Dear Fellow Shareholders,

Once again I begin this letter with a sense of pride about Eneva. As I look back on
last year it is remarkable how well our company has performed. And I’m not only
talking about our strong financial performance, but also about how much we have
accomplished in consolidating our reservoir to wire (R2W) platform and putting in
place a fit for purpose organization to cope with our growth challenges. Ours is an
exceptional company with a promising future.

Throughout a period of profound political and economic change in Brazil, we have

been steadfast in our dedication to deliver on our promises and to earn a fair return
for our shareholders. Return on capital employed continued its upward trend to reach
11%, compared to 7% in 2017 and 2.5% three years ago. We continue on the right
track and we will stick with the approach that got us here. We will not relax our
standards.

In such a capital intensive business as ours, a fundamental measure of success is the

shareholder value created over the long term. Discipline on capital allocation will
differentiate us from other players as we follow the investment principles highlighted
in last year’s letter to shareholders. We understand that significant opportunities will
arise following the major shifts we expect in the Brazilian energy market and we
believe that relative scale will be a major source of competitive advantage for Eneva.
For this reason, we plan to continue making significant value-enhancing growth
investments and have the ambition to practically double contracted generation
capacity by 2023. However, we do not pursue growth for growth's sake: we fully
understand that growth resulting from non-accretive investments destroy value. At
Eneva, we have rejected merger and acquisitions opportunities that would have
boosted current and near-term earnings but that would have reduced per-share
intrinsic value. Our approach, rather, has been to "go to where the puck is going to
be, not to where it is." As a result, our shareholders are now better than they would
have been if we had used the standard catechism.

We make decisions based on the intrinsic value of the assets, which we define as the
discounted value of the cash-flows that can be taken out of a business during its
remaining life. Anyone calculating intrinsic value necessarily comes up with a highly
subjective figure that will change both as estimates of future cash flows are revised
and as interest rates move. Despite its fuzziness, however, intrinsic value is an all-
important and logical way to evaluate the relative attractiveness of investments and
businesses. This is not rocket science but to make it work properly and efficiently
requires discipline. It is with this mindset that we have executed our 50% stake
acquisition in PECEM II. This has proved to be an extremely accretive strategy as, in
2018 alone, we have generated free cash flow for the acquired 50% stake in PECEM
II of R$ 62 million, compared to a cash disbursement of R$ 50 million paid for the
same share of future stream of cash flows of this asset. We are talking about a 1
year payback with an implied return of 124%.

We have set challenging goals for the years ahead and do not want to become
hostages of the “growth trap”. We want to be a large company with the spirit of a
startup and be driven by the essence of a challenger. We don’t want to be a huge
company that has lost its agility. The way I see it we have a unique organization,
very strategically concentrated but operationally decentralized, with a long-term
vision and a clear short-term pragmatic approach. For all these reasons, we have a
very robust, value-creating business model and are confident on our ability to
execute and deliver on our challenges over time.

We centralize control of capital allocation but prefer to decentralize management at

the business unit level. As the capital allocator, the decisions the executive board
makes shape the company. As so, we circumvent suffocating bureaucracy and
thereby accelerate speed in decision-making. Our entrepreneurial flexibility is a
competitive advantage in a corporate world awash with bureaucratic inflexibility.

We have made some meaningful changes to our operations organizational structure

through which we expect to deliver against our vision and objectives. On April 2018
we announced plans to consolidate E&P and Power operations under the leadership
of Lino Cançado – Lino has been a great partner, acting as an amazing sound board
on key strategic decisions and providing the needed comfort on the integrity of our
assets. The new organizational structure improved accountability in our R2W
business model and enhanced capital returns, as it simplified decision-making,
improved our speed of execution, developed our cadre of general managers, and
preserved and released entrepreneurial energy. We have already seen tangible
results for the company with annual costs reductions of R$ 2 million in 2018.

Still on the capital allocation debate, we would also want to remind our shareholders
that, as of today, we much prefer to use our capital to grow diligently than to buy
back stock. Buying back stock should only be considered when we either cannot
invest or when we are generating excess, unusable capital. We currently want to use
more of our excess capital to grow our businesses and deliver excess returns,
expanding in the R2W and integrating along the value chain into the gas to power
segment.

