This report does not constitute a rating action. We think CESP's credit metrics could strengthen following the conclusion of its corporate reorganization, likely in early 2027. The restructuring aims to simplify Auren Energia S.A.'s (not rated) structure by transferring roughly 5.1 gigawatt (GW) of installed capacity to CESP, adding to its existing 2.04 GW portfolio. Of that, 4.2 GW consists of hydropower plants acquired in the AES deal in October 2024, allowing for more efficient portfolio management and increasing the importance of CESP within the group, although concessions covering roughly 2.6 GW of this capacity expire in 2032. The deal excludes roughly 1 GW, mostly comprising wind capacity (the Piauà wind complex and Ventos do Araripe), and Auren's power trading
