Document:

Exhibit 4(a)(4)

                              AMENDMENT NUMBER 3 TO THE CONTRACT OF FUNDING
                              THROUGH OPENING OF CREDIT NO. 02.2.072.3.1, BY AND
                              BETWEEN BANCO NACIONAL DE DESENVOLVIMENTO
                              ECONOMICO E SOCIAL - BNDES AND EMPRESA ENERGETICA
                              MATO GROSSO DO SUL-ENERSUL, WITH INTERVENING THIRD
                              PARTIES IN THE FORM BELOW:

BANCO NACIONAL DE DESENVOLVIMENTO ECONOMICO E SOCIAL - BNDES, hereinafter simply
referred to as BNDES, a public federal company, with headquarters in Brasilia,
Distrito Federal, and with services provided in that city at Avenida Republica
do Chile, 100, registered with the General Taxpayer Register under CNPJ No.
33.657.248/0001-89, hereby represented by the undersigned below;

and

EMPRESA ENERGETICA MATO GROSSO DO SUL-ENERSUL, hereinafter simply referred to as
BENEFICIARY, a corporation with headquarters in Campo Grande, State of Mato
Grosso do Sul, at Avenida Gury Marques, registered with the General Taxpayer
Register under CNPJ No. 15.413.826/0001-50, hereby represented by the
undersigned below; and as INTERVENING PARTIES:

I-            AGENCIA NACIONAL DE ENERGIA ELETRICA- ANEEL, a special regimen
              autarchy, located at SGAN, QUADRA 603, modulo J, Anexo, Brasilia,
              Distrito Federal, registered with the General Taxpayer Register
              under CNPJ No. 02.270.669/0001-29, hereinafter simply referred to
              as ANEEL, hereby represented by the undersigned below; and

II-           BANCO DO BRASIL S.A., a financial institution with headquarters in
              Campo Grande, State of Mato Grosso do Sul, at Avenida Afonso Pena,
              2202, registered with the General Taxpayer Register under CNPJ No.
              00.000.000/4817-85, hereinafter denominated BANK, hereby
              represented by the undersigned below;

have, as just and agreed to amend the CONTRACT OF FUNDING THROUGH OPENING OF
CREDIT No. 02.2.072.3., hereinafter simply referred to as CONTRACT, executed
between BNDES and BENEFICIARY on February 18, 2002, registered in microfilm and
CD-ROM with the number 5411596, on February 22nd, 2002, at the 4th Notary's
office of Title, Deeds and Documents of the city of Rio de Janeiro, State of Rio
de Janeiro, and registered with the number 190.533, in book number 8, number
197, on February 21, 2002, at the 4th Notary and Title and Document Registration
Service office in the city of Campo Grande, State of Mato Grosso do Sul, amended
by addition number 1, executed on August 8, 2002, hereinafter called AMENDMENT 1
and by Amendment number 2, executed on October 16, 2002, hereinafter called
AMENDMENT 2, which this instrument is now part of, for all legal purposes and
effects, by means of the following Clauses:

                                      FIRST

      REVISION OF THE PERCENTAGE GRANTED IN RESERVATION OF MEAN OF PAYMENTS

In light of the publishing of Resolutions number 36, of January 29, 2001 and
number 89, of February 25, 2003, which establish the procedures for the
feasibility of the payment by the concessionaires to companies that had expenses
in the purchase of free energy resulting from the reduction of generation of
Electrical Energy at the plants participating of the Mechanism of reallocation
of Energy - MRE, and based on Third Clause of Amendment 2, the PARTIES herein
alter, with effect from this date, to 5.0% (five percent) the percentage granted
and transferred to BNDES, by BENEFICIARY, of its monthly income resulting from
collection of the tariffs of supply of public services of electrical energy, as
in Seventh Clause of the CONTRACT.

                                     SECOND

                   CONDITIONAL REDUCTION OF THE NEW PERCENTAGE

The new percentage established in First Clause of this instrument shall be
exceptionally reduced to 3.63% (three point sixty-three percent) UNTIL THE DATE
OF SEPTEMBER 30, 2007, keeping to the remaining contract conditions, including
those regarding the advance payments and advance due dates for payment, being it
conditioned to the permanent fulfillment by BENEFICIARY of all the duties
provided for in the CONTRACT, being the new percentage automatically
reestablished as in First Clause of the Instrument in case of financial or
non-financial disobedience by BENEFICIARY.

