Brazil Infrastructure Investment Opportunities CELSO KNIJNIK Brasil 11.21.2011 CELSO KNIJNIK Special Advisor Executive Office of the President of Brazil

PAC – Growth Acceleration Program In 2007 – PAC 1 To accelerate economic growth To increase employment and income rates To decrease social and regional inequalities To overcome infrastructure bottlenecks In 2009, a new goal To reduce the impact of the international economic crisis – countercyclical policy In 2010, launched a new stage: PAC 2 – 2011-2014

Growth Acceleration Program – Concept PAC – Growth Acceleration Program Concept Growth Acceleration Program – Concept Two blocks of action: Make the investment enviroment better: Credit raise Tax relieves Tax system improvements Regulation refinements Infrastructure works To incentive private investment To remove obstacles - bureaucratic, administrative, normative, law-abiding, environmental impacts and legislative - related to growth To increase public investment in infra-structure

GROWTH ACCELERATION PROGRAM – PAC 1, 2007-2010 Infrastructure projects in three areas US$ billion Area 2007-2010 After 2010 TOTAL LOGISTICS 54.5 28.9 83.3 ENERGY 171.7 429.4 601.1 SOCIAL AND URBAN 146.8 18.0 164.9 373.0 476.3 849.3 * US$ = R$ 1,76 4 4

Preliminary investment forecast GROWTH ACCELERATION PROGRAM – PAC 2, 2011-2014 Preliminary investment forecast US$ billion Area 2011-2014 After 2014 TOTAL LOGISTICS 59.4 2.6 61.9 ENERGY 262.3 356.2 618.5 SOCIAL AND URBAN 221.0 - 542.6 358.8 901.4 5

INVESTMENT OPPORTUNITIES: POWER GENERATION AND TRANSMISSION OIL AND GAS HOUSING AND SANITATION HIGHWAYS RAILROADS – High-Speed Rail AIRPORTS PORTS URBAN MOBILITY

ELECTRIC POWER GENERATION AND TRANSMISSION

ELECTRIC POWER SYSTEM – GENERAL FEATURES Installed Capacity – 105,066 MW Number of Customers – 64.6 million Energy Production – 463.2 TWh / year – 60% of South America Peak – 67,632 MW Transmission Lines – 96,207 km ≥ 230kV Source: Ministry of Mines and Energy 8 8

ELECTRIC POWER GENERATION 2011-2014 54 HPP – 47.856 MW – US$ 54,8 billion Annual tenders to contract energy in the regulated contracts environment Hydroelectric power plants – energy to be delivered at the fifth year after the tender Thermal power plants and others – energy to be delivered at the third year after the tender Needs previous environmental license to participate Tenders planned 2011 7 HPP – 1,470 MW – US$ 2,1 billion – 1st half 3 HPP – 1,096 MW – US$ 1,5 billion – 2nd half New enterprises as thermoelectric plants will have to be included accordingly to the 2008-2020 planning 9 9

UHE Santo Antônio do Jari HYDRIC SOURCES – ELETRIC POWER GENERATION North Region Cachoeira Caldeirão Ferreira Gomes UHE Santo Antônio do Jari Cachoeira do Caí São Luiz do Tapajós UHE Belo Monte Marabá UHE Serra Quebrada Jatobá UHE Estreito Jamanxim Chacorão Tabajara UHE Santo Antônio Santa Izabel UHE Jirau Cachoeira dos Patos Jardim do Ouro Usinas plataforma PAC 2 UHE São Salvador PAC 1 UHE Rondon II PAC 1 com conclusão original após 2010 10 10

UHE Estreito do Parnaiba HYDRIC SOURCES – ELETRIC POWER GENERATION Northest Region UHE Castelhano UHE Estreito do Parnaiba UHE Cachoeira UHE Uruçui UHE Ribeiro Gonçalves UHE Riacho Seco PAC 1 com conclusão original após 2010 11 11

HYDRIC SOURCES – ELETRIC POWER GENERATION Southest Region UHE Formoso UHE Retiro Baixo UHE Baguari UHE Davinópolis UHE Resplendor UHE Pompeu UHE Travessão UHE Crenaque UHE Baú I UHE Barra do Braúna UHE Simplicio PAC 2 PAC 1 PAC 1 com conclusão original após 2010 12 12

