Good morning, everyone. We now start our Cemig Day, the 29th Meeting with Investors. For those of you that do not know me, I am Carolina Senna, Superintendent of RI. It is a pleasure to have you all here. I would like to greet all of you that are here with us in this agenda, and our objective is to bring to you the main initiatives of the Company. This is a special meeting. For the first time, it's being held in Sao Paulo, the Financial Center in Brazil, getting closer to the investors marketing and also bringing with us our Minas Gerais approach, the warm coffee and cheese bread, our special hospitality and meeting you anywhere. We will have a strategic meetings, networking and a unique opportunity to talk to you. Before we go open our agenda, I would like to ask you that have your phones on mute. Our meeting also is being transmitted by Zoom and thank you all that are with us online. To open our meeting, I am glad to bring to the floor the Chair of the Board of Directors, Marcio Luiz Simoes. Please, Mr. Marcio.

Thank you, Carol. Good morning, everyone. Well, I don't know where I should look at. But anyway, I will take 10 minutes to 15 minutes of your time, at the most, to tell you a little bit about our past and then where we are going towards. I've been with Cemig since Governor Zema started. When he started his term, I also started, and I've been the Chair of the Board since then. When Zema was elected, Cemig's value was BRL10 billion. Yesterday, Cemig reached almost BRL36 billion. But in this period of time, in addition, we paid BRL12.7 billion in dividends. In addition to that amount, we paid dividends in the spirit of time. The PN shares were up 394% up to yesterday and were up 437% up to yesterday. So, this was built in terms of prices throughout this period. But price is one thing, and value is something else. What we have done at Cemig was something else. It was the value. And this past that I'm talking about, we have done some wrong things. But fortunately, we were able to score a few goals. We also took some goals, of course, that's part of life, but we were able to make it right, more times than not. So, what were the mistakes and the learnings? Well, we took a long time to sell our asset-light, but it didn't make sense for us. Renova also, it took us a while. It went there, it went back. So, it was a whole deal of things we had in court reorganization process. So, we know that this could be done. And we found a way to do things all over again. So, when we look back, sometimes, we think we could have done better. But what have we done…

Thank you very much, Marcio, for your presentation, for opening our event. And so, now, I would like to bring to the floor our CEO, Reynaldo Passanezi Filho.

Good morning. Good morning, everyone. Thank you very much for being here with us at another Cemig Day, our 29th Investors meeting. I would like to start greeting Marcio and Fernando, our Economic Development Secretary, and thanking them for the support to all this transformation. But what Marcio just said is our daily activity, we have a Board of Directors that participates, that questions us and our will to bring in these questions and follow a transformation process. So, what Marcio said here is just like a Board meeting, right? There is another Board member here, Afonso. He was announced Director, and he really knows the electric sector. And this is how our Board works. And Fernando and Governor Zema also encourage us to look for more. And this is what we are bringing to you. This is a story that brings management improving efficiency, also a wonderful CapEx increase and capital management and also leadership. That's what we have been working on. Starting with people. I will start then with Marcio's example. And just to show you what the Board works like and also to give you an example of that Board support. When I started at Cemig, there was a special specific situation, which was all the leaders, the managers and superintendents needed to go through the public examination, we could not bring anyone from the market. And I say not market people, but people that were not working at Cemig. So, we could have officers coming from out of the Company, but all the managers and superintendents would have had to been approved in the public exam. And they can be great people, but sometimes, it's not the profile that we want for the position. So, my idea was to turn that process more flexible. And to…

