1
s
t
n
e
t
n
o
C
Contents
Introduction..............................................................................03
Corporate profile......................................................................13
Strategy and vision of the future...........................................31
Operating performance.........................................................47
Economic and financial performance...................................63
Environmental performance..................................................71
Social performance.................................................................87
GRI Index..................................................................................103
Assurance report ....................................................................120
Credits......................................................................................122
Itaipu spillway
Eletrobras | Annual Report 2016 Chapter 1
Introduction
The challenge is: innovation
Apparently simple ideas can bring great results. But how to promote continuous improvement
in processes, providing reduction of losses and costs?
At the Internal Improvement Case Seminar, held at the Tucuruí plant, in Pará, employees
of Eletrobras Eletronorte’s Hydraulic Generation Superintendence register and present
works in which they seek to improve their day-to-day processes in the company, using
innovative solutions.
Creativity seems to be endless: counting 16 years of seminar, with dozens of works registered
in each edition. The ideas are presented to managers, evaluators and colleagues, with extra
care to the crowd, in a true celebration of the culture of innovation.
15th Internal Improvement Case
Seminar of Tucuruí
4
5
About this publication
G4-24; G4-25; G4-26; G4-27; G4-28; G4-32; G4-33
In order to maintain the transparency of its operations,
Eletrobras publishes its new Annual Report, in
accordance with the guidelines of the Global Reporting
Initiative (GRI, version G4), the Global Compact
Principles, the Sustainable Development Goals (SDGs).
This report covers the guidelines, management and
performance of economic, social and environmental
aspects, between January 1 and December 31, 2016,
of Eletrobras and its subsidiaries, except for Celg
Distribuição (Celg-D), which is presented only in sector
indicators, in the Operating Performance chapter.
Eletrobras has chosen to prepare this report by applying
the GRI guidelines, Core option. KPMG Brasil provided
external assurance in accordance with Rule NBC TO 3000
of the Brazilian Federal Accounting Council (CFC), and
the International Standard on Assurance Engagements
(ISAE 3000) of the International Auditing and Assurance
Standards Board. Profile items (strategy, profile and
governance) and sustainability performance indicators
are externally assured.
Stakeholder engagement
Eletrobras maintains a continual dialogue with
stakeholders, defined as persons or groups of people that
somehow impact or are impacted by its activities.
Eletrobras’ Stakeholders
The process for the Eletrobras companies to
identify and select stakeholders is aligned
with the company’s business strategy and with
the Eletrobras Companies’ Code of Ethics and
Conduct. Likewise, all subsidiaries are committed
to sustainable development, favoring the
dialogue with and engagement of stakeholders,
according to the Eletrobras Companies
Stakeholder Engagement and Communication
Policy. In order to maintain the transparency of
its operations, Eletrobras has specific channels
and actions in place for each stakeholder type.
In order to improve even more its stakeholder
communication, in January 2017 the company
introduced its IR Ombudsman, which is an
important Investor Relations tool to strengthen
corporate governance and improve internal
processes. The channel is exclusive for
consultation, suggestions, complaints, and
compliments regarding the capital markets, and
is available on Eletrobras’ IR website.
The company also surveys its stakeholders to
identify the most material aspects relative to
its companies, using mechanisms that include
a climate survey, Ombudsman channels, the
institutional website, a direct survey with
suppliers and investors, in addition to interactive
channels like Twitter and Facebook. The results
are considered for strategic planning, so that the
business conduct meets the expectations
of stakeholders.
In 2016, Eletrobras analyzed the demands
received through these communication
channels, and made an online survey with
stakeholders in order to consolidate the most
relevant themes.
A new resource was added to Eletrobras’
communication with internal stakeholders
in 2016: The “Leadership Minute” (Minuto
de Liderança, in Portuguese), broadcast by
TV Eletrobras, is a series of short videos
for employees where the top management
talks about themes that are strategic for
the company’s future. The series was first
aired on December 1, when the holding
implemented its new organizational
structure. In the first video, CEO Wilson
Ferreira Junior spoke about the
importance of that change for the
company’s sustainability.
Materiality
G4-18; G4-19; G4-20; G4-21; G4-23
For the Annual Report 2016, Eletrobras conducted
a new materiality process to map the key topics of
interest for stakeholders. The work was based on
the following activities:
•
•
•
•
•
•
•
Analysis of the results of the Stakeholders Survey
carried out by all Eletrobras companies;
Analysis of the data provided by relationship
channels: Ombudsman, Social Networks
(Facebook, and Twitter);
Meeting with Suppliers;
Investor Relations;
Media Report Analysis;
Review of the fines received in the reporting
period; and
Workshop organized with sustainability
specialists from all Eletrobras companies.
After completing these stages, the company found
13 relevant topics, which were then validated by
the Board of Directors, and guided the selection
of GRI indicators to be answered in the report. The
topics are presented below:
Themes
Management of
Ethics
Anti-
Corruption
Compliance
Risk and Crisis
Management
Water
Energy Supply
Communities
Within Eletrobras
(subsidiaries)
All the company’s
business
All the company’s
business
All the company’s
business, except
Eletropar
All the company’s
business
All the company’s
business, except
Eletropar
All the company’s
business, except
Eletropar
All the company’s
business
Outside Eletrobras
(stakeholders)
All
All
Investors, communities, society,
suppliers, government and
customers
Employees, investors,
government and suppliers
Communities, society and
government
Related GRI Indicators
G4-56 | G4-57 | G4-58
G4-SO3 | G4-SO4 | G4-SO5 | DMA
G4-SO7 | G4-SO8 | G4-PR9 | G4-EN29 | DMA
G4-14 | EU21 | G4-EC2
G4-EN8 | G4-EN9 | G4-EN10 | DMA
Customers
DMA EU1 | EU2 | EU6 (DMA) | EU10 | EU11 |
EU12 | EU23 (DMA) | EU26 | EU27 | EU28 | EU30
Communities, society and
government
G4-SO1 | G4-SO2 | DMA
Stakeholder
Satisfaction
All the company’s
business
All
G4-PR5 | EU24 | G4-PR3 | G4-EC01 | G4-12 |
G4-EN32 | G4-LA14 | HR 10 | HR 11 | G4-10 |
G4-11 | G4-LA02 | G4-LA03 | G4-LA05 | EU14 |
G4-LA09 | G4-LA10 | G4-LA12 | G4-LA13
Energy
Efficiency
All the company’s
business except
Eletropar
Environmental
Policy
All the company’s
business
Waste
Climate Change
Human Rights
All the company’s
business, except
Eletropar
All the company’s
business, except
Eletropar
All the company’s
business, except
Eletropar
Investors, communities, society,
government and customers
EU7 | G4-EN6 | G4-EN7 | DMA
Investors, communities, society,
suppliers, government and
customers
Investors, communities, society,
suppliers, government and
customers
Investors, communities, society,
suppliers, government and
customers
Employees, investors,
communities, society, suppliers
and government
(Content to be produced specifically for the
indicator)
G4-EN23 | G4-EN25 | DMA
G4-EN15 | G4-EN21 | G4-EC2 | DMA
G4-HR01 | G4-HR12 | DMA
1
2
3
4
5
6
7
8
9
10
11
12
13
All these topics are addressed in this report using GRI indicators and considering additional strategic demands, the Eletrobras
companies also report on other indicators that go beyond the material aspects identified.
Eletrobras | Annual Report 2016 Introduction
6
Highlights
Belo Monte HPP
Generation Circuit
7
New Board of Directors
In July 2016, Eletrobras approved at a Shareholders Meeting the appointment of the members
to its highest governance level. In addition to the chairman, eight directors make up the
Board, whose mission is to collaborate to make the company’s operations increasingly more
integrated, profitable, and sustainable.
Compliance Executive Office
In order to strengthen anti-corruption and anti-fraud processes, in February 2016 the top
management created the Compliance Executive Office, which has its own structure and
autonomy at all subsidiaries.
New Compliance Program
Another compliance measure was that the company has updated the Eletrobras Companies
Code of Ethics and Conduct, and started training its employees in the new Compliance
Program. In 2016, 4,038 professionals have completed the training, reaching 18,000 in
February 2017, corresponding to 74% of employees who work at Eletrobras.
Business and Management Master Plan | PDNG 2017-2021
Focusing on governance and compliance, financial discipline and operating excellence, the new
Eletrobras Business and Management Master Plan aims to ensure corporate sustainability and
boost its competitive advantages in generation, transmission, and trading.
Sale of Celg -D
Eletrobras auctioned Celg Distribuição S.A. on November 30, 2016. Italian company Enel Brasil
S/A acquired the company for R$2,187 billion. The purchase and sale agreement was executed
in February 2017.
Privatization of the Distribution subsidiaries
The privatization of Celg-D was a strategic milestone for the company, which now focuses its
businesses solely on Generation and Transmission, which are considered its great potentials.
The remaining six power distribution subsidiaries should be auctioned by the end of 2017.
Renunciation of Tumarín
Eletrobras has chosen to no longer participate in the development of the 253MW Tumarín
hydropower project in Nicaragua through its Special Purpose Entity Centrales Hidroeléctricas
de Centroamérica. The company has sold its interest in the project to Empresa Nicaraguense
de Electricidad (ENEL) and to Distribuidora de Electricidad del Norte S.A. (DISNORTE).
Filing of the 20-F report
Under penalty of being delisted from the New York Stock Exchange (NYSE), after advancing
in the independent investigation of alleged corruption in some of its companies, Eletrobras
managed to file its 2014 and 2015 20-F form with the U.S. Securities and Exchange
Commission (SEC) and the Brazilian Securities and Exchange Commission (CVM) in
October 2016.
Generation and Transmission Capacity
Eletrobras has reached an installed capacity of 46,856 MW in generation projects,
representing 31% of the 150,338 MW installed in Brazil, considering its corporate investments
and the interest it holds in Special Purpose Entities (SPEs). Transmission lines totaled nearly
70,201 km, equivalent to almost twice the Earth’s circumference.
