As
filed with the Securities and Exchange Commission on November 18, 2020

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, DC 20549



FORM 20-F/A

(Amendment No. 1)



ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended December
31, 2019

Commission file number: 001-14668



COMPANHIA PARANAENSE DE ENERGIA
– COPEL

(Exact Name of Registrant as
Specified in its Charter)

|Energy Company of Paraná
        (Translation of Registrant’s Name
        into English) | The Federative Republic of Brazil
        (Jurisdiction of Incorporation or Organization)
|---------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------



Rua Coronel Dulcídio, 800

80420-170 Curitiba, Paraná, Brazil

(Address of Principal Executive Offices)



Daniel Pimentel Slaviero

+55 41 3331 4011 – ri@copel.com

Rua Coronel Dulcídio, 800, 3rd
floor – 80420.170 Curitiba, Paraná, Brazil

(Name,
telephone, e-mail and/or facsimile number and address of company contact person)



Securities registered or to be
registered pursuant to Section 12(b) of the Act:

|Title of Each Class                                                                                                                              | Trading
        Symbol(s) | Name of Each Exchange
        on Which Registered
|------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | -------------------------------------------------
|Preferred Class B Shares, without par value*                                                                                                     | CPLE6                     | New York Stock Exchange                          
|American Depositary
        Shares (as evidenced by American Depositary Receipts),
        each representing one Preferred
        Class B Share | ELP                       | New York Stock Exchange                          
|                                                                                                                                                 |                           |                                                  



* Not for trading, but only in connection with the listing
of American Depositary Shares on the New York Stock Exchange.

Securities registered or to be registered
pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares
of each of the Issuer’s classes of capital or common stock as of December 31, 2019:

145,031,080 Common Shares, without
par value

327,142 Class A Preferred Shares, without
par value

128,297,153 Class B Preferred Shares, without
par value

Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes☒ No☐

If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.

Yes☐ No☒

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.

Yes☒ No☐

Indicate by check mark whether the
registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files).

N/A







Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” and ”emerging growth company”
in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one):

Large
accelerated filer☒ Accelerated filer☐

Non-accelerated
filer☐ Emerging growth company☐

If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.☐

†The term “new or revised financial accounting
standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5,2012.

Indicate by check mark which basis
of accounting the registrant has used to prepare the financial statements included in this filing:

U.S.
GAAP☐ IFRS	☒	Other☐

If “Other” has been checked
in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

N/A

Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by
the registered public accounting firm that prepared or issued its audit report.☒



If this is an annual report, indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes☐ No☒







Table of Contents

|Explanatory Note                                                                        | 3  
|--------------------------------------------------------------------------------------- | ---
|Presentation of Financial and Other Information                                         | 4  
|Forward-Looking Statements                                                              | 5  
|Item 1.   Identity of Directors, Senior Management and Advisers                         | 5  
|Item 2.   Offer Statistics and Expected Timetable                                       | 5  
|Item 3.   Key Information                                                               | 6  
|Selected Financial Data                                                                 | 6  
|Risk Factors                                                                            | 9  
|Item 4.   Information on the Company                                                    | 34 
|The Company                                                                             | 34 
|Business                                                                                | 38 
|Concessions                                                                             | 61 
|Competition                                                                             | 70 
|Environment                                                                             | 71 
|Plant, Property and Equipment                                                           | 72 
|The Expropriation Process                                                               | 73 
|The Brazilian Electric Power Industry                                                   | 74 
|Item 4A.   Unresolved Staff Comments                                                    | 93 
|Item 5.   Operating and Financial Review and Prospects                                  | 93 
|Overview                                                                                | 94 
|Critical Accounting Policies                                                            | 98 
|Analysis of Electricity Sales and Cost of Electricity Purchased                         | 104
|Results of Operations for the Years Ended December 31, 2019, 2018 and 2017              | 106
|Liquidity and Capital Resources                                                         | 114
|Contractual Obligations                                                                 | 120
|Off-Balance Sheet Arrangements                                                          | 121
|Item 6.   Directors, Senior Management and Employees                                    | 122
|Board of Directors                                                                      | 122
|Board of Executive Officers                                                             | 125
|Supervisory Board                                                                       | 127
|Audit Committee                                                                         | 128
|Appointment and Evaluation Committee                                                    | 129
|Compensation of Directors, Officers, Fiscal Council Members and Audit Committee Members | 130
|Employees                                                                               | 131
|Share Ownership                                                                         | 133
|Item 7.   Major Shareholders and Related Party Transactions                             | 134
|Major Shareholders                                                                      | 134
|Related Party Transactions                                                              | 135
|Item 8.   Financial Information                                                         | 137
|Legal Proceedings                                                                       | 138
|Dividend Payments                                                                       | 139
|Item 9.   The Offer and Listing                                                         | 142
|Item 10.   Additional Information                                                       | 143
|Memorandum and Articles of Association                                                  | 143
|Material Contracts                                                                      | 148
|Exchange Controls                                                                       | 149
|Taxation                                                                                | 151
|Dividends and Paying Agents                                                             | 157
|Statement By Experts                                                                    | 158
|Subsidiary Information                                                                  | 159
|Documents on Display                                                                    | 160
|Item 11.   Quantitative and Qualitative Disclosures about Market Risk                   | 160
|Item 12.   Description of Securities Other than Equity Securities                       | 160
|Item 12A.   Debt Securities                                                             | 160
|Item 12B.   Warrants and Rights                                                         | 160
|Item 12C.   Other Securities                                                            | 160
|Item 12D.   American Depositary Shares                                                  | 160
|Item 13.   Defaults, Dividend Arrearages and Delinquencies                              | 161







|Item 14.   Material Modifications to the Rights of Security Holders and Use of Proceeds | 161
|--------------------------------------------------------------------------------------- | ---
|Item 15.   Control and Procedures                                                       | 161
|Item 16A.   Audit Committee Financial Expert                                            | 167
|Item 16B.   Code of Ethics                                                              | 167
|Item 16C.   Principal Accountant Fees and Services                                      | 168
|Item 16D.   Exemption from the Listing Standards for Audit Committees                   | 169
|Item 16E.   Purchases of Equity Securities by the Issuer and Affiliated Purchasers      | 169
|Item 16F.   Changes in Registrant’s Certifying Accountant                               | 169
|Item 16G.   Corporate Governance                                                        | 169
|Item 17.   Financial Statements                                                         | 172
|Item 18.   Financial Statements                                                         | 172
|Item 19.   Exhibits                                                                     | 172
|Technical Glossary                                                                      | 174
|Signatures                                                                              | 180




Table of Contents


EXPLANATORY NOTE

This Amendment No. 1 (“ Amendment
No. 1 ”) to the Annual Report on Form 20-F of Companhia Paranaense de Energia – Copel (the “ Company”)
for the fiscal year ended December 31, 2019 filed on April 27, 2020 (the “Original Form 20-F”) is being filed
to amend Item 15(a) and Item 15(b) to correctly state that the Company’s disclosure controls and procedures and the Company’s
internal controls over financial reporting, respectively, were not effective as of December 31, 2019.

Exhibits 12.1, 12.2, 13.1 and 13.2 to
the Original Form 20-F were inadvertently filed without the requisite conformed signatures, although the original certifications
were signed on April 27, 2020. Consequently, this Amendment No.1 includes the full report and the requisite signatures to Exhibits
12.1, 12.2, 13.1 and 13.2 thereto.

Other than as set forth above, this
Amendment No. 1 does not, and does not purport to, amend, update or restate the information in any other item of the Original Form
20-F. As a result, this Amendment No. 1 does not reflect any events that may have occurred after the Annual Report was filed on
April 27, 2020.

3


Table of Contents




PRESENTATION OF FINANCIAL AND
OTHER INFORMATION

In this annual
report, we refer to Companhia Paranaense de Energia ‒ Copel, and, unless the context otherwise requires, its consolidated
subsidiaries as “Copel”, the “Company”, “we” or “us”.

References
to (i) the “real”, “reais” or “R$” are to Brazilian reais(plural)
and the Brazilian real(singular) and (ii) “U.S. dollars”, “dollars” or “US$” are
to United States dollars. We maintain our books and records in reais. Certain figures included in this annual report have
been subject to rounding adjustments.

Our audited
consolidated financial statements as of December 31, 2019 and 2018, and for each of the years ended December 31, 2019, 2018 and
2017, are included in this annual report. We prepared our audited consolidated financial statements included in this annual report
in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board,
or IASB.

References
in this annual report to the “Common Shares”, “Class A Shares” (or “Class A”) and “Class
B Shares” (or “Class B”) are to our common shares, class A preferred shares and class B preferred shares, respectively.
References to “American Depositary Shares” or “ADSs” are to American Depositary Shares, each representing
one Class B Share. The ADSs are represented by American Depositary Receipts (“ADRs”).

Certain terms
are defined the first time they are used in this annual report. As used herein, all references to “GW” and “GWh”
are to gigawatts and gigawatt hours, respectively, references to “kW” and “kWh” are to kilowatts and kilowatt
hours, respectively, references to “MW” and “MWh” are to megawatts and megawatt hours, respectively, and
references to “kV” are to kilovolts. These and other technical terms are defined in the “Technical Glossary”
that begins on page 189.

4


Table of Contents




FORWARD-LOOKING STATEMENTS

This annual
report contains forward-looking statements. We may also make written or oral forward-looking statements in our annual report to
shareholders, in our offering circulars and prospectuses, in press releases and other written materials and in oral statements
made by our officers, directors or employees. These statements are not historical facts and are based on management’s current
view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words
“anticipates”, “believes”, “estimates”, “expects”, “plans” and similar
expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration
or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the
direction of future operations and the factors or trends affecting the financial condition, liquidity or results of operations
are examples of forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake
no obligation to update publicly any of them in light of new information or future events.

Forward-looking
statements involve only the current view of management and are subject to a number of inherent risks and uncertainties. There is
no guarantee that the expected events, trends or results will actually occur. We caution you that a number of important factors
could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but
are not limited to:

| | · | Brazilian political and economic conditions;
| | - | --------------------------------------------

| | · | economic conditions in the State of Paraná;
| | - | -------------------------------------------

| | · | technical and operational conditions related
to the provision of electricity services;
| | - | --------------------------------------------------------------------------------------

| | · | lawsuits;
| | - | ---------

| | · | our ability to obtain financing;
| | - | --------------------------------

| | · | developments in other emerging market
countries;
| | - | ------------------------------------------------

| | · | changes in, or failure to comply with,
governmental regulations;
| | - | ----------------------------------------------------------------

| | · | competition;
| | - | ------------

| | · | electricity shortages;
| | - | ----------------------

| | · | impacts of the coronavirus (COVID-19)
pandemic; and
| | - | ---------------------------------------------------

| | · | other factors discussed below under “Item
3. Key Information―Risk Factors”.
| | - | ---------------------------------------------------------------------------

All forward-looking
statements are expressly qualified in their entirety by this cautionary statement, and you should not place undue reliance on any
forward-looking statement contained in this annual report.

Item 1. Identity of Directors, Senior Management
and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

5


Table of Contents


Item 3. Key Information

SELECTED FINANCIAL DATA

This section
contains selected consolidated financial data presented in reais and derived from our consolidated financial statements
that were prepared in accordance with IFRS as of and for each of the five years ended December 31, 2019, 2018, 2017, 2016 and 2015.

The
following selected financial data should be read in conjunction with our audited consolidated financial statements (including the
notes thereto), “Presentation of Financial and Other Information”, “Item 5. Operating and Financial Review and
Prospects” and “Item 8. Financial Information”.

The selected
financial data as of December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and 2017 have been derived from
our audited consolidated financial statements, prepared in accordance with IFRS, and included in this annual report. The selected
financial data as of December 31, 2017, 2016 and 2015 and for the years ended December 31, 2016 and 2015, have been derived from
our audited consolidated financial statements, prepared in accordance with IFRS, which are not included in this annual report.

As of January
1, 2019, IFRS 16 took effect, but without requiring restatement of balance sheets as of December 31, 2018 and earlier financial
periods. The applicability of IFRS 16 should to be taken into account in the comparability of balances presented below. For further
details see Note 4.16.1 to our audited consolidated financial statements, prepared in accordance with IFRS.

6


Table of Contents






|                                                 | As
        of and for the year ended December 31,
|------------------------------------------------ | -------------------------------------------------
|                                                 | 2019                                             
|                                                 | (R$million)                                      
|Statement of income data(1):                     |                                                  
|Operating revenues                               | 16,244                                           
|Cost of sales and services provided              | (11,760)                                         
|Gross profit                                     | 4,484                                            
|Operational expenses/income                      | (1,293)                                          
|Profit before financial results and taxes        | 3,191                                            
|Financial results                                | (488)                                            
|Profit before income tax and social contribution | 2,702                                            
|Income tax and social contribution on profit     | (639)                                            
|Net income for the year                          | 2,063                                            
|Statement of financial position data:            |                                                  
|Current assets                                   | 7,909                                            
|Recoverable rate deficit (CRC)(1)                | 1,350                                            
|Non-current assets                               | 10,863                                           
|Property, plant and equipment, net               | 10,592                                           
|Total assets                                     | 38,313                                           
|Loans and financing and debentures (current)     | 1,420                                            
|Current liabilities                              | 5,346                                            
|Loans and financing and debentures (non-current) | 10,152                                           
|Non-current liabilities                          | 15,368                                           
|Equity                                           | 17,598                                           
|Attributable to controlling shareholders         | 17,252                                           
|Attributable to non-controlling interest         | 346                                              
|Share capital                                    | 10,800                                           
|                                                 |                                                  



(1)This item includes both
current and non-current CRC Account receivables. Amounts due from the State of Paraná that were included in current assets
totaled R$219 million on 2019, R$190.9 million in 2018, R$167.1 million in 2017, and R$111.7 million in 2015. Amounts due from
the State of Paraná that were included in long-term assets totaled R$1,131 million in 2019, R$1,254.2 million in 2018, R$1,349.3
million in 2017, R$1,522.7 million in 2016 and R$1,271.6 million in 2015. In 2016 the entire amount due by the State of Paraná
was included in long-term assets due to the negotiation of the Amendment to the CRC Agreement. See Note 8 to our audited consolidated
financial statements.

7


Table of Contents






|                                                         | As
        of and for the year ended December 31,
|-------------------------------------------------------- | -------------------------------------------------
|                                                         | 2019                                             
|                                                         | (R$, except for number of shares)                
|Basic and diluted earnings per share:                    |                                                  
|Common Shares                                            | 6.94                                             
|Class A Preferred Shares                                 | 9.12                                             
|Class B Preferred Shares                                 | 7.64                                             
|Number of shares outstanding at year end (in thousands): |                                                  
|Common Shares                                            | 145,031                                          
|Class A Preferred Shares                                 | 327                                              
|Class B Preferred Shares                                 | 128,297                                          
|Total                                                    | 273,655                                          
|Dividends per share at year end:                         |                                                  
|Common Shares                                            | 2.24                                             
|Class A Preferred Shares                                 | 3.95                                             
|Class B Preferred Shares                                 | 2.47                                             
|                                                         |                                                  







|                                                         | As
        of and for the year ended December 31,
|-------------------------------------------------------- | -------------------------------------------------
|                                                         | 2019                                             
|                                                         | (US$1, except for number of shares)              
|Basic and diluted earnings per share:                    |                                                  
|Common Shares                                            | 1.72                                             
|Class A Preferred Shares                                 | 2.26                                             
|Class B Preferred Shares                                 | 1.90                                             
|Number of shares outstanding at year end (in thousands): |                                                  
|Common Shares                                            | 145,031                                          
|Class A Preferred Shares                                 | 327                                              
|Class B Preferred Shares                                 | 128,927                                          
|Total                                                    | 273,655                                          
|Dividends per share at year end:                         |                                                  
|Common Shares                                            | 0.56                                             
|Class A Preferred Shares                                 | 0.98                                             
|Class B Preferred Shares                                 | 0.61                                             



(1)This information is presented in U.S. dollars at the
exchange rate in effect as of the end of each year.

8


Table of Contents


Risk
Factors

Risks Relating to Our Company
and our Operations

We are controlled by the
State of Paraná, the policies and priorities of which directly affect our operations and may conflict with the interests
of our investors.

We are controlled
by the State of Paraná, which holds 58.6% of our outstanding common voting shares as of the date of this annual report,
and whose interests may differ from other shareholders. As a major shareholder, the State of Paraná has the power to control
all of our operations, including the power to elect a majority of the members of our Board of Directors and determine the outcome
of any action requiring common shareholder approval, including transactions with related parties and corporate reorganizations.

Our
operations have had and will continue to have an important impact on the commercial and industrial development of the State of
Paraná. In the past, the State of Paraná has used, and may in the future use, its status as our controlling shareholder
to decide whether we should engage in certain activities and make certain investments aimed, principally, to promote its public
policies or social objectives and not necessarily to meet the objective of improving our business and/or operational results.

We are involved
in several lawsuits that could have a material adverse effect on our business if their outcome is unfavorable to us.

We are the
defendant in several legal proceedings, mainly relating to civil, administrative, labor and tax claims. The outcome of these proceedings
is uncertain and, if determined against us, may result in obligations that could materially affect our results of operations. On
December 31, 2019, our provisions for probable (more likely than not) and reasonably estimated losses were R$1,606.7 million. For
additional information, see “Item 8. Financial Information—Legal Proceedings”.

We are subject to limitations regarding the amount
and use of public sector financing, which could prevent us from obtaining financing and implementing our investment program.

Our
current budget anticipates capital expenditures for expansion, modernization, research, infrastructure and environmental projects
of approximately R$2,087.2 million in 2020. As a state-controlled company, we are subject to Brazilian Central Bank Resolution
no. 4,589/2017(Resolução no 4,589/2017 do Banco Central do Brasil), which defines the limit of exposure
and the annual global limit of credit to public sector entities to be observed by financial institutions and other institutions
authorized to operate by the Brazilian Central Bank. The annual global limit that can be contracted in credit operations, with
and without guarantee of the Union, by the bodies and entities of the public sector with the financial institutions and other institutions
authorized to operate by the Brazilian Central Bank is defined by the National Monetary Council by means of inclusion of an annex
to Brazilian Central Bank Resolution no. 4,589/2017, establishing, until the end of each fiscal year, the limit for the following
year. The maximum amounts defined for the 2020 financial year are up to R$4.5 billion for Union guaranteed operations and up to
R$3.5 billion for operations without Union guarantee. As a result of these limits, we may have difficulty in obtaining financing
from financial institutions and other institutions authorized to operate by the Brazilian Central Bank, which could create difficulties
in the implementation of our investment program. Additionally, some of our concession contracts have provisions that limit our
permitted level of indebtedness, which could also affect our ability to obtain necessary financing. Furthermore, the requirements
and other criteria adopted by financial institutions when approving new financing transactions may be related to certain Brazilian
macroeconomic scenarios, as well as to our financial indicators, such as our indebtedness levels and other indicators usually considered
by financial institutions in their credit risk assessments. We cannot ensure you that these requirements and criteria will be met.
As a result of these regulations and provisions, our capacity to incur debt from certain sources is limited, which could negatively
affect the implementation of our investment program.

9


Table of Contents


Breach of
security of our data center by cyber attacks, or unauthorized disclosure of business or personal information, as well as our failure
to comply with existing and future laws and regulations relating to data privacy and data security, may subject us to penalties
or result in disruption of our operations.

We
collect, store, process and use various confidential information related to our business and operations. In our ordinary course
of business, we also collect and store personal data of our customers in our data centers.

Despite
our security measures, our information technology and infrastructure may be vulnerable to (i) attacks by hackers, which can access
our safety net and steal our information, paralyze our operations or even cause power outages, or (ii) breaches due to employee
error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be
accessed, publicly disclosed, lost or stolen. Any such access, disclosure or loss of information could affect our operations and
could result in legal claims or proceedings under Brazilian laws that protect the privacy of personal information (among others)
and damage our reputation.

Aware
of the increased risk of cyber threat, the Information Technology Superintendence carried out important measures during 2019, such
as contracting intrusion testing services and maturity measurement services, seeking effective actions to reduce the Company's
risks of such matter. The planning resulting from these measures became the Information Security Plan, which will be carried out
during 2020, comprising several initiatives, the most significant of which are: (i) contracting Pentest services on a quarterly
basis; (ii) implementation of a Security Operation Center (“SOC”) (Centro de Operação de Segurança);
(iii) implementing IT actions to comply with Brazilian Federal Law No. 13,709/2018; (iv)
review and update of the Information Security Incident Management and Response process; (v) adequacy of firewall security policies
at Copel - Internet use by its users; (vi) strengthening of the Information Security Committee; and (vii) implementation of an
Information Security awareness and training program.

Brazilian Federal
Law No. 13,709/2018 (known as Lei Geral de Proteção de Dados Pessoais, or the “LGPD”) was enacted
on August 14, 2018 and applies to any data processing operation performed by an individual or by a public or private entity, regardless
of the environment where this operation is carried out. This statute provides the legal principles and requirements for the processing
of personal data, as well as liabilities and penalties that data processing agents are subject to. These agents must be able to
demonstrate the measures they adopted to comply with personal data protection rules, as well as the effectiveness of such measures.
This statute is expected to come into force in August 2020, and, by then, all entities subject to it, including us, will be required
to adapt their data processing activities to the new requirements. As a result of any violations to this statute, including any
leakage of our clients’ personal data, we may be subject to penalties, such as (i) warning, with indication of a term for
adoption of corrective measures; (ii) simple fine of up to 2% of the Company’s revenue in Brazil, limited to R$50 million
per infringement; (iii) daily fine, limited to R$50 million per infringement; (iv) disclosure of the infringement after it has
been duly confirmed; and (v) elimination of the personal data to which the infringement relates. These penalties may only be imposed
as a result of an administrative proceeding, where we must be given the opportunity to present our defense, in accordance with
the peculiarities of the case. These administrative sanctions can be imposed in addition to any other applicable civil and criminal
penalties.

As
of the date hereof, Bill No. 1179/2020 and No. 1198/2020 (the “Data Privacy Bills”), which provide, respectively, for
the emergency and transitory legal regimes of the private sector during the coronavirus (COVID-19) crisis are under discussion
by the Congress. The Data Privacy Bills are being considered in the context of measures
entered into in response to the coronavirus (COVID-19) international health crisis, including Legislative
Decree No. 06 which recognizes a state of public calamity in Brazil.The Data Privacy Bills
also include, among others, an amendment to article 65 of the LGPD on timing of applicable sanctions.
A revision of the LGPB is expected to go effective on January 1st, 2021 and the revised sanctions set forth therein
shall be applicable starting August 2021

10


Table of Contents


We have engaged
an external consulting firm to assist us in adapting our internal processes, proceedings, rules and controls to the new rules on
data protection (especially the LGPD), and this process is still ongoing. As cyber threats continue to evolve, we may be required
to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security
vulnerabilities that are discovered in the future.

If we are unable to conclude
our investment program on schedule, the operation and development of our business could be adversely affected.

In 2020, we
plan to invest approximately R$865.2 million in our generation and transmission activities (including wind farms and SPCs of transmission
lines), R$1,073.8 million in our distribution activities, R$123.9 million in our telecommunications activities and R$24.3 million
in others investments. Our ability to complete this investment program depends on multiple factors, including our ability to charge
sufficient fees for our services and to obtain sufficient financing and a variety of regulatory and operational contingencies.
There is no assurance that we will have the financial resources to complete our proposed investment program, and our inability
to do so may adversely affect the operation and development of our business leading to the imposition of fines levied by ANEEL
as well as a reduction in tariff levels.

The construction
and expansion of our transmission and power generation projects involve significant risks that may have an adverse effect on us

In connection
with the development of transmission and generation projects, we generally must obtain feasibility studies, governmental concessions
or authorizations, permits and approvals, condemnation agreements, equipment supply agreements, engineering, procurement and construction
contracts, sufficient equity and debt financing and site agreements, each of which involves the consent of third parties over which
we have no control. In addition, project development is subject to environmental, engineering and construction risks that can lead
to cost overruns, delays and other impediments to timely complete within a project’s budget. We cannot assure you that all
required permits and approvals for our projects will be obtained, that we will be able to secure private sector partners for any
of our projects, that we or any of our partners will be able to obtain adequate financing for our projects or that financing will
be available on a non-recourse basis to us.

If
we are unable to complete a project, whether at the initial development phase or after construction has commenced, or if the completion
of a project is delayed, this may decrease our expected financial return from the project, which may lead to impairment. If we
experience these or other problems relating to the expansion of our electricity transmission and power generation capacity, we
may be exposed to increased costs, or we may fail to achieve the revenues we planned in connection with such expansion projects,
which may have an adverse effect on our financial condition and results of operations.

We are largely dependent
upon the economy of the State of Paraná.

Our
distribution market for the majority of our sales of electricity is located in the State of Paraná. Although a more competitive
market involving possible sales to customers outside Paraná might develop in the future, our business depends and is expected
to continue to depend to a very large extent on the economic conditions of Paraná. We cannot assure you that economic conditions
in Paraná will be favorable to us in the future. The GDP (gross domestic product) of the State of Paraná decreased
0,4% in 2019, while Brazil’s GDP increased 1.1% during the same period.

The
weak economic growth of Brazil in recent years led to the reduction of energy consumption in the State of Paraná and in
Brazil as a whole, resulting in leftover energy in the interconnected system, consequently reducing (i) short-term prices and (ii)
prices negotiated in the Free Market. At the same time, prices in the regulated market have risen steadily as a result of supply
deficiencies on the part of contracted energy by distributors and high prices in the short-term market in previous years. As a
result, consumers consistently migrated into the Free Market and, therefore, the distributors’ captive market suffered a
reduction since 2017, 2018 and 2019.

11


Table of Contents


On
December 28, 2018, the MME enacted the Ministerial Ordinance No. 514, lowering the minimum energy amounts that consumers may
purchase directly in the Free Market so that as of January 1, 2020 the minimum energy amount was reduced from an amount equal or
superior to 2,500kW to 2,000 kW. Such ordinance was amended in December 2019 by Ministerial Ordinance No. 465/2019, which authorized
consumers’ access to the Free Market in accordance with the following schedule and thresholds: (i) as from January 1, 2021:
consumers with demand equal to or greater than 1,500 kW; (ii) from January 1, 2022: consumers with
demand equal to or greater than 1,000 kW; and (iii) January 1, 2023: consumers with demand of 500 kW or more. Furthermore, by January
31, 2022, ANEEL and Electric Energy Trading Chamber (Câmara de Comercialização de Energia Elétrica,
or “CCEE”) are required to consider which regulatory changes are necessary to allow access to the Free Market by consumers
with an electric load lower than 500 kW. As a consequence of the changes introduced by Ministerial Ordinance No. 514/2018 and 465/2019,
more consumers were authorized to access the Free Market as of January 1, 2020, and it is expected a greater migration to the Free
Market following the new schedule proposed by the MME. Even though this ordinance intend to enable the migration from the captive
market to the Free Market, we cannot predict their impact on our revenues and possible contractual exposure regarding the limits
of energy purchase.

A
reduction in the captive market often leads to distributors selling excess contracted energy in the short-term market, considering
the limits established under Federal Decree No. 5,163/2004. This short-term market is subject to relevant price fluctuations.
Whenever the distributor contracting price is above the regulatory limits (above 105%) and the short-term market price is lower
than the price paid by the distributor in its long-term energy purchase agreement, the sale of energy in the short-term market
is made at a loss, which may not be recovered in the future. However, the sale within the regulatory limits (between 100% to 105%)
is neutral for the Company, in other words, it does not expose the distributor to financial risks.

Unfavorable
economic conditions in the State of Paraná and increasing energy prices may affect both the ability of our distribution
costumers to pay amounts they owe us, as well as increase the number of our commercial losses. An increase in our commercial losses
or uncollected receivables could materially adversely affect our business, financial condition and results of operations.

An
increase in electricity prices, as well as poor economic performance in the State of Paraná, would affect the ability of
some of our distributions customers to pay amounts owed to us. As of December 31, 2019, our past due receivables with Final Customers
were approximately R$667.3 million in the aggregate, or 10.4% of our net operating revenues from electricity sales to Final Customers
for the year ended December 31, 2019, and our allowance for doubtful accounts related to these receivables was R$219.0 million.
See Note 7 to our audited consolidated financial statements.

In
addition, in the event of an economic recession combined with high energy prices, the number of our distribution customers connecting
illegally to our distribution grid may increase, which would then decrease our revenue from electricity sales to Final Customers.
Furthermore, energy we lose to these illegal connections is considered a commercial loss (non-technical), and we may incur regulatory
penalties if our commercial losses exceed certain established regulatory thresholds calculated by ANEEL. If ANEEL determines that
we were not efficient in inspecting and controlling the non-technical losses in the distribution grid, the agency may limit the
transfer of such losses to the Final Customers.

Disruptions
in the operation of, or deterioration of the quality of, our services, or those of our subsidiaries, could have an adverse effect
on our business, financial condition and results of operations.

The
operation of complex electricity generation, transmission and distribution systems and networks involves various risks, such as
operational setbacks and unexpected interruptions, caused by accidents, breakdown or failure of equipment or processes, performance
below expected levels of availability and efficiency of assets, or disasters (such as explosions, fires, natural phenomena, landslides,
sabotage, vandalism, and similar events). In addition, operational decisions by authorities responsible for the electricity network,
environment matters, operations and other issues affecting the electricity

12


Table of Contents


generation, transmission
or distribution could have an adverse effect on the performance and profitability of the operations of our generation, transmission
and distribution systems. If these issues occurred, our insurance may be insufficient to wholly account for the costs and losses
that we may incur as a result of the damages caused to our assets, or
due to outages.

Further, the
revenues that our subsidiaries generate from establishing, operating and maintaining their facilities are related to the availability
of equipment and assets, and to the quality of the services (continuity and service in accordance with levels demanded by regulations).
Under the related concession contracts, we and our subsidiaries are subject to: (i) a reduction of the distributor revenue as a
result of the reduction of the so-called “Portion B” allocation in the revenue calculation formula; (ii) a reduction
of the Permitted Annual Revenue - APR (Receita Anual Permitida, or RAP), for the transmission companies; (iii) the effects
of the Availability Factor (Fator de Disponibilidade, or FID) and the offtake guarantee levels for the generation facilities;
and (iv) the application of penalties and payment of compensation amounts, depending on the scope, severity and duration of non-availability
of the services and equipment. Under Brazilian Law, we are strictly liable for direct and indirect damages resulting from the inadequate
supply of electricity such as abrupt interruptions arising from the generation, transmission or distribution systems. Therefore,
outages or stoppages in our generation, transmission and distribution facilities, or in substations or networks, may cause a material
adverse effect on our business, financial situation and results of operations.

We are subject
to risks related to social and environmental impacts of our projects.

The construction
and operation of our assets may modify the ecosystem, particularly the natural state of the water resources and of the vegetation
of the flooded river basin in the case of hydroelectric power plants. Our projects may cause direct and indirect impacts in the
local communities, such as housing displacement. Moreover, they may affect the economic outputs of the local communities, lead
to the loss of cultural identity or increase the demand for government services. In these eventualities, we may implement specific
plans in order to minimize and mitigate those impacts.

Failures in
dams under our responsibility may cause serious damages to the affected communities, to our results and to our reputation.

Dams are important
infrastructures to our business, and are fundamental components of our hydroelectric power plants for the purposes of diking and
storing water, accounting for the majority of our energy generation capacity. However, in any dam, there is an intrinsic risk of
ruptures caused by different internal or external factors. Therefore, we are subject to the risk of a dam failure that could have
repercussions much greater than just the loss of hydroelectric power generation capacity. A dam failure may result in economic,
social, regulatory and environmental damages and potential loss of human life in the communities downstream from the dams, which
may have a material adverse effect in the image, business, operational results and financial conditions of the Company.

ANEEL carried
out on-site inspections in 2019 to verify the regulatory compliance of the Dam Safety Plans and Emergency Action Plan of the hydroelectric
power plant dams, including the inspection of the dams and structures associated with them. The inspections demonstrated compliance
of the procedures in relation to dam safety practices with the current applicable legislation.

In 2019, Copel
also had meetings with state and municipal civil defense coordinating teams with respect to the Emergency Action Plans (“PAEs”),
which support the preparation of the Municipal Contingency Plans. Fifteen meetings were held with the Civil Defense coordinators
of 28 Municipalities and with coordinators of the State Civil Defense.

We are exposed to behaviors
that are incompatible with our ethical and compliance standards, and we may be unable to prevent, detect or remediate them in time,
which may cause material adverse effects in our operational results, financial condition and reputation.

We have a range
of internal rules and controls, including a Governance, Risk and Compliance Office, with the aim to guide our directors, officers,
managers, employees and third-party contractors, and

13


Table of Contents


to reinforce our ethical
principles and rules of professional conduct. However, due to the wide distribution and outsourcing of the production chains of
our suppliers, we are not able to control all possible irregularities of the latter and we are not able to ensure that our selection
processes will be sufficient to avoid that our suppliers have problems related to compliance with applicable law, sustainability
or outsourcing of the production chain under inadequate safety conditions.

Furthermore,
we are subject to the risk that our directors, officers, managers, employees, contractors or any person that may do business with
us may involve themselves in fraudulent activities, corruption or bribery, circumventing our internal controls and procedures,
misappropriating our assets or using them for private benefit to the detriment of the Company’s interests. We are also subject
to the risk that any other material violations of applicable laws by our directors, officers, managers, employees, or any person
that may do business with us, or any material legal or administrative proceeding, arbitration or investigation in connection with
those violations, may adversely affect our reputation. These risks are increased by the fact that our portfolio includes affiliated
companies, such as special purpose companies, some of which we do not hold a controlling interest in.

Although the
Company has an integrity program with timely updates, with a robust process for investigating complaints, our systems may not be
effective in all circumstances. Any failure in our capacity to prevent or detect noncompliance with the applicable governance rules
or regulatory obligations may cause damages to our reputation or other material adverse effects to our results of operation or
financial condition.

The rules for electricity
trading and market conditions may affect the sale prices of electricity.

Our energy trading
business is strongly affected by regulatory changes that impact the methodology used for short term energy price formation.

We perform trading
activities through power purchase and sale agreements, mainly in the Free Market,through our generation and trading companies.
Agreements in the Free Market may be entered into with other generation and trading entities and mainly with Free Customers.

Energy trading
is affected by changes in the methodology used to calculate energy price in the short-term (Preço de Liquidação
de Diferenças, or PLD). PLD is currently determined by the results of optimization models of operation of the interconnected
systems used by the ONS (Operador Nacional do Sistema Elétrico) and by CCEE. In such determination, there may be
data entry errors or errors in the model, which may lead to an unexpected change of the PLD and possible future republications
of the PLD. Thus, there is a risk for the commercial business with respect to the alteration of these models, data entry errors
and republishing of the PLD, which may cause market uncertainty, reduction of liquidity, and financial losses with unexpected price
variation. CCEE is expected to implement a new calculation model for the PLD as of January 2021, which will consider an hourly
base in the energy price.

Additionally,
any change in the energy trading rules related to the increase of restrictions for the entry of new consumers in the Free Market
may affect the expansion of our energy trading business.

On December
28, 2018, the MME enacted the Ministerial Ordinance No. 514, lowering the minimum energy amounts that consumers may purchase
directly in the Free Market, so that as of January 1, 2020 the minimum energy amount was reduced to from an amount equal or superior
to 2,500kW to 2,000 kW. Even though this ordinance enabled more migration from the captive market to the Free Market, we cannot
predict its effect. As a Free Costumer is responsible for contracting its own consumption directly with a generation or trading
company, an increase of the number of Free Customers may increase the trading in the Free Market and consequently affect energy
prices. In parallel, distribution companies may face energy contract surpluses and have to participate in the Mechanism for Compensation
of Surpluses and Deficits (Mecanismo de Compensação de Sobras e Déficits, or MCSD) to mitigate financial
losses.

Our energy trading
companies, Copel Comercialização and Copel GeT, that operate in the Free Market may decide, based on market conditions,
to operate in long and short positions and may present financial losses for certain periods. To operate in long positions means
that we buy electricity that will be delivered to us only in the future and sell it before the delivery is due, expecting the price
to go up in the short-term market. To operate in short positions means that we sell electricity that needs to be delivered

14


Table of Contents


only in the future, but
buy it before the delivery is due expecting the price to go down in the short-term market.

We assess the
market exposure risk of our commercialization company on a weekly basis, based on risk limits and methodology approved by the board
of directors of Copel. Our methodology for calculating the risk of market exposure was developed internally using financial market
concepts.

Our management has identified a material weakness
in our internal controls over impairment of fixed assets of Copel Telecomunicações and UEGA

Our management assesses the effectiveness
of our controls framework and reporting procedures in accordance with SEC rules, including the effectiveness of our internal controls
over financial reporting. This analysis adopts the criteria established in the Internal Control - Integrated Framework (2013) published
by the Committee of Sponsoring Organizations of the Treadway Commission – COSO.

In the context of this assessment,
our management identified a material weakness in our 2019 internal controls over assumptions and calculation of impairment of fixed
assets of both Copel Telecomunicações, a wholly-owned subsidiary of Copel, and UEGA, an entity controlled by Copel.

Although we have developed plans
and actions to remedy this material weakness, we cannot assure you that there will be no other weaknesses in our internal control
in the future.

Our affiliated companies may
not be successful in their businesses.

There is no
assurance that our investments in affiliated companies will have the expected outcome. Our activities and financial and operational
conditions may be affected as a result of (i) regulatory, economic, environmental matters, among other issues, or (ii) corporate
disputes.

The lack of equipment and
workforce in the appropriate timeframe may affect our business.

We cannot assure
that the equipment and services hired from third parties will be timely delivered. If they are delivered with delay, we may incur
in additional costs and fines.

The services and equipment
hired from third parties may not have the expected quality.

Being a mixed
capital publicly-held company, the acquisition of equipment, materials and services are subject to Paraná State Law No.
15,340/2006, Brazilian Federal Law No. 13,303/2016 and Brazilian Federal Law No. 8,666/1993, when applicable. Therefore, we are
legally obliged to engage a bidding process, which may not guarantee the best quality of services, equipment and materials.

Our wind farms’ operations
are subject to climate factors and to uncertainties related to the speed of wind and non-compliance with minimum performance covenants
set forth in our authorization agreements may adversely impact our results.

The authorization
agreements that govern our power generation activities in wind farms set forth certain performance covenants, which require us
to generate minimum amounts of energy on annual and four-year bases in accordance with the energy amounts sold in the correspondent
auctions. The operations of our wind farms are subject to climate factors and to uncertainties related to the speed of wind and
non-compliance with the above mentioned agreements may adversely impact our results.

We may acquire other companies
in the electric sector or new energy concessions, as we already did in the past, which may increase our financial leverage and
adversely affect our consolidated performance.

We constantly prospect
for businesses that are related to our corporate purpose and aligned with our strategic plan. To expand our business, we may participate
in auctions for the construction and operation of new power generation and transmission ventures, as well as invest in other companies
from the energy sector, as we have done in the past. These acquisitions can increase our financial leverage or reduce our profits.
In addition, the integration of the new businesses may not result in the synergy we expect in terms of efficiency gains and economies
of scale for our operations, which may adversely affect our operational and financial performance.

15


Table of Contents


Strikes, work interruptions or other
events carried out by our employees or by the employees of our suppliers or contractors, may adversely affect our operating results
and our businesses.



Our employees are
represented by unions. Disagreements regarding issues related to divestitures, changes to our business strategy, and reductions
in the professional staff may lead to employee reactions. Strikes, work interruptions, or other forms of protests in any of our
major suppliers or contractors or at their facilities may undermine our ability to complete relevant projects on time, negatively
impacting our results of operations, and affect our ability to achieve long-term strategic goals.

Risks Relating to the Brazilian
Electricity Sector and Other Sectors that We Operate

We are uncertain as to the
renewal of certain of our generation and transmission concessions.

Under Federal
Law No. 12,783/2013, or the 2013 Concession Renewal Law, we may only renew our concessions that were in effect as of 1995 (and,
in the case of generation facilities, generation concession contracts entered into prior to 2003) for an additional 30-year period
(or an additional 20-year period in the case of thermal plants), if we agree to amend the terms of the concession contract that
is up for renewal to reflect certain new terms and conditions imposed by the 2013 Concession Renewal Law, which vary depending
on whether the concession is for generation, transmission or distribution. If we do not agree to amend the concession contract
to reflect these new conditions, the concession contract cannot be renewed and will be subject to a competitive bidding process
upon its expiration, which we might not win. If we do not renew our generation and transmission concessions or if they are renewed
under less favorable conditions, our financial condition and results of operations could be materially adversely affected. For
more information, see “Item 4. Information on the Company—Concessions”.

The concession agreement of
our controlled company Compagas is under discussion with the granting authority.

Compagas has
entered into a concession agreement with the State of Paraná, as granting authority, pursuant to which the concession shall
expire on July 6, 2024. The purpose of this concession is to provide piped gas distribution services and other related activities,
to all segments of the consumer market, either as raw material or for the purpose of power generation or other uses made possible
by technological advances.

The gas concession
agreement is part of the so called “bifurcated model”, where part of the investments made by the concessionaire is
paid by the users of the public service and the remaining part is indemnified by the granting authority, the State of Paraná,
at the end of the concession.

On December
7, 2017, the State of Paraná enacted Complementary Law No. 205, setting forth a new interpretation regarding the expiration
date of the concession, leading to the understanding that the new expiration date was January 20, 2019. The management of Compagas,
its controlling shareholder and other shareholders are analyzing and questioning the effects of such law, as they understand that
these effects are not consistent with the terms set forth in the current concession agreement.

Compagás
filed a lawsuit challenging the early termination of the concession and, on October 30, 2018, a preliminary injunction was granted,
which can be subject to an appeal by the State of Paraná. The Company is awaiting the trial of the merit of the case.

Therefore,
in the event of non-extension of the concession, even if Compagas is entitled to compensation for the investments made in the last
10 years prior to the end of the concession, the financial condition and results of operations of our controlled company may be
adversely affected. For more information see Note 2.1.1 to our audited consolidated financial statements.

Our operating
results depend on prevailing hydrological conditions, which have been volatile recently. The impact of water shortages and resulting
measures taken by the government to conserve energy may have a material adverse effect on our business, financial condition and
results of operations.

16


Table of Contents


We
are dependent on the prevailing hydrological conditions throughout Brazil and in the geographic region in which we operate. According
to data from ANEEL, approximately 64.0% of Brazil’s installed capacity currently comes from hydroelectric generation facilities.
Hydrological conditions in our region, and Brazil in general, are frequently subject to changes because of non-cyclical deviations
in average rainfall.

From
2012 to 2015, Brazil experienced a period of low rainfall. Poor hydrological conditions could lead the Brazilian government to
institute a rationing program, which would require that our distribution business distribute less energy to Final Customers. Our
distribution business would be adversely affected by a mandatory rationing program because its revenues are partially based on
the volume of electricity it provides through our distribution grid to Final Customers. However, a mandatory rationing program
involves a predictable decrease in energy, which would allow our distribution business to better estimate the amount of electricity
it must purchase in order to sell to Final Customers. In addition, in the context of a formal rationing program, our distribution
business would be fully compensated for the amount of energy that it purchased prior to the rationing period in excess of the amount
of energy it is allowed to distribute under the rationing program, through automatic adjustment in its energy supply contracts.

In
contrast, the Brazilian federal government in the past has reacted to poor hydrological conditions not by implementing a formal
rationing program, but rather by seeking to reduce the consumption of electricity by Final Customers by other means, for example
through general conservation campaigns to raise public awareness. The effect of these campaigns is less predictable, making it
difficult for our distribution business to accurately estimate the volume of energy it needs to purchase for sale to Final Customers.
Furthermore, in the absence of a formal rationing program, our distribution business is not compensated for the amount of energy
it had previously contracted that now exceeds the newly-depressed Final Customer demand. Even after a conservation or rationing
program ends, it may take several years for demand by Final Customers to fully recover, if at all. Deteriorating hydrological conditions
may, therefore, have a material adverse effect on our distribution business.

In
2014 and 2015 the Brazilian Federal Government provided and facilitated various forms of assistance to distribution concessionaires
experiencing cash flow difficulties arising from poor hydrological conditions, which had increased their energy acquisitions costs
thereby resulting in mismatches of cash flow in the short-term. These forms of assistance included funding from the CDE Account
(as defined below), credit facilities contracted by the CCEE through the ACR Account and the new “Bandeira Tarifária”
system. There is no assurance that the Federal Government will continue this assistance, or that the Federal Government will continue
it on favorable terms or that it will be sufficient to cover our losses. See “Item 4. Information on the Company—The
Brazilian Electric Power Industry—Energy Sector Regulatory Charges—CDE” and “Item 4. Information on the
Company—Energy Sector Regulatory Charges— Regulated Market Account—ACR Account”.

With
respect to our generation business, in order to compensate for poor hydrological conditions and to maintain adequate water levels
in reservoirs, the ONS may order the reduction of generation from hydroelectric power plants, which would be partially compensated
by increased generation by thermoelectric plants. This mechanism for replacing hydroelectric production with thermoelectric production
may not provide all of the energy we need to fulfill our obligations under existing energy supply contracts. To compensate for
this deficit, our generation business can be required to purchase energy in the Spot Market, typically at higher prices, and we
would not be able to pass on these increased costs. This mechanism impacts all generation companies in Brazil regardless of whether
the geographical region in which a specific generator is located is experiencing low rainfall, and could have a material adverse
effect on our generation business.

The
Generation Scaling Factor, or GSF, is a factor used to adjust the guaranteed power output and represents the ratio between the
total power produced by the hydroelectric plants that integrate the Energy Reallocation Mechanism (Mecanismo de Realocação
de Energia, or MRE) and their guaranteed power outputs. This represents, on average, the amount of energy committed to energy
generation contracts. If there are excessively low flow rates, the GSF equals to less than 1 and the hydroelectric

17


Table of Contents


generators that contracted
their guaranteed power outputs have to incur additional costs to acquire energy in the Spot Market to fulfill their obligations.
As Brazil experienced an unusually severe drought between 2012 and 2015, its energy generation was below its expected levels.

In
2015, the financial effects of the GSF on the generation companies were discussed. There was a broad sector debate on the effects
of, and solutions for the GSF from an administrative, regulatory, business and legal perspective. Accordingly, Law No. 13,203,
dated December 8, 2015, and ANEEL Resolution No. 684, dated December 11, 2015, established the criteria for the approval and the
conditions for the renegotiation of the hydrological risks borne by certain hydroelectric generation companies. Pursuant to such
new rules, the generators could share their hydrologic risks with consumers, through the payment of a “risk premium”.
Copel Geração e Transmissão and Elejor filed a request for the renegotiation of the hydrological risk of HPPs
Mauá, Foz do Areia, Santa Clara and Fundão, which was consented through ANEEL Decisions No. 84/2016 and 43/2016,
respectively. Subsequently, in 2017 Copel Geração e Transmissão filed another request for the renegotiation
of the hydrological risk of HPPs Cavernoso II e Baixo Iguaçu, which was consented through ANEEL Decision No. 4,101/2017,
and, in 2018, ANEEL approved the renegotiation of the hydrological risk of HPP Colíder through ANEEL Decision No. 2,889/2018.
For more information, see Note 14.1 to our audited consolidated financial statements.

In
addition, in an extreme scenario, given the increased presence of thermal generation in the national electric matrix, if a shortage
of natural gas were to occur, this would increase the general demand for hydroelectric energy in the market and therefore increase
the risk that a rationing program would be instated.

Regarding
our energy trading business, the effect of volatility in hydrological conditions is the increase of the variation of energy price,
which in turn increases the Spot Market volatility, thus affecting our operating results.

Spot price (PLD)
is determined by mathematical models that consider the prevalence of hydroelectric plants in the Brazilian generation context,
hydrological conditions, energy demand, fuel prices, deficit costs, the entry of new projects and the availability of generation
and transmission equipment, and aim to find an optimal balance between the present benefit of water usage and the future benefit
of its storage, measured in terms of the expected economy of the fuels in thermoelectric plants. The energy average prices in the
short term ("spot") are calculated by CCEE every week and are set for each region.

When there is
great availability of hydrological resources, the spot price tends to remain at lower levels, which may not be enough to (i) cover
the generation costs of this very same energy (when related to our generation business) and (ii) cover the cost of the power purchase
and sale agreement in our energy trading business.

Conversely,
if hydrological availability is affected, spot prices tend to increase significantly, in addition to occasionally impacting the
GSF, which may adversely impact our costs of energy purchases, as the price set forth in power purchase and sale agreements may
not be sufficient.

The
construction, expansion and operation of our generation, transmission and distribution facilities and equipment involve significant
risks that may cause the loss of revenues or increase of expenses.

The
construction, expansion and operation of our generation, transmission and distribution of electricity facilities and equipment
involve many risks, including theinability to obtain required governmental permits and approvals, supply
interruptions, strikes, climate and hydrological interference, unexpected environmental and engineering problems, increase in losses
of electricity (including technical and commercial losses), the unavailability of adequate financing andthe unavailability
of equipment.

In
the event we experience these or other problems, we might not be able to generate, transmit and distribute electricity in favorable
quantities and on favorable terms, which may adversely affect our financial condition and the results of our operations.

18


Table of Contents


ANEEL could penalize us for
failing to comply with the terms of our concessions or with applicable laws and regulations, and we may not recover the full value
of our investment in the event that any of our concessions are terminated.

Our concessions
are for terms of 20 to 35 years and may be extended if certain conditions are met. In the event that we fail to comply with any
term of our concessions or applicable law or regulation, ANEEL may impose penalties on us, which may include warnings, the imposition
of potentially substantial fines (in some instances, up to 2% of our revenues from concessions in the twelve-month period preceding
any infraction notice or, in case of independent production, the estimated amount of energy produced in the same period) and restrictions
on our operations, among others. ANEEL may also terminate our concessions prior to the expiration of their terms if we fail to
comply with their provisions or if they determine that terminating our concessions would be in the public interest, in both cases
through an expropriation proceeding. In particular, our renewed distribution concession agreement contains both quality and financial
metrics that become more restrictive over time, and that we must meet to ensure that our distribution concession agreement is not
terminated. If ANEEL terminates any of our concessions before its expiration, we would not be able to operate the segment(s) of
our business that had been authorized by the concession. Furthermore, any compensation that we may receive from the federal government
for the unamortized portion of our investment may not be sufficient for us to recover the full value of our investment. The early
termination or non-renewal of any of our concessions or the imposition of severe fines or penalties by ANEEL could have a material
adverse effect on our financial condition and results of operations. See “Item 4. Information on the Company—The Brazilian
Electric Power Industry—Concessions”.

Our operating
revenues could be adversely affected if ANEEL makes decisions relating to our tariffs that are unfavorable to us.

The tariffs
that we charge for sales of electricity to Captive Customers are determined pursuant to a concession agreement with the Brazilian
government through ANEEL. ANEEL has substantial discretion to establish the tariff rates we charge our customers, which are determined
pursuant to a concession agreement with ANEEL and in accordance with ANEEL’s regulatory decision-making authority.

It is also
incumbent upon ANEEL to determine the revenues to be charged by the generating companies, holding assets with renewed concession
agreements or resulting from concessions auctions (both cases in accordance with 2013 Concession Renewal Law). The Annual Generation
Revenue (“RAG”) is the amount which the generating companies are entitled to in accordance with the physical guarantee
of a hydroelectric plant that is allocated to the regulated/quota market. RAG is calculated taking into account the regulatory
costs of operation, maintenance, administration, compensation and amortization of the hydroelectric plant, being adjusted annually,
in addition to being reviewed every 5 years.

Our distribution
concession agreement and Brazilian law establish a price cap mechanism that permits three types of tariff adjustments: (i) annual
adjustment (reajuste anual), (ii) periodic revision (revisão periódica), and (iii) extraordinary revision
(revisão extraordinária). We are entitled to apply each year for the annual adjustment, which is designed
to offset some effects of inflation on tariffs and pass through to customers certain changes in our cost structure that are beyond
our control, such as the cost of electricity we purchase from certain sources and certain other regulatory charges, including charges
for the use of transmission facilities. In addition, ANEEL carries out a periodic revision every five years that is aimed at identifying
variations in our costs as well as setting a factor based on our operational efficiency that will be applied against the index
of our ongoing annual tariff revision, the effect of which is to ensure that we share the benefits of improved economies of scale
with our customers. At any time, we may also request an extraordinary revision of our tariffs in the case of a significant and
unexpected event, including if such an event significantly alters our cost structure.

As is the case
for distribution companies, the regulation mechanisms for transmission companies are the tariff review, which occurs every five
years, and the annual tariff readjustment, which is a

19


Table of Contents


monetary adjustment of the tariffs charged.
These mechanisms depend on the concession agreement of each company. At the time of the tariff review, the objective of ANEEL is
to recalculate the costs for the efficient operation and maintenance of the system managed by the transmission company.

We cannot assure
you that ANEEL will establish tariffs at rates that are favorable to us. To the extent that any of our requests for adjustments
are not granted by ANEEL in a timely manner, our financial condition and results of operations may be adversely affected. In addition,
ANEEL’s decisions relating to our tariffs may be contested by public authorities or by our customers. Administrative and
judicial decisions resulting from these challenges may modify ANEEL’s decisions in a manner that is unfavorable to us, which
may adversely affect our financial condition and results of operations.

We are subject to comprehensive
regulation of our business, which fundamentally affects our financial performance.

Our business
is subject to extensive regulation by various Brazilian legal and regulatory authorities, particularly the MME and ANEEL, which
regulate and oversee various aspects of our business and establish our tariffs. Changes to the laws and regulations governing our
operations, which have occurred in the past, could adversely affect our financial condition and results of operations.

For example,
the Brazilian government has taken action to reduce tariffs in recent years. In order to substantially reduce the price paid by
Final Customers for electricity, the Brazilian government enacted the 2013 Concession Renewal Law, which significantly changed
the conditions under which concessionaires are able to renew concession contracts. Under the 2013 Concession Renewal Law, most
generation, transmission and distribution concessionaires may be renewed at the request of the concessionaire for an additional
period of 30 years, but only if the concessionaire agrees to amend the terms of the concession contract to reflect certain new
terms and conditions. For more information, see “Item 4. Information on the Company—Concessions”.

If any further
regulations or new laws are passed by the Brazilian government to lower electricity prices, these new laws and regulations could
have a material adverse effect on our results of operations. If we are required to conduct our business in a manner substantially
different from our current operations as a result of regulatory changes, our results of operations and financial condition may
be adversely affected.

The regulatory framework
under which we operate is subject to legal challenge.

The Brazilian
government implemented fundamental changes in the regulation of the electric power industry under the 2004 legislation known as
the New Industry Model Law (Lei do Novo Modelo do Setor Elétrico). Challenges to the constitutionality of New Industry
Model Law are still pending before the Brazilian Supreme Court. If all or part of this statute were held to be unconstitutional,
it would have uncertain consequences for the validity of existing regulation and the further development of the regulatory framework.
The outcome of the legal proceedings is difficult to predict, but they could have an adverse impact on the entire energy sector,
including our business and results of operations.

Certain customers in our
distribution concession area may cease to purchase energy from our distribution business.

Our distribution
business generates a large portion of its revenues by selling energy that it purchases from generation companies. Large electricity
customers within the geographic area of our concession that meet certain regulatory requirements may qualify as free customers
(“Free Customers”). A Free Customer in our distribution concession area is entitled to purchase energy directly from
generation and energy trading companies rather than through our distribution business, in which case that Free Customer would cease
to pay our distribution business for that energy that we previously supplied. Therefore, if the number of Free Customers within
the geographic area of our concession increases and to the extent these Free Customers purchase energy from sources other than
our generation and trading companies, our revenues and results of operations would be adversely affected. Furthermore, prices in
the

20


Table of Contents


Free Market have recently been lower than
those in the regulated market in the past years, which has been leading to an increase in the number of Free Customers within the
geographic area of our concession.

In addition,
ANEEL has recently improved regulations related to micro and mini distributed generation, which has been facilitating customers
to purchase or to lease power generation equipment, especially solar photovoltaic modules, to produce energy for their own consumption.
Therefore, if the number of customers with micro and mini distributed generation within the geographic area of our concession increases,
our revenues and results of operations could also be adversely affected.

We generate a portion of
our operating revenues from Free Customers who may seek other energy suppliers upon the expiration of their contracts with us.

As
of December 31, 2019, we had 425 Free Customers, representing approximately 5.7% of our consolidated operating revenues and approximately
13.8% of the total volume of electricity sold by us.

Regarding
our energy trading company, as of December 31, 2019, our energy trading company had 375 Free Customers, representing approximately
8.3% of our consolidated operating revenues and approximately 5.5% of the total volume of electricity we sold in 2019.

Without the
addition of new contracts in 2019, Copel GeT had 50 Free Costumers on December 31, 2019. Approximately 17.67% of the megawatts-hours
sold under contracts to such customers by Copel GeT expired in 2019. These customers represented approximately 4.88% of the total
volume of electricity we sold in 2019, and approximately 4.09% of total net operating revenue from energy sales for that year.
Our contracts with Free Customers are typically for periods ranging between two years and five years in our generation business.
There can be no assurance that Free Customers will enter into contracts or extend their current contracts to purchase energy from
us.

Additionally,
it is possible that our large industrial clients could be authorized by ANEEL to generate electric energy for their own consumption
or sale to other parties, in which case they may obtain an authorization or concession for the generation of electric power in
a given area, which could adversely affect our results of operations.

We may be forced to purchase or sell
energy in the Spot Market at higher or lower prices if our forecasts for energy demand are not accurate, if there is a shortage
of energy supply available in the regulated market or if energy we contract is not delivered, and we may not be entitled to pass
on any increased costs or incurred losses to our Final Customers in a timely manner, or at all.

Under
the New Industry Model Law, electric energy distributors, including us, must contract, through public bids conducted by ANEEL,
100% of the forecasted electric energy demand for their respective distribution concession areas. The auctions in which the distributors
are allowed to purchase energy are held up to seven years prior to the actual delivery of electric energy. We cannot guarantee
that our forecasts for energy demand in our distribution concession area will be accurate. If our forecasts fall short of actual
electricity demand, or if we are unable to purchase energy through the regulated market due to lack of energy supply in the market,
or if a generation company fails to deliver energy that was previously contracted, we may be forced to make up for the shortfall
by entering into short-term agreements to purchase electricity in the Spot Market where we may pay significantly more for energy
without being able to pass on these increased costs to our Final Customers. In addition, if we underestimate our distribution energy
needs, we may be subject to penalties imposed by the CCEE. Moreover, if our forecasts surpass actual demand by more than the allowed
margin (105% of actual demand), including where demand is depressed due to government campaigns in response to poor hydrological
conditions or due to reduced economic activity, we will not be able to pass on to our Final Customers the cost of the excess energy
that we acquire.

In
2016, as a consequence of the country’s economic crisis and the increase in the number of Free Customers who were attracted
by lower prices in the Free Market, several distribution companies, including Copel Distribuição, were contracted
above 105% of their actual demand. As a result, those

21


Table of Contents


companies may incur losses
due to sale of the excess energy at lower prices in the Spot Market. On the other hand, facing this same scenario in 2017, Copel
Distribuição and other distribution companies sold the surplus energy at a higher price in the Spot Market, resulting
in the possibility of earnings. On August 28, 2017, Brazilian Decree No. 9,143/2017 recognized the involuntary nature of energy
surplus arising from the migration of consumers to the Free Market. However, we cannot guarantee the results of such rules and
their impact on our future operations.

In
2018, purchases made by Copel Distribuição did not exceed the regulatory margin of 105% of the forecasted energy
amount. Even though Copel Distribuição plans on adopting the same strategies onwards, we cannot ensure you that it
will be able to comply with the regulatory requirements in the future.

In
2019, although Copel Distribuição maximized its efforts to manage the surplus of contracting energy, the supply and
demand scenarios point out to the occurrence of contracting above the regulatory limits, in the order of 105.8%. However, considering
that this situation arises mainly from the migration of consumers to the Free Market, it is considered that the distributor maintains
the guarantee of energy surplus tariff’s pass-through, since this factor is subject to the recognition of involuntary over-contracting.
Although the regulator does not recognize involuntary exposure for amounts above the regulatory limit, this surplus is not a loss
for the distributor, since in 2019 the spot price was above the average purchase price of energy.

We are subject to a counterparty’s
credit risk, and, in case the purchasers or sellers that are parties to power purchase and sale agreements entered into with Copel
Comercialização default on their obligations, we may have to sell or purchase energy at a different base price.