                                      THIRD

                       DECLARATION, GUARANTEES AND RIGHTS

BENEFICIARY declares and guarantees that the execution of this Amendment number
3 and the fulfillment of its obligations does not constitute a violation or
non-fulfillment of any contract agreement or any other instruments which
BENEFICIARY is part of or bound to.

                                     FOURTH

                                  RATIFICATION

The contracting Parties and INTERVENING AGENTS ratify, herein, all the Clauses
and conditions of the CONTRACT, of AMENDMENT 1 and AMENDMENT 2, in what does not
collide with those established in this AMENDMENT, keeping to the guarantees
convened in the stated CONTRACT, with the alteration introduced by this
instrument, regardless of the innovation of the present instrument.

                                      FIFTH

                                  REGISTRATION

BENEFICIARY commits itself to proceed to the registration of this AMENDMENT,
aside from the registration in microfilm and CD-ROM with the number 5411596, on
February 22nd, 2002, at the 4th Notary's office of Title, Deeds and Documents of
the city of Rio de Janeiro, State of Rio de Janeiro, and registered with the
number 190.533, in book number 8, number 197, on February 21, 2002, at the 4th
Notary and Title and Document Registration Service office in the city of Campo
Grande, State of Mato Grosso do Sul, mentioned in the introduction of this
instrument, within 15 (fifteen) days from the date of this amendment.

The sheets of the present instrument all have the signature of Elizabeth
Pinheiro Correa, lawyer of BNDES, with the authorization of the legal
representatives who sign it.

And having among themselves agreed upon this Contract as just and contracted,
the parties hereto have hereunto signed the present document in 5 (five) copies,
of equal content and for one sole effect, in the presence of the witnesses
signed below.

Rio de Janeiro,

BY BNDES:

--------------------------------------------------------------------------------
BANCO NACIONAL DE DESENVOLVIMENTO ECONOMICO E SOCIAL

BY BENEFICIARY:

--------------------------------------------------------------------------------
EMPRESA ENERGETICA DE MATO GROSSO DO SUL -ENERSUL

BY INTERVENING AGENTS:

--------------------------------------------------------------------------------
AGENCIA NACIONAL DE ENERGIA ELETRICA- ANEEL

----------------------------------------      ----------------------------------
BANCO DO BRASIL S.A.

WITNESSES:

--------------------------------
Name:
Social security (CPF):

--------------------------------
Name:
Social security (CPF):

<PAGE>Exhibit 4(a)(5)

                              CONTRACT OF FUNDING THROUGH OPENING OF CREDIT NO.
                              03.2.556.3.1, BY AND BETWEEN BANCO NACIONAL DE
                              DESENVOLVIMENTO ECONOMICO E SOCIAL - BNDES AND
                              ESPIRITO SANTO CENTRAIS ELETRICAS - ESCELSA, WITH
                              INTERVENING THIRD PARTIES IN THE FORM BELOW:

BANCO NACIONAL DE DESENVOLVIMENTO ECONOMICO E SOCIAL - BNDES, hereinafter simply
referred to as BNDES, a public federal company, with headquarters in Brasilia,
Distrito Federal, and with services provided in this city at Republica do Chile
Ave., 100, registered with the General Taxpayer Register under CNPJ No.
33.657.248/0001-89, by the undersigned signed below;

and

ESPIRITO SANTO CENTRAIS ELETRICAS S.A. - ESCELSA, hereinafter simply referred to
as BENEFICIARY, a corporation with headquarters in Vitoria , State of Espirito
Santo, at Rua Sete de Setembro, 362, Downtown, registered with the General
Taxpayer Register under CNPJ No. 28.152.650/0001-71, hereby represented by the
undersigned below; and as INTERVENING PARTIES:

AGENCIA NACIONAL DE ENERGIA ELETRICA- ANEEL, a special regimen autarchy, located
at SGAN, QUADRA 603, Modulo J, Anexo Brasilia, Distrito Federal, registered with
the General Taxpayer Register under CNPJ No. 02.270.669/0001-29, hereinafter
simply referred to as ANEEL, hereby represented by the undersigned below; and