Good morning. I would like to start congratulating Cemig and the whole management here, represented by Marcio Utsch, Chairman of the Board; and Reynaldo, the CEO, for this Cemig Day, which is already a success. We can see everyone engaged in social media and all of you attending on site. And I want to briefly say that our Governor, Romeu Zema, and the Vice Governor are very focused on what Cemig can offer in terms of development. It is now by chance that Cemig is linked to the Secretariat of Economic Development. Everything that was said so far is investment that brings more investment. Why do I say this? From 2015 to 2018, and I'm talking about protocols of investment intent. These protocols of investment intention generated close to BRL26 billion for a four year plan. The prior administration attracted BRL26 billion in private investments from business people spread around the world who chose to invest in the State of Minas Gerais. And this program to attract investments, in my opinion, was too small. BRL26 billion is too little for a State of the size of Minas Gerais. Governor Zema, because he was always an entrepreneur and focused on having the best public policy in the world, which is creating jobs, he required us to turn the key of the whole team and to start attracting investments at a different pace. If they attracted BRL26 billion in four years, he said, I want to have BRL150 billion in the next four. So, he raised the bar quite a lot. And with the Romeu Zema standard of quality, we were very proactive. We put Minas Gerais in the world. Minas Gerais is still unknown. The world knows Brazil as Sao Paulo, Rio de Janeiro and Brasilia, and not so much Minas…

Thank you very much, Reynaldo, for sharing with us this transformation over the years, and thank you Fernando Passalio for sharing with us the transformation of Minas Gerais State that is allowing our state to grow and also your view on the state-owned controlled assets. I have time for two questions. If you want to ask questions either to our CEO or our Secretary of Development, feel free to do so.

Good morning. Daniel Travitzky from Banco Safra. Thank you very much for this opportunity. I have one question to Secretary, Fernando Passalio. Mr. Secretary, thank you very much for being here. And my question is about the federalization topic from Cemig as was discussed by the federal administration and also by Zema's administration. So how are these discussions going and how the Minas Gerais administration is tackling this topic? I am Daniel Travitzky from Safra Bank.

Well this is a topic that was on the headlines for the past few months. This is an initiative of our Senate Representative and President, Rodrigo Pacheco, and we know that there is high debt from the controlling shareholder, and the Governor always says that the state cannot be that indebted neighbor with five BMWs in his garage. So we have to be responsible for the public figures, and there is a deficit there, but the fiscal recovery regimen is the only option that we have. Well, still is being discussed. We don't know if we are going to have a feed or if, this is going to go, something going on in there, and we don't know what's going to come out, but we are still waiting for things to happen. But what we have today is a fiscal recovery system, which is the best option today. The best option is always the one that we have. And we are in this fiscal recovery system and our idea is to remove this possibility and turn it into the regular system, because right now we are under an injunction and we want that to be regular. Yes, federalization might be a way out, but after the law is approved, there is a journey that is a very long one, so that you can come out and realize, it is a public knowledge, you all know, about the Cemig's tagalongs that might discourage even from the federal administration, the sale of this asset. And really, we do not have that, second page is still being developed, and federalization will depend on the valuations if we come to that stage. Anyway the IRF has to be approved, and if needed, we can move from that and go to Propag. And something else that we really see as a possibility is to turn Cemig into a corporation and then a hypothetic scenario. If we would have federalization after Cemig becomes a corporation, so everything that I said here of maintaining a technical management that will be insured once in the diffuse control of the corporation, we end up having shares even with a greater value, we can discount our debt, and Cemig will keep on investing as it is investing and also promoting investments.

Thank you very much, Fernando Passalio. And now I would like to bring to the floor our CFO and IR Officer, Leonardo George de Magalhaes, and he's going to talk about our results in the second quarter.

Good morning, everyone. Thank you very much for being here. This is a very important moment for the company. This is the chance that we have once a year to be here with all the management of the company, RI, investments, and financial results, but we believe this is a single opportunity where we can be with you. It's important to be here with investors. It's a very important moment for the company. We are having consistent results. It is very clear that the market is happy about the company's results, but this is very consistent for the past few years and we can seize this opportunity, and we want to talk more to you and be here available and be able to talk more about our strategy. Let me talk about the results. Once again consistent results. The company in the last years was sometimes 5% lower than the market consensus and sometimes 5% over. This is very consistent. That makes a big difference and this allows us to have consistency and robustness in our results. And we have interest equity in another quarter, over BRL430 million in June, without considering the extraordinary dividends. We are among one of the main dividends payment company and with the additional dividends that we have posted in the last month, clearly this is, we are clearly the highest dividends paying company. Also we have here BRL1.9 billion operating cash generation. We will talk more about that and in spite of results being in line, these non-recurring positive events are not neutral, they will be generating more cash to the company or they have reduced the company's risk related to some topics that were in our balance sheet, so we strengthen our situation. We believe that the non-recurring effects, and this is a…

Thank you, Leonardo. Now we can have a brief coffee break. Questions related to our results can be asked during the Q&A session with the whole management. So we can go back to any questions you might have. I hope you enjoy our Minas coffee. You can taste our special coffee break with Minas products. Thank you. [Break] We are back to continue with our agenda. Before we begin our next presentation, I would like to invite all of you to have your smartphones in the silenced mode. I'd like to invite our Vice President of Distribution of Cemig, Marney Tadeu Antunes.