Copel Comercialização
is subject to a counterparty’s credit risk. When Copel Comercialização sells energy, the counterparties to
power purchase agreements may default on their contractual obligations, which may cause Copel Comercialização to
sell energy at a different base price. In cases where Copel purchases energy, whether from energy generation projects, in operation
or under construction, or even from energy trading, the selling counterparties may also default on the relevant contracts, and,
consequently, Copel Comercialização may have to buy energy at a different base price and be subject to regulatory
penalties imposed by CCEE due to insufficient contractual guarantees. Even though the Company performs credit analyses in accordance
with market standards and requires its counterparties to provide guarantees in connection with the power purchase and sale agreements,
we cannot guarantee that our counterparties will not fail to comply with their payment obligation or with their obligation to deliver
energy to Copel, as the case may be, which may adversely affect our results.

We are
subject to the risk of exchange rate variation if we start to perform energy import business, as well as if we perform business
involving natural gas



Our
subsidiary Copel Comercialização obtained authorization from the Ministry of Mines and Energy to import energy from
neighboring countries, Argentina and Uruguay, and if we start doing business in this regard, we will be subject to the risk of
exchange rate fluctuation.



This subsidiary
was also authorized by the National Agency of Petroleum, Natural Gas and Biofuels to operate in the sale of natural gas within
Brazil. Although the natural gas business still has an incipient market in Brazil, if we do business in this area, we will be subject
to the risk of exchange rate variation, considering that these transactions are carried out in foreign currencies.

We are subject to unrealized
losses or net gains arising out from the mark-to-market of the purchase and sale of energy contracts, which may expose the Company
to the risk of future energy prices

Our subsidiary
Copel Comercialização negotiates energy purchase and sale transactions, and part of its agreements are classified
as derivative financial instruments measured at fair value through its results. Unrealized net losses or gains resulting from the
mark-to-market of these contracts (difference

22


Table of Contents


between contracted prices and market prices)
are recognized in the results of the fiscal year. This activity may expose the Company to the risk of future energy prices.

Our equipment, facilities
and operations are subject to numerous environmental and health regulations, which may become more stringent in the future and
may result in increased liabilities and increased capital expenditures.

Our distribution,
transmission and generation activities are subject to comprehensive federal, state and local legislation, as well as supervision
by Brazilian governmental agencies that are responsible for the implementation of environmental and health laws and policies. These
agencies could take enforcement action against us for our failure to comply with their regulations and with requirements established
for the maintenance of our environmental licenses. These actions could result in, among other things, the imposition of fines,
embargoes and revocation of licenses, which could have a material adverse effect on our financial condition and results of operations.
It is also possible that enhanced environmental and health regulations will force us to allocate capital towards compliance, and
consequently, divert funds away from planned investments. Such a diversion could have a material adverse effect on our financial
condition and results of operations.

We
are strictly liable for any damages resulting from inadequate provision of electricity services and our insurance policies may
not fully cover such damages.

We are strictly
liable under Brazilian law for damages resulting from the inadequate provision of electricity distribution services. In addition,
our distribution, transmission and generation utilities may be held liable for damages caused to others as a result of interruptions
or disturbances arising from the Brazilian generation, transmission or distribution systems, whenever these interruptions or disturbances
are not attributed to an identifiable member of the National Electric System Operator, the Operador Nacional do Sistema Elétrico
(“ONS”). We cannot assure you that our insurance policies will fully cover damages resulting from inadequate rendering
of electricity services, which may have an adverse effect on us.

We are the controlling shareholders
of a company that operates a gas distribution business (Compagas) and we are consequently exposed to risks inherent to this sector.

We control
a business in the gas distribution sector, which is operated by Companhia Paranaense de Gas – Compagas. This company is entitled
to exclusive rights with respect to the supply of piped gas in the State of Paraná. The clients of this business are thermoelectric
plants, cogeneration plants, gas stations, other companies and residences.

Businesses
in the gas distribution sector are subject to a broad set of risks inherent to its operation, including among the main ones:

• Regulatory
instability,

• Shortage
of natural gas,

• Depending
on a single supplier in Brazil,

• Capacity
of financing expansion,

• Operational
failures and accidents in distribution,

• Performance
of outsourced service providers,

• Alternative
energy sources,

• Quality
in service.

23


Table of Contents


As a result
of these uncertainties, there is no guarantee that the purposes of our gas distribution business will be achieved, which may have
an adverse effect on our results of operations and our business.

We are the
controlling shareholders of a company that operates a telecommunications business (Copel Telecomunicações S.A.) and
we are consequently exposed to the risks inherent to this sector.

We
control a business in the telecommunications sector under an authorization granted by the National Telecommunications Agency (Agência
Nacional de Telecomunicações– ANATEL). This business provides telecommunications services through the
use of fiber optics. It also provides a number of telecommunications services to other companies of the Copel group.

Businesses
in the telecommunications sector are subject to a broad set of risks inherent to its operation, such as:

•
Regulatory instability,

•
Increase in competition,

•
Technological changes,

•
Capacity of financing our expansion,

•
Failures in technological systems and information security,

•
Performance of outsourced service providers,

•
Exchange rate fluctuations,

•
Variation in operating costs,

•
Operational failures,

•
Quality in service.

As a result
of these uncertainties, there is no guarantee that the purposes of our telecommunications business will be achieved, which may
have an adverse effect on our results of operations and our business.

If it is not possible to
implement our proposal to divest control of Copel Telecomunicações S.A., we will need to reevaluate our strategy
in the telecommunications sector

Considering
that the process of potential divestment in the control of the subsidiary Copel Telecomunicações SA is in progress,
as approved by the Board of Directors, this process may not be materialized, either due to the lack of interested parties, due
to judicial decisions or restrictions imposed by regulatory bodies or other governmental entities. Failure to complete such sale
may force us to reevaluate our divestment strategy in the telecommunications sector.

We are uncertain as to the
outcome of the administrative proceeding brought by ANATEL against Sercomtel S.A. Telecomunicações to terminate concessions
and authorizations previously awarded to this company and also on the success of a new privatization attempt, in a way that we
may be adversely affected considering the financial capacity of that company

We own 45%
of the stock of Sercomtel Telecomunicações S.A. (“Sercomtel”). Sercomtel holds a concession to provide
fixed telephony services and an authorization to provide mobile services in the

24


Table of Contents


municipalities of Londrina
and Tamarana, located in the State of Paraná. In addition, Sercomtel has two (2) other authorizations from ANATEL that allow
it to provide fixed telephony and broadband internet services in all other municipalities of the State of Paraná. Currently,
Sercomtel operates with its own network in fifteen (15) municipalities of the State of Paraná, providing voice services
and fixed broadband.

In September
2017, ANATEL determined that Sercomtel was not in compliance with certain financial indicators set forth by the agency in connection
with the concessions granted to Sercomtel and required for the company’s operations to continue. As a consequence of this
determination, ANATEL brought an administrative proceeding against Sercomtel to assess whether the concession and the authorizations
granted to this company should be terminated. In March 2019, ANATEL decided to suspend the above mentioned proceeding for a 120-day
period, so that Sercomtel could present to the agency alternative plans for meeting the relevant regulatory indicators.

In
June 2019, the municipal legislature of Londrina approved the sale of the stake held by the Londrina City Hall as the controlling
shareholder of Sercomtel (Municipal Law no 12.871, dated June 12, 2019). In November 2019, the City Hall published the bidding
notice for the privatization process of Sercomtel, which provides for the assignment of the City Hall’s preemptive right
to subscribe shares in a future capital increase of Sercomtel. This process can result in the dilution of the stake held by the
City Hall and Copel in Sercomtel. However, a bid for the sale of such preemptive rights was scheduled for February 5, 2020, and
no participants attended. We understand that alternative procedures are under consideration by Sercomtel’s controlling shareholder
for the company. Considering the uncertainties regarding company's financial capacity to maintain the normality of its operations,
including commitments to customers and suppliers, we may be adversely affected if Sercomtel's services are impaired, even if partially.
In case a new attempt for the privatization of Sercomtel is not successful, or if ANATEL determines
the termination and forfeiture of the licenses held by Sercomtel, we can be adversely affected in view of our stake in Sercomtel’s
capital stock.

We cannot assure the speed
of our innovation capacity and our responses in view of the changes the energy sector has been going through as a result of technology
advances.

The electric
energy sector has been going through changes driven by (i) the decentralization of the power generation systems; (ii) advances
in energy storage technologies; (iii) dissemination of digital technologies that improve the efficiency of energy generation, transmission
and consumption; (iv) increase of renewable energy sources, such as wind and solar energy; and (v) a tendency of reducing carbon
footprints in the energy system, as part of the global efforts to mitigate the effects of climate change. These changes present
many challenges and we may not be able to keep up with the effects of the increasing adoption of digital technologies in the electric
energy sector and the significant potential of new technology solutions (both with respect to the improvement of processes and
services provided to consumers and with respect to the development of new products that may lead to higher productivity gains,
more affordable prices, higher competition and the creation of new markets). Investments in research and development may contribute
to mitigate the risks related to the transformations of the energy sector and create new opportunities.

Risks Relating to Brazil

The Brazilian Government has
significant influence over the Brazilian economy. Brazilian economic and political conditions— and investor perception of
these conditions— have a direct impact on our business, financial condition, results of operation and prospects.

Historically,
the country’s political situation has influenced the performance of the Brazilian economy, and political crises have affected
the confidence of investors and the general public, which resulted in economic deceleration, the downgrading of credit ratings
of the Brazilian government and Brazilian issuers, and heightened volatility in the securities issued abroad by Brazilian companies.

Additionally,
the Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy and often changes
monetary, credit, exchange and other policies to influence Brazil’s economy. Our business, financial condition, results of
operations and prospects may be

25


Table of Contents


adversely affected by changes
in government policies, as well as other factors including, without limitation:

• fluctuations
in the exchange rate;

• inflation;

• changes in
interest rates;

• exchange control
policies;

• fiscal policy
and changes in tax laws;

• other political, diplomatic,
social and economic developments that may affect Brazil or the international markets;

• controls on
capital flows; and/or

• limits on foreign trade.

In
the last few years, Brazil faced a mild economic growth, adverse fiscal developments and political instability. Brazilian GDP grew
by 1,1% in 2019, grew by 1.1% in 2018 and grew by 1.3% in 2017. Unemployment rate was 11.9% in 2019, 11.6% in 2018 and 12.7% in
2017. Inflation, as reported by the consumer price index (IPCA), was 4.31% in 2019, 3.75% in 2018 and 2.95% in 2017. The Brazilian
Central Bank’s base interest rate (SELIC) was 4.5% on December 31, 2019, 6.5% on December 31, 2018 and 7.00% on December
31, 2017. Future economic, social and political developments in Brazil may impair our business, financial condition or results
of operations, or cause the market value of our securities to decline.

Changes
in, or uncertainties regarding the implementation of, the policies above, might generate or contribute to uncertainties in the
Brazilian economy. This would increase the volatility of the domestic capital market and the value of Brazilian securities traded
abroad, and adversely affect our business, results of operations and financial condition.

Moreover, taking
into account the Brazilian presidential system of government, and the considerable influence of the executive power, it is not
possible to predict whether the present government or any successive governments will have an adverse effect on the Brazilian economy,
and consequently on our business.

The effects of the coronavirus
(COVID-19)outbreak and the strong expectation of lower growth, zero growth, or even a recession in some economies, including the
Brazilian Economy, may negatively affect our operations and results

The
performance of the Brazilian economy may be directly affected by lower or zero-level worldwide economic growth or an economic recession
caused by the coronavirus (COVID-19) pandemic. The results of Copel’s operations are directly related to the performance
of the Brazilian economy.

On
March 24, 2020, ANEEL issued ANEEL Resolution No. 878 establishing measures to preserve public electricity distribution services
during the coronavirus (COVID-19) pandemic. These measures include, inter alia, ANEEL prohibitions on suspension of electricity
supply by distribution companies due to lack of payment with respect to specific categories of services including (i) essential
services and activities, (ii) limited autonomy equipment, (iii) low-income residencies, and (iv) locations with no operational
collection posts.

26


Table of Contents


The
Federal Government also enacted a number of measures in response to the coronavirus (COVID-19) pandemic, including but not limited
to:

| | · | Provisional Measure No. 950/2020, which
provides for temporary emergency measures for the electricity sector, including (i) establishing a discount of 100% for low-income
residential consumers with electricity consumption below or equal to 220 kWh/month for the period from April 1, 2020 to June 30,
2020, and (ii) charging a tariff to revert to electricity distributors.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Provisional Measure No.
950/2020 does not apply nor is it expected to apply to free market energy services contracts. Copel may suffer an impact on collections
due to reductions in contracted volumes, or the postponement of the expiration of customers' electricity bills.

| | · | Provisional Measures No. 927/2020 which
provides for emergency labor and public health related measures; and
| | - | ------------------------------------------------------------------------------------------------------------

| | · | Provisional Measures No. 936/2020 which
institutes the Emergency Program for Employment and Income Maintenance and provides for additional emergency labor and public health
related measures.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

States
throughout Brazil have also imposed operational impediments (both commercial and industrial) that directly impact Copel’s
operations. Particularly with respect to the State of Paraná, on April 23, 2020, the State government enacted Law No. 20,187/2020
prohibiting providers from cutting power to (i) low-income families, (ii) costumers of age 60 and above or that have been diagnosed
with coronavirus (COVID-19) or other serious or infectious diseases or that have disabilities; (iii) informal workers; and (iv)
entrepreneurs classified as micro and small companies or individual micro-entrepreneurs.

With
regards to the captive distribution market, Copel may experience in the near term (i) a significant reduction in revenue and collection
from energy supply chains, (ii) defaults of large high voltage customers, and (iii) defaults of commercial class clients. In the
medium term, Copel negative impacts may extend to other customer classes, especially residential ones.

A
possible increase in payment defaults by residential consumers, coupled with the decrease in collection and the standstill of several
commercial and industrial activities resulting from social isolation measures can adversely affect the financial and economic results
involving the activities of the electricity sector, mainly the electricity distributors. Eventually, with the decrease in energy
consumption, the Company may be in a position above the permitted regulatory limit for overcontracting electricity.

Copel
has followed the load projections issued by official bodies in the electricity sector, which already show signs of retraction in
2020, strongly impacted by the drop in consumption in the commercial and industrial segments. This fall has caused notifications
by energy buyers, under the perspective and allegation of unforeseeable circumstances and force majeure generated by the coronavirus
(COVID-19) pandemic, requiring a reduction in the amounts of energy contracts and/or installments of defaulted bills.

Both
the projections of PLD and GSF for the remainder of 2020 already show a significant decrease in light of the coronavirus (COVID-19)
pandemic. Adverse impacts of the coronavirus (COVID-19) pandemic can also be felt on the implementation of generation and transmission
projects, or on the availability of existing assets resulting from local actions, preventing access to facilities or problems with
suppliers in the sector, also affected by the coronavirus (COVID-19) pandemic.

27


Table of Contents


To
the extent the government does not adopt a joint solution for the energy sector as a means to control or remove a systemic risk,
the Company may suffer, among other impacts, cash damages, decreases in its profitability and the impossibility of performing certain
operational activities.

The
Brazilian government may propose or enact either temporary or permanent changes to its tax policies in 2020. We are continuously
assessing the impact of any new proposed changes on our applicable tax rate and planning and will continue to monitor any changes
and their related impact on us.

The
Company has established a Contingency Committee in light of the coronavirus (COVID-19) pandemic with the objective of monitoring
and mitigating current and futures impacts and consequences in the Company’s activities. The Contingency Committee has four
main focus objectives: (i) people’s safety, (ii) continuation of essential activities of the Company, (iii) monitoring guidelines
and requirements of regulatory bodies, and (iv) preservation of adequate financial conditions to support the crisis. The Company
has also continuously been (A) monitoring the impacts of the pandemic on (i) its contracts and (ii) the liquidity of the energy
market and its short-term pricing, as well as (B) involved and negotiating with the relevant authorities for the implementation
of guidelines that guarantee the maintenance of the economic and financial sustainability of Brazil’s electricity power generation,
transmission, commercialization and distribution chain.

Fluctuations in the value
of the Brazilian real against foreign currencies may result in uncertainty in the Brazilian economy and the Brazilian securities
market, which could have a material adverse effect on our net income and cash flow.

In recent years,
the Brazilian realhas fluctuated in value against foreign currencies, and the value of the realmay rise or decline
substantially from current levels. Over the course of 2015, the value of the Brazilian real declined more than 48% against
the U.S. Dollar. In contrast, in the course of 2016, the Brazilian real appreciated 16.5% against the U.S. Dollar, following a
year of intense volatility. In 2017, the Brazilian real was subject to relative stability. As of December 31, 2019, the real
vs. U.S. dollar exchange rate recorded was R$4.03 to US$1.00, depreciating 4.0% against the U.S. Dollar, compared to the exchange
rate recorded on December 31, 2018. Depreciation of the realincreases the cost of servicing our foreign currency-denominated
debt and the cost of purchasing electricity from the Itaipu – a hydroelectric facility which is one of our major suppliers
and adjusts its electricity prices based in part on its U.S. dollar costs. Depreciation of the realalso creates additional
inflationary pressure in Brazil that may negatively affect us. Indeed, depreciation generally curtails access to international
capital markets and may prompt government intervention. It also reduces the U.S. dollar value of our dividends and the U.S. dollar
equivalent of the market price of our common shares and the ADSs.

Inflation and governmental
measures to curb inflation may contribute to economic uncertainty in Brazil, and could reduce our margins and the market price
of the Class B Shares and ADSs.

Brazil has in the
past experienced extremely high rates of inflation. More recently, Brazil’s annual rates of inflation, measured in accordance
with the variation of the Índice Geral de Preços - Disponibilidade Interna (“IGP-DI”) index, were
1.75% for the three-month period ended March 31, 2020, 7.7% in the year 2019, 7.1% in the year 2018, (0.4)% in the year 2017 and
7.2% in 2016. The Brazilian government has in the past taken measures to combat inflation, such as raising the basic Selic interest
rate to elevated levels, and public speculation about possible future government actions has had significant negative effects on
the Brazilian economy. Although our concession contracts provide for annual adjustments based on inflation indexes, if Brazil experiences
substantial inflation in the future, and the Brazilian government adopts inflation control policies similar to those adopted in
the past, our costs may increase faster than our revenues, our operating and net margins may decrease and, if investor confidence
lags, the price of the Class B Shares and ADSs may fall. Inflationary pressures may also curtail our ability to access foreign
financial markets and could lead to further government intervention in the economy, including the introduction of government policies
that may adversely affect the overall performance of the Brazilian economy.

Allegations
of political corruption against the Brazilian federal government and the Brazilian legislative branch could create economic and
political instability.

28


Table of Contents


Currently,
several former and current members of the Brazilian executive and legislative branches of government are being investigated as
a result of allegations of unethical and illegal conduct identified by the Operation Car Wash (Operação Lava-Jato)
being conducted by the Office of the Brazilian Federal Prosecutor, and a number of politicians and businessmen have been arrested.
The potential outcome of these investigations is unknown, but they have already had an adverse impact on the image and reputation
of the investigated companies, in addition to adversely impacting general market perception of the Brazilian economy, including
our business, financial condition and results of operations, as well as the trading price of our common shares and ADSs. Moreover,
the conclusion of these proceedings or further allegations of illicit conduct could have additional adverse effects on the Brazilian
economy. We cannot predict whether such allegations will lead to further instability or whether new allegations against key Brazilian
government officials will arise in the future. In addition, we cannot predict the outcome of any such allegations and their effect
on the Brazilian economy.

Changes in
Brazilian tax policies may have an adverse effect on us and our shareholders.

The
Brazilian government has in the past changed its tax policies in ways that affect the electricity sector, and it may do so again
in the future. These changes include increases in the tax rates affecting energy companies and, occasionally, the collection of
temporary taxes related to specific governmental purposes. If we are unable to adjust our tariffs accordingly, we may be adversely
affected.

There
are also bills under discussion at the National Congress of Brazil that may change the way in which taxes are collected in Brazil,
including the collection of income tax on dividends, which may adversely affect our shareholders.

In
2020, in response to the global spread of the coronavirus (COVID-19) virus and the resulting disruptions to financials markets
and business operations, the Brazilian government has proposed or enacted changes to its tax policies that include both temporary
and permanent changes. The impact of these new rules on us and on our effective tax rate and tax planning is not yet clear.

Negative developments
in other national economies, especially those in developing countries, may negatively impact foreign investment in Brazil and the
country’s economic growth.

International
investors generally consider Brazil to be an emerging market. Historically, adverse developments in the economies of emerging markets
have resulted in investors’ perception of greater risk from investments in such markets. Such perceptions regarding emerging
market countries have significantly affected the market value of securities of Brazilian issuers. Furthermore, although economic
conditions are different in each country, investors’ reactions to developments in one country can impact the prices of securities
in other countries, including those in Brazil, and this may diminish investors’ interest in securities of Brazilian issuers,
including ours.

Risks Relating to the Class
B Shares and ADSs

As a holder of ADSs, you
will generally not have voting rights at our shareholders’ meetings.

In accordance
with Brazilian Corporate Law and our bylaws, holders of the Class B Shares, and thus of the ADSs, are not entitled to vote at our
shareholders’ meetings except in limited circumstances. That means, among other things, that you, as a holder of the ADSs,
are not entitled to vote on corporate transactions, including any proposed merger.

In addition,
in the limited circumstances where the holders of Class B Shares are entitled to vote, holders may exercise voting rights with
respect to the Class B Shares represented by ADSs only in accordance with the provisions of the deposit agreement relating to the
ADSs. There are no provisions under Brazilian Corporate Law or under our bylaws that limit ADS holders’ ability to exercise
their voting rights through the Depositary with respect to the underlying Class B Shares. However, the procedural steps involved
create practical limitations on the ability of ADS holders to vote. For example, holders of our Class B Shares will be able to
exercise their voting rights by either attending the meeting in

29


Table of Contents


person or voting by proxy. In accordance
with the Deposit Agreement, we will provide the notice to the Depositary, which will in turn, as soon as practicable thereafter,
mail to holders of ADSs the notice of such meeting and a statement as to the manner in which instructions may be given by holders.
To exercise their voting rights, ADS holders must then instruct the Depositary how to vote their shares. Because of this extra
procedural step involving the Depositary, the process for exercising voting rights will take longer for ADS holders than for direct
holders of Class B Shares. ADSs for which the Depositary does not receive timely voting instructions will not be voted.

As a holder of ADSs, you
will have fewer and less well-defined shareholders’ rights in Brazil than in the United States and certain other jurisdictions.

Our corporate
affairs are governed by our bylaws and Brazilian Corporate Law, which may differ from the legal principles that would apply if
we were incorporated in a jurisdiction in the United States or in certain other jurisdictions outside Brazil. Under Brazilian Corporate
Law, you and the holders of the Class B Shares may have fewer and less well-defined rights to protect your interests in connection
with actions taken by our Board of Directors or the holders of Common Shares than under the laws of the United States and certain
other jurisdictions outside Brazil.

Although Brazilian
law imposes restrictions on insider trading and price manipulation, the Brazilian securities markets are not as highly supervised
as the United States securities markets or markets in certain other jurisdictions outside Brazil. For instance, rules and policies
against self-dealing and regarding the preservation of minority shareholder interests may be less developed and not as robustly
enforced in Brazil as in the United States and certain other jurisdictions outside Brazil, which could potentially disadvantage
you as a holder of the preferred shares and ADSs. In addition, shareholders in Brazilian companies must hold 5% of the outstanding
share capital of a corporation in order to have standing to bring shareholders’ derivative suits, and shareholders in Brazilian
companies ordinarily do not have standing to bring a class action suit.

You may be unable to exercise
preemptive rights relating to the preferred shares.

You will not
be able to exercise the preemptive rights relating to the Class B Shares underlying your ADSs unless a registration statement under
the Securities Act, is effective with respect to those rights or an exemption from the registration requirements of the Securities
Act is available. Therefore, the Depositary will not offer rights to you as a holder of the ADSs unless the rights are either registered
under provisions of the Securities Act or are subject to an exemption from the registration requirements. We are not obligated
to file a registration statement with respect to the shares or other securities relating to these rights, and we cannot assure
you that we will file any such registration statement. Accordingly, you may receive only the net proceeds from the sale of your
preemptive rights by the Depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. If you are unable
to participate in rights offerings, your holdings may also be diluted.

Sales of a substantial number
of shares, or the perception that such sales might take place, could adversely affect the prevailing market price of our shares
or ADSs.

As a consequence
of the issuance of new shares, sales of shares by existing share investors, or the perception that such a sale might occur, the
market price of our shares and, by extension, of the ADSs may decrease significantly.

Future equity issuances may
dilute the holdings of current holders of our shares or ADSs and could materially affect the market price for those securities.

We may in
the future decide to offer additional equity to raise capital or for other purposes. Any such future equity offering could reduce
the proportionate ownership and interests of holders of our shares and ADSs, as well as our earnings and net equity value per share
or ADS. Any offering of shares and ADSs by us or our main shareholders, or a perception that any such offering is imminent, could
have an adverse effect on the market price of these securities.

30


Table of Contents


You may not receive dividend
payments if we incur net losses or our net profit does not reach certain levels.

Under Brazilian
Corporate Law and our by-laws, we must pay our shareholders a mandatory distribution equal to at least 25% of our adjusted net
profit for the preceding fiscal year, with holders of preferred shares having priority of payment. According to our bylaws, Class
A Shares and Class B Shares are entitled to receive annual, non-cumulative minimum dividends, which dividend per share shall be
at least 10% higher than the dividends per share paid to the holders of the Common Shares. Class A Shares have a dividend priority
over the Class B Shares, and Class B Shares have a dividend priority over the Common Shares.

If we realize
a net profit in an amount sufficient to make dividend payments, at least the mandatory dividend is payable to holders of our preferred
and common shares. After payment of the mandatory dividend, we can retain profits as statutory profit reserves for investments
or capital reserves. If we incur net losses or realize net profits in an amount insufficient to make dividend payments, including
the mandatory dividend, our management may recommend that dividend payments be made using the statutory profit reserve after accounting
for the net losses for the year and any losses carried forward from previous years. In the event that we are unable to declare
dividends, our management may nevertheless decide to defer payment of dividends or, in limited circumstances, not to declare dividends
at all. We cannot make dividend payments from our legal reserve and capital reserve accounts.

Additionally,
in accordance with Brazilian Corporate Law, in fiscal years in which the amount of mandatory dividends exceeds the amount of realized
net profits, according to the parameters set forth in this law, management may suggest the formation of a reserve for realizable
profits. This reserve can be offset with any losses and then used for paying mandatory dividends.

Holders of our ADSs may be
unable to enforce judgments against our directors or officers.

All of our
directors and officers named in this annual report reside in Brazil. Substantially all of our assets, as well as the assets of
these persons, are located in Brazil. As a result, it may not be possible for holders of our ADSs to effect service of process
upon us or our directors and officers within the United States or other jurisdictions outside Brazil, attach their assets or enforce
against us or our directors and officers judgments obtained in the United States or other jurisdictions outside of Brazil. Because
judgments of U.S. courts for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if certain
requirements are met, holders of ADSs may face greater difficulties in protecting their interest in actions against us or our directors
and officers than would shareholders of a corporation incorporated in a state or other jurisdiction of the United States.

Judgments of Brazilian courts
with respect to our shares will be payable only in reais.

If proceedings
are brought in the courts of Brazil seeking to enforce our obligations in respect of our shares, we will not be required to discharge
any such obligations in a currency other than reais (R$). Under Brazilian exchange control limitations, an obligation in Brazil
to pay amounts denominated in a currency other than reais (R$) may only be satisfied in Brazilian currency at the exchange rate,
as determined by the Central Bank, in effect on the date the judgment is obtained, and any such amounts are then adjusted to reflect
exchange rate variations through the effective payment date. The then prevailing exchange rate may not afford non Brazilian investors
with full compensation for any claim arising out of, or related to, our obligations under our shares.

If you exchange your ADSs
for Class B Shares, you risk increased taxes and the inability to remit foreign currency abroad.

Brazilian
law requires that parties obtain a registration before the Central Bank in order to be allowed to remit foreign currencies, including
U.S. dollars, abroad. For the ADSs, the Brazilian custodian for the Class B Shares has obtained the necessary certificate from
the Central Bank for the payment of dividends or other cash distributions relating to the preferred shares or upon the disposition
of the preferred shares. If you exchange your ADSs for the underlying Class B Shares, however, you must obtain your own certificate
of registration or register in accordance with Central Bank and CVM rules in

31


Table of Contents


order to obtain and remit U.S. dollars
abroad upon the disposition of the Class B Shares or distributions relating to the preferred shares. If you do not obtain a certificate
of registration, you may not be able to remit U.S. dollars or other currencies abroad and may be subject to less favorable tax
treatment on gains with respect to the preferred shares. Pursuant to Central Bank rules, obtaining this registration requires exchange
transactions, which are subject to taxes in Brazil. For more information, see “Item 10. Additional Information—Taxation—Brazilian
Tax Considerations—Other Brazilian Taxes”. If you attempt to obtain your own registration, you may incur expenses or
suffer delays in the application process, which could delay your ability to receive dividends or distributions relating to the
preferred shares or the return of your capital in a timely manner. The custodian’s registration before the Central Bank and
any certificate of foreign capital registration you obtain may be affected by future legislative changes. Additional restrictions
may be imposed in the future on the disposition of the underlying Class B Shares or the repatriation of the proceeds from disposition.

The Brazilian government
may impose exchange controls and restrictions on remittances abroad which may adversely affect your ability to convert funds in
reais into other currencies and to remit other currencies abroad.

In the past,
the Brazilian government has imposed restrictions on the remittance to foreign investors of the proceeds of their investments in
Brazil and the conversion of Brazilian currency into foreign currencies. The Brazilian government could again choose to impose
this type of restriction if, among other things, there is deterioration in Brazilian foreign currency reserves or a shift in Brazil’s
exchange rate policy. Reintroduction of these restrictions would hinder or prevent your ability to convert dividends, distributions
or the proceeds from any sale of Class B Shares, as the case may be, from reaisinto U.S. dollars or other currencies and
to remit those funds abroad. We cannot assure you that the Brazilian government will not take similar measures in the future.

The relative volatility and
illiquidity of the Brazilian securities markets may impair your ability to sell the Class B Shares underlying the ADSs.

The Brazilian
securities markets are substantially smaller, less liquid, more concentrated and more volatile than major securities markets in
the United States and certain other jurisdictions outside Brazil, and are not as highly regulated or supervised as some of these
other markets. The illiquidity and relatively small market capitalization of the Brazilian equity markets may cause the market
price of securities of Brazilian companies, including our ADSs and Class B Shares, to fluctuate in both the domestic and international
markets, and may substantially limit your ability to sell the Class B Shares underlying your ADSs at a price and time at which
you wish to do so.

Instability of the exchange
rate could adversely affect the value of remittances of dividends outside of Brazil and also the market price of the ADSs.

Many Brazilian
and global macroeconomic factors have an influence on the exchange rate. In this context, the Brazilian federal government, through
the Central Bank, has in the past occasionally intervened for the purpose of controlling unstable variations in exchange rates.
We cannot predict whether the Central Bank or the federal government will continue to allow the real to float freely or whether
it will intervene through a system involving an exchange rate band, or the use of other measures.

As a result,
the real might fluctuate substantially in relation to the United States dollar, and other currencies, in the future. That instability
could adversely affect the equivalent in US dollars of the market price of our shares, and as a result the prices of our ADSs and
also outward dividends remittances from Brazil.

Changes in economic and market
conditions in other countries, especially Latin American and emerging market countries, may adversely affect our business, results
of operations and financial condition, as well as the market price of our shares, preferred ADS and common ADSs.

The market
value of the securities of Brazilian companies is affected to varying degrees by economic and market conditions in other countries,
including other Latin American countries and emerging market countries. Although the economic conditions of such countries may
differ significantly

32


Table of Contents


from the economic conditions of Brazil,
the reactions of investors to events in those countries may have an adverse effect on the market value of the securities of Brazilian
issuers. Crises in other emerging market countries might reduce investors’ interest in the securities of Brazilian issuers,
including our Company. In the future, this could make it more difficult for us to access the capital markets and finance our operations
on acceptable terms or at all. Due to the characteristics of the Brazilian power industry (which requires significant investments
in operating assets) and due to our financing needs, if access to the capital and credit markets is limited, we could face difficulties
in completing our investment program and refinancing our obligations, and this could adversely affect our business, results of
operations and financial condition.

Changes in Brazilian tax laws
may have an adverse impact on the taxes applicable to a disposition of our shares or ADS.

Law No. 10,833
of December 29, 2003, provides that the disposition of assets located in Brazil by a non-resident to either a Brazilian resident
or a non-resident is subject to taxation in Brazil, regardless of whether the disposition occurs outside or within Brazil. This
provision results in the imposition of income tax on the gains arising from a disposition of our common or preferred shares by
a nonresident of Brazil to another non-resident of Brazil. There is no judicial guidance as to the application of Law No. 10,833
and, accordingly, we are unable to predict whether Brazilian courts may decide that it applies to dispositions of our ADS between
nonresidents of Brazil. However, in the event that the disposition of assets is interpreted to include a disposition of our ADS,
this tax law would accordingly result in the imposition of withholding taxes on the disposition of our ADS by a non-resident of
Brazil to another non-resident of Brazil.



33


Table of Contents




Item 4. Information on the Company



The
Company1

We engage in
the generation, transmission, distribution and sale of electricity mainly in the Brazilian State of Paraná, pursuant to
concessions granted by ANEEL, the Brazilian regulatory agency for the electricity sector. We also provide telecommunications and
other services. While our activities are more concentrated in the Brazilian State of Paraná, we also operate in 10 different
Brazilian states through our generation and transmission businesses.

As
of December 31, 2019, we generated electricity from nineteen (19) hydroelectric plants, twenty five (25) wind plants and one (1)
thermoelectric plant, for a total installed capacity of 5,742.0 MW, of which, approximately 99.7% is derived from renewable sources.
Including the installed capacity of generation companies in which we have an equity interest, our total installed capacity is 6,397.8
MW. Our electric power business is subject to comprehensive regulation by ANEEL.

We hold concessions
to distribute electricity in 394 of the 399 municipalities in the State of Paraná and in the municipality of Porto União
in the State of Santa Catarina. As of December 31, 2019, we owned and operated 3,389 km of transmission lines and 199,952.6 km
of distribution lines, constituting one of the largest distribution networks in Brazil. Of the electricity volume we supplied in
2019 to our Final Customers:

| | · | 33.8% was to industrial customers;
| | - | ----------------------------------

| | · | 28.1% was to residential customers;
| | - | -----------------------------------

| | · | 19.7% was to commercial customers; and
| | - | --------------------------------------

| | · | 18.4% was to rural and other customers.
| | - | ---------------------------------------

Key elements
of our business strategy include the following:

| | · | bringing together sustainable growth,
profitability, adequate indebtedness levels and allocation of profits;
| | - | ------------------------------------------------------------------------------------------------------------

| | · | preparing the Company to go from consumer
to client;
| | - | ----------------------------------------------------

| | · | seeking profitable opportunities related
to new businesses and services in the energy sector;
| | - | ---------------------------------------------------------------------------------------------

| | · | managing an integrated and strategic energy
portfolio, including strategic partnerships and maximizing synergies and profitability;
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | · | divesting from non-strategic assets;
| | - | ------------------------------------

| | · | maintaining discipline in allocating capital
and technical rigor in planning and implementing projects;
| | - | -------------------------------------------------------------------------------------------------------

| | · | achieving the same efficiency standards
as the best companies from the energy sector, promoting innovation, investment in technology and optimization of the workforce;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

34


Table of Contents


| | · | ensuring and raising levels of corporate
sustainability, environmental, governance, risk management and compliance;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | developing and implementing a culture
based on meritocracy and consequence management towards building high performance teams;
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | · | seeking greater protagonism in our interaction
with regulators and institutions;
| | - | --------------------------------------------------------------------------------

| | · | consolidating a culture focused on safety,
health and quality of life.
| | - | ----------------------------------------------------------------------

Our revenues
for each of the last three (3) financial years by activity are described in “Item 5. Operating and Financial Review and Prospects
—Results of operations for the years ended December 31, 2019, 2018 and 2017”.

Historical Background

We were formed
in 1954 by the State of Paraná to engage in the generation, transmission and distribution of electricity, as part of a plan
to bring the electric energy sector under state control. We acquired the principal private power companies located in the State
of Paraná in the early 1970s. From 1970 to 1977, we significantly expanded our transmission and distribution grid and worked
to increase the connectivity of our network to networks in other Brazilian states. In 1979, a change in state law permitted us
to extend our generating activities to include production from sources other than hydroelectric and thermal power plants.

Currently,
we are the largest energy company in the State of Paraná. We are a corporation incorporated and existing under the laws
of Brazil, with the legal name Companhia Paranaense de Energia – Copel. Our head offices are located at Rua Coronel Dulcídio,
800, CEP 80420-170 Curitiba, Paraná, Brazil. Our telephone number at the head office is +55 (41) 3331-4011. Our website
is www.copel.com and any filings we make electronically with the
SEC will be available to the public over the Internet at the SEC’s website. The commercial name of each of our businesses
is provided as follows.

Relationship with the State of Paraná

The State of
Paraná owns 58.6% of our Common Shares and, consequently, has the ability to control the election of the majority of the
members of our Board of Directors, members of our Supervisory Board, the appointment of senior management and our direction, future
operations and business strategy.

Corporate Structure

Prior to 2001,
we operated as a single corporation engaged in the generation, transmission and distribution of electricity and in certain related
activities. In compliance with the new regulatory regime, we transferred our operations to four wholly-owned subsidiaries (one
each for generation, transmission, distribution and telecommunications) and our investments in other companies to a fifth wholly-owned
subsidiary. This corporate restructuring was completed in July 2001.

In 2007, to
comply with energy sector legislation, we divided the assets of our transmission business (“Copel Transmissão S.A.”)
between our distribution business (“Copel Distribuição S.A.”) and our generation business, (“Copel
Geração S.A.”). As a result, we changed the name of the latter entity to Copel Geração e Transmissão
S.A.

In 2013, the
Company was restructured in order to enhance the efficiency of our corporate structure and reduce our operating costs.

On
January 28, 2016, our board of directors approved the amendment of the bylaws of Copel Participações S.A., in order
to change its corporate purpose and denomination to Copel Comercialização S.A. The corporate purpose of this company
is the sale of energy and rendering of related services. The

35


Table of Contents


restructuring that created
Copel Comercialização S.A. is aimed at strengthening Copel’s positioning in the energy trading market and to
improve its efficiency, allowing for greater agility and flexibility in the sale of energy.

In
September 2017, in order to optimize the management of operating activities, the Company carried out an organizational restructuring
of its wholly-owned subsidiary Copel Renováveis S.A., whose activities were absorbed by Copel Geração e Transmissão
S.A,

On
August 30, 2018, Copel GeT signed a Share Exchange Agreement with Eletrosul with respect to the joint ventures Costa Oeste Transmissora
de Energia S.A. (51% - Copel GeT and 49% - Eletrosul), Marumbi Transmissora de Energia S.A. (80% - Copel GeT and 20%- Eletrosul)
and Transmissora Sul Brasileira de Energia S.A. (20% - Copel GeT and 80% - Eletrosul). Under this agreement, Copel GeT started
holding share of interest of 100% in the joint ventures Costa Oeste and Marumbi, in addition Eletrosul started to hold share of
interest of 100% in Transmissora Sul Brasileira. The business combinations occurred on August 31, 2018, date of transfer of the
shares. For additional information, see Note 1.2 to our audited consolidated financial statements.

In
March 2019, Copel GeT signed a purchase and sale agreement with Centrais Elétricas Brasileiras S.A. and Fundação
Eletrosul de Previdência e Assistencial Social - Elos to transfer 100% of the shares issued by SPE Uirapuru Transmissora
de Energia SA. In June 2019, Copel GeT took over control of the company.

In
order to renew the concession of HPP Gov. Bento Munhoz (or HPP Foz do Areia) for another 30 years, Copel incorporated the special-purpose
entity SPE F.D.A. Geração de Energia Elétrica S.A. (“FDA”)and, on March 03, 2020, requested the
Ministry of Mines and Energy to apply Federal Decree no. 9,271/2018 (as amended by Federal Decree no. 10,135/2019), which conditions
the renewal to the sale of the concession's corporate control in up to 18 months before the end of the current concession. On the
same date, FDA signed with ANEEL the Brazilian Electricity Regulatory Agency, the Concession Contract that transfers the concession
of the HPP Foz do Areia from Copel GeT to FDA, for the exploration of the plant until the end of the current concession, on September
17, 2023.

On
October 18, 2019, Copel GeT, through a consortium with its subsidiary Cutia Empreendimentos Eólicos, participated in the
A-6 new energy generation auction, having sold 14.4 average MW of the Jandaíra Wind Complex. The Jandaíra Wind Complex,
which has 90.1 MW of installed capacity and 47.6 average MW of assured power, will be built in the northeastern state of Rio Grande
do Norte, a region where Copel has other wind generation assets.

Copel currently
has five wholly-owned subsidiaries, which are Copel Geração e Transmissão S.A., Copel Distribuição
S.A., Copel Telecomunicações, Copel Comercialização S.A. and Copel Renováveis S.A.

Copel also
holds 100% shareholding stake in several Special Purpose Companies (SPC).

The current
organization of the group is as described as follows. All of our subsidiaries are incorporated in the Federative Republic of Brazil
and subject to the Brazilian law.

36


Table of Contents




37


Table of Contents


BUSINESS

In the past,
our generation and distribution businesses were integrated, and we sold most of the electricity we generated to the customers of
our distribution business. This changed as a result of the implementation of the New Industry Model Law, enacted in 2004. Today,
open auctions on the regulated market are still one of the primary channels by which our distribution business purchases energy
to resell to Captive Customers and one of the channels by which our generation business generates revenues. Our generation business
only sells energy to our distribution business through auctions in the regulated market. Moreover, our distribution business, like
other certain Brazilian distribution companies, is also required to purchase energy from Itaipu, in an amount determined by the
Brazilian government based on our proportionate share in the Brazilian electricity market. For more information, see “Item
4. Information on the Company—The Brazilian Electric Power Industry”.

The following
table shows the total electricity we (i) generated through entities in which we hold a 100.0% shareholding stake and the 51.0%
and 30,0% of energy generated by Mauá and Baixo Iguaçu Hydroelectric Plants respectively (corresponding to the interest
we hold in each of these assets) and (ii) purchased in the last five years, broken down by the total amount of electricity generated
and purchased by Copel Geração e Transmissão and our wind farm generation facilities described below (“Wind
Farms”) and the total amount of electricity purchased by Copel Distribuição and Copel Comercialização.

|                                                                                                                                   | Year
        ended December 31,
|---------------------------------------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                                                   | 2019                           
|                                                                                                                                   | (GWh)                          
|Copel Geração e Transmissão(1)                                                                                                     |                                
|Electricity generated(2)                                                                                                           | 17,199                         
|Electricity purchased from Copel Comercialização                                                                                   | 155                            
|Electricity purchased from others                                                                                                  | 140                            
|Electricity received from the Interconnected System                                                                                | 445                            
|Total electricity generated and purchased by Copel Geração e Transmissão                                                           | 17,939                         
|Wind Farms(1) (3)                                                                                                                  |                                
|Electricity generated(2)                                                                                                           | 1,912                          
|Electricity purchased from others                                                                                                  | 61                             
|Total electricity generated and purchased by Wind Farms                                                                            | 1,973                          
|Copel Distribuição                                                                                                                 |                                
|Electricity purchased from Itaipu(4)                                                                                               | 5,532                          
|Electricity purchased from Auction – CCEAR – affiliates                                                                            | 153                            
|Electricity purchased from Auction – CCEAR – other                                                                                 | 12,361                         
|Electricity purchased from others(5)                                                                                               | 8,093                          
|Total electricity purchased by Copel Distribuição                                                                                  | 26,139                         
|Copel Comercialização                                                                                                              |                                
|Electricity purchased from Copel Geração e Transmissão                                                                             | 5,124                          
|Electricity purchased from others(5)                                                                                               | 3,331                          
|Electricity purchased from Spot Market – CCEE                                                                                      | 34                             
|Total electricity purchased by Copel Comercialização                                                                               | 8,489                          
|Total electricity generated and purchased by Copel Geração e Transmissão, Copel Distribuição, Wind Farms and Copel Comercialização | 54,540                         



38


Table of Contents


|(1) | In 2018, Copel adopted the criteria set forth by the CCEE to determine the energy flows in sale and purchase transactions. The
energy amounts reflected in this table, even with respect to past years, were calculated in accordance with the criteria adopted
by the CCEE.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes the electrical losses of wiring and interconnecting station and technical losses by delivering energy to the Interconnected
System.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Electricity generated and purchased by our wind farm generation facilities which were under the supervision of Copel Renováveis
until 2015. In December 2015, Copel Geração e Transmissão became responsible for the operation of these facilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Distribution companies operating under concessions in the Midwest, South and Southeast regions of Brazil purchase electricity
generated by Itaipu.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | These numbers do not include assignments related to the Mechanism for Compensation of Surpluses and Deficits of New Energy (Mecanismo
de Compensação de Sobras e Déficits de Energia Nova,or MCSD-EN).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





The following
table shows the total electricity we sold to Free Customers, Captive Customers, distributors, energy traders and other utilities
service providers in the south of Brazil through the Interconnected Transmission System in the last five years.

|                                                                                                                                             | Year
        ended December 31,
|-------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                                                             | 2019                           
|                                                                                                                                             | (GWh)                          
|Copel Geração e Transmissão(1)                                                                                                               |                                
|Electricity delivered to Free Customers                                                                                                      | 4,146                          
|Electricity delivered to Bilateral Agreements (Copel Comercialização)                                                                        | 5,123                          
|Electricity delivered to Bilateral Agreements                                                                                                | 3,724                          
|Electricity delivered under auction – CCEAR – affiliates(2)                                                                                  | 122                            
|Electricity delivered under auction – CCEAR – other(2                                                                                        | 2,215                          
|Electricity delivered to Spot Market – CCEE(2)                                                                                               | (594)                          
|Electricity delivered to the Interconnected System                                                                                           | 3,203                          
|Total electricity delivered by Copel Geração e Transmissão                                                                                   | 17,940                         
|Wind Farms(1) (3)                                                                                                                            |                                
|Electricity delivered under auction – CCEAR – affiliates                                                                                     | 31                             
|Electricity delivered under auction – CCEAR – other                                                                                          | 1,288                          
|Electricity delivered under auction – CER – other                                                                                            | 914                            
|Total electricity delivered by Wind Farms                                                                                                    | 2,233                          
|Copel Distribuição                                                                                                                           |                                
|Electricity delivered to Captive Customers                                                                                                   | 19,784                         
|Electricity delivered to distributors in the State of Paraná                                                                                 | 164                            
|Spot Market – CCEE(4)                                                                                                                        | 1,319                          
|Total electricity delivered by Copel Distribuição                                                                                            | 21,267                         
|Copel Comercialização                                                                                                                        |                                
|Electricity delivered to Free Customers                                                                                                      | 2,715                          
|Electricity delivered to Bilateral Agreements (Copel GeT)                                                                                    | 216                            
|Electricity delivered to Bilateral Agreements                                                                                                | 5,722                          
|Electricity delivered to Spot Market – CCEE                                                                                                  | 52                             
|Total electricity delivered by Copel Comercialização                                                                                         | 8,490                          
|Subtotal                                                                                                                                     | 49,930                         
|Losses by Copel Distribuição and Wind Farms5)                                                                                                | 2,808                          
|Total electricity delivered by Copel Geração e Transmissão, Copel Renováveis, Copel Distribuição and Copel Comercialização, including losses | 52,738                         



39


Table of Contents


|(1) | In 2018, Copel adopted the criteria set forth by the CCEE to determine the energy flows in sale and purchase transactions. The
energy amounts reflected in this table, even with respect to past years, were calculated in accordance with the criteria adopted
by the CCEE.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Amounts indicated as less than zero (negative numbers) refer to the consolidated purchase of electricity from the Spot Market
along the year.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Electricity generated and purchased by our wind farm generation facilities which were under the supervision of Copel Renováveis
until 2015. In December 2015, Copel Geração e Transmissão became responsible for the operation of these facilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes the MCSD.
|--- | ------------------

|(5) | Includes Technical, Non-technical and Basic network losses of Copel Distribuição and losses related to the Wind
Farms.
|--- | ----------------------------------------------------------------------------------------------------------------------

Generation

As
of December 31, 2019, considering only the entities in which we hold a 100.0% shareholding stake and 51.0% and 30.0% of the energy
generated by Mauá and Baixo Iguaçu Hydroelectric Plants, respectively (corresponding to the interest we hold in each
of these assets), we operated and sold energy through nineteen (19) hydroelectric plants, twenty eight (28) wind plants and one
(1) thermoelectric plant, with a total installed capacity of 5,560.0 MW. Our assured energy totaled an average of 2,494.9 MW in
2019. Our generation varies yearly as a result of hydrological conditions and other factors. We generated 19,029 GWh in 2019, 19,121
GWh in 2018, 20,891 GWh in 2017, 27,068 GWh in 2016 and 25,960 GWh in 2015.

Considering
the installed capacity of all of the generation companies in which we have an interest (equity or otherwise), our total installed
capacity as of December 31, 2019, was 6,397.8 MW.

The generation of electrical energy
at our power plants is supervised, coordinated and operated by our Generation and Transmission Operation Center in the city of
Curitiba. This operation center is responsible for coordinating the operations related to approximately 100% of our total installed
capacity, including some of the plants in which we hold only partial ownership interests.

Hydroelectric Generation Facilities



The following
table sets forth certain information related to our main hydroelectric plants in operation during 2019:



|Plant                 | Installed
        capacity | Assured
        energy (1) | Placed
        in service | Concession
        expires
|--------------------- | -------------------------- | -------------------------- | ------------------------- | --------------------------
|                      | (MW)                       | (GWh/yr)                   |                           |                           
|Foz do Areia          | 1,676.0                    | 5,284.91                   | 1980                      | September, 2023           
|Segredo               | 1,260.0                    | 5,067.66                   | 1992                      | November, 2029            
|Salto Caxias          | 1,240.0                    | 5,305.06                   | 1999                      | May, 2030                 
|Capivari Cachoeira(2) | 260.0                      | 954.84                     | 1971                      | January, 2046             
|Mauá                  | 185.2(3)                   | 883.24                     | 2012                      | July, 2042                
|Baixo Iguaçu          | 105,06(4)                  | 452.89                     | 2019                      | October, 2049             
|Colíder               | 300                        | 1,560.16                   | 2019                      | January, 2046             
|Others                | 102.7                      | 556.30                     | N/A                       | N/A                       



|(1) | Values used to determine volumes committed for sale.
|--- | ----------------------------------------------------

|(2) | On January 5, 2016, Copel Geração e Tramissão executed a concession agreement with ANEEL so that it will
continue to operate this plant under an operation and maintenance regime until 2046.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Corresponds to 51.0% of the installed capacity of the plant (361.0 MW), corresponding to the interest we hold in this plant, as
we operate this plant through a consortium.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Corresponds to 30.0% of the installed capacity of the plant (350.2 MW), corresponding to the interest we hold in this plant, as
we operate this plant through a consortium.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Governador Bento
Munhoz da Rocha Netto (“Foz do Areia” Plant). The Foz do Areia Hydroelectric Power Plant is located on the Iguaçu
River, approximately 350 kilometers southwest of the city of Curitiba.

40


Table of Contents




Copel Geração
e Transmissão SA (“Copel GeT”) held the concession for the exploration rights of the Governador Bento Munhoz
da Rocha Netto Hydroelectric Power Plant (“UHE GBM”), in accordance with the Concession Agreement No. 045/1999, with
the term of such concession until September, 2023. On the occasion of the termination of such concession, it is the Federal Government’s
responsibility to launch a new competitive bidding process for UHE GBM 's exploration rights, with wide competition between agents
in the sector. Decree 9.271/18 allows the Federal Government to grant a new concession contract for a period of up to 30 years
to the winning legal entity of the privatization bidding of a public electricity generation service concessionaire under the control
of the States.

The Company
carried out studies to analyze the feasibility of becoming the winner in the future bidding process, and in the administrators’
assessment, the appetite of foreign investors represents a high risk for Copel, which may not be sufficiently competitive in the
event of more efficient agents, or with lower financial cost for investments.

In this context,
Copel GeT incorporated FDA and requested ANEEL for the transfer of the public electricity generation service for the plant in question.
The transfer of the concession rights of UHE GBM to FDA took place under the terms of ANEEL Authorization Resolution No. 8,578,
of February 11, 2020 and the Concession Contract for Generation of Electricity destined to the Public Service between FDA No. 002/2020.

On
March 3, 2020, for the purposes of the provisions of Article 1st §2nd, item II of Decree No. 9.271/2018 (as amended
by Decree No. 10.135/2019), Companhia Paranaense de Energia - Copel and Copel Geraçãoe Transmissão
S.A. filed a petition with the Ministry of Mines and Energy, through which they expressed their
intention to privatize, by means of the sale of FDA’s control, associated with obtaining a Concession Agreement for 30 (thirty)
years, counted as from its signing date, for the Governador Bento Munhoz da Rocha Netto Hydroelectric Plant. The petition provided
that the privatization bidding, by means of the sale of FDA’s control, will be effected only after the acknowledgement and
evaluation of the conditions involved in obtaining the concession rights, especially those related to the payment of the concession
rights, in addition to the respective procedures and governance therefore.



Governador
Ney Aminthas de Barros Braga (“Segredo” Plant). The Segredo Hydroelectric Power Plant is located on the Iguaçu
River, approximately 370 kilometers southwest of the city of Curitiba.

Governador
José Richa (“Salto Caxias” Plant). The Salto Caxias Hydroelectric Power Plant is located on the Iguaçu
River, approximately 600 kilometers southwest of the city of Curitiba.

Governador
Pedro Viriato Parigot de Souza (“Capivari Cachoeira” Plant). The Capivari Cachoeira Hydroelectric Power Plant is
the largest underground hydroelectric plant in Southern Brazil. The reservoir is located on the Capivari River, approximately 50
kilometers north of the city of Curitiba, and the power station is located on the Cachoeira River, approximately 15 kilometers
from the reservoir.

Our
former concession agreement for the Capivari Cachoeira Plant expired on July 7, 2015. Although Copel Geração e Transmissão
did not elect to renew the original concession pursuant the 2013 Concession Renewal Law, it participated in the new competitive
bidding process and won. On January 5, 2016, Copel GeT executed a concession agreement with ANEEL, allowing it to continue to operate
this plant under an operation and maintenance regime until January 5, 2046. We paid a total of R$574.8 million as the signing bonus
for this concession and we received an annual generation revenue (AGR) of R$144.1 million from January 5, 2016 to December 31,
2016. This AGR is subject to an annual tariff adjustment. In July 2017, the AGR was adjusted to R$114.1 million for the period
from July 2017 to June 2018 pursuant to the ANEEL Resolution No. 2,265/2017, and in 2018 the AGR was adjusted to R$119.2 million
for the period from July 2018 to June 2019 pursuant ANEEL Resolution No. 2,421/2018. In 2019 the AGR was adjusted to R$123,7 million
for the period from July 2019 to June 2020 pursuant ANEEL Resolution No. 2,587/2019.

The
Capivari Cachoeira Plant has 260.0 MW of installed capacity and assured energy of 954.8 GWh/year. Since January 1, 2017, 70.0%
of the energy generated by this plant has been allocated in quotas to

41


Table of Contents


the regulated market. Copel
GeT will no longer bear the hydrological risk for the energy allocated in quotas under the MRE associated with the Capivari Cachoeira
Plant.

Mauá.
The Jayme Canet Júnior Hydroelectric Power Plant (Mauá Plant) is located on the Tibagi River, in the State of Paraná.
It was constructed between 2008 and 2012 by Consórcio Energético Cruzeiro do Sul, in which we hold a 51.0% interest
and CGT Eletrosul holds the remaining 49.0%. The facility is located approximately 250 kilometers from Curitiba, in the Municipality
of Telêmaco Borba.

ColíderHydroelectric Power Plant has an installed capacity of 300.0 MW and it is located on the Teles Pires River, in the State of
Mato Grosso, between the municipalities of Nova Canaã do Norte and Itaúba, with the municipalities of Colíder
and Cláudia are also affected by the reservoir. The construction of the plant began in 2011 and the work was totally concluded
in 2019. The first generating unit entered commercial operation on March 9, 2019 and the last unit started operating on December
21, 2019.

Baixo IguaçuHidroelectric Power Plant has an installed capacity of 350.2 MW and it is located on the Iguaçu River, in the municipalities
of Capanema, Capitão Leonidas Marques, Planalto, Realeza and Nova Prata do Iguaçu, State of Paraná. Baixo
Iguaçu HPP is the last large energy project planned for the main Iguaçu and it is located around 30 km downstream
from Governador José Richa HPP - the Salto Caxias Hydroelectric Power Plant, which is 100.0% owned by Copel. It was constructed
by a consortium in which Copel GeT holds a 30% interest and Geração Céu Azul S.A. holds the remaining 70.0%.
This power plant became fully operational on April 10, 2019.In addition to our generation facilities, we have ownership interests
in several other hydroelectric generation companies as detailed below.

Between 2004
and 2010, we were required by law to retain a majority of the voting shares of any company in which we obtained an ownership interest.
Starting in 2010, it became possible for us to hold non-controlling interests in companies.

The following
table sets forth information regarding the hydroelectric generation plants in which we had a partial equity interest as of December
31, 2019:

|Plant                                                              | Installed
        capacity | Assured
        energy | Placed
        in service | Our
        ownership | Concession
        expires 
|------------------------------------------------------------------ | -------------------------- | ---------------------- | ------------------------- | --------------------- | ---------------------------
|                                                                   | (MW)                       | (GWh/yr)               |                           | (%)                   |                            
|Elejor Facility 
(Santa Clara, Santa Clara I, Fundão and Fundão I) | 246.5                      | 1,229.0                | July, 2005
June, 2006     | 70.0                  | May, 2037(1)
December, 2032
|Dona Francisca                                                     | 125.0                      | 664.9                  | February, 2001            | 23.0                  | August, 2033               
|SHP Arturo Andreoli 
(Foz do Chopim)                               | 29.1                       | 178.7                  | October, 2001             | 35.8                  | April, 2030                
|UHE Baixo Iguaçu                                                   | 350.2                      | 1,513.72               | April, 2019               | 30.0                  | August, 2047               



|(1) | Elejor Facility adhered on January 14, 2015, with the renegotiation of the hydrological risks, which caused the expiration date
to be extended from 2036 to 2037.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

Elejor Facility.
The Elejor Facility consists of the Santa Clara and Fundão Hydroelectric Power Plants, both of which are located on the
Jordão River in the State of Paraná. The aggregate total installed capacity of the units is 246.5 MW, which includes
two smaller hydroelectric generation units installed in the same location. Elejor signed a concession agreement with a term of
35 years for the Santa Clara and Fundão plants in October 2001. As of December 31, 2019, we own 70.0% of the common shares
of Elejor, and Paineira Participações owns the remaining 30.0%.

Elejor is required
to make monthly payments to the federal government for the use of hydroelectric resources, which in 2001 totaled R$19.0 million.
This amount is adjusted on an annual basis by the IGP-M Index.

42


Table of Contents


We had a power
purchase agreement with Elejor, which provides that we will purchase all of the energy produced by the Santa Clara and Fundão
facilities at a set rate until April 2019, to be adjusted annually in accordance with the IGP-M Index.This agreement was terminated,
there was no renewal and Elejor is selling the energy in the Free Market. In 2019, Elejor’s net revenues and net profits
were R$218.4 million and R$26.1 million, respectively, while in 2018 its net revenues and net profits were R$293.9 million and
R$76.3 million, respectively.

Dona Francisca.
We own 23.03% of the common shares of Dona Francisca Energética S.A. (“DFESA”). The other shareholders are Gerdau
S.A. with a 51.82% interest, Celesc S.A. with a 23.03% interest and Statkraft S.A. with a 2.12% interest. DFESA Hydroelectric Power
Plant is located on the Jacuí River in the State of Rio Grande do Sul. The plant began full operations in 2001. In April
2015, we signed a new ten year power purchase agreement with DFESA, valued at R$17.0 million annually, under which Copel purchases
23.03% of DFESA’s assured energy (proportional to Copel’s stake).

In 2019, DFESA’s
net revenues and net profits were R$70.1 million and R$42.8 million, respectively, while in 2018 its net revenues and net profits
were R$70.1 million and R$43.8 million, respectively.