BANCO BANESTES S.A.- BANCO DO ESTADO DO ESPIRITO SANTO, a financial institution,
with headquarters in Vitoria, State of Espirito Santo, at Avenida Princesa
Isabel, 574- QUADRA B - 9th floor, registered with the General Taxpayer Register
under No. 28.127.603/0001-78, hereinafter simply referred to as BANK, hereby
represented by the undersigned below;

have, as just and agreed what is contained in the following clauses:

                                      FIRST

                   NATURE, AMOUNT AND PURPOSE OF THE CONTRACT

BNDES, under the Emergent and Exceptional Program of Support to the
Concessionaires of Public Services of Distribution of Electrical Energy - CVA,
created by the Board of Officers of BNDES based on Medida Provisoria no. 127, of
August 4, 2003, hereby grants to the BENEFICIARY a credit facility in the amount
of R$ 42,714,463.50 (forty-two million, seven hundred fourteen thousand, four
hundred sixty three reais and fifty cents), considering the base date as of
August 7, 2003, to be supplied with funds from the National Treasury, with the
compliance with the Third Paragraph of Second Clause.

<PAGE>

Sole Paragraph
The present credit facility has the purpose of compensating the lack of funds of
the BENEFICIARY resulting from the adjourning of the application of the
mechanism of compensation referred to in article 1 of Medida Provisoria No.
2,227, of September 4, 2001, for the annual tariff readjustments and revisions
related to the period within April 8, 2003 and April 7, 2004, with prioritized
application in the compliance of the obligations towards agent of the energy
sector, with observance of article 2, topic II, of resolution no. 3,119 of the
Conselho Monetario Nacional.

                                     SECOND

                             AVAILABILITY OF CREDIT

The credit shall be available to the BENEFICIARY, conditioned to its effective
transfer by the National Treasury, in parcels, after the fulfillment of the
conditions for utilization referred to in Nineteenth Clause, as follows:

I - 50% (fifty percent) until 60 (sixty) days from the date stated in First
Clause;

II - 30% (thirty percent) in 180 days from the date stated in First Clause; and

III - 20% (twenty percent) in 270 (two hundred seventy) days from the date
stated in Fist Clause.

First Paragraph
The parcels referred to in topics I, II and III may be released by BNDES within
15 (fifteen) working days preceding or succeeding the final term of deadlines
established therein.

Second Paragraph
The funds of the present operation shall be available to the BENEFICIARY through
a credit deposited into a non-moveable checking account held by it with BNDES,
linked to the present operation, in which shall be discounted, at the moment of
release, the debts determined by law and the ones authorized by the BENEFICIARY
in this contract, whose total remaining balance shall be immediately transferred
to the checking account no. 5,518,022, that the BENEFICIARY holds at BANCO
BANESTES S.A. - Banco do Estado do Espirito Santo no. 021, branch no. 0093, with
the observance of sections "a" and "b" of topic II in Nineteenth Clause.

Third Paragraph
The amount of each of the credit parcels to be made available to the BENEFICIARY
shall be updated by the adjusted average of the daily loans accounted in the
Special System for Custody and Liquidation - SELIC, as of the base date stated
in First Clause until the release of the respective parcel to the BENEFICIARY.

                                      THIRD

                                    INTEREST

An interest rate of 1% (one percent) per year (as "spread"), will be applicable
to the principal of the debt, over the yearly average rate of the daily loans
accounted in the Especial Liquidation and Custody System - SELIC.

Sole paragraph
The interest shall be calculated daily by the proportional system as established
in the formula presented below, capitalized on the 15th of each month as of the
funds release until August 15th 2004 (the month preceding the beginning of the
amortization of the debt) and shall be due monthly as of September 15, 2004 (the
month for the first amortization) along with the parcels of the principal and on
the due date or liquidation of this Contract, with observance of Fifth Clause:

<PAGE>

[GRAPHIC OMITTED]

    n
  (SIGMA)[SDVi  * (Txi +1)]
J= i=1
   ------------------------
              36,000

where:

J= interest
SDVi = daily open balance of the principal
Txi = annual average adjusted rate of the daily loans accounted in the Especial
Liquidation and Custody System - SELIC for day "i"; and
N = number of days in the period of interest accounting