Good morning, everyone. Thank you for being here with us. We speak a little about distribution, putting it into numbers. Of course, as Dr. Reynaldo said, anything we decide to talk about, we could spend hours talking about. I'll be very brief. Okay, so how do we operate, trying to be proficient in the largest DisCo of the country, with more than nine million consumers, 567,000 kilometers -- square kilometers of our concession area, equivalent to the size of France, bigger than Spain, with more than 20,000 people out in the field working to operate the system and how we look for operating efficiency, considering all of that. Our first strategy was very much talked about here to be customer-centric, focus on the client. Client at the center of everything we do, optimizing revenue management, fighting losses, improving collection and reducing delinquency. I always say that for the DisCo, we have to assess losses together with delinquency, because one is related to the other. If I do not disconnect and I start collecting from customers, we'll reduce losses, we'll be very effective in collection, but there will be a lot of fraud. So these two topics are interrelated and we have to be doing well in both indicators, increase operating efficiency, applying innovative and technological solutions such as digitalization of all of our systems. And as established in our strategic plan, we need to induce the development of the State of Minas Gerais, increasing market size. In addition to improving the quality of what we already have, we have to be able to connect new customers to the grid. BRL23 billion for the 2024-2028 period, BRL23 billion in investments and some numbers. 404 substations will end 2028 with 615, 19,000 kilometers of lines in 2018. By 2028, 21,950 kilometers of…

Thank you, Marney, for the presentation. We have time for two questions related to concession and distribution. Please state your name and where you work.

I'm with JP Morgan, Viktor. A question about this transition from single to three phase. The question is, will you have a write-off of assets? Perhaps these assets are not 100% depreciated. If there is a quick replacement, you'll have to write-off assets from the regulatory standpoint. How are you analyzing this, the progress of three phase supply?

Well, this is an interesting question. This includes cables, isolators. We can understand that these networks since they are more than 25 years old, many of them, they are already depreciated. So we will not have that issue. Also in overall planning, one of the items is to look for the most depreciated networks because that's where we have the most interruptions, given the deterioration of the lamp holes and all the equipment. So it's all under control.

Okay, thank you.

Unfortunately, we cannot hear the question. I think this is an important point. Our average depreciation reduced to quite a lot. Indeed, our average depreciation reduced. And I think Leo presented this four times our reintegration quota. So we are working to eliminate those networks that are all those assets that are totally differentiated. Thank you.

Thank you, Afonso. Any further questions? All right, if we don't have any more questions, then thank you, Marney, for your explanation, for your presentation regarding everything we are doing in the DisCo. And I'd like to invite on stage a Member of the Board of Directors, Coordinator of the Innovation and Energy Transition Committee, Professor Afonso Santos.

Let me check my watch. Everyone says I speak too much and I do speak too much. So I can see very young people in the audience and I feel in the academia. I'm Professor of the Federal University. I've been an Advisor to Light for several companies. And I'm -- I've been a Board Member of Cemig for four years. I'd like to thank Reynaldo for the invitation to speak. It's a funny thing, I feel nervous. I didn't expect that, but I hope to be at ease. So as a Board Member, no one told me to speak about the good things and avoid the bad things. I will tell you my view with the Board as an Independent Board Member. And that's why I was invited to join the Board. So let's speak about Energy Transition. The Energy Transition and Innovation Committee has been established a year ago. I was with Reynaldo. We were having dinner and discussing a place to discuss this, and Marcio accepted it. I'm the Coordinator of this Committee. We meet monthly. Some regular and some extraordinary meetings. And during that period, we invited relevant players in the Energy sector, also from aboard to speak with us, to bring us the new things and their opinions. For example [indiscernible] Skeen, Andre Clark from Siemens. From EDP International, sometimes online, sometimes on-site. [indiscernible] is a great name in Energy Transition of the International EDP. And this has been great interaction because it's creating a culture of Energy Transition. But what is Energy Transition? What is Cemig's role on Energy Transition? We have to understand what Energy Transition is all about. Energy Transition, in my opinion, is a lot more than what we are talking about today. It starts with the first oil crisis in…