SHP Arturo
Andreoli (“Foz do Chopim” Hydroelectric Plant). The Foz do Chopim Hydroelectric Plant is located on the Chopim
River in the State of Paraná. We own 35.8% of the common shares of Foz do Chopim Energética Ltda., the entity that
owns the Foz do Chopim Hydroelectric Plant. Silea Participações Ltda. owns the remaining 64.2%. The operation and
maintenance of Foz do Chopim Hydroelectric Plant is performed by Copel Geração e Transmissão S.A. Energy supply
agreements were executed at an average tariff of R$220.07/MWh. Foz do Chopim Energética Ltda. also had the authorization
to operate Bela Vista SHP, a hydroelectric power plant that is located on the same river and has similar capacity, which was transferred
to Bela Vista Geração de Energia S.A. (“Bela Vista Geração”), through the ANEEL’s
Authorizing Resolution no. 7.802/2019. In 2019, Foz do Chopim’s net revenues and net profits were R$56.9 million and R$38.9
million, respectively, while in 2018 its net revenues and net profits were R$46.6 million and R$36.9 million, respectively.

Wind Farm Generation Facilities

Since
2013 we have been expanding our energy generation capacity and diversifying our energy matrix through the development of renewable
energy sources, like the construction and acquisition of wind farms in the State of Rio Grande do Norte. The following table sets
forth certain information relating to our wind farm plants in operation as of December 31, 2019:

|Plant                             | Installed
        capacity | Assured
        Power | Placed
        in Service | Concession
        Expires
|--------------------------------- | -------------------------- | --------------------- | ------------------------- | --------------------------
|                                  | (MW)                       | (Average MW)          |                           |                           
|São Bento Energia                 | 94.0                       | 46.3                  |                           |                           
|Boa Vista                         | 14.0                       | 6.3                   | February, 2015            | April, 2046               
|Olho d'Água                       | 30.0                       | 15.3                  | February, 2015            | May, 2046                 
|São Bento do Norte                | 30.0                       | 14.6                  | February, 2015            | May, 2046                 
|Farol                             | 20.0                       | 10.1                  | February, 2015            | April, 2046               
|Palmas                            | 2.5                        | 0.5                   | November, 1999            | September, 2029           
|Copel Brisa Potiguar Wind Complex | 183.6                      | 98.4                  |                           |                           
|Asa Branca I                      | 27.0                       | 14.2                  | August, 2015              | April, 2046               
|Asa Branca II                     | 27.0                       | 14.3                  | September, 2015           | May, 2046                 
|Asa Branca III                    | 27.0                       | 14.5                  | September, 2015           | May, 2046                 
|Eurus IV                          | 27.0                       | 14.7                  | August, 2015              | April, 2046               
|Santa Maria                       | 29.7                       | 15.7                  | April, 2015               | May, 2047                 
|Santa Helena                      | 29.7                       | 16.0                  | May, 2015                 | April, 2047               

43


Table of Contents




|Ventos de Santo Uriel               | 16.2  | 9.0   | May, 2015      | April, 2047  
|----------------------------------- | ----- | ----- | -------------- | -------------
|Voltália São Miguel do Gostoso I(1) | 108.0 | 57.1  |                |              
|Carnaúbas                           | 27.0  | 13.1  | June, 2015     | April, 2047  
|Reduto                              | 27.0  | 14.4  | June, 2015     | April, 2047  
|Santo Cristo                        | 27.0  | 15.3  | June, 2015     | April, 2047  
|São João                            | 27.0  | 14.3  | June, 2015     | March, 2047  
|Cutia Empreendimentos Eólicos(2)    | 312.9 | 126.2 |                |              
|Cutia                               |       |       |                |              
|Dreen Cutia                         | 23.1  | 9.6   | December, 2018 | January, 2042
|Dreen Guajiru                       | 21.0  | 8.3   | December, 2018 | January, 2042
|Esperança do Nordeste               | 27.3  | 9.1   | December, 2018 | May, 2050    
|GE Jangada                          | 27.3  | 10.3  | December, 2018 | January, 2042
|GE Maria Helena                     | 27.3  | 12.0  | December, 2018 | January, 2042
|GE Paraíso dos Ventos do Nordeste   | 27.3  | 10.6  | January, 2019  | May, 2050    
|Potiguar                            | 27.3  | 11.5  | December, 2018 | May, 2050    
|Bento Miguel                        |       |       |                |              
|São Bento do Norte I                | 23.1  | 9.7   | January, 2019  | August, 2050 
|São Bento do Norte II               | 23.1  | 10.0  | January, 2019  | August, 2050 
|São Bento do Norte III              | 23.1  | 9.6   | April, 2019    | August, 2050 
|São Miguel I                        | 21.0  | 8.7   | February, 2019 | August, 2050 
|São Miguel II                       | 21.0  | 8.4   | February, 2019 | August, 2050 
|São Miguel III                      | 27.3  | 8.4   | February, 2019 | August, 2050 
|                                    |       |       |                |              



|(1) | Copel has a 49.0% interest in Voltália São Miguel do Gostoso .
|--- | --------------------------------------------------------------

|(2) | In January 2019, São Bento do Norte I, II and III began their commercial operations with 100% of their installed capacity,
while the São Miguel I,II and III began their operation with 100% of their installed capacity in February 2019.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

São
Bento Energia. On February 25, 2015, the four wind farms (Boa Vista, Olho d’Água, São Bento do Norte and
Farol) which are part of the São Bento Wind Farm Complex, located in the State of Rio Grande do Norte, began operations.
With an installed capacity of 94 MW and assured energy of 46.3 average-MW. In August 2010, 43.7 average-MW of the energy generated
at a weighted average price of R$134.40/MWh (annually adjusted by IPCA index) was sold to fifteen distribution concessionaires
in ANEEL public auctions. The energy generated by these wind farms is sold through 20-year term contracts.

Copel Brisa
Potiguar Wind Complex. On September 15, 2015, Copel concluded the installation of the Brisa Potiguar Wind Complex with an installed
capacity 183.6 MW and assured energy of 98,4 average-MW. An assured energy of 57.7 average-MW (from Asa Branca I, Asa Branca II,
Asa Branca III and Eurus IV wind farms) was committed under contract to electric power distributors in the alternative energy auction
in August 2010 at a weighted average price of R$135.40/MWh (adjusted annually by IPCA inflation index) and an average of 40.7 MW
(from WPPs Santa Helena, Santa Maria and Ventos de Santo Uriel) was committed under contract in the 6th Reserve Energy
Auction held in August 2011 at a weighted average price of R$101.98/MWh (annually adjusted by the IPCA inflation index). The energy
to be generated was sold through 20-year term contracts with payments beginning in April 2015.

Voltália
São Miguel do Gostoso I. In June 2014, we negotiated with Voltalia Energia do Brasil Ltda. (Voltalia) the acquisition
of a 49.0% interest in the São Miguel do Gostoso I Wind Farm Complex, in the State of Rio Grande do Norte. The São
Miguel do Gostoso wind farm complex has 108.0 MW of installed capacity and assured energy of 57.1 average-MW, and its energy was
sold in the 4th Reserve Energy Auction at an average price of R$98.92/MWh through 20-year term contracts. In April 2015,
we concluded the construction of this wind farm complex and ANEEL, in July and August 2015, classified it as ready for commercial
operation. This wind farm complex began production in June 2017 after completion of the necessary transmission lines.

Cutia.
Cutia Empreendimentos Eólicos, which is Copel’s largest wind farm business, is divided into two large complexes totaling
312.9 MW of installed capacity: (a) Cutia Complex, composed of seven wind

44


Table of Contents


farms (Guajiru, Jangada, Potiguar, Cutia,
Maria Helena, Esperança do Nordeste and Paraíso dos Ventos do Nordeste), with a total installed capacity of 180.6
MW, 71.4 average MW of physical guarantee and located in the State of Rio Grande do Norte; and (b) Bento Miguel Complex, composed
of six wind farms (São Bento do Norte I, São Bento do Norte II, São Bento do Norte III, São Miguel
I, São Miguel II and São Miguel III) with 132.3 MW of total installed capacity, 58.7 average MW of physical guarantee
and located in the State of Rio Grande do Norte, in the same region of other wind farm complexes that belong to us. On October
31, 2014, at the 6th Reserve Energy Auction, we sold 71.2 average MW from the Cutia Complex for R$144.00/MWh (maximum auction price).
In addition, at the 20th New Energy Auction (A-5), held on November 28, 2014, we sold 54.8 average MW from the six Bento Miguel
wind farms for R$136.97/MWh, through Availability Agreements with a 20-year term.

In
December 2018, the wind farms of Cutia, Guajiru and Esperança do Nordeste, all part of the Cutia Complex, began their operations
with 100% of their installed capacity. The parks of Jangada, Maria Helena and Potiguar, also part of the Cutia Complex, began their
commercial operations in December 2018 with 85%, 54% and 77% of their installed capacity, respectively. On September 20, 2019,
according to ANEEL Order No. 2,593 / 2019, the last three generating units of the Maria Helena Wind Power Plant were released.
With this, the Cutia Wind Complex became fully operational in 2019.

In January
2019, São Bento do Norte I, São Bento do Norte II began their operations, while in February 2019, São Miguel
I, São Miguel II e São Miguel III began theirs. In April 2019, São Bento do Norte III began their operations.
With this, the Bento Miguel Complex became fully operational.

Thermoelectric Generation Facilities

The
following table sets forth certain information about our thermoelectric plants in operation as of December 31, 2019:

|Plant         | Installed
        capacity | Assured
        energy | Placed
        in service | Our
        ownership | Concession/
        authorization
        expires
|------------- | -------------------------- | ---------------------- | ------------------------- | --------------------- | -------------------------------------------------
|              | (MW)                       | (GWh/yr)               |                           | (%)                   |                                                  
|TPP Araucária | 484.1                      | 2,338.92(1)            | September, 2002           | 81.2 (2)              | December, 2029                                   
|TPP Figueira  | 20.0                       | 90.2                   | April, 1963               | 100.0                 | March, 2019(3)                                   



(1) The annual assured energy
of thermal plants such as Araucária varies depending on the price of natural gas, according to criteria established by the
MME.

(2) Held 20,3% by Copel and
60,9% by Copel GeT.

(3) We are currently
waiting for the granting authority to amend our concession agreement with respect to TPP Figueira, extending the concession of
the thermoelectric plant for another 20 years, pursuant to the Concession Extension Law of 2013

Araucária.
We have an 81.2% interest in UEG Araucária Ltda., which owns the Araucária Thermoelectric plant, a natural gas thermoelectric
power plant, located in the state of Paraná. The Araucária Thermoelectric plant has 484.2 MW of installed capacity,
does not have Availability Agreements currently in force and operates under a business model in which revenue depends on the plant’s
operation. When produced, energy will be sold in the Spot Market as directed by the ONS.

As of November
2019, the plant may also have the possibility of being activated in the form of an assignment of energy credits, in accordance
with the agreement signed with Petróleo Brasileiro SA - Petrobrás and in accordance with Normative Resolution No.
614/2014 from ANEEL. Based on this agreement, in force until December 31, 2020, the plant may be dispatched outside of out-of-merit-order,
and the UTE Araucária gas supplier will inform, weekly, if it will activate the plant. In this scenario, the order will
not be at the price of the CVU approved by ANEEL, but at a price agreed between the parties, considering, among other factors,
market opportunities and margins considered adequate for the plant's operation, thus enabling recovery fixed cost for the order
period.

A
gas supply agreement was signed between Petróleo Brasileiro S.A - Petrobras and UEG Araucária

45


Table of Contents


Ltda - UEGA. The agreement
is valid from February 21th to December 31th, 2020 and it provides for the delivery of up to 2,150,000 cubic meters of natural
gas per day, without take-or-pay clauses. As a result, TPP Araucária will remain available to the National Interconnected
System - SIN and can therefore be dispatched at the discretion of ONS. However, UEG Araucária signed an amendment to the
Transfer of Energy Credits agreement with Petróleo Brasileiro S.A. - Petrobras, in accordance with ANEEL's Normative Resolution
No. 614/2014, for the same duration as the gas supply agreement. The amendment will allow the plant to be dispatched out-of-merit-order,
and the gas supplier will inform TPP Araucária weekly whether it will activate the plant. In this context, dispatch will
not be charged at the CVU approved by ANEEL but at the value agreed by the parties, taking into account, among other factors, market
opportunities and margins considered adequate for the operation of the plant, thus enabling the recovery of the fixed cost related
to the dispatch period. With an installed capacity of 484 MW, the combined cycle power plant is one of the most efficient in Brazil.

TPP Araucária
was activated on March 8, 2020, according to the schedule for the operational week of ONS. The dispatch order is part of the exceptional
measures adopted at the meeting of March 4, 2020 by the Electric Sector Monitoring Comittee (“CMSE”) for the recovery
of hydroelectric reservoirs in the southern region of the country. The plant's remuneration, therefore, will be based on the Variable
Cost per Unit - CVU approved by ANEEL, in the amount of R$681.79/MWh.

Figueira.
The Figueira plant is located in the city of Figueira, in the northeast of the state of Paraná (where the main coal basin
of Paraná is located). This plant is currently in a modernization process, which consists of replacing the old equipment
for new equipment. This process aims to make this plant more efficient, reduce emissions of gases and particles resulting from
the burning of coal and comply with applicable environmental legislation.

After
the modernization, the plant will have the installed capacity of 20.0 MW with only one generating unit and the physical guarantee
of 17.7 MW, so that it is in compliance with Normative Resolution No. 801/2017, which defines a minimum efficiency of 25% for installations
with installed capacity up to 50.0 MW.

Expansion and Maintenance of Generating Capacity

We expect to
spend R$654.1 million in 2020 to expand and maintain our generation capacity, including participation in new businesses, of which
R$118.6 million will be invested in SHP Bela Vista, , R$80.5 million will be invested in the Colíder Hydroelectric Power
Plant and R$25.8 million will be invested in the Baixo Iguaçu Hydroelectric Power Plant. The remaining amount will be spent
on equipment maintenance, the modernization of the HPP Foz do Areia, the modernization of the Figueira Thermal Power Plant] and
other projects.

Hydroelectric Power Plant Projects

We have interests
in several hydroelectric generation projects. The following table sets forth information regarding our major hydroelectric generation
projects under construction.

|Facility       | Installed
        capacity | Estimated
        assured energy (1) | Budgeted
        completion cost | Beginning
        of operation | Our
        ownership | Status            
|-------------- | -------------------------- | ------------------------------------ | -------------------------------- | ------------------------------ | --------------------- | ------------------
|               | (MW)                       | (GWh/year)                           | (R$million)                      |                                | (%)                   |                   
|SHP Bela Vista | 29                         | 145                                  | 200                              | January, 2024                  | 100.0                 | Concession granted



|(1) | Values used to determine volumes committed for sale.
|--- | ----------------------------------------------------

Bela
Vista. In August 2018, we participated in the A-6 auction as a member of the Consórcio Bela Vista Geração
and sold 14.7 MW of the SHP Bela Vista, at a price of R$195.70 / MWh. With an estimated investment of R$200.0 million, the Bela
Vista SHP has 29 MW of installed capacity and 16.6 MW of assured

46


Table of Contents


power and is under construction
in the Chopim river, in the São João and Verê Municipalities, located in the southwest of the State of Paraná.
The energy sales agreement will be in force as of January 1, 2024, for a 30-year term and will be subject to an annual readjustment
by the IPCA. The construction of this facility began in the first semester of 2019.

Wind Farm Projects

The
following table sets forth information regarding our wind farm projects, all of which currently refer to the Jandaíra wind
farm (Complexo Eólico Jandaíra). In October 2019, Copel GeT and its subsidiary Cutia wind farm (Cutia Empreendimentos
Eólicos) joined the Auction ANEEL A-6 for new energy generation and sold an average of 14.4 MW from the Jandaíra
wind farm for R$98.00 MW/h. We expect to invest R$400 million in this new wind farm, which has an installed capacity equivalent
to 90.1 MW and a physical guarantee equivalent to 47.6 MW. The Jandaíra wind farm will be built in the state of Rio Grande
do Norte, and, as other wind farm assets of Copel are located in the same region, we believe that this project may benefit from
operational synergies related to our projects that are already operating.

The
amount of energy sold in October 2019 corresponds to 30% of the project’s physical guarantee. Pursuant to the power purchase
agreement executed in connection with the above, such amount of energy shall be supplied as from January 1, 2025, this agreement
will be in force for 20 years and prices will be adjusted pursuant to the IPCA index. Any additional energy generated by the Jandaíra
wind farm will be negotiated in the Free Market.

|Wind
        Farm | Installed
        capacity | Estimated
        Assured Power | Budgeted
        completion cost | Beginning of commercial operation | Our
        ownership | Concession
        expires
|----------------- | -------------------------- | ------------------------------- | -------------------------------- | --------------------------------- | --------------------- | --------------------------
|                  | (MW)                       | (Average MW)                    | (R$million)                      |                                   | (%)                   |                           
|Jandaíra          | 90.1                       | 47.6                            | 400.0                            | January 1, 2025                   | 100.0                 | April 2055                
|Jandaíra I        | 10,4                       | 5.3                             | -                                | January 1, 2025                   | 100                   | April 2055                
|Jandaíra II       | 24,3                       | 13.5                            | -                                | January 1, 2025                   | 100                   | April 2055                
|Jandaíra III      | 27.7                       | 14.6                            | -                                | January 1, 2025                   | 100                   | April 2055                
|Jandaíra IV       | 27.7                       | 14.2                            | -                                | January 1, 2025                   | 100                   | April 2055                

Development
Projects

We are involved
in various initiatives to study the technical, economic and environmental feasibility of certain hydroelectric, wind, solar photovoltaic
and thermoelectric generation projects. The following table sets forth information regarding our proposed generation projects that
are considered feasible under a technical, economic, social, environmental and land-related perspective pursuant to the above-mentioned
studies.

|Proposed Projects(1)      | Estimated
        Installed Capacity | Estimated
        Assured Energy | Our Ownership
|------------------------- | ------------------------------------ | -------------------------------- | -------------
|                          | (MW)                                 | (GWh/yr)                         | (%)          
|HPP São Jerônimo          | 331.0                                | 1,560.2                          | 41.2         
|WPP Complexo Alto Oriente | 60.0                                 | 247.5                            | 100.0        
|HPP Salto Grande          | 47.0                                 | 235.8                            | 99.9         
|SHP Salto Alemã           | 29.0                                 | 173.8                            | 19.0         
|TOTAL                     | 467.0                                | 2,217.3                          | -            



| | (1) | Do not include other proposed projects of Copel whose technical, economic,
social, environmental and land-related feasibility is still under analysis.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------

Copel is also
a member of Consortium Geração Luz Paranaense - CGLP, which was granted with exploration rights related to the following
projects: (i) SHP Foz do Curucaca, (ii) SHP Salto Alemã, (iii) SHP

47


Table of Contents


Alto Chopim and (iv) SHP Rancho Grande.
After obtaining the applicable authorization from ANEEL and evaluating the hydraulic potential of each project, the consortium
decided to carry out the studies only with respect to SHP Salto Alemã and SHP Foz do Curucaca and to return the exploration
rights for SHP Alto Chopim and SHP Rancho Grande projects to ANEEL. The basic design of SHP Salto Alemã had already been
approved by ANEEL in 2017 and the environmental studies related to this project were registered in the competent entity for analysis
in October 2018. In December 2018, the basic design of SHP Foz do Curucaca was submitted to ANEEL approval.

Since 2017,
Santa Clara Indústria de Pasta e Papel Ltda. (“Santa Clara”) had demonstrated that it had no interest in maintaining
the partnership with COPEL in Dois Saltos Empreendimentos de Geração de Energia Elétrica Ltda. (“Dois
Saltos”), a company that owns the rights to exploit SHP Dois Saltos. In October 2017, Santa Clara made an offer for the entire
stake held by COPEL in Dois Saltos. After engaging an independent consulting firm in January 2018 and determining the fair value
of its stake in Dois Saltos, COPEL presented to Santa Clara its terms for reaching an agreement. In October 2018, Santa Clara adjusted
its proposal, based on the conditions and price requested by COPEL. This proposal was accepted by the Board of Directors of COPEL
in November 2018, and a share purchase agreement was signed by the parties in December 2018. The closing of the transaction, with
the settlement of the amounts provided for in the contract and transfer of quotas, occurred in the first half of 2019.

In 2020, we
plan to bid for concessions to construct and operate new hydroelectric and solar photovoltaic plants or wind farms in power auctions
in the regulated market for new generation projects. We are studying the feasibility of our participation in the hydroelectric,
wind farms and solar photovoltaic projects planned to be listed in the auctions of 2020, or sell the energy in the unregulated
electricity market (Free Market). We will also conduct studies of new hydroelectric power plants. For instance, we have partnered
with BE - Empresa de Estudos Energéticos S.A., Minas PCH S.A. and SILEA Participações Ltda.
to develop studies in the lower region of the Chopim River, which may lead to the development of another four (4) hydroelectric
projects. We are also conducting studies related to future government auctions for wind farms, solar photovoltaic and hydropower
plants, small hydroelectric plants and thermoelectric power plants in which we may eventually participate. Other renewable energy
projects under study or development include the use of municipal solid waste in power generation, and thermosolar energy. For instance,
since 2017, Copel has conducted solarimetric measurements in two solarimetric stations located in areas leased by Copel Brisa Potiguar.
The development of solar energy projects in such areas is still under analysis and the corresponding studies are expected to be
concluded as to be able to submit such projects to energy auctions in 2020.

We are also
developing studies for the implementation / acquisition of projects related to Generation Distribution, Biomass (sugar cane and
forest residues), Biogas and Natural Gas. In addition to energy generation projects, investment opportunities in new energy transmission
assets whose concession will be auctioned by the Federal Government or existing assets that have synergy with the Company's current
portfolio are also being studied.

Transmission
and Distribution

General

Electricity
is transferred from power plants to customers through transmission and distribution systems. Transmission is the bulk transfer
of electricity from generating facilities to the distribution system by means of the Interconnected Transmission System, in tension
greater than or equal to 230 kV. Distribution is the transfer of electricity to Final Customers, in tension lesser or equal to
138 kV.

The following
table sets forth certain information concerning our transmission and distribution grids on the dates presented.

48


Table of Contents




|                                                              | As
        of December 31,
|------------------------------------------------------------- | --------------------------
|                                                              | 2019                      
|Transmission lines (km):                                      |                           
|230 kV and 500 kV                                             | 3,074.6                   
|138 kV                                                        | 13.4                      
|69 kV(1)                                                      | -                         
|Distribution lines (km):                                      |                           
|230 kV(2)                                                     | -                         
|138 kV                                                        | 6,506.7                   
|69 kV                                                         | 755.6                     
|34.5 kV                                                       | 85,734.5                  
|13.8 kV                                                       | 106,955.7                 
|Transformer capacity (MVA):                                   |                           
|Transmission and distribution substations (69 kV – 500 kV)(3) | 23,860.2                  
|Generation (step up) substations                              | 6,691.0                   
|Distribution substations (34.5 kV)                            | 1,545.8                   
|Distribution transformers                                     | 13,800.9                  
|Total energy losses(4) (5)                                    | 7.0%                      



|(1) | As approved by ANEEL in 2008, these 69 kV transmission lines held by Copel Distribuição were transferred to Copel
Geração e Transmissão, since they were part of our transmission business segment.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Due to improvements to registration and control systems used by Copel Distribuição to classify and register its
transmission lines, lines were classified pursuant to its insulation voltage, and not according to its structure and isolate components.
Consequently, all lines previously registered by Copel Distribuição were reclassified and there are no lines classified
as 230 kV anymore.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | This figure includes transformers with primary tensions of 69 kV and 138 kV which belong to Copel Distribuição but
are implemented in 230 kV and 525 kV substations, which belong to Copel Geração e Transmissão.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Percentage of losses on the energy injected in the distributor (technical and non-technical losses on injected energy). Does not
consider losses in the basic network.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | We note that percentages measured until 2016 and reported in previous reports of the Company reflected the amounts of physical
losses (Technical), commercial losses (Non-Technical) and losses on the basic network (allocation of agreements on the gravity
center of the submarket) of Copel Distribuição, as well as the losses related to the allocation of agreements of
Copel GeT. Those percentages were calculated taking into account the total of power purchased and sale agreements entered into
by both Copel Distribuição and Copel GeT. For a better representation and comparison of the percentage of losses,
we considered the percentage obtained by dividing the total amount of technical and non-technical losses by the energy injected
into the network of Copel Distribuição. This percentage may be compared to other companies and has a more accurate
physical meaning as it utilizes the database of measured data and not information taken from agreements of the period being analyzed.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Transmission

Our transmission
system consists of all our assets of 230 kV and greater and a small portion of our 69 kV and 138 kV assets, which are used to transmit
the electricity we generate and the energy we receive from other sources. In addition to using our transmission lines to provide
energy to customers in the State of Paraná, we also transmit energy through the Interconnected Transmission System. Two
companies owned by the federal government, Companhia de Geração e Transmissão de Energia Elétrica do
Sul do Brasil – CGT Eletrosul and Furnas, also maintain significant transmission systems in the State of Paraná. Furnas
is responsible for the transmission of electricity from Itaipu, while CGT Eletrosul’s transmission system links the states
in the south of Brazil. Copel, like all other companies that own transmission facilities, is required to allow third party access
to its transmission facilities in exchange for compensation at a level set by ANEEL.

Currently,
we carry out the operation and maintenance of 3,382 km of transmission lines, forty one (41) substations in the State of Paraná
and two (2) substation in the State of São Paulo. In addition, we have partnerships with other companies to operate 4,028
km of transmission lines and seven (7) substations through special purpose companies (SPCs).

The table below
sets forth information regarding our transmission assets in operation:



49


Table of Contents




|Subsidiary
        / SPC      | Transmission
        Lines                                                                                         | TL Extension
        (km)5 | Number
        of Substations | Concession
        Expiration Date | Our
        Ownership | APR
        1
        (R$million)
|----------------------------- | ------------------------------------------------------------------------------------------------------------------ | -------------------------- | ----------------------------- | ---------------------------------- | --------------------- | ---------------------------------
|COPEL GeT                     | Main Transmission Concession(1)                                                                                    | 2,026                      | 34                            | December, 2042                     | 100.0%                | 469.5                            
|COPEL GeT                     | TL Bateias - Jaguariaiva                                                                                           | 137                        | -                             | August, 2031                       | 100.0%                | 10.9                             
|COPEL GeT                     | TL Bateias - Pilarzinho                                                                                            | 32                         | -                             | March, 2038                        | 100.0%                | 1.1                              
|COPEL GeT                     | TL Foz - Cascavel Oeste                                                                                            | 116                        | -                             | November, 2039                     | 100.0%                | 12.5                             
|COPEL GeT                     | Cerquilho III Substation                                                                                           | -                          | 1                             | October, 2040                      | 100.0%                | 5.1                              
|COPEL GeT                     | TL Londrina –
        Figueira
        Foz do Chopim –
        Salto Osório                                        | 102                        | -                             | August, 2042                       | 100.0%                | 6.1                              
|COPEL GeT                     | TL Assis – Paraguaçu
        Paulista
        Paraguaçu Paulista
        II Substation                             | 83                         | 1                             | February, 2043                     | 100.0%                | 8.2                              
|COPEL GeT                     | Curitiba Norte Substation
        TL Bateias –
        Curitiba Norte                                              | 31                         | 1                             | January, 2044                      | 100.0%                | 9.9                              
|COPEL GeT                     | Realeza Sul Substation
        TL Foz do Chopim- Realeza
        Sul                                               | 52                         | 1                             | September, 2044                    | 100.0%                | 7.8                              
|COPEL GeT                     | TL Assis – Londrina                                                                                                | 122                        | -                             | September, 2044                    | 100.0%                | 20.4                             
|COPEL GeT                     | TL Araraquara II – Taubaté                                                                                         | 334                        | -                             | October, 2040                      | 100.0%                | 31.4                             
|COPEL GeT                     | TL Baixo Iguaçu
        – Realeza
        TL Curitiba Centro -
        Uberaba                                     | 46                         | 3                             | April, 2046                        | 100%                  | 79.0                             
|Uirapuru(Copel GeT – 100%)(2) | TL Ivaiporã - Londrina                                                                                             | 120                        | -                             | March, 2035                        | 100%                  | 32.4                             
|Costa Oeste(Copel GeT – 100%) | LT Cascavel Oeste - Cascavel Norte
TL Cascavel Norte -  Umuarama Sul                                               | 152                        | 1                             | January, 2042                      | 100%                  | 12.5                             
|Marumbi(Copel GeT – 100%)     | TL Curitiba – Curitiba Leste                                                                                       | 29                         | 1                             | May, 2042                          | 100%                  | 19.5                             
|Subtotal Copel GeT            | 3,382                                                                                                              | 43                         |                               |                                    | 726.3                
|Caiuá Transmissora            | TL Guaíra - Umuarama Sul 
TL Cascavel Norte - Cascavel Oeste
Santa Quitéria Substation / Cascavel Norte Substation | 142                        | 2                             | May, 2042                          | 49.0%(3)              | 11.6                             
|Integração Maranhense         | LT Açailandia-Miranda II                                                                                           | 365                        | -                             | May, 2042                          | 49.0%(3)              | 17.1                             
|Matrinchã                     | TL Paranaíta - Ribeirãozinho                                                                                       | 1,005                      | 3                             | May, 2042                          | 49.0%(3)              | 91.52                            
|Guaraciaba                    | TL Ribeirãozinho - Marimbondo                                                                                      | 600                        | 1                             | May, 2042                          | 49.0%(3)              | 49.5                             
|Paranaíba                     | TL Barreiras II - Pirapora II                                                                                      | 953                        | -                             | May, 2043                          | 24.5%(3)              | 33.5                             
|Cantareira                    | TL Estreito – Fernão Dias                                                                                          | 342                        | -                             | September, 2044                    | 49.0%(3)              | 50.1                             
|Mata de Santa Genebra(4)      | TL Araraquara II - Atatiba 
TL Bateias - Atatiba                                                                   | 621                        | 1                             |                                    | 50.1%(3)              | 80.8                             
|Subtotal SPCs                 |                                                                                                                    | 4,028                      | 7                             |                                    |                       | 334.1                            
|Total                         |                                                                                                                    | 7,410                      | 50                            |                                    |                       | 1,060.4                          



|(1) | Our main transmission concessions encompasses several transmission lines.
|--- | -------------------------------------------------------------------------

|(2) | In March 2019, Copel GeT signed a purchase and sale agreement with Centrais Elétricas Brasileiras SA and Fundação
Eletrosul de Previdência e Assistencial Social - Elos to transfer 100% of shares issued by SPE Uirapuru Transmissora de
Energia S.A.. In June, 2019 Copel GeT took over the stake control of the company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Refers to the equity interest held by Copel Geração e Transmissão.
|--- | ------------------------------------------------------------------

|(4) | Refers to transmission lines that are already in commercial operation, representing 66.2% of the project's total RAP
|--- | --------------------------------------------------------------------------------------------------------------------

|(5) | Considers double circuits as a single extension.
|--- | ------------------------------------------------

50


Table of Contents


Expansion and Maintenance of Transmission Facilities

The construction
of new transmission facilities of 230 kV and higher must be awarded in a bidding process or otherwise authorized by ANEEL. We are
permitted by ANEEL to make minor improvements to some of the existing 230 kV and 500 kV facilities.

In November 2013, SPC Mata de Santa
Genebra Transmissora, a strategic partnership between Copel (50.1%) and Furnas (49.9%), won the right to build and operate 847
km of transmission lines and three substations in the States of Paraná and São Paulo. The construction schedule of
the Mata de Santa Genebra project was affected by successive vandalism events, which resulted in the collapse of towers and theft
of aluminum cables in transmission lines already installed and commissioned, in different sections of the project. On February
25, 2019, all the stages planned for the test run period of the Santa Bárbara d’Oeste substation (300MVar/-300MVar
static compensator), belonging to the SPE Mata de Santa Genebra, were concluded, allowing the operation of this substation under
the commercial operation regime. The Annual Permitted Revenue (APR) related to the Santa Bárbara d’Oeste substation
is R$10.8 million. On March 28, 2020 the transmission line 500 kV Araraquara 2 – Itatiba (207 Km of extension), the transmission
line 500kV Itatiba –Bateias (414 km of extension) and the Itatiba substation (300 MVar) started the commercial operations.
Thus, together with Santa Bárbara d’Oeste substation, the SPC Mata de Santa Genebra is authorized to receive an APR
of R$161.3 million, approximately 66.2% of the total APR. The transmission line 500kV Araraquara 2 – Fernão Dias and
the Fernão Dias SE are scheduled to become fully operational by May, 2020. The project’s total expected APR is R$243.5
million, of which R$122.0 million related to COPEL's stake, and full receipt is subject to the startup of the other stages of the
project.

In November 2015,
Copel GeT won ANEEL’s public auction No. 005/2015 for the construction and operation of 188 km of transmission lines in the
States of Paraná and Santa Catarina, and three (3) substations in the State of Paraná, with a total capacity of 900
MVA. With an APR of R$116.9 million, the corresponding concession agreement was signed in April 2016, and, except for the transmission
line Blumenau – Curitiba Leste, which is still under construction and scheduled to become operational in March 2021, the
remaining facilities are already in commercial operation.

The
table below summarizes information regarding our transmission assets currently under construction:

|Subsidiary
        / SPC | Transmission
        Lines | State   | Km* | Number
        of Substations | Our
        Ownership | Beginning
        of Operation (expected)
|------------------------ | -------------------------- | ------- | --- | ----------------------------- | --------------------- | -----------------------------------------
|COPEL GeT                | TL Curitiba Leste-Blumenau | PR/SC   | 142 | 3                             | 100.0%                | March, 2021                              
|Subtotal Copel GeT       |                            | 142     | 3   |                               |                      
|Mata de Santa Genebra    | TL Araraquara II - Bateias | SP / PR | 264 | 1                             | 50.1%                 | May, 2020                                
|Subtotal SPC             |                            |         | 264 | 1                             |                       |                                          
|Total                    |                            |         | 406 | 4                             |                       |                                          
|                         |                            |         |     |                               |                       |                                          

* Proportional to the section under
construction.

Distribution

Our distribution
system consists of a widespread network of overhead lines and substations with voltages up to 138 kV assets. Higher Voltage electricity
is supplied to bigger industrial and commercial customers and lower voltage electricity is supplied to residential, small industrial,
and commercial customers in addition to other customers. As of December 31, 2019, we provided electricity in a geographic area
encompassing approximately 97% of the State of Paraná and served 4.7 million customers.

51


Table of Contents


Our distribution
grid includes 199,953 km of distribution lines, 440,691 distribution transformers and 227 distribution substations of 34.5 kV,
36 substations of 69 kV and 111 substations of 138 kV. During 2019, 75,436 new captive customers were connected to our network,
including customers connected through the rural and urban electrification programs. We are continuing to implement compact grid
design distribution lines in urban areas with large concentration of trees in the vicinity of the distribution grid.

We have two
(2) captive customers that are directly supplied with energy at a high voltage (69 kV and above) through connections to our distribution
lines. These customers accounted for approximately 0.7% of the total volume of electricity sold by Copel in 2019.

We are also
responsible for expanding the 138 kV and 69 kV distribution grid within our concession area to meet any future demand growth.

On October
16, 2019 Copel Distribuição launched a program to modernize its distribution grid called “Transformation Program”
(Programa Transformação). The Transformation Program is comprised of three projects: “Total Reliability”
(Confiabilidade Total), “Three-phase Paraná” (Paraná Trifásico) and “Smart Grid Copel”.
The goal is to improve infrastructure, particularly in rural areas, in order to enhance quality of energy supply and reduce supply
restoration period in case of power outages. With investments of up to R$2.9 billion until 2025, which shall compose the Regulatory
Remuneration Base, the Transformation Program involves the construction of approximately twenty-five 25,000 kilometers of power
grids, 15,000 new automated power connections and the setting up of smart grid technology in the State of Paraná.

Performance of the Distribution
System

Total
losses are commonly divided into a technical and non-technical component. Technical losses are inherent to the transportation of
electricity and consist mainly of power dissipation in the line network. Non-technical (or commercial) losses are caused by actions
external to the power system (for instance, electricity theft). Since total losses are comprised of both technical and non-technical
parcels, the latter is easily calculated as the difference between total losses and the estimated technical losses inherent to
the system.

Total
losses in our distribution system are segmented between (i) losses in the basic network (tension equal to or greater than 230kV),
which are external to our distribution grid and have a technical cause, and (ii) losses in the distribution network (internal to
our distribution grid), which are usually caused by both technical and non-technical reasons.

Losses
in the basic network are calculated monthly by the CCEE as the difference between the total generation and the energy effectively
delivered to the distribution networks. The total losses from our distribution grid are calculated as the difference between the
energy allocated to the system and the energy supplied to the customers.

Our
total energy distribution losses (including transmission system, technical and commercial losses) totaled 8.4% of the total energy
amount available in 2019, being (i) 1.4% related to losses in the basic network, (ii) 6.0% of technical losses and (iii) 1.0% of
non-technical losses.

ANEEL
grants the transfer of all energy losses to the final consumers when the real losses are less than regulatory losses. The calculation
is made within the regulatory period, that is different from a civil year, and thereby we will know the result just in the next
tariff adjustment, in June 2020. But our simulation indicates that in the civil year, from January through December 2020, we will
have all losses transferred to the final consumers.

Furthermore,
ANEEL requires distributors to observe certain standards for “energy supply continuity”, namely (i) duration of outages
per customer per year or DEC – Duração Equivalente de Interrupção por Unidade Consumidora
and (ii) frequency of outages per customer per year or FEC – Frequência Equivalente de Interrupção
por Unidade Consumidora. Information regarding the duration and frequency of outages for our customers is set forth in the
following chart for the years indicated.

52


Table of Contents




|                                                                           |         
|-------------------------------------------------------------------------- | --------
|Quality
        of supply indicator                                        | 2019    
|DEC – Duration of outages
        per customer per year
        (in hours) | 09h07min
|FEC – Frequency of outages per customer per year (number of outages)       | 6.02    



We
comply with the quality indicators defined by ANEEL for 2019, which penalizes power outages in excess of an average number of hours
per customer, in each case calculated on an annual basis. These limits vary depending on the geographic region, and the average
limit established by ANEEL for our distribution company was 9 hours and 07 minutes of outages per customer per year, and a total
of 6.22 outages per customer per year. Failure to comply with these predetermined standards with a Final Customer results in a
reduction of the amount we can charge such Final Customer in future periods.

In addition,
quality target indicators are taken into consideration by ANEEL during distribution concession renewal proceedings, and also influence
ANEEL’s calculation of our tariff adjustments. For more information, see “Distribution Concessions” and “Distribution
Tariffs”.

Purchases for the captive market

The following
table contains information concerning volume, cost and average tariff for the main sources of the electricity we purchased for
the captive market in the last three years.

|Source                           | 2019   | 2018    | 2017   
|-------------------------------- | ------ | ------- | -------
|Itaipu                           |        |         |        
|Volume (GWh)                     | 5,533  | 5,726   | 5,934  
|Cost (R$millions)                | 1,317  | 1,272.2 | 1,118.0
|Average tariff (R$/MWh)          | 238    | 222.18  | 188.41 
|Angra                            |        |         |        
|Volume (GWh)                     | 979    | 1,009   | 1,023  
|Cost (R$millions)                | 248    | 250.3   | 231.7  
|Average tariff (R$/MWh)          | 253    | 248.07  | 226.49 
|CCGF                             |        |         |        
|Volume (GWh)                     | 6,274  | 6,520   | 7,271  
|Cost (R$millions)                | 642    | 593.0   | 447.5  
|Average tariff (R$/MWh)          | 102.32 | 90.95   | 61.55  
|Auctions in the regulated market |        |         |        
|Volume (GWh)(1)                  | 12,515 | 10,783  | 9,860  
|Cost (R$millions)(2)             | 2,257  | 2,080.8 | 2,014.8
|Average tariff (R$/MWh)          | 180.34 | 192.97  | 204.34 



|(1) | These numbers do not include assignments related to MCSD-EN and MVE.
|--- | --------------------------------------------------------------------

|(2) | These numbers do not include short-term energy purchased through the CCEE.
|--- | --------------------------------------------------------------------------

53


Table of Contents


Itaipu

We purchased
5,533 GWh of electricity from Itaipu in 2019, which constituted 11.3% of our total available electricity in 2019 and 21.1% of Copel
Distribuição’s total available electricity in 2019. Our purchases represented approximately 9.2% of Itaipu’s
total production. Distribution companies operating under concessions in the midwest, south and southeast regions of Brazil are
required by law to purchase Brazil’s portion of the energy generated by Itaipu in a proportion that correlates with the volume
of electricity that they provide to customers. The rates at which these companies are required to purchase Itaipu’s energy
are fixed to cover Itaipu’s operating expenses and payments of principal and interest on Itaipu’s U.S. dollar-denominated
borrowings, as well as the cost of transmitting the power to their concession areas. These rates are denominated in U.S. dollars,
and have been set for 2020 at US$28.41 per kW per month.

In 2019, we
paid an average tariff of R$237.94/MWh for energy from Itaipu, compared to R$227.03/MWh in 2018. These figures do not include the
transmission tariff that distribution companies must pay for the transmission of energy from Itaipu.

ANGRA

Because Eletronuclear renewed
the generation concession of Angra under the 2013 Concession Renewal Law, the energy generated by Angra is no longer sold in auctions
in the regulated market. Rather, under the 2013 Concession Renewal Law, this energy is sold to distributors in accordance with
the quota system established by said law. For more information, see “Item 4. Information on the Company—The Brazilian
Electric Power Industry”. As a result, Copel Distribuição was legally required to purchase 979 GWh from Angra
in 2019, 1,009 GWh from Angra in 2018 and 1,023 GWh in 2017.

Assured
Power Quota Contract – CCGF

Under
the 2013 Concession Renewal Law, certain generation concessionaires renewed their concession contracts, and therefore these concessionaires
no longer sell the energy produced by these generation facilities at auctions in the regulated market. Rather, this energy is sold
to distribution companies in accordance with the quota system established by the 2013 Concession Renewal Law. For more information,
see “Item 4. Information on the Company—The Brazilian Electric Power Industry”. Copel Distribuição
is obligated to purchase energy from these generation concessionaires that have renewed generation concessions under this quota
system. Copel Distribução was legally required to purchase 6,274 GWh in CCGF contracts in 2019, 6,520 GWh in CCGF
contracts in 2018 and 7,271 GWh in CCGF contracts in 2017.

Auctions
in the Regulated Market

In 2019, we
purchased 12,514 GWh of thermoelectric and hydroelectric energy through auctions in the regulated market. This energy represents
48% of the total electricity purchased by the Copel Distribuição. For more information on the regulated market and
the Free Market, see “Item 4. Information on the Company—The Brazilian Electric Power Industry”.

Sales to Captive Customers

During 2019,
we supplied approximately 98.6% of the energy distributed directly to Captive Customers in the State of Paraná. Our concession
area includes nearly 4.7 million customers located in the State of Paraná and in one municipality in the State of Santa
Catarina, located in the south of the State of Paraná. During 2019, the total power consumption of our Captive Customers
was 19,784 GWh, a 1.0% increase as compared to 19,594 GWh during 2018.

54


Table of Contents




|                                | Year ended
        December 31,
|------------------------------- | -------------------------------
|Categories
        of purchaser | 2019                           
|                                | (GWh)                          
|Industrial customers            | 2,648                          
|Residential                     | 7,499                          
|Commercial                      | 4,730                          
|Rural                           | 2,361                          
|Other(1)                        | 2,546                          
|Total(2)                        | 19,784                         



|(1) | Includes public services such as street lighting, electricity supply for municipalities and other governmental agencies, as well
as our own consumption.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Total GWh does not include our energy losses.
|--- | ---------------------------------------------



Sales
to Free Customers



We operate
in the Free Energy Contracting Environment (“ACL”) through our wholly owned subsidiaries Copel Geração
e Transmissão and Copel Comercialização. As of December 31, 2019, we had 425 Free Customers (of which 375
were customers of our energy trading company and 50 of Copel GeT), representing approximately 5.7% of our consolidated operating
revenue and approximately 13.8% of the total quantity of electricity sold by us. During 2019, the total power consumption of our
Free Customers was 6,860 GWh, a 13.3% increase as compared to 6,055 GWh during 2018.

|                                | Year ended
        December 31,
|------------------------------- | -------------------------------
|Categories
        of purchaser | 2019                           
|                                | (GWh)                          
|Industrial customers            | 6,352                          
|Commercial                      | 508                            
|Total                           | 6,860                          
|                                |                                



The
following table sets forth the number of our Final Customers, considering both Captive and Free Customers, in each category as
of December 31, 2019.

|Category    | Number
        of Final Customers
|----------- | ---------------------------------
|Industrial  | 72.328                           
|Residential | 3,825,989                        
|Commercial  | 406,856                          
|Rural       | 349,914                          
|Other(1)    | 58,578                           
|Total       | 4,713,665                        



|(1) | Includes street lighting, as well as electricity for municipalities and other governmental agencies, public services and own consumption.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------



Industrial
and commercial customers accounted for approximately 12.2% and 20.8%, respectively, of our total revenues from sales to Final Customers
during 2019. In 2019, 31.8% of our total revenues from energy sales were from sales to residential customers.

Tariffs

55


Table of Contents


Retail Tariffs.We classify our customers in two groups (“Group A Customers” and “Group B Customers”), based on the
voltage level at which electricity is supplied to them and on whether they are considered as industrial, commercial, residential
or rural customers. Each customer falls within a certain tariff level defined by law and based on the customer’s classification,
although some flexibility is available according to the nature of each customer’s demand. Under Brazilian regulation, low
voltage customers such as residential customers (other than Low-income Residential Customers, as defined as follows) pay the highest
tariff rates, followed by 13.8 kV and 34.5 kV voltage customers (usually commercial customers), and 69 kV and 138 kV voltage customers
(usually industrial customers).

Group A Customers
receive electricity at 2.3 kV or higher and the tariffs applied to them are based on the actual voltage level at which energy is
supplied and the time of day the energy is supplied. Tariffs are comprised of two components: a “capacity charge” and
an “energy charge”. The capacity charge, expressed in reaisper kW, is based on the higher of (i) contracted
firm capacity and (ii) power capacity actually used. The energy charge, expressed in reaisper MWh, is based on the amount
of electricity actually consumed as evidenced by our metering.

Group B Customers
receive electricity at less than 2.3 kV, and the tariffs applied to them are comprised solely of an energy charge and are based
on the classification of the customer.

ANEEL restates
our tariffs annually, usually in June. For more information about the distribution tariff adjustments that have been made by ANEEL
in recent years, see “Item 5. Operating and Financial Review and Prospects—Overview—Rates and Prices”.

The following
table sets forth the average tariffs for each category of final customer in effect in 2019, 2018 and 2017.

|Tariffs             | 2019     | 2018   | 2017  
|------------------- | -------- | ------ | ------
|                    | (R$/MWh)
|Industrial          | 488.78   | 767.87 | 389.04
|Residential         | 504.36   | 505.08 | 425.26
|Commercial          | 574.41   | 527.31 | 419.27
|Rural               | 466.9    | 345.80 | 286.96
|Other customers     | 364.49   | 375.99 | 311.37
|All Final Customers | 534.32   | 514.94 | 387.90



Low-income
Residential Customers. Under Brazilian law, we are required to provide low level rates to certain low-income residential customers
(“Low-income Residential Customers”). In December 2019, we served approximately 292,173 low-income residential customers.
For servicing these customers, in 2019 we received an approximately R$70.3 million grant from the Brazilian Federal Government,
which was approved by ANEEL.

The following
table sets forth the current minimum discount rates approved by ANEEL for each category of Low-income Residential Customer.

|Consumption                   | Discount
        from base tariff
|----------------------------- | ---------------------------------
|Up to 30 kWh per month        | 65%                              
|From 31 to 100 kWh per month  | 40%                              
|From 101 to 220 kWh per month | 10%                              



Special
Customers.A customer of our distribution business that consumes at least 500 kW (a “Special Customer”) may choose
its energy supplier if that supplier derives its energy from alternative sources, such as small hydroelectric plants, wind plants
or biomass plants. A Special Customer that chooses to purchase energy from a supplier other than Copel Geração e
Transmissão continues to use our distribution grid and pay our distribution tariff. However, as an incentive for Special
Customers to purchase from alternative sources, we are

56


Table of Contents


required to reduce the tariff paid by Special
Customers by 50%. This discount is subsidized by the Brazilian federal government, and therefore does not impact the revenues of
our distribution business.

Transmission
Tariffs. A transmission concessionaire is entitled to annual revenues based on the transmission network it owns and operates.
These revenues are annually readjusted according to criteria stipulated in the concession contract. We are directly a party to
twelve (12) transmission concession contracts, eleven (11) of which are in the operational stage and one (1) of which includes
a transmission line that is still under construction. Not all of the transmission concession contracts employ the same revenue
model. 1.5% of our transmission revenues are updated on an annual basis by the IGP-M and the other 98.5% are subject to the tariff
review process.

The first periodic
revision related to our main transmission concession scheduled for 2005 was only carried out in 2007, at which point ANEEL reduced
the tariffs by 15.08%. This adjustment was applied retroactively to July 2005, and was passed on to our final customers until June
2009. In addition, in July 2010 pursuant to a second periodic revision of our principal concession, ANEEL granted provisional approval
of a reduction in our transmission tariff by 22.88%, applied to the revenues of new installations in the Interconnected Transmission
System, and applied retroactively from July 1, 2009 onward. In June 2011, ANEEL reviewed the figures of the second periodic revision
and reduced the annual revenues by 19.94%. The remainder of our annual revenues was subject to adjustment by IGP-M or IPCA, as
applicable.

By late 2012,
Copel decided to anticipate the extension of its main transmission concession agreement (corresponding to 78% of the Company’s
transmission lines then in operation) that would expire in 2015, pursuant to the new rules of the 2013 Concession Renewal Law.
In December 2012, Copel executed the Third Addendum to the Concession Agreement 060/2001, extending this transmission concession
agreement until December 31, 2042. In order to adjust these assets’ annual permitted revenue to the new rules of 2013 Concession
Renewal Law, ANEEL reduced the transmission tariffs we charged by 61.9%.

Of
all our transmission concessions in operational stage, our main transmission concession (which involves our main transmission facilities)
accounted for about 71% of our gross transmission revenues in 2019. In addition, we have ten (10) concession agreements for transmission
lines and substations in operation and one (1) partially in operation, which correspond to an aggregate of 29% of our transmission
revenues. The amount of revenues we are entitled to receive pursuant to one (1) of these contracts is updated on an annual basis
by the IGP-M and is not subject to the tariff review process, but, pursuant to the terms set forth in this agreement, our revenues
were reduced by 50% starting in June 2018. Other ten (10) agreements revenues are subject to the tariff review process and adjustments
by the IPCA.

In
relation to our main concession agreement, on April 22, 2016, Ordinance No. 120/2016 of the Ministry of Mines and Energy determined
that the amounts ratified by ANEEL related to the non-depreciated transmission assets existing on May 31, 2000 (Existing Basic
Network System “RBSE”) should be incorporated to the Regulatory Remuneration Base, and that their cost of capital should
be added to APR. The Ordinance also determined that the cost of capital would be composed of compensation and depreciation installments,
plus related taxes, and recognized as of the 2017 tariff revision process, with adjustments and revisions in accordance with contractual
conditions.

Also
pursuant to the above mentioned Ordinance, the cost of capital not incorporated between the concessions’ extensions and the
2017 tariff revision process should be restated at the real cost of own capital of the transmission segment defined by ANEEL (10.4%)
and, after the tariff revision process, it should be remunerated at the Weighted Average Cost of Capital (WACC) of 6.6%, also defined
by that agency.

On
May 9, 2017, ANEEL approved the result of the inspection of the appraisal report of the transmission assets existing on May 31,
2000 (RBSE and Other Transmission Facilities - RPC) related to our main transmission concession agreement. The Agency recognized
the amount of R$667.6 million as the net value of the assets for the purposes of indemnification as of December 31, 2012. As of
December 31, 2017, the net value of those assets for the purposes of indemnification amounted to R$1,418.4 million.

57


Table of Contents


On
June 27, 2017, ANEEL approved the Annual Permitted Revenue (Receita Anual Permitida, or
APR) of the transmission assets of Copel GeT for the 2017/2018 cycle, including the commencement of receipt of the RBSE indemnification
of our main transmission concession agreement.

In
2017(i) our main transmission concession agreement was adjusted by the IPCA and by the portion related the commencement of receipt
of the RBSE indemnification (average increase of 151.3%) (ii) one of our transmission concession agreements was adjusted by the
IPCA and improvements to the system were approved by ANEEL (average increase of 3.7%), (iii) six transmission concession agreements
were adjusted by the IPCA (3.6%), (iv) one transmission concession agreement was adjusted by the IGP-M (1.6%), and (v) one transmission
agreement became operational in August 2017, adding R$18.9 million of annual permitted revenues. As a result, the annual permitted
revenues for the 2017/2018 cycle for our transmission assets reflected an increase of 121.2% over our annual permitted revenues
for the 2016/2017 cycle.

In June 2018,
ANEEL approved the APR for the 2018/2019 cycle, considering (i) an adjustment of relevant amounts by the IGP-M and IPCA indexes,
and (ii) the expansion of our transmission system with strengthening works and revenues from other works classified as improvement
measures.

Compared to our
total APR for the 2017/2018 cycle, the APR of our main concession for the 2018/2019 cycle was reduced by 8.1%, as a result of the
correction of a prior calculation made by ANEEL, which take into account certain financial and economic portions of unamortized
and unrepaired assets related to the RBSE when determining the assets of the Regulatory Remuneration Base in the prior cycle.

The
APR of concession No. 075/2001 was reduced by approximately 30.5%, as a result of a 50% reduction of the APR starting at the 16th
anniversary of commercial operation, which occurred during the 2018/2019 cycle. Two of our concession agreements (022/2012 and
002/2013) were subject to a periodic review, which resulted in a lower APR in connection with increasing revenues related to strengthening
works.

In
June 2019, ANEEL approved the APR for the 2019/2020 cycle, considering (i) an adjustment of relevant amounts by the IGP-M and IPCA
xes, and (ii) the expansion of our transmission system with strengthening works and revenues from other works classified as improvement
measures.

The
table below shows our APR (R$ million) for the last four cycles of transmission lines over which we hold a 100% ownership:

|Contract | Transmission Line /
        Substation                       | Jul.
        2019 Jun.2020 | Jul. 2018
        Jun. 2019 | Jul. 2017
        Jun. 2018 | Jul.2016
        Jun.2017
|-------- | ------------------------------------------------------------ | -------------------------- | --------------------------- | --------------------------- | -------------------------
|         |                                                              |                            | APR (R$ million)           
|060/2001 | Main Transmission Concession(1)                              | 469.5                      | 450.4                       | 482.7                       | 192.1                    
|075/2001 | Bateias – Jaguariaiva                                        | 10.9                       | 13.5                        | 19.4                        | 19.1                     
|006/2008 | Bateias – Pilarzinho                                         | 1.1                        | 1.1                         | 1.0                         | 1.0                      
|027/2009 | Foz do Iguaçu - Cascavel Oeste                               | 12.5                       | 11.9                        | 11.6                        | 11.2                     
|015/2010 | Cerquilho III                                                | 5.1                        | 4.8                         | 4.7                         | 4.5                      
|022/2012 | Foz do Chopim – Salto Osório                                 | 6.1                        | 5.8                         | 5.8                         | 5.6                      
|002/2013 | Assis-Paraguaçu Paulista II
        SE Paraguaçu Paulista II | 8.2                        | 7.9                         | 7.7                         | 7.7                      
|005/2014 | Bateias – Curitiba Norte                                     | 9.9                        | 9.5                         | 8.7                         | 8.4                      
|021/2014 | Foz do Chopim - Realeza(2)                                   | 7.8                        | 7.5                         | 7.3                         | 7.1                      
|022/2014 | Assis – Londrina(3)                                          | 20.4                       | 19.5                        | 18.9                        | -                        
|010/2010 | Araraquara 2 – Taubaté(4)                                    | 31.4                       | 30.0                        | -                           | -                        
|006/2016 | Baixo Iguaçu – Realeza
        Curitiba Centro - Uberaba     | 79.0                       | -                           | -                           | -                        
|         |                                                              |                            |                             |                             |                          

58


Table of Contents




|Total |  | 661.9 | 561.9 | 567.8 | 256.7
|----- |  | ----- | ----- | ----- | -----



|(1) | Our main transmission concessions encompasse several transmission lines.
|--- | ------------------------------------------------------------------------

|(2) | This transmission line became operational in January 2017.
|--- | ----------------------------------------------------------

|(3) | This transmission line became operational in August 2017.
|--- | ---------------------------------------------------------

|(4) | This transmission line became operational in July 2018.
|--- | -------------------------------------------------------

Other Businesses

Telecommunications

Copel
Telecomunicações S.A. Pursuant to an authorization from the Brazilian National Telecommunication Agency, Agência
Nacional de Telecomunicações(“ANATEL”), we provide telecommunication services within the States
of Paraná and Santa Catarina. We have been offering these services since August 1998 through the use of our fiber optics
network (totaling 35.1 thousand km of fiber optic cables by the end of 2019). In addition we have been involved in an educational
project aimed at providing broadband internet access to public elementary and middle schools in the State of Paraná.

COPEL currently
serves 399 municipalities in the State of Paraná. All of these municipalities are connected to COPEL’s optical backbone.

In addition
to the high transmission capacity in its backbone, Copel Telecom serves 85 municipalities in the State of Paraná, with GPON
(Gigabit-Capable Passive Optical Networks) access technology, providing several network services with symmetry rates, in different
types of FTTx services.

We provide
services to most of the major Brazilian telecommunication companies that operate in the State of Paraná. In total, we have
corporate clients that include supermarkets, universities, banks, internet service providers and television networks in addition
to retail clients. We also provide a number of different telecommunication services to our subsidiaries.

On
April 17, 2019, Copel's Board of Directors resolved, unanimously, that we should continue to analyze alternatives for a potential
transfer of control of Copel Telecomunicações S.A.

Sercomtel.We own 45% of the stock of Sercomtel Telecomunicações S.A. (“Sercomtel”). Sercomtel holds a concession
to provide fixed telephony services and an authorization to provide mobile services in the municipalities of Londrina and Tamarana,
located in the State of Paraná. In addition, Sercomtel has two (2) other authorizations from ANATEL that allow it to provide
fixed telephony and broadband internet services in all other municipalities of the State of Paraná. Currently, Sercomtel
operates with its own network in fifteen (15) municipalities of the State of Paraná, providing voice services and fixed
broadband. Pursuant to a commercial agreement between COPEL and Sercomtel in force since March 2012, Sercomtel can provide voice
services over COPEL’s network in one hundred and eighty three (183) cities within the State of Paraná, including Curitiba.
..

As of December
31, 2019, Sercomtel provided a total of 232.2 thousand accesses in fixed telephone services, 53.8 thousand mobile accesses and
89 thousand fixed broadband accesses in operation.

In
addition to the telecommunications business, Sercomtel S.A. – Telecomunicações currently holds the following
equity interest: (i) 100% of the capital stock of Sercomtel Participações, a company whose purpose is to provide
added value services, design, deploy and maintain internet service providers, operate a service center for users of telecommunications
services, offer integrated IT solutions, among others activities; and (ii) 18.92% (common shares) and 18.73% (preferred shares)
of the capital stock of Companhia de Tecnologia e Desenvolvimento S.A., a mixed capital company incorporated from the transformation
of Sercomtel Contact Center S.A. in accordance with Law No. 12,912 of September 12, 2019, approved and sanctioned by the City Council
and the Municipality of Londrina, respectively. In addition, Sercomtel Participações S.A. holds 10% (common shares)
of the capital stock of Sercomtel Iluminação S.A., a company

59


Table of Contents


that provides public lighting
maintenance services in the city of Londrina, State of Paraná. In September 2017, pursuant to Decision (Acórdão)
no. 366, ANATEL determined that Sercomtel was not in compliance with certain financial indicators set forth by the agency in connection
with the concessions granted to Sercomtel and required for the company’s operations to continue. As a consequence, ANATEL
brought an administrative proceeding against Sercomtel to assess whether the concession and the authorizations granted to this
company should be terminated. In March 2019, ANATEL decided to suspend the above mentioned proceeding for a 120-day period, so
that Sercomtel could present to the agency alternative plans for meeting the relevant regulatory indicators. Even though this proceeding
has not been concluded yet, ANATEL published a bidding notice proposal in September 2019 with respect to the licenses held by Sercomtel.
ANATEL’s proposal is subject to review by the Federal Audit Court (Tribunal de Contas da União). If a bidding
process is indeed carried out by ANATEL, Sercomtel’s licenses can be forfeited and terminated.

In
June 2019, the municipal legislature of Londrina approved the sale of the stake held by the Londrina City Hall as the controlling
shareholder of Sercomtel (Municipal Law No 12.871, dated June 12, 2019). In November 2019, the City Hall published the bidding
notice for the privatization process of Sercomtel, which provides for the assignment of the City Hall’s preemptive right
to subscribe shares in a future capital increase of Sercomtel. This process can result in the dilution of the stake held by the
City Hall and Copel in Sercomtel. However, a bid for the sale of such preemptive rights was scheduled for February 5, 2020, and
no participants attended. We understand that alternative procedures are under consideration by Sercomtel’s controlling shareholder.