Belo Monte’s deployment
2016 was also the year when the Belo
Monte 1,988.70 MW plant begun
commercial operations, as well as the
Jirau hydroelectric power plant, wth
installed capacity of 3,750 MW. The plant
represents a new technological frontier in
the Amazon: it uses bulb hydro turbines
that take advantage of the characteristics
of the rivers in the region, which have a
high water flow and low drops.
Record high at Itaipu
Itaipu broke its annual generation record in
2016, with 103,098,366 MWh1 and is once
again the plant with the highest annual
production in the world. Such production
would be enough to supply the whole
of Brazil for two months and 18 days, or
Paraguay for seven years and
three months.
Business alignment with the SDGs
Reaffirming its commitment to
sustainable development, in 2016,
Eletrobras started to align its businesses
to the Sustainable Development Goals -
a global agenda adopted during the
United Nations Sustainable Development
Summit held in September 2015, and that
contains 17 objectives and 169 goals to be
met by 2030.
1 Eletrobras owns 50% of Itaipu Binacional capital.
The reported value represents 100% of the energy
produced.
Eletrobras | Annual Report 2016 Introduction
9
n
o
i
t
c
u
d
o
r
t
n
I
Eletrobras | Annual Report 2016
employees on this commitment, defending this motto in
every new project initiated, in each investment analyzed,
at each business meeting.
We believe that Eletrobras represents a significant asset
for Brazil and we are aware that only by making the
changes we have planned throughout this important
year of 2016 and by valuing our values - focus on
results; ethics and transparency; people appreciation
and commitment, entrepreneurship and innovation;
and sustainability - we may continue as one of the main
drivers of sustainable development in our country. We
thank each one of our stakeholders for their key role in
this history. Finally, we thank the support received from
the federal government and especially from the Minister
of Mines and Energy, Fernando Bezerra Coelho Filho,
who is tireless in defending the greater interests of the
Brazilian electric sector.
We remain counting on each one of you, employees,
partners, shareholders, investors and the whole
Brazilian society, to make this company, already the
Latin American largest holding company in the electric
sector, also the best.
José Luiz Alquéres
Eletrobras Board of Directors President
Wilson Ferreira Junior
Eletrobras CEO
sustainable performance is naturally embedded in the
core business of the company. In 2016, projects such
as the ones Eletrobras has been conducting with Norte
Energia, responsible for the Belo Monte dam, and the
Kabu Institute to strengthen income generation and
protection of lands of the Kayapó Indians in the state
of Pará, were continued. The company also provided
support for the activities carried out within the Eletrobras
Volunteer Program, which implements company’s
employees initiatives in partnership with institutions
that serve socially vulnerable groups, such as women and
children in need.
We are signatories to the Global Compact commitments
and we hold an important role in achieving the UN
Sustainable Development Goals for 2030, which we
have been aligned since its launch. In recognition to
the commitment undertaken towards the sustainable
development of contemporary society and ethical
responsibility demands, Eletrobras was included for the
tenth consecutive year in the portfolio of Bovespa‘s (the
São Paulo Stock Exchange) Corporate Sustainability Index
(ISE).
Gradually, we are taking firm steps to leave the period of
difficulties behind. Our purposes have been recognized by
the market, which has already shown signs of confidence
in our transformation capacity, as evidenced by the 240%
appreciation of our shares in 2016, the second highest
increase on the Bovespa in the year. And the annual result
of 2016, after four years of consecutive losses, registered
a profit of R$ 3,426 billion.
Undoubtedly, this is a moment that will go down in the
company’s history. We learned a lesson and we must take
it for our future: to be sustainable it needs to be efficient.
Efficient and disciplined. The 2016 events served to prove
that a company that aims not only to be great, but to be
recognized for its excellence, needs to engage each of its
José Luiz Alquéres
Eletrobras Board of Directors President
8
Wilson Ferreira Junior, Eletrobras CEO
Message from the
management
G4-1
In 2016, we witnessed one of the biggest turning points
in the history of Eletrobras. On the eve of celebrating
55 years (in June 2017), the company faced one of
the most challenging periods in its trajectory. Debts
reached unsustainable levels. The company’s shares
were suspended from the NYSE, and were at risk of being
unlisted. The crisis demanded an intense reflection on
management choices, as well as a necessary consistent
revolution in our organizational culture.
Having nearly completely renewed the company’s
top management members - president, president of
the Board and most of the directors, chosen among
experienced professionals with a long history of services
rendered to the country and to the electric sector -
from July 2016, we were able to tackle the challenges
of operational improvement, financial discipline and
corporate governance. With regard to this last point, we
have not only followed up and deepened the investigation
on previous administrative acts but also created a
Compliance Board to implement the most rigorous
controls at Eletrobras and a the companies in which it
participates.
Through intense mobilization with employees and
senior management, we were able to file the 20-F Forms
for 2014 and 2015 with the Securities and Exchange
Commission of the United States. As a result, the
shares could be traded again on the New York Stock
Exchange on October 13, 2016. The successful operation
represented a milestone and served to show us that the
difficult moment could be overcome, as long as a course
correction was initiated.
Moving on this new path, we have strengthened
the reforms with the launch of the Business and
Management Master Plan 2017-2021, entitled
“Challenge 21 - Sustainable Excellence”, an
offshoot of the strategic planning 2015-2030,
which carries in its name our concern with
sustainability, inherent to a structuring business
such as that of Eletrobras. The “Challenge 21” is
based on the three aforementioned pillars that
we have identified as the company’s great needs
- operational excellence, corporate governance
and financial discipline - and encompasses 18
measures that will help put the company on
the path to a more efficient and sustainable
management.
We must not forget to mention the achievements
not only of Eletrobras, but of the entire country:
the start-up of the Belo Monte dam, on the Xingu
river and the completion of the Jirau dam on
the Madeira river. These dams, including Santo
Antônio, represent a new innovation milestone
for the sector, very different from past projects.
Belo Monte, Jirau and Santo Antônio are the
result of long projects, which have gone through
many adaptations over time to comply with
environmental and social requirements. The
three projects use bulb-type turbines, allowing
maximum utilization of the characteristics
specific to the rivers of the region, with great
flow and low falls. In addition, for each dam, a
specific sustainability project was developed that
takes into account the particularities of each
affected area and the needs of the surrounding
communities.
It should be noted that the concern for
sustainability has never been overlooked in the
projects the company is involved with, even when
complex challenges were faced by Eletrobras
companies in recent years, demonstrating that
10
Itaipu Binacional Spillway
11
Industry
overview
2016 was another year
of political and economic
instability, which reflected
throughout the whole Brazilian
economy. The country’s GDP
dropped 3.6%, investments
plummeted 10.2%, and
household consumption fell
4.2% due to more expensive
credit and a decrease in income.
Adding to that, Brazilians
witnessed Operation Car
Wash shake companies and
the national political scenario,
as the corruption and money
laundering investigation, started
in 2014, got more intense.
Political instability reached
top point with president Dilma
Rousseff’s impeachment,
causing an impact in the
economy—construction works
were suspended, investments
were cut, and layoffs affected
several industries.
The electric power sector was
also affected by this crisis.
According to the Brazilian
Energy Research Agency (EPE),
the total consumption of electric
power reached 460,001 GWh in
2016 in Brazil, down 0.9% year-
over-year. The sharpest drop
was recorded in the industrial
sector—2.9% as expected due
to the economic slowdown.
Commerce and services also
recorded a decrease of 2.5%,
and the residential sector
recorded a slight increase
of 1.4%.
Against this backdrop,
hydropower plant Itaipu broke
its annual generation record in
2016, with 103,098,366 MWh2
and is once again the plant with
the highest annual production
in the world. Angra dos Reis’s
nuclear plants Angra I and Angra
II also reported record high
generation figures for 2016, and
generated nearly 15.9 TWh.
This whole scenario of political
and economic uncertainty
resulted in a few new measures
that aim at supporting the
rebound of businesses in
the electric power sector.
Normative Resolution 699/2016,
for example, regulates acts
executed among related parties,
and allows for the sharing of
infrastructure and human
resources. Such regulation is an
important step for Eletrobras,
which in its strategic planning
intends to create a Shared
Services Center (CSC) to
cut costs.
An important achievement
this year was the recognition
in Eletrobras’ balance sheet of
compensation relative to the
Existing System’s Basic Network
(RBSE), whose transmission
assets generated net income
of R$ 18,876.3 million in 2016.
Now, Eletrobras is focusing
on receiving a more adequate
remuneration for the operation
and maintenance of generation
and transmission assets—
whose concessions have
been renewed—especially in
terms of recognition for the
improvements made in the
system to ensure firm and
continuous electric power.
Another important development
in 2016 is Decree 8,828/2016,
which changed the electric
power trading model in Brazil.
These changes have an impact
on electric power purchase
and sale strategies in the
distribution, generation and
trading segments, and influence
the dynamics of free and
regulated markets.
Moreover, electric power
distributors and generators now
have greater autonomy to set
the terms of their agreements,
under Aneel Normative
Resolution 711/2016,
which regulates the
improvement of mechanisms
in bilateral agreements.
Regarding the management
of sector resources, Act #
13,360/2016 determined that
the Electric Power Trading
Chamber (CCEE) be responsible
for managing and operating
sector funds from the Energy
Development Account (CDE,
or Conta de Desenvolvimento
Energético, in Portuguese), the
Fuel Consumption Account
(CCC, Conta de Consumo
de Combustíveis), and the
Global Reversion Reserve
(RRR, Reserva Global de
Reversão), beginning in 2017.
Prior to that, Eletrobras was
responsible for it. Therefore,
the company started
concentrating its efforts on
the electric power generation,
trading and transmission
businesses, in line with its
strategic planning.