Thank you Afonso for sharing with us your point of view as a Board Member and also your professor point of view about Cemig's initiatives. Well, I would like to, before I bring our Executive Management to the floor to the Q&A, I would like to know if you have any questions. So I would like to bring to the floor to start the Q&A session, our CEO, Reynaldo Passanezi Filho also Gasmig CEO, Carlos Colombo; Iuri Mendonca, Cemig SIM's President; also our CFO and IR Officer, Leonardo George de Magalhaes; our Distribution VP, Marney Tadeu Antunes; our VP for Transmission and VP in Participation, Marco da Camino Soligo; Dr. Cristiana Fortini, our Legal VP and representing our trading area, Marcus Vinicius Lobato. So if you have questions related to the company representatives that are here on the floor, do raise your hand and we'll take the microphone to you. But I will start with a question here and then I'll open the floor to the audience. Just a minute here so that everyone comes up to the floor. Very well.

I will start with a question. We recently concluded the sale of Alianca, we shared that with you with the market, on August 13th. The conclusion was announced. So the question is for Marco Soligo, about the Taesa sale. We received questions and about the process, does it still make sense for the company to divest that asset, considering the fluid dividends that we received from the company?

Good morning, everyone. It is an honor to be here talking to you. The company has a strategic planning and the strategic plan is annually reviewed. Taesa sale is in this strategic planning. Therefore, we are working to sell it, to dispose of it, and to meet what is determined in our strategic planning and that's it. That's what I can tell you. Thank you.

Another question before I open to the general audience. I would like to introduce to you Carlos Colombo, our new CEO for Gasmig. And I have a question to you, Carlos. Today, you are Gasmig CEO and also you are the CEO of the Board of Directors, and you have been also been the CEO of the gas company in Rio Grande do Sul. So what can we expect from your management ahead of this asset right now?

Good morning, everyone. It's a pleasure to be here. This is my first Cemig Day and I hope it is the first of many. If I were to summarize it, this is something that Reynaldo and Marcio have already mentioned, but we are here focused on the client's, the customer-centricity and this is a challenge that we have. I could talk about it in different segments. Of course, we wish to expand our network in other areas of the state, really bringing in more clients and also working on the existing network, focusing in our residential and commercial clients. That is where we find the [indiscernible] of our margin. It is a significant margin. That's a great challenge. But this is what we aim to do, to focus our clients so that we can expand our network and increase the number of consumers.

Thank you very much, Carlos. Next question is for Iuri Mendonca, Cemig SIM's CEO. So last year the company aimed to grow via M&A and your current growth project is by Greenfield strategies or are we going to continue with our M&A strategy? If you can talk a little bit more about the growth of Cemig SIM and what we can expect for the next years and what you can tell to the market?

Well, good afternoon. Yeah, Cemig SIM in 2019, had that vision of public and private and we had a review in the strategy later on and so we show the integrity of our assets. We have Greenfield projects. We have 159 megawatts peak in the field and our objective is to reach 600 megawatts in the peak. Obviously, the market provides opportunities. We are also analyzing brownfields. Last year, we had an acquisition of 6.5 megawatts peak in an operation that started last year. So our growth has diversified, but we want to focus Minas Gerais reaching 600 megawatts peak up to 2027.

Next question for Dr. Cristiana Fortini. In this results for the second quarter, you all could see that we were successful in the reversal process for taxes and we have other amount already provisioned regarding the same topic. If you can share with us what is the success expectation that we have and what we have going on regarding this taxes topic? Just to add in this growth moment, we reached an operation of 224 megawatts peak, but also with the leasing power for assets, third-party assets, so that we could grow. It ends up contributing to the ecosystem of DG. And remember that minor GD is complementary to GDE and this Marney talked about this and micro GD is 78% of the market and mean is 22%, and I use my example here. I have self-consumption at home, but I do not generate the full capacity that I need. So I also have minor DG in the complementary vision. So this is the idea, the complementary understanding, complementary vision, not replacing a strategy here.