Our stock price is a measure of the progress we have made over the years. This
progress is a function of continually making important investments, in good times
and not-so-good times, to build our capabilities — people, systems and assets. These
investments drive the future of our company and position it to grow and prosper for
decades. Since our Re-IPO in 2017 we have delivered 36% in total shareholder return
(TSR), out of which 17% in 2017 and 16% in 2018. But as I remind myself and the
team on a far too frequent basis — and this is advice I received from one of my most
respected mentors — do not confuse a bull market with great performance. While we
have a tremendous platform in place and optimism for the future, it is critical that
we stay laser-focused on execution to create continued value for you as a
shareholder. This means continuing to build upon the foundation we have established
with strong cash flow growth and continued emphasis on improving our cost base,
while maintaining our credit standards.

As the economy grows and competitiveness in many industries increases, the need
for more reliable and competitive energy will become more evident. Power supply
from renewable energy still cannot be switched on and off like a fossil fuel power
plant – the sun does not shine at night, and wind does not blow all the time.
Integrating intermittent renewables into dynamic grids with rigid demand profiles will
become costlier as penetration rises. By the law of supply and demand, all power
plants suppress the marginal value of energy, and solar and wind, in particular,
‘cannibalize’ their own power prices by generating at the same time. Gas is the
cleanest of all fossil sources and the most reliable source of energy to stabilize the
energy grid and support peak demand from the system, and we have vast expertise
with this resource.

In the coming years we expect to benefit from the liberalization of the energy market.
With the increased adoption to a free market in Brazil, millions of new consumers will
be able to choose their supplier freely, something that is reserved to about 30% of
consumption today. As the buy and sell experience continues to improve, consumer
trust and confidence will increase, driving further adoption. And if we at Eneva do
our job right, we can be uniquely positioned to serve these new customers best and
benefit as a result, providing reliable and competitive energy.

But having a good business model is not enough. I believe that the single most
important driver of Eneva’s success has been the commitment to our core behaviors:
1) have the courage to take risks responsibly; 2) strive for the highest standards; 3)
be open, constructive and resilient; 4) celebrate and reward success; and 5) care for
each other – the way we do it makes a difference! Our commitment to these
principles—to living them every day—is the brick and mortar of Eneva’s culture, and
the result of the performance delivered over the years. Culture isn’t an accident. It’s
an action. It has to be lived, and has to be constantly renewed. I have never felt
better about our culture than I do today. It is stronger than it has ever been and I
am confident that it will drive the next 5-10 years of success for the company.

What do you own?

In a recent roadshow a prospective investor asked me a great question: “If I buy

shares from Eneva, what do I own?”. Simply put, you own a piece of the leading
integrated energy company in Brazil.

We are uniquely positioned as the only privately held integrated energy generation
company in Brazil. Our portfolio of thermal generation assets and our expansion
strategy are based on the R2W business model, which enables us to control the
supply of natural gas to our gas TPPs, and integrates our expertise in the
development and operation of TPPs with our experience in the exploration and
production of onshore natural gas.

Our ability to develop and operate vertically integrated thermoelectric projects under
the R2W business model provides us with a competitive advantage in the generation
segment that is essential to maintaining the reliable supply of energy within the
Brazilian energy matrix.

But we want to go further! We want to pioneer new energy frontiers and provide
reliable and affordable energy to the market.

Compensation & Shareholders Alignment

This is also another question that I usually get: how aligned is management
compensation scheme to shareholders objectives? At Eneva, we try to be as logical
about compensation as about capital allocation; in fact, having the right
compensation scheme in place implies in optimal human capital allocation. In setting
compensation, we like to hold out the promise of large carrots, but make sure their
delivery is tied directly to results in the area that an executive/manager controls.

The product of this money's-not-free approach is definitely visible at our variable and
long-term compensation. If we can employ incremental funds at good returns, it pays
us to do so: our long-term incentive bonuses increases when returns on additional
capital (reflected on a total shareholder return metric) exceed a meaningful hurdle
charge.

The consequence of this arrangement is that it pays us, executives, to send to

shareholders any cash we can't advantageously use in our business. Up until today
we haven’t proposed any cash back approach (i.e., dividends, JCP, or any other
related form) as we do believe that we can provide better returns on our excess cash
and increase share price.

