AES Brasil Energia S A : 4Q22/2022 Earnings Release

4Q22 Results

EARNINGS CONFERENCE	Code: AES Brasil
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São Paulo, February 27, 2023 - AES Brasil Energia S.A. (AES Brasil Energia and Company) (B3: AESB3) announces today its results for the fourth quarter of 2022 ("4Q22") and the year 2022 compared to the results of the fourth quarter of 2021 ("4Q21") and the year 2021. Except where stated otherwise, the operational and financial information of the Company is presented on a consolidated basis in millions of Brazilian real, in accordance with Brazilian Corporation Law. For comparison purposes, given the incorporation and listing of AES Brasil Energia S.A. on March 29, 2021, information in this document includes the financial results of AES Brasil Energia for 4Q22, 4Q21 and 2022 and the pro forma net financial result of AES Tietê Energia for 1Q21 to represent 2021.

MANAGEMENT COMMENTS

"The year 2022 was marked by the rollout of the strategy of growth in 100% energy renewable sources and by the advances made by AES Brasil towards meeting the strategic objective of being the customer's best choice in the free market by offering resilient, competitive and responsible solutions.

The highlight event of the year was the acquisition of Ventos do Araripe, Caetés and Cassino, which added 456 MW of installed capacity to the Company's portfolio, fully contracted in the regulated market. The Enterprise Value of this transaction was BRL 1.9 billion, which was funded by the successful private capital increase of approximately BRL 1 billion. With this acquisition, AES Brasil now has installed capacity of 5.2 GW, 100% renewable (49% wind/solar and 51% hydro), of which 4.2 GW is operational and 1.0 GW under construction, making it one of the largest renewable players in Brazil.

We also announced the acquisition of up to 305 MW of wind development capacity by winning the competitive bid for the Cordilheira dos Ventos Isolated Production Unit (UPI), in connection with the court-supervised reorganization of Renova.

Also worth highlighting is the progress of construction of the Tucano and Cajuína Wind Complexes. At Tucano, more than 95% of the construction work has been concluded and 24 of the 52 wind turbines are operating. By the end of 2Q23, Tucano is expected to be fully operating. Cajuína Phase 1 has completed 78% of the construction work, with 21 wind turbines assembled, out of a total of 55. Phase 2 has concluded more than 18% of construction work. The Cajuína Complex is expected to start operations in 2023.

Regarding regulation, 2022 was marked by an important step toward the full opening of the free energy market, which means that all high voltage consumers will be eligible to migrate to the free market and choose their energy provider as of January 1, 2024. With more consumers enabled to purchase energy directly from generators, AES Brasil is ready to meet this new demand with its retail trader, which is one of the leading retail traders in Brazil.

We also made progress in regulatory discussions about Green Hydrogen (H2V), which will generate opportunities for the Company's future. In this regard, we signed a pre-contract with the Port of Pecém to conduct a feasibility study on generating 2 GW of H2V a year.

We ended 2022 with EBITDA of BRL 1.2 billion, up 37% from 2021, mainly reflecting the improved hydropower margin and better operational performance of the wind and solar complexes. Net Income in 2022 was BRL 320 million. This significant improvement is the result of our portfolio growth and diversification strategy, which is now increasingly reflected, until the full startup of assets under construction, in our financial results.

Finally, we wish to highlight that we have neutralized 100% of our historic greenhouse gas emissions, we remained in B3's Corporate Sustainability Index (ISE) portfolio for the 16th straight year and continue to be the only energy company in Latin America with the AAA rating from MSCI.

Alessandro Gregori - CFO

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CONTENTS
CONTENTS	3
2022 HIGHLIGHTS	4
CONSOLIDATED FINANCIAL HIGHLIGHTS - AES BRASIL	5
AES BRASIL	6
COMPANY PROFILE	6
OWNERSHIP BREAKDOWN - 12/31/2022	6
PORTFOLIO	7
OPERATING PERFORMANCE	9
CONSOLIDATED GENERATION	9
HYDROPOWER GENERATION	9
WIND POWER GENERATION	10
SOLAR POWER GENERATION	12
COMMERCIAL PERFORMANCE	13
ENERGY MARKET	13
PORTFOLIO CONTRACTING LEVEL	14
ENERGY BALANCE - HYDROPOWER	15
FINANCIAL PERFORMANCE - CONSOLIDATED	16
NET REVENUE AND NET MARGIN	16
OPERATING COSTS AND EXPENSES	17
EBITDA	19
FINANCIAL RESULTS	20
EQUITY INCOME	21
NET INCOME	21
DEBT	22
INVESTMENTS	24
MANAGERIAL CASH FLOW	25
REGULATORY SCENARIO	25
ORDINARY REVIEW OF PHYSICAL GUARANTEE (HYDROELECTRIC PLANTS)	25
MARKET OPENING	26
GREEN HYDROGEN	27
NEW METHODOLOGY FOR CALCULATING TUST	27
ANCILLARY SERVICES	29
RESERVE AND ENERGY	29
ESG PERFORMANCE	30
GUIDELINES AND COMMITMENTS	30
ANNEXES	32
OPERATIONAL INDICATORS IN THE PERIOD	32
GENERATION PERFORMANCE BY SOURCE	33
AES BRASIL ENERGIA - BALANCE SHEET AND INCOME STATEMENT	34
RESULTS BY SOURCE	36
DEBT	37
ESG INDICATORS	38
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2022 HIGHLIGHTS

• GROWTH & CONSTRUCTION

1. M&A: Acquisition on November 30, 2022, of 456 MW of operational wind capacity related to the Ventos do Araripe, Caetés and Cassino Wind Complexes. The Enterprise Value of the operation was BRL 1,855 million, comprised of: (i) the payment of BRL 960 million; and (ii) the assumption of net debt of BRL 895 million (baseline date: November 30, 2022).