Good morning, everyone. Actually, the legal area aims to foster the main businesses in the company and to try to obtain more efficacy gains and agility in businesses, and so everything that we can in a way add to the company's life or daily life and that will allow the strategic planning to be consolidated and that can turn a company into more agile one is in the expectations that the company has, along with its legal area, which is very much active. We celebrated that victory and we have other perspectives to be winners in other segments that will allow the company to be more agile.

And before turning to the audience, the last question is for Marcus Vinicius. So we always ask about supply and demand and the margins. We have an amazing result in 2023. Our results in the trading company for 2024 is really great. So what can we expect in the future? So, Marcus Vinicius, here is the slide so that you can talk maybe a little bit about our balance sheet and our results and what we can expect in terms of opportunities.

Very well, good morning, Carol. Good morning, everyone, and thank you for the question. Well, these results are, thanks to our volume of sales, that is increasing. We see that for '25, we even have a higher volume in '24 itself. And of course the different margins between purchase and selling prices. 2023 was an exceptional year. There was a combination of long-term strategies and opportunities in the short-term, our long-term strategies to have positions that we can bring to the market for clients in the long-term contracts. But we are always paying attention to the short-term movements. And this is what happened in 2023. We were able to arbitrate movements that were in the market. These opportunities are not recurring as they have been in 2023. So what we expect for the long-term, yes, is a reduction when compared to '23, but going back to normal levels and this is expected amount for the next years. Of course, there are moments where the results go up or go down, but it is a very interesting value for this year. And about our balance sheet, as you can see there today, we have our sales positions for '25 and '26 already contracted. And we are a little bit long for these years and because of an expectation of increasing prices from now to up to the next month, so we have been able to get the energy that is needed for the serving '25, '26, and '27.

If you have a question. Please raise your hand.

Thank you. I'm Bruno Amorim with Goldman Sachs. I have a question about the distribution business. I'd like to hear from you, what is the strategy to monetize this whole investment that you're expecting for the coming years in the distribution business, your cost today is close to the regulatory level. I'd like to understand if you think there's any room for cost reduction and what are the other drivers you see to outperform the regulatory EBITDA and deliver an ROIC above the regulatory one. Thank you.

Well, we are quite okay regarding including this whole investment in the regulatory base. And as we said here, the base is very much depreciated. For many, many years we invested less than depreciation. What we have today is a unique opportunity to modernize the grid and to add 100% to the regulatory base. And I think that Afonso put this really well, despite the loss of load given distributed generation, disconnection we've been having with the rural by replacing diesel oil in irrigation has offered us stable load. When you look at the load, I think, we are going to lose the load and increase tariff to consumers. But when we look, our load has been increasing a little less than 100%, of course, because part of it is in DG. But when we look at the rural areas, it's impressive the number of situations we still see running on diesel oil. When I have the Three Phase supply, I will connect them and I will allow for this replacement of diesel oil. And if you remember the comment by the Secretary, Minas increased our share in the GDP from 8.8% to 9.5% of GDP. So Minas Gerais as a state is growing more. So from the strict standpoint, I have a lot of peace of mind regarding including this investment in the base. Our last tariff review had zero disallowance. So I believe that this should happen again. And I understand that Minas state is growing more than the country, and we are bringing load by these replacements, particularly in the rural areas. And this theme that Afonso mentioned storage and batteries. That's a theme that is not in this strategic plan. But we will need to move forward in terms of this topic of power storage to…

Let me add to that. Our investments. When we invest in a different technology, for instance, we review with our specific department the risks of disallowance. Serra da Saudade, for example, was mentioned here. The distribution company will have its first solar power mill and we'll have energy accumulator. We did the work with Roberta in regulatory, we consulted with NAL to see the risk of disallowance of that kind of typology. So we have a committee that meets monthly to evaluate all of these points.