In our view, alignment means being a partner in both directions, not just on the
upside. Many "alignment" plans flunk this basic test, being deceitful forms of "heads
I win, tails you lose." Having our long term incentives granted on shares provides
this alignment.

Building a Fit for Purpose Organization

Discussing the military’s performance during the Iraq war, Donald Rumsfeld, the US
defense secretary at the time, famously said, “You go to war with the army you have,
not the army you might want or wish to have at a later time.” When engaging our
leaders about creating great teams, I tell them to approach the process in exactly
the opposite way. You’ve got to hire now the team you wish to have in the future.

The basic problem is that most people start with the team they have, thinking, we’ll
do more, and we’ll be amazing. The thing is, if you start with the team you have,
sure you can do more, but it won’t necessarily be amazing. Instead, build the ideal
team by starting with the vision down the road. Identify the problem you want to
solve, the time frame in which you want to solve it, the kinds of people who will be
successful at that, and what they need to know how to do. Then ask yourself, what
do we need to do to be ready and able, and whom do we need to bring in? Such
mental framework doesn’t assure you won’t make mistakes but it certainly better
positions the company for the future.

Just as great sports teams are constantly scouting for new players and discarding
others from their lineups, our team leaders would need to continually look for talent
and reconfigure team structures. We set the mandate that their decisions about
whom to bring in and who might have to go must be made purely on the basis of the
performance their teams need to produce for the company to succeed.

I know this may sound harsh, because the notion that companies should make special
investments in developing people, provide paths for promotion, and strive for high
employee retention rates are deeply ingrained. But I’ve come to believe such thinking
is outmoded and isn’t even the best approach for high performance teams. It often
leads to people becoming stuck in jobs they don’t really want or aren’t doing as well
as they want to—or as you need them to—rather than screening the job landscape
for better opportunities.

We want to have the right person in every single position. At Eneva we have three
fundamental tenets to our talent-management philosophy. First, the responsibility
for hiring great people, and for determining whether someone should move on, rest
primarily with managers. Second, for every job, we try to hire a person who would
be a great fit, not just adequate. Finally, we would be willing to say goodbye to even
very good people if their behaviors and/or skills no longer match the needed ones.
In that sense I believe that Netflix provides the best definition on how to build a
dream team.
 “Those who do not pass the keeper test (i.e. their manager would not fight to keep
them) are promptly and respectfully given a generous severance package so we can
find someone for that position that makes us an even better dream team. Getting cut
from our team is very disappointing, but there is no shame. Being on a dream team
can be the thrill of a professional lifetime.” (Netflix)

Safety as a State of Mind

The recent tragedy that happened in the Brazilian mining sector made us all
reevaluate our policies, procedures and best practices related to HSE and
operational risks.

Culture is the atmosphere created by shared beliefs, shared attitudes, practices and
a philosophy that characterizes a group of people. An organization’s safety culture is
the result of a number of these factors. To develop a strong safety culture, that
culture must start from the top and extend down to the least experienced employee.
Every worker needs to understand that safety must be the first focus of his or her
job. The final responsibility for safety is not the responsibility of the safety person,
but of each employee executing an assignment. After all, at the end of the day, the
employees are the ones safely returning home.

No one plans to have an accident. No one leaves home in the morning thinking, “I’m
going to hurt myself or somebody else today.” However, incidents do happen and
there is always a reason. Sometimes the reason may be a simple lack of knowledge,
or perhaps the employee did not understand instructions due to a language barrier.
There are many reasons why things might go bad. But, having strong self-awareness
and sense of urgency are always a good start to prevent a bad event from turning
into a catastrophe.

To further develop our safety and asset integrity culture, we constantly reinforce the
elements of our HSE management system. Through internal campaigns and audit
schedules — which also encompasses third party suppliers — we are capable of
verifying operations compliance to internal standards and benchmarks, which have
always been equal or better than that required by regulators.

In a strong safety culture, everyone feels responsible for safety and pursues it on a
daily basis; Safety is a state of mind. In this type of environment, employees go
beyond the call of duty to identify unsafe conditions and behaviors and intervene to
correct them. For instance, in a strong safety culture, any worker would feel
comfortable walking up to the plant manager or CEO and reminding him or her to
wear safety glasses. This type of behavior would not be viewed as forward or
overzealous, but rather would be valued and rewarded. This is how we see HSE at
Eneva.