Ultimately, Act # 13,334/2016
established the Investment
Partnership Program (PPI, in
Portuguese) with the goal of
expanding and strengthening
the interaction between
government and private
initiative in the execution
of public infrastructure
projects and in other
privatization measures.
2 Eletrobras owns 50% of Itaipu Binacional
capital. The reported value represents 100%
of the energy produced.
Eletrobras | Annual Report 2016 Introduction Chapter 2
Corporate
profile
The challenge is: leadership
The Chinese Three Gorges plant started operating at full load in 2012, with 22,000 MW of
installed capacity - 60% more than the 14,000 MW of the Itaipu plant. Has much difference
made it impossible for Itaipu to maintain the world’s leading annual power generation? The
answer is no, after all, we are talking about the largest generator of clean and renewable
energy on the planet.
Although with much higher installed capacity equipment, Three Gorges only managed to
produce more than Itaipu in 2014, when Brazil faced a major drought and water generation
was impaired.
2016 was an unprecedented year for Itaipu, which reached 32 years and seven months of
operation, at production peak, with many records, retaking the world’s leading annual power
generation, with over 4 million MWh of advantage over the Chinese hydropower.
Itaipu Spillway, the largest
clean energy generator
Eletrobras | Annual Report 2016
15
e
l
fi
o
r
p
e
t
a
r
o
p
r
o
C
14
About Eletrobras
G4-3; G4-4; G4-7; G4-8; G4-9; G4-13
Ownership Chart
Founded in 1962, Centrais Elétricas Brasileiras S/A –
Eletrobras controls 13 subsidiaries in electric power
generation, transmission, and distribution, a research
center (Eletrobras Cepel), a holding company (Eletrobras
Eletropar), and half of the capital stock of Itaipu
Binacional. The company also holds an indirect interest
in 179 Special Purpose Entities (SPEs), and minority
interests in 26 companies.
Eletrobras companies:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Eletrobras Itaipu
Eletrobras Furnas
Eletrobras Chesf
Eletrobras Eletronorte
Eletrobras Eletronuclear
Eletrobras Amazonas GT
Eletrobras Eletrosul
Eletrobras Companhia de Geração Térmica de
Energia Elétrica - CGTEE
Eletrobras Cepel
Eletrobras Eletropar
Eletrobras Distribuição Acre
Eletrobras Distribuição Amazonas
Eletrobras Distribuição Piauí
Eletrobras Distribuição Alagoas
Eletrobras Distribuição Rondônia
Eletrobras Distribuição Roraima
16
17
Eletrobras figures
International operations
G4-6
In 2016, Eletrobras redesigned its international operations,
seeking to increase its participation in international
generation, transmission, and trading businesses, by
prioritizing projects in regional integration and renewable
energy generation in Latin America. With that in mind,
the company has been building on studies on hydropower
development in the regions bordering Bolivia and
Argentina, and on interregional transmission systems
integration with Guiana, French Guiana, and Suriname.
In 2016, we had nine projects in our International Projects
Portfolio, being one in operation and eight under analysis.
Assets totaled 4,721 MW in generation and 900 km in
transmission lines.
Eletrobras maintained the partnership with Uruguayan
state-run company Administración Nacional de Usinas
y Trasmisiones Eléctricas (UTE)—resulting in the
development of the Artilleros Wind Farm (65 MW), located
in the Colônia department (Uruguay)— and Argentine
state-run company EBISA (Emprendimientos Energéticos
Binacionales Sociedad Anónima), for the studies on
hydropower development in the Uruguay River, on the
Brazil-Argentina frontier.
Negotiations with Bolivian ENDE (Empresa
Nacional de Electricidad) have also evolved
for the exploration of the power generation
potential on the Brazil-Bolivia frontier. In
November 2016, a technical cooperation
agreement was executed by Eletrobras, ENDE,
and CAF (Banco de Desarrollo de América
Latina) to begin the studies for the development
of a binational hydroelectric power plant
on the Madeira River. Viability studies have
also advanced for the Arco Norte Project—a
transmission system of nearly 1,900 km that
will ensure the transfer of the electric power
generated by new generation projects among
Brazil (Roraima and Amapá), Guiana, Suriname,
and French Guiana.
Eletrobras also operates medium- to large-sized
international interconnections with Argentina,
Paraguay, Uruguay, and Venezuela.
Through SPE Centrales Hidroeléctricas de
Centroamérica, Eletrobras has chosen to
no longer participate in development of the
Tumarín hydropower project (253MW) in
Nicaragua, and sold the shares of its wholly-
owned subsidiary Centrales Hidroeléctricas de
Nicaragua (CHN) to Nicaraguense de Eletricidad
(ENEL) and Distribuidora de Electricidad del
Norte S.A (DISNORTE).
Eletrobras auctioned Celg Distribuição S.A. (Celg-D) on November 30, 2016. Eletrobras held a
50.93% interest in the company, and the State of Goiás, the remaining 49.07%. Italian company Enel
Brasil S/A was the winner, with a bid of R$ 2.187 billion (R$ 1.065 billion corresponding to Eletrobras’
interest, and the remainder, to the government of the State of Goiás).
In 2015, Eletrobras had included Celg Distribuição S.A (Celg-D) in the National Privatization Program
(PND), and the Ministry of Mines and Energy was responsible for executing and supervising the
process, with the technical support of the Brazilian Development Bank (BNDES). The privatization
of Celg-D also marked the Federal Government’s Investment Partnership Program’s (PPI) debut; this
program provides for the sale or concession of projects in the electric power, airports, highways,
ports, railways and mining sectors, with the purpose of attracting investors to these fields.
The execution of the purchase and sale agreement completed the concession company’s
privatization in February 2017, during the preparation of this report, and is a strategic milestone
for the company, which now focuses its businesses solely on generation, transmission and trading
which are considered its great potentials.
By the end of 2017, Eletrobras intends to sell its other six distribution companies, and the proceeds
from these transactions will be used to pay short-term debts and support the company’s investment
plan, which provides for R$ 35.8 billion in investments between 2017 and 2021. Read more about this
topic on the Strategy section, on page 32.
*Scenario until May/ 2017
Eletrobras | Annual Report 2016 Corporate profile 18
19
Ownership structure
G4-9
A publicly held government-controlled company,
Eletrobras is controlled by the Brazilian government and
its stock is listed on the São Paulo Stock and Futures
Exchange, New York Stock Exchange (United States),
and Madrid Stock Exchange (Spain). The company is also
listed on BM&FBovespa’s Corporate Sustainability Index
(ISE Bovespa), which gathers the companies with the best
business sustainability practices.
Profile of Eletrobras shares
Information on distribution by
shareholder and by region can
be obtained on page 111 of the
Financial Statements, available on
the Eletrobras website, in the Investor
Relations section.
Awards and recognition
Eletrosul
Eletrobras
Listed, for the tenth consecutive year, on the Sao Paulo
Stock and Futures Exchange Corporate Sustainability
Index (ISE), which reviews the companies’ sustainability
policies and practices and selects the most committed to
be part of the portfolio.
Eletrobras’ common shares ranked second in a ranking
made by consulting firm Economatica that listed the
16 stocks that rose over 100% in 2016. Eletrobras’
common shares rose 288% in the period, and its
preferred shares ranked ninth in the same ranking,
with a 141% rise.
Winner of the MarCo award in the energy sector,
awarded by Época Negócios magazine to the most
prestigious companies in Brazil, evaluated for attributes
such as quality, purpose, and media recognition.
Global Recognition “Good Practices for
Employees with Disability”, at the United
Nations’ headquarters, for its Program of
Attention to People with Disability, in the
protagonist and accessibility categories.
“Onda Verde” trophy, in the “Environmental
Management” category, for the project to
make the headquarters building, located in
Florianópolis, more efficient.
Itaipu Binacional
Two first places in the 2016 ranking of
“Sustainability Legitimacy” promoted by
the Benchmarking Brazil Program, for its
case “Biodiversity: Our Heritage” and the new
“Indicators” category, for the certifications
and parameters that attest to the quality of the
company’s social-environmental management.
22nd place in the ranking of the 1,000 largest
companies in Brazil in the “Best of Dinheiro
2016” publication.
Furnas
For the fourth consecutive year, it is the largest company
in the Brazilian electric power sector in terms of net
revenue in the “Valor 1000” yearbook, published by Valor
Econômico in a partnership with Serasa Experian and
the Getúlio Vargas Foundation. In the overall ranking of
the 1,000 largest companies in terms of net revenue,
Eletrobras ranked 16th.
Recognized in innovation for the “Advanced
Metering Infrastructure” (AMI) project, carried out
in a partnership with Consórcio Energia + Smart, in
the Metering Excellence Awards category of the Latin
American Utility Week Awards 2016.
Certified in recognition for its contribution, throughout
the years, to disseminating the culture of quality
in Brazil, by the Brazilian Quality Committee of the
Brazilian Technical Standards Association (ABNT).
Eletronorte
First “Summa cum laude” award of the National
Quality Foundation, granted to the organizations
that have maintained an excellence level for three
consecutive years.
Eletronuclear
Certified by the Brazilian Authorized Economic
Operator Program (OEA) of the Brazilian Federal
Revenue Office, in recognition for its foreign trade
operations; it is the first state-run company to be part of
the group of 85 certified operators.
Fourth place among the 17 finalists in the
“Sustainability Legitimacy” ranking, with the
case “Furnas Educa”.
Winner of the 6th Environmental Agenda in
Public Administration Award, in the “Innovation
in Public Management,” with the project for the
development and testing of electric buses in a
partnership with Coppe/UFRJ; and 2nd place
in the “Waste Management” category, with
the project for the application of stationary
ion-lithium batteries in its information and
communication systems.
Distribuição Alagoas
Recognized as the company that evolved the
most in customer satisfaction in Latin America,
in an award granted by the Energy Integration
Regional Committee (Cier).