Sercomtel has had losses in previous
years and is facing financial difficulties for carrying out its operations, so it may need additional financial contributions from
its shareholders. In view of the accumulated losses and uncertainties regarding its operational feasibility, we carried out in
2013 the write-off of this investment in our financial statements.

Gas

Gas Distribution

We
are engaged in the distribution of natural gas through Companhia Paranaense de Gás (“Compagas”), the company
that holds the exclusive rights to supply piped gas in the State of Paraná. Compagas operates the gas distribution grid
in the State of Paraná under a concession agreement with a term of 30 years, with expiry on July 6, 2024. Such date has
always been announced and considered for assessment of the balances of the prior-year financial statements. The concession agreement
may be extended for an equal 30-year period upon request of the concessionaire.

On
December 7, 2017, however, the State of Paraná published Supplementary Law 205, introducing a new interpretation of the
expiry of the concession, which should have occurred on January 20, 2019. Notwithstanding the new expiration date provided by the
state law, this concession has not been subject to neither an extension nor a new bidding process. Pursuant to applicable law,
Compagas, as the current concessionaire, may continue to operate the concession until a new concessionaire is appointed.

In
addition, the management of Compagas, we and other shareholders are challenging the effects of the aforesaid law, understanding
that it conflicts with the provisions of the concession agreement currently in force. Compagas filed a lawsuit challenging the
anticipating of the expiration date of such concession and was granted with a provisional remedy on October 30, 2018. A final decision
on this lawsuit is still pending. However, such discussion has not yet been concluded and that law continues in force, and the
effects of such law on our financial statements for 2019 had to be taken into consideration. For more information, see Note 2.1.1
to our audited consolidated financial statements for December 31, 2019.

Management
will continue to make its best efforts to protect the Company interests, aiming to appropriately settle the impacts of the new
interpretation given by the concession grantor and find alternatives necessary to maintain the concession in a sustainable manner.
For more information see Note 2.1.1 to our audited consolidated financial statements.

60


Table of Contents


Compagas
covered 833 kilometers in 2019, increase of 1.1% compared to 824 kilometers covered in 2018. Compagas’s net revenues were
R$866.9 million, an increase of 47.3%, compared to 2018 (R$588.5 million), and its net income was R$173.0 million, an increase
of R$113.4 million or 190.1% compared to 2018. Compagas’ customers include industries, gas stations, other businesses and
residences and Araucária Thermoelectric plan. Compagas is focusing its business strategy on increasing the volume of gas
it distributes to customers by marketing the benefits of substituting oil and other fuels by gas as a mean of achieving greater
energy efficiency. Compagas’ customer base increased 8%, to 47,238 customers in 2019 from 43,943 in 2018.

Compagas registered
an increase of 15% in the average daily volume of natural gas distributed to Final Customers, to 1,368,915 cubic meters per day
in 2019 (not including the volume of gas supplied to Araucária Thermoelectric plant) compared to 1,190,302 cubic meters
per day in 2018 (not including the volume of gas supplied to Araucária Thermoelectric plant). In addition, Compagas makes
its distribution grid available to transport natural gas to Araucária TPP. The volume of natural gas supplied from Petrobras
and distributed by Compagas to Araucária TPP, was 68,050 cubic meters per day in 2019, compared tp 5.0 cubic meters per
day in 2018.

As of December
31, 2019, we owned a controlling stake (51%) of the capital stock of Compagas and consolidated this equity interest in our financial
statements. The minority shareholders of Compagas are Petrobras and Mitsui Gás, each of which owns 24.5% of the capital
stock of Compagas.

Gas Exploration

In the 12th
bidding round of National Petroleum Agency (Agência Nacional do Petróleo“ANP”), held at the end
of 2013, the consortium formed by us (30%), Bayar Participações (30%), Tucumann Engenharia (10%) and Petra Energia
(30%), the latter acting as operating company, won the right to explore, research, develop and produce oil and natural gas in four
blocks located in the central southern region of the State of Paraná, in a 11,327 km2 area. The minimum investment
in the first phase of the research is approximately R$78.1 million for a 4-year term. We and our partners have signed the concession
contracts for 2 blocks in May 2014. However, because of a public civil action, the first phase of exploration for these two blocks
was halted and the signing of the other two concession contracts was prohibited. On June 7th, 2017, a court decision
held that all the bidding round and the agreements related thereto should be deemed null and void. Moreover, the Government of
the State of Paraná enacted Law No. 19,878 (July 3, 2019), forbidding the exploration of shale gas through the drilling
/ fracking method.

As a result
of the above-mentioned events, our consortium requested ANP to release it from its contractual obligations, with no liabilities
and with reimbursement of the signing bonuses, reimbursement of all costs incurred in connection with guarantees and release of
such guarantees for the four blocks. Even though this request was submitted to ANP on September 6th, 2017, it is still
subject to analysis. All the activities for the four blocks were interrupted due to the suspension of the effects of the12th
bidding round of ANP because of an injunction granted in connection with the above mentioned public civil action, which awaits
a decision from the Federal Court of Appeals of the 4th Region. For this reason, in October 2018, the consortium approved
the establishment of an institutional arbitration procedure with the ANP for the four blocks awarded in the 12th bidding
round of ANP, asking for the refund of the contributions made. Arbitral proceedings have already been initiated.

CONCESSIONS



We operate
under concessions granted by the Brazilian government for our generation, transmission and distribution businesses. Under Brazilian
law, concessions are subject to competitive bidding processes at the end of their respective terms.

2013
Concession Renewal Law

Until 2013,
the Brazilian rules governing generation concessions gave concessionaires the right to renew for additional 20 year concession
contracts that were entered into prior to December 11, 2003. For

61


Table of Contents


transmission and distribution concessions
granted after 1995, concessionaires had the right to renew these contracts for an additional 30-year period.

On September
11, 2012, the Brazilian federal government enacted the Provisional Measure No. 579, subsequently converted into the 2013 Concession
Renewal Law, which significantly changed the conditions under which concessionaires are able to renew concession contracts. Under
the 2013 Concession Renewal Law, generation, transmission and distribution concessionaires may renew the concessions that were
in effect as of 1995 (and, in the case of generation facilities, generation concession contracts entered into prior to 2003) for
an additional period of 30 years (or an additional 20-year period in the case thermal plants), provided that the concessionaire
agrees to amend the concession contract to reflect a series of new conditions that aim to ensure that services are provided in
a continuous and efficient fashion and subject to low tariffs. Under the 2013 Concession Renewal Law, concessionaires must decide
60 months before the end of each concession term (or 24 months with respect to thermal plant concessions that it is 24 months)
whether to amend and renew a concession contract or to terminate each concession contract at the end of its respective term.

For concessionaires
of generation facilities existing at that time, the 2013 Concession Renewal Law changed the scope of the concession contracts at
the moment they were renewed. Previously, a generation concessionaire had the right to sell the energy generated by the facilities
subject to its concession for profit. In contrast, generation concessions renewed pursuant to the 2013 Concession Renewal Law do
not grant concessionaires the right to sell the energy generated by these facilities. Instead, these concessions only cover the
operation and maintenance of the generation facilities, subject to quality standards determined by Brazilian authorities. The energy
generated by these facilities are allocated by the Brazilian federal government in quotas to the regulated market, for purchase
by distribution concessionaires. For new generation facilities (i.e., generation facilities operated after the 2013 Concession
Renewal Law), on the other hand, the concessionaire still has the right to sell the energy produced by the generation facility.

In addition
to changing the scope of generation concessions, the 2013 Concession Renewal Law establishes a new tariff regime that significantly
affects the treatment of amounts to be invested by concessionaires to improve and maintain generation plants. To this effect, several
regulations were issued by MME and ANEEL to regulate the compensation due to concessionaires as a result of their investments to
improve and maintain generation plants.

The 2013 Concession
Renewal Law affects transmission and distribution concessions differently. The principal change is that amounts invested in modernization
projects, structural reforms, equipment and contingencies are subject to prior ANEEL approval. However, the 2013 Concession Renewal
Law does not affect the manner in which distribution and transmission concessionaires may recover amounts invested in transmission
infrastructure.

With respect
to the transmission agreements, the conditions for renewal set forth in the 2013 Concession Renewal Law are the acceptance of a
fixed income as determined by ANEEL and compliance with quality standards set forth in applicable regulation. With respect to distribution
agreements, the conditions are set forth in the amendment to the concession agreement and are related to compliance with quality
standards, economic-financial sustainability indicators and corporate governance as set forth
in the amendment to the concession agreement according to the parameters provided in the 2013 Concession Renewal Law.

The 2013 Concession
Renewal Law applies to all generation, transmission and distribution contracts that were in effect as of 1995 (and, in the case
of generation concessions, entered into prior to 2003), regardless of whether a contract grants to the concessionaire the right
to renew a concession on its original terms. For example, several of our concession contracts contain provisions allowing us to
renew these concessions for a period of 20 years. Under the 2013 Concession Renewal Law, in order to renew these contracts, we
nonetheless would be required to accept the application of the conditions imposed by the 2013 Concession Renewal Law to the contract,
and the concession contract would then be renewed for 30 years, rather than 20 years. If we choose to renew a concession contract
that contains a renewal provision, we would be indemnified by the Brazilian government using funds from the RGR Fund (see Energy
Sector Regulatory Charges) in an amount equal to the portion of our investments related to the concession that have not yet been
amortized or depreciated, as calculated by ANEEL.

62


Table of Contents


If a concessionaire
decides not to accept the new tariff regime with respect to a concession contract and therefore decides not to renew the contract,
the concession will terminate at the end of its original term, and the Brazilian government will conduct a new competitive bidding
process for the concession. The original concessionaire may participate in the new competitive bidding process.

In the case
of hydroelectric generation concessions with an installed capacity of more than 5,000 kW, upon the expiration of their original
term and provided that the concessionaire does not request the extension of such term, the granting authority may submit the concession
to a new bidding process. In the case of concessions for hydroelectric generation units with an installed capacity of 5,000 kW
or less, upon the expiration of their original term, the concessions may be granted to the current concessionaire in the form of
registration, for an indefinite term.

Generation
Concessions

Of
the nineteen (19) hydroelectric plants we operated in 2019, fourteen (14) were operated under the generation concession contracts
that were in force prior to the 2013 Concession Renewal Law, and five (5) were operated in accordance with the 2013 Concession
Renewal Law (Capivari Cachoeira HPP, Chopim I HPP, Marumbi HPP, Baixo Iguaçu HPP and Colíder HPP). In 2013, 12 of
the 13 hydro and thermoelectric generation concessions operated by the Company in 2013 (exception made only to Rio dos Patos HPP)
were extended pursuant to the old regime and could be renewed again under the 2013 Concession Renewal Law.

However,
at the time the 2013 Concession Renewal Law was enacted, the Company elected not to renew the following generation concessions:
Rio dos Patos (2014), Mourão I (2015), Chopim I (2015) and Capivari Cachoeira (2015), all of which had remaining terms of
60 months or less. Please see below for further information on each of these concessions.

Foz
do Areia HPP. Copel Geração e Transmissão did not elect to renew the original concession pursuant the 2013
Concession Renewal Law for the Foz do Areia HPP (Governador Bento Munhoz da Rocha Netto). However, in order to obtain a new concession
for the Foz do Areia HPP for another 30 years, Copel GeT transferred the ownership of this HPP to its subsidiary, the SPC F.D.A.
Geração de Energia Elétrica S.A (F.D.A) on March 3, 2020, and, on the same date, requested a new concession
from the Ministry of Mines and Energy pursuant to Federal Decree no. 9,271/2018 (as amended by Federal Decree no. 10,135/2019),
which conditions that, to obtain a new concession, the sale of the concession's corporate control (F.D.A) must occur. On the same
date, F.D.A. signed with ANEEL the Concession Contract that transfers the concession of the HPP Foz do Areia from Copel GeT to
the F.D.A., for the exploration of the plant until the end of the current concession, on September 17, 2023.

Rio
dos Patos HPP. The concession of Rio dos Patos HPP was terminated and not submitted to a further bidding process due to the
lack operational conditions.

Mourão
I and Capivari Cachoeira HPP. The granting authority submitted the concessions for HPP Capivari Cachoeira and Mourão
I to new bidding processes, pursuant to which new agreements should be in force for a 30-year period. Copel GeT was the winner
in the bidding process related to HPP Capivari Cachoeira. With respect to Capivari Cachoeira, although Copel GeT did not elect
to renew the original concession for the Capivari Cachoeira HPP, it participated in the new competitive bidding process and won.
On January 5, 2016, Copel GeT executed a concession agreement with ANEEL so that it will continue to operate this plant under an
operation and maintenance regime until 2046. We paid a total amount of R$574.8 million as signing bonus for this concession agreement.
100.0% of the energy generated by this plant in 2016 was allocated in quotas to the regulated market, and reduced to 70.0% on January
1, 2017. Copel GeT can sell remaining amount of energy generated by this plant on the Free Market or Spot Market.

Chopin I HPP. As the installed
capacity of Chopin I HPP does not exceed the 5,000 kW, the concession regime of this plant has been changed to a registration in
favor of the Company, valid for an indefinite term.

63


Table of Contents


Figueira
TPP. Our concession for the Figueira TPP expired on March 26, 2019. We had filed an extension request with respect to this
plant on May 24, 2017, but we are still waiting for the granting authority to amend our concession agreement, extending its term
for an additional 20-year period in accordance with the 2013 Concession Renewal Law. This plant has an installed capacity equivalent
to 20 MW and subject to a modernization process.

With respect
to the concessions granted between 2011 and 2017 with no renewal right attached, we acquired the right to renew only one of the
hydroelectric plants (HPP Cavernoso II) for a 30-year period, as a result of an amendment to the 2013 Concession Renewal Law by
Law No. 13,360, of November 17, 2016.

In accordance
with the 2013 Concession Renewal Law, Copel could have flagged to the granting authority by 2019 its intention to renew the concession
of HPP São Jorge. However, Copel elected not to renew such concession and, consequently, it will be able to operate such
HPP until December 2024 and request the conversion of this operating regime into a registration regime, as the installed capacity
does not exceed 5,000 kW.

As the installed
capacity of Chopin I HPP also does not exceed 5,000 kW, the concession regime of this plant has been changed to a registration
in favor of the Company, valid for an indefinite term. In addition, pursuant to the same statute, the Company may flag to the granting
authority its intention to extend: (i) in 2020, the concession of HPP Apucaraninha; and (ii) in 2021, the concessions of HPP Guaricana
and Chaminé. In the event the Company does not request the extension of these concessions, they will be subject to new bidding
processes conducted by the granting authority.

Concessions
for generation projects granted after December 11, 2003 were not affected by the 2013 Concession Renewal Law and are non-renewable,
meaning that upon expiration of their 35-year term, the concession will be granted subject to a new competitive bidding process.
In 2019, we had three (3) hydroelectric plants operating in this condition (HPP Mauá, HPP Colíder and HPP Baixo Iguaçu).

The following
tables sets forth information relating to the terms as well as the renewals of our main generation hydroelectric, thermoelectric
and wind farm plants and all of which we hold a direct ownership interest in:

|Hydroelectric
        Plants | Initial
        concession date | First
        expiration date | Extension
        Date | Final
        expiration date
|---------------------------- | ------------------------------- | ----------------------------- | ---------------------- | -----------------------------
|Foz do Areia (1)             | May, 1973                       | May, 2003                     | January, 2001          | September, 2023              
|Apucaraninha                 | October, 1975                   | October, 2005                 | April, 2003            | October, 2025                
|Guaricana                    | August, 1976                    | August, 2006                  | August, 2005           | August, 2026                 
|Chaminé                      | August, 1976                    | August, 2006                  | August, 2005           | August, 2026                 
|Segredo                      | November, 1979                  | November, 2009                | September, 2009        | November, 2029               
|Derivação do Rio Jordão      | November, 1979                  | November, 2009                | September, 2009        | November, 2029               
|Salto Caxias                 | May, 1980                       | May, 2010                     | September, 2009        | May, 2030                    
|Mauá (2)                     | June, 2007                      | July, 2042                    | Not extendable         | July, 2042                   
|Colíder(3)                   | January, 2011                   | January, 2046                 | Not extendable         | January, 2046                
|Cavernoso II                 | February, 2011                  | February, 2046                | Not extendable         | February, 2046               
|Baixo Iguaçu(4)              | August, 2012                    | August, 2047                  | Not extendable         | September, 2049              
|SHP Bela Vista (5)           | May, 2007                       | January, 2041                 | Extendable             | January, 2071                



|(1) | In March 3, 2020, the concession of Foz do Areia was transferred from Copel GeT to FDA pursuant to ANEEL Authorizing Resolution
no. 8.578/2020. Copel GeT owns 100% of FDA Geração de Energia S.A.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mauá was constructed by Consórcio Energético Cruzeiro do Sul, of which Copel owns 51.0% and Eletrosul owns
the remaining 49.0%.
|--- | -------------------------------------------------------------------------------------------------------------------------------

|(3) | The commercial operations of generation units 1, 2 and 3 of Colíder’s began in March 2019, May 2019 and December
2019, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(4) | Baixo Iguaçu was constructed by Consórcio Empreendedor Baixo Iguaçu, of which Copel owns 30% and Geração
Céu Azul the remaining 70%. The commercial operations of generation units 1, 2 and 3 of Baixo Iguaçu’s began
in February 2019, Feburary 2019 and April 2019, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

64


Table of Contents


|(5) | The consortium CBVG, formed by Copel GeT and Foz do Chopim Energética Ltda., won ANEEL Auction No. 003/2018 for SHP Bela
Vista. In April 2019, the authorization to operate SHP Bela Vista was transferred from Foz do Chopim Energética Ltda. to
Bela Vista Geração de Energia S.A through the Aneel’s Authorizing Resolution no. 7.802/2019. In December 2019,
Copel GeT became the owner of 100% of Bela Vista Geração de Energia. This power plant is still under construction.
..
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Thermoelectric
        Plants | Initial
        concession date | First
        expiration date | Extension
        date | Final
        expiration date
|----------------------------- | ------------------------------- | ----------------------------- | ---------------------- | -----------------------------
|Figueira                      | March 1969                      | March 1999                    | June 1999              | March 2019                   



|Wind Plants                       | Initial
        concession date | First
        expiration date
|--------------------------------- | ------------------------------- | -----------------------------
|Asa Branca I                      | April, 2011                     | April, 2046                  
|Asa Branca II                     | May, 2011                       | May, 2046                    
|Asa Branca III                    | May, 2011                       | May, 2046                    
|Nova Eurus IV                     | April, 2011                     | April, 2046                  
|Santa Maria                       | May, 2012                       | May, 2047                    
|Santa Helena                      | April, 2012                     | April, 2047                  
|Ventos de Santo Uriel             | April, 2012                     | April, 2047                  
|Boa Vista                         | April, 2011                     | April, 2046                  
|Farol                             | April, 2011                     | April, 2046                  
|Olho D'Água                       | June, 2011                      | May, 2046                    
|São Bento do Norte                | May, 2011                       | May, 2046                    
|Cutia(1)                          | January, 2012                   | January, 2042                
|Guariju(1)                        | January, 2012                   | January, 2042                
|Jangada(1)                        | January, 2012                   | January, 2042                
|Maria Helena(1)                   | January, 2012                   | January, 2042                
|Palmas                            | September, 1999                 | September, 2029              
|Potiguar(1)                       | May, 2015                       | May, 2050                    
|Esperança do Nordeste(1)          | May, 2015                       | May, 2050                    
|Paraíso dos Ventos do Nordeste(1) | May, 2015                       | May, 2050                    
|São Bento do Norte I(1)           | August, 2015                    | August, 2050                 
|São Bento do Norte II(1)          | August, 2015                    | August, 2050                 
|São Bento do Norte III(1)         | August, 2015                    | August, 2050                 
|São Miguel I(1)                   | August, 2015                    | August, 2050                 
|São Miguel II(1)                  | August, 2015                    | August, 2050                 
|São Miguel III(1)                 | August, 2015                    | August, 2050                 
|Jandaíra I(2)                     | April, 2020                     | April, 2055                  
|Jandaíra II(2)                    | April, 2020                     | April, 2055                  
|Jandaíra III(2)                   | April, 2020                     | April, 2055                  
|Jandaíra IV(2)                    | April, 2020                     | April, 2055                  

|(1) | Wind plants located at Copel’s Cutia wind farm complex.
|--- | -------------------------------------------------------

|(2) | The consortium formed by Copel GeT and Cutia Empreendimentos Eólicos S.A.., won ANEEL Auction no. 004/2019 for Jandaíra
Wind Complex (I, II, III and IV) and granting process is still ongoing.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following
table sets forth information relating to the terms of our generation hydroelectric plant, whose concession agreement has been executed
under the terms and conditions of the 2013 Concession Renewal Law:

65


Table of Contents




|Hydroelectric
        Plants              | Initial
        concession date | First
        expiration date | Extension
        Date   | Final
        expiration date
|----------------------------------------- | ------------------------------- | ----------------------------- | ------------------------ | -----------------------------
|Capivari Cachoeira (Gov Parigot de Souza) | January, 2016                   | January, 2046                 | Not subject to extension | January, 2046                



The following
table sets forth information relating to the terms of our generation hydroelectric plants which, once respective original concession
period expires, will no longer be subject to a concession regime but rather to a registration proceeding with the ANEEL:

|Hydroelectric
        Plants(1) | Initial
        concession date | Concession
        expiration date | Final
        expiration date
|------------------------------- | ------------------------------- | ---------------------------------- | -----------------------------
|Chopim I                        | March, 1964                     | July, 2015                         | Indefinitely                 
|São Jorge                       | December, 1974                  | December, 2024                     | -                            
|Cavernoso                       | January, 1981                   | January, 2031                      | -                            
|Melissa                         | May, 2002                       | Indefinitely                       | -                            
|Pitangui                        | May, 2002                       | Indefinitely                       | -                            
|Salto do Vau                    | May, 2002                       | Indefinitely                       | -                            
|Marumbi                         | March, 1956                     | May, 2018                          | Indefinitely                 



|(1) | Upon the expiration of concessions or authorizations for hydroelectric energy generation with installed capacity equal to or less
than 5,000 KW, the relevant projects are subject to a registration regime in accordance with Brazilian Federal Law No. 9,074/1995,
as amended by Brazilian Federal Law No. 13,360/2016. The operation of hydroelectric and thermoelectric plans with installed capacity
of up to 5,000 KW are not subject to any concession, permission or authorization and require solely the registration with the
granting authority.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We also have
ownership interests in eleven (11) other generation projects. The following table sets forth information relating to the terms
of the concessions of the generation facilities in which we had such partial ownership interest as of December 31, 2019.

|Generation
        Facility | Company                                        | Initial
        concession date | Expiration
        date | Extension   
|--------------------------- | ---------------------------------------------- | ------------------------------- | ----------------------- | ------------
|HPP Dona Francisca          | Dona Francisca Energética SA ‒ DFESA           | July, 1979                      | August, 2033            | Possible    
|HPP Santa Clara             | Centrais Elétricas do Rio Jordão S.A. - ELEJOR | October, 2001                   | May, 2037               | Possible    
|HPP Fundão                  | Centrais Elétricas do Rio Jordão S.A. - ELEJOR | October, 2001                   | May, 2037               | Possible    
|SHP Santa Clara I           | Centrais Elétricas do Rio Jordão S.A. - ELEJOR | December, 2002                  | December, 2032          | Possible    
|SHP Fundão I                | Centrais Elétricas do Rio Jordão S.A. - ELEJOR | December, 2002                  | December, 2032          | Possible    
|TPP Araucária               | UEG Araucária Ltda.                            | December, 1999                  | December, 2029          | Possible    
|HPP Arturo Andreoli         | Foz do Chopim Energética                       | April, 2000                     | April, 2030             | Possible    
|WPP Carnaúbas               | São Miguel do Gostoso I                        | April, 2012                     | April, 2047             | Not possible
|WPP Reduto                  | São Miguel do Gostoso I                        | April, 2012                     | April, 2047             | Not possible
|WPP Santo Cristo            | São Miguel do Gostoso I                        | April, 2012                     | April, 2047             | Not possible
|WPP São João                | São Miguel do Gostoso I                        | March, 2012                     | March, 2047             | Not possible



Transmission Concessions

Pursuant to
the 2013 Concession Renewal Law and the terms of our transmission concessions, we have the right to request 30-year extensions
of the concessions from ANEEL, provided that such request is delivered within 60 months prior to the expiration of the contract.
Our principal transmission concession, from which 71%

66


Table of Contents


of our transmission revenues in 2019 derived,
has been renewed pursuant to the 2013 Concession Renewal Law, and will therefore now expire in December 2042.

In addition,
in 2019, an aggregate of 29% of our transmission revenues derived from eleven (11) other concession contracts for transmission
lines and substations that are currently in operation and whose terms and extensions are set forth in the next table. In accordance
with the 2013 Concession Renewal Law, each of these contracts can be extended for an additional 30-year period.

We intend to
continue requesting extensions for all of our transmission concessions.

The following
table sets forth certain information relating to the terms and extension terms of our main transmission concessions (all of which
we hold a direct ownership interest), including the concession contracts for transmission lines and substations both in operation
or under construction:

|Transmission
        Facility  | Initial concession
        Date | First expiration
        Date | Possibility
        of extension | Expected
        (or final) expiration date
|------------------------------ | ------------------------------- | ----------------------------- | -------------------------------- | -------------------------------------------
|Main transmission concession   | July, 2001                      | July, 2015                    | Extended                         | December, 2042                             
|Bateias – Jaguariaíva          | August, 2001                    | August, 2031                  | Possible                         | August, 2061                               
|Bateias – Pilarzinho           | March, 2008                     | March, 2038                   | Possible                         | March, 2068                                
|Foz do Iguaçu – Cascavel Oeste | November, 2009                  | November, 2039                | Possible                         | November, 2069                             
|Substation Cerquilho III       | October, 2010                   | October, 2040                 | Possible                         | October, 2070                              
|Araraquara 2 – Taubaté         | October, 2010                   | October, 2040                 | Possible                         | October, 2070                              
|Foz do Chopim - Salto Osorio   | August, 2012                    | August, 2042                  | Possible                         | August, 2072                               
|Assis – Paraguaçu Paulista II  | February, 2013                  | February, 2043                | Possible                         | February, 2073                             
|Bateias – Curitiba Norte       | January, 2014                   | January, 2044                 | Possible                         | January, 2074                              
|Realeza Sul – Foz do Chopim    | September, 2014                 | September, 2044               | Possible                         | September, 2074                            
|Assis - Londrina               | September, 2014                 | September, 2044               | Possible                         | September, 2074                            
|Curitiba Leste – Blumenau(1)   | April, 2016                     | April, 2046                   | Possible                         | April, 2076                                



|(1) | Facility under construction.
|--- | ----------------------------

We have
ownership interests in ten (10) other transmission projects, through special purpose companies. The following table sets forth
information relating to the terms of the concessions of the transmission facilities in which we had such partial ownership interest
as of December 31, 2019:

|Transmission
        Facility     | Special
        Purpose Company (SPC)              | Initial
        concession date | First
        Expiration date | Possibility
        of Extension | Expected
        (or final) expiration date
|--------------------------------- | -------------------------------------------------- | ------------------------------- | ----------------------------- | -------------------------------- | -------------------------------------------
|Cascavel Oeste – Umuarama         | Costa Oeste Transmissora de Energia S.A            | January, 2012                   | January, 2042                 | Possible                         | January, 2072                              
|Umuarama - Guaira                 | Caiuá Transmissora de Energia S.A                  | May, 2012                       | May, 2042                     | Possible                         | May, 2072                                  
|Açailândia
Miranda II             | Integração Maranhense Transmissora de Energia S.A. | May, 2012                       | May, 2042                     | Possible                         | May, 2072                                  
|Curitiba -
        Curitiba Leste | Marumbi Transmissora de Energia S.A.               | May, 2012                       | May, 2042                     | Possible                         | May, 2072                                  
|Paranaíta –
        Ribeirãozinho | Matrinchã Transmissora de Energia S.A.             | May, 2012                       | May, 2042                     | Possible                         | May, 2072                                  
|Ribeirãozinho – Marimbondo II     | Guaraciaba Transmissora de Energia S.A             | May, 2012                       | May, 2042                     | Possible                         | May, 2072                                  
|Barreiras II – Pirapora II        | Paranaíba Transmissora de Energia S.A              | May, 2013                       | May, 2043                     | Possible                         | May, 2073                                  

67


Table of Contents




|Itatiba – Bateias      | Mata de Santa Genebra Transmissora S.A  | May, 2014       | May, 2044       | Possible | May, 2074      
|---------------------- | --------------------------------------- | --------------- | --------------- | -------- | ---------------
|Estreito – Fernão Dias | Cantareira Transmissora de Energia S.A. | September, 2014 | September, 2044 | Possible | September, 2074
|Ivaiporã – Londrina    | Uirapuru Transmissora de Energia S.A.   | March, 2005     | March, 2035     | Possible | March 2065     



Distribution Concessions

We
originally operated our distribution business pursuant to a concession contract that was signed on June 24, 1999 (retroactive to
July 7, 1995), and was set to expire on July 7, 2015. Under the 2013 Concession Renewal Law, we had the right to renew this concession
for an additional 30-year period by accepting an amendment to the concession contract. Notwithstanding the changes introduced by
the 2013 Concession Renewal Law, we concluded that the renewal of our distribution concession in accordance with the 2013 Concession
Renewal Law would not materially affect our results of operations. Accordingly, after a careful evaluation of the conditions imposed
by the Brazilian federal government for the extension of our distribution concession, we decided to request the renewal of this
contract and our renewal request was approved by the MME on November 11, 2015. On December 9, 2015, we have executed the fifth
amendment to the public Electricity Distribution Service Concession Agreement No. 46/1999 of Copel Distribuição S.A.

This
amendment imposes efficiency conditions to Copel Distribuição that are measured through two different metrics: quality
of the service and economic-financial sustainability of the company. Failure to comply with any of these metrics (i) for two consecutive
years within the first four years of this renewed concession or (ii) in the fifth year of this concession, may, in each case, result
in the termination of our distribution concession. From January 1, 2021 on, failure to comply with the quality indicator for three
consecutive years or the economic-financial sustainability indicator for two consecutive years may also result in the termination
of the distribution concession.

Additionally,
non-compliance with quality indicator targets for two consecutive years or three times in five years may lead to restrictions in
the payment of dividends and interest on equity to the controlling shareholders of Copel Distribuição, while non-compliance
with the economic-financial sustainability indicators may require capital contributions from Copel Distribuição controlling
shareholders.

The
table below presents the economic and financial and quality indicators established for the first five (5) years after the execution
of this amendment.

|     | Economic
        and Financial Indicators                | Quality
        Indicators (1)
|---- | -------------------------------------------------------- | ------------------------------
|Year |                                                          | DECi(2)                       
|2016 | N/A                                                      | 13.61                         
|2017 | EBITDA(3) ≥ 0                                            | 12.54                         
|2018 | [EBITDA (-) QRR (4)] ≥ 0                                 | 11.23                         
|2019 | {Net Debt(5)/[EBITDA(3) (-) QRR(4)]} ≤ 1/(0.8*SELIC(6))  | 10.12                         
|2020 | {Net Debt(5)/[EBITDA(3) (-) QRR(4)]} ≤ 1/(1.11*SELIC(6)) | 9.83                          
|     |                                                          |                               



|(1) | According to ANEEL’s Technical Note No. 0335/2015.
|--- | --------------------------------------------------

|(2) | DECi – Duration of outages per customer per year (in hours); and FECi – Frequency of outages per customer per year
(number of outages).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(3) | Earnings before interest, tax depreciation and amortization, as calculated according to ANEEL regulations.
|--- | ----------------------------------------------------------------------------------------------------------

|(4) | QRR: Regulatory Reintegration Quota or Regulatory Depreciation Expense. This is the value defined in the most recent Periodic
Tariff Review (RTP), plus the General Market Price inflation index (IGP-M) between the month preceding the Periodic Tariff Review
and the month preceding the twelve-month period of the economic and financial sustainability measurement.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | As calculated according to ANEEL regulations.
|--- | ---------------------------------------------

|(6) | Selic base rate: limited to 12.87% per year.
|--- | --------------------------------------------

68


Table of Contents


We have complied with the quality
indicators for 2019 both with respect to DECi totaling 9.10 in 2019) and FECi (totaling 6.0 in 2019).





69


Table of Contents




COMPETITION

We have concessions
to distribute electricity in substantially all of the State of Paraná, and we do not face competition from the five utilities
that have been granted concessions for the remainder of the state. As a result of legislation passed in 2004, however, other suppliers
are able to offer electricity to our existing Free Customers at prices lower than those we currently charge. However, when a Captive
Customer becomes a Free Customer, it is still required to pay to use our distribution grid. The reduction in net revenue of our
distribution business is therefore compensated with a reduction in our costs for energy that we would otherwise acquire to sell
to these customers.

Furthermore,
under certain circumstances, Free Customers may be entitled to connect directly to the Interconnected Transmission System rather
than our distribution grid. Unlike a Free Customer’s choice of another energy supplier, in which case that customer must
still use our distribution grid and thus pay us the appropriate tariff, our distribution business ceases to collect tariffs from
a customer that connects directly to the Interconnected Transmission System. The migration of customers from the distribution grid
to the transmission network therefore results in the loss of revenues for our distribution business.

Distribution
and transmission companies are required to permit the use of their lines and ancillary facilities for the distribution and transmission
of electricity by other parties upon payment of a tariff.

Free Customers
are limited to:

| | · | as from July 1, 2019, customers with demand
of at least 2.5 MW; after January 1, 2020, with demand of at least 2 MW; after January 1, 2021, with demand of at least 1.5 MW;
after January 1, 2022, with demand of at least 1.0 MW at any voltage; and, after January 1, 2023, with demand of at least 500 kW
at any voltage; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | customers with demand of at least 500
kW that opt to be supplied energy by means of alternative sources, such as wind power projects, small hydroelectric power plants,
biomass projects, solar plants and others.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As
of December 31, 2019, we had 425 Free Customers (of which 375 were customers of our energy trading company and 50 of Copel GeT),
representing approximately 5.7% of our consolidated operating revenue and approximately 13.8% of the total quantity of electricity
sold by us.

Without the
addition of new contracts in 2019, Copel GeT had 50 Free Costumers as of December 31, 2019. Approximately 17.67% of the megawatts-hours
sold under contracts to such customers by Copel GeT expired in 2019. These customers represented approximately 4.88% of the total
volume of electricity we sold in 2019, and approximately 4.09% of total net operating revenue from energy sales for that year.

In
the generation business, any producer may be granted a concession to build or manage thermoelectric and small hydroelectric generating
facilities in the State of Paraná. Brazilian law provides for competitive bidding for generation concessions for hydroelectric
facilities and, since 2017, this requirement applies only to facilities with capacity higher than 50 MW.

In the transmission
business, Brazilian law provides for competitive bidding for transmission concessions for facilities with a voltage of 230 kV or
greater that will form part of the Interconnected Transmission System.

Brazilian law
requires that all of our generation, transmission and distribution concessions be subject to a competitive bidding process upon
their expiration. We may face significant competition from third parties in bidding for renewal of such concessions or for any
new concessions. The loss of certain concessions could adversely affect our results of operations.

70


Table of Contents




ENVIRONMENT

Our construction
and operation activities for the generation, transmission and distribution of electric energy, distribution of natural gas and
our telecommunications operations are subject to federal, state and municipal environmental regulations.

All
of our activities follow our Sustainability Policy, which integrates corporate planning and sustainability management in order
to optimize our financial, social and environmental performance. Also our activities follow our Climate Change Policy, which establishes
guidelines for the mitigation of greenhouse gas emission and changes in our business, evaluating risks and opportunities related
to climate change.

We request
and renew our environmental licenses in accordance with the environmental regulation issued by applicable federal, state and municipal
level authorities. We are in compliance with all material environmental regulations and our more recent (post-1986) generation,
transmission and distribution projects are in compliance with federal, state and municipal regulations.

Being
a signatory to the Global Compact since 2000, we are committed to sustainability. As a founding member of the Brazilian Global
Compact Network Committee, created in 2003, we support the movement to disseminate the principles of the Global Compact in promoting
effective and consistent articulations between governments, companies and social organizations in favor of social, environmental
and economic challenges for sustainability, as well as raising awareness among other Brazilian companies to engage and adopt corporate
citizenship as a standard for managing their businesses.

We
adopt best market practices to guide and evaluate our performance, and compare practices with global and local references: B3 Corporate
Sustainability Index - ISE, Ethos Indicators for Sustainable and Responsible Business Models, and other evaluations and classifications
related to ESG (Environmental, Social and Governance) matters.

Through
an annual report, we reinforce our commitment to sustainable development and are accountable for our performance related to economic,
social, environmental and governance aspects (Integrated Report Copel). This report follows the international guidelines of the
Standards model of the Global Reporting Initiative (GRI), and the International Integrated Reporting Initiative (IIRC), and is
submitted to independent assurance, to ensure the reliability of the information disclosed.

71


Table of Contents




PLANT, PROPERTY AND EQUIPMENT

Our principal
properties consist of the generation and telecommunications facilities described in “Business”. Of the net book value
of our total property, plant and equipment as of December 31, 2019 (including construction in progress), generation facilities
represented 58.5%, wind farms represented 27.5%, telecommunications represented 7.9%, Elejor represented 3.5%, and Araucária
Thermoelectric plant represented 2.7%. We believe that our facilities generally are adequate for our present needs and suitable
for their intended purposes.

In
addition, the infrastructure used by transmission and distribution business is classified as a financial, contract and intangible
assets as described in Notes 4.4, 4.5 and 4.9 to our audited consolidated financial statements.

72


Table of Contents




THE EXPROPRIATION PROCESS

Although we
receive concessions from the Brazilian government to construct hydroelectric facilities, we do not receive title to the land on
which the facilities are to be located. In order for us to construct, the land must be expropriated. The land required for the
implementation of a hydroelectric facility may only be expropriated pursuant to specific legislation, after proving its public
interest. We generally negotiate with communities and individual owners occupying the land so as to resettle such communities in
other areas and to compensate individual owners. Our policy of resettlement and compensation generally has resulted in the settlement
of expropriation disputes, with friendly settlements for most of them. As of December 31, 2019, we estimated our liability related
to the settlement of such disputes to be approximately R$118.7 million. This amount is in addition to amounts for land expropriation
included in each of our hydroelectric facility budgets.



73


Table of Contents




The
Brazilian eLECTRIC Power Industry

General

In February
2020, according to Ordinance No. 38/2020, MME approved the Decennial Energy Plan - PDE 2029, which projects that the installed
capacity of electricity generation in Brazil will be 221 in GW in 2029 (not including distributed generation and self-production).
It is projected in the 2020 PDE that 81% of this total will be renewable (47% is projected to be hydroelectric and 34% will be
alternative sources of energy, such as wind, biomass and small hydroelectric plants), 18% will be thermoelectric, 5% will be solar,
and 2% will be nuclear.

As of 2019,
approximately 30% of the installed power generating capacity of Brazil is currently owned by Eletrobras (including its wholly-owned
subsidiary Eletronuclear and its 50% participation interest in Itaipu). Through its subsidiaries, Eletrobras is also responsible
for approximately 45% of the installed transmission capacity equal or above 230 kV within Brazil. In addition, some Brazilian states
control entities involved in the generation, transmission and distribution of electricity. They include Companhia Energética
de Minas Gerais – CEMIG and us, among others.

Principal Regulatory Authorities

Ministry of Mines and Energy
– MME

The MME is
the primary regulatory institution of the power industry and acts as the Brazilian governmental authority empowered with policymaking,
regulatory and supervisory powers.

National Energy Policy Council
– CNPE

The National
Energy Policy Council (Conselho Nacional de Política Energética - “CNPE”), created in August 1997,
provides advice to the President of the Republic of Brazil regarding the development and creation of a national energy policy.
The CNPE is chaired by the MME and is composed of six ministers of the Federal Government and three members chosen by the President
of Brazil. The CNPE was created in order to optimize the use of energy resources in Brazil and ensure the national supply of electricity.

National Electric Energy
Agency – ANEEL

The Brazilian
power industry is regulated by ANEEL, an independent federal regulatory agency. ANEEL’s primary responsibility is to regulate
and supervise the power industry in accordance with the policies set forth by the MME and to respond to matters which are delegated
to it by the Brazilian government and the MME. ANEEL’s current responsibilities include, among others, (i) administering
concessions for electric energy generation, transmission and distribution, including the approval of electricity tariffs, (ii)
enacting regulations for the electric energy industry, (iii) implementing and regulating the utilization of energy sources, including
the use of hydroelectric power, (iv) promoting, monitoring and managing the public bidding process for new concessions, (v) settling
administrative disputes among electricity sector entities and electricity purchasers, and (vi) defining the criteria and methodology
for the determination of transmission and distribution tariffs.

National Electric System
Operator – ONS

The ONS (Operador
Nacional do Sistema Elétrico) is a non-profit private entity comprised of electric utilities engaged in the generation,
transmission and distribution of electric energy, in addition to other private participants such as importers, exporters and Free
Customers. The primary role of the ONS is to coordinate and regulate the generation and transmission operations in the Interconnected
Transmission System, subject to the ANEEL’s regulation and supervision. The objectives and principal responsibilities of
the ONS include, among others, operational planning for the generation industry, organizing the use of the domestic Interconnected
Transmission System and international interconnections, ensuring that industry participants have access to the transmission network
in a non-discriminatory manner, assisting in the expansion of the electric energy system,

74


Table of Contents


proposing plans to the MME for extensions
of the Interconnected Transmission System, and formulating regulations regarding the operation of the transmission system for ANEEL’s
approval.

Electric Energy Trading Chamber
– CCEE

The CCEE (Câmara
de Comercialização de Energia Elétrica) is a non-profit private entity subject to authorization, inspection
and regulation by ANEEL. The CCEE is responsible for, among other things, (i) registering all energy purchase agreements in the
regulated market, Contratos de Comercialização de Energia no Ambiente Regulado (“CCEAR”) and in
the Free Market, (ii) accounting for and clearing short-term transactions and (iii) managing funds generated by some of the regulatory
charges. The CCEE is composed of holders of concessions, permissions and authorizations in the electricity industry and Free Customers,
and its board of directors is composed of four members appointed by these agents and one by the MME, who is the chairman of the
board of directors.

Energy Sector Monitoring
Committee – CMSE

The CMSE (Comitê
de Monitoramento do Setor Elétrico) was created by the New Industry Model Law to monitor service conditions and to recommend
preventative measures to ensure energy supply adequacy, including demand-side action and contracting of energy reserves.

Energy Research Company –
EPE

In
August 2004, the Brazilian government created the Energy Research Company (Empresa de Pesquisa Energética - “EPE”),
a federal public company responsible for conducting strategic studies and research in the energy sector, including the industries
of electric power, petroleum, natural gas, coal and renewable energy sources. The studies and research conducted by the EPE subsidize
the formulation of energy policy by the MME.

Eletrobras

Eletrobras
serves as a holding company for the following federally-owned energy companies: Companhia Hidro Elétrica do São Francisco
– CHESF, Furnas Centrais Elétricas S.A., CGT Eletrosul, Centrais Elétricas do Norte do Brasil S.A. –
Eletronorte, Companhia de Geração Térmica de Energia Elétrica – CGTEE and Eletrobras Termonuclear
S.A. – Eletronuclear, Centro de Pesquisas de Energia Elétrica – Cepel and Itaipu Binacional. Eletrobras
manages the commercialization of energy from Itaipu and from alternative energy sources, under the Program for incentive to alternative
energy sources (Programa de Incentivo às Fontes Alternativas de Energia– “Proinfa”).

Historical Background of Industry
Legislation

The Brazilian
constitution provides that the development, use and sale of electric energy may be undertaken directly by the Brazilian federal
government or indirectly through the granting of concessions, permissions or authorizations. Historically, the Brazilian electric
energy industry has been dominated by generation, transmission and distribution concessionaires controlled by the federal or state
governments. Since 1995, the Brazilian government has taken a number of measures to reform the Brazilian electric energy industry.
in general, these measures were aimed at increasing the role of private investment
and eliminating foreign investment restrictions in order to increase overall competition and productivity in the industry.

The following
is a summary of the principal developments in the regulatory and legal framework of the Brazilian electricity sector:

| | · | In 1995, (i) the Brazilian constitution
was amended to authorize foreign investment in power generation; (ii) the Concessions Law was enacted, requiring that all concessions
for energy-related services be granted through public bidding processes, providing for the creation of independent producers and
Free Customers and granting electricity suppliers and Free Customers open access to all distribution and transmission systems;
and (iii) a portion of the controlling interests held by Eletrobras and various Brazilian
states in generation and distribution companies were sold to private investors.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

75


Table of Contents


| | · | In 1998, the Power Industry Law was enacted,
providing for, among other things, the creation of the ONS and the appointment of Banco Nacional de Desenvolvimento Econômico
e Social (“BNDES”), a development bank wholly owned by the Brazilian government, as the financing agent of the power
industry, especially to support new generation projects.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2001, Brazil faced a serious energy
crisis that lasted through February 2002. During this period, the Brazilian government implemented an energy-rationing program
in the most adversely affected regions, namely the southeast, central-west and northeast regions of Brazil. In April 2002, the
Brazilian government for the first time implemented the extraordinary tariff adjustment to compensate the electricity suppliers
for financial losses incurred as a result of the rationing period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2004, the Brazilian government enacted
the New Industry Model Law (Law No. 10,848), in an effort to further restructure the power industry with the ultimate goal of providing
customers with a stable supply of electricity at reasonable prices. The New Industry Model Law introduced material changes to the
regulation of the electric energy industry, in order to (i) provide incentives to private and public entities to build and maintain
generation capacity, and (ii) ensure the supply of electricity in Brazil at low tariffs through a competitive electricity public
bidding process. The key elements of the New Industry Model Law include:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Ensuring the existence of two markets:
(i) the regulated market, a more stable market in terms of supply of electricity, and (ii) a market specifically addressed to certain
participants (i.e., Free Customers and energy-trading companies), called the Free Market, that permits a certain degree of competition
vis-à-vis the regulated market.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Restrictions on certain distribution activities,
including requiring distributors to focus on their core business of distribution activities in order to promote more efficient
and reliable services to Captive Customers.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Elimination of self-dealing by providing
an incentive for distributors to purchase electricity at the lowest available prices rather than buying electricity from related
parties.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Upholding contracts executed prior to
the New Industry Model Law, in order to provide regulatory stability for transactions carried out before its enactment.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2004, Decree No. 5,163 was enacted
to governor the purchase and sale of electricity in the regulated market and the Free Market, as well as the granting of authorizations
and concessions for electricity generation projects. This decree includes, among other items, rules relating to auction procedures,
the form of power purchase agreements and the mechanism for passing costs through to final customers. Among other matters, this
decree:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | provides for the guidelines under which
electricity-purchasing agents must contract their electricity demand. Electricity-selling agents must show that the energy to be
sold comes from existing or planned power generation facilities. Agents that do not comply with such requirements are subject to
penalties imposed by ANEEL.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | requires electricity distribution companies
to contract for 100% of their energy needs primarily through public auctions. In addition to these auctions, distribution companies
can purchase limited amounts (up to 10% of their demand) from: (i) generation companies that are connected directly to a distribution
company (except for hydroelectric power plants with capacity higher than 30 MW and certain thermoelectric power plants) (ii) electricity
generation projects participating in the initial phase of the Proinfa Program, (iii) the Itaipu Power Plant and (iv) quotas from those generation concession contracts
extended or subject to a new competitive bidding process in accordance with the 2013 Concession Renewal Law.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

76


Table of Contents


| | o | provides that the MME shall establish
the total amount of energy that will be contracted in the regulated market, including the number and the type of generation projects
that will be auctioned each year.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | requires all electricity generation, distribution
and trading companies, independent producers and Free Customers to notify MME, by August 1st of each year, of their
estimated electricity demand or estimated electricity generation, as the case may be, for each of the subsequent five years. In
advance of each electricity auction, each distribution company is also required to inform MME of the amount of electricity that
it intends to contract in the auction. In addition, distribution companies are required to specify the portion of the contracted
amount they intend to use to supply potentially Free Customers.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2012, the Brazilian government enacted
two Provisional Measures that brought important changes to the Brazilian electricity regulatory framework: (i) Provisional Measure
No. 577, dated as of August 29, 2012 (converted into Law No. 12,767 dated as of December 27, 2012); and (ii) Provisional Measure
No. 579, dated September 11, 2012 (converted into the 2013 Concession Renewal Law). Provisional Measure No. 577 established the
obligation of the granting authority to render electricity services in the event of termination of an electricity concession, as
well as new rules related to the intervention by the granting authority in electricity concessions to ensure adequate performance
of Utility services. The 2013 Concession Renewal Law established new rules that changed concessionaires’ ability to renew
concession contracts. Under this Law, generation and distribution concessionaires may renew their concession contracts that were
in effect as of 1995 and transmission concessionaires may renew their concession contracts that were in effect prior to and as
of 1995 for an additional period of 30 years, provided that the concessionaires agree to amend the concession contracts to reflect
a new tariff regime to be established by ANEEL. See “Concessions”.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2013, the 2013 Concession Renewal Law
was enacted. This statute changed the nature of the concession agreements for generation facilities existing at the time. Prior
to 2013, a generation concessionaire had the right to sell the energy generated by the facilities subject to its concession for
profit. In contrast, generation concessions for existing generation facilities (including those renewed pursuant to the 2013 Concession
Renewal Law) could no longer grant concessionaires the right to sell the energy generated by these facilities. Instead, these concessions
started to cover the operation and maintenance of the generation facilities. The energy generated by these facilities was then
allocated by the Brazilian federal government in quotas to the regulated market, for purchase by distribution concessionaires.
In case of generation facilities created after the 2013 Concession Renewal Law, the concessionaire has the right to sell the energy
produced by the facility. For further information, see “Item 4. Information on the Company—Concessions—2013 Concession
Renewal Law.”
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In 2015, the Brazilian government enacted
Provisional Measure No. 688, dated as of August 18, 2015, converted into Federal Law No. 13,203, dated as of December 8, 2015,
to revise the allocation of the hydrological risks borne by hydroelectric power plants that share hydrological risks under Energy
Reallocation Mechanism. In 2014 and 2015, given poor hydrological conditions, the MRE participants generated less electricity than
their assured energies, which was confirmed by a significant decrease of the Generating Scaling Factor (“GSF”), a measurement
of the proportion between the electricity generated by the MRE participants and their respective assured energy. These generation
deficits resulted in losses for the MRE participants given their exposure to hydrological risks. As a consequence, Federal Law
No. 13,203 established an optional mechanism that allows each generation plant to transfer these risks to Final Customers upon
payment of a risk premium to the Brazilian federal government, as well as certain temporary extensions of generation concessions
to compensate for losses in 2015. We decided to opt-in with respect to all of Copel GeT ́s
and Elejor ́s eligible Energy Agreements under this new hydrological risk allocation mechanism, which represented approximately
16% of Copel GeT ́s total assured energy.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

77


Table of Contents


| | · | In 2016, the Brazilian government enacted
Provisional Measure No. 735, dated as of June 22, 2016, converted into Federal Law No. 13,360, dated as of November 17, 2016, which
changed several federal laws mainly to: (i) revise certain rules related to regulatory charges (CDE, CCC and RGE) and appoint CCEE
as the new manager of such charges in lieu of Eletrobras; (ii) facilitate the privatization of generation, transmission and distribution
companies, (iii) change certain requirements of the generation concession and authorization regimes; (iv) change rules related
to the MRE; (v) allow distribution companies to sell energy excess in the Free Market; (vi) extension of terms for commencement
of the supply under energy auctions in the regulated market; and (vii) transfer back from MME to ANEEL the authority to decide
about generation and transmission companies’ requests for extension of their facilities construction schedules.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In July 2017, the MME released the Public
Consultation No. 033/2017, named “Proposal for improvement of the legal framework of the electricity sector”. This
public consultation marks an important step to guide the MME in preparation of specific legislative proposals capable of providing
measures of economic rationalization and modernization of the electricity sector.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In August 2017, Decree No. 9,143/2017
changed the frequency of the auctions for new energy and authorized the distribution companies to negotiate contracts for the sale
of energy in the Free Market to Free Consumers and other agents (generators, marketers, and self-producers), provided that these
contracts are linked to excess in energy contracted in auctions.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In January 2018, Decree No 9,271/2018
regulated the granting of a new energy concession in the event of privatization of an energy generation concession holder that
provides public services, in accordance with Law No 9.074, dated July 7, 1995. Pursuant to this decree, the Brazilian Federal Government
may grant a new concession contract for a period of up to 30 years to the entity that results from a bidding process for the privatization
of a concessionaire previously controlled directly or indirectly by a federal, state or municipal governmental entity. This decree
determined that [the concessionaire shall request a new concession contract during the remaining period of its concession (up to
60 months counted from the end of the concession)]. This decree was amended in November 2019 pursuant to Decree No 10,135 in order
to reduce the deadline for the concessionaire to request the granting of a new agreement, from 60 months to 42 months counted from
the end of the concession and required the privatization process to be concluded no later than 18 months prior to the termination
of the prior concession.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | During 2018, the Brazilian federal government
concluded the privatization of Eletrobras’ distribution companies Companhia Energética do Piauí - Cepisa, Companhia
Energética de Rondônia S.A. - Ceron, Companhia de Eletricidade do Acre - Eletroacre, Boa Vista Energia S.A. - Boa
Vista Energia, Companhia Energética de Alagoas - Ceal and Amazonas Distribuidora de Energia S.A. - Amazonas Distribuidora.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2019, the National Energy Policy
Council (Conselho Nacional de Política Energética– CNPE) launched a program pursuant to its Resolution
No. 16 to boost the natural gas market and foster competition by promoting free competition and using thermoelectric plants as
a vehicle for creating demand for the better use of natural gas from the Pre-Salt layer.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In December 2019, MME published the Ordinance
No. 465/2019, determining that MME will gradually decrease, over the next years, the power limits to contract electric power by
consumers served at any voltage, allowing them to purchase energy from conventional sources, considering the following schedule:
(i) from January 1, 2021: consumers with demand equal to or greater than 1,500 kW; (ii) from January 1, 2022: consumers with demand
equal to or greater than 1,000 kW; and (iii) January 1, 2023: consumers with demand of 500 kW or more. Furthermore, by January 31, 2022, ANEEL and CCEE shall present
studies on the regulatory measures necessary to allow the opening of the Free Market for consumers with electric load below 500
kW.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

78


Table of Contents


| | · | In January 2020, the ONS implemented the
Short Term Hydrothermal Dispatch Model (Modelo de Despacho Hidrotérmico de Curtíssimo Prazo - DESSEM), in order to
optimize the operations of National Interconnected System (Sistema Interligado Nacional – SIN), and to reduce the
difference between the planned dispatch and the one that is actually carried out by taking into account factors related to the
electric grid, the operation of hydroelectric power plants, thermoelectric plants and other sector components. The execution of
DESSEM meets the schedule set forth in Ordinance MME no 301, dated July 31, 2019.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Potential New Regulatory Framework

The following
potential changes to the Brazilian regulatory framework may have a direct impact in our operations, as our business is subject
to comprehensive regulation by various Brazilian legal and regulatory bodies, especially the MME (which proposes sector policies)
and ANEEL (which regulates, supervises and inspects various aspects of our business, including our tariff rates).

| | · | In February 2018, the MME published on
its website a report of the public hearing, reflecting the final proposal for improvements to the energy regulatory framework,
which were especially motivated by technological, social and environmental matters, as well as difficulties arising from the current
business models. Among the discussed topics, the following stand out:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Termination of the quota system applicable
to hydropower plants (HPP) concessions that have been extended or granted through competitive biddings, in accordance with Federal
Law No. 12,783/2013, and allocation of part of the economic benefit of grants to the Energy Development Account (Conta de Desenvolvimento
Energético, or CDE) in order to reduce what is charged to the population;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | Lowering the minimum thresholds for accessing
the Free Market;
| | - | --------------------------------------------------------------

| | o | Approach between the short-term price
formation and the operating cost of the system;
| | - | -------------------------------------------------------------------------------------

| | o | Whether energy and ballast (currently
combined for commercialization purposes) should be segregated;
| | - | ----------------------------------------------------------------------------------------------------

| | o | Effects of the migration of consumers
to the Free Market;
| | - | ---------------------------------------------------------

| | o | Market for environmental attributes;
| | - | ------------------------------------

| | o | Attraction of foreign capital for investments
in the Brazilian energy sector;
| | - | -----------------------------------------------------------------------------

| | o | More efficient tariff discounts;
| | - | --------------------------------

| | o | Allocation of resources from the global
reversion reserve to the transmission segment;
| | - | --------------------------------------------------------------------------------------

| | o | Guidelines for the use of research and
development resources;
| | - | -------------------------------------------------------------

| | o | Modernization of the regulated market;
and
| | - | ------------------------------------------

| | o | Reduction of judicial disputes regarding
the hydrological risk.
| | - | ---------------------------------------------------------------

79


Table of Contents


| | · | In May 2018, most of the improvements
proposed by the MME with respect to the regulatory framework applicable to the energy sector were included in Bill No. 1,917/2015
of the House of Representatives, known as the bill for the energy bill portability (Projeto de Lei da Portabilidade da Conta
de Luz). This bill is still subject to analysis in the House of Representatives and, if approved, will depend on further approval
by the Senate and the President of Brazil.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Another legislative initiative waiting
for approval is the Senate Bill No. 10,985/2018 (formerly, Bill No. 209/2015), which addresses the judicial disputes in the short-term
energy market known as GSF. This bill is currently under analysis in the Senate.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Also, there are initiatives
in order to promote the modernization of the energy sector. Ordinance MME No. 187/2019 established a working group in order
to develop proposals for the modernization of the energy sector, which released a report in October, 2019 with measures that should
be adopted or studied, including topics such as (i) opening of the consumer market; (ii) pricing mechanism for the short-market;
(iii) expansion of the Free Market accommodating new technologies and new business models; (iv) Energy Reallocation Mechanism;
(v) cost and risk allocation; (vi) introduction of new technologies; and (vii) sustainable distribution services. This working
group has been appointed for a 2-year term, which may be extended for 1 additional year.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In November 2019, the Brazilian Federal
Government submitted to Brazilian Congress Bill No. 5,877, which, among other matters, address the privatization of Centrais Elétricas
Brasileiras S.A. - Eletrobras. Such bill determines the privatization of Eletrobras pursuant to a capital increase and public offering
of new common shares (that entitle their holders to voting rights), resulting in the dilution of the stake held by the Brazilian
Federal Government in Eletrobras.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In November 2019, ANEEL submitted a proposed
amendment to Resolution No. 482/2012 to a public hearing. This resolution refers to the distribution of micro and mini energy generation.
The update of such rules was required in 2015 by Resolution 687/2015 and suggests improvements to the credit compensation system
in view of changes to distributed generation in recent years.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In December 2019, CNPE approved its Resolution
No. 29, pursuant to which (i) it reviewed the general criteria adopted with respect to supply guarantee in studies on offer expansion,
planning of the SIN operations, and calculations of energy physical guarantees and power of a generation project. However, MME
shall determine the specific thresholds for such criteria, which is used in the calculation of physical guarantees and plans for
expansion.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

These potential
changes to the regulatory framework applicable to the Brazilian Energy Sector may impact our operations in the coming years.

Concessions

The companies
or consortia that wish to build or operate facilities for generation, transmission or distribution of electricity in Brazil must
participate in a competitive bidding process or must apply to the MME or to ANEEL for a concession, permission or authorization,
as the case may be. Concessions grant rights to generate, transmit or distribute electricity in a specific concession area for
a specified period. This period is 35 years for generation concessions granted after 2003, and 30 years for new transmission or
distribution concessions. In accordance with the 2013 Concession Renewal Law, generation and distribution concessionaires may renew
their concession contracts that were in effect as of 1995 and transmission concessionaires may renew their concession contracts
that were in effect prior to and as of 1995 for an additional period of 30 years, provided that the concessionaires agree to amend
the concession contracts to reflect certain new terms and conditions established by the law. The 2013 Concession Renewal Law does
not impact generation concessions granted after 2003, as they are non-renewable.

The Concessions
Law establishes, among others, the conditions that the concessionaire must comply with when providing electricity services, customers’
rights and the respective rights and obligations of the concessionaire and the granting authority. In addition to the Concessions
Law, the concessionaire must also

80


Table of Contents


comply with the general regulations governing
the electricity sector. The main provisions of the Concessions Law and related ANEEL regulations are summarized as follows:

Adequate
service. The concessionaire must render adequate service to all customers in its concession and must maintain certain standards
with respect to regularity, continuity, efficiency, safety and accessibility.