Innovation: Driving the business beyond Eyesight

Barriers to innovation have never been so low. Computing power has constantly
increased, and transaction costs steadily dropped. A good example is the reduction
in price of cloud storage, which has dropped by 99%, from USD10/GB to
USD0.03/GB, in just 15 years. Furthermore, the combination of disparate
innovations, such as the smartphone and autonomous car, have resulted in the most
radical technological advances. These are just a few factoids to show how much and
how quickly the market environment can change. As Jack Welch correctly said “If the
rate of change in the outside exceeds on the inside, the end is near”. No matter the
business, high tech or not, and the market, regulated or not, we have to be able to
adapt quickly.
Eneva is obligated by Brazilian regulation to invest approximately R$ 18 million per
year in research & development, which represents roughly 0,5% of our total
revenues. Allocating correctly this amount of capital would not guarantee our success
into cutting edge technologies but it would be a good start. Based on the poor results
achieved over the previous years I am positive we can do better and allocate capital
more efficiently, focusing on areas that are more aligned with our strategy.

Capital allocation into innovation should have a well-defined scope, an associated

risk-return and a time horizon dimension to allow a common basis of understanding
and performance evaluation. We will explore new ideas of technology, process
innovation, service offerings and business models to 1) optimize current business;
and 2) develop new business to maintain or improve competitiveness.

We want to be recognized as reference in innovation in the Brazilian energy market

with a risk balanced portfolio of projects. We expect to deliver this primarily by
applying cutting edge technologies on our core business and by deploying highly
profitable new business models and disruptive new solutions.

We have already identified a few low hanging fruits that should boost productivity
and increase efficiency in the short term. These are initiatives with high impact
potential and ease of implementation such as field operations automation and
advance analytics to predictive maintenance and seismic interpretation.

High level assessment of trends, competitive landscape and Eneva’s capabilities

indicate solar energy and utility scale batteries as the main topic arising for disruptive
innovation. There is a market place for new business models, nonetheless, no
signaling of players being able to seize the market. Growth opportunities in
generation lie with gas and solar, being solar conditioned on a better regulatory
framework and storage capacity.

A Recap of 2018

We have exceeded our goals for the year with operating cash flows of R$ 1.6 billion
and recurring net profits of R$ 308 million. The team has worked hard to achieve
these goals; they are and should be, proud of the accomplishment. A few highlights
from a notable year:

▪ Recurring EBITDA has reached R$ 1.4 billion implying in a cash conversion

above 100%, with improved margins across all operational segments
▪ We have increased our 2P certified reserves by 4bcm, representing a reserve
replacement ratio (RRR) of 286%, and above our annual target of 100% RRR
▪ For the first year in our history we have delivered positive bottom-line results
in our coal assets
▪ Capital structure optimization was concluded through the incorporation of
Parnaiba Gas Natural into Eneva and the refinancing of gas thermal power
plants
▪ Free Cash Flow to Equity reached R$ 231 million, with cash position at year
end of approximately R$ 1.5 billion (including escrow account)
▪ Parnaiba V was the winning bidder in the last A-6 energy auction;385 MW of
new installed capacity and 326 average MW sold to the regulated market

Net sales remained stable at R$ 3.3 billion whilst the availability of gas and coal TPPs
has continued to show improvements, reaching 95% (Vs 85% in FY17) and 94% (Vs
88% in FY17), respectively. If it were not for the lower dispatch levels at gas TPPs in
the Parnaiba Complex, resulting from an anticipation of rainy season in 4Q18,
revenues would have been 12% higher (assuming equivalent dispatch levels on a
quarter over quarter basis). The average dispatch of gas TPPs remained at our long-
term average guidance levels of 55% - 60%.

We delivered on our promises.

On exploration & production we have surpassed our goal to achieve a reserve

replacement ratio (RRR) of 100%, delivering 286% in 2018. We have increased the
amount of certified gas reserves for the Parnaiba basin to 21.4 BCM (from 18.8 BCM).
We attributed this increase to (i) +1.3 BCM from Gavião Tesoura field; (ii) +1.9 BCM
from the first appraisal well in Gavião Preto field; and (iii) +0.8 BCM from better than
initially expected performance from existing fields. These additions more than offset
the 1.4 BCM gas consumption in 2018 and lead to a net increase of 2.6 BCM in
certified gas reserves (2P).