Distribuição Rondônia
Winner in the northern region of the 2016
ANEEL Customer Satisfaction Rate (IASC) award.
Distribuição Amazonas
Eletrobras Distribuição Amazonas ranked
fourth in Aneel’s service quality ranking, up 11
positions.
Eletrobras | Annual Report 2016 Corporate profile 20
Chairman and Board of Directors of the holding
represented in meeting with employees
21
Structure
Eletrobras’ corporate governance model includes the Shareholder’s Annual Meeting, the Board of Directors, the
Supervisory Board and the Executive Board. their roles and responsibilities are determined in the company’s
Bylaws and the internal statutes of each body, under the current legislation. The Audit Committee and the Board of
Directors’ Supporting Committees respond to the Board of Directors. The supporting committees include Audit and
Risks, and Compensation and People Management.
Management Organizational Chart
Corporate governance
G4-34; G4-35; G4-38; G4-39; G4-40; G4-42; G4-43; G4-44
Principles
Eletrobras complies with the best corporate governance practices in order to strengthen its credibility for
shareholders and investors, showing the reliability of internal controls, management transparency, the importance of
compliance, and attention to stakeholder interests.
The company’s governance model relies on five principles—Ethics, Transparency, Equality, Accountability, and
Corporate Responsibility—to maintain solid bases for the sustainability of its companies, and to continually improve
its relationship with stakeholders.
In addition to these principles, Eletrobras has a structure in place with management bodies, policies and tools to
promote governance, in addition to corporate governance agents trained every year.
Below are the key cornerstones of this structure for the promotion of governance and a culture of ethics.
Policies and other management tools
Eletrobras’ key policies and governance tools:
Bylaws
Boards’ Internal Statutes
Guide for the Board of Directors
Eletrobras Companies’ Antitrust Policy, and Eletrobras Antitrust Guidelines
Code of Ethics and Conduct of the Eletrobras Companies
•
•
•
•
•
• Manual for the Disclosure and Use of Material Information, and Policy on Trading in Eletrobras Securities
•
•
• Manual of the Eletrobras Companies’ Anti-corruption Program
• Manual for Participating in Eletrobras’ Shareholders Meetings
•
Guide for the Board of Directors Representing the Eletrobras Companies
Guide for the Supervisory Board Member Representing the Eletrobras Companies
Eletrobras companies’ specific policies for the management of their businesses
More details on these policies are available on the company’s website in the Corporate Governance section.
Eletrobras | Annual Report 2016 Corporate profile 22
23
Shareholders Meetings: this is the decision-making body of shareholders with right to vote; the Annual
Shareholders Meeting (AGO, in Portuguese) is held every year up to April, and the Extraordinary Shareholders
Meetings (AGEs) are held whenever the Board of Directors deems convenient or in circumstances provided for by
the law. In 2016, the company held one AGO and two AGEs.
Board of Directors: this is Eletrobras’ main governance body, in charge of the company’s strategic direction,
mission, vision and values, with active participation in the elaboration of the strategic planning and in the Business
and Management Master Plan (PDNG) of the company. The Board protects and values the company, optimizing the
long-term return on investment, and seeks to balance the expectations of all stakeholders. The Board is formed
by up to 10 directors elected at the Annual Meeting, seven of whom are appointed by the majority shareholder;
one, by minority shareholders holding common shares; one, by minority shareholders holding preferred shares;
and one representing the employees (Under Act #12,353/2010). They serve a term of office of one year and can be
reelected. One of these directors must be independent, as required by BM&FBOVESPA and the Brazilian Corporate
Governance Institute (IBGC).
The members of the Board hold ordinary meetings every month, and convene extraordinary meetings whenever
necessary. They can require that Executive Officers attend the meetings. In 2016, the board held 20 meetings.
Eletrobras’ Board of Directors in 2016
Director
José Luiz Alquéres
Carlos Eduardo Rodrigues Pereira
Mozart de Siqueira Campos Araújo
Wilson Ferreira Junior
José Pais Rangel
Ana Paula Vitali Janes Vescovi
Elena Landau
Esteves Pedro Colnago Júnior
Vicente Falconi Campos
Position*
president
director representing the employees
independent director
director and Chief Executive Officer (executive)
director representing the minority shareholders
holding common shares
director
director
director
director
* The chair appointed by the minority shareholder holding common shares was not filled due to noncompliance with the requirements in the Bylaws
(art. 17, item IV).
The Internal Audit Committee and the Board of Directors’ Supporting Committees respond to the Board of
Directors. The supporting committees include Sustainability, Audit and Risks, and Compensation and People
Management, and are formed by directors responsible for deepening the company’s strategic studies in economic,
environmental and social aspects. Learn more about the roles and the composition of the committees in their
internal statutes and the Internal Audit Rules, available on Eletrobras’ website.
Executive Board: responsible for the general management of Eletrobras, based on the guidelines set by the Board
of Directors, it is made up by six officers and one CEO, elected by the Board of Directors, with a term of office of
up to three years, reelection being allowed. The Executive Board meets on a weekly basis, and in 2016 it held 63
meetings. The board also has committees and workgroups created on-demand to discuss the technical aspects of
management matters.
Eletrobras’ Executive Board in 2016
Executive Officer
Wilson Ferreira Junior
Carlos Eduardo Gonzalez Baldi
José Antonio Muniz Lopes
Luiz Henrique Hamann
Armando Casado de Araujo
Lucia Casasanta
Alexandre Aniz
Position
CEO
Chief Generation officer
Chief Transmission officer
Chief Distribution officer
Chief Financial and Investor Relations officer
Chief Compliance officer
Chief Legal and Corporate Management officer
Supervisory Board: Supervisory Board: it is chiefly responsible for substituting and representing the shareholders’
supervisory function, overseeing the management to ensure compliance with their statutory and bylaw duties.
It is formed by five members and their relative deputies, serving a term of one year in office. Members may run
for reelection. One of the members must be a financial expert, according to the requirements of the Securities
and Exchange Commission (SEC). Three members are appointed by the majority shareholder, one by the minority
shareholders holding common shares, and one by the minority shareholders holding preferred shares. This board
holds ordinary meetings every month, and convenes extraordinary meetings whenever necessary. In 2016, the
board held 14 meetings.
Eletrobras’ Supervisory Board in 2016
Member
Eduardo Cesar Pasa
Luis Felipe Vital Nunes Pereira
Agnes Maria de Aragão da Costa
Aloisio Macario Ferreira de Souza
Ronaldo Dias
Position
president
sitting member - financial expert
sitting member
sitting member
sitting member
In 2016, Eletrobras’ corporate governance was improved, especially the reviewing process for appointees of
the Board of Directors, the Executive Board, and the Supervisory Board. In addition to considering the current
law, bylaws and other corporate rules, Act # 13,303 and Decree 8,945 added new criteria for reviewing these
appointees’ qualification.
The Board of Directors of Eletrobras has recommended that for all appointments of directors and executive officers
a prior analysis must be conducted by the integrity department on the compliance status of the appointees, and
that the Eletrobras companies’ Ombudsman must be consulted. The analysis of the appointees now includes a
database search on sanctions applied by the Public Ethics Commission and on the websites of regulators (control
agencies and courts of accounts), to check for violations of integrity.
In order to guarantee that directors and executive officers exercise their activities in line with
the company’s strategy and the guidelines of the Board of Directors, every year the governance
members undergo a self-evaluation and an evaluation by their relative peers. This methodology has
been standardized in all Eletrobras companies. Results are scored and consolidated in a report, and
presented to the respondents at a feedback meeting.
Eletrobras also identifies, on a yearly basis, the training needs of its corporate governance agents
and implements actions focusing on these needs.
In 2017, a change is planned in the bylaws to create the Eligibility Committee, which will help shareholders appoint
executives and members of the supervisory board regarding prerequisites and the lack of restrictions for such
appointments. It will also ensure compliance of the evaluation process of these directors and executive officers.
While the implementation of the Eligibility Committee is not completed, the Transitional Internal Eligibility
Commission (CITE) will temporarily play this role. It is composed of directors, and one of them is independent.
Eletrobras | Annual Report 2016 Corporate profile 24
25
Ethics and integrity
Eletrobras promotes the creation of an ethical
organizational culture of management to guide its
operations based on institutional and normative
instruments that establish the principles, guidelines
and standards that formalize actions and commitments
by companies and their employees, as well as how they
liaise with vendors, business partners, customers and
other stakeholders.
State-Owned Companies Acts
In December 2016, the Federal Government
regulated Act number 13,303, named State-
Owned Companies Act (Lei das Estatais), which
provides for the legal status of public-owned
companies, mixed-capital companies and their
subsidiaries, under the scope of the federal, state,
federal district, and city governments. This Act
establishes the governance and management
guidelines, and has brought significant changes
to the selection process of directors and vendors
for state-owned companies. However, even before
the regulation came into force, the company had
already started adjusting to the new requirements
set forth. In addition, Eletrobras has been working
on a contract regulation aimed at improving the
efficiency of its processes.
Compliance
G4-37; G4-49; G4-50; G4-57; G4-58; G4-SO3; G4-SO4;
G4-SO5
In addition to being a guide for all stakeholders to
work in accordance with the values and practices of an
ethical conduct, the instruments used by Eletrobras also
identify, mend, handle and, in case of breach, penalize
any acts that might be contrary to ethics and integrity.
In this sense, all areas in the company undergo internal
audits that check whether processes, internal procedures
and contracts are adequate and comply with the rules.
