THELEAD MANAGER**

3.1. Under the applicable regulations, the Issuer isresponsible for the veracity of the information contained in the CommencementAnnouncement and warrants that that information is true, correct, consistentand sufficient, in accordance with a statement given by the Issuer pursuant toArticle 56 of CVM Instruction 400, of December 29, 2003 (“CVM Instruction400/03”), which was signed by its statutory Directors Mr. Djalma Bastos deMorais and Mr. Flávio Decat de Moura.

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

**4.****DISTRIBUTIONPROCEDURE**

4.1. The Securities shallbe the object of a public distribution, intermediated by financial institutionsthat are part of the Securities Distribution System. The sharing criterionshall be of proportionality to the volume of orders placed by investors. Thereshall be no prior reserves nor setting of maximum or minimum lots. No contractfor stabilization of the price of the Securities shall be signed. No fund tosustain liquidity for the Securities shall be constituted. No type of discountshall be granted by the Lead Manager to investors interested in requiring theSecurities.  

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

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

4.3. If the CVM does notgrant Automatic Registry, the terms and conditions of this present Issue shallremain in force, but the period of 5 (five) days referred to in item 4.2 shallbe replaced by the periods referred to by CVM Instruction 134, and the term “AutomaticRegistry” shall be replaced by “Registry”, which shall have the followingmeaning: “concession of registry of the issue by the CVM”. 

4.4. Subject tocompliance with the applicable regulations, the Lead Manager shall carry outthe 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) theinvestment is adapted to the risk profile of its clients.

4.5 In accordance with the option provided for inArticle 1 of CVM Instruction 155 of August 7, 1991, for the purposes of thisIssue no prospectus nor any advertising material intended for public disclosureshall be used, other than this Announcements of Commencement and Closing of theDistribution and the Summary of Information on the Issue as specified inAppendix I of CVM Instruction 155.

**5.  LOCATIONSFOR ACQUISITION OF THE SECURITIES**

Those interestedin acquiring the Securities may contact the Lead Manager of the Offering at thefollowing 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 fullpresentation of the details of this Offering is available on the web pages ofthe 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 moreinformation in relation to the Offering and the Securities interested partiesshould visit the head office of the Lead Manager at the address indicated in item5 above, or at the CVM, at the CETIP or at the head office of the Issuer, atthe addresses indicated below:

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| **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 – SãoPaulo - SP

www.cetip.com.br

**Headquartersof 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 theOffering: 5 (five) business days after the publication of this CommencementAnnouncement, that is to say on July 26, 2006, as stated in item 4.2.  The application for registry with the CVM wasmade on July 14, 2006, in accordance with Article 3 of CVM Instruction 429 ofMarch 22, 2006.**

The registration of thisdistribution with the Securities Commission (CVM) aims only to guarantee accessto the information that will be given by the Issuer at the request of thesubscribers in the location mentioned in this notice, and does not constitute aguarantee by the CVM of the truthfulness of the information, nor any judgmentin relation to the quality of the Issuing Company or in relation to theSecurities 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. |
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