HYDRIC SOURCES – ELETRIC POWER GENERATION South Region UHE Telêmaco Borba UHE São João UHE Tijuco Alto UHE Cachoeirinha UHE Mauá UHE Baixo Iguaçu UHE Salto Grande UHE Foz do Chapecó UHE Paranhos UHE Garibaldi UHE São Roque UHE Itapiranga UHE Monjolinho UHE Passo São João UHE Salto Pilão UHE São José Binacional (2) UHE Pai-Querê UHE 14 de julho UHE Castro Alves PAC 2 PAC 1 PAC 1 com conclusão original após 2010 13 13

UHE Barra dos Coqueiros UHE Salto do Rio Verdinho HYDRIC SOURCES – ELETRIC POWER GENERATION Center-west Region UHE São Manoel UHE Foz do Apiacás UHE Mirador UHE Teles Pires UHE Porteiras UHE Dardanelos UHE Corumbá III UHE Colíder UHE Sinop UHE Toricoejo UHE Água Limpa UHE Couto Magalhães UHE Batalha UHE Barra dos Coqueiros UHE Caçu UHE Porteiras UHE Serra do Facão UHE Foz do Rio Claro UHE Salto Usinas plataforma PAC 2 UHE Salto do Rio Verdinho PAC 1 UHE São Domingos PAC 1 com conclusão original após 2010 14 14

TOTAL PROJECTED INVESTMENT- US$ 5.5 billion ALTERNATIVE ENERGY SOURCES From 2011 to 2014 71 Wind Power Plants – 1.803 MW 3 Biomass TPP – 224 MW TOTAL PROJECTED INVESTMENT- US$ 5.5 billion New alternative energy sources bidding will be planning annualy and added to the programm, according to the energy long-term plan 15 15 15

Alternative Energy Sources Wind Power Aratua 1 Araras Coqueiros Areia Branca Buriti Quixaba Miassaba 3 Cajucoco Garças Lagoa Seca Vento do Oeste Morro dos ventos I, III, IV, VI, IX Dunas do Paracuru Taíba Águia Rei dos Ventos 1, 3 Taíba Andorinha Icarai I e II Eurus VI Colonia Cabeco Preto Embuaca Mangue Seco 1, 2 , 3 e 5 Barra dos Coqueiros Planaltina Faisa I, II, III, IV e V Mar e Terra Porto Seguro Santa Clara I Rio Verde Guirapa Icarai Guanambi Igapora Sangradouro 3 Candiba Serra do salto Alvorada Ilheus Sangradouro 2 Pedra do Reino Pindai Santa Clara II, III, IV, V e VI Osório 2 Seabra Macaubas Nossa Senhora da Conceição Fazenda Rosário 3 Pajeu do vento Licinio de Almeida Novo Horizonte Coxilha Negra V Coxilha Negra VI PAC 2 Coxilha Negra VII Fazenda Rosário 16

ELECTRIC POWER TRANSMISSION Large interconnections To provide greater security and reliability to the electric power supply To complete the interconnection of the Isolated Systems to the National Interconnected System To ensure the energy flow from large hydropower projects – Belo Monte, Tapajós and Teles Pires To meet the expanding demand in all country regions Tenders planned 2011 615 km – US$ 553 million – 1st half 2010 2011-14 36,000 km – US$15.6 billion 17 17 17

ELECTRIC POWER TRANSMISSION North Region PAC 2 Interligação Manaus – Boa Vista Interligação Tucuruí -Manaus -Macapá PAC 1 PAC 1 com conclusão original após 2010 LT Tucuruí – Tucuruí Vila LT Itacaiúnas – Integradora Lechuga – Jorge Teixeira LT Itacaiúnas – Carajás C3 Interligação Tapajós - Sudeste LT Integradora Sossego - Xinguara Interligação das Usinas do Madeiraa C1 e C2 Interligação N – CO III (Rio Branco – Jauru) Interligação N-NE e N-SE Interligação Norte - Sul III Ji- Paraná - Vilhena Interligação N–CO Vilhena - Samuel Interligação N-CO III (Jauru - Vilhena) Interligação N-NE ( Colinas-S.J.do Piauí) 18 18