As a way of strengthening its commitment against
corruption and fraud, improve its control mechanisms,
intensify risk mitigation practices to ensure that the
Eletrobras companies are healthy and sustainable,
and gain shareholders’ confidence, the company has
been working to step up its controls and investigation,
compliance, and integrity processes for the past two
years. As a result, three major actions have been put in
place to mitigate new risks and correct nonconformities,
namely:
Internal investigation and audit
Considering that some of the Eletrobras
companies have been named in Operation
Car Wash (Lava Jato) (an investigation led by
the Brazilian Federal Police and the Federal
Prosecutor’s Office), and the risk of a violation
to the Integrity Program, the company launched
an independent investigation in 2015, with the
help of U.S. law firm Hogan Lovells to assess the
existence of irregularities.
The investigation was organized around the
principles of the Securities and Exchange
Commission (SEC) and Department of Justice
(DOJ), in light of the fact that Eletrobras has been
listed on the New York Stock Exchange through
American Depositary Receipts (ADRs) since
2008, which require the company to comply with
U.S. laws that govern the securities industry,
specifically the regulations set forth by the U.S.
Securities and Exchange Act.
Another law that the company must abide by is
the Foreign Corrupt Practices Act (FCPA), which
prohibits acts of corruption in connection with
payment to foreign government officials and the
trading of commercial or economic benefits with
foreign political parties or candidates. In this
context, the independent internal investigation
undertaken by Eletrobras took into consideration
the Brazilian legislation, the Code of Ethics and
Conduct of Eletrobras Companies, and also
the FCPA.
Between 2015 and 2016, under the scope of
Operation Car Wash, operations Radioactivity
and Pripyat resulted in arrest warrants for five
former executives of Eletronuclear and other
parties. It is worth mentioning that since the
investigations started, Eletrobras has been
cooperating with authorities and sharing
information gathered by the independent
investigation, in addition to assisting the
prosecutors in the criminal proceedings.
Therefore, with the goal of facilitating and
guaranteeing the ongoing progress of the
investigations, the company management
has been adopting the governance measures
required and/or recommended by Hogan
Lovells, by the Independent Commission and the
independent auditors.
Since the start of investigations has been
strengthening its compliance structure. An
executive Compliance Office was also put in
place and is responsible for the coordination of
the Compliance Program and risk management
at all the Eletrobras companies (more
information in the box to your right - second
significant action).
Executive Compliance Office
In February 2016, Eletrobras senior management
created the executive Compliance Office, which
has oversight over the Risks, Internal Controls,
and Integrity departments, and also replaced
the Compliance & Risk Management Committee
created in December 2015.
The new department is part of the Eletrobras
Executive Board, has its own structure and
multidisciplinary team. It has been working
closely with the holding company and its
subsidiaries. The office is currently chaired by a
renowned market professional recruited for a
high management position, through a selection
process led by a head hunter, for a three-year
term and the possibility for renewal.
The new executive board abides by the best
market practices and trends, is responsible for
the Eletrobras Integrity Program and among
its duties, monitors compliance and adherence
of corporate processes to the Brazilian Anti-
Corruption Act of 2013 (Act #12,846), and the
Foreign Corrupt Practices Act (FCPA), applicable
to companies listed on the NYSE.
With respect to employees and directors
identified by the investigation, Eletrobras
took non-judicial punitive measures including
suspension and termination of employment
contracts. Options for imposing civil liability on
such employees are under consideration, and
the company has started talks with the Federal
Attorney General’s Office to charge them with
impropriety.
In October 2016, the independent investigation
completed the stage of identifying unlawful acts
that could cause potential distortions to the
company’s consolidated financial statements. It
found fraudulent overpricing of bids arising from
the practice of collusion and kickbacks paid,
since 2008, by some contractors and contracted
suppliers.
The company has not identified any contracts
that may have been affected by the overpricing
scheme after December 31, 2015. Therefore,
Eletrobras recorded a loss of R$ 211,123, which
represents the estimated amounts of improper
payments in prior periods, of which R$ 143,957
had already been recorded as an impairment. A
loss in the amount of R$ 91,464 has also been
recorded from investments in Norte Energia S.A.,
an SPE (“special-purpose entity”) not controlled
by Eletrobras.
Individual and consolidated balance sheet adjustments are summarized below:
Investigation Findings
Angra 3
Mauá 3
Simplício
Balance
Fixed assets
Costs
Provision for impairment
Equity investments
Income Statement
Investigation findings
Reversal of provision for impairment (operating provisions)
Equity investments result
*Note: the values in the table are in R$ thousand.
12/31/2016
-141,313
-67,166
-2,644
-211,123
12/31/2016
-211,123
143,957
-91,464
-158,630
12/31/2016
-211,123
143,957
-91,464
-158,630
Eletrobras completed the stage of the independent investigation, and recorded the accounting impacts caused by
the unlawful acts, however, additional procedures are still ongoing mainly to comply with the requirements
of U.S. regulators.
Eletrobras | Annual Report 2016 Corporate profile 26
Integrity Program
The third action devised by Eletrobras to tackle issues related to fraud, corruption and unethical conduct is an
organization-wide Integrity Program held that counts on the permanent engagement of the holding company’s
Executive Board and its Board of Directors.
For that matter, in 2015 the company set up under the coordination of the holding company a Compliance
Committee (CDC) that holds weekly meetings and is made up of Eletrobras compliance managers.
The main contributions of CDC are in terms of proposing and developing practices that strengthen integrity
practices in companies - by providing the continuous improvement and dissemination of the Eletrobras
Compliance Program -, as well as encouraging compliance with anti-corruption laws, providing training sessions
and analyzing company guidelines regarding this topic.
The success of this initiative gave Eletrobras the chance to participate in the best practices in integrity
management award organized by the Brazilian Government Accountability Office (CGU).
In addition, in order to supplement the company’s Integrity Program, the Compliance Department created in 2016
the program ‘Eletrobras 5 Dimensões’ (5 Dimensions), implemented in all subsidiaries to boost integrity into
processes, routines and conducts.
5 dimension program
The program is comprised of the following phases listed below:
1. Development of the management environment of the integrity program: creation of a management
environment focused on corporate integrity, in which the initiatives are sponsored by top management and culture
is disseminated through the Boards of Directors of the controlled companies.
2. Regular risk assessments: risk analysis and management focused on identifying and protecting areas in which
risk of corruption is more likely.
27
3. Designing and implementing the integrity program policies and procedures: revision of feedback channels
with the rollout of a complaints management program (ongoing) aimed at improving complaints handling and
management; regular updates of the Code of Ethics and Conduct of Eletrobras companies (for compliance
with Act# 13,303/16); and the enforcement of policies and procedures that guide interpersonal and business
relationships.
Through the Ombudsman office and the reporting channel (Canal Denúncia), internal and external
stakeholders can speak up and report anonymously any suspected or observed violations of the
Integrity Program and/or anti-corruption laws; confidentiality will be maintained and retaliation will
not be tolerated. Depending on the nature of the complaint, it may be directed to senior management.
In 2016 the Ombudsman offices of the Eletrobras companies received 25,488 reports, 97% of which
were resolved and 3% were being processed as of December 31, 2016. These figures are net of
distributor Celg-D reports due to its ongoing privatization process (please refer to Corporate profile
for more details). From 2015 to 2016, the total number of reports received by Eletrobras companies
increased 41%. Total complaints increased by 18%.
As for fraud, corruption and other irregularities, Eletrobras companies received 88 complaints in
2016, 49 of which were closed and reporters informed, and 16 of those were considered partially or
fully valid after investigation. The Ombudsman area is attached to +9the company’s chairmanship
and periodically and, in specific cases, reports to the Board of Directors and Supervisory Board (Audit
Committee).
Eletrobras is set to start using this year a third-party service to receive and triage complaints.
4. Communication and Training: dissemination of Eletrobras 5 Dimensions program via communication actions
and training sessions tailored to every audience, in all companies, reaching 100% of the employees and the Boards
of Directors of the main subsidiaries. Among the initiatives, we highlight news broadcast via intranet, lectures
from the Compliance Board and the “Leadership Minute” -Minuto de Liderança, in Portuguese -, (featuring
short movies with the CEO and the Compliance Board about the program). The company has also consolidated,
as a communication and training initiative, the annual Ethical Culture Week, which, in its third edition (in 2016),
published an updated version of the Code of Ethics and Conduct of Eletrobras Companies, which is available online
(both on the company’s private and public portals), and introduced its Online Integrity and Ethics Course for all
employees, a joint effort with Unise (Universidade das Empresas Eletrobras), held between December 2016 and
February 2017.
The Eletrobras companies participate in the National Forum on Ethics Management in State-Run
Companies, which carries out studies on ethics-related topics and promotes certifications and
seals in this segment; maintain study groups and holds an annual seminar open to all employees of
the participating companies, renowned professors, government authorities and stakeholders. The
seminar regularly debates and discusses issues such as conflict of interest, anti-corruption practices
and others, and its purpose is to promote the exchange of information and strengthen ethical
management practices at state-run companies.
5. Program monitoring, remediation measures and enforcement of penalties: continuous monitoring of the
Integrity Program by internal audit committee, controls implemented at ProERP (SAP) and Sarbanes-Oxley (SOX)
control testing.
Eletrobras | Annual Report 2016 Corporate profile 28
29
Management compensation
G4-51; G4-52; G4-53
The monthly remuneration
of the Executive Board is
determined by the department
of coordination and governance
of state-run companies
(SEST), as per federal decree #
8,578/2015.
As per Act # 9,292/1996, the
monthly compensation of
the members of the board of
directors and finance committee
of federal state-run and mixed-
investment companies must
not exceed 10% of the average
monthly remuneration of the
directors of the respective
companies. Members of the
Board of Directors are not paid
any additional remuneration
as consideration for their
board committees and/or
advisory commissions’ duties.
Conversely, members of the
Executive Board receive a
fixed remuneration and annual
variable remuneration (AVR) as
a percentage of the company’s
profits; in 2016, they were not
paid variable remuneration due
to the company’s results.