Use of
land. The concessionaire may use public land or request that the granting authority expropriate necessary private land for
the benefit of the concessionaire. In the latter case, the concessionaire must compensate the affected private landowners.

Strict
liability. The concessionaire is strictly liable for all damages arising from the provision of its services.

Changes
in controlling interest. The granting authority must approve any direct or indirect change in the concessionaire’s controlling
interest.

Intervention
by the granting authority. The granting authority may intervene in the concession, through ANEEL, to ensure the adequate performance
of services, as well as the full compliance with applicable contractual and regulatory provisions. Once ANEEL determines the intervention,
limited to one year, but extendable for additional two years, it must designate a third party to manage the concession. Within
30 days of the determination of the intervention, the granting authority’s representative must commence an administrative
proceeding in which the concessionaire is entitled to contest the intervention. The administrative proceeding must be completed
within 1 year. The shareholders of the concessionaire under intervention must submit to ANEEL, within 60 days of the determination
of the intervention, a recovery and correction plan. If ANEEL approves such plan, the intervention is terminated. In the event
ANEEL does not approve the plan, the granting authority may: (i) declare forfeiture of the concession; (ii) determine the spin-off,
incorporation, merger or transformation of the concessionaire, incorporation of a subsidiary or assignment of quotas/shares to
a third party; (iii) determine the change of control of the concessionaire; (iv) determine a capital increase of the concessionaire;
or (v) determine the incorporation of an special purpose company.

Termination
of the concession. The termination of the concession agreement may occur by means of expropriation and/or forfeiture. Expropriation
is the early termination of a concession for reasons related to the public interest. An expropriation must be specifically approved
by law or decree. Forfeiture must be declared by the granting authority after ANEEL or the MME has made a final administrative
ruling that the concessionaire, among other things, (i) has failed to render adequate service or comply with an applicable law
or regulation, (ii) no longer has the technical, financial or economic capacity to provide adequate service, or (iii) has not complied
with penalties assessed by the granting authority. The concessionaire may contest any expropriation or forfeiture in the courts.

A concession
agreement may also be terminated (i) through the mutual agreement of the parties, (ii) upon the bankruptcy or dissolution of the
concessionaire, or (iii) following a final, non-appealable judicial decision rendered in a proceeding filed by the concessionaire.

When a concession
agreement is terminated, all assets, rights and privileges that are materially related to the rendering of electricity services
revert to the Brazilian government. Following termination, the concessionaire is entitled to indemnification for its investments
in assets that have not been fully amortized or depreciated, after deduction of any amounts due by the concessionaire related to
fines and damages.

Expiration.
When the concession expires, all assets, rights and privileges that are materially related to the rendering of the electricity
services revert to the Brazilian government. Following the expiration, the concessionaire is entitled to indemnification for its
investments in assets that have not been fully amortized or depreciated as of the expiration.

Penalties.ANEEL regulations govern the imposition of sanctions against electricity sector participants and determine the appropriate
penalties based on the nature and importance of the breach (including warnings, fines, temporary suspension from the right to participate
in bidding procedures for new concessions, licenses or

81


Table of Contents


authorizations and forfeiture). For each
infraction, the fines can be up to 2% of the revenue (net of value-added tax and services tax) of the concessionaire in the 12-month
period preceding any penalty notice. Some infractions that may result in fines relate to the failure to request ANEEL’s approval
to, among other things: (i) execute certain contracts between related parties; (ii) sell or assign the assets related to services
rendered as well as impose any encumbrance (including any security, bond, guaranty, pledge and mortgage) on these or any other
assets related to the concession or the revenues from electricity services; (iii) effect a change in the controlling interest of
the holder of the authorization or concession; and (iv) make certain changes to the bylaws. In the case of contracts executed between
related parties that are submitted for ANEEL’s approval, ANEEL may seek to impose restrictions on the terms and conditions
of these contracts and, in extreme circumstances, require that the contract be rescinded.

Parallel Environment for
the Trading of Electric Energy

Under the
New Industry Model Law, the purchase and sale of electricity is carried out in two different segments: (i) the regulated market,
which contemplates that distribution companies will purchase by public auction all the electricity they need to supply their customers;
and (ii) the Free Market, which provides for the purchase of electricity by non-regulated entities (such as the Free Customers
and energy traders).

However, the
electricity arising from the following is subject to specific rules different from the rules applicable to the regulated market
and to the Free Market: (i) low capacity generation projects located near consumption points (such as certain co-generation plants
and small hydroelectric power plants), (ii) plants qualified under the Proinfa Program, an initiative established by the Brazilian
government to create incentives for the development of alternative energy sources, such as wind power projects, small hydroelectric
power plants and biomass projects, (iii) Itaipu, (iv) Angra 1 and 2 as from 2013 and (v) those generation concession contracts
extended or subject to a new bidding process in accordance with the 2013 Concession Renewal Law.

The electricity
generated by Itaipu will continue to be sold by Eletrobras to the distribution concessionaires operating in the South, Southeast
and Midwest portions of the Interconnected Transmission System. The rates at which Itaipu-generated electricity is traded are denominated
in U.S. dollars and established pursuant to a treaty between Brazil and Paraguay. As a consequence, Itaipu rates rise or fall in
accordance with the variation of the real/U.S. dollar exchange rate. Changes in the price of Itaipu-generated electricity
are, however, subject to the Parcel A cost recovery mechanism discussed as follows under “Distribution Tariffs”.

Beginning
January 2013, the energy generated by nuclear plants Angra 1 and 2 started to be sold by Eletronuclear to the distribution concessionaires
at a rate calculated by ANEEL.

The New Industry
Model Law does not affect Bilateral Agreements entered into before 2004.

The Regulated Market

In the regulated
market, distribution companies must purchase their expected electricity requirements for their Captive Customers in the regulated
market through a public auction process. The auction process is administered by ANEEL, either directly or through the CCEE, under
certain guidelines provided by the MME.

Electricity
purchases are generally made through three types of Bilateral Agreements: (i) Energy Agreements (Contratos de Quantidade de
Energia), (ii) Availability Agreements (Contratos de Disponibilidade de Energia) and (iii) allocation of energy quotas,
as defined by the ANEEL. Under an Energy Agreement, a generator commits to supply a certain amount of electricity and assumes the
risk that its electricity supply could be adversely affected by hydrological conditions and low reservoir levels, among other conditions,
which could interrupt the supply of electricity. In such case, the generator would be required to purchase electricity elsewhere
in order to comply with its supply commitments. Under an Availability Agreement, a generator commits to making a certain amount
of capacity available to the regulated market. In such case, the generator’s revenue is guaranteed and the distributors must
bear the risk of a supply shortage. With respect to the third method (introduced by the 2013 Concession Renewal Law), the plants
that have had their concession renewed under the 2013 Concession Renewal Law lost the right to sell their energy, and from now
on will only receive compensation under the energy quota system as a result of the operation and maintenance of such facilities.
As a

82


Table of Contents


result, energy generated by these generation
concessionaires are passed on to distributors at a lower cost through quotas that match the size of the markets served.

With
respect to the generation plants with expired concessions, which are subject to a new competitive bidding process, the winner of
the competitive bidding process may be required to allocate up to 100% of the energy generated by this plant in quotas to the regulated
Market depending on the criteria adopted in the relevant auction process.

The
estimate of demand from distributors is the principal factor in determining how much electricity the system as a whole will contract.
A distributor is obligated to contract all of its projected electricity needs. A deviation in actual demand from projected demand
could result in penalties to distributors. In the event of under-contracting, the distributor is penalized directly in an amount
that increases as the difference between the amounts of energy contracted for and actual demand increases. An under-contracting
distributor must also pay to meet its demand by purchasing energy in the Spot Market.

In the event
of over-contracting, where the contracted volume falls between 100% and 105% of actual demand, the distributor is not penalized
and the additional costs are compensated customers’ tariffs. Where the contracted volume is over 105% of actual demand, the
distributor must sell energy in the Spot Market. If the contract price proves lower than the current Spot Market price, the distributor
sells its excess energy for a profit. On the other hand, if the contract price is higher than the Spot Market price, the distributor
sells its excess energy at a loss. ANEEL Normative Resolution No. 711, dated April 19, 2016, allowed distribution companies to
renegotiate their energy purchase agreements in the regulated market to reduce the contracted amounts. The Federal Law No. 13,360,
dated November 17, 2016, also permitted the sale of excess energy by distribution companies in the Free Market. Resolutions No.
824, dated July 10, 2018, and 833, dated December 4, 2018, have recently provided additional rules on the methodology to be adopted
by distribution companies with respect to the Mechanism of Surplus Sales (Mecanismo de Venda de Excedentes, or MVE).

With respect
to the granting of new concessions, regulations provide that bids for new hydroelectric generation facilities may include, among
other things, the minimum percentage of electricity to be supplied in auctions in the regulated market. Concessions for new generation
projects, such as Mauá and Colíder in our case, are non-renewable, meaning that upon expiration, the concessionaire
must again complete a competitive bidding process.

The Free Market

The Free Market
covers transactions between generation concessionaires, Independent Power Producers – IPPs, self-generators, energy traders,
exporters and importers of electric energy and Free Customers. The Free Market also covers bilateral agreements between generators
and distributors signed under the old model, until they expire. Upon expiration, such contracts must be executed under the New
Industry Model Law guidelines.

A consumer
that is eligible to choose its supplier may only do so upon the expiration of its contract with the local distributor and with
advance notice or, in the case of a contract with no expiration date, upon 15 days’ notice in advance of the date on which
the distributor must provide MME with its estimated electricity demand for the year. In the latter case, the contract will only
be terminated in the following year. Once a consumer has chosen the Free Market, it may only return to the regulated system with
five years prior notice to its regional distributor, provided that the distributor may reduce such term at its discretion. This
extended period of notice seeks to assure that, if necessary, the distributor can buy additional energy in auctions on the regulated
market without imposing extra costs on the captive market.

Private generators
may sell electricity directly to Free Customers. State-owned generators may sell electricity directly to Free Customers but are
obligated to do so only through private auctions carried out by the state-owned generators exclusively to Free Customers or by
the Free Customers.

83


Table of Contents


As mentioned
above, recently, Federal Law No. 13,360, dated November 17, 2016, also permitted the sale of excess energy by distribution companies
in the Free Market, but the effectiveness of the rule is still subject to further regulation by ANEEL.

Focusing on
the future of the electricity sector, the Ministry of Mines and Energy launched Public Consultation No. 33/2017 with the purpose
of obtaining the view of different participants around improvements in the business model of the sector. Issues such as the expansion
of the Free Market and removal of barriers to the entry of its participants, hourly energy price, adequate allocation of risks,
security of supply and socio-environmental sustainability were discussed. Further regulation is expected for the years to come
with bills being discussed in the Brazilian Congress in order to implement reforms in the power sector. For more information see
“Potential New Regulatory Framework”.

Regulation under the New
Industry Model Law and further rules enacted

A July 2004
decree governs the purchase and sale of electricity in the regulated market and the Free Market, as well as the granting of authorizations
and concessions for electricity generation projects. This decree includes, among other items, regulations relating to auction procedures,
the form of power purchase agreements and the mechanism for passing costs through to final customers.

These regulations
establish the guidelines under which electricity-purchasing agents must contract their electricity demand. Electricity-selling
agents must show that the energy to be sold comes from existing or planned power generation facilities. Agents that do not comply
with such requirements are subject to penalties imposed by ANEEL.

These regulations
also require electricity distribution companies to contract for 100% of their energy needs primarily through public auctions. In
addition to these auctions, distribution companies can purchase limited amounts (up to 10% of their demand) from: (i) generation
companies that are connected directly to the distribution company (except for hydroelectric power plants with capacity higher than
30 MW and certain thermoelectric power plants) (ii) electricity generation projects participating in the initial phase of the Proinfa
Program, (iii) the Itaipu Power Plant and (iv) quotas from those generation concession contracts extended or subject to a new competitive
bidding process in accordance with the 2013 Concession Renewal Law.

The MME establishes
the total amount of energy that will be contracted in the regulated market, the number and the type of generation projects that
will be auctioned each year.

All electricity
generation, distribution and trading companies, independent producers and Free Customers are required to notify MME, by August
1st of each year of their estimated electricity demand or estimated electricity generation, as the case may be, for
each of the subsequent five years. In advance of each electricity auction, each distribution company is also required to inform
MME of the amount of electricity that it intends to contract in the auction. In addition, distribution companies are required to
specify the portion of the contracted amount they intend to use to supply potentially Free Customers.

Auctions in the Regulated
Market

Electricity
auctions for new generation projects are held from the third to the seventh year before the initial delivery date of electricity
(“A-3 to A-7 Auctions”). Electricity auctions for existing generation projects are held (i) from the first to the fifth
year before the initial delivery date (“A to A-5 Auctions”), and (ii) up to four months before the initial delivery
date (“Adjustment Auctions”).

New and existing
power generators may participate in the Reserve Energy Auctions as long as these generators increase the power system capacity
or if they did not achieve commercial operation by January 2008. Invitations to bid in the auctions are prepared by ANEEL in accordance
with guidelines established by the MME, including the requirement that the lowest bid wins the auction. Each generation company
that participates in the auction executes a contract for the purchase and sale of electricity with each distribution company, in
proportion to the distribution companies’ respective estimated demand for electricity, except for the market adjustment and
Reserve Energy Auctions.

84


Table of Contents


The contracts
for new generation projects have a term between 15 and 35 years, and the contracts for existing generation projects have a term
between 1 and 15 years. Contracts arising from market Adjustment Auctions are limited to a two-year term. The reserve energy contracts
are limited to a 35-year term.

The quantity
of energy contracted from existing generation facilities may be reduced for three reasons: (i) to compensate for Captive Customers
that become Free Customers; (ii) to compensate for market deviations from the estimated market projections (up to 4% per year of
the annual contracted amount, beginning two years after the initial electricity demand is estimated); and (iii) to adjust the quantity
of contracted energy in bilateral agreements entered into prior to the enactment of the New Industry Model Law.

With regard
to (i) above, the reduction in net revenue caused when a Captive Customer becomes a Free Customer is partially compensated by the
increased amounts that Free Customers are required to pay to use our distribution system. However, a Free Customer may disconnect
from our distribution grid (and therefore cease to pay us a distribution tariff) if it chooses to connect directly to the Interconnected
Transmission System or if it generates energy for self-consumption and transports this energy without using our distribution grid.
Because a Free Customer that connects directly to the Interconnected Transmission System no longer pays us a distribution tariff,
we might not be able to fully recover this loss in revenues.

Since 2004,
CCEE has conducted twenty-seven (27) auctions for new generation projects, twenty two (22) auctions for energy from existing power
generation facilities, ten (10) auctions for reserve energy in order to increase energy supply security, three (3) auctions from
alternative energy sources and thirteen (13) auctions for market adjustments. No later than August 1 of each year, the generators
and distributors provide their estimated electricity generation or estimated electricity demand for the five subsequent years.
Based on this information, MME establishes the total amount of electricity to be traded in the auction and determines which generation
companies will participate in the auction. The auction is carried out electronically in two phases.

After the completion
of the auction (except in the case of reserve energy auction), generators and distributors execute the CCEAR, in which the parties
establish the price and amount of the energy contracted in the auction. The price is adjusted annually based on price variations
published by the IPCA. The distributors grant financial guarantees to the generators (mainly receivables from the distribution
service) to secure their payment obligations under the CCEAR.

Also after
completion of the Reserve Energy Auction, the generation concessionaire and the CCEE execute the Contrato de Energia de Reserva,
in which the parties establish the price and amount of the energy contracted for in the auction. The distributors, Free Customers
and self-producing customers then execute the Contrato de Uso da Energia de Reserva (“CONUER”) with CCEE, in
order to provide for the terms of the use of the reserve energy. The reserve energy customers grant financial guarantees to CCEE
to secure their payment obligations under CONUER.

The 2013 Concession
Renewal Law established that generation concessions entered into prior to 2003 that were not renewed would be subject to a new
competitive bidding process and that the energy generated by these facilities will be allocated by the Brazilian federal government
in quotas to the regulated market, for purchase by distribution concessionaires. On November 25, 2015, ANEEL carried out a competitive
bidding process for the grant of new 30-year concessions of 29 hydroelectric plants in accordance with the 2013 Concession Renewal
Law. Until December 31, 2016, 100% of the electricity generated by such 29 hydroelectric plants must be destined to the regulated
market and, as of January 1, 2017, the percentage was reduced to 70%. On September 27, 2017, the ANEEL carried another competitive
bidding process for the grant of new 30-year concessions of 4 hydroelectric plants in accordance with the 2013 Concession Renewal
Law. In this auction, the percentage destined to the regulate market was 70% since the beginning of the concession.

The Annual Reference Value

Brazilian
regulation establishes a mechanism (“Annual Reference Value”) that limits the costs that can be passed through to final
customers.

85


Table of Contents


The regulation
establishes certain limitations on the ability of distribution companies to pass-through costs to customers, such as no pass-through
of costs for electricity purchases that exceed 105% of actual demand.

The MME establishes
the maximum acquisition price for electricity generated by existing projects. If distributors do not comply with the obligation
to fully contract their demand, the pass-through of costs from energy acquired in the short-term market is the lower of the Spot
Market price and the Annual Reference Value.

Electric Energy Trading Convention

The Electric
Energy Trading Convention (Convenção de Comercialização de Energia Elétrica) regulates
the organization and functioning of the CCEE and defines, among other things, (i) the rights and obligations of CCEE participants,
(ii) the penalties to be imposed on defaulting agents, (iii) the means of dispute resolution, (iv) trading rules in the regulated
and Free Markets, and (v) the accounting and clearing process for short-term transactions.

Restricted Activities of
Distributors

Distributors
in the Interconnected Transmission System are not permitted to (i) engage in activities related to the generation or transmission
of electric energy, (ii) hold, directly or indirectly, any interest in any other company, corporation or strategic agreement, or
(iii) engage in activities that are unrelated to their respective concessions, except for those permitted by law or the relevant
concession agreement. According to Law No. 13,360/2016, distributors are allowed to sell energy to Free Customers. This possibility
is regulated by ANEEL through REH No. 824/2018, with the application of the Electricity Surplus Sale Mechanism - MVE.

Elimination of Self-Dealing

Since the purchase
of electricity for Captive Customers is now performed through auctions in the regulated market, “self-dealing” (under
which distributors were permitted to meet up to 30% of their energy needs using energy that was either self-produced or acquired
from affiliated companies) is no longer permitted.

Challenges to the Constitutionality
of the New Industry Model Law

The New Industry
Model Law is currently being challenged on constitutional grounds before the Brazilian Supreme Court. The Brazilian government
moved to dismiss the actions, arguing that the constitutional challenges were moot because they related to a provisional measure
that had already been converted into law. To date, the Supreme Court has not reached a final decision and we do not know when such
a decision may be reached. While the Supreme Court is reviewing the law, its provisions have remained in effect. Regardless of
the Supreme Court’s final decision, certain portions of the New Industry Model Law relating to restrictions on distributors
performing activities unrelated to the distribution of electricity, including sales of energy by distributors to Free Customers
and the elimination of self-dealing, are expected to remain in full force and effect.

Tariffs for the Use of the Distribution and Transmission
Systems

ANEEL regulates
access to the distribution and transmission systems and establishes tariffs for the use of these systems. The tariffs are (i) network
usage charges, which are charges for the use of the proprietary local grid of distribution companies (“TUSD”) and (ii)
for the use of the transmission system, which is the Interconnected Transmission System and its ancillary facilities (“TUST”).

TUSD

Users of a
distribution grid pay the distribution concessionaire a tariff known as the TUSD (Tarifa de Uso dos Sistemas Elétricos
de Distribuição). The TUSD is divided into two parts: one related to the contracted power in R$/kW and another
related to the regulatory charges in R$/kWh. The amount paid by the users of a distribution grid is calculated by multiplying the
maximum contracted power for each of the customer’s points

86


Table of Contents


of connection to the concessionaire’s
distribution grid, by the tariff in R$/kW, plus the product of the power consumption by the tariff in R$/kWh, per month.

In relation
to the Captive Customers, the TUSD is part of the supply tariff that is calculated based on the voltage used by each customer.

TUST

The TUST (Tarifa
de Uso do Sistema de Transmissão)is paid by distribution companies, generators and Free Customers to transmission companies
for the use of the Interconnected Transmission System (electrical transmission system with a voltage equal or higher than 230 kV).
This tariff is revised annually according to (i) the location of the user of the Interconnected Transmission System and (ii) the
annual revenues that a transmission company is permitted to collect for the use of its assets in the Interconnected Transmission
System. The ONS, an entity that represents all transmission companies that own assets in the Interconnected Transmission System,
coordinates the payment of transmission tariffs to these transmission companies. Users of the Interconnected Transmission System
sign contracts with the ONS, which allows them to use the transmission grid in return for paying TUST.

Distribution Tariffs

Distribution
tariff rates to final customers are subject to review by ANEEL, which has the authority to adjust and review these tariffs in response
to changes in energy purchase costs and market conditions. When adjusting distribution tariffs, ANEEL divides the costs of distribution
companies into (i) costs that are beyond the control of the distributor, (“Parcel A costs”), and (ii) costs that are
under control of distributors (“Parcel B costs”). ANEEL’s tariff adjustment formula treats these two categories
differently.

Parcel A
costs include, among others, the following:

| | · | costs of electricity purchased by the
concessionaire to attend Captive Customers, in accordance to the regulatory model in force;
| | - | ---------------------------------------------------------------------------------------------------------------------------------

| | · | charges for the connection to and use
of the transmission and distribution grids; and
| | - | -------------------------------------------------------------------------------------

| | · | energy sector regulatory charges.
| | - | ---------------------------------

Parcel B costs
include, among others, the following:

| | · | a component designed to pay the distributor
for the investments made by the distributor on the concession assets;
| | - | -----------------------------------------------------------------------------------------------------------------

| | · | depreciation costs; and
| | - | -----------------------

| | · | a component designed to compensate the
distributor for its operating and maintenance costs.
| | - | -------------------------------------------------------------------------------------------

Each distribution
company’s concession agreement provides annual readjustments. In general, Parcel A costs are fully passed through to customers.
Parcel B costs, however, are adjusted for inflation in accordance with the IPCA Index, minus the X factor.

Electricity
distribution concessionaires are also entitled to periodic tariff revisions (revisão periódica) every four
or five years. In these processes, Parcel B is recalculated, taking into account incentives for efficiency, quality improvement
and reasonable tariff. These revisions are aimed at (i) assuring necessary revenues to cover efficient Parcel B operational costs
and adequate compensation for investments deemed essential for services provided within the scope of each such company’s
concession and (ii) determining the “X factor”. The fifth amendment to our concession agreement, which establishes
the renewal of our concession agreement, determines the Periodic Tariff Review every five years.

87


Table of Contents


The X factor
for each distribution company is calculated based on the following components:

| | · | P, based on the concessionaire’s
productivity, which is calculated through the productivity of the distribution segment (PTF), determined by the relation between
the variation of the billed market and the operating and capital costs, plus the average growth of the billed market and the consumer
units of the concessionaire itself;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | T, based on the trajectory of the concessionaire’s
operating costs, measured as the difference between the cost benchmarks established by ANEEL and the concessionaire’s actual
operating costs; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Q, based on quality target indicators
that measure the interruption of energy supply to final customers, and other quality indicators.
| | - | --------------------------------------------------------------------------------------------------------------------------------------

In addition,
a distribution concessionaire may request an Extraordinary Tariff Review of its tariffs in case of evident economic-financial imbalance,
according to the admissibility criteria established through the Tariff Regulation Procedures (PRORET), sub-module 2.9. Extraordinary
tariff adjustments were granted (i) in June 1999 to compensate for increased costs of electricity purchased from Itaipu as a result
of the devaluation of the real against the dollar; (ii) in 2000 to compensate for the increase in Social Security Financing
Contribution (Contribuição para o Financiamento da Seguridade Social - COFINS) from 2% to 3%; (iii)
in December 2001 to compensate for losses caused by the Rationing Program; (iv) in January 2013, due to the enactment of 2013 Concession
Renewal Law; (v) in March 2015, to compensate the costs related to the quotas of the Electric Development Account (CDE) and increased
costs with the purchase of energy, and (vi) in March 2017, to compensate the amount unduly included in the tariffs for captive
consumers in 2016, referring to the Angra III plant.

Since October
2004, on the date of a subsequent tariff adjustment or tariff revision, whichever occurs earlier, distribution companies have been
required to execute separate contracts for the connection and use of the distribution grid and for the sale of electricity to their
potentially Free Customers.

Tariff Flags (Bandeiras Tarifárias)

Effective
as of January 1, 2015, a new system has been introduced by the ANEEL to permit distribution concessionaires to pass on to their
final customer certain variable cost increases attributable to changes in hydrological conditions in Brazil, prior to the formal
tariffs periodic revisions made by ANEEL.

In accordance
with this model, a green, yellow or red flag, as determined by ANEEL, is included in invoices sent to final customers, reflecting
nationwide hydrological conditions (except for the State of Roraima). If a green flag is added to final customers’ invoices
due to satisfactory hydrological conditions, no additional charges are added. On the other hand, if these invoices contain yellow
or red flags, this indicates that distribution concessionaires are facing higher variable costs from the acquisition of electricity
and will pass these costs on to final customers.

Incentives

In 2000, a
Federal decree created the Thermoelectric Priority Program, (Programa Prioritário de Termoeletricidade, or“PPT”),
for the purposes of diversifying the Brazilian energy matrix and decreasing Brazil’s strong dependence on hydroelectric plants.
The incentives granted to the thermoelectric plants included in the PPT were: (i) guarantee of gas supply for 20 years, as per
a MME regulation, (ii) assurance that the costs related to the acquisition of the electric energy produced by thermoelectric plants
will be passed on to customers through tariffs up to the normative value established by ANEEL, and (iii) guarantee of access to
a special BNDES financing program for the electric energy industry.

In 2002, the
Brazilian government established the Proinfa Program to encourage the generation of alternative energy sources. Under the Proinfa
Program, Eletrobras would purchase the energy generated by alternative sources for a period of 20 years. In its initial phase,
the Proinfa Program was limited to a total

88


Table of Contents


contracted capacity of 3,300 MW. In its
second phase, which should start after the 3,300 MW cap has been reached, the Proinfa Program intends to purchase up to 10% of
Brazil’s annual electric energy consumption from alternative sources. The first phase of the Proinfa program commenced in
2004 and it so far has supported the construction of 131 alternative energy plants which is expected to reach the production of
11.2 million MWh. According to a decision of ANEEL, the total investment to the Proinfa Program in 2020 will be R$3.3 billion.

Energy Sector Regulatory Charges

EER

The Encargo
de Energia de Reserva(“EER”) is a regulatory charge designed to raise funds for energy reserves that have been
contracted through CCEE and which are deposited in the Reserve Energy Account (Conta de Energia de Reserva – CONER).
These energy reserves, which are mandatory, were created in order to attempt to ensure a sufficient supply of energy in the Interconnected
Transmission System. The EER shall be collected from final customers of the Interconnected Transmission System. Beginning in 2010,
this charge has been collected on a monthly basis.

RGR Fund

In certain
circumstances, electric energy companies are compensated for certain assets used in connection with a concession if the concession
is revoked or is not renewed. In 1971, the Brazilian Congress created a reserve fund designed to provide these compensatory payments
(“RGR Fund”). In February 1999, ANEEL established a fee requiring public-industry electric companies to make monthly
contributions to the RGR Fund at an annual rate equal to 2.5% of the company’s fixed assets in service, not to exceed 3%
of total operating revenues in any year. Since the enactment of the 2013 Concession Renewal Law, the RGR Fund has been used to
fund the compensations arising from the termination of non-renewed concessions. The 2013 Concession Renewal Law also allowed the
funds from the RGR Fund to be transferred to the CDE.

According
to 2013 Concession Renewal Law, as from January 1, 2013, the concession contracts from concessionaires of (i) distribution; (ii)
transmission which competitive bidding process occurred after September 12, 2012; and (iii) transmission and generation which had
their concession contract renewed or had their underlying facilities subject to a new competitive bidding process are no longer
obliged to pay the annual RGR fee.

UBP

Some hydroelectric
generation enterprises (except small hydroelectric power plants) are required to make contributions for using a public asset, Uso
de Bem Público (“UBP”) according to the rules of the corresponding public bidding process for the granting
of concessions. Eletrobras receives the UBP payments in a specific account. See Note 27 to our audited consolidated financial statements.

ESS

The
costs related to maintaining system reliability and stability when thermoelectric plants generate energy to meet demand in the
National Connection System (SIN) are called System Service Charges, or Encargos de Serviços de Sistema (ESS). These
amounts are paid by each entity that purchases energy in the Spot Market (CCEE), proportional to each such entity’s consumption.

ESS
is expressed in R$/MWh and paid only to thermoelectric plants that generate energy in response to requests by the Electricity System
National Operator (ONS).

CDE

In 2002, the
Brazilian government instituted the Electric Energy Development Account, Conta de Desenvolvimento Energético (“CDE
Account”). The CDE Account is funded by (i) annual payments made by

89


Table of Contents


concessionaires for the use of public assets,
(ii) penalties imposed by ANEEL, (iii) the annual fees paid by agents offering electric energy to final customers, by means of
an additional charge added to the tariffs for the use of the transmission and distribution grids and (iv) transfer of resources
from the Federal General Budget. The CDE Account was originally created, amongst others, to promote the availability of electric
energy services to all of Brazil and the competitiveness of the energy produced by alternative sources.

Currently,
CDE aims to fund several public policies in the Brazilian electricity sector, such as: universalization of the electricity service
throughout the national territory; granting of tariff discounts to various users of the service (low income; rural; Irrigating;
public water, sewage and sanitation services; incentive energy generation and consumption, etc.); low tariff on isolated electricity
systems (Fuel Consumption Account - CCC); competitiveness of electricity generation from the national coal source; among others.
The CDE is managed by CCEE since May, 2017, pursuant to Federal Law No. 13,360/2016. This charge had been substantially reduced
by the 2013 Concession Renewal Law (approximately 75% compared to its December 31, 2011 amount) in an attempt to reduce the cost
of electricity paid by final customers. The 2013 Concession Renewal Law also allowed the funds from the RGR Fund to be transferred
to the CDE Account, provided that the Federal Treasury would also contribute with the CDE Account and permit the funds deposited
in the CDE Account to be used in support of the electricity generation program in non-integrated electric grids (sistemas elétricos
isolados) as well as to partially offset the increased costs borne by distribution concessionaires for the purchase of energy
in the Spot Market as a result of the non-renewal of generation concessions due to the 2013 Concession Renewal Law.

On
March 7, 2014, the Brazilian government also permitted the transfer to distribution concessionaires of funds deposited in the CDE
Account to cover their respective costs arising from involuntary exposure to the Spot Market in January 2014 as a result of poor
hydrological conditions in 2013 and 2014, which mandated the acquisition of thermoelectric energy at higher prices in the Spot
Market, costs which distribution concessionaires were not able to pass on to Final Customers through regular Retail Tariffs prior
to annual readjustments or formal tariffs periodic revisions made by ANEEL.

Distribution
concessionaires will be able to pass on to its final customer a CDE Account charge, to the extent necessary to repay their respective
financing obligations contracted by the CCEE through the ACR Account. See “Regulated Market Account – ACR Account.”

On February
27, 2015, ANEEL approved a significant increase of the CDE fee charged to cover all of these additional costs supported by the
CDE Account. ABRACE, an association of Free Customers filed lawsuits to contest the increase of the CDE fee. Since July 2015, the
Free Customers associated with ABRACE benefit from an injunction suspending the increase of the CDE fee. Associations of distributors
of energy (ABRADEE, with whom Copel Distribuição is associated) also obtained injunctions suspending its obligation
to withhold such CDE fees while ABRACE ́s and other consumers’ injunction remains in force.

Federal Law
No. 13,360/2016 established that the Federal Government must prepare a plan for a structural reduction of the CDE charge until
December 31, 2017, and it also provided that the revenues, expenses and beneficiaries of the CDE Account must be published monthly
by CCEE, among other changes. As a result, Decree no 9,642/2018 was published, which determined the gradual reduction, in
5 years, of discounts granted to consumer units classified as Rural and Public Service of Water, Sewage and Sanitation, in Groups
A (high voltage) and B (low voltage).

Regulated Market Account
– ACR Account.

On April 2014,
the Brazilian government created the Regulated Market Account, Conta no Ambiente de Contratação Regulada –
Conta-ACR (“ACR Account”), to assist distribution concessionaires to cover their respective costs for the acquisition
of thermoelectric energy for the period from February 2014 to December 2014, incurred as a result of poor hydrological conditions.
Distributors incurred higher costs as a result of adverse hydrological conditions because they were required to buy thermoelectric
energy at higher prices in theSpot Market, and were unable to pass all these costs on to Final Customers prior to a formal tariff
periodic revision made by ANEEL. To fund the ACR Account, the Brazilian federal government authorized the CCEE to enter into credit
agreements with certain Brazilian financial institutions. An aggregate of R$21.7 billion,

90


Table of Contents


composed of nine tranches, was deposited
in the ACR Account. Distribution concessionaires have been repaying this loan since 2015 by charging its final customers with additional
CDE Account amounts on a monthly basis. At first, the amount deposited in the ACR Account should be repaid by 2020. However, in
March 2019, ANEEL authorized CCEE to negotiate with the creditor financial institutions and seek early termination of the corresponding
loans, which occurred in September 2019

Itaipu Transmission Fee

The Itaipu
Hydroelectric Plant has an exclusive transmission grid and is not part of the Interconnected Transmission System. Companies that
are entitled to receive electricity from Itaipu pay a transmission fee in an amount equal to their proportional share of the Itaipu
generated electricity.

Use of Water Resources Tax

Holders of
concessions and authorizations that allow for the exploitation of water resources must pay a total tax of 6.75% of the value of
the energy they generate, which for the purposes of this calculation is based on a rate set by ANEEL. Beginning on January 1, 2020,
ANEEL set this rate at R$79.62/MWh. The proceeds of this tax are shared among the states and municipalities where the plant or
the plant’s reservoir is located, as well as with certain federal agencies.

ANEEL Inspection Fee (TFSEE)

The ANEEL
Inspection Fee is an annual fee due by the holders of concessions, permissions or authorizations equal to an ANEEL determined percentage
of their revenues. The ANEEL Inspection Fee requires these holders to pay up to 0.4% of their annual revenue to ANEEL in 12 monthly
installments.

Default on the Payment of
Regulatory Charges

The failure
to pay required contributions to the RGR Fund, Proinfa Program or CDE Account or to make certain payments, such as those due from
the purchase of electric energy in the regulated market or from Itaipu, will prevent the defaulting party from receiving adjustments
or reviews of their tariffs (except for an extraordinary review) and will also prevent the defaulting party from receiving funds
from the RGR Fund or CDE Account. We comply with payment obligations related to Regulatory Charges.

Energy Reallocation Mechanism

The Energy
Reallocation Mechanism (Mecanismo de Realocação de Energia,or
MRE) attempts to mitigate the risks borne by hydroelectric generators due to variations in river flows (hydrological risk).

Under Brazilian
law, each hydroelectric plant is assigned a determined amount of “assured energy”, according to an energy supply risk
criteria defined by MME, based on historical river flow records. The assured energy also represents the maximum energy that can
be sold by the generator, which is set forth in each concession agreement, irrespective of the volume of electricity actually generated
by the facility.

The MRE tries
to guarantee that all participating plants receive the revenue corresponding to their assured energy, irrespective of the volume
of electricity generated by them. In other words, the MRE effectively reallocates the electricity, transferring the surplus from
those who have produced in excess of their assured energy to those that have produced less than their assured energy. The relocation,
which occurs in the Interconnected Transmission System, is determined by the ONS, considering the nationwide electricity demand
and hydrological conditions, regardless of the power purchase agreement of each individual generator. The volume of electricity
actually generated by the plant, whether more or less than their assigned assured energy quotient, is priced pursuant to a tariff
known as the “Energy Optimization Tariff”, designed to cover only the variable operation and maintenance costs of the
plant, so that generators are largely unaffected by the actual dispatch of their plants.

91


Table of Contents


Each
hydroelectric plant which has its concession contract renewed in accordance to 2013 Concession Renewal Law will no longer participate
in the MRE, and the hydrological risk from those plants will be borne by the distribution concessionaires under the National Interconnected
Power Grid. For the generation plants with expired concessions, which were subject to a new competitive bidding process under the
2013 Concession Renewal Law, 30% of the generated energy available for the generation concessionaire to sell in the market is also
subject to the MRE hydrological risk allocation mechanism. This risk does not impact our distribution business, since we are allowed
to increase the tariffs of our distribution customers to compensate any costs arising from this hydrological risk.

Research and Development

The companies
holding concessions and permissions for distribution of electricity must invest a minimum of 0.50% of their annual net operational
revenues in research and development and 0.50% in energy efficiency programs. Beginning on January 1, 2023, these percentages will
become 0.75% and 0.25%, respectively.

A company
holding concessions and authorizations for generation and transmission of electricity must invest a minimum of 1% of its annual
net operational revenues in research and development. A company that generates electricity exclusively from small hydroelectric
power plants, cogeneration or alternative energy projects is not subject to this requirement.

The amount
to be invested in research and development must be distributed as follows:

| | · | 40% to the company research and development
projects, under the supervision of ANEEL;
| | - | -------------------------------------------------------------------------------------

| | · | 40% to the Ministry of Sciences and Technology,
to be invested in national research and development projects; and
| | - | -----------------------------------------------------------------------------------------------------------------

| | · | 20% to the MME, to defray EPE.
| | - | ------------------------------

Environmental Regulations

The Brazilian
Federal Constitution includes environmental matters among the ones that are subject to concurrent legislative competence, meaning
that the Brazilian federal government enacts general rules, which are supplemented by rules passed by states; municipalities, in
turn, enact local rules or supplement federal and/or state legislation.

In
1981, the National Environmental Policy was enacted in Brazil (Federal Law No. 6,938/1981). The Federal Environmental Crimes Act
(Federal Law No. 9,605/1998), which took effect in 1998, establishes a general framework of liability for environmental crimes.
Federal laws and statutes have established the National System for Management of Water Resources and the National Council of Water
Resources to address the major environmental issues facing the hydroelectric sector and users of water resources. In 2000, the
Brazilian government created an independent agency, the National Water Agency, to regulate and supervise the use of water resources.
In 2008, the Federal Decree No. 6,514/2008 was enacted to prescribe the administrative liability due for environmental infractions.

The Brazilian
Forestry Code (Federal Law No. 12,651/2012) and related regulations establish rules regarding the maintenance and acquisition of
areas affected by hydroelectric plant reservoirs. These regulations may result in increased maintenance, reforestation and expropriation
costs to energy industry concessionaires. We have been developing conservation actions in our power plants, as established in the
Forestry Code, since their construction.

Under Brazilian
environmental Law, one single action that causes risk to the environment can trigger three types of liability: civil, administrative
and criminal.

92


Table of Contents


Thus, a violator
of an environmental law may be subject to administrative and criminal sanctions and, in case environmental damage occurs, will
have an obligation to repair or provide compensation to the affected party. Administrative sanctions may apply to both the company
and the individual representatives of the company concomitantly and may include substantial fines and the suspension of activities.
Criminal sanctions may include fines and, for individuals, including for directors and employees of companies that commit environmental
crimes, possible imprisonment.

Our energy
generation, distribution and transmission facilities are subject to prior environmental licensing procedures, which may include
the preparation of environmental impact assessments before such facilities are constructed. As a condition for the regularity of
these procedures, we must also request authorization from certain regulatory entities, such as Brazilian Institute of National
Historic and Artistic Heritage (Instituto do Patrimônio Histórico e Artístico Nacional – IPHAN),
an oversight body that is in charge of the protection and preservation of Brazilian cultural heritage (archeological, material
and immaterial). Once the respective environmental licenses are obtained, their maintenance is still subject to compliance with
certain requirements.

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial
Review and Prospects

The information presented in this
section should be read together with our audited consolidated statements of income for the years ended December 31, 2019, 2018
and 2017 that have been prepared in accordance with IFRS as issued by the IASB. For more information see “Presentation of
Financial and Other Information” and Note 3 to our audited consolidated financial statements for the year ended December
31, 2019.

93


Table of Contents




OVERVIEW

Brazilian Economic Conditions

All of our
operations are in Brazil, and we are affected by general Brazilian economic conditions. In particular, the general performance
of the Brazilian economy affects demand for electricity, and inflation affects our costs and our margins. The Brazilian economic
environment faced periods of instability in recent years, impacting the performance of the Brazilian GDP growth rates, with an
increase of 2.3% in 2013 and 0.1% in 2014 and a decrease of 3.8% in 2015. The growth rate was equally negative in 2016, with a
decrease of 3.3%. The economic environment showed signs of recovery in 2017, with an increase of 1.0% in growth rate. In 2018 and
2019, the economic environment continued to recover, with an increase of 1.1% and 1.1%, respectively, in growth rate, but mainly
due to the uncertainties caused by the Brazilian presidential election, the realhas depreciated in comparison to the U.S.
dollar.

The following
table shows selected economic data for the periods indicated:

|                                                       | Year
        ended December 31, |         
|------------------------------------------------------ | ------------------------------- | --------
|                                                       | 2019                            | 2018    
|Inflation (IGP-DI)                                     | 7.70%                           | 7.10%   
|Appreciation (depreciation) of the realvs. U.S. dollar | (4.0%)                          | (17.13)%
|Period-end exchange rate – US$1.00(1)                  | 4.0307                          | 3.8748  
|Average exchange rate – US$1.00                        | 3.9461                          | 3.6558  
|Change in real GDP                                     | 1.1                             | 1.1%    
|Average interbank interest rates(2)                    | 4.40%                           | 6.40%   



|(1) | The real/U.S. dollar exchange rate at December 31, 2019 was R$4.03 per US$1.00.
|--- | -------------------------------------------------------------------------------

|(2) | Calculated in accordance with Central Clearing and Custody House, or Central de Custódia e Liquidação
Financeira de Títulos (“CETIP”), methodology (based on nominal rates).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Sources: | FGV ‒ Fundação Getúlio Vargas, the Brazilian Central Bank, the Brazilian Geography and Statistics
Institute IBGE and CETIP.
| | -------- | ---------------------------------------------------------------------------------------------------------------------------

Rates and Prices

Our operational
results are significantly affected by changes in the prices at which our generation business sells energy, and by the prices at
which our distribution business buys and resells energy.

Our
generation business sells energy at unregulated prices in the regulated market, in the Free Market and in the Spot Market. Our
generation business allocates the amount of energy that it sells in each of these markets seeking to maximize returns, based on
factors such as: (i) the requirements of its concession contracts, many of which set a minimum percentage of energy generated in
a particular concession that must be sold in the regulated market; (ii) the volume of energy that we plan to sell to Free Customers
for a given year; and (iii) the outlook of the short-term, medium-term and long-term for energy prices generally. Although sales
in the Free Market and the Spot Market are not directly regulated, they are influenced by energy regulatory policy. The prices
at which our generation business sells energy are not regulated.

Our distribution
business purchases enough energy to meet 100% of the demand we forecast for our final customers in auctions at unregulated prices
in the regulated market. Our distribution business resells that energy to final customers at regulated tariffs that take into consideration
the price at which the energy was purchased. If our forecasts fall short of the actual electricity demand of our final customers,
we may be forced to make up for the shortfall by entering into short-term agreements to purchase electricity in the Spot Market.
If our forecasts exceed the actual demand of our final customers, our distribution business sells the excess energy in the Spot
Market. The margins in our distribution business tend to be relatively stable due to the regulated nature of the distribution business,
while the margins in our generation business are typically larger but less stable, since they are substantially market regulated.

94


Table of Contents


Sales to final
customers (which include sales by our distribution business to Captive Customers, sales by our generation business and sales by
our trading business to Free Customers) represented approximately 53.5% of the volume of electricity we made available in 2019,
and accounted for 69.1% of our energy sales revenues. Almost all of such sales were to Captive Customers. For more information,
see “Item 4. Information on the Company—The Brazilian Electric Power Industry—Distribution Tariffs”. In
general, if our costs for energy increase, the tariff process permits us to recover these costs from our customers through higher
rates in future periods. However, if we do not receive tariff increases to cover our costs, if the recovery of these costs is delayed,
or if our Board of Directors elects to reduce the tariff increase awarded by ANEEL, our profits and cash flows may be adversely
affected.

ANEEL modifies
our Retail Tariffs annually, generally in June. Since January 2013, the adjustments have been as follows.

| | · | In January 2013, due to the enactment
of 2013 Concession Renewal Law, we were subject to an extraordinary revision that has been approved by ANEEL. The average impact
of this extraordinary review in the tariffs we charge our customers was a decrease of 19.28%.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2013, ANEEL approved the annual
revision of our Retail Tariffs, increasing them by an average of 13.08%, of which 11.40% related to the tariff increase and 1.68%
referred to an increase in recovery of deferred regulatory accounts (CVA). After giving effect to the recovery of Parcel A costs,
the average effect of this tariff readjustment on our Captive Customers was an increase of 14.61%. However, Copel Distribuição
requested a partial deferral of this adjustment, which was authorized by ANEEL and approved on July 9, 2013. The amount of R$255.9
million was therefore deferred, and to be included as a financial component in the 2014 annual revision. This deferral reduced
the average effect of the tariff adjustment to 9.55%.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2014, ANEEL approved the annual
adjustment of our Retail Tariffs, increasing them by an average of 35.38%, of which 25.05% related to the tariff increase and 10.34%
related to an increase in recovery of deferred regulatory accounts (CVA). After giving effect to the recovery of Parcel A costs,
the average effect of this tariff adjustment on our Captive Customers was an increase of 39.71%. However, Copel Distribuição
requested a partial deferral of this adjustment, which was authorized by ANEEL and approved on July 22, 2014. The amount of R$898.3
million was therefore deferred, and to be included as a financial component in the 2015 annual readjustment. This deferral reduced
the average effect of the tariff revision to 24.86%.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In March 2015, ANEEL approved an extraordinary
revision due to a series of events that significantly impacted the distribution concessionaires’ costs, which were not originally
foreseen in the 2014 Retail Tariff increase, such as the increase of Itaipu tariffs (46.14%) and higher prices to purchase energy
in recent energy auctions. Copel Distribuição’s average tariff revision approved by ANEEL was 36.79% starting
from March 2, 2015. Of this total, 22.14% related to CDE Account charges that have been passed to customers and 14.65% relates
to (i) Itaipu’s tariff increase and (ii) the higher prices paid by us to purchase energy in recent energy auctions that have
been passed to customers.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2015, ANEEL authorized the annual
revision of Copel Distribuição’s tariff to final customers, increasing them by an average of 15.32%, of which
(i) 20.58% related to the inclusion of the financial components, which will be recovered in the 12 months subsequent to the adjustment
(including the amount of R$935.3 million corresponding to the deferrals in 2013 and 2014), (ii) 0.34% related to the restatement
of Portion B, (iii) (3.25)% related to the adjustment of Portion A, and (iv) (2.35)% reflected the removal of the financial components
from the previous process. The adjustment was fully applied to Copel Distribuição’s tariffs as of June 24,
2015.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2016, ANEEL approved the fourth
periodic review of our Retail Tariffs, decreasing them by 12.87%, of which: (1.73)% related to the inclusion of financial components;
4.48% due to the update of Portion B; (2.57)% related to the update of Portion A; and (13.05)% reflecting the removal of the financial
components of the previous tariff process.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

95


Table of Contents


| | · | In March 2017, ANEEL approved an extraordinary
tariff revision to correct the amount unduly included in the tariffs for captive consumers in 2016. The return corresponded to
the energy that was to be generated by the Angra III power plant; however, the plant was not yet in commercial operation. The refund
of the amount charged the most was made in a single installment during the month of April 2017, and, as of May 2017, the tariffs
were adjusted to disregard the amount that was being charged. The decision, of extraordinary character, affected 90 distributors
of electric power of the country. Copel’s retail tariff was reduced by an average of 11.8% during April 2017, and in May
2017, the tariff was close to its previous value, retaining an average discount of 1.27% until June 2017.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2017, ANEEL approved the annual
revision of our Retail Tariffs, increasing them by an average of 3.13%, of which 3.86% related to the tariff increase and (0.73)%
related to the inclusion of financial components. After the removal of the financial components of the previous tariff process,
the average effect of this tariff adjustment on our Customers was an increase of 5.85%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2018, ANEEL approved the annual
revision of our Retail Tariffs, increasing them by an average of 14.32%, of which 7.80% related to the tariff increase and 6.52%
related to the inclusion of financial components. After the removal of the financial components of the previous tariff process,
the average effect of this tariff adjustment on our Customers was an increase of 15.99%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2019, ANEEL approved the annual
readjustment of our Tariffs, increasing them on average by 8.57%, with -1.96% related to the variation in economic revenue and
10.54% related to the inclusion of financial components. After removing the financial components from the previous tariff process,
the average effect of the tariff adjustment on our consumers was an increase by 3.41%.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchase and Resale of Energy

Our
distribution business purchases energy from generation companies and resells this energy to final customers at regulated rates.
For more information, see “Item 4. Information on the Company— Business—Generation” and “Item 4.
Information on the Company—Business—Purchases for the captive market”. Our major long-term contracts or purchase
obligations are described as follows.

| | · | We purchase energy from Itaipu at prices
that are determined based on the Itaipu project’s costs, including servicing its U.S. dollar-denominated debt. In 2019, our
electricity purchases from Itaipu amounted to R$1,316 million;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Our distribution business is required
to purchase a large portion of its energy needs from the regulated market. For more information, see “Item 4. Information
on the Company—The Brazilian Electric Power—Industry—Auctions in the Regulated Market”.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Under current
legislation, the amount that our distribution business charges Final Customers is composed of two fees: a fee for the actual energy
consumed and a fee for the use of our distribution grid. Since the regulated rates at which our distribution business sells energy
to final customers are substantially the same as the rates at which it purchases energy (after accounting for deductions and the
cost of energy purchased for resale), our distribution business does not generate operating profit from the sale of electricity
to final customers. Rather, our distribution business generates operating profit principally by collecting tariffs for the use
of our distribution grid.

Impact of the CRC Account

One of our
most significant assets consists of the obligations of the State of Paraná under an agreement that was last amended in October
2017. These obligations derive from amounts we were entitled to recover

96


Table of Contents


under a prior regulatory regime, and as
a result they are referred to as the recoverable rate deficit account or “CRC Account” (Conta de Resultados a Compensar).
The balance is adjusted for IGP-DI, plus interest at 6.65% per year, and is payable in monthly installments until April 2025. If
the State of Paraná fails to make payments on a timely basis, we may apply dividends we owe to the State of Paraná
in its capacity as our shareholder against amounts it owes us under the CRC Account agreement.

In June 2016,
as per the request of the Paraná State Government, our Board of Directors approved an amendment to the CRC Agreement, contingent
upon the approval of the Brazilian Department of Treasury, comprising: (i) a grace period from April 2016 to December 2016, in
which no principal and interest amounts were paid under the CRC Agreement; and (ii) a grace period from January 2017 to December
2017, in which amounts corresponding exclusively to the interest were paid monthly, but no principal amounts were paid. All other
provisions of the CRC Agreement were maintained as they were, including the maintenance of the current correction and interest
rates, thus not affecting the global net present value of such agreement.

The
Company and the State of Paraná formalized the above-mentioned amendment on October 31, 2017, after the consent from the
Brazilian Department of Treasury. The State of Paraná complied with the agreed terms of
such amendment and made monthly interest payments until December 2018.As of December 31, 2019, the outstanding balance
of the CRC Account was R$1,350.7 million.

As
of January 1, 2020, there were 64 monthly installments left. For additional information, see Note 8 to our audited consolidated
financial statements.

Special Obligations

The contributions
received from the federal government and our customers exclusively for investment in our generation assets, transmission and distribution
grid are named as special obligations. We record the amount of these contributions on our statement of financial position as a
reduction of our intangible and financial assets, under the caption “special obligations”, and, upon the conclusion
or termination of the operating concession granted to us, the amount of these contributions is offset against intangible and financial
assets. The amount we recorded as special obligations as of December 31, 2019 was R$2,783.6 million as a reduction of intangible
assets and R$31.1 million as a reduction of contract assets.



97


Table of Contents


CRITICAL ACCOUNTING POLICIES

In preparing
our financial statements, we make estimates concerning a variety of matters as referred to in Note 3.4 to our audited consolidated
financial statements. Some of these matters are highly uncertain, and our estimates involve judgments we make based on the information
available to us. We have discussed in “Overview” above certain accounting policies relating to regulatory matters.
In the discussion below, we have identified several other matters for which our financial information would be materially affected
if either (i) we reasonably used different estimates or (ii) in the future we change our estimates in response to changes that
are reasonably likely to occur.

The discussion
below addresses only those estimates that we consider most important based on the degree of uncertainty and the likelihood of a
material impact if we used a different estimate. There are many other areas in which we use estimates about uncertain matters,
but the reasonably likely effect of changed or different estimates is not material to our financial presentation. Please see Note
3.4 to our audited consolidated financial statements included herein for a more detailed discussion of the application of these
and other accounting policies.

Property, Plant and Equipment



We have adopted
the deemed cost methodology to determine the fair value of Copel Geração e Transmissão’s property, plant
and equipment, specifically for the generation business as of the date of transition of our financial statements to IFRS (January
1, 2009). These assets are depreciated according to the linear method based on annual rates set forth and reviewed periodically
by ANEEL, which are used and accepted by the market as representative of the economic useful life of the assets related to concession’s
infrastructure, limited to the term of said concession, when applicable. The estimated useful life, the residual amounts, and depreciation
are reviewed as of each reporting date, and the effect of any changes in estimates is recorded prospectively.

Accounting for Concession
Arrangements

We account
for our concession contracts segregated in: Financial Assets (Accounts receivable - concession), Contract Assets and Intangible
Assets, as presented below:

Concession of electric power distribution

The portion
that we recognize as a financial asset refers to the indemnification provided for in the concession agreement for public electricity
distribution services that guarantees the unconditional right to receive cash at the end of the concession, to be paid by the granting
authority. This indemnification aims to reimburse the Company for investments made in infrastructure, without recovery, through
the tariff. We calculate the cash flows linked to these assets considering the value of the tariff base called the Regulatory Remuneration
Base - BRR, defined by the granting authority, using the methodology of replacement cost of the assets that are part of the distribution
infrastructure linked to the concession.

The portion
that we recognize as contract asset represents the contractual right of the concessionaire related to the works under construction
to meet the needs of the distribution concession, accounted for at cost plus financial charges, when applicable. When these assets
are put into operation, we transfer to the intangible asset the amount equivalent to what will be remunerated by the user through
payment of the fee for the use of the services, and for the receivables linked to the concession, the amount equivalent to the
residual portion of the assets not amortized which will be reverted to the granting authority through indemnification at the end
of the concession.

The portion
that we recognize as an intangible asset comprises the right to exploit the infrastructure, built or acquired under the concession
regime for the public electric power service, and to charge users for the public service rendered. We record at acquisition cost,
including borrowing costs, less accumulated amortization and impairment losses, when applicable. The amortization of this intangible
asset reflects the pattern in which

98


Table of Contents


we expect the future economic benefits
of the asset to be consumed, with amortization expected during the concession term.

Concession of electric power transmission

The portion
that we recognize as a financial asset refers to the right to indemnification of Concession Agreement No. 060/2001 arising from
the Annual Revenue Allowed - RAP not received in the period from January 2013 to June 2017 for the assets of the Basic Network
of the Existing System - RBSE. On the balance, we recorded monetary restatement and interest.

The portion
that we recognize as a contract asset represents the balance of the public electricity transmission service contracts signed with
the granting authority to build, operate and maintain the high voltage lines and substations of the generation centers up to the
distribution points. During the term of the agreement, we receive, subject to performance, a remuneration denominated Annual Revenue
Allowance (RAP) that amortizes the investments made in the construction of the infrastructure and covers the costs of operation
and maintenance incurred. After the start of the commercial operation and to the extent that the operation and maintenance service
is provided, we recognize this revenue on a monthly basis in the result and invoice together with the part of the revenue recognized
in the construction phase related to the remuneration of the constructed assets. The assets arising from the construction of the
transmission infrastructure are formed by the recognition of the construction revenue and its financial remuneration. Upon expiration
of the concession, if there is a remaining balance not yet received related to the construction of the infrastructure, it will
be received directly from the granting authority, as provided in the concession agreement, as compensation for the investments
made and not recovered through RAP.

We have not
recognized intangible assets for energy transmission concession contracts.

Concession of electric power generation

We recognize
as a financial asset the concession agreement for quota generation that provides for the payment of a bonus for the grant, considering
that this bonus represents an unconditional right to receive cash, guaranteed by the granting authority during the term of the
concession and without risk of demand. The remuneration of this financial asset is based on the weighted average cost of capital
(WACC).

We also recognize
as financial assets the electricity generation concession contracts that contain clauses for indemnification of the infrastructure
not depreciated, amortized and / or received during the term of the concession. At the end of each reporting period, we evaluate
the recoverability of the asset, remeasuring its cash flow based on our best estimate.

In intangible
assets, we record the onerous concession contract for the generation of electric energy, which corresponds to the acquisition of
the right to exploit the hydroelectric power generation potential whose contract provides for payments to the Federal Government
as Use of Public Property - UBP. During the construction of the project, we recognize the amount at the present value of the future
cash outflows during the period of validity of the concession agreement. On the date of commencement of the commercial operation
of the enterprise, the amount presented is fixed and amortized during the concession period.

We also recognize
as an intangible asset the asset constituted by the Generation Scaling Factor (GSF), derived from the excess amount between the
amount recovered from the cost and the MRE (GSF) adjustment factor, subtracted from the total cost of the risk premium to be amortized
over the period of energy supply in the regulated environment. The amount was transformed by ANEEL into an extension of the grant
period, which we amortized on a straight-line basis as from January 1, 2016 until the end of the new concession term.

We did not
recognize a contract asset for the power generation concession contracts

Distribution of piped gas

99


Table of Contents


The portion
that we recognize as a financial asset is the one that will be indemnified by the granting authority corresponding to the investments
made in the ten years prior to the end of the concession provided for in the agreement and which, in Management's opinion, guarantees
the unconditional right to receive cash at the end of the concession. We use the indemnification premise based on the replacement
cost of the concession assets.

The portion
that we recognize as a contract asset comprises the works in progress for the distribution of piped gas which will be transferred
to the intangible asset upon its entry into operation and to the extent that the right (authorization) to receive the users is
received.

The portion
that we recognize as an intangible asset corresponds to the users' right to charge for the gas supply. We initially valued this
asset at acquisition cost, including interest and other capitalized financial charges. We apply the linear depreciation method
based on the estimated useful life of each asset, considering the standard of economic benefit generated by the intangible assets.

In addition to
our financial assets, contract assets and intangible assets, under IFRS we also recognize construction revenues and construction
costs for construction activities we perform in connection with our distribution and transmission concessions. Our distribution
business outsources power distribution infrastructure construction. As a result, under IFRS we recognize construction costs and
revenues in roughly the same amounts. In contrast, since our transmission business performs much of our transmission infrastructure
construction, we recognize construction revenue in amounts that exceed construction costs. The resulting margin for our transmission
business’ construction revenue was 1.65% in 2019, and is calculated based on a methodology that takes into account business
risk.

The determination
of the amortization term of our intangible assets and the fair value of our financial assets in connection with our concession
contracts is subject to assumptions and estimates, and the use of different assumptions could affect the amounts we recognize.
The estimated useful lives of the underlying assets, as well as the rate of return of the financial assets also require significant
assumptions and estimates. Different assumptions and estimates and changes in future circumstances could have a significant impact
on our results of operations.

Additional
information on the accounting for intangible, contract and financial assets arising from concession agreements is contained in
Notes 4.4, 4.5 and 4.9 to our audited consolidated financial statements.

Revenue Recognition

Revenue
from contracts with customers is measured based on the consideration that the Company expects to receive in a contract with the
customer, net of any variable consideration. The Company recognizes revenues when it transfers control of the product or service
to the customer and when it is probable to receive the consideration considering the client's ability and intention to pay the
consideration when due. The Company records unbilled revenue, by estimate, when there is no information on the effective revenue
incurred.

Interest
income is recognized on a straight-line basis and based on time and the effective interest rate on outstanding principal amounts,
when it is probable that future economic benefits will flow to the Company and its amount can be reliably measured.

Revenue
related to construction services for infrastructure in the power transmission and distribution services, and gas distribution,
are recognized using the percentage of completion method at each reporting period and measured on the basis of the proportion of
costs incurred in relation to the total estimated costs of the contracts.

Additional
information is contained in Notes 4.12 and 4.13 to our audited consolidated financial statements.