                                     FOURTH

                        COMMISSION OF CREDIT RESERVATION

The BENEFICIARY shall pay BNDES a commission of credit reserve of 0.1% (one
tenth percent), chargeable for a period of 30 (thirty) days, or a fraction, and
shall apply to:

I - the unused balance of each parcel, from the immediate date of its release
until the date of utilization, when its payment shall be charged; and

II - the unused balance of the credit, from the immediate date of its
availability to the date of its cancellation, when requested by request of the
BENEFICIARY, or by initiative of BNDES, and its payment shall be due at the date
of request, or by a decision of BNDES, whichever the case.

Sole Paragraph
The appliance of the commission referred to in the above mentioned topics I and
II, shall occur in case of the setting of a system for the availability of
funds.

                                      FIFTH

                       PROCESSING AND CHARGING OF THE DEBT

The principal and the charges shall be requested through a Charging Notice
issued by BNDES, in advance, to the BANK which shall then inform the BENEFICIARY
and shall transfer the due amount to the checking account indicated by BNDES, as
provided for in FIRST PARAGRAPH of Tenth Clause, aiming at liquidating those
liabilities on their due dates.

First Paragraph
The non-reception of the Charging Notice shall not exempt the Bank from its
obligations as provided for in this Contract, or exempt the BENEFICIARY from the
obligation of paying the installments of the principal and charges on the dates
established in this Contract.

Second Paragraph
In case the SELIC rate changes during the period within the first and fifteenth
day of a month, the difference between the owed amount and the charged amount
shall be incorporated to the owing balance.

                                      SIXTH

                                  AMORTIZATION

<PAGE>

The principal resulting from this Contract must be paid to BNDES in 24 (twenty-
four) monthly successive parcels, calculated according to the formula presented
below, being the first parcel due on September 15, 2004, with due observance of
Twenty Fifth Clause, and the BENEFICIARY commits itself to liquidate, with the
last parcel on August 15, 2006, all the obligations resulting from this
Contract, with due compliance of Third and Fourth Paragraphs and in Eleventh
Clause.

[GRAPHIC OMITTED]

               TM
              ----
AP= SDV*      1200
          -------------
           1 + TM -1
              ----
              1200

where:

AP= principal amortization
SDV= principal balance due on the date of maturity
M= number of installments of amortization undue
TM= medium fee calculated under the formula below:

TM=  J* 36000
     ---------
         n
      (SIGMA) SDVi
        i=1

where:

J= interest defined in Third Clause
n= number of the days of period calculated; and
SDVi= daily balance due of principal.

                                     SEVENTH

                         RESERVATION OF MEANS OF PAYMENT

With the aim of performing the payment of any liabilities resulting from this
Contract, such as the principal, interests, commissions, conventional penalty
and fines, the BENEFICIARY assigns and transfers the product of the collection
of the supply tariffs relating to the public services of electrical distribution
at the rate of 2.97% (two point ninety-seven percent) of its monthly income to
BNDES, from this date on and until the final liquidation of the liabilities
resulting from this Contract, in an irrevocable and irretrievable manner.

First Paragraph
For the purposes of this Contract, monthly income shall be understood as the
gross income of the BENEFICIARY, including all the fees and taxes paid by the
consumer, except for the Tax for Circulation of Goods and Services (Imposto
sobre Circulacao de Mercadorias e Servicos) - ICMS.

Second Paragraph
The rights and actions of BNDES resulting from this Contract, especially those
regarding the cession of funds provided for in the caption, shall not be
jeopardized by any changes related to the adjourning of the application of the
mechanism of compensation stated in 1st Article of Medida Provisoria no. 2,227,
of September 4, 2001, on the annual tariff readjustments and periodical tariff
reviews which may occur in the period between April 8, 2003 and April 7, 2004,
mainly those originally from the processes of conversion into law of Medidas
Provisorias 2,227, of September 4, 2001 and 127, of August 4, 2003 or any
further judicial or administrative measures.

