This report does not constitute a rating action. Overview Key strengths Key risks Positive energy balance after transferring bilateral contracts in the free market to its parent, Auren (not rated), ensuring more cash flow predictability, despite lower revenue. Although the company has some diversification in solar energy, CESP's main asset, Porto Primavera, is exposed to a single hydrological system in southeastern Brazil. Smooth debt maturity profile and low maintenance capital expenditure (capex) provide ample financial flexibility. More aggressive dividends upstream to its parent will constrain cash in the next few years. Support from its parent underpins the ratings on CESP. On a consolidated level, Auren is exposed to curtailment risk, which could further delay its deleveraging. Higher spot energy prices
