Neoenergia Elektro is majority-owned by Neoenergia S.A. (“Neoenergia” or the “Sponsor”). Neoenergia is one of the largest integrated power utilities in Brazil, with more than 4.98GW of power generation assets and 2.5 thousand km of transmission lines in operation, as well as five DISCOs serving approximately 16% of the Brazilian population. Neoenergia is 53.5% owned by Iberdrola Group as of February 2023, and it is also listed in the Brazilian Stock Exchange.

The proposed investment consists of an 8-year green + sustainability-linked loan of up to BRL 800 million to fund a portion of Neonergia Elektro’s 2023-2025 capex plan.

The Project will be implemented across the Company’s concession area, which includes 228 municipalities in the States of Sao Paulo and Mato Grosso do Sul.

 This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The environmental and social risks and impacts associated with this project are limited, site-specific and can be readily addressed through generally accepted mitigation measures as described in this document and the attached Environmental and Social Action Plan (ESAP).

Use of IFC proceeds will be used for the improvement of the reliability of the electrical system including substations, renovations and upgrades and will not include new distribution or high voltage transmission lines. Neoenergia Elektro has established an effective IMS and dedicated E&S teams to manage and monitor the Company’s E&S performance. Thus, the key E&S issues associated with this project as identified during IFC’s review are related to (i) Neoenergia Elektro’s capacity and competence on the implementation of the corporate environmental and social management system to manage E&S risks in its expansion and operations, (ii) fair and safe working conditions and management of occupational health and safety (OHS) aspects; (iii) contractor management in terms of all relevant E&S issues, including working conditions and OHS; (iv) emergency response and preparedness; (v) gender, sexual harassment and gender-based violence (GBV) issues at the workplace; (vi) resource and energy efficiency, and management of waste and emissions; (vii) land acquisition; (viii) biodiversity screening and management; (ix) impacts on Indigenous Peoples and ethnic traditional communities; (x) protection and management of cultural heritage sites, and (xi) stakeholder engagement.