                                     EIGHTH

           PARTIAL CONCENTRATION OF THE COLLECTION OF THE BENEFICIARY

<PAGE>

The BENEFICIARY commits itself to promote, during the validity of this Contract,
in its checking account number 1448.232 (hereinafter denominated COLLECTION
ACCOUNT), of branch number 0093, the collection of invoice payments that may
assure an effective reception corresponding to at least 10% (ten percent) of the
income of the preceding month resulting from public services of electrical
energy distribution provided.

                                      NINTH

                          TRANSFERS TO A LINKED ACCOUNT

The BENEFICIARY, herein authorizes the BANK, in an irrevocable and irretrievable
manner, to transfer daily, all the product of collection of invoice payments
referred to in Eighth Clause, to the checking account number 9.508.334
(hereinafter called LINKED ACCOUNT), of branch 0093, with the BANK, until the
sum transferred has reached the rate of 2.97% (two point ninety-seven percent)
of the monthly income of the BENEFICIARY, due to the cession stated in Seventh
Clause.

First Paragraph
It shall be a duty of the BENEFICIARY, as of September 1, 2004, to inform the
BANK, with a copy to BNDES, until the fifth working day of each month, of the
sum to be transferred to the LINKED ACCOUNT during the stated month, based on
the income registered in the preceding month.

Second Paragraph
In case of non-compliance by the BENEFICIARY, the provisions contained in the
First Paragraph, the BANK must then transfer the total amount of funds drawn
from collection.

                                      TENTH

                                     PAYMENT

The BENEFICIARY herein authorizes the BANK, in an irrevocable and irretrievable
manner as a result of the assignments provided for in Seventh and Ninth Clauses,
to transfer the necessary amounts to the payment of amortization of the
principal and other charges of the debt resulting from this Contract, to the
account and order of BNDES, from the LINKED ACCOUNT to the checking account
indicated by BNDES, within the amounts and deadlines stipulated herein.

First Paragraph
BNDES shall be responsible to inform the BANK, through a charging notice, the
amount of funds to be transferred to the indicated checking account, with due
observance of the stated in Fifth Clause, First Paragraph of this Contract.

Second Paragraph
In case there are not enough funds in the LINKED ACCOUNT for the payment of the
parcels of the principal and other charges of the debt resulting from this
Contract, the BENEFICIARY must deposit of the necessary amount to the full
payment of such parcel, upon information from the BANK, as provided for in Topic
V of Sixteenth Clause, with no jeopardy to the continuation of transfers to the
LINKED ACCOUNT, as stated in Ninth Clause, until the amount stated in it has
been reached.

Third Paragraph
In case of insufficiency of funds for 3 (three) consecutive months, the deadline
for amortization referred to in Caluse Six must be adjourned, by means of the
signing of a contract amendment, so that the payment of the parcels of the
principal and the other charges of the debt be performed with a new asset flow,
keeping the percentage of the monthly income of the BENEFICIARY, as provided for
in Seventh Clause.

Fourth Paragraph
The adjourning stated in Third Paragraph of this Clause shall not be extended
for longer than 12 (twelve) months.

<PAGE>

                                    ELEVENTH

                                 ADVANCE PAYMENT

In every occasion when the LINKED ACCOUNT presents a net balance enough for the
payment of one complete parcel, a partial advance payment equivalent to the
upcoming parcels shall be made, independently of the execution of a contract
amendment, being this payment deducted from the debt balance, but with due
observance of the respective due dates.

Sole Paragraph
It shall be duty of the BANK to verify the possibility of advance payment
referred to in the caption, to perform such payment and to inform BNDES of the
total of the amount transferred.

                                     TWELFTH

                    EXCLUSIVE HANDLING OF THE LINKED ACCOUNT

THE LINKED ACCOUNT shall be handled exclusively in the manner provided for in
this Contract and used solely for the payment to BNDES, but the funds therein
can be invested exclusively in National Treasury Bonds (Renda Fixa) or in funds
covered by those, so long as the withdrawals be compatible with the obligation
of this Contract and as long as the profit be incorporated to the cession
provided for in Seventh Clause.

                                   THIRTEENTH

                             ASSIGNMENT PROHIBITION

The BENEFICIARY may not assign or link the revenues assigned as provided for in
Seventh Clause to any other creditor.