Net Sectorial Financial Assets
and Liabilities

100


Table of Contents


Until
2009, the Brazilian accounting standards allowed distribution concessionaires to book the difference, if any, between the amounts
that concessionaires were entitled to collect under their respective concession contracts and the amounts they actually collected,
which are referred to as sectorial assets and liabilities. The positive or negative variations in these amounts were included in
the tariffs in the following annual tariff adjustment. With the adoption of IFRS in 2010, these assets and liabilities were no
longer recorded in the financial statements of distribution concessionaires.

As
a result of an amendment to our distribution concession agreement executed on December 10, 2014, we recognized on December 31,
2019, a financial asset of R$474.0 (R$678.8 million in 2018) and a financial liability in the amount of R$102.3 million (R$96.5
million in 2018). This amendment added a guarantee that, if the concession is extinguished for any reason, the residual amounts
of items of Parcel A costs and other financial components that have not been recovered or returned via tariff shall be incorporated
in the calculation of the indemnification amount by the granting authority. For more information, see Note 9 to the audited consolidated
financial statements.

Impairment of Long-Lived
Assets

Long-lived
assets, primarily property, plants and equipment and intangible assets, comprise a significant amount of our total assets. We evaluate
our long-lived assets and make judgments and estimates concerning the carrying value of these assets, including the amounts to
be capitalized, the depreciation/ amortization rates and useful lives of these long-lived assets. The carrying values of these
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.
An impairment loss is recorded in the period in which it is determined that the carrying amount is not recoverable. This requires
us to make long-term forecasts of future revenues and costs related to the assets subject to review. These forecasts require assumptions
about the demand for our products and services, future market conditions and regulatory developments. Significant and unanticipated
changes to these assumptions could require a provision for impairment in a future period. Our evaluation as of December 31, 2019,
resulted in an impairment of our in service and in progress property, plant and equipment in the amounts of R$1,042.5 million and
R$127.6 million, respectively (see Notes 17.1 of our consolidated financial statements).

Provision for Risks (Labor, Civil, Tax and Environmental
Claims)

Our subsidiaries
and we are party to certain legal proceedings in Brazil arising in the normal course of business regarding tax, labor, civil and
environmental claims.

Provisions
are recognized when, and only when: (i) the Company has a present obligation (legal or constructive) resulting from a past event,
(ii) it is probable (i.e., more likely than not) that an outflow of resources embodying economic benefits will be required to settle
the obligation, and (iii) a reliable estimate can be made of the amount to settle the obligation. By their nature, risks will only
be resolved when a future event or events occur or fail to occur. Typically such events will occur a number of years in the future.
The evaluation of these risks is performed by our internal and external legal counsel. Accounting for risks requires significant
judgment by management concerning the estimated probabilities, including classification as probable or possible losses and ranges
of exposure to potential liability. Management’s assessment of our exposure to risks could change as new developments occur
or more information becomes available. The outcome of the risks could vary significantly and could materially impact our consolidated
results of operations, cash flows and financial position. The provision classified as probable losses, as of December 31, 2019
amounted to R$1,606.7 million, of which R$175.8 million was related to tax proceedings, R$591.8 million was related to civil claims,
R$673.1 million was related to labor claims, R$86.2 million was related to employee benefits and R$79.8 million was related to
regulatory proceedings.

As of December
31, 2019, we estimate that the total amount of claims against us, excluding disputes involving non-monetary claims or claims that
cannot be evaluated in the current stage of proceedings, classified as possible losses, was approximately R$3,485.1 million, of
which R$419.9 million correspond to labor claims; R$21.3 million to employee benefits; R$1,141,4 million to regulatory claims;
R$1,273.9 million to civil claims; and R$628.6 million to tax claims. For more information, see Note 29 to our audited consolidated
financial statements.

101


Table of Contents


Employee Retirement and Health
Benefits

We sponsor
a (i) defined-benefit pension plan and a (ii) variable contribution pension plan covering substantially all of our employees. We
have also established a health care plan for current and retired employees. We determine our obligations for these plans based
on calculations performed by independent actuaries using assumptions that we provide about interest rates, investment returns,
rates of inflation, mortality rates and future employment levels (see the assumptions in Note 23.5.1 and the sensitivity analysis
in Note 23.5.8 of our consolidated financial statements). These assumptions directly affect our post-employment benefits liability.

In 2019, we
recorded expenses in the amount of R$238.3 million for our pension and health care plans. We estimate that we will incur expenses
in the amount of R$94.3 million in 2020 for our health care plans (according to actuarial calculations).

102


Table of Contents




Deferred Taxes

We recognize
deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis
of assets and liabilities using prevailing rates. We regularly review our deferred tax assets for recoverability based on historical
taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences. If
we are unable to generate sufficient future taxable income, or if there is a material change in the actual effective tax rates
or time period within which the underlying temporary differences become taxable or deductible, we could be required to derecognize
all or a significant portion of our deferred tax assets resulting in a substantial increase in our effective tax rate and a material
adverse impact on our operating results. The taxes balances subject to the federal taxing department inspection are those constituted
over the last five years. As of December 31, 2019, we have recognized deferred tax assets totaling R$2,069.0 million and deferred
tax liabilities in the amount of R$1,350.8 million. We have not considered any reduction for risk of recovery of such assets (see
Note 13.1.2 to the consolidated financial statements).

Expected credit losses

We
recorded the expected credit losses in amounts deemed sufficient to cover potential losses on the realization of customer receivables
and others whose recovery is considered unlikely. We account for the balance of expected credit losses based on the credit risk
analysis, taking into account specific payment history criteria, recovery actions for credit recovery and the relevance of the
amount due in the receivables portfolio. As of December 31, 2019, we recorded expected credit losses in the amount of R$376.8 million
(see Note 7.3 to our consolidated financial statements for further details including provisions and reversals).

Derivative Financial Instruments

We
negotiate energy purchase and sale operations and part of our contracts are classified as derivative financial instruments measured
at fair value through profit or loss. We recognize in the income for the period unrealized net gains or losses arising from the
mark-to-market of these contracts, based on the difference between contracted and market prices.

In addition, we enter into Non-Deliverable
Forward (“NDF”) contracts, which aim exclusively at providing hedge against exchange rate risks associated with cash
flows from capital contributions to subsidiaries, when they reflect foreign-currency denominated purchases of projected equipment.
They are measured at their fair value, with changes recorded in the statement of income for the year. The fair value is calculated
based on the information of each contracted operation and the respective market information on the closing dates of the financial
statements.

103


Table of Contents


ANALYSIS OF ELECTRICITY SALES
AND COST OF ELECTRICITY PURCHASED

The following table
sets forth the volume and average rate components of electricity sales and purchases for the years ended December 31, 2019, 2018
and 2017:

|                                                              | Year
        ended December 31,
|------------------------------------------------------------- | -------------------------------
|                                                              | 2019                           
|Electricity Sales                                             |                                
|Sales to Final Customers                                      |                                
|Average price (R$/MWh):(1)                                    |                                
|Industrial customers(2)                                       | 284.03                         
|Residential customers                                         | 789.75                         
|Commercial customers                                          | 743.25                         
|Rural customers                                               | 465.30                         
|Other customers(3)                                            | 582.91                         
|All customers(2)                                              | 561.27                         
|Volume (GWh):                                                 |                                
|Industrial customers(2)                                       | 9,000                          
|Residential customers                                         | 7,499                          
|Commercial customers                                          | 5,238                          
|Rural customers                                               | 2,361                          
|Other customers(3)                                            | 2,546                          
|All customers(2)                                              | 26,644                         
|Total revenues from sales to final customers (millions of R$) | 14,954                         
|Sales to distributors(4)                                      |                                
|Average price (R$/MWh)(1)                                     | 213,57                         
|Volume (GWh) (5)                                              | 15,456                         
|Total revenues (millions of R$)                               | 3,301                          
|Electricity Purchases                                         |                                
|Purchases from Itaipu                                         |                                
|Average cost (R$/MWh)(6)                                      | 237.4                          
|Volume (GWh)                                                  | 5,533                          
|Percentage of total Itaipu production purchased               | 8.7                            
|Total cost (millions of R$)(7)                                | 1,316.5                        
|Purchases from Angra                                          |                                
|Average cost (R$/MWh)                                         | 253,58                         
|Volume (GWh)                                                  | 0,978                          
|Total cost (millions of R$)(7)                                | 248.0                          
|Purchases from CCGF                                           |                                
|Average cost (R$/MWh)                                         | 102.28                         
|Volume (GWh)                                                  | 6,274                          
|Total cost (millions of R$)(7)                                | 641.7                          
|Purchases from others(4)                                      |                                
|Average cost (R$/MWh)                                         | 185.27                         
|Volume (GWh)                                                  | 21,045                         
|Total cost (millions of R$)(7)                                | 3,899                          



|(1) | Average prices or costs have been computed by dividing (i) the corresponding revenues or expenses by (ii) MWh of electricity sold
or purchased.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes Free Customers outside Paraná.
|--- | ---------------------------------------

|(3) | Includes public services such as street lighting, as well as the supply of electricity to government agencies, and our own consumption.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(4) | Energy traded between Copel’s subsidiaries not included.
|--- | --------------------------------------------------------

|(5) | Energy Reallocation Mechanism not included.
|--- | -------------------------------------------

104


Table of Contents


|(6) | Our purchases of electricity generated by Itaipu are stated in reais and paid for on the basis of a capacity charge
expressed in U.S. dollars per kW plus a “wheeling” (or transportation) charge expressed in reais per kWh.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | See “Item 4. Information on the Company—Business—Generation” and “Item 4. Information on the Company—Business—
Purchases for the captive market” for an explanation of our expenses relating to electricity purchases.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

105


Table of Contents




RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER
31, 2019, 2018 AND 2017

The following
table summarizes our results of operations for the years ended December 31, 2019, 2018 and 2017.

Our consolidated
financial statements present our operating costs of sales and services provided by function. However, in accordance with IFRS,
Note 32 of our audited consolidated financial statements presents this information according to the nature of the operating cost
or expense. For ease of understanding, the analysis below reflects the information presented by nature.

|                                                           | Year
        ended December 31,
|---------------------------------------------------------- | -------------------------------
|                                                           | 2019                           
|                                                           | (R$million)                    
|Operating Revenues:                                        |                                
|Electricity sales to Final Customers:                      | 10,481.7                       
|Residential                                                | 3,336.4                        
|Industrial                                                 | 1,276.1                        
|Commercial, services and other activities                  | 2,179.5                        
|Rural                                                      | 631.5                          
|Other classes                                              | 3,058.2                        
|Electricity sales to distributors                          | 3,301.3                        
|Use of main distribution and transmission grid             | 8,271.0                        
|Residential                                                | 2,585.9                        
|Industrial                                                 | 1,280.2                        
|Commercial, services and other activities                  | 1,713.6                        
|Rural                                                      | 467.0                          
|Other classes                                              | 597.9                          
|Interest income                                            | 413.2                          
|Other distribution and transmission revenue                | 1,213.2                        
|Construction revenues                                      | 1,132.9                        
|Revenues from telecommunications                           | 532.9                          
|Distribution of piped gas                                  | 1,003.8                        
|Sectorial financial assets and liabilities result          | 25.1                           
|Other operating revenues                                   | 442.4                          
|Fair value of assets from the indemnity for the concession | 36.6                           
|                                                           | 25,227.7                       
|Cost of sales and services provided:                       |                                
|Electricity purchased for resale                           | (6,105.3)                      
|Charge of main distribution and transmission grid          | (1,249.3)                      
|Personnel and management                                   | (1,325.4)                      
|Pension and healthcare plans                               | (238.3)                        
|Material and supplies                                      | (82.2)                         
|Materials and supplies for power electricity               | (49.4)                         
|Natural gas and supplies for gas business                  | (585.2)                        
|Third-party services                                       | (613.1)                        
|Depreciation and amortization                              | (1,093.8)                      
|Accruals and provisions                                    | (374.8)                        
|                                                           |                                

106


Table of Contents




|Construction cost                                             | (1,091.4)  | (1,052.2)  | (1,003.9) 
|------------------------------------------------------------- | ---------- | ---------- | ----------
|Other costs and expenses                                      | (352.2)    | (342.7)    | (414.0)   
|                                                              | (13,160.3) | (12,676.6) | (11,984.9)
|Equity in earnings of associates and joint ventures           | 106.8      | 135.9      | 101.7     
|Financial results                                             | (488.5)    | (438.1)    | (748.4)   
|Profit before income tax and social contribution              | 2,702.2    | 1,956.0    | 1,392.9   
|Income tax and social contribution on profit                  | (639.3)    | (512.0)    | (274.7)   
|Net income for the year                                       | 2,062.9    | 1,444.0    | 1,118.3   
|Net income attributable to controlling shareholders           | 1,989.9    | 1,407.1    | 1,033.6   
|Net income attributable to non-controlling interest           | 72.9       | 36.9       | 84.7      
|Other comprehensive income                                    | 123.2      | 38.5       | 31.3      
|Comprehensive income                                          | 1,939.7    | 1,405.6    | 1,086.9   
|Comprehensive income attributable to controlling shareholders | 1,862.5    | 1,368.5    | 1,002.4   
|Comprehensive income attributable to non-controlling interest | 77.2       | 37         | 84.5      



Results of Operations for 2019
Compared with 2018

Operating
Revenues

Our
consolidated operating revenues increased by 6.3% or R$1,502.1 million in 2019 compared to 2018. This result reflected an increase
of R$377.7 million in electricity sales to Final Customers; an increase of R$35.6 million in construction revenues; an increase
of R$250.6 million in the distribution of piped gas; an increase of R$ 20.4 million in telecommunications revenues; and an increase
of R$220 million in other operating revenues; an increase of R$165.1 million in electricity sales to distributors; and an increase
of R$1,403.7 million in the use of our main transmission grid. These increases were partially offset by a reduction of R$960.2
million in sectorial financial assets and liabilities and a reduction of R$10.9 million in fair value of the indemnity for the
concession assets.

Electricity
Sales to Final Customers. Our revenues from electricity sales to Final Customers increased by 3.7%, or R$377.7 million, to
R$10,481.7 million in 2019 compared to R$10,104.0 million in 2018, mainly due to an increase of 3.96% of total power consumption
of our Final Customers, from 25,627 GWh in 2018 to 26,644 GWh in 2019, as follows:

| | · | The volume of electricity sold to residential
customers increased by 3.6% in 2019 compared to 2018, while there was an increase in the number of customers by 1.9%.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to industrial
customers, including both Captive Customers and Free Customers, increased by 3.9% in 2019 compared to 2018, mainly due to the growth
of energy consumption of industrial customers in the Free Market, partially offset by the reduction of 1.5% in the number industrial
customers in the captive market.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to commercial
customers, including both Captive Customers and Free Customers, increased by 5.2% in 2019 compared to 2018. The number of Captive
customers increase by 1.6%, in 2019 compared to 2018.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to rural
customers increased by 3.2% in 2019 compared to 2018. This increase is mainly due to the performance of agribusiness in the State
of Paraná.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Electricity
Sales to Distributors. Our revenues from electricity sales to distributors increased by 5.3%, or R$165.1 million, to R$3,301.3
million in 2019 compared to R$3,136.2 million in 2018. This increase was mainly due to the increase in our revenues from electricity
sold in regulated contracts, which increased by 121.8%, or R$469.1 million, to R$854.2 million in 2019 compared to R$385.1 million
in 2018.

107


Table of Contents


Use
of main distribution and transmission grid. Our revenues from the use of main distribution and transmission grid increased
by 20.4%, or R$1,403.8 million, to R$8,271.0 million in 2019 compared to R$6,867.2 million in 2018. This increase was mainly due
the 3.3% growth in the grid market and the tariff readjustment of Copel Distribuição (with an increase of 16.42%
and 11.63% in TUSD as of June 24, 2018 and June 24, 2019, respectively), and the entry into operation of new transmission assets
that increased.

Construction
revenues. Our revenues construction increased by 3.2%, or R$35.6 million, to R$1,132.9 million in 2019, compared to R$1,097.3
million in 2018. This increase was mainly due to the intensification of construction efforts in 2019 with the objective of improving
our distribution and transmission infrastructure.

Fair
value of assets from the indemnity for the concession. The fair value of the assets from the indemnity for the concession decreased
by 22.9%, or R$10.9 million, to R$36.6 million in 2019, compared to R$47.5 million in 2018. The decrease was mainly due to lower
variation in the distribution concession agreement’s assets.

Revenues
from Telecommunications. Revenues from our telecommunications segment increased by 4.0%, or R$20.4 million, to R$532.9 million
in 2019 compared to R$512.5 million in 2018, as a result of an increase in the number of customers in the retail market, notably
in the internet broadband segment

Distribution
of Piped Gas. Revenues from the distribution of piped gas increased by 33.2%, or R$250.6 million, to R$1,003.8 million in 2019,
compared to R$753.2 million in 2018, due to the tariff adjustment and improvement in the gas market.

Sectorial
Financial Assets and Liabilities. Sectoral financial assets and liabilities decreased by 97.4%, or R$960.2 million, to R$25.1
million in 2019, compared to R$985.3 million in 2018. This variation was mainly due to the amortization of the amounts considered
in the electricity sales to final customers after the tariff adjustment in June 2018 and the lower variation of balances created
for the adjustment applied as of June 2019.

Other
Operating Revenues. Other operating revenues increased by 98.9%, or R$220 million, to R$442.4 million in 2019, compared to
R$222.4 million in 2018, mainly due to fair value in the purchases and sale of power revenues, and higher revenues from leases
and rents.

Cost
of sales and services provided

Our
consolidated costs of sales and services provided increased by 3.8% or R$483.7 million, to R$13,160.3 million in 2019 compared
to R$12,676.6 million in 2018. The main factors leading to such increase in our cost of sales and services provided are as follows:

| | · | Electricity Purchased for Resale.
Our purchased energy costs for resale decreased by 4%, or R$255.9 million, to R$6,105.3 million in 2019, compared to R$6,361.2
million in 2018. This was mainly due to a decrease in the cost of "electricity purchased for resale", due to the higher
GSF applicable.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Charge of Main Distribution and Transmission
Grid. Expenses we incurred for our use of the main distribution and transmission grid increased 6.2%, or R$72.5 million, to
R$1,249.3 million in 2019, compared to R$1,176.8 million in 2018, mainly as a result of the increase in tariffs and charges for
transmission infrastructure made available for new generation projects from 2019, in addition to the effect of the variation in
costs related to dispatching thermal plants, with an impact on system service fees - ESS.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Personnel and Management. Personnel
and administrative expenses decreased by 2.4%, or R$32.4 million, to R$1,325.4 million in 2019, compared to R$ 1,357.8 million
in 2018. Despite the increase in the provision for profit sharing (PLR) due to the improvement in the Company’s results,
the decrease in costs reflects on employee reduction occurred in 2019.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

108


Table of Contents


| | · | Pension and Healthcare Plans. Pension
and Healthcare expenses decreased 2.25%, or R$5.5 million, to R$238.3 million in 2019, compared to R$243.8 million in 2018, due
to the readjustment of the monthly care plans.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Material and Supplies. Material
expenses increased 0.5%, or R$0.4 million, to R$82.2 million in 2019 compared to R$81.8 million in 2018.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | Material and Supplies for Power Electricity.
These expenses increased 150.7% or R$29.7 million, totaling R$49.4 million in 2019, compared to R$19.7 million in 2018, mainly
as a result of the completion of Araucária TPP in 2019.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Natural Gas and Supplies for Gas Business.
Expenses related to natural gas purchases increased 41.8%, or R$172.6 million, to R$585.2 million in 2019, compared to R$412.6
million in 2018, mainly due to growth in the market of Compagás and exchange variation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Third-Party Services. Third-party
service expenses increased by 7.1%, or R$40.9 million, to R$613.1 million in 2019, compared to R$572.2 million in 2018, mainly
due to the higher maintenance value of the electric system, communication, data processing and transmission and advisory and auditing
services.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Depreciation and Amortization.
Depreciation and amortization increased by 46%, or R$344.6 million, to R$1,093.8 million in 2019, compared to R$749.2 in 2018,
due to an increase by 81.2% in the costs with depreciation and amortization resulting from the start of commercial operation in
2019 at the Colíder, Cutia and Baixo Iguaçu plants.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Accruals and Provisions. Provisions
and reversals expenses increased by 22.2%, or R$68.1 million, to R$374.8 million in 2019, compared to R$306.7 million in 2018,
mainly due to (i) increase by 17.4% related to provisions for litigations, and (ii) increase by 59.7% in expected credit losses
(or bad debt).
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Construction Cost. Construction
costs increased by 3.7%, or R$39.2 million, to R$1,091.4 million in 2019, compared to R$1,052.2 million in 2018, mainly reflecting
investments in transmission, distribution and Compagas assets.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Other Costs and Expenses. Other
costs and expenses increased 2.8%, or R$9.5 million, to R$352.2 million in 2019, compared to R$342.7 million in 2018.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------

Equity
earnings of associates and joint ventures

Equity earnings
of associates and joint ventures was R$106.8 million in 2019, a decrease of 21.4%, compared to R$135.9 million in 2018, mainly
due to a decrease in the profits of our associate entities and joint ventures.



Namely, our
equity accounting income for 2019 was: (i) loss of R$3.4 million from Voltalia, compared to loss of R$4.0 million in 2018; (ii)
R$4.8 million from Caiuá, compared to R$5.0 million in 2018; (iii) R$11.3 million from the Integração Maranhense
compared to R$9.2 million in 2018; (iv) R$48.6 million from Matrinchã compared to R$50.4 million in 2018; (v) R$18.3 million
from Guaraciaba, compared to R$35.3 million in 2018; (vi) R$16.4 million from Paranaíba, compared to a loss of R$16.5 million
in 2018; (vii) loss of R$41.7 million from the Mata de Santa Genebra, compared to a loss of R$2.5 million in 2018; (viii) R$28.0
million from Cantareira compared to R$24.6 million in 2018; (ix) R$9.8 million from Dona Francisca compared to R$10.0 million in
2018; and (x) R$13.9 million from Foz do Chopim versus R$13.2 million from 2018.

Financial
Results

109


Table of Contents


We recognized
an increase of financial losses of 11.5%, or R$10.4 million, to R$488.5 million in 2019. This result is due to: (i) a decrease
by 7.8% in financial revenues, mainly due to other financial income, monetary variation on CRC onlendings and the recognition of
tax credits; and, (ii) a reduction of 1.06% in financial expenses, other financial expenses.

Income
Tax and Social Contribution Expenses

In 2019, our income tax
and social contribution expenses increased to R$639.3 million, reflecting an effective tax rate of 23.7% in our pretax income,
compared to R$512.0 million and an effective tax rate of 26.2% in our pretax profit in 2018. The decrease in our effective tax
rate was mainly due to (i) our enrollment in a special tax benefit program of the Brazilian Federal Tax Authority (Programa Especial
de Regularização Tributária – PERT da Secretaria da Receita Federal). For more information on this special
tax benefit program, see Note 13.2.2 to our Consolidated Financial Statements; and (ii) an increase of R$123.9 million in paid
Capital in 2019.



Results of Operations for 2018
Compared with 2017

Operating
Revenues

Our
consolidated operating revenues increased by 10.0% or R$2,151.3.2 million in 2018 compared to 2017. This result reflected an increase
of R$1,414.5 million in electricity sales to Final Customers; an increase of R$229.3 million in construction revenues; an increase
of R$218.3 million in sectorial financial assets and liabilities; an increase of R$131.2 million in the distribution of piped gas;
an increase of R$85.7 million in telecommunications revenues; an increase of R$424.4 million in the use of our main transmission
grid; and an increase of R$51 million in other operating revenues. These increases were partially offset by a reduction of R$393.6
million in electricity sales to distributors; and a reduction of R$9.6 million in fair value of the Indemnifiable Concession Assets.

Electricity
Sales to Final Customers. Our revenues from electricity sales to Final Customers increased by 16.3%, or R$1,414.5 million,
to R$10,104.0 million in 2018 compared to R$8,689.5 million in 2017, mainly due to an increase of 5.1% of total power consumption
of our Final Customers, from 24,374 GWh in 2017 to 25,627 GWh in 2018, and the average readjustment of 15.99% in June 2018 in tariffs
paid by consumers in the captive market, as follows:

| | · | The volume of electricity sold to residential
customers increased by 1.6% in 2018 compared to 2017. While there was an increase in the number of customers by 2.0%, the average
consumption remained stable in 2018 compared to 2017.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to industrial
customers, including both Captive Customers and Free Customers, increased by 12.4% in 2018 compared to 2017, mainly due to the
growth of Copel's commercial customers in the Free Market, partially offset by the reduction of industrial customers in the captive
market. The number of industrial customers decreased by 4.1% and average consumption grew by 17.2% in 2018 compared to 2017.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to commercial
customers, including both Captive Customers and Free Customers, increased by 2.7% in 2018 compared to 2017. Despite the increase
in number of customers by 2.7%, the average consumption remained practically stable in 2018 compared to 2017.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The volume of electricity sold to rural
customers increased by 1.4% in 2018 compared to 2017. This increase is mainly due to the performance of agribusiness in the State
of Paraná and an increase of 2.2% in the average consumption.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

110


Table of Contents


Electricity
Sales to Distributors. Our revenues from electricity sales to distributors revenues decreased by 11.1%, or R$393.6 million,
to R$3,136.2 million in 2018 compared to R$3,529.8 million in 2017. This reduction was mainly due to the decrease in our revenues
from electricity sold in the Spot Market (CCEE), which decreased by 38.1%, or R$387.0 million, to R$628.1 million in 2018 compared
to R$1,015.1 million in 2017. This reduction in CCEE's revenues is a result of (i) the non-activation of the Araucária Thermoelectric
Plant; and (ii) lower prices in the Spot Market.

Use
of main distribution and transmission grid. Our revenues from the use of main distribution and transmission grid increased
by 6.6%, or R$424.4 million, to R$6,867.2 million in 2018 compared to R$6,442.8 million in 2017. This decrease was mainly due to
the remeasurement of assets related to tRBSE, which registered a revenue of R$82.6 million in 2018 compared to R$361.2 million
in 2017, as disclosed in Note 10.5 of our consolidated audited financial statements. This decrease in our revenues from the use
of main distribution and transmission grid was partially offset by the 1.9% growth in Copel Distribuição's grid market.

Construction
revenues. Our revenues construction increased by 26.4%, or R$229.3 million, to R$1,097.3 million in 2018, compared to R$868.0
million in 2017. This increase was mainly due to the intensification of construction efforts in 2018 with the objective of improving
our distribution and transmission infrastructure.

Fair
value of assets from the indemnity for the concession. The fair value of the assets from the indemnity for the concession decreased
by 16.8%, or R$9.6 million, to R$47.5 million in 2018, compared to R$57.1 million in 2017. The decrease was mainly due to lower
variation in the distribution concession agreement’s assets.

Revenues
from Telecommunications. Revenues from our telecommunications segment increased by 20.1%, or R$85.7 million, to R$512.5 million
in 2018 compared to R$426.8 million in 2017, as a result of an increase in the number of customers in the retail market, notably
in the internet broadband segment

Distribution
of Piped Gas. Revenues from the distribution of piped gas increased by 21.1%, or R$131.2 million, to R$753.2 million in 2018,
compared to R$622.0 million in 2017, due to the tariff adjustment and improvement of 2.9% in the gas market.

Sectorial
Financial Assets and Liabilities. Sectoral financial assets and liabilities increased by 28.4%, or R$218.3 million, to R$985.3
million in 2018, compared to R$767.0 million in 2017. This variation was mainly due to the recognition of receivables resulting
from the positive difference between the average price of electricity purchased from Itaipu, Angra, CCGF and the Availability Contracts
and the average price of the hedging rate. In relation to Itaipu's electricity, the higher cost is due to the exchange variation,
while in relation to other contracts the higher cost originates from the hydrological scenario (variations in GSF and PLD). For
more information on this variation, see Note 9.2 to our consolidated audited financial statements.

Other
Operating Revenues. Other operating revenues increased by 29.7%, or R$51.0 million, to R$222.4 million in 2018, compared to
R$171.4 million in 2017, mainly due to revenues from services rendered of the engineering contract of owner of the HPP Baixo Iguaçu,
and higher revenues from leases and rents.

Cost
of sales and services provided

Our
consolidated costs of sales and services provided increased by 5.8% or R$691.7 million, to R$12,676.6 million in 2018 compared
to R$11,984.9 million in 2017. The main factors leading to such increase in our cost of sales and services provided are as follows:

| | · | Electricity Purchased for Resale.
Our purchased energy costs for resale increased by 3.2%, or R$195.8 million, to R$6,361.2 million in 2018, compared to R$6,165.4
million in 2017. This increase was mainly due to: (i) an increase by 21.1% in the cost of electricity purchased through bilateral
contracts, explained in particular by the higher volume of electricity purchased by Copel Comercialização (4,101
GWh in 2018 compared to 2,644 GWh in 2017), and (ii) an increase by 13.8% in the costs of purchasing electricity from Itaipu, due
to the exchange variation.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

111


Table of Contents


| | · | Charge of Main Distribution and Transmission
Grid. Expenses we incurred for our use of the main distribution and transmission grid increased 65.3%, or R$464.8 million,
to R$1,176.8 million in 2018, compared to R$712.0 million in 2017, mainly as a result of (i) the adjustment in TUST in June 2018
and June 2017 (when the indemnity related to RBSE assets began to incorporate Permitted Annual Revenue - APR, and in 2018 the impact
was on the whole year), and (ii) cost of System Services Charges (ESS), reflecting the greater amount of resources received from
the reserve electric energy (Coner) in 2017, due to the effects of the indemnities to the transmission of energy.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Personnel and Management. Personnel
and administrative expenses increased by 1.1%, or R$14.5 million, to R$1,357.8 million in 2018, compared to R$1,343.3 million in
2017, as a result of (i) salary readjustment of 3.97% as of October 2018 and 1.63% as of October 2017, (ii) provision for indemnification
for retirement incentive program (PDI), and (iii) an increase of R$22.7 million in the amount allocated to Profit Sharing - PLR,
partially offset by a reduction in the number of employees.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Pension and Healthcare Plans. Pension
and Healthcare expenses increased 2.6%, or R$6.2 million, to R$243.8 million in 2018, compared to R$237.6 million in 2017, due
to the readjustment of the monthly care plans.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Material and Supplies. Material
expenses decreased 1.6%, or R$1.3 million, to R$81.8 million in 2018 compared to R$83.1 million in 2017.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | Material and Supplies for Power Electricity.
These expenses decreased 79.8% or R$77.7 million, totaling R$19.7 million in 2018, compared to R$97.4 million in 2017, mainly as
a result of the activation of Araucária TPP in 2017, and the corresponding increase in purchases of natural gas, while in
2018 the plant was not activated.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Natural Gas and Supplies for Gas Business.
Expenses related to natural gas purchases increased 33.3%, or R$103.1 million, to R$412.6 million in 2018, compared to R$309.5
million in 2017, mainly due to growth in the market of Compagas and exchange variation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Third-Party Services. Third-party
service expenses increased by 9.7%, or R$50.7 million, to R$572.2 million in 2018, compared to R$521.5 million in 2017, mainly
due to the higher maintenance value of the electric system, communication, data processing and transmission and advisory services
and auditing services.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Depreciation and Amortization.
Depreciation and amortization increased by 2.4%, or R$17.6 million, to R$749.2 million in 2018, compared to R$731.6 in 2017, mainly
due to an increase in our non-current assets.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Accruals and Provisions. Provisions
and reversals expenses decreased by 16.1%, or R$58.8 million, to R$306.7 million in 2018, compared to R$365.5 million in 2017,
due in particular to the reversal of the provision for R$92.7 million related to an indemnification action against third parties.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Construction Cost. Construction
costs increased by 4.8%, or R$48.3 million, to R$1,052.2 million in 2018, compared to R$1,003.9 million in 2017, mainly reflecting
investments in transmission, distribution and Compagas assets.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Other Costs and Expenses. Other
costs and expenses decreased 17.2%, or R$71.3 million, to R$342.7 million in 2018, compared to R$414.0 million in 2017. This reduction
is mainly due to reimbursement from suppliers of
wind farm assets of the Brisa Potiguar Complex in the amount of R$72.1 million.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

112


Table of Contents


Equity
earnings of associates and joint ventures

Equity earnings
of associates and joint ventures was R$135.9 million in 2018, an increase of 33.5%, compared to R$101.8 million in 2017, mainly
due to a growth in the profits of our associate entities and joint ventures.



Namely, our
equity accounting income for 2018 was: (i) loss of R$4.0 million from Voltalia, compared to loss of R$0.6 million in 2017; (ii)
R$3.0 million from Costa Oeste, compared to loss of R$2.6 million in 2017; (iii) R$7.0 million from Marumbi compared to loss of
R$9.5 million in 2017; (iv) R$1.2 million from Transmissora Sul Brasileira, compared to loss of R$5.0 million in 2017; (v) R$5.0
million from Caiuá, compared to loss of R$4.0 million in 2017; (vi) R$9.2 million from the Integração Maranhense
compared to loss of R$8.9 million in 2017; (vii) R$50.4 million from Matrinchã compared to R$57.4 million in 2017; (viii)
R$35.3 million from Guaraciaba, compared to R$25.4 million in 2017; (ix) loss of R$16.5 million from Paranaíba, compared
to R$17.0 million in 2017; (x) loss of R$2.5 million from the Mata de Santa Genebra, compared to R$19.5 million in 2017; (xi) R$24.6
million from Cantareira compared to R$3.9 million in 2017; (xii) R$10.0 million from Dona Francisca compared to R$8.9 million in
2017; and (xiii) R$13.2 million from Foz do Chopim versus R$6.6 million from 2017.

Financial
Results

We recognized
a reduction of financial losses of 41.5%, or R$310.3 million, to R$438.1 million of net financial losses in 2018, compared to a
net financial loss of R$748.4 million in 2017. This result is due to: (i) an increase by 16.4% in financial revenues, mainly due
to the increase in interest and monetary variation on CRC onlendings and the recognition of tax credits, and (ii) a reduction of
13.5% in financial expenses, due to lower monetary, exchange rate and debt charges, mainly influenced by the reduction of the SELIC
rate.

Income
Tax and Social Contribution Expenses

In 2018, our income tax
and social contribution expenses increased to R$512.0 million, reflecting an effective tax rate of 26.2% in our pretax income,
compared to R$274.7 million and an effective 19.7% in our pretax profit in 2017. The increase in our effective tax rate in 2018
compared to 2017 was primarily due to our enrollment in a special tax benefit program of the Brazilian Federal Tax Authority (Programa
Especial de Regularização Tributária – PERT da Secretaria da Receita Federal). For more information
on this special tax benefit program, see Note 13.3.1 to our consolidated audited financial statements.







113


Table of Contents




LIQUIDITY
AND CAPITAL RESOURCES

Our principal
liquidity and capital requirements are to finance the expansion and improvement of our distribution and transmission infrastructure
and to finance the expansion of our generation facilities.

We
believe our working capital is sufficient for our present requirements and the next 12 months. However, the expectation of the
economic impacts resulting from the shutdown caused by the outbreak of the coronavirus (COVID-19), with subsequent effects on Copel's
operations, may affect Company's financial results. In December 2019, our Current Liquidity, an index ratio that measures our current
assets over our current liabilities reached 1.5x (1.0x in 2018) with a cash balance, equivalent to cash and marketable securities
of R$3,223.8 million (R$2,292.7 million in 2018).

The
Company monitors its financial liquidity continuously and, for that that purpose, it considers (i) on the external side, the possibility
of raising funds and the prospect of preserving cash through the assistance of structural measures by the Federal Government and
other Sectoral Institutions, and (b) on the internal side, taking the necessary actions in our operations by reducing expenses
or postponing investments in order to guarantee the timely fulfillment of financial obligations. Accordingly, our estimates are
to preserve the working capital required for our operations throughout the period.

In addition
to working capital, our other principal uses of cash are to dividends payments and debt servicing. Capital expenditures were R$2,055.6
million in 2019 and R$2,590.8 million in 2018. The following table sets forth a breakdown of our capital expenditures for the periods
indicated. Our capital expenditures are focused on projects located in Brazil.

As in previous
years, our capital requirement will be financed by cash from our operations and/or by external financing, which may serve to offset
commitments arising from the maturity of previous external financing.

|                                            | Year
        ended December 31,
|------------------------------------------- | -------------------------------
|                                            | 2019                           
|                                            | (R$million)                    
|Generation and transmission1                | 691.9                          
|Distribution                                | 919.9                          
|Telecom                                     | 146.3                          
|Investment of associates and joint ventures | 267.5                          
|Araucária Thermoelectric Plant              | 0.4                            
|Compagas                                    | 17.6                           
|Elejor                                      | 0.2                            
|Others                                      | 11.8                           
|Total                                       | 2,055.6                        



1 Considers investment
in projects held 100% by Copel GeT.

Our total budgeted
capital expenditures for our wholly-owned subsidiaries for 2020 is R$2,087.2 million, of which:

| | · | R$792.3 million are for generation and
transmission, R$80.5 million are for the construction of the Colíder Hydroelectric Plant, and R$25.8 million are for the
construction of the Baixo Iguaçu Hydroelectric Plant;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | R$1,073.8 million are for our distribution
business;
| | - | ----------------------------------------------------

| | · | R$123.9 million are for our telecommunication
business;
| | - | -------------------------------------------------------

114


Table of Contents


| | · | R$13.0 million for the construction of
the Cutia Wind Farm Complex; and
| | - | -----------------------------------------------------------------------

| | · | R$84.2 million are for other investments.
| | - | -----------------------------------------

Our
following subsidiaries also budgeted their own capital expenditures for 2019, as described as follows:

| | · | Compagas: R$27.3 million;
| | - | -------------------------

| | · | Araucária: R$1.5 million; and
| | - | -----------------------------

| | · | Elejor: R$13.9 million.
| | - | -----------------------

Historically,
we have financed our liquidity and capital requirements primarily with cash provided by our operations and through external financing.
Our principal source of funds in 2019 was our operating activities. Net cash used by financing activities was R$288.0 million in
2019, compared with R$1,286.5 million in 2018. Net cash provided by operating activities was R$2,945.0 million in 2019, compared
with R$1,771.0 million in 2018. In 2020, we expect to finance our liquidity and capital requirements primarily with cash provided
by our operations and through debt financing from BNDES and the Brazilian capital markets.

As in prior
years, we plan to make significant investments in future periods to expand and upgrade our generation, transmission and distribution
businesses. In addition, we may seek to invest in other existing electric utilities, in communications services or in other areas,
each of which may require additional domestic and international financing. Our ability to generate cash sufficient to meet our
planned expenditures is dependent upon a variety of factors, including our ability to maintain adequate tariff levels, to obtain
the required regulatory and environmental authorizations, to access domestic and international capital markets, and a variety of
operating and other contingencies. We anticipate that our cash provided by operations may be insufficient to meet these planned
capital expenditures, and that we may require additional financing from sources such as BNDES and the Brazilian and international
capital markets.

ANEEL’s
regulations require prior approval from ANEEL for any transfer of funds from our subsidiaries to us in the form of loans or advances.
ANEEL approval is not required for cash dividends, as long as cash dividends do not exceed a dividend threshold (“Dividend
Threshold”) equal to the greater of adjusted net income or income reserves available for distribution. The Dividend Threshold
is established by Brazilian Corporate Law.

The cash dividends
we have received from our subsidiaries have been historically sufficient to meet our cash flow requirements without exceeding the
Dividend Threshold. As a result, we have not sought approval from ANEEL to receive either loans or advances from our subsidiaries
or cash dividends from our subsidiaries in excess of the Dividend Threshold. We do not expect these restrictions on loans and advances
and on cash dividends exceeding the Dividend Threshold to impact our ability to meet our cash obligations, since we expect cash
dividends below the Dividend Threshold to be sufficient in the future.

Like
other state-owned companies, we are subject to certain CMN restrictions on our ability to obtain financing from domestic and international
financial institutions. CMN restrictions could limit our ability to obtain bank financing but do not affect our ability to access
the Brazilian and international capital markets, and do not restrict our access to banking financing for the purpose of repaying
or refinancing debt.

Our
total outstanding loans and financing (including debentures) as of December 31, 2019 totaled R$11,572 million. Approximately R$109
million of the total debt outstanding as of December 31, 2019 was denominated in U.S. dollars. For more information on the terms
of these loans and financings, including reference to their specific maturity dates and interest rate structure, see Notes 22 and
23 to our audited consolidated financial statements. We are not subject to seasonality with respect to our borrowing requirements.
Our major loans and financing arrangements are:

Banco do Brasil:

115


Table of Contents


| | · | We have R$789 million of outstanding debt
with Banco do Brasil (not including the debentures listed below), consisting of financings we contracted to increase our working
capital.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Debentures:

| | · | In May 2015, Copel GeT issued R$1,000.0
million in simple, in five-year non-convertible debentures, with an interest rate of 113% of the CDI index per year and payment
of interest on an annual basis. As of December 31, 2019, we had an aggregate balance of R$347 million of outstanding debt under
these debentures;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In October 2015, Copel Telecom issued
R$160.0 million in simple, in nine-year non-convertible debentures. These debentures have an interest rate equal to IPCA index
+ 7.9633% per year, a five-year maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate
balance of R$195.4 million of outstanding debt under these debentures;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In March 2016, Nova Asa Branca I, Nova
Asa Branca II, Nova Asa Branca III, Nova Eurus IV and Ventos de Santo Uriel Wind Farms issued R$300.8 million in non-convertible
debentures, with sixteen-year maturity and payment of interest on monthly basis. The interest rate of TJLP index + 2.02% per year
is applicable to R$147.6 million and IPCA index + 9.87% per year is applicable to R$153.2 million. As of December 31, 2019, we
had an aggregate balance of R$254.8 million of outstanding debt under these debentures. As of December 31, 2019, all the conditions
agreed had been fulfilled. For more information, see Note 23.3 to our audited consolidated financial statements;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In April 2016, Compagas privately issued
R$33.6 million in simple non-convertible debentures, single series, with floating charge, with an interest rate equal to TJLP index
+ 2.17% per year, with a five-year maturity and payment of interest on a quartely basis. As of December 31, 2019, we had an aggregate
balance of R$11.8 million of outstanding debt under these debentures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In July 2017, Copel Telecom issued R$220.0
million in five-year simple, non-convertible debentures. These debentures have an interest rate equal to IPCA index + 5.4329% per
year, a five-year maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding
balance of R$246.3 million under these debentures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In October 2017, Copel Distribuição
issued R$500.0 million in simple, non-convertible debentures, with an interest rate of 126% of the CDI index per year, with a five
years maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of
R$505.8 million under these debentures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In October 2017, Copel GeT issued R$1.0
billion in simple non-convertible debentures, with an interest rate of 126% of the CDI index per year, with a five years maturity
and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$1,011.7 million
under these debentures;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In January 2018, Copel Holding issued
R$600.0 million in simple, non-convertible debentures, with an interest rate of 119% of the CDI index per year, with a three-year
maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$617.4
million under these debentures;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In July 2018, Copel GeT issued R$1.0 billion
in simple, non-convertible debentures, with an interest rate of 126% of the CDI index per year, with a five-year maturity and payment
of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$1,030.1 million under these
debentures;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In September 2018, Copel GeT issued R$290.0
million in simple, non-convertible debentures. These debentures have an interest rate equal to IPCA index + 7.6475% per year, with
a seven-year maturity and payment of interest
on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$308.5 million under these debentures;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

116


Table of Contents


| | · | In September 2018, Copel Distribuição
issued R$1.0 billion in simple, non-convertible debentures with an interest rate of CDI index + 2.70% per year, with a five-year
maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$1,019.6
million under these debentures;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In March 2019, Cutia Empreendimentos issued
R$360.0 million in simple, non-convertible debentures. These debentures have an interest rate equal to IPCA index + 5.8813% per
year, with a thirteen-year maturity and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding
balance of R$352.9 million under these debentures;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In May 2019, Copel Telecom issued R$210
million in simple, non-convertible debentures, with an interest rate of 117% of the CDI index per year, with a five-year maturity
and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$211,3 million
under these debentures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2019, Copel Holding issued R$500
million in simple, non-convertible debentures, with an interest rate of 106% of the CDI index per year, with a three-year maturity
and payment of interest on a semester basis. As of December 31, 2019, we had an aggregate outstanding balance of R$501 million
under these debentures;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In July 2019, Copel GeT issued R$1 billion
in simple, non-convertible debentures, in two series, with an interest rate of 109% of the CDI index per year and IPCA index +
3.90% with a five-years and six-years maturity and payment of interest on a semester basis. As of December 31, 2019, we had an
aggregate outstanding balance of R$1.024,1 million under these debentures;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In November 2019, Copel Distribuição
issued R$850 million in simple, non-convertible debentures, in two series, with an interest rate of IPCA index + 4.20% per year
and CDI index + 1,45% per year with an eight-years and three-years maturity and payment of interest on a semester basis. As of
December 31, 2019, we had an aggregate outstanding balance of R$858,1 million under these debentures; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In December 2019, Compagas privately issued
R$43 million in simple non-convertible debentures, single series, with an interest rate equal to CDI index + 0.88% per year, with
a two-year maturity and payment of interest on a monthly basis. As of December 31, 2019, we had an aggregate balance of R$44,7
million of outstanding debt under these debentures.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BNDES

| | · | In December 2013, we received approval
for the BNDES financing of HPP Colíder in an aggregate amount of R$1,041.2 million. As of December 31, 2013, we had received
R$840.1 million of this amount, with the remaining disbursements to be made in accordance with the construction schedule of HPP
Colíder. Additionally, BNDES approved the finance of the Cerquilho III transmission substation in the amount of R$17.6 million,
which was disbursed in a single installment. As of December 31, 2019, the aggregate outstanding balance of these two contracts
totaled R$828.7 million;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | BNDES has provided a loan to Copel of
R$339.0 million to finance the construction of the Mauá Hydroelectric Plant. Mauá is owned by Consórcio Energético
Cruzeiro do Sul, in which Copel has a 51.0% interest and Eletrosul has a 49.0% interest. BNDES is providing 50.0% of the loan amount,
and Banco do Brasil S.A. is providing the remaining 50.0%. All the receivables arising from this plant were pledged in favor of
BNDES and Banco do Brasil until full repayment of the loan. As of December 31, 2019, we had an aggregate of R$191.6 million in
outstanding debt with BNDES and Banco do Brasil under this facility;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

117


Table of Contents


| | · | In December 2011, we entered into a financing
contract with BNDES in the total value of R$44.7 million for the construction of Transmission Line Foz do Iguacu - Cascavel Oeste,
with maturity in 14 years. As of December 31, 2019, we had an aggregate of R$21.1 million in outstanding debt under this financing
contract;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In March 2012, we entered into a financing
contract with BNDES in the total value of R$282.1 million for the construction of GE Farol, Ge Boa Vista, GE São Bento do
Norte and GE Olho D’Água Wind Farms with maturity in 16 years. As of December 31, 2019, we had an aggregate of R$215.5
million in outstanding debt under this financing contract;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In September 2012, we entered into a financing
contract with BNDES in the total value of R$73.1 million for the construction of SHP Cavernoso II, with maturity in 16 years. As
of December 31, 2019, we had an aggregate balance of R$46.2 million of outstanding debt under this financing contract;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In December 2014, we entered into a financing
contract with BNDES to finance the improvement of the distribution system of the greater Curitiba area, with maturity in 9.4 years.
We have obtained a R$139.1 million funding on December 2014 and as of December 31, 2019, we had an aggregate outstanding balance
of R$51.2 million under this financing contract;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In June 2015, we entered into a financing
contract with BNDES in the total value of R$124.0 million for the construction Santa Helena and Santa Maria Wind Farm, with maturity
in 16 years. As of December 31, 2019, we had an aggregate balance of R$95.1 million of outstanding debt under this financing contract;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In December 2015, we entered into a financing
contract with BNDES in the total value of R$55.8 million for the construction of Transmission Line Assis - Paraguaçu Paulista
II and Londrina - Figueira e Salto Osório - Foz do Chopim C2, with maturity in 15 years. As of December 31, 2019, we had
an aggregate balance of R$35.9 million of outstanding debt under this financing contract;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In October 2018, we entered into a financing
contract with BNDES in the total value of R$194.0 million for the implementing Baixo Iguaçu Hydroelectric Power Plant as
well as its associated transmission system, with maturity in 17 years. As of December 31, 2019, we had an aggregate balance of
R$196.8 million of outstanding debt under this financing contract;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In October 2018, we entered into a financing
contract with BNDES in the total value of R$619.4 million for the construction and implementing Cutia Empreendimentos Eólicos
Wind Farms, with maturity in 17 years. As of December 31, 2019, we had an aggregate balance of R$611.5 million of outstanding debt
under this financing contract.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | In August 2018, Copel GeT signed a share
exchange agreement with Eletrosul in the controlled ventures Costa Oeste Transmissora de Energia S.A. (51% Copel GeT and 49% Eletrosul),
Marumbi Transmissora de Energia S.A. (80% Copel GeT and 20% Eletrosul) and Transmissora Sul Brasileira de Energia S.A. (20% Copel
GeT and 80% Eletrosul). With this contract, Copel GeT starts to hold 100% interest in the Costa Oeste and Marumbi undertakings
and Eletrosul now holds 100% stake in Transmissora Sul Brasileira.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Marumbi has an agreement signed with BNDES
in 2014, in the amount of R$55 million, for the Implementation of the 525 kV Transmission Line between SE Curitiba and SE Curitiba
Leste and the implementation of SE Curitiba. It has a balance on December 31, 2019 of R$34.4 million.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Costa Oeste, has an agreement signed with
BNDES in 2013, in the amount of R$36.7 million, for the implementation of the 230 kV Transmission Line between SE Cascavel Oeste
and SE Umuarama Sul and the implementation of the SE. It has a balance on December 31, 2019 of R $22.2 million
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

118


Table of Contents


CAIXA ECONÔMICA
FEDERAL (CEF)

| | · | We have R$13.4 million in outstanding
debt related to government programs to finance distribution projects; and
| | - | ---------------------------------------------------------------------------------------------------------------

| | · | Copel Distribuição entered
into an agreement in 2016, in the amount of R$1.2 million, for the purchase of machinery and/or equipment and also computer and
automation goods. It has a balance on December 31, 2019 of R$0.3 million.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ELETROBRAS

| | · | We have R$10.9 million in outstanding
debt with Eletrobras under government programs to finance distribution projects;
| | - | ----------------------------------------------------------------------------------------------------------------------

FINEP

In July 2012, a loan agreement
in the amount of R$52.2 million was signed by Copel Telecomunicações S.A. with FINEP to partially finance the BEL
– Extra Broadband project. As of December 31, 2019, we had an aggregate outstanding balance of R$4.8 million under this loan
agreement.

We are party
to several legal proceedings that could have a material adverse impact on our liquidity if the rulings are unfavorable to us. These
contingencies are described in “Item 8. Financial Information—Legal Proceedings”.

119


Table of Contents




CONTRACTUAL OBLIGATIONS

In the table
below, we set forth certain of our contractual obligations as of December 31, 2019, and the period in which such contractual obligations
come due.

|                                                    | Payments
        due by period
|--------------------------------------------------- | ------------------------------
|                                                    | Total                         
|                                                    | (R$million)                   
|Contractual obligations:                            |                               
|Loans and financing(1)                              | 4,185.8                       
|Debentures(2)                                       | 10,413.5                      
|Suppliers(3)                                        | 1,873.2                       
|Purchase obligations(4)                             | 130,075.9                     
|Concession payments(5)                              | 1,799.9                       
|Eletrobras ‒ Itaipu(6)                              | 6,723.5                       
|Installment due to the Federal Revenue of Brazil(7) | 623.8                         
|Post-employment benefits(8)                         | 10,322.2                      
|Sectoral Financial liabilities(9)                   | 108.4                         
|Lease liability(10)                                 | 126,999.2                     
|Total                                               | 293,125.4                     



|(1) | Includes interest as agreed under agreements in the amount of R$1, 016.1. For more details, see Note 21 to our audited consolidated
financial statements.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes interest as agreed under relevant agreements in the amount of R$1, 647.0.
For more details, see Note 22 to our audited consolidated financial statements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Mainly consists of Electricity purchased from auctions on the CCEAR with balances falling due in less than 30 days and gas supplied
by Petrobras to the Araucária Thermoelectric Plant.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Consists of binding power purchase commitments. Includes monetary restatements as agreed under relevant agreements.
|--- | -------------------------------------------------------------------------------------------------------------------

|(5) | Payments to the federal government arising from Elejor, Mauá, Colíder, Rio Jordão and Baixo Iguaçu
facilities concession agreement. Includes interest and applicable monetary restatements.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes expected exchange variation.
|--- | -------------------------------------

|(7) | Income Tax and Social Contribution due by Copel Geração e Transmissão in 2014 and joining the Special Tax
Regularization Program (Programa Especial de Regularização Tributária – Pert) in August 2017 by Copel
Distribuição. Includes interest and applicable monetary restatement.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | For more details, see Note 23 to our audited consolidated financial statements.
|--- | -------------------------------------------------------------------------------

|(9) | For more details, see Note 9 to our audited consolidated financial statements.
|--- | ------------------------------------------------------------------------------

|(10) | For more details, see Note 27 to our audited consolidated financial statements.
|---- | -------------------------------------------------------------------------------





We are also
subject to risks with respect to tax, labor and civil claims and have provisioned R$1,606.7 million for accrued liabilities under
legal proceedings related to these claims as of December 31, 2019. For more information, see “Item 8. Financial Information—Legal
Proceedings” and Notes 15 and 29] to our audited consolidated financial statements.

120


Table of Contents




OFF-BALANCE SHEET ARRANGEMENTS

We have not
engaged in any off-balance sheet arrangements that have, or are reasonably likely to have a current or future effect on the registrant’s
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures
or capital resources that is material to investors.

121


Table of Contents




Item 6. Directors, Senior Management and Employees

We are managed by:

| | · | a Board of Directors, which may be composed
of up to nine (9) members and is currently composed of nine (9) members; and
| | - | ------------------------------------------------------------------------------------------------------------------------

| | · | a Board of Executive Officers, which is
currently composed of seven (7) members.
| | - | --------------------------------------------------------------------------------

BOARD OF DIRECTORS

The Board of
Directors ordinarily meets monthly. A majority of the members of the Board of Directors is required for the meeting to be held,
and decisions are taken by a majority vote of those present at the meeting. For additional information, see “Item 10. Additional
Information—Memorandum and Articles of Association”. The members of the Board of Directors are elected to serve for
two-year terms and may be reelected. Among the current nine members of the Board of Directors:

| | · | six were elected by the controlling shareholders;
| | - | -------------------------------------------------

| | · | one was elected by minority shareholders
(holding voting shares);
| | - | -----------------------------------------------------------------

| | · | one was elected by minority shareholders
(holding outstanding non-voting shares); and
| | - | -------------------------------------------------------------------------------------

| | · | one was elected by our employees.
| | - | ---------------------------------

According to
Brazilian Corporate Law, minority shareholders are entitled to appoint and remove at least one member of the Board of Directors,
in a separate election, without the participation of the controlling shareholder, if such minority shareholders hold (i) at least
15% of the company’s voting shares or (ii) at least 10% of the company’s outstanding non-voting shares.

Also according
to Brazilian Coroporate law, members of our Board of Directors who are elected by the non-controlling shareholders have the right
to veto (provided it is duly justified) the appointment of the independent accountant made by the majority of the members of our
Board of Directors.

The terms of
the current members of the Board of Directors expire in April 2021. The current members of our Board of Directors are:

|Name                          | Position | Since
|----------------------------- | -------- | -----
|Marcel Martins Malczewski     | Chairman | 2019 
|Leila Abraham Loria           | Director | 2017 
|Olga Stankevicius Colpo       | Director | 2017 
|Carlos Biedermann             | Director | 2019 
|Adriana Angela Antoniolli     | Director | 2017 
|Marco Antônio Barbosa Cândido | Director | 2018 
|Gustavo Bonini Guedes         | Director | 2019 
|Luiz Claudio Maia Vieira      | Director | 2019 
|Daniel Pimentel Slaviero      | Director | 2019 

The following
are brief biographies of the current members of our Board of Directors:

Marcel
Martins Malczewski. Mr. Malczewski was born on December 8, 1964. He holds a Master's degree in Industrial Sciences and Computing
from Universidade Tecnológica Federal do Paraná (2001); and a Bachelor's degree in Electrical Engineering from Universidade
Federal do Paraná (1992). Mr. Malczewski also attended the Owner/President Management Program at Harvard Business School
(2004). He is currently Chairman of the Board of Directors of Companhia Paranaense de Energia - Copel. Additionally, Mr.

122


Table of Contents


Malczewski is a partner at M3 Investimentos
Ltda. and at Trivella M3 Investimentos S.A. Previously, he was co-founder (1990), CEO (2001-2009), Chairman (2010-2011) and member
of the Board of Directors (2012-2015) at Bematech S.A. He was also a Professor (1989-1994) and coordinator (1991-1994) of the Computer
Engineering undergraduate course at Pontifícia Universidade Católica do Paraná.

Leila
Abraham Loria. Ms. Loria was born on January 26, 1954. Ms. Loria took an advanced Governance, Risk and Compliance training
course at Risk University - KPMG (2018) and a Corporate Governance and Innovation course at Nova School of Business and Economics,
in Lisbon, Portugal (2016). She holds a Post-MBA in Corporate Governance and Capital Markets for executives from B.I. International
(2015) and an International Executive MBA from APG-Amana (1994). Ms. Loria also has a Taught Master’s Degree in Business
Administration from COPPEAD-UFRJ Business School (1978) and a Bachelor’s Degree in Business Administration from Fundação
Getúlio Vargas (1976). Ms. Loria is currently a member of the Board of Directors and of the Statutory Audit Committee of
Companhia Paranaense de Energia - Copel. Additionally, she sits on the Board of the Brazilian Institute of Corporate Governance
- IBGC, and of the Board of Directors of Madeira Energia - MESA. She is also a member of the Advisory Board on Casas Pernambucanas,
INPLAC Indústria de Plástico and Costão do Santinho Resort. Previously, she was an Executive Officer at Telefonica
Brasil and Member of the Board of Directors of Telefonica Vivo (2010-2015); Chairman and General Officer at TVA (Abril Group) and
Member of the Board of Directors at Tevecap (1997-2006) and Canbras, a joint venture between Abril and Bell Canada (1998-2002);
General Officer and Member of the Board of Directors at Direct TV (1997-1999); Chief Business Officer at Walmart (1994-1997); and
Chief Officer for Marketing, Sales, Business, Acquisitions and Human Resources at Mesbla (1978-1994).

Olga
Stankevicius Colpo. Ms. Colpo was born on May 26, 1952. Ms. Colpo received a post-graduate degree from the Executive Program
of Singularity University (2018) and, an international executive MBA degree from FIA/USP (2000); she took a specialization course
in International Business at Harvard University (1996), a specialization course in Managing Managers at Michigan University (1986);
a Continued Education Program in Human Resources Management from Fundação Getúlio Vargas (1984); Ms. Colpo
has a Bachelor’s degree in Psychology from Universidade de Mogi das Cruzes - UMC (1975). Ms. Colpo is currently a member
of the Board of Directors and of the Statutory Audit Committee of Companhia Paranaense de Energia - Copel. She is also a member
of the Board of Directors of Solvi S.A., member of the Board of Directors, Audit Committee and People Committee at Banco BMG S.A.;
member of the Consulting Board of the International Executive MBA at FIA; counselor and member of the Executive Board at Childhood
Brasil; Visiting Professor at the International Executive MBA program at FIA/USP; and instructor of the Board of Directors Training
Course at IBGC. Previously, she was Chief Executive Officer at Participações Morro Vermelho S.A. (2009-2016); a partner
at PwC - PricewaterhouseCoopers (1999-2009); and partner at Coopers & Lybrand (1974-1999).

Adriana
Angela Antoniolli. Ms. Antoniolli was born on November 19, 1966. Ms. Antoniolli received a post-graduate degree in Applied
Law from Escola da Magistratura do Paraná (2011) and a post-graduate degree in Marketing and Advertising from Instituto
Superior de Pós-graduação - ISPG (2000). Ms. Antoniolli holds a degree in Law from Universidade Tuiuti do
Paraná (2008) and a degree in Accounting from Faculdade de Educação, Ciências e Letras de Cascavel (1988).
She is currently a Regulatory Analyst at Copel. Previously, she acted as Services Department Manager at Copel (2013-2015); East
Revenue Department Manager at Copel (2009-2013); and Business Procedures Department Manager at Copel (2008). Ms. Antoniolli was
appointed as a member of our Board of Directors as a representative of our employees.