1. Tucano Complex (322 MW): Overall evolution of the project exceeds 95%. By February 2023, 24 of the 52 wind turbines started operations. The complex is expected to be 100% operational in 2Q23.

o Cajuína Complex Phase 1 (325 MW): More than 78% of the project executed, the first 21 wind turbines fully assembled and the connection bay to the Açu III Substation energized in January 2023. In Phase 2 (370 MW), progress of works already exceeds 18%, with 47% progress in construction works and 42% progress in works at the Caju substation. The complex is expected to start operations in 2023.

• CAPITAL STRUCTURE

1. Private Capital Increase (ACP): On October 3, the Board of Directors approved a Capital Increase through the issue of 106,599,446 new common shares at the issue price of BRL 9.61 per share, totaling BRL 1,024.4 million. The operation received important support from the shareholder base, which subscribed to 92% of the shares issued. The proceeds were used to fund the acquisition of the Ventos do Araripe, Caetés and Cassino Wind Complexes.

• 1. Equalization of Cajuína funding: By January 2023, the Company had raised all the necessary funds to build Cajuína 1 and 2 (installed capacity of 695 MW) through the issue of debentures amounting to BRL 950 million, at an average cost of IPCA + 7.07% p.a. and a term of 22 years, in addition to bridge loans totaling BRL 1.8 billion. AES Brasil will replace the short-term bridge loans with long-term financing at the project level as market conditions evolve to a favorable scenario.
• REGULATION
• 1. Opening of Free Market: On September 28, the Ministry of Mines and Energy published Ordinance 50/2022, which entitles all high voltage market consumers to migrate to the Free Market that can choose their energy supplier as from January 1, 2024. In this scenario, the Company remains a leading retail trader in Brazil and is prepared to serve the new entrants in the free market.

o Ordinary Review of Physical Guarantee: The Ministry of Mines and Energy published Ordinance 709/2022, which approved the methodology, criteria, assumptions and structures for the Ordinary Review of the Physical Guarantee of Energy from Hydroelectric Plants dispatched centrally in the National Interconnected System, effective from January 1, 2023. The Company estimates this process will result in loss of allocated energy of approximately 9 MWavg a year, considering the generation of ERM adjusted by the expected impact of GSF.

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o Green Hydrogen: On September 22, AES Brasil signed a pre-contract with the Industrial Port Complex of Pecém to start feasibility studies for generating up to 2 GW of green hydrogen from electrolysis and up to 800 thousand tons of green ammonia per year. This is the Company's first initiative in this new segment of the Brazilian market, which offers the ideal conditions for generating this new source of energy, to spearhead the energy transition movement and enable it to achieve the global decarbonization targets.

• ESG:

o Carbon Credits: AES Brasil sold, for the first time, 465,807 carbon credits generated by the Mandacaru and Salinas Wind Complexes, which earned revenues of BRL 12 million booked in 2022. The Company is studying the possibility of selling another 2.8 million credits from the wind and solar complexes with COD as of 2016.

1. Carbon Neutral: In 3Q22, AES Brasil neutralized all of its greenhouse gas emissions since it started operating in Brazil. This was achieved by purchasing carbon credits certified by the UN to offset the emissions from 1999.

1. MSCI: For the second consecutive year, AES Brasil is the only energy company in Latin America to be assigned the "AAA" rating by MSCI, one of the leading rankings to assess the company's resilience to Environmental, Social and Governance (ESG) risks.

1. ISE: For the 16th consecutive year, the Company has been included in the portfolio underlying the Corporate Sustainability Index (ISE) for 2023. It is one of the 61 companies selected for their recognized commitment to ESG best practices.

CONSOLIDATED FINANCIAL HIGHLIGHTS - AES BRASIL1

Financial Indicators (BRL million)	4Q21	4Q22	Var	2021	2022	Var
Net Revenue	731.9	760.8	3.9%	2,511.7	2,845.1	13.3%
Energy Costs¹	(437.3)	(254.8)	-41.7%	(1,241.4)	(1,126.1)	-9.3%
Adjusted Net Margin2	294.6	505.9	71.8%	1,270.4	1,719.0	35.3%
Adjusted EBITDA2	203.7	359.9	76.7%	864.8	1,183.7	36.9%
Adjusted EBITDA Margin 2 (%)	27.8%	47.3%	19.5 p.p.	34.4%	41.6%	7.2 p.p.
Adjusted Net Income3	(31.5)	137.4	n.a.	(38.8)	320.1	n.a.

1 - Includes industry and transmission charges and excludes the GSF reimbursement in 1Q21 (BRL 35.9 million); 2 - Excludes the GSF reimbursement in 1Q21; 3 - Excludes the effect of tax credit recognition (BRL 532.6 million in 3Q21) and GSF reimbursement, net of income tax (1Q21).

In addition, the Company provides an Excel file with historical financial and operational data. To access it, click here.

For a table with other operational indicators for the period, click here.

1 Given the incorporation and listing of AES Brasil Energia S.A. on March 29, 2021, information in this document includes the results of AES Operações (formerly AES Tietê) for 1Q21

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