As we have always said there is no need to rush exploration investments as this

would imply in a sub-optimal capital allocation decision. The continuous de-risking of
our upstream assets, with a reserve replacement threshold of 100%, is the most
efficient way to deploy capital and optimize asset turnover over time. However, if
while doing so, the reserve replacement is higher than 100%, as it has been in the
past 3 years, opportunities for growth in the Parnaiba basin will arise.

In addition to the increase in reserves, which lengthens the production life of gas
TPPs in Parnaiba, our performance in 2018 was highlighted by the successful
execution of our asset integrity program, the reduction in operating costs and SG&A
expenses and the improvement in our capital structure.

On our asset integrity program, we streamlined variable costs of coal plants. At Itaqui
we have reached breakeven levels on variable margins in the last quarter, resulting
from operational efficiency initiatives and more favorable tax conditions. At the same
time, we have successfully concluded the investments to reduce logistics costs in
Pecem II, reducing demurrage costs by R$ 8 million, with an average vessel
unloading time of 3-5 days (down from 8-10 days in the previous year) and with no
vessel unload utilizing trucks. We expect to maintain or marginally improve these
assets variable margins in 2019.

Through process improvements and reduction in consulting fees we were able to

reduce SG&A expenses by R$ 15.8 million, approximately 9% on a YoY basis. Alan
‘Ace’ Greenberg, former Chairman of Bear Sterns, had a great definition on why we
should always be concerned about optimizing expenses:

“When you are a private enterprise, savings on expenses go to the bottom line. When
you are owned by the public, savings still go to the bottom line, but they are in turn
magnified by the multiple the stock carries”.

Recurring EBITDA reached R$ 1.4 billion, 2% below 2017 figures. Despite our efforts
to offset sales decrease by a reduction in operating costs and SG&A expenses – which
by the way we ended up successful – EBITDA figures were negatively impacted by a
slight increase on exploration expenses. The increase in exploration expenses
resulted from 2,495 kilometers of seismic acquired in 2018, 21% higher than in FY17,
at a unit cost of R$ 20,000/km (in line with previous year associated figures).
Operating cash-flows reached R$ 1.6 billion, resulting in a cash-conversion ratio of
108% compared to 88% in 2017. The higher cash-conversion ratio can be mainly
attributed to working capital improvements and reduction in one-time events. We
continue our efforts to show real growth on operational cash-flows and EBITDA
figures by streamlining costs over inflation adjusted revenue contracts and optimizing
cash flow requirements.

We have also improved our capital structure through the refinancing of our gas TPPs
and our upstream asset (Parnaiba Gas Natural – PGN). The initiative resulted in an
increase on average debt terms from 2.8 years to 4.1 years whilst associated cost
remained stable at 127% of CDI (IPCA+1.75%). With the new organizational
structure we will be able to free up cash flows from our assets and, through the
incorporation of PGN, at our holding company, make better usage of tax-loss carry
forwards. Needless to say that these transactions have streamlined financial
expenses (cash), from R$ 543 million to R$ 426 million and diversified our lenders
base. Despite the improvements on our capital structure, we still believe that we
have not reached optimal levels yet and you should expect to see further optimization
through an active liability management strategy.

Recurring net profits reached R$ 308 million, with a net margin of 9%, 140% up from
previous year figures. Bottom line results were positively influenced by capital
restructuring measures highlighted before and more efficient tax strategies.

We have also concluded the acquisition of Azulão field, opening new venues to further
consolidate our R2W business. As you might recall from last year’s letter, I mentioned
that we were bullish on the strategy of closing the cycle of Parnaiba I (Parnaiba V –
PV) and we were working to guarantee that our project was the most competitive
one. In August 2018 PV was the winning bidder in the A-6 new energy auction.
Parnaíba V sold 326 average MW, securing in an annual capacity payment equivalent
to R$ 272 million for a 25-year tenure starting on January 2024. The EPC and critical
equipment contracts have been secured and the notice to proceed was given to the
contractors on February this year. Given this earlier start, Parnaiba V is expected to
start operations well before the COD date in the PPA. Azulão project was also
registered and approved to participate in the last energy auction with a capacity of
96 MW (150 MW installed capacity), but given the low demand, which was almost
fulfilled with Parnaiba V, we have exercised the option to wait for better opportunities.