Marco
Antônio Barbosa Cândido. Mr. Cândido was born on March 6, 1969. Mr. Cândido holds a Ph.D. degree in
Production Engineering from Universidade Federal de Santa Catarina - UFSC (1997), a Master’s degree in Production Engineering
from Universidade Federal de Santa Catarina - UFSC (1994) and a degree in Aeronautical Mechanics Engineering from Instituto
Tecnológico de Aeronáutica - ITA (1991). Mr. Cândido is currently a member of the Board of Directors and of
the Statutory Audit Committee of Companhia Paranaense de Energia - Copel , Chief Executive Officer and Founding Partner at MBC
Consultoria, member of the Board of Directors of Hospital Santa Rita and Santa Rita Saúde health care provider in the city
of Maringá – PR, and member of the Board of Directors at the hotel group Rafain, in the city of Foz do Iguaçu
- PR. Previously, he was a professor and researcher at Pontifícia Universidade Católica do Paraná - PUCPR
(1995-2013); Chief Executive Officer at Associação Paranaense de Cultura - APC, a parent company of Pontifícia
Universidade Católica do Paraná - PUCPR (2005-2012); Chief Executive Officer at Grupo Marista (2012-2013); Chief
Executive Officer at Grupo Paysage (2013-2015); member of the Board of Directors at Sistema de

123


Table of Contents


Saúde Mãe de Deus, health
care provider in the state of Rio Grande do Sul (2014-2015); and member of the Board of Directors at Grupo Positivo (2014-2016).

Carlos
Biedermann. Mr. Biedermann was born on August 18, 1953. Mr. Biedermann attended the Executive Program of the Singularity University
(2019) and the International Business Programme at INSEAD in France (1995). He holds a post-graduate degree in Financial Markets
from Fundação Getúlio Vargas - FGV (1979) and Bachelors’ degrees in Accounting, from Unisinos (1977),
and in Business Management and Public Management, from Universidade Federal do Rio Grande do Sul (1975). He is currently a member
of the Board of Directors and of the Statutory Audit Committee of Companhia Paranaense de Energia - Copel. Mr. Biedermann has considerable
experience as a board member in several sectors, including organizations such as Amcham/RS and the Association of Marketing and
Sales Directors of Brazil - ADVB/RS. At present, he also has seats in the Board of Directors of Lojas Lebes and Maiojama Empreendimentos
Imobiliários; in the Audit Committee of Suzano Papel e Celulose, Grupo Algar, Grupo Solar and Grupo Cornélio Brennand;
and as Chairman of the Deliberative Council of Grêmio Foot-Ball Porto Alegrense. Additionally, he is an instructor at the
Brazilian Institute of Corporate Governance - IBGC and a partner at Biedermann Consulting. Previously, he was senior partner for
the southern region and senior partner of Capital and Infrastructure Projects (CP&I) for Brazil at PricewaterhouseCoopers (2002
- 2015); Chairman of the Audit Committee of IBGC (2009 - 2014), Chairman (2013 - 2014) and member (2009 - 2017) of the Board of
the Young Presidents Organization - YPO, and a guest lecturer in the Post-MBA Corporate Governance Program at Unisinos (2017 -
2019).

Gustavo
Bonini Guedes. Mr. Guedes was born on April 10, 1982. He holds a post-graduate degree in Election Law from Centro Universitário
Curitiba (2009) and a Bachelor's degree in Law from Centro Universitário Autônomo do Brasil (2005). Mr. Guedes is
currently a member of the Board of Directors of Companhia Paranaense de Energia - Copel. Additionally, he is a member of the Brazilian
Academy of Election and Political Law - Abradep and a founding partner at Bonini Guedes Advocacia. Previously, he was President
of the Election Law Institute of Paraná; a Professor at Escola Superior de Advocacia - ESA/PR; advisory member of the Election
Law Commission of the Federal Council of the Brazilian Bar Association - OAB; and coordinator of the Election Law Department of
Vernalha Guimarães e Pereira Advogados.

Luiz
Claudio Maia Vieira. Mr. Vieira was born on October 7, 1969. Mr. Vieira attended an Advanced Management Program at Fundação
Dom Cabral/INSEAD Fontainebleau (2013) and an Advanced Management Program at IESE Business School in Barcelona (2009). He holds
an MBA in Finance from Columbia University (1998) and a Bachelor’s degree in Business Management from Fundação
Getúlio Vargas - FGV (1992). Mr. Vieira is currently a member of the Board of Directors and of the Statutory Audit Committee
of Companhia Paranaense de Energia - Copel. Additionally, he is a member of the Board of Directors of Grupo Aviva (Rio Quente and
Costa do Sauípe Resorts) and a Partner at Partilha Empreendiemtos. Previously, he was Chief Consumer Goods Officer and Chief
Financial Officer of Nutrimental Indústria e Comércio de Alimentos S.A. (2017 - 2018); Executive Director of Planning
and Finance at Infoglobo Comunicação e Participações S.A. (2011 - 2014); CEO of Rede Paranaense de
Comunicação - RPCTV (2001 - 2011); and Vice President of Corporate Finance at BNP Paribas Bank (1998 - 2001).

Daniel
Pimentel Slaviero.Mr. Slaviero was born on November 22, 1980. Mr. Slaviero attended the Owner/President Management - OPM program
(2015) and the YPO Harvard President Seminar (2010), both from Harvard Business School. Mr. Slaviero also completed the Executive
Business Program (STC) from Kellog School of Management/Fundação Dom Cabral (2009); and holds a degree in Business
Administration from Universidade Positivo - UP (2001). He is currently Copel’s Chief Executive Officer and Chairman of the
Board of Directors of Copel Geração e Transmissão S.A.,Copel Distribuição S.A., Copel
Comercialização S.A., Copel Telecomunicações S.A. and Copel Renováveis S.A..
Previously he acted as the Chief Executive Officer at Sistema Brasileiro de Televisão - SBT (2017-2018); Chief Business
Officer at Sistema Brasileiro de Televisão - SBT (2017-2018); Chief Institutional Officer at Grupo Silvio Santos (2010-2017);
General Director at Sistema Brasileiro de Televisão - SBT Brasília (2010-2017); Chairman at the Brazilian Association
of Radio and Television Broadcasters - ABERT (2006-2016); Executive Officer at Grupo Paulo Pimentel (2001-2010); and Programming
and Production Manager at Grupo Paulo Pimentel (2000-2001).

124


Table of Contents


BOARD OF EXECUTIVE OFFICERS

Our Board of
Executive Officers meets every two weeks and is responsible for the daily management of the Company. Each Executive Officer also
has individual responsibilities established by the Board’s rules of procedure.

According to
our bylaws, our Board of Executive Officers consists of seven (7) members. The Executive Officers are elected by the Board of Directors
for two-year terms but may be removed by the Board of Directors at any time. The terms of the current members of the Board of Executive
Officers expire in December 2021. The current members are as follows:

|Name                            | Position                                        | Since
|------------------------------- | ----------------------------------------------- | -----
|Daniel Pimentel Slaviero        | Chief Executive Officer                         | 2019 
|Ana Letícia Feller              | Chief Business Management Officer               | 2018 
|Adriano Rudek de Moura          | Chief Financial and Investor Relations Officer  | 2017 
|Cassio Santana da Silva         | Chief Business Development Officer              | 2019 
|Eduardo Vieira de Souza Barbosa | Chief Legal and Institutional Relations Officer | 2019 
|Vicente Loiácono Neto           | Chief Governance, Risk and Compliance Officer   | 2018 
|David Campos                    | Chief Assistant Officer.                        | 2019 



The following
are brief biographies of the current members of our Board of Executive Officers:

Daniel Pimentel
Slaviero. Mr. Slaviero has been our Chief Executive Officer since January 8, 2019. For biographical information regarding
Mr. Slaviero, see “Board of Directors”.

Ana Letícia
Feller.Ms. Feller was born on October 15, 1977. She received an MBA degree in Leadership with emphasis in Management, from
Estação Business School (2015); a Post-graduate degree in Management with emphasis in Strategic People Management,
from FAE Centro Universitário (2009); and a Post-graduate degree in Labor Law, from Unibrasil (2005). She holds a Bachelor’s
degree in Law from Pontifícia Universidade Católica do Paraná (2000). Ms. Feller has been a Lawyer at Companhia
Paranaense de Energia - Copel since 2000, where she also served as Assistant to the Chief Corporate Management Officer (2017-2018);
Chair of the Permanent Compensation Committee (2017-2018); Chair of the Management Committee (2017-2018); Human Resources Chief
Official (2007-2010 e 2013-2017); and member of the Ethical Guidance Council (2006-2008 and 2010-2012). Additionally, she was an
alternate member of the Deliberative Council of Fundação Copel de Previdência e Assistência Social (2014-2018).
She is currently Copel’s Chief Corporate Management Officer, as well as a member of
the Board of Directors of Copel Distribuição S.A., Copel Comercialização S.A., Copel Telecomunicações
S.A. and Copel Renováveis S.A.

Adriano
Rudek de Moura. Mr. Moura was born on September 25, 1962. Mr. Moura took a professional development course at Fundação
Dom Cabral (2019), at Instituto Brasileiro de Governança Corporativa - IBGC (2018), at Duke’s Fuqua School of Business
(2010) and at Harvard Business School (2007). He received a post-graduate degree in Finance and Controllership from Fundação
Instituto de Pesquisas Contábeis, Atuariais e Financeiras - FIPECAFI/USP (1997). Mr. Moura holds a degree in Accounting
from Centro Universitário Ítalo Brasileiro – Unítalo (1985). Mr. Moura is currently Copel’s Chief
Financial and Investor Relations Officer. He is also Chief Financial and Investor Relations Officer of Copel Geração
e Transmissão S.A.; Chief Financial Officer of Copel Distribuição S.A.; Chief Financial Officer of Copel Comercialização
S.A.; and Chief Financial Officer of Copel Renováveis S.A.. Previously, he was Vice-president and Chief Management, Financial
and Investor Relations Officer at Elecrolux for Latin America (2003-2017); Chief Management, Financial and Investor Relations Officer
at Electrolux do Brasil (1999-2003); Controller at Electrolux do Brasil (1997-1999); Vice-president at Associação
Nacional de Fabricantes de Produtos Eletroeletrônicos (National Association of Home Appliance Manufacturers)(2013-2015);
member of the Board of Directors at CTI (2011-2017); at Eletros (2013-2015); member of the Supervisory Board at Gafisa (2009-2014);
member of the Supervisory Board at Tenda (2009-2014); at Alphaville (2012-2013); graduate school Professor at Fundação
Armando Alvares

125


Table of Contents


Penteado - FAAP (1999);
Professor at Faculdade de Administração de Empresas e Economia do Paraná – FAE (1995); and auditor and
consultant at Arthur Andersen (1982-1997).

Cassio Santana
da Silva. Mr. da Silva was born on August 14, 1978. He holds a Bachelor’s degree in Business Administration from Universidade
Federal do Paraná - UFPR (2002); and an Executive MBA from Fundação Getúlio Vargas - Rio de Janeiro
(2003). He is currently Copel’s Chief Business Development Officer. Previously, he held leading positions in many multinational
companies, such as Business Unit Manager at Telefônica Brasil S.A. (2014-2019); Senior Brand and Trade Manager at Kimberly
Clark (2011-2013); Marketing and Trade Marketing Manager at Danone Northeastern Business Unit (2009-2011); National Trade Marketing
Manager at Danone (2008-2009); Trade Marketing Manager at Philip Morris (2007-2008); Regional Sales Manager at Ambev in the Dominican
Republic (2006-2007); Trade Marketing Manager (2005-2006) and Sales Manager (2002-2005) at AmBev.

Eduardo
Vieira de Souza Barbosa.Mr. Barbosa was born on October 3, 1982. Mr. Barbosa holds a post-graduate degree in Constitutional
Law from Academia Brasileira de Direito Constitucional - ABDConst. Mr. Barbosa holds a Bachelor’s degree in Law from Universidade
Tuiuti do Paraná - UTP. He is currently Copel’s Chief Legal and Institutional Relations Officer, as well as the Chief
Legal and Institutional Relations Officer of Copel Geração e Transmissão S.A.,Copel Distribuição
S.A., Copel Comercialização S.A. and Copel Renováveis S.A.. Previously he
acted as Chief Legal Officer of the Conselho de Jovens Empresários - CJE (Young Entrepreneurs Committee) at the State of
Paraná Trade Association (2011-2016); Member of the Political Council of the State of Paraná Trade Association (2013-2016);
Strategic Consultant of Companhia Paranaense de Saneamento do Paraná - Sanepar, Assistant to the Chief Legal Officer for
CS Bioenergia S.A. (2015); Chief Prosecutor of the Commercial Registry of the State of Paraná (2011-2015); and Legal adviser
and referee to legal and individual entities directly and indirectly connected to the Public Administration.

Vicente
Loiácono Neto.Mr. Loiácono was born on June 4, 1983. He received a post-graduate degree in Civil Procedure Law
from Universidade do Sul de Santa Catarina (2010). He holds a Bachelor’s degree in Law from Faculdades Integradas Curitiba
(2007). He is currently attending the Master’s program on Business Law and Citizenship from Centro Universitário Curitiba
(2019-2021). Mr. Loiácono is currently Copel’s Chief Governance, Risk and Compliance Officer. Mr. Loiácono
has been a lawyer at the company since 2011, where he also served as Advisor to the CEO (2017-2018);; member of the Supervisory
Board of Fundação Copel de Previdência e Assistência Social (2015); and member of the Ethical Guidance
Council (2014). Previously, Mr. Loiácono had served as deputy coordinator of the Conselho
de Jovens Empresários - CJE (Young Entrepreneurs Committee) at the State of Paraná Trade Association.

David Campos.
Mr. Campos was born on November 05, 1969. Mr. Campos received a Bachelor’s degree in Social Communication - Journalism from
Universidade Estadual de Ponta Grossa - UEPG (1990). He is currently Chief Assistant Officer at Companhia Paranaense de Energia
- Copel. Previously he acted as Chief Communication Official at Itaipu Binacional (2017); Municipal Secretary of Social Communication
at Curitiba Municipality (2011-2012); Head of the Mayor’s Office in Curitiba (2010); Chief Journalist at the State of Paraná
Legislative Assembly (2001-2009); Secretary of Social Communication for the State of Paraná (1999-2000); and Municipal Secretary
of Social Communication at Curitiba Municipality (1997-1998).



126


Table of Contents


SUPERVISORY BOARD

We have a permanent
Supervisory Board (Conselho Fiscal), which generally meets monthly. The Supervisory Board consists of five (5) members and
five (5) alternates elected for two-year terms by the shareholders at the annual meeting. The Supervisory Board, which is independent
of our management and of our external auditors, has the responsibilities provided in Federal Law No. 6,404/1976 and Federal Law
No. 13,303/2016, which include, among others:

| | · | reviewing our financial statements and
reporting on them to our shareholders;
| | - | -----------------------------------------------------------------------------

| | · | issuing reports on proposed changes in
capitalization, corporate budgets and proposed dividend distributions and any corporate reorganization to be submitted to the shareholders;
and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | in general, supervising the activities
of management and reporting on them to our shareholders.
| | - | -----------------------------------------------------------------------------------------------

The following
table lists the current and alternate members of the Supervisory Board, who were appointed at the 63rd annual shareholders’
meeting held on April 29, 2019 and at the 200thextraordinary shareholders’ meeting held on December 2, 2019.
The term of all members of the Supervisory Board indicated below will expire in April 2021.

|Name                           | Since
|------------------------------ | -----
|Demetrius Nichele Macei        | 2019 
|Harry Françóia Júnior          | 2019 
|José Paulo da Silva Filho      | 2019 
|Roberto Lamb                   | 2017 
|Letícia Pedercini Issa Maia(1) | 2017 
|Alternates                     |      
|Emir Calluf Filho              | 2019 
|João Luiz Giona Junior         | 2018 
|Otamir Cesar Martins           | 2018 
|Estevão de Almeida Accioly     | 2019 
|Gilberto Pereira Issa(1)       | 2018 

|(1) | Letícia Pedercini Issa Maia, member of our Supervisory Board, is the daughter of Gilberto Pereira Issa, an alternate member
of our Supervisory Board.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

127


Table of Contents




AUDIT COMMITTEE

Pursuant to
Rule 10A-3 under the Securities Exchange Act and our bylaws, our Audit Committee is composed of five members of our Board of Directors,
each of whom serves a term of two years, and may be re-elected up to three consecutive times. Pursuant to the rules of procedure
of the Audit Committee, the members of this committee are appointed by, and may be replaced by, a resolution taken by our Board
of Directors. The members of the Audit Committee are Mr. Marco Antônio Barbosa Cândido (chairman), Ms. Leila Abraham
Loria, Ms. Olga Stankevicius Colpo, Mr. Luiz Claudio Maia Vieira and Mr. Carlos Biedermann. The Audit Committee is responsible
for auditing, supervising and fiscalizing the processes related to the preparation of our financial statements, ensuring that we
are in compliance with all legal requirements related to our reporting obligations, monitoring the work of the independent auditors
and our staff who are responsible for internal auditing of the Company and reviewing the effectiveness of our internal control
and risk management procedures and staff.

Under Brazilian
Corporate Law, the function of hiring independent auditors is reserved for the board of directors of a company. As a result, our
Board of Directors acts as our Audit Committee, as specified in Section 3(a)(58) of the Securities Exchange Act, for the purposes
of approving, on a case-by-case basis, any engagement of our independent auditors for audit and non-audit services provided to
us or our subsidiaries. Except in these respects, our Audit Committee is comparable to and performs the functions of audit committees
of U.S. companies.

128


Table of Contents




APPOINTMENT AND EVALUATION COMMITTEE (“CIA”)



The CIA is a
permanent statutory body of Copel which provides support to Copel’s shareholders. The CIA’s purpose is to verify the
compliance of the process of appointment and evaluation of statutory body members of Copel (i.e. Board of Directors, Fiscal Council,
Executive Board and relevant statutory committees), in each case in accordance with (i) the Appointment Policy; (ii) the Internal
Rules of Appointment of Statutory Bodies Members; (iii) other internal rules; and (iv) applicable law. The CIA works closely with
Copel (Holding) and its wholly-owned subsidiaries and its scope may be extended to controlled companies, affiliates and other companies
in which Copel and its wholly-owned subsidiaries hold equity interests.

|Member                      | Position  | Date
        of Appointment
|--------------------------- | --------- | ---------------------------
|Marcos Leandro Pereira      | President | 12.02.2019                 
|Robson Augusto Pascoalini   | Member    | 12.02.2019                 
|Claudio Nogas               | Member    | 04.29.2019                 
|Ana Silvia Corso Matte      | Member    | 04.29.2019                 
|Durval Jose Soledade Santos | Member    | 04.29.2019                 



129


Table of Contents


COMPENSATION OF DIRECTORS, OFFICERS, SUPERVISORY
BOARD MEMBERS AND AUDIT COMMITTEE MEMBERS

Under
Brazilian Corporate law, the total compensation of the Board of Directors, Executive Board and Supervisory Board is established
annually by our general shareholders meeting. Under parapraph 3 of section162 of the Brazilian Corporate Law, the compensation
of the members of our Supervisory Board must be equal to, or greater than, 10% of the average compensation paid to the members
of our Executive Board (excluding benefits, representation funds and profit-sharing plans, if applicable). The members of our Supervisory
Board received in 2018 15% of the monthly compensation of the Chief Executive Officer. Finally, the members of our Audit Committee
(who are also members of our Board of Directors) received the monthly compensation paid to the members of the Supervisory Board
plus R$5,000.

For
the year ended December 31, 2019, the aggregate amount of compensation paid by us to the members of our Board of Directors, Board
of Executive Officers and Supervisory Board was R$12,549.0 million, of which 78.6% was for our Board of Executive Officers, 14.9%
was for our Board of Directors, and 6.4% was for our Supervisory Board, as approved by our 64rd annual shareholders’ meeting
held on April 29, 2019.

The following table
shows additional details about the compensation paid to the members of our Board of Directors, Executive Board and Supervisory
Board for the periods indicated.

|                                         | Compensation
        (R$’000) in the years ended December 31,
|---------------------------------------- | -------------------------------------------------------------
|                                         | Board
        of Directors                                   
|Area                                     | 2019                                                         
|Number of members(1)                     | 8.33                                                         
|Total Salary                             | 514.7                                                        
|Largest Salary                           | 230.3                                                        
|Smallest Salary                          | 158.3                                                        
|Average Salary                           | 224.6                                                        
|Compensation for attending committees(2) | 1,005.2                                                      
|Others(3)                                | 340.0                                                        
|Total                                    | 1,871.9                                                      
|                                         |                                                              



|(1) | This figure corresponds to the average number of members per year.
|--- | ------------------------------------------------------------------

|(2) | Refers to Statutory Audit Committee.
|--- | ------------------------------------

|(3) | Refers to Private Pension Contribution, Assistance Plan for all members and Representation Grant for Executive Officers.
|--- | ------------------------------------------------------------------------------------------------------------------------

We have no
service contracts with our directors providing for benefits upon termination of employment. We do not have a stock option plan
for our directors, officers or employees.

130


Table of Contents


EMPLOYEES

On December
31, 2019, we had 7,095 employees, compared to 7,611 employees on December 31, 2018 and 8,245 employees on December 31, 2017. Including
employees at Compagas, Elejor and UEG Araucária Ltda. (companies in which we have a majority stake) we had 7,266 employees
as of December 31, 2019.

The following
table sets forth the number of our employees and a breakdown of employees by area of activity as of the dates indicated in each
area of our operations.

|                                                   | As
        of December 31,
|-------------------------------------------------- | --------------------------
|Area                                               | 2019                      
|Generation and transmission                        | 1,620                     
|Distribution                                       | 4,964                     
|Telecommunications                                 | 412                       
|Corporation staff and research and development     | 61                        
|Other employees                                    | 38                        
|Total employees of Copel wholly-owned subsidiaries | 7,095                     
|Compagas                                           | 148                       
|Elejor                                             | 7                         
|Araucária                                          | 16                        
|Total                                              | 7,266                     

All of our employees
are covered by collective bargaining agreements that we renegotiate annually with the unions that represent the various employee
groups. In 2019, we negotiated and signed labor agreements with the unions representing our employees. These new bargaining agreements
became effective in October and will be in place for a one-year term. We agreed to salary increases of 2,92% in 2019 compared to
2018 salaries.

We provide
a number of benefits to our employees. The most significant is our sponsorship of Fundação Copel de Previdência
e Assistência Social (“Fundação Copel”), which supplements the Brazilian government retirement
and health benefits available to our employees. As of December 31, 2019, approximately 99% of our employees had elected to participate
in a defined contribution plan.

In accordance
with federal law and our compensation policy, our employees participate in a profit-sharing plan. The Board of Directors and the
shareholders must approve the amount of such compensation, which is determined in accordance with an agreement between an employee
committee and us. An employee’s receipt of compensation is conditioned on the company meeting certain benchmarks described
in the above-mentioned agreement, as confirmed in our published year-end financial statements. The amount of profit-sharing distributions
reserved and approved for the 2019 fiscal year (including Compagas) was R$155.5 million. The amount of profit-sharing distributions
accrued and approved for the 2018 fiscal year (including Compagas) was R$91.5 million. The terms of the profit-sharing agreement
are currently being revised and negotiated for future years. On November 1, 2019, we launched a new retirement incentive program
(“PDI”), which was divided into two phases: (i) from November 1 to November 15, 2019, only employees who met the following
requirements were entitled to took advantage of the PDI: (a) having worked at Copel for 25 years or more and (b) being 55 years
old or older; and (ii) from November 16 to November 30, 2019, any employee could apply to the program. All employees who joined
the program were to leave the company prior to December 15, 2019.

Thus, by December
15, 2019, three hundred and ninety-seven (397) employees took advantage of the program, totaling R$43.5 million in benefits paid
and expenses related to this program.

On February
12, 2020 the Board of Directors approved the implementation, within Copel and its wholly-owned subsidiaries, of a short-term incentive
program called Performance Incentive Program (Prêmio Por Desempenho“PPD”) directed at aligning efforts
throughout different organizational levels to the company's strategic objectives.

131


Table of Contents


The program
prizes technical consistency and takes the best market practices into account. It was developed with the support of Fundação
Instituto de Administração - FIA, a consultancy that specializes in people management modernization projects for
the private sector as well as state-owned companies.

As a result,
Copel improves its target-based management strategy and enhances its merit-based culture, thus aligning with the achievement of
its strategic plan. Upholding the company's values, the implementation of the program reflects the commitment of Copel's management
to the improvement of the group's operational efficiency, and to the highest corporate governance standards, strengthening the
pillars that support the business' sustainable growth and longevity.



132


Table of Contents




SHARE OWNERSHIP

As of March
31, 2020, board members and executive officers held, collectively, directly or indirectly, less than 0,01% of any class of our
shares.

The
following table indicates the board members, executive officers and members of the Supervisory Board who held shares as of March
31, 2020, and their respective share ownership as of such date. No other board member, executive officer, members or alternate
members of the Supervisory Board held shares issued by the Company on March 31, 2020.

|                                | Number of shares
|------------------------------- | ----------------
|Common                          | Class A         
|Board of Directors             
|Marcel Martins Malczewski       |                 
|Leila Abraham Loria             | -               
|Olga Stankevicius Colpo         | -               
|Adriana Angela Antoniolli       |                 
|Executive Officers             
|Daniel Pimentel Slaviero        | -               
|Ana Letícia Feller              | -               
|Adriano Rudek de Moura          | -               
|Cassio Santana da Silva         | -               
|Eduardo Vieira de Souza Barbosa | -               
|Vicente Loiácono Neto           | -               
|                                |                 
|Supervisory Board – Members    
|Demetrius Nichele Macei         | -               
|Harry Françóia Júnior           | -               
|José Paulo da Silva Filho       | -               
|Roberto Lamb                    | -               
|Letícia Pedercini Issa Maia     | 2               
|Supervisory Board – Alternates 
|Emir Calluf Filho               |                 
|João Luiz Giona Junior          | -               
|Otamir Cesar Martins            | -               
|Estevão de Almeida Accioly      | -               
|Gilberto Pereira Issa           | -               



We have no
share-based incentive plan for employees.

133


Table of Contents




Item 7. Major Shareholders and
Related Party Transactions.

MAJOR SHAREHOLDERS

Since
1954, the State of Paraná has owned the majority of our Common Shares and has exercised control over us. On December 31,
2019, the State of Paraná directly owned 58.63% of the Common Shares.The State of Paraná does not have any
different voting rights, but as long as it holds a majority of our Common Shares, it will have the right to elect a majority of
our directors.

On
December 31, 2019, BNDESPAR owned directly 26.41% of our Common Shares. The shareholders’ agreement entered into by and between
the State of Paraná and BNDESPAR on December 22, 1998, and amended on March 29, 2001, was terminated on December 21, 2018.

The
following table sets forth certain information regarding the ownership of our Common Shares on December 31, 2019:

|Shareholder                               | Common
        shares
|----------------------------------------- | ---------------------
|                                          | (thousands)          
|State of Paraná                           | 85,029               
|BNDESPAR                                  | 38,299               
|Eletrobras                                | 1,531                
|Public Float – ADRs                       | 109                  
|Public Float – B3 (Brasil, Bolsa, Balcão) | 19,728               
|Other                                     | 335                  
|All directors and officers as a group(1)  | -                    
|Total                                     | 145,031              



|(1) | On December 31, 2019, our directors and officers held an aggregate of 2 Common Shares.
|--- | --------------------------------------------------------------------------------------

The following
table sets forth certain information regarding the ownership of our Class B Shares on December 31, 2019:

|Shareholder                              | Class
        B Shares
|---------------------------------------- | ----------------------
|                                         | (thousand)            
|State of Paraná                          | –                     
|BNDESPAR                                 | 27,282                
|Eletrobras                               | –                     
|Traded as ADSs                           | 27,181
        ]      
|Traded in the B3 (Brasil, Bolsa, Balcão) | 73,613                
|Other                                    | 221                   
|All directors and officers as a group    | –                     
|Total                                    | 128,297               



As of March
31, 2020, 1.19% of the Common Shares and 39.79% of the Class B Shares were held by 239 holders that reside in the United States
and have registered with the B3 (Brasil, Bolsa, Balcão) market. At the same date, the ADSs represented 0.07% of the Common
Shares and 18.18% of the Class B Shares, and together, approximately 8.56% of our total share capital. Until December 31,2019,
there were conversions of 1,485 Class A Shares into Class B shares. For the last three fiscal years, we had no changes in the amount
of our issued corporate capital, in the number of our shares or in the voting rights of our shares.

134


Table of Contents


Related
Party Transactions

We
engage in transactions, including the sale of electric energy, with our principal shareholders and with our affiliates. The tariffs
we charge on electric energy sold to our related parties are approved by ANEEL, and the amounts are not material. We also provide
guarantees in the context of financing transactions and power purchase agreements entered into by our subsidiaries in the ordinary
course of business.For more information, see Note 36 to our audited consolidated financial statements.

Transactions with Shareholders

The following
summarizes the most significant transactions with our principal shareholders:

Government of the State of
Paraná

The Company's
management and the Paraná State Government formalized on October 31, 2017 the fifth amendment to the agreement for renegotiation
of the Account for Compensation of Income and Losses - CRC. The State of Paraná complied with the agreed terms and made
the payments of the monthly interest until December 2017. With the end of the grace period, the State of Paraná has complied
with the payments under the agreed terms, with 64 monthly installments remaining to be paid. The contract balance is updated by
the IGP-DI variation and interest of 6.65% p.a.

BNDES and BNDESPAR

BNDESPAR, a
wholly-owned subsidiary of BNDES, owns 26.4% of our Common Shares. BNDES has granted us loans to finance the construction of generation
and transmission facilities and both BNDES and BNDESPAR have purchased debentures issued by Compagás and all debentures
issued by Nova Asa Branca I, Nova Asa Branca II, Nova Asa Branca III, Nova Eurus IV and Ventos de Santo Uriel Wind Farms, which
are our subsidiaries.

As of December
31, 2019, we had an aggregate of R$2,521 million in outstanding debt with BNDES and BNDESPAR under these financing transactions.
For additional information, please see Notes 21 and 22 to our audited consolidated financial statements, as well as “Item
5. Operating and Financial Review and Prospects—Liquidity and Capital Resources.”

Fundação Copel

Fundação
Copelis a closed pension fund sponsored by Copel, Compagas and other entities that runs and operates benefit plans, welfare
and social assistance. In 2019, Copel made payments to Fundação Copel consisting of: (i) rental in the amount of
R$2.5 million and (ii) R$238.3 million for expenditure on pension and welfare plans. For more information, see Notes 32 and 36
to our audited consolidated financial statements.

Transactions with Affiliates

Dona Francisca Energética S.A.

We own 23.0%
of the total issued and outstanding share capital of Dona Francisca Energética S.A. - DFESA.

Until March
2015, we had a power purchase agreement with DFESA, valued at R$81.3 million annually, under which Copel Geração
e Transmissão purchased 100% of DFESA’s assured energy. In April 2015, we signed a new ten-year power purchase agreement
with DFESA, valued at R$17.0 million annually, under which Copel Geração e Transmissão purchases 23.03% of
DFESA’s assured energy (proportional to Copel’s equity interest).

135


Table of Contents


As of December
31, 2019, we had accounts payable to DFESA in the amount of R$1.4 million under the above-mentioned agreements. For more information,
see Note 36 to our audited consolidated financial statements.

Foz do Chopim Energética Ltda.

We own 35.8%
of Foz do Chopim Energética Ltda., which operates a hydroelectric generation project. In 2018, we acquired from Foz do Chopim
plant projects for which we recorded a liability of R$19.5 million. In 2019, this acquisition was settled through a matching of
accounts with the dividend’s receivable from that supplier, which is part of the Company's consolidated investments as associate.
For more information, see Note 39 to our audited consolidated financial statements.

We
also had balances receivable from jointly controlled projects, mainly in the case of dividends. For additional information, please
see Note 36 to our audited consolidated financial statements.

136


Table of Contents




Item 8. Financial Information

See pages F-1
through F-138.

A. Consolidated Financial Information

See “Item
3. Key Information—Selected Financial Data”, “Item 5. Operating and Financial Review and Prospects—Overview”
and “Item 18. Financial Statements.”

137


Table of Contents




Legal
Proceedings

We are currently
subject to numerous proceedings relating to civil, administrative, labor and tax claims. Our audited consolidated financial statements
only include provisions when the Company has a present obligation (legal or constructive)
resulting from a past event; it is probable (i.e, more likely than not) that an outflow of resources embodying economic benefits
will be required to settle the obligation; and a reliable estimate can be made of the amount necessary to settle the obligation.As of December 31, 2019, our provisions for such risks were R$1,606.7 million. However, it is possible that some amounts
actually paid are different from the estimates made in recognizing these provisions because of determinations of final judgments
and/or liquidations of the award.

As of December
31, 2019, we estimate that the total amount of claims against us, excluding disputes involving non-monetary claims or claims whose
potential losses cannot be reasonably estimated due to the current early stages of proceedings, for which no provisions have been
made, was approximately R$3,485.1 million, of which R$419.9 million correspond to labor claims; R$21.3 million to employee benefits;
R$1,141.4 million to regulatory claims; R$1,273.9 million to civil claims; and R$628.6 million to tax claims. For more information,
see Note 29 to our audited consolidated financial statements.

Tax and Social Contribution Claims

During the
second half of 2010, two lawsuits were decided before the Federal Regional Court (Tribunal Regional Federal) in favor of
the federal government, reversing the prior judgment that recognized our immunity regarding the payment of COFINS tax. As a result,
the Federal Internal Revenue Service (Receita Federal) issued an infraction notice demanding the payment of COFINS tax from
the period between August 1995 and December 1996. As of December 31, 2019, we had provisioned R$104.2 million to cover expected
losses related to these lawsuits.

Additionally,
we are party to administrative and judicial proceedings pursuant to which we are challenging claims of the Brazilian Social Security
authorities to pay additional security contributions for the period between 2000 and 2006. In these proceedings, we estimate the
amount of our expected loss to be R$30.7 million.

Labor-related Claims

We are the
defendant in several lawsuits filed by either current or past employees of ours, related to overtime claims, dangerous work conditions,
relocation, and other matters. As of December 31, 2019, we have provisions totaling R$673.0 million reflecting the expected losses
related to these lawsuits.

Regulatory

We are disputing
certain regulatory and legal proceedings in connection with ANEEL’s allegations that we violated regulatory standards. As
of December 31, 2019, we have provisions totaling R$79.8 million reflecting the expected losses related to these proceedings.

Additional Claims

We are party
to several lawsuits related to accidents involving equipment used in our electricity transmission and distribution grids and vehicle
accidents (for more information see Note 29.1.2(e) to our audited consolidated financial statements). As of December 31, 2019,
we have provisions totaling R$337.0 million reflecting the expected losses related to these lawsuits.

We are also
party to several lawsuits brought by landowners whose land has been affected by our transmission and distributions lines. As of
December 31, 2019, we have provisions totaling R$245.8 million reflecting the expected losses related to these lawsuits.

138


Table of Contents


Dividend
Payments



In accordance
with our bylaws and Brazilian Corporate Law, we regularly pay annual dividends for each fiscal year within sixty days of the declaration
of the dividends at the annual shareholders’ meeting. To the extent amounts are available for distribution, we are required
to distribute as a mandatory dividend an aggregate amount equal to at least 25.0% of our adjusted net profit. Dividends are allocated
pursuant to the formula described in “Dividend Priority of Class A Shares and Class B Shares” below. Under Brazilian
Corporate Law, we are not permitted to suspend the mandatory dividend payable with respect to the Common Shares, Class A Shares
and Class B Shares for any year. Brazilian Corporate Law permits, however, a company to suspend the payment of all dividends if
the Board of Directors, with the approval of the Supervisory Board, reports at the shareholders’ meeting that the distribution
would be detrimental to the Company given its financial circumstances. In such a case, companies with publicly traded securities
must submit a report to the CVM providing the reasons for the suspension of dividend payments. Notwithstanding the above, Brazilian
Corporate Law and our bylaws provide that Class A Shares and Class B Shares shall acquire voting rights if we suspend the mandatory
dividend payments for more than three consecutive fiscal years, and such voting rights will continue until all dividend payments,
including back payments, have been made. We are not subject to any contractual limitations on our ability to pay dividends.

On March 30,
2020, and in the context of the coronavirus (COVID-19) pandemic, the Brazilian Government issued Provisional Measure No. 931 which
is applicable to us and allows for (i) annual shareholders meetings for the fiscal year of 2020 to take place on a date up to seven
months from the end of the respective 2019 fiscal year and (ii) board of directors of Brazilian companies to declare dividends
pending the 2020 annual shareholders meeting.

Calculation of Adjusted Net Profit

Annual dividends
are payable from our adjusted net profit for such period. Brazilian Corporate Law defines “net profit” for any fiscal
year as the result of a fiscal year after the deduction of income and social contribution taxes for that fiscal year and after
the deduction of any amounts allocated to employees’ and management’s participation in our results in such fiscal year.
The “net profit” for a relevant fiscal year is subject to adjustment by the addition or subtraction of amounts allocated
to legal and other reserves, the result of which is known as our adjusted net profit.

In accordance
with Brazilian Corporate Law, we must maintain a legal reserve, to which we must allocate a minimum of 5% of our net profits for
each fiscal year until such reserve reaches an amount equal to 20.0% of our capital stock (calculated in accordance with Brazilian
Corporate Law). However, we are not required to make any allocations to our legal reserve in a fiscal year in which the legal reserve,
when added to our other established capital reserves, exceeds 30.0% of our total capital stock. The amounts to be allocated to
such reserve must be approved by our shareholders in a shareholders’ meeting and may be used only for the increase of our
capital stock or compensation of losses.

On December
31, 2019, our legal reserve was R$1,014.2 million, or approximately 9.4% of our capital stock at that date.

In addition
to deducting amounts for the legal reserve, under Brazilian Corporate Law net profit may also be adjusted by deducting amounts
allocated to:

| | · | the contingency reserve: under Brazilian
Corporate Law, our shareholders’ meeting, upon a justified proposal of our Board of Directors or Board of Executive Officers,
may decide to allocate a percentage of our net profits to a contingency reserve for anticipated losses that are deemed probable
in future years, which amount may be estimated;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the tax incentives reserve: under Brazilian
Corporate Law, our shareholders’ meeting, upon a justified proposal of our Board of Directors or Board of Executive Officers,
may decide to allocate a percentage of our net profits resulting from government donations or subsidies for investment purposes.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

139


Table of Contents


On the other
hand, net profits may also be increased by:

| | · | the reversal of any amounts previously
allocated to a contingency reserve in the fiscal year in which the loss that had been anticipated does not occur as projected or
in which the anticipated loss occurs but is lower than the contingency allocated to it; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | any amounts included in the unrealized
profits reserve that have been realized in the relevant fiscal year and have not been used to offset losses, as approved by our
shareholders’ meeting, upon the proposal of our Board of Directors or Board of Executive Officers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Moreover, our
net profits are also adjusted by adding the realization of amounts registered under “Equity Value Adjustments”. The
account “Equity Value Adjustments” was created as a result of the first-time adoption of IFRS by Copel in 2010, which
caused a fair value revaluation of certain fixed assets and the adoption of the fair value as its “deemed cost” at
that date. The increase of the deemed cost of fixed assets led to an increase in depreciation costs. Thus, our management has decided
to add to the adjusted net profits the realization of the “Equity Value Adjustments” in order to compensate for effects
of the increased depreciation costs. This procedure is authorized by ICPC 10 (“Interpretação do Comitê
de Pronunciamento Contábil”). In 2019, our adjusted net profits used to calculate our dividends was increased
by R$66.2 million as a result of said realization.

The amounts
available for distribution are determined on the basis of the Statutory Financial Statements prepared using the method required
by Brazilian Corporate Law, which differ from our audited consolidated financial statements included herein.

Dividend Priority of Class A Shares and Class B Shares

According to
our bylaws, Class A Shares and Class B Shares are entitled to receive annual, non-cumulative minimum dividends, which dividend
per share shall be at least 10% higher than the dividends per share paid to the holders of the Common Shares. Class A Shares have
a dividend priority over the Class B Shares, and Class B Shares have a dividend priority over the Common Shares. To the extent
that dividends are paid, they are to be paid in the following order:

| | · | first, the holders of Class A Shares have
the right to receive a minimum dividend equal to 10% of the total share capital represented by the Class A Shares outstanding at
the end of the fiscal year in respect of which the dividends have been declared;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | second, to the extent there are additional
amounts to be distributed after all amounts allocated to the Class A Shares have been paid, the holders of Class B Shares have
the right to receive a minimum dividend per share equal to (i) the mandatory dividend divided by (ii) the total number of Class
B Shares outstanding at the end of the fiscal year in respect of which the dividends have been declared; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | third, to the extent that there are additional
amounts to be distributed after all amounts allocated to the Class A Shares and the Class B Shares have been paid, the holders
of Common Shares have the right to receive an amount per share equal to (i) the mandatory dividend divided by (ii) the total number
of Common Shares outstanding at the end of the fiscal year in respect of which dividends have been declared, provided that the
Class A Shares and Class B Shares receive dividends per share at least 10% higher than the dividends per share paid to the Common
Shares.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

To the extent
that there are additional amounts to be distributed after all amounts described in the preceding items have been paid and in the
form therein described, any such additional amount will be divided equally among all our shareholders.

Payment of Dividends

140


Table of Contents


We are required
to hold an annual shareholders’ meeting by April 30th of each year at which, among other things, an annual dividend
may be declared by decision of the shareholders on the recommendation of the management, as approved by the Board of Directors.
The payment of annual dividends is based on the financial statements prepared for the fiscal year ending December 31. Under Brazilian
Corporate Law, we must pay dividends to shareholders of record within 60 days of the date of the shareholders meeting that declared
the dividends. A shareholders’ resolution may set forth another date of payment, which must occur prior to the end of the
fiscal year in which such dividend was declared. We are not required to adjust the amount of paid-in capital for inflation for
the period from the end of the last fiscal year to the date of declaration or to adjust the amount of the dividend for inflation
for the period from the end of the relevant fiscal year to the payment date. Consequently, the amount of dividends paid to holders
of Class B Shares may be substantially reduced due to inflation.



Pursuant to
our bylaws, our management may declare interim dividends to be paid from profits in our semi-annual financial statements, in accordance
with the Company's dividend policy and subject to further endorsement by the Shareholders’ Meeting. Any payment of interim
dividends counts towards the mandatory dividend for the year in which the interim dividends were paid.

Pursuant to
Brazilian Corporate Law, we may pay interest on equity in lieu of dividends as an alternative form of making distributions to shareholders.
We may treat a payment of interest on equity as a deductible expense for tax purposes, provided that it does not exceed the lesser
of:

| | · | the total amount resulting from (i) Long-Term
Interest Rate (Taxa de Juros a Longo Prazo, or “TJLP”) multiplied by (ii) the total shareholders’ equity
(determined in accordance with Brazilian Corporate Law), less certain deductions prescribed by Brazilian Corporate Law; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the greater of (i) 50.0% of current net
income (after the deduction of social contribution on profits (CSLL ‒ Contribuição Social sobre o Lucro
Líquido) and before taking such distributions and any deductions for corporate income tax) for the year in respect of
which the payment is made or (ii) 50.0% of retained earnings and profit reserves for the year prior to the year in respect of which
the payment is made.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In order to
be eligible to receive amounts remitted in foreign currency outside of Brazil, shareholders who are not residents of Brazil must
register with the Central Bank in order to receive dividends, sales proceeds or other amounts with respect to their shares. The
Class B Shares underlying the ADSs are held in Brazil by the Custodian, as agent for the Depositary, which is the registered owner
of our shares.

Payments of
cash dividends and distributions, if any, will be made in Brazilian currency to the Custodian on behalf of the Depositary, which
will then convert such proceeds into U.S. dollars and will cause such U.S. dollars to be delivered to the Depositary for distribution
to holders of ADSs. In the event that the Custodian is unable to immediately convert the Brazilian currency received as dividends
into U.S. dollars, the amount of U.S. dollars payable to holders of ADSs may be adversely affected by devaluations of the Brazilian
currency that occur before such dividends are converted and remitted. In the event the holder of an ADS fails to collect its dividends
from the Custodian within three (3) years, counted as of the date when such dividend was made available, Brazilian corporate law
states that such dividends may be returned to us. In this case, the ADS holder shall lose its right to receive the dividends.

The table below sets
forth the cash distributions we paid/will pay as dividends and as interest on equity for the periods indicated.



|Year | Payment
        date | Distribution
        (R$ thousands) | Payment
        per share (R$)
|---- | -------------------- | ----------------------------------- | ------------------------------
|     |                      |                                     | Common                        
|2014 | June 2015            | 622,523                             | 2.17236                       

141


Table of Contents




|2015 | June 2016     | 326,795 | 1.13716 | 2.52507 | 1.25473
|---- | ------------- | ------- | ------- | ------- | -------
|2016 | June 2017     | 282,947 | 0.98539 | 2.89050 | 1.08410
|2016 | December 2017 | 223,266 | 0.77927 | -       | 0.85932
|2017 | August 2018   | 266,000 | 0.92624 | 2.89050 | 1.01887
|2017 | August 2018   | 23,401  | 0.08177 | -       | 0.08996
|2018 | December 2018 | 280,000 | 0.97515 | 2.89050 | 1.07270
|2018 | April 2019    | 98.54   | 0.34435 | -       | 0.37881
|2019 | December 2019 | 643,000 | 2.24235 | 3.94657 | 2.46692



The table below
sets forth the cash distributions we paid/will pay as dividends and as interest on equity, translated into US$ based on the exchange
rate at year-end, for the periods indicated.

|Year | Payment
        date | Distribution
        (US$ thousands) | Payment
        per thousand shares (US$)
|---- | -------------------- | ------------------------------------ | -----------------------------------------
|     |                      |                                      | Common                                   
|2014 | June 2015            | 234,366                              | 0.81785                                  
|2015 | June 2016            | 83,691                               | 0.29122                                  
|2016 | June 2017            | 86,818                               | 0.30235                                  
|2016 | December 2017        | 68,505                               | 0.23911                                  
|2017 | August 2018          | 81,618                               | 0.29237                                  
|2017 | August 2018          | 7,387                                | 0.02581                                  
|2018 | December 2018        | 72,262                               | 0.25166                                  
|2018 | April 2019           | 25,431                               | 0,08887                                  
|2019 | December 2019        | 159,526                              | 0.55632                                  



Item 9. The Offer and Listing

The principal
trading market for our shares (including our Class B Shares) is the B3 (Brasil, Bolsa, and Balcão) market. Our Common Shares
trade on B3 under the symbol “CPLE3” and our Class B Shares trade under the symbol “CPLE6”. On March 31,
2020, approximately 15,878 shareholders owned our Class B Shares.

In the United
States, our Class B Shares in the form of ADSs, each representing one Class B Share (as a result of the reverse stock split), issued
by the Depositary pursuant to the Deposit Agreement by and between Copel, the Depositary and the registered holders and beneficial
owners from time to time of the ADSs. The ADSs trade on the NYSE under the symbols “ELP” and “ELPVY”.

On June 19, 2002,
our shares were listed on Latibex, an Euro-based market for Latin American securities. The shares trade under the symbol “XCOP”.

142


Table of Contents




Item 10. Additional Information



Memorandum
and Articles of Association

Organization

We are a publicly
traded company duly registered with the CVM under No. 1431-1. According to Article One of our bylaws, we are authorized to pursue,
directly or through consortia or in partnership with private companies, the following objectives and purposes:

| | · | researching and studying, technically
and economically, all energy sources, providing solutions for a sustainable development;
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | · | researching, studying, planning, constructing
and developing the production, transformation, transportation, storage, distribution and trade of energy in any of its forms, chiefly
electric power, as well as fuels and energy raw materials;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | studying, planning, designing, constructing
and operating dams and their reservoirs, as well as other undertakings for multiple uses of water resources;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | providing services in energy trading,
energy infrastructure, information and technical assistance concerning the rational use of energy to business undertakings with
the aim of implementing and developing economic activities deemed relevant for the development of the State of Paraná, upon
approval by the Board of Directors; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | developing activities in the areas of
energy generation, electronic data transmission, electronic communications and control, cellular telephone systems, and other endeavors
that may be deemed relevant to the Company and the State of Paraná, being authorized, for such aims, upon approval by the
Board of Directors, and for the aims set forth in the second and third sub-items above, to join, preferably holding major stakes
or controlling interest, consortia or concerns with private companies, pension funds or other private entities, to participate
in bidding processes of new concessions and/or already established special purpose companies to exploit already existing concessions,
having taken into consideration, besides the projects' general features, their respective social and environmental impacts.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Except as described
in this section, our bylaws do not contain provisions addressing the duties, authority, or liabilities of directors and management,
which are instead established by Brazilian Corporate Law.

Qualification of Board of Directors

The appointed
directors must comply with the legal requirements set forth in Federal Law No. 13,303/2016, particularly the ones mentioned in
its article 17, and Federal Law No. 6,404/1976. Moreover, pursuant to Federal Law No. 13,303/2016 and to our bylaws, our Board
of Directors will mandatorily comprise, at least, (i) three independent members, (ii) five members that meet the requirements for
members of the Statutory Audit Committee, and (iii) one member appointed by the employees. Among the members described in item
(ii) above, at least one shall compulsorily have recognized professional experience in matters of corporate accounting in order
to sit on the Statutory Audit Committee.

Limitations on Directors’ Powers

Under Brazilian
Corporate Law, if a director or an executive officer has a conflict of interest with the company in connection with any proposed
transaction, the director or executive officer may not vote in any decision of the board of directors or of the board of executive
officers related to that transaction, and must disclose the nature and extent of the conflict of interest for transcription in
the minutes of the meeting. A director or an executive officer may not transact any business with a company, including accepting
any loans, except on reasonable and fair terms for the Company and conditions that are identical to the terms and

143


Table of Contents


conditions prevailing in the market or
offered by third parties. According to our bylaws, shareholders set the aggregate compensation payable to directors and executive
officers. For more information, see “Item 6. Directors, Senior Management and Employees”. Our bylaws do not establish
any mandatory retirement age limits.

Board of Directors and Board
of Executive Officers

According
to our bylaws, we are managed by a Board of Directors, composed of nine members and a Board of Executive Officers, composed of
six members. -

Our
Board of Directors ordinarily meets monthly and is responsible, among other things, for: (i) establishing our corporate strategy;
(ii) defining the general orientation of our business; (iii) defining the responsibilities of members of our Board of Executive
Officers; and (iv) electing the members of our Board of Executive Officers.

Our
Board of Executive Officers meets every two weeks and is responsible for the daily management of the Company. Each Executive Officer
also has individual responsibilities established by our bylaws.

The
members of our Board of Directors, of our Board of Executive Officers, our Supervisory Board and of our statutory committees shall
be liable for any loss or damages resulting from the performance of their duties, in compliance with the applicable law. Notwithstanding,
we shall ensure, provided no conflict with our own interests arises, legal assistance for members or former members of statutory
bodies in judicial and administrative proceedings brought by third parties, during or after their term of office, for the performance
of the duties of their office, in accordance to the terms and provisions of our bylaws.

For
further information, see Items 6 – “Directors, Senior Management and Employees -Board
of Directors” and “Directors, Senior Management and Employees -Board of Executive
Officers”.

Shareholders’ Meetings

The convening
of our shareholders’ meeting is made through publication of a notice to shareholders in two newspapers, which are determined
at the previous shareholders’ meeting. Generally, we make such notice in Diário Oficial do Estado – PRand
the Folha de Londrina. As provided by Brazilian Corporate Law, publications have to be made in the official newspaper located
in the state of our corporate headquarters, and in a newspaper with wide circulation in the same city as our corporate headquarters.
The notice must be published no fewer than three times, beginning at least 30 calendar days prior to the scheduled meeting date.

In
order for a shareholders’ meeting to be held on first call, shareholders representing at least one- quarter of the voting
capital have to be present, except as otherwise provided for under Brazilian law. If no such quorum is verified, a second meeting
may be called by notice given at least 8 calendar days prior to such meeting and in accordance with the same rules of publication
previously described. The quorum requirements will not apply to a second meeting, subject to the minimum quorum and voting requirements
for certain matters, as discussed as follows. A shareholder without a right to vote may attend a general shareholders’ meeting
and take part in the discussion of matters submitted for consideration.

A
shareholder may be represented at a general shareholders' meeting by a proxy appointed in accordance with applicable Brazilian
law not more than one year before the meeting, who must be a shareholder, a company officer, a lawyer or a financial institution.

144


Table of Contents


Right of Withdrawal

Our common
shares and preferred shares are not redeemable, with the exception that a dissenting shareholder has, under certain circunstances
provided for in Brazilian Corporate Law, the right to withdraw its equity interest from a company and to receive a payment for
the portion of shareholder’s equity attributable to his or her equity interest.

Preferred Shares Rights

Pursuant to
Brazilian Corporate Law, each preferred share of a class that is admitted to trading on a Brazilian stock exchange must have the
certain rights under the Company’s bylaws.

Our bylaws
comply with the directives provided by Brazilian Corporate Law as follows: (i) our Class A Shares shall have priority in the distribution
of minimum dividends of 10% per year, pro rata, calculated as a percentage of the paid-in capital stock represented by such
shares on December 31of the previous fiscal year; (ii) our Class B Shares shall have priority in the distribution
of minimum dividends, pro rata, in the amount equivalent to 25.0% of our net profits, as adjusted in accordance with Section
202 of Law No. 6,404/76, calculated as a proportion of the paid-in capital stock represented by such shares on December 31st
of the previous fiscal year; (iii) the dividends paid on Class B Shares pursuant to item (ii) above shall be paid only from any
remaining profits after the payment of priority dividends to Class A Shares; and (iv) the dividends to be paid per preferred share,
regardless of the class, shall be at least 10% higher than the dividends to be paid per Common Share; and (v) the preferred shares
will acquire voting rights if, during three consecutive fiscal years, we fail to pay a fixed or minimum dividend to which the preferred
shares are entitled. For more information on our dividend policy, see “Item 8. Financial Information.”

Voting Rights

As a general
rule, only our Common Shares are entitled to vote and each Common Share corresponds to one vote. Holders of preferred shares acquire
voting rights if, during three consecutive fiscal years, we fail to pay a fixed or minimum dividend to which the preferred shares
are entitled. If a holder of preferred shares acquires voting rights in this manner, such rights will be identical to the voting
rights of a holder of Common Shares and will continue until the dividend is paid.

Preemptive Rights

Our shareholders
have a general preemptive right to subscribe for shares in any capital increase, in proportion to his or her ownership, as provided
for in the Brazilian Corporate Law. A minimum period of 30 days following the publication of notice of a capital increase is assured
for the exercise of the right, and the right is transferable. We may issue shares up to the limit of the authorized capital, excluding
right of first refusal to the shareholders, as provided for in the Brazilian Corporate Law and in our bylaws.

Liquidation

In the event
of liquidation of the Company, after all creditors have been paid, all shareholders will participate equally and ratably in any
remaining residual assets.

Liability of the Shareholders
for Further Capital Calls

Neither Brazilian
Corporate Law nor our bylaws provide for capital calls. The shareholders’ liability is limited to the payment of the issue
price of the shares subscribed or acquired.

Conversion Rights

Our bylaws
provide that the only permitted conversion of shares is Class A Shares are convertible into Class B Shares. Our shares are not
otherwise convertible.

145


Table of Contents


Form and Transfer

Our shares
are maintained in book-entry form with a transfer agent (“Transfer Agent”). To make a transfer of shares, the Transfer
Agent makes an entry in the register, debits the share account of the transferor and credits the share account of the transferee.

Transfers of
shares by foreign investors are made in the manner described above and are executed by the investor’s local agent on the
investor’s behalf. However, if the original investment was registered with the Central Bank pursuant to a foreign investment
mechanism regulated by Resolution No. 4,373 of September 29, 2014 of the CMN (“Resolution No. 4,373”) as described
under “Exchange Controls” as follows, the foreign investor must declare the transfer in its electronic registration.

A shareholder
may choose, in its individual discretion, to hold its shares through B3. Shares are added to the B3 system through Brazilian institutions
that have clearing accounts with the B3. Our shareholder registry indicates which shares are listed on the B3 system. Each participating
shareholder is in turn registered in a register of beneficial shareholders maintained by the B3 and is treated in the same manner
as the other registered shareholders.

Changes in rights of shareholders

A
General Meeting of Shareholders must be held whenever the Company intends to change the rights of holders of our common shares
or preferred shares. Under Brazilian Corporate Law the proposed changes must be approved by a majority of the class of shareholders
that would be affected. Certain changes related to the rights of preferred shares, such as changes in preferences, advantages or
conditions of redemption or amortization, may result in the exercise of rights to withdraw by the holders of the shares affected.

Regulation of and Restrictions
on Foreign Investors

Foreign investors
face no legal restrictions barring them from holding Common Shares, Class A Shares, Class B Shares or ADSs.

The ability
to convert into foreign currency dividend payments and proceeds from the sale of Class B Shares or preemptive rights, and to remit
such amounts outside Brazil is subject to restrictions under foreign investment legislation which generally requires, among other
things, the registration of the relevant investment with the Central Bank. Any foreign investor who registers with the CVM in accordance
with CMN Resolution No. 4,373 may buy and sell securities on Brazilian stock exchanges without obtaining a separate certificate
of registration for each transaction.

Annex II to
CMN Resolution No. 4,373 (“Annex II Regulations”) allows Brazilian companies to issue depositary receipts in foreign
exchange markets. Our ADS program is duly registered with the Central Bank and the CVM.

Our bylaws
do not impose any limitation on the rights of Brazilian residents or non-residents to hold our shares and exercise the rights in
connection therewith.

Disclosure of Shareholder Ownership

Under Brazilian
regulations any person or group of persons representing the same interest that carries out a relevant trading involving shares
or securities issued by a publicly traded company must disclose its share ownership to the investor relations officer of such company,
which, in turn, must disclose such information to the CVM and to any relevant stock exchange. A relevant trading is defined as
a transaction by which the direct or indirect equity stake of the persons referred above reaches an equity interest corresponding
to 5% or its multiples (10%, 15%, and so on), of a type or class of shares representing the company’s capital stock. Any
subsequent increase or decrease of 5% or its multiples in ownership of any class of shares must be similarly disclosed. The same
reporting obligation applies to the acquisition of any rights over the shares and other securities mentioned in applicable regulation
and to the execution of any derivative financial instruments

146


Table of Contents


referenced in shares. If such increase
results in change of corporate control or administrative structure, or if the increase imposes a public offering, in addition to
informing the investor relations officer, a statement containing certain required information must be published in newspapers that
are widely circulated in Brazil.

Arbitration

As provided
for in our bylaws, we, our shareholders, directors, officers and members of the supervisory board shall resolve through arbitration
any dispute or conflict that may arise between them, regarding, among others, the application, validity, effectiveness, interpretation,
violation and corresponding effects of the provisions of our bylaws, of the current applicable law, of the rules applicable to
the capital markets in general, as well as those of the regulation of the level 1 of corporate governance of B3 (Brasil, Bolsa,
Balcão) (“Level 1”), of the Level 1 participation contract, and of the Sanctions and the Arbitration
Regulations of the B3 Market Arbitration Chamber.



147


Table of Contents




Material
Contracts

For information
concerning our material contracts, see “Item 4. Information on the Company” and “Item 5. Operating and Financial
Review and Prospects”.

148


Table of Contents




Exchange
Controls

The ownership
of Class A Shares, Class B Shares or Common Shares of the Company by individuals or legal entities domiciled outside Brazil is
subject to certain conditions established under Brazilian law, as described below.

The right to
convert dividend payments and proceeds from the sale of shares into foreign currency and to remit such amounts outside Brazil is
subject to restrictions under Brazilian foreign investment legislation, which generally requires, among other things, that the
relevant investments have been registered with the Central Bank. Such restrictions on the remittance of foreign capital abroad
may hinder or prevent Itaú Unibanco S.A., as custodian for the Class B Shares represented by ADSs (“Custodian”),
or holders who have exchanged ADSs for Class B Shares from converting dividends, distributions or the proceeds from any sale of
such Class B Shares, as the case may be, into U.S. dollars and remitting such U.S. dollars abroad. Holders of ADSs could be adversely
affected by delays in, or refusal to grant any, required government approval for conversions of Brazilian currency payments and
remittances abroad of the Class B Shares underlying the ADSs.

Under Resolution
No. 4,373/2014, foreign investors may invest in almost all financial assets and engage in almost all transactions available in
the Brazilian financial and capital markets, provided that certain requirements are fulfilled. The definition of foreign investor
includes individuals, legal entities, mutual funds and other collective investment entities, domiciled or headquartered abroad.

To be eligible
to invest in the Brazilian financial and capital markets, foreign investors must:

| | 1. | point at least one representative in Brazil with powers to perform actions relating to foreign
investments;
| | -- | -----------------------------------------------------------------------------------------------------------

| | 2. | register as a foreign investor with the CVM;
| | -- | --------------------------------------------

| | 3. | register the foreign investment with the Central Bank; and
| | -- | ----------------------------------------------------------

| | 4. | constitute at least one custodian institution authorized by CVM.
| | -- | ----------------------------------------------------------------

Securities
and other financial assets held by foreign investors must be registered or maintained in deposit accounts or under the custody
of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading is restricted to transactions carried
out in the stock exchanges or organized over-the-counter markets licensed by the CVM.