For 2017, the proposed AVR
includes financial, operational,
social and environmental
indicators, among which the
ISE-BOVESPA climate change
score, in order to engage the
company managers with the
strategic guidelines of the Board
of Directors and with public
policies. The AVR also includes
the outcome of the performance
evaluation of the Executive
Board, which assesses how well
aligned the company’s strategy
management is with the
Board of Directors guidelines,
observing the economic,
environmental and social
impacts and risks.
It is worth mentioning that the
remuneration of the Board of
Directors and the Executive
Board is also disclosed on
an aggregated basis in the
Management Report and in
the Reference Form submitted
to the Brazilian Securities and
Exchange Commission (CVM);
and individually in the Business
Management Report submitted
to the Brazilian Government
Accountability Office (CGU),
which then presents it to the
Federal Court of Accounts (TCU).
Moreover, shareholders
can access the “Manual for
Participation in Shareholders
Meetings of Eletrobras”
on the company’s website,
which explains matters being
discussed at general meetings
and how they should participate.
Code of Ethics
and Conduct
2016
www.eletrobras.com
Cover of the new Eletrobras Code of Ethics, launched in 2016
Conflict of interest
G4-36; G4-41
especially abusive related party
transactions.
committee, likewise applicable to
those on leave.
The other company employees,
in turn, rely on a consultation
system that integrates the
people management area
and Ethics Committee, and
can be reached on the e-mail
conflitodeinteresses@eletrobras.
com, through which they can
make formal consultations about
how to go about situations that
may be a conflict of interest, as
per Act # 12,813/2013.
In addition to that, the Brazilian
Government Accountability
Office (CGU) created an
electronic system to prevent
conflicts of interest (SeCI),
which can be accessed by all
government entities and is
available online both on the
company’s private portal and on
the CGU website.
Eletrobras relies on several
mechanisms to prevent conflicts
between company and personal
interests of its employees or
officers from happening.
As for the Board of Directors,
the company bylaws determine
that when situations of conflict
of interest arise its members
should abstain from discussing
or voting such matters. The
board member elected by the
employees, specifically, does
not participate in debates and
deliberations about matters
involving union relations,
remuneration, benefits, and
advantages, including matters
related to supplemental pension
funds and assistance funds; such
cases are deemed a conflict of
interest as per paragraph 3 of Act
# 12,353/2010.
Board members are likewise
responsible for monitoring
and handling potential
conflicts of interest involving
executives, board members,
and shareholders to prevent
misuse of company assets and
To prevent potential conflicts
of interest and the misuse
of confidential and strategic
information, officers are
forbidden to hold management
or consulting positions at
private companies, utilities
concessionaires, or at private
entities linked to the electricity
sector that are not controlled by
the company, special purpose
entities (SPE), and state-run
concessionary companies in
which Eletrobras has an equity
interest. Act # 9,292/1996,
which regulates remuneration, is
also considered for when officers
also hold positions in the board of
directors and finance committee.
Board members must also submit
a confidential information
statement (DCI) to the public
ethics committee, which includes
a comprehensive list of their
estate, as well as shareholdings
that may be deemed a conflict
of interest, and which actions
have been taken by the board
members and chairman to
mitigate such situations. Act #
12,813/2013 establishes a series
of information that public agents
must submit to the public ethics
Eletrobras | Annual Report 2016 Corporate profile Chapter 3
Strategy and
vision of the
future
The challenge is: technology
Increase revenues, optimize operating costs, improve the quality of services provided and
decrease the level of energy losses. All this is possible with the Measurement Intelligence
Center (CIM), inaugurated by Eletrobras in 2016, in Brasília.
The CIM is part of the Advanced Measurement Infrastructure (AMI) project of Eletrobras
distribution companies, which consists of a platform with intelligent meters, which will have
their data collected online, at the CIM, through a communication network. The data will then
be interpreted, identifying potential frauds and measurement errors.
Measurement Intelligence
Center (CIM)
32
33
Strategic planning
G4-56
The challenges of Brazil’s economic scenario and of
the company led Eletrobras to prepare its Business
and Management Master Plan (PDNG), for the five-
year period 2017- 2021, focused on governance
and compliance, financial discipline and
operational excellence, to ensure the company
sustainability and intensify the competitive
advantages in generation, transmission and
trading, creating value for all its stakeholders.
The document, launched in November 2016, is an
extension of Eletrobras Companies Strategic Plan
2015-2030, it encompasses targets and projects to
achieve strategic objectives, projections to support
decisions on business portfolio and maintains the
lineup with Eletrobras Corporate Identity– Mission,
Vision 2030 and Values.
In order comply with its Mission and to achieve its
Vision of the Future, within 2015-2030 time frame,
Eletrobras companies shall guide their performance
in the business portfolio defined through five
strategic guidelines shown in the figure below:
Strategic ambition of the Business and
Management Master Plan (PDNG)
2017-2021:
“Potentialize competitive
advantages in generation,
transmission and trading, attaining
corporate sustainability recognized
by all stakeholders”.
Corporate Identity of Eletrobras
Strategic Plan 2015-2030:
Mission: Operate in the energy
markets on an integrated, profitable
and sustainable basis
Vision 2030: Be ranked among top
3 world’s clean energy companies
and among top 10 global largest
electricity companies, with
profitability comparable with
the sector’s best companies and
recognized by all its stakeholders
Values: Ethics and transparency,
focus on results; valuation
and people’s commitment;
entrepreneurship and innovation;
and sustainability
The three cornerstones of PDNG 2017-2021 – governance and compliance, financial discipline and operational
excellence - were considered priority in the next five-year period and are directly inspired in the guidelines of the
Strategic Plan 2015-2030. Each one is broken down in initiatives and targets, as described below:
1. Alignment of Bylaws and
approval competence
– Review the corporate
bylaws of the Eletrobras
companies, incorporating
the best Corporate
Governance practices;
2. 5 Dimensions Compliance
Program, which provides
for a series of actions
related to integrity,
ethics and compliance
(read more on page 26);
3. Eliminate material
weaknesses – with
initiatives from the 5
Dimension Model;
4.
Implement actions
to list in Indexes and
obtain Corporate
Governance seals – aims
to create values for
the shareholders with
a more efficient risk
management, evaluates
the performance of
the companies in
sustainability and
their adapting to the
market trends.
5. Reduce Investments by 29%
when compared to PDNG
2015-2019;
6. Privatization of Distributors
– which will contribute to
the improvement of the
Eletrobras Ebitda. It will
also avoid disbursement of
resources by Eletrobras to
finance cash and investment
deficit of these distribution
companies, contributing
to the achievement of the
reduction target of the Net
Debt/Ebitda indicator;
7. Sale of administrative real
estate – to increase the
Company’s cash generation.
Estimated gain of
R$ 200 million;
8. Divesture in SPE – decrease
consolidated leverage
and promote the debt
settlement of controlled
companies with Eletrobras.
Estimated gain potential of
R$ 2.2 million;
9. Taxation optimization - to
avoid cash disbursement for
payment of taxes, which can
be compensated in different
processes; and
10. Corporate restructuring
aiming at using the
tax credit.
11. Organizational Restructuring – to reduce
management positions, gratified functions,
required permanence and gratified function to
project management. Estimated gain potential of
R$ 67.8 million per year;
12. Extraordinary Retirement Plan (PAE) – the
objective is to reach the 4,937 employees already
retired and employees who can retire by the
INSS considering the holding company and the
generation and transmission companies of the
Eletrobras System. Estimated cost of R$ 1.5
billion, estimated savings of R$ 920 million per
year and payback in 1.72 years;
13. Implementation of PRO-ERP – to unify finance,
asset and supply management data of all
controlled companies;
14. Shared Service Center – aims to centralize
the following activities: Finance and Treasury,
Accounting and Fiscal, Human Resources,
Supplies and Logistics, Infrastructure and
General Services, Information Technology and
Legal, with estimated savings of R$ 616 million,
starting in 2018, after the reconfiguration of the
processes involved and the Leave Incentive Plan
designated to approximately 4,832 employees on
administrative activities;
15. Reduction of Administrative Costs – by renting
a single real estate in Rio de Janeiro to place the
Holding’s employees. Estimated gain potential:
R$ 65 million per year, from 2018;
16. Reduction of extra time, hazard and on-call pay
- the Company intends to adjust the expenses in
the Personnel account aiming at higher adherence
to the regulatory limits, including through
automation. Estimated gain potential: R$ 77
million, as of 2017;
17. Regulatory strategy for Generation and
Transmission - to receive credit and adequate
income, in accordance with laws and regulations
and the electricity sector; and
18. Integrated power commercialization - Creation
of a Commercialization Committee within
the scope of the Holding with participation of
representatives from all Controlled entities,
aiming at increase in income through optimization
of the power commercialization transactions.
Eletrobras | Annual Report 2016 Strategy and vision of the future
34
35
Corporate performance monitoring
Investment
Eletrobras monitors its companies to measure performance in established strategies and planned results;
it assists in the decision-making process; it facilitates cooperation, articulation and integration among its
companies and even with external bodies; it identifies needs of adjustments and plans revision; and it favors
the accountability.
The Business Performance Target Agreement (CMDE) is the main instrument of Eletrobras business
management, as it subsidizes the areas of strategic planning and corporate sustainability, besides
intensifying the integration between the holding and its subsidiaries. The indicators and targets established
to achieve the corporate objectives result in a portfolio of actions which are managed in each company,
monitored by Corporate Project Management Office (Corporate EGP).
Based on PDNG 2017-2021, the CMDE was revised in 2017 and extended until 2021, updating its panel of
indicators to current reality of Eletrobras companies. The monitoring of CMDE and PDNG results is published
in monthly reports for analysis by the Executive Board and Board of Directors.
In 2016, the CMDE was used as basis to develop the Management Variable Compensation Program (RVA
2017), which is focused on corporate sustainability. Each executive board of Eletrobras companies relies with
at least, a project listed to monitor the RVA. Likewise, the Profit Sharing Program (PLR), which is a variable
compensation for Eletrobras companies’ employees, is composed of a subgroup of economic and financial,
operating, social and environmental, management and corporate governance indicators of CMDE.