                                   FOURTEENTH

                        SPECIAL DUTIES OF THE BENEFICIARY

The BENEFICIARY commits itself to:

I - fulfill, when suitable, until the final liquidation of the debt resulting
from this Contract, the "DISPOSICOES APLICAVEIS AOS CONTRATOS DO BNDES" approved
by Resolution 665, of December 10, 1987, partially altered by Resolution 775, of
December 16, 1991, by Resolution 863, of March 11, 1996, by Resolution 878 of
September 4, 1996, by resolution 894, of March 6, 1997, by Resolution 927 of
April 1, 1998 and by Resolution 976, of September 24, 2001, all by the board of
BNDES, published in Diario Oficial da Uniao (section I) , of December 29, 1987,
December 27, 1991, April 8, 1996, September 24, 1996, March 19, 1997, April 15,
1998 and October 31, 2001, respectively, with a copy herein delivered to the
BENEFICIARY, which, upon having knowledge of the full content of such, declares
to accept it as an integral and inseparable part of this Contract, for all legal
purposes and effects;

II - use the total amount of the credit within 12 (twelve) months, counting from
the date of the execution of this Contract, with the possibility of BNDES
extending the stated period, before or after the final term of this period,
covered by the guarantees constituted in this Contract, through clear
authorization, in writing, needless of any other formalities or registration;

III - keep its duties towards the environmental organs during the validity of
this Contract;

<PAGE>

IV - forward to BNDES annual audit, balance and spread sheet reports of its
results, with the endorsement of external auditors;

V - send to BNDES monthly reports containing the amount invoiced and those
effectively collected by the BENEFICIARY in the immediate preceding month;

VI - hire and independent audit company, if demanded by BNDES, to perform
accounting auditing that may attest the fulfillment of the duties of the
BENEFICIARY as provided for in this Contract, with the prior and clear approval
by BNDES of such company.

                                    FIFTEENTH

   DUTIES OF INTERVENING AGENT - AGENCIA NACIONAL DE ENERGIA ELETRICA - ANEEL

Intervening agent AGENCIA NACIONAL DE ENERGIA ELETRICA- ANEEL, qualified in the
introduction commits itself to:

I - keep BNDES permanently informed of any fact that may come to harm the
reaching of the purpose of the concession;

II - communicate clearly and in advance to BNDES any modification to be promoted
in the Contract of Concession of the BENEFICIARY, which may affect the
compliance with this Contract;

III - keep the faithful accomplishment of the obligations provided for in this
Contract, including the cession provided for in Seventh Clause, in case of an
intervention of the concession of the BENEFICIARY;

IV - include the duties of the BENEFICIARY resulting from the present Contract
as a condition for the granting of concession to a new concessionaire, in the
bid for the exploration of services object of the Contract of Concession of the
BENEFICIARY, in case of extinction of the concession;

V - inform BNDES, before every credit liberation, of the intra-sector duties of
the BENEFICIARY, as stated in 15th Paragraph of First Article of Medida
Provisoria 127, of August 4, 2003.

                                    SIXTEENTH

                      DUTIES OF INTERVENING AGENT- THE BANK

The intervening agent BANCO BANESTES S.A. - BANCO DO ESTADO DO ESPIRITO SANTO,
qualified in the introduction of this Contract, commits itself to:

I - inform immediately BNDES the non-fulfillment of any duty regarding the
assignment of the revenues provided for in Seventh Clause;

II - not obey any order, be it from BNDES or the BENEFICIARY, in what regards
the cession of assets provided for in Seventh Clause, that may be in conflict
with the present Contract, without the allowance in writing by the other Party;

III - promote the transfer of the amounts deposited in the COLLECTION ACCOUNT,
as provided for in Ninth Clause, as well as execute all the actions and
procedures provided for in the Contract to ensure the cession of funds provided
for in Seventh Clause;

IV - promote the drawing and transfer of funds deposited in the LINKED ACCOUNT,
upon information by BNDES, as provided for in First Paragraph of Tenth Clause,
as well as execute all the actions and procedures provided for in the Contract
to ensure the cession of funds in Seventh Clause;

<PAGE>

V - inform the BENEFICIARY of the insufficiency of assets in LINKED ACCOUNT for
the payment of the parcels of the principal and accessories of the debt
resulting from this Contract, as well as the sum to be deposited by the
BENEFICIARY for the full payment of such;