The Annex II
Regulations provide for the issuance of depositary receipts in foreign markets in respect of shares of Brazilian issuers. Prior
to the issuance of the ADSs, the ADS program was approved by the Central Bank and the CVM under the Annex V to CMN Resolution No.
2,689, which allowed Brazilian companies to issue depositary receipts in foreign exchange markets and was in force by the time
the ADSs were issued. Depositary receipts are currently governed by Resolution No. 4,373. The proceeds from the sale of ADSs by
ADS holders outside Brazil are free of Brazilian foreign investment controls and should not be subject to taxation in Brazil. The
withdrawal and the disposal of Class B Shares upon cancellation of ADS will be subject to taxation in Brazil. For more information,
see “Item 10. Additional Information—Taxation—Brazilian Tax Considerations—Taxation
of Gains Outside Brazil”.

An electronic
registration has been issued in the name of the Depositary with respect to the ADSs and is maintained by the Custodian on behalf
of the Depositary. Pursuant to this electronic registration, the Custodian and the Depositary are able to convert dividends and
other distributions with respect to the Class B Shares represented by ADSs into foreign currency and remit the proceeds outside
Brazil. In the event that a holder of ADSs exchanges such ADSs for Class B Shares, such holder must seek to obtain its own electronic
registration with the Central Bank.

Pursuant to
Central Bank Resolution No. 4,373/2014, the withdrawal of Class B Shares upon cancellation of ADSs may require simultaneous exchange
transactions in the event the investor decides not to

149


Table of Contents


dispose of those Class B Shares. The simultaneous
exchange transactions may be required in order to obtain a certificate of registration of Class B Shares with the Central Bank.
This transaction will be subject to tax in Brazil. For more information, see “Item
10. Additional Information—Taxation—Brazilian Tax Considerations—Other
Brazilian Taxes”.

Thereafter,
any holder of Class B Shares may not be able to convert into foreign currency and remit outside Brazil the proceeds from the disposition
of, or distributions with respect to, such Class B Shares, unless such holder obtains his own electronic registration. A holder
that obtains an electronic registration may be subject to less favorable Brazilian tax treatment than a holder of ADSs. For more
information, see “Item 10. Additional Information—Taxation—Brazilian Tax
Considerations”.

The federal
government may impose temporary restrictions on remittances of foreign capital abroad in the event of a serious imbalance or an
anticipated serious imbalance of Brazil’s balance of payments. For approximately six months in 1989 and early 1990, the federal
government froze all dividend and capital repatriations held by the Central Bank that were owed to foreign equity investors, in
order to conserve Brazil’s foreign currency reserves. These amounts were subsequently released in accordance with federal
government directives. There can be no assurance that the federal government will not impose similar restrictions on foreign repatriations
in the future.



150


Table of Contents




Taxation

The following
summary contains a description of the principal Brazilian and U.S. federal income tax consequences of the acquisition, ownership
and disposition of Class B Shares or ADSs, but it does not purport to be a comprehensive description of all of the tax considerations
that may be relevant to a decision to purchase Class B Shares or ADSs. The summary is based upon the tax laws of Brazil and regulations
thereunder and on the tax laws of the United States and regulations thereunder as in effect on the date hereof, which are subject
to change. Prospective purchasers of Class B Shares or ADSs should consult their own tax advisors as to the tax consequences of
the acquisition, ownership and disposition of Class B Shares or ADSs.

Although there
is at present no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had discussions
that may culminate in such a treaty. No assurance can be given, however, as to whether or when a treaty will enter into force or
how it will affect the U.S. holders of Class B Shares or ADSs. Prospective holders of Class B Shares or ADSs should consult their
own tax advisors as to the tax consequences of the acquisition, ownership and disposition of Class B Shares or ADSs in their particular
circumstances.

Brazilian Tax Considerations

The following
discussion summarizes the principal Brazilian tax consequences of the acquisition, ownership and disposition of Class B Shares
or ADSs by an individual, entity, trust or organization resident or domiciled outside Brazil for purposes of Brazilian taxation
(“Non-Brazilian Holder”). It is based on Brazilian law currently in effect, which is subject to differing interpretations
and changes that may apply retroactively. This discussion does not address all the Brazilian tax considerations that may be applicable
to any particular Non-Brazilian Holder, and each Non-Brazilian Holder should consult its own tax advisor about the Brazilian tax
consequences of investing in Class B Shares or ADSs.

Taxation of Dividends

Dividends paid
by the Company in cash or in kind from profits of periods beginning on or after January 1, 1996 (i) to the Depositary in respect
of Class B Shares underlying ADSs or (ii) to a Non-Brazilian Holder in respect of Class B Shares generally will not be subject
to Brazilian withholding income tax. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian withholding
income tax at varying rates depending upon the year in which the profits have been obtained.

Distributions of Interest
on Equity

In accordance
with Law No. 9,249, dated December 26, 1995, as amended, Brazilian corporations may make payments to shareholders characterized
as distributions of interest on the equity of the company as an alternative form of making dividend distributions. The rate of
interest may not be higher than TJLP, as determined by the Central Bank from time to time. The total amount distributed as interest
on equity may not exceed, for tax purposes, the greater of (i) 50.0% of net income (after the deduction of the social contribution
on net profits and before taking into account the provision for corporate income tax and the amounts attributable to shareholders
as net interest on equity) related to the period in respect of which the payment is made and (ii) 50.0% of the sum of retained
profits and profit reserves as of the date of the beginning of the period in respect of which the payment is made.

Distributions
of interest on equity paid to Brazilian and Non-Brazilian Holders of Class B Shares, including payments to the Depositary in respect
of Class B Shares underlying ADSs, are deductible by the Company for Brazilian corporate income tax and social contribution on
net profits purposes as far as the limits above described are observed. Such payments to shareholders are subject to Brazilian
withholding income tax at the rate of 15.0%, except for payments to shareholders situated in tax haven jurisdictions (that is,
a country or location that does not impose income tax or where the maximum income tax rate is lower than 20% or where the local
legislation imposes restrictions on disclosing the shareholding composition or the ownership of the investment or the beneficial
owner of the income derived from transactions carried out and attributable to a Non-Brazilian Holder - “Tax Haven Holder”),
which payments are subject to withholding income tax at a 25.0%

151


Table of Contents


rate. A regulation issued by the Brazilian
tax authorities on November 28, 2014 (Ordinance 488, of 2014) decreased, from 20% to 17%, the minimum threshold for certain specific
cases. The reduced 17% threshold applies only to countries and regimes aligned with international standards of fiscal transparency
in accordance with rules to be established by the Brazilian tax authorities in Normative Ruling 1,530 dated December 19, 2014.
The list of tax haven jurisdictions is currently provided in Normative Ruling No. 1,037. These payments may be included, at their
net value, as part of any mandatory dividend. To the extent that payment of interest on net equity is so included, the corporation
is required to distribute to shareholders an additional amount to ensure that the net amount received by them, after payment of
the applicable withholding income tax, plus the amount of declared dividends, is at least equal to the mandatory dividend.

Taxation of Gains Outside
Brazil

According to
Law No. 10,833 of December 29, 2003 (“Law No. 10,833/03”), capital gains realized on the disposition of assets located
in Brazil by a Non-Brazilian Holder, whether to another non-Brazilian resident or to Brazilian residents, are subject to taxation
in Brazil. In this sense, if the Class B Shares are disposed of by a Non-Brazilian Holder, as they are defined as assets located
in Brazil, such holder will be subject to income tax on the gains assessed, following the rules described below, whether the disposition
is conducted in Brazil or abroad and with a Brazilian resident or not.

A disposition
of Class B Shares can occur abroad if an investor decides to cancel its investment in ADSs and register the underlying Class B
Shares as a direct foreign investment under Law No. 4,131. Any capital gain arising from sales or other dispositions of Class B
Shares outside Brazil would be subject to Brazilian income tax at the rates that range from 15% to 22.5% depending on the amount
of the gain, as follows: (i) 15% on gains not exceeding R$5,000,000.00; (ii) 17.5% on gains that exceed R$5,000,000.00 and do not
exceed R$10,000,000.00; (iii) 20% on gains that exceed R$10,000,000.00 and do not exceed R$30,000,000.00; and (iv) 22.5% on gains
exceeding R$30,000,000.00 or, if the investor is a Tax Haven Holder, 25.0%, which should be withheld by the purchaser of the Class
B Shares outside Brazil or its attorney-in-fact in Brazil.

Regarding ADSs,
although the matter is not free from doubt, the gains realized by a Non-Brazilian Holder on the disposition of ADSs to another
Non-Brazilian Holder should not be taxed in Brazil, based on the theory that ADSs do not constitute assets located in Brazil for
purposes of Law No. 10,833/03. However, we cannot assure you that Brazilian courts would adopt this theory. Thus, the gain on a
disposition of ADSs by a Non-Brazilian Holder to a resident in Brazil (or possibly even to a Non-Brazilian Holder in the event
that courts determine that ADSs would constitute assets located in Brazil) may be subject to income tax in Brazil.

Taxation of Gains in Brazil

For purposes
of Brazilian taxation, the income tax rules on gains related to disposition of Class B Shares vary depending on the domicile of
the Non-Brazilian Holder, the form by which such Non-Brazilian Holder has registered its investment before the Brazilian Central
Bank and/or how the disposition is carried out, as described below.

Generally,
gains are defined as the positive difference between the amount realized on the sale or exchange of a security and its acquisition
cost. Gains assessed on the disposition of the Class B Shares carried out on the Brazilian stock exchange (which includes the transactions
carried out on the organized over-the-counter market) are:

| | 1. | exempt from income tax when assessed by a Non-Brazilian Holder registered under Resolution No.
4,373 of the CMN (“4,373 Holder”) that is not a Tax Haven Holder; or
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | subject to income tax at a rate of 15.0% in any other case, including the gains assessed by a Non-Brazilian
Holder that (i) is not a 4,373 Holder, or (ii) is a 4,373 Holder and is a Tax Haven Holder.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There can be
no assurance that the current preferential treatment for 4,373 Holders will continue in the future.

152


Table of Contents


Any other gains
assessed on a disposition of the Class B Shares that is not carried out on the Brazilian stock exchange is subject to income tax
at the progressive rates ranging from 15% to 22.5%, except for gains assessed by Tax Haven Holders who are subject to an income
tax rate of 25.0%.

If these gains
are related to transactions conducted on the Brazilian non-organized, over-the-counter market, through an intermediary, the withholding
income tax of 0.005% on the sale value shall also be applicable and can be offset with the eventual income tax due on the capital
gain.

The deposit
of Class B Shares in exchange for the ADSs may be subject to Brazilian income tax In this case, the difference between the acquisition
cost and the market price of the Class B Shares would be subject to income tax at the progressive rates ranging from 15% to 22.5%
or 25.0% in the case of investors that are Tax Haven Holders. There may be arguments to claim that this taxation is not applicable
in the case of a Non-Brazilian Holder that is registered under Resolution 4,373 (other than Tax Haven Holders), which should not
be subject to income tax in such a transaction.

The withdrawal
of Class B Shares upon cancellation of ADSs should not be subject to Brazilian income tax, as long as the regulatory rules are
appropriately observed with respect to the registration of the investment before the Central Bank.

In the case
of redemption of the Class B Shares or ADSs or capital reduction by a Brazilian corporation, with subsequent withdrawal of the
ADSs, such as our company, the positive difference between the amount effectively received by the Non-Brazilian Holder and the
acquisition cost of the securities redeemed is treated as capital gain derived from the sale or exchange of shares not carried
out on a Brazilian stock exchange market and is therefore subject to income tax at the progressive rates ranging from 15.0% to
22.5% or 25.0%, as the case may be.

Any exercise
of preemptive rights relating to the Class B Shares or ADSs will not be subject to Brazilian taxation. Gains on the sale or assignment
of preemptive rights will be subject to the same tax treatment applicable to disposition of Class B Shares.

Other Brazilian
Taxes

There are no
Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of Class B Shares or ADSs
by a Non-Brazilian Holder except for gift and inheritance taxes levied by some states in Brazil on gifts made or inheritances bestowed
by individuals or entities not resident or domiciled in Brazil or in the relevant State to individuals or entities that are resident
or domiciled within such State in Brazil. There are no Brazilian stamp, issue, registration, or similar taxes or duties payable
by holders of Class B Shares or ADSs.

Pursuant to
Decree No. 6,306 of December 14, 2007 (“Decree No. 6,306/07”), a tax on foreign exchange transactions (“IOF/Exchange”)
may be imposed on the conversion of Brazilian currency into foreign currency (e.g., for purposes of paying dividends and interest)
or vice-versa. Currently, for most exchange transactions, the rate of IOF/Exchange is 0.38%, except for: (i) foreign exchange
transactions for the inflow of funds related to investments in variable income effectuated by a Non-Brazilian Holder in the Brazilian
financial and capital market, in which case the rate is 0%, and (ii) payment of dividends, and interest on shareholders’
equity related to the investment mentioned under item (i) above, in which case the rate is zero. Nonetheless, the Brazilian government
may increase the rate to a maximum of 25.0%. Any such increase will be applicable only prospectively.

Pursuant to
Decree No 6,306/07, the Tax on Bonds and Securities Transactions (“IOF/Bonds”) may be imposed on any transactions involving
bonds and securities, including those carried out on Brazilian stock, futures and commodities exchanges. The rate of IOF/Bonds
Tax applicable to transactions involving common shares is currently zero if the redemption, transfer or renegotiation occurs after
30 days of their acquisition. As from December 24, 2013, the IOF/Bonds levies at a rate of zero percent on the transfer (cessão)
of shares traded in a Brazilian stock exchange environment with the specific purpose of enabling the issuance of depositary

153


Table of Contents


receipts to be traded outside Brazil. The
Brazilian government is permitted to increase such rate at any time up to 1.5% per day, but only in respect of future transactions.

U.S. Federal Income Tax Considerations

The statements
regarding U.S. tax law set forth below are based on U.S. law as in force on the date of this annual report, and changes to such
law subsequent to the date of this annual report may affect the tax consequences described herein (possibly with retroactive effect).
This summary describes the principal U.S. federal income tax consequences of the ownership and disposition of Class B Shares or
ADSs, but it does not purport to be a comprehensive description of all of the U.S. tax consequences that may be relevant to a decision
to hold or dispose of Class B Shares or ADSs. This summary applies only to purchasers of Class B Shares or ADSs who will hold the
Class B Shares or ADSs as capital assets and does not apply to special classes of holders such as brokers or dealers in securities
or currencies, holders whose functional currency is not the U.S. dollar, holders of 10% or more of our shares by
vote or value (taking into account shares held directly or through depositary arrangements), tax-exempt organizations, financial
institutions, holders liable for the alternative minimum tax, securities traders who elect to account for their investment in Class
B Shares or ADSs on a mark-to-market basis, regulated investment companies, partnerships or other pass-through entities (or partners
or members therein), insurance companies, U.S. expatriates, and persons holding Class B Shares or ADSs in a hedging transaction
or as part of a straddle, conversion or other integrated transaction for U.S. federal income tax purposes. Moreover, this summary
does not address the Medicare tax on net investment income or the tax consequences to U.S. holders of acquiring, owning or disposing
of Class B Shares or ADSs under any U.S. federal estate or gift, state, local or foreign taxes.

Each holder
is encouraged to consult such holder’s tax advisor concerning the overall tax consequences to it, including the consequences
under laws other than U.S. federal income tax laws, of an investment in Class B Shares or ADSs.

In this discussion,
references to a “U.S. holder” are to a beneficial holder of a Class B Share or an ADS that is (i) an individual citizen
or resident of the United States of America, (ii) a corporation, or any other entity taxable as a corporation, organized under
the laws of the United States of America, any state thereof, or the District of Columbia, or (iii) otherwise subject to U.S. federal
income taxation on a net basis with respect to the Class B Share or ADS.

For purposes
of the U.S. Internal Revenue Code of 1986, as amended, which we call the “Code”, holders of ADSs will generally be
treated as owners of the Class B Shares represented by such ADSs.

Taxation of Distributions

A U.S. holder
will recognize dividend income for U.S. federal income tax purposes in an amount equal to the amount of any cash and the value
of any property distributed by us as a dividend to the extent that such distribution is paid out of our current or accumulated
earnings and profits, as determined for U.S. federal income tax purposes, when such distribution is received by the custodian (or
by the U.S. holder in the case of a holder of Class B Shares).

We do not expect
to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles. U.S. holders therefore
should expect that distributions generally will be treated as dividends for U.S. federal income tax purpose.

If you are
a U.S. holder, the amount of any distribution will include the amount of Brazilian tax withheld on the amount distributed, and
the amount of a distribution paid in reais will be measured by reference to the exchange rate for converting reais
into U.S. dollars in effect on the date the distribution is received by the custodian (or by a U.S. holder in the case of a holder
of Class B Shares). If the custodian (or U.S. holder in the case of a holder of Class B Shares) does not convert such reais
into U.S. dollars on the date it receives them, it is possible that the U.S. holder will recognize foreign currency loss or gain,
which would be ordinary loss or gain, when the reais are converted into U.S. dollars. Dividends paid by us will not be eligible
for the dividends received deduction allowed to corporations under the Code.

154


Table of Contents


Subject to
certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual, with respect
to the ADSs, will be subject to taxation at preferential rates if the dividends are “qualified dividends”. Dividends
paid on the ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on an established securities market
in the United States and (ii) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year
in which the dividend is paid, a passive foreign investment company (“PFIC”). The ADSs are listed on the New York Stock
Exchange, and will qualify as readily tradable on an established securities market in the United States so long as they are so
listed. Based on our audited consolidated financial statements and relevant market and shareholder data, we believe that we were
not treated as a PFIC for U.S. federal income tax purposes with respect to our 2018 and 2019 taxable years. In addition, based
on our audited consolidated financial statements and our current expectations regarding the value and nature of our assets, the
sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for the 2020 taxable
year. Based on existing guidance, it is not clear whether dividends received with respect to the Class B Shares will be treated
as qualified dividends, because the Class B Shares themselves are not listed on a U.S. exchange.Holders of ADSs and Class B Shares
should consult their own tax advisers regarding the availability of the reduced dividend tax rate in the light of the considerations
discussed above and their own particular circumstances.

Distributions
with respect to the Class B Shares or ADSs generally will be treated as dividend income from sources outside of the United States
and generally will be treated separately along with other items of “passive” income for purposes of determining the
credit for foreign income taxes allowed under the Code. Subject to certain limitations, Brazilian income tax withheld in connection
with any distribution, with respect to the Class B Shares or ADSs may be claimed as a credit against the U.S. federal income tax
liability of a U.S. holder if such U.S. holder elects for that year to credit all foreign income taxes. Alternatively such Brazilian
withholding tax may be taken as a deduction against taxable income. Foreign tax credits will not be allowed for withholding taxes
imposed in respect of certain short-term or hedged positions and may not be allowed in respect of arrangements in which a U.S.
holder’s expected economic profit, after non-U.S. taxes, is insubstantial. U.S. holders should consult their own tax advisors
concerning the implications of these rules in light of their particular circumstances.

Distributions
of additional shares to holders with respect to their Class B Shares or ADSs that are made as part of a pro rata distribution to
all our shareholders generally will not be subject to U.S. federal income tax.

Holders of
Class B Shares or ADSs that are foreign corporations or nonresident alien individuals, which we call “Non-U.S. Holders”,
generally will not be subject to U.S. federal income tax or withholding tax on distributions with respect to Class B Shares or
ADSs that are treated as dividend income for U.S. federal income tax purposes unless such dividends are effectively connected with
the conduct by the holder of a trade or business in the United States.

Taxation of Capital Gains

Upon the sale
or other disposition of a Class B Share or ADS, a U.S. holder will recognize gain or loss for U.S. federal income tax purposes.
The amount of the gain or loss will be equal to the difference between the amount realized in consideration for the disposition
of the Class B Share or ADS (including the gross amount of the proceeds before the deduction of any Brazilian tax) and the U.S.
holder’s tax basis in the Class B Share or ADS. Such gain or loss generally will be subject to U.S. federal income tax as
capital gain or loss and will be long-term capital gain or loss if the Class B Share or ADS has been held for more than one year
on the date of the disposition. The net amount of long-term capital gain recognized by an individual holder generally is subject
to taxation at preferential rates. Capital losses may be deducted from taxable income, subject to certain limitations. Gain realized
by a U.S. holder on a sale or disposition of Class B Shares or ADSs generally will be treated as U.S. source income for U.S. foreign
tax credit purposes. Consequently, if Brazilian tax is imposed on such gain, the U.S. holder will not be able to use the corresponding
foreign tax credit, unless the holder has other foreign source income of the appropriate type in respect of which the credit may
be used. Alternatively, such Brazilian tax may be taken as a deduction against taxable income if the U.S. holder does not take
a credit for any foreign income tax during the taxable year.

155


Table of Contents


A Non-U.S.
Holder will not be subject to U.S. federal income tax or withholding tax on gain realized on the sale or other disposition of a
Class B Share or ADS unless (i) such gain is effectively connected with the conduct by the holder of a trade or business in the
United States, or (ii) such holder is an individual who is present in the United States of America for 183 days or more in the
taxable year of the sale and certain other conditions are met.



Foreign Financial Asset Reporting

Certain U.S.
Holders that own “specified foreign financial assets” with an aggregate value in excess of US$50,000 on the last day
of the taxable year or US$75,000 at any time during the taxable year are generally required to file an information statement along
with their tax returns, currently on Form 8938, with respect to such assets. “Specified foreign financial assets” include
any financial accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer that are not
held in accounts maintained by financial institutions. The understatement of income attributable to “specified foreign financial
assets” in excess of US$5,000 extends the statute of limitations with respect to the tax return to six years after the return
was filed. U.S. Holders who fail to report the required information could be subject to substantial penalties. Prospective investors
are encouraged to consult with their own tax advisors regarding the possible application of these rules, including the application
of the rules to their particular circumstances.

Backup Withholding and Information
Reporting

Dividends paid
on, and proceeds from the sale or other disposition of, the ADSs or Class B Shares to a U.S. holder generally may be subject to
the information reporting requirements of the Code and may be subject to backup withholding unless the U.S. holder (i) is a corporation
or other exempt recipient or (ii) provides an accurate taxpayer identification number and certifies that no loss of exemption from
backup withholding has occurred. The amount of any backup withholding collected from a payment to a U.S. holder will be allowed
as a credit against the U.S. holder’s U.S. federal income tax liability and may entitle the U.S. holder to a refund, provided
that certain required information is furnished to the Internal Revenue Service.

A Non-U.S.
Holder generally will be exempt from these information reporting requirements and backup withholding tax, but may be required to
comply with certain certification and identification procedures in order to establish its eligibility for such exemption in connection
with payments received within the United States or through certain U.S.-related intermediaries.

156


Table of Contents


Dividends
and Paying Agents



Not applicable.

157


Table of Contents




statement
by experts

Not applicable.

158


Table of Contents




SUBSIDIARY
INFORMATION

Not applicable.

159


Table of Contents




Documents
on Display

We file reports,
including annual reports on Form 20-F and other information with the SEC pursuant to the rules and regulations of the SEC that
apply to foreign private issuers. We are required to make filings with the SEC by electronic means. Any filings we make electronically
will be available to the public over the Internet at the SEC’s website.

For more information
about our securities, see Exhibit 2.4 to this annual report.

Item 11. Quantitative and Qualitative Disclosures
about Market Risk

See Note 36.2 to our audited consolidated
financial statements for disclosure about market risk.

Item 12. Description of Securities Other than Equity
Securities

Not applicable.

Item 12A. Debt Securities

Not applicable.

Item 12B. Warrants and Rights

Not applicable.

Item 12C. Other Securities

Not applicable.

Item 12D. American Depositary Shares

In the United
States, the Class B Shares trade in the form of ADSs, each representing one Class B Share (as a result of the reverse stock split),
issued by The Bank of New York Mellon (or the Depositary) pursuant to the Deposit Agreement. The ADSs trade under the symbols ELP
and ELPVY. ADS holders are required to pay various fees to the Depositary, and the Depositary may refuse to provide any service
for which a fee is assessed until the applicable fee has been paid. The Depositary is located at 240 Greenwich Street, New York,
NY 10286.

ADS holders
are required to pay the Depositary: (i) an annual fee of up to US$0.02 per ADS (or portion thereof) for administering the ADS program,
and (ii) amounts in respect of expenses incurred by the Depositary or its agents on behalf of ADS holders, including expenses arising
from compliance with applicable law, taxes or other governmental charges, facsimile transmission, or conversion of foreign currency
into U.S. dollars. In both cases, the Depositary may decide in its sole discretion to seek payment by either billing holders or
by deducting the fee from one or more cash dividends or other cash distributions.

ADS holders
are also required to pay additional fees for certain services provided by the Depositary, as set forth in the table below.

|Depositary
        service                                                                                | Fee
        payable by ADS holders               
|--------------------------------------------------------------------------------------------------------- | -------------------------------------------------
|Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property | US$5.00 or less per 100 ADSs (or portion thereof)
|Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates         | US$5.00 or less per 100 ADSs (or portion thereof)
|Distribution of cash dividends                                                                            | US$0.02 or less per ADS                          

160


Table of Contents




|Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders                                                  | A fee equivalent to the fee that would be payable if securities distributed to the holder had been shares and the shares had been deposited for issuance of ADSs
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Depositary services                                                                                                                                                                          | US$0.02 (or less) per ADSs per calendar year                                                                                                                    
|Transfer and registration of shares on the Depositary’s share register to or from the name of the depositary or its agent when the holder deposits or withdraws shares                       | Registration or transfer fees                                                                                                                                   
|Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement)                                                                                                  | Expenses of the Depositary                                                                                                                                      
|Converting foreign currency to U.S. dollars                                                                                                                                                  | Expenses of the Depositary                                                                                                                                      
|Taxes and other governmental charges the Depositary or the custodian are required to pay on any ADS or share underlying an ADS (e.g., stock transfer taxes, stamp duty or withholding taxes) | As necessary                                                                                                                                                    
|Any charges incurred by the Depositary or its agents for servicing the deposited securities                                                                                                  | As necessary                                                                                                                                                    

Payments by the Depositary

The Depositary
pays us an agreed amount, which includes reimbursements for certain expenses we incur in connection with the ADS program. These
reimbursable expenses currently include legal and accounting fees, listing fees, investor relations expenses and fees payable to
service providers for the distribution of material to ADR holders. For the year ended December 31, 2019, this amount was US$781,639.97
thousand.

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of
Security Holders and Use of Proceeds

None.

Item 15. Control and Procedures

2019 Fiscal Year

Disclosure Controls and Procedures,
and Report on Internal Control over Financial Reporting

(a) Disclosure Control and Procedures

We evaluated the effectiveness of our
disclosure controls and procedures as of December 31, 2019 with the participation of our Chief Executive Officer and Chief Financial
Officer. Based on our assessment, we concluded that, as of December 31, 2019, because of the material weakness in our internal
control over financial reporting discussed below, our disclosure controls and procedures were not effective in providing reasonable
assurance that the information that we are required to disclose in the reports we present or submit under the Exchange Act is recorded,
processed, summarized and reported, within the deadlines specified in the applicable rules and forms, and are accumulated and reported
to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions
regarding any required disclosure.

(b) Management Annual Report on
Internal Control over Financial Reporting

Our management is responsible for establishing
and maintaining adequate internal control over financial reporting and for evaluating the effectiveness of internal control over
financial reporting. The process of internal controls over financial reporting is designed by our Chief Executive Officer and our
Chief Financial Officer, under the supervision of our Board of Directors, and is carried out by our management and other employees
as a means to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated
financial statements for external purposes in accordance with IFRS, issued by the IASB.

161


Table of Contents


Rules 13a-15 (f) and 15d-15 (f) under
the Exchange Act define internal control over financial reporting as a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for purposes external in accordance with generally
accepted accounting principles, and includes policies and procedures that (1) refer to record keeping that, in reasonable detail,
accurately and reasonably reflect the transactions and dispositions of the Company's assets; (2) provide reasonable assurance that
transactions are recorded as necessary to enable the preparation of financial statements in accordance with generally accepted
accounting principles, and that Company's receipts and expenses are being made only with authorization from Company's management
and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of Company's assets that could have a material effect on the audited consolidated financial statements.

Due to its inherent limitations, internal
control over financial reporting may not prevent or detect distortions. In addition, projections of any assessment of effectiveness
for future periods are subject to numerous risks, including that controls may become inadequate due to changes in conditions.

Our management’s assessment of
the effectiveness of our internal controls over financial reporting as of December 31, 2019 was based on the criteria established
in the Internal Control - Integrated Structure (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on such criteria, our management concluded that there is a material weakness in our internal control as of December
31, 2019.

A material weakness is a deficiency,
or a combination of deficiencies, in the internal control over financial reporting, in such that there is a reasonable possibility
that a material misstatement of Company's consolidated annual or interim financial statements will not be avoided or detected in
a timely manner.

Our management concluded that our internal
control over financial reporting was not effective as of December 31, 2019, because of the following material weakness identified
and assessed by our management as of December 31, 2019:

Ineffective control related to the
review of the assumptions and the calculation of impairment of fixed assets of Copel Telecomunicações, a wholly-owned
subsidiary of the Company, and of UEGA, a non-wholly-owned subsidiary of the Company.

Company's management identified a failure
in the operating effectiveness of the control related to the review of the assumptions and the calculation of impairment of fixed
assets of Copel Telecomunicações and of UEGA.

Our independent registered public accounting
firm has examined the effectiveness of our internal control of financial disclosure, as indicated in the report included in this
document.



162


Table of Contents




(c) Attestation Report of the
Registered Public Accounting Firm





163


Table of Contents








164


Table of Contents








165


Table of Contents




(d) Changes in Internal Control
on Financial Reporting

Company's management did not identify
any change in the internal control over financial reporting during the fiscal year ended December 31, 2019 that significantly affected
or had a reasonable possibility to significantly affect the internal controls over financial reporting, except for the matter related
to the material weakness mentioned above and with respect to the remediation plans related to the material weakness described below.

Remediation Plan for Material
Weakness Identified as of December 31, 2019

Company's management is committed
to remediating the material weakness referred to above. The remediation plan described herein is in the process of being implemented
and is designed to directly address the identified material weakness.

As a preliminary measure, Company's
management decided to implement a performance indicator to monitor remediation actions related to the identified material weakness
including periodic reports to the Audit Committee, the Fiscal Council and the Board of Directors of the Company.

Ineffective control related to
the review of the assumptions and the calculation of impairment of fixed assets of Copel Telecomunicações, a wholly-owned
subsidiary of the Company, and of UEGA, a non-wholly-owned subsidiary of the Company.

This material weakness arises from
dificiencies in the operating effectiveness of the control related to the review of the assumptions and the calculation of impairment
of fixed assets of Copel Telecomunicações and UEGA.

The Company has established the
following procedures:

| | · | Additional training and communication to the employees
involved in the processes, including internal control concepts, as well as operational aspects of impairment calculation;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Implementation of procedures and controls so that all
impairment tests are duly reviewed by another qualified employee of the Company, through a checklist created strictly for this
purpose;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Improvement of the controls and processes to carry out
prior internal evaluation of all potential impacts of impairment indicators.
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | · | Implementation of procedures and control so that all
assumptions related to telecommunications assets and UEGA assets will be formally approved by the executive board of
Copel Telecomunicações and UEGA.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Material Weakness identified
as of 2018 Fiscal Year

Ineffective Controls on the Revenues
of Copel Geração e Transmissão and Copel Telecomunicações, wholly-owned subsidiaries of the
Company.

As of December 31, 2018, we reported
a material weakness related to the result of the aggregation of deficiencies in internal controls on revenues in our wholly owned
subsidiaries Copel Geração e Transmissão and Copel Telecomunicações. We identified deficiencies
in the design and in the operating effectiveness of controls related to (1) the review of unbilled revenues, by professionals with
adequate levels of authority and competence; (2) absence of controls to verify the accuracy of customer registration information,
including with respect to invoiced prices; and (3) absence of controls verifying the completeness of the revenue invoicing of Copel
Telecomunicações.

In response to this material weakness,
the Company adopted measures to mitigate the risks associated with such material weaknesses that included a set of actions involving
changes in procedures and controls that were implemented throughout 2019:

| | • | Establishment of criteria
for calculating the provision for unbilled revenues, including with respect to recalculations at Copel Geração e
Transmissão and Copel Telecomunicações;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

166


Table of Contents


| | • | Intensification of training
initiatives and internal communication procedures to reinforce operational aspects of activities related to the accounting of revenue
balances in Copel Geração e Transmissão and Copel Telecomunicações;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Improvement of controls
in order to ensure that prices and quantities of contracted energy are duly invoiced at Copel Geração e Transmissão;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

| | • | Improvement of customer
registration, prices and flow registration processes with the implementation of controls and procedures at Copel Telecomunicações;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | • | Improvement of internal
system to control and certify the integration of information related to Copel Telecomunicações, so as to ensure that
Company's revenue is appropriately reported in relation to all of its customers.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Remediation of Material Weaknesses
Reported as of December 31, 2018

As a means to remedy material deficiencies
identified as of December 31, 2018, Company's management incorporated a committee comprised of Company Directors, with the support
of specialists representing each management department. The aim of the committee was to analyze and establish immediate actions
to remedy the identified deficiencies and its measures were periodically reported to the Statutory Audit Committee, the Fiscal
Council and the Board of Directors CAD throughout 2019.

The Company has continuously been
working to improve its internal controls environment. With the support of a consultancy company specifically engaged to provide
internal controls consultancy, Company’s management has successfully established action plans to mitigate risks, carrying
out periodic communication with governance bodies.

As a result of the work carried
out by Company’s management, all material weaknesses identified as of December 31, 2018 have now been remedied.



Item 16A. Audit
Committee Financial Expert

In May 3, 2019,
our Board of Directors reviewed the qualifications and backgrounds of the members of the Audit Committee and determined that Mr.
Carlos Biedermann an “audit committee financial expert” within the meaning of Item 16A of Form 20-F and satisfied the
requirements of independence of Rule 10A-3 under the Securities Exchange Act.. For more information regarding our Audit Committee,
see “Item 6. Directors, Senior Management and Employees—Audit Committee”.

Item 16B. Code of Ethics

Our code of
ethics, named as “Code of Conduct”, was first adopted in 2003, applicable to our chief executive officer, our executive
financial officer and the main executives of our accounting department.

In 2015, our
code was revised after an open consultation process that involved our internal staff and inputs from stakeholders. In this process,
after the proposals were consolidated, the code was approved by our Management and by our Board of Officers. In 2017, an amendment
to this code was approved by our Management and our Board of Directors to reflect new Brazilian regulation on conflict of interests
and periodical training. In 2018, the Code of Ethics was revised and a new version was approved by the Board of Directors on March
13, 2018. In 2019, we began a new process of revising our Code of Ethics, through public consultation, with completion scheduled
for the second half of 2020.

This code
applies to all of our employees, board members, officers (including our Chief Executive Officer, our Chief Financial Officer and
our officer in charge of our accounting department) and outsourced, as well as those of our wholly-owned subsidiaries. Our code
is available on our website (ir.copel.com) and copies can also be delivered by mail upon a written request sent to the address
provided on the cover page of this 20-F.

167


Table of Contents


As from the
adoption of our code of ethics, we have not granted any implicit or explicit waivers to any sections of our code of ethics to the
above-mentioned employees, board members, officers and outsourced.

Item 16C. Principal Accountant
Fees and Services

Audit and Non-Audit Fees

Deloitte Touche
Tohmatsu Auditores Independentes acted as our independent registered public accounting firm for the fiscal years ended December
31, 2019, 2018 and 2017.

The table next sets
forth the total amount billed to Deloitte Touche Tohmatsu Auditores Independentes for services performed in 2019, 2018 and 2017,
and breaks down these amounts by category of service.



|                   | Year
        ended December 31,
|------------------ | -------------------------------
|Billed             | 2019                           
|                   | (R$million)                    
|Audit fees         | 3.0                            
|Audit-related fees | -                              
|Tax fees           | 0.2                            
|All other fees     | -                              
|Total              | 3.2                            

Audit Fees

Audit fees
are fees billed for the audit of our annual financial statements and for the reviews of our quarterly financial information in
connection with statutory and regulatory filings or engagements.

Tax Fees

Tax fees are
fees billed for the review of fiscal and tax procedures, including the examination of the procedures in force for the calculation,
retention, registration, control, collection, recovery and accounting of taxes, including ancillary obligations.

All Other Fees

The services
comprising the fees disclosed under “All Other Fees” refer to (i) the rendering of independent technical assistance
and issuance of opinions in connection with the dispute with the Colíder Consortium, with respect to the “Agreement
for the Supply of Goods and Services” for the Implementation of the Colíder HPP, and (ii) the analysis and issuance
of an opinion in connection with the legal procedure aimed at reestablishing the economic and financial balance of said Agreement.

Audit Committee Pre-Approval
Policies and Procedures

When hiring
other services from its external auditors, the Company's practice provides for prior analysis by the Audit Committee of the Board
of Directors, which must consider in this assessment whether a relationship or service provided by an independent auditor: (i)
creates conflicting interests with your audit client; (ii) puts them in a position to audit their own work; (iii) results in acting
as a manager or as an employee of the audit client; or (iv) puts them in a position of attorney for the audit client.

The Audit Committee
also considers, in this type of assessment, whether any service provided by the independent auditing company may impair, in fact
or apparently, the firm's independence. Whenever necessary, the Audit Committee can count on the technical support of the Internal
Audit, or of an independent consultancy, for technical evaluation that may be required in each specific case, with discussions
on the contracting of other services being recorded in the minutes of this collegiate meeting independent auditor.

168


Table of Contents


For more information
regarding our Board of Directors and Audit Committee, see “Item 6. Directors, Senior Management and Employees”.

Item 16D. Exemption from the Listing Standards for
Audit Committees

Under the
listed company audit committee rules of the NYSE and the SEC, we must comply with Securities Exchange Act Rule 10A-3, which requires
that we establish an audit committee composed of members of the board of directors that meets specified requirements. All five
members of our Audit Committee rely on the exemption in Rule 10A-3(b)(iv)(E): (i) Mr. Carlos Biedermann, Mr. Marco Antônio
Barbosa Cândido and Luiz Claudio Maia Vieira, who are designees of the State of Paraná, and (ii) Ms. Leila Abraham
Loria and Ms. Olga Stankevicius Colpo, who are designees of minority shareholders. In our assessment, each of these members acts
independently in performing the responsibilities of an audit committee member under the Sarbanes-Oxley Act and satisfies the other
requirements of Securities Exchange Act Rule 10A-3. For more information regarding our Audit Committee, see “Item 6. Directors,
Senior Management and Employees—Audit Committee”.

Item 16E. Purchases of Equity Securities by the Issuer
and Affiliated Purchasers

None.

Item 16F. Changes in Registrant’s Certifying
Accountant

Not applicable.

Item 16G. Corporate Governance

|Section                                           | New
        York Stock Exchange Corporate Governance Rules for U.S. Domestic Issuers                                                                                                                                   | Copel’s
        Approach                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Director
        Independence                    
|303A.01                                           | A company listed on the New York Stock Exchange (a “listed company”) must have a majority of independent directors on its Board of Directors. “Controlled companies” are not required to comply with this requirement. | Copel fits the definition of a “controlled
        company” since the majority of its voting shares are held by the State of Paraná. As such, Copel would not be required
        to comply with the majority of independent directors requirement. However, Brazilian Law 13,303/2016 requires that at least 25%
        of our board members be independent members and according to Copel’s bylaws, meeting the requirements of B3's State-Owned
        Enterprises Governance Program, we are required to have a minimum of 30% of independent directors on Board of Directors.                             
|303A.03                                           | The non-management directors of a listed company must meet at regularly scheduled executive sessions without management.                                                                                               | Copel's non-managing directors regularly
        hold executive sessions without management, which are usually scheduled to occur at the end of board meetings.. Our Chief Executive
        Officer is also a member of our board of directors.
        Pursuant to the internal regulations
        of our board of directors, in the event a conflict of interest or particular interest of any board member is identified in relation
        to a matter to be decided to be decided by the board, such board member must recuse himself from the meeting, which will continue
        without his presence.
|Nominating/Corporate
        Governance Committee

169


Table of Contents




|303A.04 | A listed company must have a Nominating/ Corporate Governance Committee composed entirely of independent directors, with a written charter that covers certain minimum specified duties. “Controlled companies” are not required to comply with this requirement. | As a controlled company, Copel would
        not be required to comply with the nominating/ corporate governance committee requirements. However, Brazilian Law 13,303 / 2016
        requires Copel to keep a permanent statutory committee, advisory to the shareholders, and responsible for monitoring the nomination
        and evaluation processes applicable to our management, members of our board of directors, Supervisory Board and board committees.
        This committee is composed of members nominated by the shareholders.
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



170


Table of Contents






|Compensation
        Committee                      
|----------------------------------------------------
|303A.05                                             
|Audit
        Committee                             
|303A.06
        303A.07                             
|Equity
        Compensation Plans                   
|303A.08                                             
|Corporate
        Governance Guidelines             
|303A.09                                             
|Code of Ethics for Directors, Officers and Employees
|                                                    

171


Table of Contents




|303A.10                            | A listed company must adopt and disclose a code of business conduct and ethics for its directors, officers and employees, and must promptly disclose any waivers of the code for directors or executive officers.                                                                                                                                                                                                                                                                                                                                                                                                                                      | Copel has adopted a code of ethics
        that applies to all members of the board of directors, the Supervisory Board, the executive board and employees.                                                                                                                                                                                                                                                                                                                                                          
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Certification
        Requirements
|303A.12                            | A CEO of a listed company must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any material non-compliance with any applicable provisions of Section 303A and certify he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Each listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. | Copel’s CEO will promptly notify
        the NYSE in writing after any executive officer of Copel becomes aware of any material non-compliance with any applicable provisions
        of the NYSE corporate governance rules and will also certify if he is not aware of any violation by the listed company of NYSE
        corporate governance listing standards.
        Copel submits every year an Annual
        Written Affirmation to the NYSE and will submit an interim Written Affirmation when required.
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



Item 17. Financial Statements

Not applicable.

Item 18. Financial Statements

Reference is
made to pages F-1 through F-143.

Item 19. Exhibits

|1.1 | Corporate Bylaws approved and consolidated by the 187th Extraordinary Shareholders Meeting, of October 10, 2013, and amended by the 190th Extraordinary Shareholders meeting, of April 23, 2015, and by the 193rd Extraordinary Shareholders meeting of December 22, 2016, and by the 195th Extraordinary Shareholders meeting of June 7, 2017, and by the 197th Extraordinary Shareholders meeting of June 28, 2018 , and by the 199th Extraordinary Shareholders meeting of April 29, 2019, and by the 200th Extraordinary Shareholders meeting of December 02, 2019, incorporated by reference to Exhibit 1.1 to Copel’s annual report on Form 20-F dated April 27, 2020 (File Nos. 001-14668, Accession No. 0001292814-20-001451).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1 | Deposit Agreement (preferred shares) dated as of March 21, 1996, as amended and restated as of November 21, 2007, filed with the SEC on February 12, 2009 as an exhibit to our Registration Statement on Form F-6 and incorporated herein by reference (File No. 333-157278).                                                                                                                                                                                                                                                                                                                                                                                                                                                         



172


Table of Contents




|2.4      | Description of Securities registered under Section 12 of the Exchange Act, incorporated by reference to Exhibit 2.4 to Copel’s annual report on Form 20-F dated April 27, 2020 (File Nos. 001-14668, Accession No. 0001292814-20-001451).                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1      | The Adjustment Agreement of August 4, 1994 between the State of Paraná and Companhia Paranaense de Energia ‒ Copel (“Adjustment Agreement”) (incorporated by reference to our Form F-1 333-7148, filed with the SEC on June 30, 1997), the Deed of Amendment to the Adjustment Agreement (Quarto Termo Aditivo ao Termo de Ajuste celebrado em 21 de janeiro de 2005) (English translation) (incorporated by reference to our annual report on Form 20-F for the year ended December 31, 2005, filed with the SEC on June 30, 2006) (File No. 001-14668), and the Deed of Amendment to the Adjustment Agreement (Quinto Termo Aditivo ao Termo de Ajuste celebrado em 31 de outubro de 2017) (English translation).
|8.1      | List of subsidiaries, incorporated by reference to Exhibit 8.1 to Copel’s annual report on Form 20-F dated April 27, 2020 (File Nos. 001-14668, Accession No. 0001292814-20-001451).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|12.1     | Certification of the Chief Executive Officer of Copel, pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|12.2     | Certification of the Chief Financial Officer of Copel, pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|13.1     | Certification of Chief Executive Officer of Copel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|13.2     | Certification of the Chief Financial Officer of Copel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|101.INS  | XBRL Instance Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|101.SCH  | XBRL Taxonomy Extension Schema Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|101. CAL | XBRL Taxonomy Extension Calculation Linkbase Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|101. DEF | XBRL Taxonomy Extension Definition Linkbase Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|101.LAB  | XBRL Taxonomy Extension Label Linkbase Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|101.PRE  | XBRL Taxonomy Extension Presentation Linkbase Document.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

We omitted from
the exhibits filed with or incorporated by reference into this annual report certain promissory notes and other instruments and
agreements with respect to our long-term debt, none of which authorizes securities in a total amount that exceeds 10% of our total
assets. We hereby agree to furnish to the Securities and Exchange Commission copies of any such omitted promissory notes or other
instruments or agreements as the Commission requests.

173


Table of Contents


technical
GLOSSARY

2013 Concession
Renewal Law: Brazilian Law No. 12,783 enacted on January 11, 2013, under which most generation, transmission and distribution
concessionaires may be renewed at the request of the concessionaire for an additional period of 30 years, but only if the concessionaire
agrees to amend the terms of the concession contract to reflect a new tariff regime to be established by ANEEL.

A-3 Auctions:
The denomination of electricity auctions for new generation projects being held in the regulated Brazilian market in the third
year before the initial delivery date.

A-5 Auctions:
The denomination of electricity auctions for new generation projects being held in the regulated Brazilian market in the fifth
year before the initial delivery date.

ADRs:
American Depositary Receipts.

ADSs:
American Depositary Shares, each representing one Class B Share.

ANATEL:
The Brazilian National Telecommunication Agency, or the Agência Nacional de Telecomunicações.

ANEEL:
The Brazilian Electricity Regulatory Agency, or the Agência Nacional de Energia Elétrica.

Annual Permitted
Revenues: The annual revenue established by ANEEL to be charged by a transmission concessionaire for the use of its transmission
lines by third parties, which include Free Customers, generators and distributors, or Receita Anual Permitida - RAP.

Assured
Energy: Determined amount assigned to each hydroelectric plant according to the energy supply risk criteria defined by MME.
The assured energy also represents the maximum energy that can be sold by the generator, which is set forth in each concession
agreement, irrespective of the volume of electricity actually generated by the facility.

Availability
Agreement: Agreement under which a generator commits to making a certain amount of electrical capacity available to the Regulated
Market. In such case, the generator’s revenue is guaranteed and the distributors must bear the risk of a supply shortage.

Average
Tariff or Rate: Total sales revenue divided by total megawatt hours (MWh) sold for each relevant period, including in the case
of the Company, unbilled electricity, or electricity which has been delivered to a customer, but for which the utility has yet
to deliver a bill. Total sales revenue, for the purpose of computing average tariff or rate, includes both gross billings before
deducting value-added tax and unbilled electricity sales upon which such taxes have not yet accrued.

Bilateral
Agreement:Legal instrument that formalizes the purchase and sale of electric energy between Agents of the Chamber of Commercialization
of Electric Energy - CCEE, with the purpose of establishing prices, terms and amounts of supply at determined time intervals.

B3 (Brasil,
Bolsa, Balcão):B3 S.A. - Brasil, Bolsa, Balcão, the securities, commodities and futures exchange, headquartered
in São Paulo, Brazil, incoporated as a resulto f the merger of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias
e Futuros and CETIP S.A. – Mercados Organizados.

Captive
Customers: customers whose energy is supplied by the distributor in which the consumer unit is connected, such as that the
amount paid already includes the energy cost and service cost for use of transmission and distribution - wire service. The consumer
is not free to negotiate the conditions and the flexibility of energy supplied to meet the needs of its business, instead having
to follow the determinations set forth by the distributor. The consumer is subject to the unpredictability of the annual variation
of the value of the distributors’ tariffs.

174


Table of Contents


CBLC:
The Companhia Brasileira de Liquidação e Custódia.

CER:
Reserve Energy Contract (Contrato de Energia Reserva).

Central
Bank: The Brazilian Central Bank, or Banco Central do Brasil.

Class A
Shares: The Company’s class A preferred shares.

Class B
Shares: The Company’s class B preferred shares.

CMN:
The National Monetary Council of Brazil, or Conselho Monetário Nacional.

Code:The
U.S. Internal Revenue Code of 1986, as amended.

Common Shares:
The Company’s common shares.

Copel Distribuição
S.A.: The Company’s entity engaged in the distribution business.

Copel Geração
e Transmissão S.A. or Copel GeT: The Company’s entity engaged in the generation and transmission business.

CRC Account:
The recoverable rate deficit account, or Conta de Resultados a Compensar.

Custodian:
Itaú Unibanco S.A., as custodian for the Class B Shares represented by ADSs.

Decree No.
6,306/07: Brazilian tax Decree No. 6,306 dated December 14, 2007, which regulates tax on credit, exchange and insurance, or
relating to securities - IOF.

Deloitte:Deloitte Touche Tohmatsu Auditores Independentes.

Deposit
Agreement: A Deposit Agreement between Copel, the Depositary and the registered holders and beneficial owners from time to
time of the ADSs.

Depositary:
The Bank of New York Mellon, as depositary.

Distribution:
The transfer of electricity from the transmission lines at grid supply points and its delivery to customers through distribution
lines at voltages between 13.8 kV and 44 kV.

Distributor:
An entity supplying electrical energy to a group of customers by means of a distribution network.

Elejor:
Centrais Elétricas do Rio Jordão S.A.

Eletrosul:
Eletrosul Centrais Elétricas S.A.

Energy Agreement:
Agreement under which a generator commits to supply a certain amount of electricity and assumes the risk that its electricity supply
could be adversely affected by hydrological conditions and low reservoir levels, which could interrupt the supply of electricity.
In such case, the generator would be required to purchase electricity elsewhere in order to comply with its supply commitments.

Final Customer:
A party that uses electricity for its own needs.

FINEP:
The Brazilian Studies and Projects Funding Agency or Financiadora de Estudos e Projetos.

Free Customers:
Electricity customers that are able to choose their own power suppliers since they meet the following requirements: (i) demand
of at least 3 MW at any voltage for new customers (those connected to the distribution grid after July 1995); (ii) demand of at
least 3 MW and supplied at voltage levels

175


Table of Contents


equal to or greater than 69 kV for existing
customers (those connected to the distribution grid before July 1995); and (iii) demand of at least 500 kW and that opt to be supplied
energy by means of alternative sources, such as wind power projects, small hydroelectric power plants or biomass projects (also
known as Special Customers).

Free Market:
Market segment that permits a certain degree of competition. The Free Market specifically contemplates purchase of electricity
by non-regulated entities such as Free Customers and energy traders.

Furnas:
Furnas Centrais Elétricas S.A

Generating
Unit: An electric generator together with the turbine or other device that drives it.

Gigawatt
(GW): One billion watts.

Gigawatt
hour (GWh): One gigawatt of power supplied or demanded for one hour, or one billion watt hours.

GPON:
Gigabit-Capable Passive Optical Networks - A passive optical network (PON) is a system that brings optical fiber cabling and signals
all or most of the way to the end user. Depending on where the PON terminates, the system can be described as fiber-to-the-curb
(FTTC), fiber-to-the-building (FTTB), or fiber-to-the-home (FTTH). Passive Optical Network: A point-to-multipoint, passive fiber
network architecture in which a single fiber utilizes optical splitters to serve multiple premises. Gigabit PON: Based on the previous
PON types, GPON supports higher data rates and increased security, and has been deployed around the world by major telecom operators.

Group A
Customers: A group of customers that uses electricity at 2.3 kV or higher. Tariffs applied to this group are based on the actual
voltage level at which energy is supplied and the time of day and year the energy is supplied.

Group B
Customers: A group of customers that uses electricity at less than 2.3 kV. Tariffs applied to this group are comprised solely
of an energy charge and are based on the classification of the customer.

High Voltage:
A class of nominal system voltages equal to or greater than 69,000 volts and less than 230,000 volts.

HPP –
Hydroelectric Power Plant: A generating unit that uses water power to drive the electric generator.

IASB:
International Accounting Standards Board.

IFRS:
International Financial Reporting Standards.

IGP-DI:
The Índice Geral de Preços—Disponibilidade Interna inflation index.

IGP-M Index:
The Brazilian General Market Price inflation index, or the Índice Geral de Preços do Mercado.

Installed
Capacity: The level of electricity that can be delivered from a particular generating unit on a full-load continuous basis
under specified conditions as designated by the manufacturer.

Interconnected
Transmission System: Systems or networks for the transmission of energy, connected together by means of one or more lines and
transformers.

IPCA:
Índice Nacional de Preços ao Consumidor Amplo - IPCA inflation index.

176


Table of Contents


IPP:
Independent Power Producer, a legal entity or consortium holding a concession or authorization for power generation for sale for
its own account to public Utility concessionaires or Free Customers.

Itaipu:
Itaipu Binacional, a hydroelectric facility equally owned by Brazil and Paraguay, with an installed capacity of 14,000 MW.

Kilovolt
(kV): One thousand volts.

Kilowatt
(kW): One thousand watts.

Kilowatt
hour (kWh): One kilowatt of power supplied or demanded for one hour, or one thousand watt hours.

Latibex:
A Euro-based market for Latin American securities, which is part of the Madrid Stock Exchange.

Low-income
Residential Customers: A group of customers that consumes less than 220 kWh per month and has filed an application to receive
benefits under any of the federal government’s social programs. Low-income residential customers are considered a subgroup
of residential customers and are not subject to payment of emergency capacity and emergency acquisition charges or any extraordinary
tariff approved by ANEEL.

Main Transmission
Concession: transmission concession contract No. 060/2001 comprised of different transmission assets that were in operation
in the year of 2001 (date of execution of the concession agreement).

MCSD:
The Mechanism for Compensation of Surpluses and Deficits (Mecanismo de Compensação de Sobras e Déficits),
which corresponds to theprocess
of reallocation of energy surpluses and deficits undertaken in accordance with the Regulated Contracting Environment – ACR
among the distribution agents that participate in CCEE.

MCSD-EN:
The Mechanism for Compensation of Surpluses and Deficits of New Energy (Mecanismo de Compensação de Sobras e Déficits
de Energia Nova), which allows distribution agents to offsetamounts of electric
energy and power acquired in auctions of new generation projects, and allows the reduction of amounts contracted with generating
agents bound to new generation ventures.

Megawatt
(MW): One million watts.

Megawatt
hour (MWh): One megawatt of power supplied or demanded for one hour, or one million watt hours.

MME:
The Brazilian Ministry of Mines and Energy, or the Ministério de Minas e Energia.

MRE:
The Energy Reallocation Mechanism is a mechanism which attempts to mitigate the risks borne by hydroelectric generators due to
variations in river flows (hydrological risk).

MVE:
The Mechanism of Surplus Sales (Mecanismo de Venda de Excedentes), which allows distribution companies to sell energy surpluses
and, in the case of sales related to amounts within the regulatory limits or involuntary overcontracting, allows distribution companies
to revert the acquired benefit to consumers through tariff adjustments.

Non-Brazilian
Holder: An individual, entity, trust or organization resident or domiciled outside Brazil for purposes of Brazilian taxation
that acquires, owns and disposes of Class B Shares or ADSs.

ONS:
The National Electric System Operator, or the Operador Nacional do Sistema Elétrico.

RAP or APR:Annual Permitted Revenues (or Receita Anual Permitida).

177


Table of Contents


Rationing
Program: A program instituted by the Brazilian government to reduce electricity consumption, in effect from June 1, 2001 to
February 28, 2002, given it was a period of low rainfall in Brazil.

Real, Reais
or R$: Brazilian reais(plural) and the Brazilian real(singular).

Regulated
Market: Market segment in which distribution companies purchase all the electricity needed to supply customers through public
auctions. The auction process is administered by ANEEL, either directly or through CCEE, under certain guidelines provided by the
MME. The regulated market is generally considered to be more stable in terms of supply of electricity.

Regulatory
Remuneration Base:The aggregate amount of investments made by the distribution companies in connection with the services compensated
by tariffs charged to consumers (Base de Remuneração Regulatória).

Reserve
Energy Auction:mechanism for the contracting of reserve energy created to increase the security in the supplied of energy
by the National Interconnected System (SIN). The reserve auction acts as an insurance contracted by distributors to be used when
there is a mismatch between forecasted demand and supply. This modality of contracting is formalized through the conclusion of
the CER between the selling agents in the auctions and the CCEE.

Retail Tariff:
Revenue charged by distribution companies to its customers. Each customer falls within a certain tariff level defined by law and
based on the customer’s classification, although some flexibility is available according to the nature of each customer’s
demand. Retails tariffs are subject to annual revision by ANEEL.

RGR Fund:
A reserve fund designed to provide compensatory payments to energy companies for certain assets used in connection with a concession
if the concession is revoked or is not renewed.

Sanepar:
Companhia de Saneamento do Paraná – Sanepar.

Securities
Act:The United States Securities Act of 1933, as amended.

Securities
Exchange Act:The United States Securities Exchange Act of 1934, as amended.

Sercomtel
Telecomunicações: Sercomtel Telecomunicações S.A.

SHP ‒
Small Hydroelectric Plant: Hydroelectric plants with generating capacity between 1,000 kW and 30,000 kW with a reservoir covering
an area equal to or less than 3.0 km2.

Special
Customers: A group of customers that uses at least 500 kV. A Special Customer may choose its energy supplier if that supplier
derives its energy from alternative sources, such as small hydroelectric plants, wind plants or biomass plants.

Spot Market:Deregulated market segment in which electricity is bought or sold for immediate delivery. In general, prices of spot market
energy purchases tend to be substantially higher than the price of energy under long-term energy purchase agreements.

Substation:
An assemblage of equipment, which switches and/or changes or regulates the voltage of electricity in a transmission and distribution
system.

Tax Haven
Holder: A shareholder situated in tax haven jurisdictions (that is, a country or location that does not impose income tax or
where the maximum income tax rate is lower than 20% (or 17%, as the case may be) or where the local legislation imposes restrictions
on disclosing the shareholding composition or the ownership of the investment or the beneficial owner of the income derived from
transactions carried out and attributable to a Non-Brazilian Holder). The list of tax haven jurisdictions is currently provided
in Normative Ruling No. 1,037.

178


Table of Contents


Thermoelectric
Power Plant or TPP: A generating unit which uses combustible fuel, such as coal, oil, diesel natural gas or other hydrocarbon
as the source of energy to drive the electric generator.

TJLP:
The Long-Term Interest Rate, or the Taxa de Juros a Longo Prazo, the Brazilian federal government’s long-term interest
rate.

Transmission:
The bulk transfer of electricity from generating facilities to the distribution grid at load center station by means of the transmission
grid (in lines with capacity between 69 kV and 525 kV).

Transmission
Tariff: Revenue charged by a transmission concessionaire based on the transmission network it owns and operates. Transmission
tariffs are subject to periodic revisions by ANEEL.

TUST:
The tariff established by ANEEL for the use of the transmission system, which is the Interconnected Transmission System and its
ancillary facilities.

U.S. Dollars,
dollars, or US$: United States dollars.

U.S. Holder:
A beneficial holder of a Class B Share or an ADS that is (i) an individual citizen or resident of the United States of America,
(ii) a corporation, or any other entity taxable as a corporation, organized under the laws of the United States of America, any
state thereof, or the District of Columbia, or (iii) otherwise subject to U.S. federal income taxation on a net basis with respect
to the Class B Share or ADS.

Utility:
An entity that is the holder of a concession or authorization to engage in the generation, transmission or distribution of electric
energy in Brazil.

Volt:
The basic unit of electric force analogous to water pressure in pounds per square inch.

Watt:
The basic unit of electrical power.

179


Table of Contents


Signatures

The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.



Companhia
Paranaense De Energia – Copel

By:/s/ Daniel
Pimentel Slaviero

Name: Daniel Pimentel
Slaviero

Title: Chief Executive Officer





By:
/s/ Adriano Rudek de Moura

Name: Adriano Rudek
de Moura

Title: Chief Financial and Investor
Relations Officer



Date: November 18, 2020





180