ELECTRIC POWER TRANSMISSION Northeast Region São Luiz II – São Luiz III C1 Teresina II – Teresina III São Luiz II – São Luiz III C2 Milagres - Tauá Miranda – Encruzo Novo Banabuíu - Mossoró Interligação Açailândia – P.Dutra – São Luiz Picos - Tauá Paraíso - Açu II P.Dutra – Miranda II Pau Ferro – Santa Rita II Açailândia – P.Dutra Milagres - Coremas Balsas - Ribeiro Gonçalves Xingó - Angelim Interligação N-NE (S.J. Piauí – Milagres) Jardim - Penedo Interligação N-NE (Colinas - S.J. Piauí) Ibicoara – Brumado II Interligação N-NE e N-SE Sapeaçu – Sto. Antônio de Jesus C3 Funil - Itapebi PAC 2 Eunápolis – T.de Freitas II C1 PAC 1 Eunápolis – T.de Freitas II C2 PAC 1 com conclusão original após 2010 19 19

ELECTRIC POWER TRANSMISSION Southeast Region Estreito – Nova Ponte - Emborcação Paracatu - Pirapora Chapadão – Ilha Solteira Irapé - Araçuaí Interligação Norte - Sudeste LT Itumbiara - Bom Despacho Montes Claros - Pirapora LT São Simão – Itaguaçu Mascarenhas - Verona LT São Simão – Ribeirão Preto Mascarenhas - Linhares Interligação Tapajós - Sudeste Furnas – Pimenta C2 Interligação Teles Pires - Sudeste Mesquita - Viana Estreito – Ribeirão Preto Neves - Mesquita Interligação das Usinas do Madeira Porto Velho – Araraquara SP LT Campos - Macaé Itutinga - Juiz de Fora Bom Despacho 3 – Ouro Preto 3 Interligação Sul - Sudeste Interligação Região Sudeste Jaguara – Poços de Caldas PAC 2 Taubaté – Terminal Rio PAC 1 PAC 1 com conclusão original após 2010 Itararé - Jaguariaíva Araraquara - Taubaté Araraquara - Nova Iguaçu 20 20

ELECTRIC POWER TRANSMISSION South Region Ivinhema - Umuarama LT Londrina - Maringá Cascavel do Oeste - Umuarama Londrina Esul – Londrina Copel Umuarama - Guaíra Interligação Sul - Sudeste LT Cascavel Oeste – Foz do Iguaçu Norte LT Itararé - Jaguariaíva Bateias - Pilarzinho Foz do Iguaçu - Cascavel Oeste Curitiba - Bateias Salto Osório – Foz do Chopim Curitiba – Joinville Norte Videira – Campos Novos Desterro – Palhoça Machadinho – Campos Novos Jorge Lacerda B - Siderópolis Garibaldi – Monte Claro Rio do Sul – Barra Grande Campo Bom - Taquara Campos Novos – Nova Santa Rita Nova Santa Rita – Porto Alegre 9 LT Santa Cruz I – Presidente Médici Viamão - Restinga Porto Alegre 9 – Porto Alegre 4 PAC 2 Porto Alegre 9 – Porto Alegre 8 Porto Alegre - Restinga PAC 1 21 21

ELECTRIC POWER TRANSMISSION Center-east Region Nova Mutum- Sorriso - Sinop Interligação Tapajós - Sudeste Interligação Teles Pires - Sudeste Cuiabá – Nobres – Nova Mutum C2 Serra da Mesa – Barro Alto Cuiabá – Ribeirãozinho - Rio Verde Norte Juína - Brasnorte Interligação N – Sudeste Brasnorte – Nova Mutum Rio Verde Norte - Trindade Interligação N – S III Parecis - Brasnorte Interligação Madeira Porto Velho – Araraquara C1 e C2 Trindade - Carajás Interligação N – CO III (Rio Branco – Jauru) Trindade - Xavantes Interligação N-CO (Jauru – Vilhena) Brasnorte – Juba Juba - Jauru Jauru - Cuiabá Barra dos Coqueiros -Quirinópolis Luziânia - Emborcação Itaguaçu – Barra dos Coqueiros Palmeiras - Edéia São Simão - Itaguaçu Itumbiara – Bom Despacho Corumbá – Anastácio São Simão – Rib. Preto PAC 2 PAC 1 Anastácio - Chapadão Chapadão - Jataí PAC 1 com conclusão original após 2010 Chapadão – Ilha Solteira 2 22 22