VI - verify the possibility of advance payment referred to in Eleventh Clause,
perform it whenever possible, and inform BNDES of the total transferred sum;

VIi - transfer the total of assets received through collection in COLLECTION
ACCOUNT to LINKED ACCOUNT, in case of disobedience by the BENEFICIARY, to the
stated in First Paragraph of Ninth Clause;

VIIi - perform the financial application of the assets existent in LINKED
ACCOUNT exclusively in National Treasury Bonds (renda fixa) or in funds
predominantly covered by those, so long as the withdrawals be compatible with
the duties provided for in this Contract and as long as the profit be
incorporated to the cession provided for in Seventh Clause; and

IX - forward to BNDES monthly balance sheet of LINKED ACCOUNT and of COLLECTION
ACCOUNT, whenever asked to.

                                   SEVENTEENTH

                        PAYMENT OF INDEMNITY BY THE BANK

In case of non-fulfillment, by the BANK, of any of the duties provided for in
this Contract, regardless of other suitable penalties, the BANK shall be subject
to the payment of indemnity to BNDES and/or the BENEFICIARY, depending on the
case, for the damage caused by such fact.

                                   EIGHTEENTH

                              THE BANK REPLACEMENT

The intervening BANK may be replaced, by determination of BNDES or after its
authorization, though it shall remain in the exercise of its functions until the
new bank has signed a contract of adhesion to this Contract, in a manner and
substance satisfactory to BNDES, through which the duties and duties of the BANK
shall be transferred to this replacing the bank.

                                   NINETEENTH

                    CONDITIONS FOR THE UTILIZATION OF CREDIT

The utilization of the credit, shall be subject to the performance of the topics
below, aside from the fulfillment, whenever suitable, of the conditions provided
for in 5th and 6th Articles of "DISPOSICOES APLICAVEIS AOS CONTRATOS DO BNDES"
(APPLICABLE DISPOSITIONS TO CONTRACTS OF BNDES) as previously mentioned, and the
fulfillment of the conditions established in "NORMAS DE INSTRUCAO E
ACOMPANHAMENTO" (NORMS AND INSTRUCTIONS OF FOLLOW-UP), referred to in 2nd
article of the same "DISPOSICOES":

I-for the utilization of the first parcel of credit:

(a) opening, by the BENEFICIARY, of a checking account at BNDES.

II-for the utilization of each parcel of the credit:

<PAGE>

(a) the presentation, by ANEEL, of the list of overdue debts of the BENEFICIARY
with Agents of the Electricity Sector specifying: creditor, amount, finality and
due date; or if the case, the declaration of inexistence of such debts, as the
stated in Paragraph 15 of 1st Article of Medida Provisoria 127, of August 4,
2003;

(b) the presentation, by the secretary of the National Treasury, of the list of
overdue debts of the BENEFICIARY with the National Treasury, specifying amount,
finality, due date; or if the case, the declaration of inexistence of such
debts, as stated in 2nd Article, topic II, of Resolution 3,119 of Conselho
Monetario Nacional (National Monetary Council);

(c) the sending of mailing, in satisfactory terms to BNDES, through which the
BENEFICIARY determines, in an irrevocable and irretrievable manner, that the
assets released in the scope of this Contract be used for purposes of
liquidation of the duties stated in topics "a" and "b" above, specifying at
least the following information: CNPJ(corporate social security number), bank
branch and checking account number;

(d) the inexistence of an issue of a financial-economic fact that, in the
judgment of BNDES may compromise the funding; and

(e) the presentation, by the BENEFICIARY, of a Certidao Negativa de Debito (a
no-debt certificate)- CND, issued by Instituto Nacional do Seguro Social
(National Social Security Agency)- INSS, through the INTERNET, to be downloaded
by the BENEFICIARY and verified by BNDES at www.mpas.gov.br;

Sole Paragraph
In case of an insufficiency of funds to fully pay the debts contained in topics
"a", "b" and "c" of 2nd Article, topic II, of Resolution 3,119 of Conselho
Monetario Nacional (National Monetary Council), the payment must be integral
according to the order of priority therein established, being the payment
proportional to the worth of each of the debts in the list whose full payment is
not possible.