Goals for 2019

It is both deceptive and dangerous for CEOs to predict growth rates for their
companies. As a CEO you are, of course, frequently incited to do so by both analysts
and portfolio managers, but you should resist, however, as most often these
predictions lead to trouble. On the other hand, it is fine for a CEO to have his own
internal goals and, in my view, it’s even appropriate for the CEO to publicly express
some views about the future, if these expectations are accompanied by sensible
caveats. This is what I did when we set the goals for 2018 and that’s what you should
expect for the years ahead.

What an executive must do is handle the basics well and not get diverted. That's
precisely our formula. We establish the right goals and don’t forget what we set out
to do. In 2019 Eneva has 5 major goals: i) maintain our reserve replacement ratio of
at least 100% and further develop our exploration portfolio in Parnaiba Basin; ii)
initiate construction phase and conclude the financing of Parnaiba V project; iii)
monetize Azulão project and expand along the gas-to-power the value chain; iv)
optimize our energy trading business and v) develop and implement our innovation
accelerator.
i) Reserve Replacement and Exploration Portfolio – as I mentioned earlier, there is
nothing that adds more value to our business model than finding and developing new
reserves. We remain confident on our portfolio and have set a target of drilling 15
wells in 2019, out of which 12 will be concentrated in the 13 th bidding round area —
where we acquired 2.495 km in 2D seismic last year.

We understand the risks and returns embedded in an exploration campaign and to

measure the efficiency of our campaign and capital allocation over time we have
implemented a risk/return metric, “Reserves Consumption Rate / Free Cash Flows”,
which has been cascaded throughout the company. The index indicates the efficiency
at which we generate free cash flows while burning reserves, and as long as we are
above the expected reserve consumption volume for a given expected cash
generation (as a function of dispatch) the better we are positioned to generate value
and finance growth. On the other hand, if our RRR is below 100%, or there are no
additional reserves beyond yearly consumption, and at the same time, free cash flows
are lower than expected – due to lower than expected dispatch levels – we are
destroying value and limiting the company’s growth perspectives.

ii) Initiate construction phase and conclude financing of UTE Parnaiba V (PV) – in
February 2019 Eneva submitted to Techint the notice to begin the implementation of
UTE Parnaíba V. The notice to proceed was delivered six months ahead of the initial
schedule and we maintained the estimated construction term set forth in the turn-
key contract (EPC) of 31 months. Through the anticipation of the notice to proceed,
the implementation activities for the project may be performed throughout the dry
season in 2019, reducing the execution risks for the construction phase and
potentially improving economics. Our main objective is to accelerate the start-up of
Parnaiba V, not only to further minimize any potential risks of project delay, but also
to capture additional revenues by selling Parnaiba V energy in the free market, before
the PPA starting date. Bear in mind that this additional revenue will be generated
without the consumption of a single molecule of gas, as Parnaiba V will be generating
additional energy every time Parnaiba I is dispatched.

We have also been working diligently on the financing of UTE Parnaíba V to come up
with a hybrid structure between project finance and capital market instruments. Such
structure would enable us to optimize even further the utilization of tax-loss carry
forward benefits and maintain the required flexibility to move cash across our
corporate structure. If we were to be successful, Parnaiba V should be fully financed,
enhancing even further the double digit expected real returns, with positive
contribution to our debt portfolio duration and at lower costs. We expect to get the
closing of the structure by the end of the 1H19.

iii) Monetize Azulão project and expand along the value chain – the country is moving
towards an increased share of renewables in the matrix. Most of the demand will be
supplied by solar and wind sources - following a global trend - which compounded to
the increase of run of the river large hydro projects should increase matrix
intermittency and seasonality. We believe that this “instability” must be off-set by
the increase of reliable thermal generation, with flexible clean gas, which is available
to operate when there is no sun or wind, and can be turned off while renewables are
generating.