An additional comment to add to what Reynaldo and Marney mentioned. If we look at the success story of DisCos in Brazil, the players who are admired. Well, these are companies that invested in operating efficiency and did a lot of investments. Cemig, we mentioned before, in prior years, had a strategic option of investing less in distribution and investing in businesses outside Minas. Now we are catching up and this brings a number of positive effects. In addition to the natural market, growth was mentioned here. We have the demand to serve irrigation. This is a market that Cemig will be able to serve with these investments. And there are some byproducts of this investment. We can reduce operating cost. One example, we can invest in smart meters. We don't have to send somebody to disconnect the customer. We can disconnect or reconnect customers remotely. So that's a cost reduction when we can invest more, another positive, we reduce the value of financial compensations. We reduced those by 30 million this year vis-a-vis last year. And a good part comes from these investments we're making that will also contribute to reduce the level of fines and financial compensations that the company has to pay to customers. When we put it all together, market growth, greater regulatory coverage. You can clearly spend more with operation and maintenance because we're expanding the grid at the network. We will have a great gain of scale when we can keep the other costs under discipline. So all of these gains that the company has direct and indirect alike resulting from these investments will bring Cemig D to a whole new level of efficiency.

And let me build on what our board members said. Infrastructure is essential for Energy Transition. We just saw this 600 billion to be invested per annum in network. We're talking about irrigation. But if I tell you that Brazil will lead Energy Transition and that we will attract data centers to Brazil, forget it. We need a lot of network for that. You know that today we have problems at A&S. So it shows that we need to invest in the network. In addition to the network being depreciated, we need the grid, we need the network to ensure quality and resilience. And to me, that's what gives me peace of mind that we won't have disallowance. And indeed, if we get the United States, they have a lot of data centers, and data centers are disproportional, they are life changing. And we've been working on that to be able to mention Brazil, to have Brazil seen as a locus for Energy Transition. If those who need clean energy come along with us, we'll need the network. And that's why we're investing upfront. We are leaving the network ready and on our end, we're also trying to attract more. But of course, this requires public policies. And I particularly see this as an extremely positive possibility for Brazil, an opportunity. Questions?

Victor with JPMorgan. Thank you for taking my question. My question is about generation. What has been the strategy followed by the company in renewing some concessions, Nova Ponte among them? What are the options on the table now? And what is your preference today?

Your name?

Victor.

Okay, Victor. So the company is interested in three mills or power plants, actually, and this renewal work is done together with the federal government and the Ministry of Mines and Energy. There is always this dialogue with the ministry. The company has expressed its interest in maintaining the plants and in a regulatory way you can do this by renewing the concessions by quota. The company explained our demands that would allow us to do this. We could keep the plants, privatizing them, keeping 49% stake, but it really depends on approvals by shareholder's meetings, and the company is not working with that scenario or we could build a different solution with the federal government that would allow the company to keep the concessions. We are working to keep them. And we are talking with a granting power for this to happen. Would you like to add to that?

Well, you see, there are four ways. One that we don't want to follow, which is fighting for them in an auction. We don't want that. I think that the past example is an example we do not want to repeat. So the first is renewing the concession by quota. And we sent the right messages, the official communications to the ministry. We expressed our interest in renewing by quota. And there are the two other possibilities, which are to keep 49% of the SPEs and sell 51% stake. We would keep 49% minority interest, calculating the rent bonus. And or if there is a change in the ownership structure of the parent company. If we change the ownership structure of the parent company, well, that does not depend on us. We had Secretary Passalio here, you have asked them questions. This could happen. And in this case, we would have guarantee of renewal, automatic renewal. Actually not automatic renewal. We would have to pay a concession bonus. But we would have to consider that compared to quotas, what is best. Perhaps I shouldn't spend any more money, keep it out of the free market and put it in the regulated market. The important thing, an important point is that we are following all of the steps. We send all of the communications in the right time. So now we have all of the options. We can renew concessions by quota, we can renew the SPE or we can renew if there is a change in the ownership structure of the parent company. What we do not want is to take part in the auction if it comes to that.

Yes.