PDNG is essential so that Eletrobras may achieve its strategic objectives. Therefore, the
Company executes, monitors and reports the progress of strategic projects, based on the project
management best practices. The Corporate Project Management Office (EGP) observes the
good practices envisaged by Project Management Institute (PMI), in conformity with its Project
Management Body of Knowledge (PMBOK).In addition, the company relies on a specific project
management software, whose monitoring is on-line customizable and auditable, enabling the
monitoring in real time by the Executive Board and Board of Directors.
Simplício Hydroelectric Facility - Furnas Collection
In 2016, Eletrobras invested R$8.7 billion corresponding to 76% of the budget estimated for the year. Among
investments made, we point out the implementation of the UHE Belo Monte hydroelectric power plant, the
converter station Xingu-Estreito and LT Xingu-Estreito, the UHE Jirau and UHE São Manuel.
Nature of Investments
(R$ million)
Budgeted** Realized
Generation
Transmission
Distribution
2016
2015
2014
2013
2012
1,780.81
1,092.34
2,162.98
2,182.88
2,630.91
1,770.95
1,811.83
1,204.92
1,855.35
2,111.04
2,281.84
1,638.74
1,207.60
Maintenance - Generation 373.98
Maintenance -
Transmission
453.49
Maintenance - Distribution 318.54
Other*
436.17
861.15
201.16
315.62
274.78
265.59
791.2
330.97
405.51
212.19
301.33
577.46
393.75
477.95
151.35
370.1
741.17
427.4
472.21
204.38
501.16
837.22
511.56
401.18
218.78
545.68
Total Corporate
6,382.41
4,215.55
6,059.52
6,264.54
7,259.06
5,924.11
Financial Investments in SPEs (Equity)
Generation
Transmission
Total SPEs
Overall total
4,074.58
3,450.52
3,181.30
3,703.65
3,219.39
2,109.14
1,019.25
1,044.92
1,152.99
1,437.14
745.32
994.56
5,093.83
4,495.44
4,334.29
5,140.79
3,964.71
3,103.70
11,476.24
8,710.99
10,393.81
11,405.33
11,223.77
9,027.81
*Research, Infrastructure, Environmental Quality
**Scheduled for the year by Act # 13,255 of 01/14/2016 and re-scheduled by Laws 13,380 and 13,386 of 12/20/2016.
Source of Resources
For the period between 2017 and 2021,
PDNG foresees investments of R$35.8
billion, down 29% compared to previous
five-year period of 2015-2019.
Out of this total, approximately R$20.5
billion (57%) are estimated to expand
generation and transmission, in own
projects, of which R$15.27 billion in
clean energy (74.5%) and R$1.3 billion
(3.8%) to expand energy distribution.
R$5.5 billion will be invested to revamp
and maintain generation, transmission
and distribution, and 85% of this amount
will be allocated for generation and
transmission. Eletrobras estimates
investments in infrastructure of R$1.3
billion; and, approximately R$6.9 billion
will be set aside to SPEs.
Eletrobras | Annual Report 2016 Strategy and vision of the future 36
37
Commitments and goals
Future
Commitments and goals
Justification
ECONOMIC
Reduce indebtedness
(Net Debt/EBITDA)
Eletrobras will prioritize measures to reduce the company’s indebtedness
to the Net Debt/EBITDA ratio below 4.0, mainly by means of reduction of
investments, amortization of debts and divestments.
Reduce operating costs (PMSO)
Eletrobras plans to decrease until 2018, R$1.7 billion in operating costs
(PMSO), adopting initiatives envisaging the operational excellence.
Remove material weaknesses
Measures foreseen in Challenge 21 aim at eliminating all the material
weaknesses identified relating to financial reports internal controls until
2017.
In progress
Commitments and goals
Performance
Justification
ECONOMIC
Obtain the remaining amount for
compensation in GT assets arising
from the renewal of concessions,
pursuant to Act # 12,783/13
Partially
attained
Invest R$ 26 billion projects for the
generation of electric power from
clean sources
Partially
attained
Implement the mobility plan of
Eletrobras companies
In progress
Eletrobras companies submitted Appraisal Reports of
its RBSE (Basic Grid of Electric System) transmission and
generation assets to Aneel. Indemnities referring to non-
amortized transmission assets and/or not depreciated of
Eletrobras were recognized by Aneel with accounting record
totaling R$28.597 billion. Referring to generation assets,
expected gains with obtainment of remaining indemnity
amount sum up R$6.162 billion. It is worth mentioning there
is a possibility of Aneel disallowance in relation to amounts
pleaded, due to the agency’s power of inspection and
autonomy.
Eletrobras, between 2015 and December 2016, invested in
own projects and interests in SPEs, R$9.96 billion in electric
power generation from clean sources. Until 2019, Eletrobras
and partners will invest R$12.9 billion in new projects or
generation projects already contracted, from clean sources.
It is worth mentioning the stoppage of works at Angra 3
nuclear plant with investments estimated at R$14.7 billion.
SOCIAL
The implementation of the mobility plan has as its basic
premise the qualitative and quantitative sizing of personnel
planned to have occurred in 2016. These processes will be
re-analyzed considering the company’s restructuring and
the guidelines defined by the Executive Board, as well as
the plan for voluntary dismissal and implementation of the
Shared Service Center (CSC), foreseen in PDNG 2017-2021,
which will interfere with the personnel.
In progress
Commitments and goals
Performance
Justification
BUSINESS
Implement 3,180 km of
transmission lines and
an additional 9,140 MVA
in power to the National
Interconnected System
(SIN). Of this total, 15% of
the lines and 54% of the
power will be operated by
the Eletrobras companies,
and the remainder through
SPE partnerships
Develop a portfolio of
projects related to the sale of
energy efficiency services
Attained
Between 2015 and December 2016, Eletrobras and its partners
added to the National Interconnected System 3,494 km of
transmission lines and 7,213 MVA in transformation capacity.
In progress
Between 2015 and December 2016, Eletrobras entered into services
agreement related to energy efficiency totaling R$350 thousand.
Implement a portfolio of
contracted generation
projects, equivalent to
22.6 GW
Partially
attained
Eletrobras and its partners implemented from 2015 to December
2016, 7.21 GW of installed power or 42% of Brazilian electricity
matrix. From 2017 to Dec/2019, Eletrobras and its partners will add
10.58 GW of installed capacity to the SIN, nearly 41.43% of Brazil’s
growth (25.54 GW).
Implement a portfolio of
contracted transmission
projects, equivalent to
12,667 km of
transmission lines
Partially
attained
Between 2015 and December 2016, Eletrobras and its
partners added 3.494 km of transmission lines to the National
Interconnected System. From 2017 to December 2019, Eletrobras
and its partners will add 11,222 km of transmission lines.
Prospect new business
opportunities in generation:
solar, gas and biomass
Attained
Develop a study to evaluate
the impact of climate
change on the business of
Eletrobras companies
In progress
Progressively reduce the
use of fossil fuels in road
mobile sources
Reduce 6.6% in mobile
sources (Scope 1) and 3.6% in
energy consumption
(Scope 2)
In progress
Reviewed
Eletrobras companies in the generation segment developed in 2016
and in 2017 are developing a comprehensive study for prospecting
projects in different energy clean sources for the period ranging
from 2016 to 2021. Prospecting occurred during the development of
the Business and Management Master Plans (PDNG 15-19 and PDNG
17-21).
ENVIRONMENTAL
Although the topic has great relevance to the company's
management, in 2016 it was not possible to progress consistently in
the project due to the difficulty found in delimiting a methodology
that could adequately quantify the impacts of climate change on its
business. Eletrobras maintains its interest in deepening the study
and plans to finalize a pilot scope in 2017.
Among the performance goals established by the PDNG 2017-2021,
the reduction in use of fossil fuels of the vehicle fleet was included,
aiming to achieve 1% reduction in the five-year period.
In order to contribute to the national targets, a reevaluation to
reduce greenhouse gas emissions was carried out and the new
performance target of 1% in the five-year period was included in the
PDNG 2017-2021.
Eletrobras | Annual Report 2016 Strategy and vision of the future 38
39
Risks and opportunities
G4-2; G4-14, G4-45, G4-46, G4-47; G4-EC2; G4-SO3; G4-
SO4
At Eletrobras companies, risk management is
governed by a single policy and coordinated by the
holding, ensuring a systemic view of the results and its
standardization across all companies of the group. Based
on the principle of caution, the main purpose of the
process is to reduce the occurrence of events that could
have a negative impact on its strategic goals, seeking
to safeguard and create value and provide transparent
information to the market and shareholders.
Having as methodological bases the COSO 2013 and ISO
31000:2009, the company’s risk integrated management
model identifies and consolidates, in a matrix, the
strategic, operational, financial, and compliance
risks to which the companies are exposed to, for
subsequent analysis, treatment, and monitoring
through specific proprietary processes.
This process is conducted by the risk
management departments and by the risk
committees of each of the Eletrobras companies.
Its general guidelines are set out by the Risk
Committee of the holding, and the results are
forwarded for analysis to the Executive Board
and Board of Directors of Eletrobras by means of
the Audit and Risk Committee.
The Board of Directors periodically resolves on strategic matters referring to risk management, such as the
company’s level of appetite for risk, its tolerance ranges, the role of the Executive Board in managing risks, and the
policy that should govern the whole process.
The Company reports the results of its analysis understood as most relevant in documents, such as the 20-F Form
and the Reference Form of the Brazilian Securities Commission, available at its investor relations website.
non-strategic assets, owned by the company or in
partnerships, and reducing the PMSO. In order to
support Eletrobras cash, the federal government
injected approximately R$2.90 billion in 2016, by
means of Future Capital Increase (AFACs). To have
access to the credit market has been essential
so that Eletrobras may maintain current levels
of investments and reach its long-term targets,
without impairing its capacity of appropriately
complying with all its obligations with creditors.