OIL AND GAS Exploration, Production and Natural Gas Transport Infrastructure

Increase oil and gas production PRODUCTION AND EXPLORATION Increase oil and gas production Seismic assessment, drilling, plataform production To explore the reserves and enlarge national production, including the new Pre-Salt discoveries Value chain: naval industry; mecaninc engineering, steel, quimic, precision engineering among other Identificado problema de fixação dos parafusos da “árvore de natal” molhada, que ficam na cabeça do poço no fundo do mar. O conjunto foi substituído e o poço fechado para a instalação dos novos equipamentos. US$ 418,5 billion 2011-2014 – US$ 110.4 billion Pós 2014 – US$ 308 billion

Parque das Baleias – P-57 e P-58 Baleia Franca e Baleia Anã PRODUCTION AND EXPLORATION – Pré-salt level Bacia de Santos Bacia de Campos TLD Tupi Parque das Baleias – P-57 e P-58 Baleia Azul, Jubarte, Baleia Franca e Baleia Anã Piloto Tupi Piloto Guará Piloto - Baleia Azul 8 FPSO Piloto - Tupi Nordeste Novas Descobertas Exploração Pré-Sal Pré - Salt 17 TLD´s US$ 73.9 billion 2011-2014 – US$ 37.9 billion Pós 2014 – US$ 61.2 billion PAC 2 PAC 1 PAC 1 com conclusão original após 2010

REFINEMENT, PETROCHEMESTRY and FERTILIZER Refinaria Premium I Refinaria Clara Camarão Refinaria Premium II Refinaria Abreu e Lima Petroquímica Suape – PTA FAFEN-SE Sulfato de amônio Petroquímica Suape – PET POY Fabrica de Amônia Complexo Químico UFN-4 Fábrica de Fertilizantes Nitrogenados III Complexo Petroquímico do Rio US$ 76.6 billion 2011-2014 – US$ 41,8 billion Pós 2014 – US$ 34,71 billion PAC 2 PAC 1 PAC 1 com conclusão original após 2010

HIGHWAYS

Central-South Region 54% of Brazil’s GDP FEDERAL HIGHWAY CONCESSION PROGRAM Central-South Region 54% of Brazil’s GDP Length: 2,212.4 km BR-040/Distrito Federal-Goiás-Minas Gerais – 937 km BR-116/Minas Gerais – 817 km BR-101/Espírito Santo – 458.4 km Total Investment: US$ 5.5 billion Governador Valadares Belo Horizonte GO DF MG BR-040 BR-116 Vitória ES BR-101 Concession bidding 1st Half, 2011 28

CONCESSION MODEL Internal Rate of Return: 8.0% per year Reference value used on the 3rd Phase of the Federal Highway Concession Program Term of Concession: 25 years Annual tariff adjustment according to inflation variation Investments described in the Highway Usage Program Constructions required (recovery, duplication, lighting, and others) Constructions conditioned to the volume of traffic (to expand capacity) Performance Parameters: paving, safety, signage, lighting, user assistance, and others. Focus on service quality Concessionaire performs the necessary investments in the most efficient way to meet the Performance Parameters *Allows the participation of Brazilian or foreign companies, financial institutions, pensions funds and private equity funds, separately or in consortiums 29

HIGH-SPEED RAILS PLANNED 36 million inhabitants Resende Taubaté São José dos Campos Metropolitan Region of Campinas Volta Redonda Metropolitan Region of São Paulo Metropolitan Region of Rio de Janeiro Campinas - São Paulo - Rio de Janeiro – 511 km Market Potential Metropolitan Region of São Paulo: 19 million inhabitants Metropolitan Region of Rio de Janeiro: 12 million inhabitants Metropolitan Region of Campinas: 2.5 million inhabitants Economic Importance Rio de Janeiro and São Paulo States concentrate 45 % of Brazil’s GDP São Paulo is Latin America's biggest financial center, concentrating 70% of the stock market Rio de Janeiro is the biggest Brazilian tourism hub Concession bidding 2nd Quarter, 2011

HIGH-SPEED RAIL – HSR Project scope Estimated investment: US$ 19.7 billion Deadline for entry into operation: 2016 Concessionaire responsible for the design, construction, operation and maintenance, complying with technical performance parameters; Auction to be open to all existing technologies Compulsory technology transfer Public sector participation: own capital and financing Documentation available at www.tavbrasil.gov.br Technical studies on demand, alignment, geology, operation and economic-financial modeling completed and available 31

Brazil Infrastructure Investment Opportunities CELSO KNIJNIK Brasil 11.21.2011 CELSO KNIJNIK Special Advisor Executive Office of the President of Brazil