No wonder, natural gas, the cleanest of fossil fuels, has been pointed as a transition
fuel to a more renewable matrix. But even within natural gas there are different ways
of meeting this demand. Both LNG and pre-salt natural gas are good alternatives but
have a high level of inflexibility. Non-associated onshore gas, on the other hand, is
highly flexible and very competitively priced.
We maintain our view that R2W is the most competitive reliable energy resource with
embedded higher returns. Azulão is well positioned to participate in either A-4 or A-
6 auctions, expected to take place in the second half of this year. In addition, we are
also assessing an alternative monetization strategy through the auction bid for a gas
TPP in the isolated system, in the state of Roraima, considering a 15-year contract
and scheduled for May 2019.

Considering current market conditions we also believe that there will be a narrow
opportunity window for gas to power projects, through either LNG or pre-salt gas, to
fulfill a pent-up demand during the transition of the matrix.

iv) Optimize Energy Trading Business – Eneva has recently launched an initiative to
assess the opportunities and threats of repositioning ourselves as a relevant player
in the deregulated market. The main drivers for bringing this topic now are the
changes observed in the energy market: we’re heading towards a freer and more
mature market, with higher requirements for financial solidity and professional risk
management. There will be opportunities related to tailored contract design and
structured products that could fit well with Eneva´s asset portfolio.

Among different business models adopted, we’re positioning ourselves as a market

originator in which we will pursue to extract marginal value from our own assets,
while we will also act more actively as intermediators, selling energy from third
parties. Through this business model we expect to: i) increase profitability in existing
products as market becomes more liquid for companies like us; ii) address the risk
of liquidity in long term contracts; iii) enhance value added to our commercial
products through market intelligence; iv) extend new business opportunities; and v)
increase the profitability of existing assets through improvements in the energy
portfolio management.

An active presence in the energy trading market will provide us with physical and
financial market insight and commercial knowledge. From time to time, we should
actively engage in these markets in order to take commercial advantage of business
opportunities. These trading activities provide not only a source of revenue, but also
a further insight into planning, and can, in some cases, give rise to business
development opportunities. The trading activities will be accompanied by a more
robust approach to potential partners and clients in order to originate long term
energy contracts that could add up to regulated market revenues.

We are positioning Eneva´s commercial business unit to capture demand growth that
will come with a greater deregulated market.

v) Develop and implement our innovation strategy – we have recently revisited our
innovation strategy, leveraging our R&D resources focusing on: (i) extracting
additional value from our current business using new technologies and (ii) creating
new businesses with potentially disrupting business models. Among several key
initiatives in our innovation portfolio for 2019, we would like to highlight three main
deliverables:

a) Solar power distributed generation pilots: Following international trends,

both solar and distributed generation are expected to grow exponentially
in Brazil. Coming from almost no presence in the matrix in 2016, utility-
scale solar installed capacity has already reached 1.8GW in 2018, doubling
from 2017 levels. Conservative estimates indicate it will reach almost 10
GW over the next ten years, not including projects developed under the
distributed generation model, which should reach a similar figure. Based
on that potential, we are launching two pilot projects in 2019.
 The first will be developed and implemented in the Parnaíba Complex to
source power consumption of several of our gas exploration & production
assets, including clusters of wells and processing plants. The second will
be in Tauá, in the State of Ceará, through the expansion of our 1 MW
plant. Both projects will be small in scale (1 to 3MW) and developed as
pilots to enhance our capabilities in solar technologies, distributed
generation and eventual adjacent innovations – such as storage.

b) Startup accelerator: The program first phase will focus on the screening
process to identify and select startups uniquely positioned to follow key
market trends such as the exponential adoption of new technologies,
increased penetration of renewables, market liberalization, growth of
distributed generation and energy storage capacity. After the selection
phase, we will support the acceleration of such startups leveraging their
position, products and/or business models to identify opportunities to
create new growth platforms for the company in the future.

In last year’s letter I concluded stating that I was more enthusiastic than ever about
our business. And indeed 2018 was a year of outstanding accomplishments. As 2019
begins, I can’t help but feel that improved macroeconomics in Brazil will create many
valuable opportunities and boost our growth even further.

Eneva is a wealth-creating company. We are very proud of having successfully

executed its turnaround and its repositioning in the energy segment. As executives
and shareholders we have the imagination and initiative to continue building what
we expect to be most admired company in the Brazilian energy market.

We aim to make your journey with us a prosperous one.

Pedro Zinner
CEO