                                    TWENTIETH

                                 NON-FULFILLMENT

In the occurrence of disobedience to the duties taken by the BENEFICIARY, the
stated in Articles 40 to 47 of the "DISPOSICOES APLICAVEIS AOS CONTRATOS DO
BNDES" shall be kept in what regards Topic I of Fourteenth Clause.

                                  TWENTY-FIRST

                                  JUDICIAL FINE

In the hypothesis of judicial collection of the debt resulting from this
Contract, the BENEFICIARY shall pay a fine of 10% (ten percent) over the
principal and other financial charges relating to the debt, besides judicial,
extra judicial expenses and attorney fees, due from the first issuing of the
petition of collection by the inherent authority.

                                  TWENTY-SECOND

                         ADVANCE LIQUIDATION OF THE DEBT

In case of advance liquidation of the debt, the guarantees shall be liberated,
being then applied to the stated in Article 18, 2nd Paragraph, of the
"DISPOSICOES APLICAVEIS AOS CONTRATOS DO BNDES" mentioned in topic I of
Fourteenth Clause.

<PAGE>

                                  TWENTY-THIRD

                                ADVANCE DUE DATE

BNDES may consider this Contract early due, with the demand for payment of the
debt and immediate suspension of any fund release, if, besides the cases
provided for in Articles 39 and 40 of the "DISPOSICOES APLICAVEIS AOS CONTRATOS
DO BNDES" referred to in Topic I of Fourteenth Clause, BNDES may come to attest
in a shareholding agreement, charter, or social contract of the BENEFICIARY, the
inclusion of any device by which there be demanded a special quorum for the
deliberation or approval of issues that may limit or restrict the control by the
respective controllers, or yet, the inclusion in those documents of any device
that may cause:
restrictions to the growth capacity of the BENEFICIARY or to its technological
development
restrictions for the access of the BENEFICIARY to new markets; or
restrictions or jeopardy to the capacity of payment of the financial liabilities
resulting from this operation;

Sole Paragraph
In case of application of the funds granted through this Contract in a manner
diverse from the stated in First Clause, BNDES, aside from the established in
the caption of this Clause, shall communicate the fact to Ministerio Publico
Federal , for the purposes and effects of Law 7,492, of June 16, 1986.

                                  TWENTY-FOURTH

                         REPRESENTATIONS AND WARRANTIES

The BENEFICIARY represents and warrants that the execution of this Contract and
the fulfillment of its duties, especially the assignment provided for in Seventh
Clause does not constitute any violation or default to any contract, agreement
or any other instruments which the BENEFICIARY is part of or to which it is
bound.

                                  TWENTY-FIFTH

                              DUE DATE ON HOLIDAYS

Any due date for the payment of parcels of the principal and liabilities that
may occur on Saturdays, Sundays or National Holidays, including banking
holidays, shall be, for all the ends and purposes of this Contract, transferred
to the first succeeding working day, with the liabilities calculated until that
date, and the next regular period for accounting and calculation of the
liabilities of this Contract shall also start from that day.
The BENEFICIARY has presented the Certidao Negativa de Debito - CND number
171042003-07001130, issued on November 12, 2003, by Instituto Nacional do Seguro
Social -INSS.

The sheets of the present instrument all have the signature of Elizabeth
Pinheiro Correa, lawyer of BNDES, with the authorization of the legal
representatives who sign it.

And having among themselves agreed upon this Contract as just and contracted,
the parties hereto have hereunto signed the present document in 4(four) copies,
of equal content and for one sole effect, in the presence of the witnesses
signed below.

Rio de Janeiro, December 1, 2003.

<PAGE>

(Signature Sheet of the Contract of funding number 03.2.556.3.1)

BY BNDES:

BANCO NACIONAL DE DESENVOLVIMENTO ECONOMICO E SOCIAL

BY BENEFICIARY:

ESPIRITO SANTO CENTRAIS ELETRICAS S.A. -ESCELSA

BY INTERVENING AGENTS:

AGENCIA NACIONAL DE ENERGIA ELETRICA- ANEEL

BANESTES S.A.- BANCO DO ESTADO DO ESPIRITO SANTO

WITNESSES:

--------------------------------
Name:
Social security (CPF):

--------------------------------
Name:
Social security (CPF):

<PAGE>

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