Congratulations [indiscernible]. And I would like to understand what is the strategic view for the gas business looking at the mid to long-term, because we have seen some companies like Copel divesting in that area. They sold Compagas. And I would like to know, how does this complement the company's portfolio strategy and also considering sustainability, because Copel divested from Compagas based on the assumption that this was dirtying their energy matrix. So that's my question. What is the strategic view for Gasmig in Cemig's portfolio in the coming years?

Well, our view is that Carlos will remain with us for many, many years. That's an indirect answer to your question. Well, number one, we cannot sell it, unlike Copel. Perhaps that's the first restriction. The constitution of the State of Minas Gerais does not allow privatization of electricity, gas and sanitation. The constitution even includes natural gas or gas distribution. I don't know exactly the wording, but there is a restriction in our constitution regarding that. And as part of strategic planning, we have an opportunity to have an IPO that means an IPO would preserving the control of the company. And we see that there are many possible synergies in the free market, DG, natural gas and trading. So we see as positive the synergy among the three businesses of the group. And I am a lot less negative regarding decarbonization and of course with a lot of respect for Copel, but it is a transition and natural gas replaces other fuels which are much more polluting than natural gas.

If I may add. Of course, there is Copel's way or their journey, but we had the opposite. Energisa, they joined as gas and they participated in the distribution companies in the northeast. So I believe that there are many possible paths to be followed. It is important to remember that Gasmig is a distribution company, a network company. By chance, it distributes natural gas. It could also distribute other things like biomethane, green hydrogen. We have to be agnostic regarding how things can develop in Brazil. I think that this opens up a number of options for Cemig in the future so that the company can use us as a partner in this Energy Transition. Although the Energy Transition started back in the 1970s, we are still at incipient points in terms of the developments of biomethane, green hydrogen, biodiesel and many other options. I guess that this opens a lot of options to Gasmig.

Thank you. Another question.

I am Daniel Travitzky with Safra Bank. I'd like to ask a question about capital allocation considering that the company today has a leverage net debt over EBITDA ratio of one-time. You have been paying dividends in a recurring fashion. I just want to understand, how do you imagine that this will unfold in the future? What would be the projects that could require more? There was a question about renewal in the generation concession. Do you have any idea of how much you would have to mobilize in terms of capital for this project? In other words, how do you see the leverage of the company in capital allocation looking forward? Thank you.

Thank you for the question. As Reynaldo and others showed have a big investment plan. This year, 6 billion. But when we imagine the 2024 to 2028 of 35 billion, we are talking about 7 billion to 8 billion investments. So the company has a lot of leverage now, but constantly we'll have to be going to the capital markets -- to the capital market to be able to fund these investments. So with this, our leverage, and we're talking about a ramp up of our leverage getting, as I mentioned before close to 2.5 by 2027, which we believe is a leverage that will grow sustainably. But at the same time, we won't be sacrificing remuneration to our shareholders. When we compare Cemig with other players in the sector, Cemig is at a unique position because we're positioned to make a lot of investments in the regulated market with leverage growing in a soft way getting to 2.5 by 2027, which will allow the company to take part in an M&A or a business opportunity, because we'll have room in our balance sheet for that at the same time paying good dividends to our shareholders. We believe that this is a winning strategy for the company. It's a unique moment for the company compared with other players. Some players are adding a lot of value, making a lot of investments, but with a higher leverage level than Cemig. Now we invest in the regulated market and the regulated system. So the company will be able to make investments at moments of imbalance in the free market, investing in the regulated market, maintaining leverage, growing softly, gradually and adequately remunerating the shareholders. And then you ask, will we have extraordinary dividend payout in the future at this moment? Like I said, I've told you before, our Board of Directors today will give -- they give a guidance for the company first to grow in a sustainable fashion. But perhaps in the future, depending on the investments, of course, the company will consider dividends, but the regular dividends of the company already placed the company as one of the biggest payers of dividends in comparison with other players in the market. Reynaldo?

No, extra comments, perhaps say that if we divest and we have an extraordinary profit, of course, this will change this policy, just as we have always done with the case of Alianca.

Hello. Good afternoon. My name is Rafael [indiscernible] with BO Investment. I'd like to ask a question about the energy balance. Question to Marcus Vinicius. You drew my attention, your energy balance from April to now. In April, you have a short position of 230 average meg. And now in the presentation for August, you have longer the 138 for 2025, 168 for 2026. How come this happened? How can you explain it? How are you seeing all this?

Thank you, Rafael for the question. Well, you see, like I said, our result depends on long-term actions and short-term actions observing market movements so we can have better margins, but also to protect the company. The beginning of this year, we had pressure on market prices and we had risk limits or thresholds that need to be met. So we kept observing that. As the year went by, we thought it would be better to close those positions and to be a little long for the coming years because we expect to have some results of these positions in the foreseeable future because we expect prices to perhaps increase a little bit more until September, October, but after that, it's the unknown. So it's all about risk management and take advantage of this ascending moment of the market. We thought it would be safer to reverse that. Thank you.

Other questions? Yes.

Andre with Santander. Still on energy balance, if you could speak about this long position, do you see any more room, any need to purchase more energy to protect not only from the short position you had before, but also from GSF? And I have a second question about distribution.

Yeah, of course, we are observing both the position of the trading portfolio and also exposure of the generation company. So in 2025, this position is being built. Observing these two points, today, we have a slightly more pessimistic view of GSF. So we did some energy purchase for that. When we're observing, perhaps we might have to expand that regarding GSF for next year.

Now, moving to distribution, going back to the question asked by Bruno regarding CapEx. In the renewal of the new concessions, I know that this does not have a direct impact on you. But there was a discussion about including the investments in the RAB and some companies interpreting to include RAB for quality. Could this have an impact on old concessions, old contracts?

Are you discussing this regarding the regulatory asset base RAB?

Yes.

We are evaluating this and we have a consulting firm helping us with that to see whether it would make sense to join this new contract because our renewal have been done together with other distribution companies that have had their renewals, we are evaluating the advantages of joining this new contract format.

I'm Vladimir with XP. My question is in distribution. You mentioned smart meters. There's a perk of 1.8 million of those smart meters. What is the expectation by the end of the plan? And you mentioned that you can disconnect, but do you have any integrated strategy, for example, of closing a neighborhood, a city or region to have a totally automated grid for that region, city or neighborhood?

Yes, we do have some strategies, for example, replacing the obsolete meters. But not all obsolete meters will be replaced by smart meters because of the communication difficulty. So we will limit a neighborhood to set up a communication network and we work with that strategy. Let me give you an example. We were going -- for us to put smart meters in buildings it's hard. So if there's an obsolete meter, normally all meters are kind of getting obsolete, so we exchange all of them. This is recommended. It's happening all over Brazil. Given the difficulty to access the meters in the buildings. The buildings are now replacing the doormen by electronic control of entrance, so it's hard to have access to the meters. So we go to these buildings and we replace all of the meters by smart ones. In some places, we still install regular meters. Today we have 400,000 smart meters. By 2028 that's when we will get to 1,800,000 smart meters. Today, we are the distribution company with the most smart meters already installed.

I am Bruno Rivera with [indiscernible] Research. Speaking about transmission and looking forward, how much do you believe you need to invest in reinforcement and improvements in terms of the potential, in addition to what you already have in approved investments?

Well, thank you for the question. We have an investment of BRL3.5 billion from 2023 to 2027 for improvements and reinforcements. Reinforcements and improvements are a good business. They bring us a reasonable return on the investment and we work according to what is published. We immediately start a bidding process, as mentioned by Reynaldo, Afonso. We must do because we are a public company. So the bidding process takes more time. When we have the authorizations published, we make the reinforcements and the associated improvements. We don't make any investment if the amount of the investment is more than what was published in the requirement and the request. So in that case, we bring it to discussion. We just approved an investment of almost BRL400 million. The company has millions of depreciated assets and the lack of investment that happened in distribution in recent years also happened in the segment of transmission and also in the segment of generation. So as well not to mention that we are still catching up in these two segments.

Have another question? No. We are closing the Q&A session. We end the 29th Cemig Investors Day and I thank you all very much for spending your time with us today whether here in person or online. And I would like to invite you all to a delicious lunch.