Licensing, Social and Environmental
Management - the company’s risk reports
now more frequently approach and with detail
issues related to the companies’ environmental
variables management, which are the measures
and actions they foresee to avoid or minimize the
impacts associated with their activities. Electric
power generation and transmission companies
must comply with specific environmental laws for
them to operate. The indigenous issue has been
standing out as one of the most striking issues
and its recognition came from its inclusion in the
second version of Eletrobras Companies Social
Responsibility Policy, updated in 2016. In order
to tackle this aspect of project environmental
management risk , Eletrobras companies seek to
develop actions in partnership with Indigenous
National Foundation (Funai) - see more on
page 98. In addition, the subsidiaries have been
implementing environmental management
systems encompassing tested and formalized
rules and procedures, such as those required for
treatment of waste and effluents.
Oriximiná - Manaus Power line
Main risks analyzed
Compliance - the actions taken by Eletrobras to address
issues relating to fraud, corruption, and unethical conduct
are strongly sustained by its Compliance Program, which
encompasses all Eletrobras companies, and count on the
involvement of the holding company’s Executive Board
and Board of Directors. Since 2014, the Company has been
implementing the guidelines of the Manual of Compliance
with the Anticorruption Policy in all its subsidiaries. In order
to strengthen the commitment with issues, such as fraud and
corruption, since 2015 a series of actions has been set out to
reinforce the culture of integrity at Eletrobras companies. In
this sense, 93% of the governance members were informed
about the anticorruption policies adopted by Eletrobras
and around 4 thousand employees that work in Eletrobras
companies (16% of the total) received training on the subject in
2016. Until February 2017, this percentage increased to 74%.
In addition, the Company mapped in 2016, the main business
partners exposed to the corruption risk and prioritized the
implementation of integrity practices and protection with
goods and services suppliers, representatives of Eletrobras
companies, donees and joint ventures partners. Further details
on the Company’s Integrity Program may be checked on
page 26.
SPEs Management and Consortia (2016) - the
business structuring by means of SPEs is a prevailing
alternative for growth of Eletrobras companies. However,
the companies of the group had not structured a uniform
process for monitoring and managing these partnerships so
far, especially for the holding to manage their consolidated
information about financial, technical, and corporate issues,
both in pre-operating and operating stages. In this regard,
in 2015, the Board of Directors approved the elaboration
of “Eletrobras Companies SPEs Manual”, which sets forth
specific structures to treat and monitor these issues in
the group’s companies. The Investment Committee of the
Eletrobras System (CISE) was also restructured, responsible
for analyzing the companies’ investment proposals. The
Manual is currently being implemented.
Budget and Cash Flow - With Act # 12,783/13, the
companies are now responsible only for the operation and
maintenance of the generation assets under its concession,
which has substantially reduced their revenue. To offset
this loss, as provided for by the law, and in order to be
compensated for the investments made in such assets, the
companies have requested to ANEEL that these amounts
be refunded. Certain group’s companies obtained favorable
decision and they will receive indemnities as of July 2017,
through collection of a charge over consumer’s bills during
eight years. This will represent a relevant improvement in
Eletrobras cash flows, however, the companies’ expansion
now mainly relies on the result of their interest in SPEs
and significant reduction of its operating costs. In an
attempt to reduce the exposure to cash flow risk for the
companies that have difficulties to generate resources by
themselves, the Business and Management Master Plan
(PDNG) brings several actions to improve the finances of
these companies in the short-term, including the sale of
Eletrobras | Annual Report 2016 Strategy and vision of the future 40
41
Climate Change Risk
The company assesses whether companies may be
impacted by risks deriving from climate change,
foreseeing actions to readapt their operations, repair
and mitigate damages, adhering to regulations
established for the electric power sector.
Since 87% of energy production derives from
hydroelectric power plants, the impacts from climate
change on the water regime in the country may cause
great financial losses to the company. Extreme events,
such as droughts, floods and windfalls, can also affect
the generation, transmission, and distribution of
electricity. The subsidiaries monitor this issue through
the Environment area of the holding company and
through the working group GT3 - Climate Strategy,
of the Environment Committee (SCMA), where
information is made available for the elaboration of the
Annual Greenhouse Gas Emissions Inventory (published
since 2009).
Experiences on actions to control these emissions
are shared at the GT3, and aspects related to the
implementation of a methodology that allow a
systematic calculation of all the risks associated with
the climate change at Eletrobras companies are also
discussed.
Operating Risks
Nuclear power generation: Eletrobras Eletronuclear
periodically conducts clarification campaigns and
yearly distributes approximately 40 thousand calendars
to neighboring community households, along with
instructions about how to act in emergency situations.
The calendar also calls the attention for the sound
system monthly test in locations nearby the plants,
which takes place every day 10 of each month, at same
hour.
The company also maintains work groups formally
created (on-call duty) for emergency situations and
Emergency Centers; it conducts simulations and
training with its employees, it maintains 24-hour
emergency calls, with team and emergency medical
support procedure and in emergency situations, it
has hospital-medical support from Marcílio Dias
Navy Hospital to assist persons injured by radiation,
according to agreement signed with Navy Health
Executive Board.
Hydropower generation: the generation companies
operating hydroelectric power plants have Flood
Control manuals for basins where they operate their
main reservoirs, with operation guidelines in the
event of floods and measures to be taken upon such
occurrence. Yearly the Flood Prevention Annual Plan
is reviewed and updated, document which is approved
by the National Water Regulatory Agency (ANA) and
by Aneel. Referring to the safety at dams, the Itaipu
hydroelectric power plant, for instance, is a global
benchmark in terms of dam safety, devoting special
attention to safety procedures, with over 2.4 thousand
monitoring instruments installed, international
audits conducted every four years, visual inspections
and sounding periodically performed, as well as
seismological monitoring.
Employees working on the construction of Belo Monte
Sustainability vision
G4-EU8
Sustainability management
G4-36; G4-48
Increasingly, sustainability has been driving Eletrobras’
business strategy, which seeks at all times the balance
between economic, financial, environmental and social
aspects of its projects as way to prevent risks and promote
the value creation and successful operations.
Due to a consistent commitment with
sustainability, Eletrobras for the 10th
consecutive year takes part in the portfolio
of the Corporate Sustainability Index of São
Paulo Stock Exchange (ISE/Bovespa), which
gathers companies listed at Bovespa with
the business citizenship best practices.
Signatory of the Global Compact since 2006, which
mobilizes international business community to adopt
essential and globally accepted values in the areas
of human rights, labor relations, environment and
anti-corruption, the Company has been lining up its
performance based on the principles established by such
initiative. The Sustainable Development Goals (SDGs)
represent a global agenda adopted by member states of
the United Nations, composed of 17 goals and 169 targets
to be met until 2030. Such agenda foresees actions in
areas such as poverty eradication, health, education,
energy, water, amongst others.
In compliance with such global agenda, Eletrobras
approved, in 2016, its Business and Management Master
Plan – Challenge 21: Sustainable Excellence. The initial
evaluation performed by the company showed that 277
actions, projects and programs of its companies correlate
with at least one of the SDGs. In addition to the SDG 7 -
Affordable and Clean Energy, Eletrobras’ primary vocation,
all SDGs were contemplated by actions, projects and
programs, highlighting: SDG 3 - Good Health and Well-
being; SDG 8 - Decent Work and Economic Growth and
SDG 10 - Reduced Inequalities. For additional information
on SDGs, access http://www.agenda2030.com.br/
aagenda2030.php.
Subsequently, the Company’s objective is to prioritize the
SDGs with greater capillarity to its strategic planning and
in the next PDNG (2018-2022) define targets for all its
subsidiaries.
The integration of Eletrobras and its companies in SDGs
evidences the company’s commitment with sustainable
development and reinforces the ties with civil society
and governments, promoting the development and
implementation of public policies.
To ensure the connection of planning,
strategy and sustainability, Eletrobras relies
on the Sustainability Management Executive
Committee, which is linked to the chief executive
officer and reports to the Sustainability
Committee.
This committee is responsible for internationally
implementing recognized sustainable
management processes, procedures and tools—
and monitoring and assessing results—for
preparing target and improvement plans for
sustainable development.
The Committee is coordinated by the
Superintendence of Strategy, Business
Management and Sustainability, having among
its duties:
•
•
•
•
providing support and interacting with
Eletrobras Sustainability Committee;
disclosing and unfolding the guidelines
established by Sustainability Committee;
structuring plans for improvement and
proposing them to the Sustainability
Committee based on the results of the
ISE/Bovespa, DJSI, assurance process, and
others; and
proposing to the Sustainability Committee
the editorial model to be adopted in
Eletrobras Companies Annual Report.
The process of drawing up this report
comprises the presentation of research on
the issues listed by materiality study for
Sustainability Committee’s analysis.
Clean and responsible energy
G4-EU8
Eletrobras’ commitment, present in its mission,
vision and in its set of organizational values
and in the transversality of its electric power
programs is to bring energy and sustainable
development for the country.
One of the major cornerstones to achieve such
commitment is promoting the clean energy
generation, environmentally less striking
and socially responsible, generating value
for stakeholders.
Therefore, Eletrobras invests in innovation,
research and development, as a way to provide
more competitiveness to businesses and
mitigate the social and environmental impacts
of its operations.
Eletrobras | Annual Report 2016 Strategy and vision of the future
42
Photovoltaic panels at Sobradinho HPP
43
In partnership with universities, research centers
and experts, Eletrobras encourages and takes
part in studies on different issues deemed as
critical for its business, as a way to mitigate
its impact and ensure continued processes
improvement: greenhouse gas emissions in
hydroelectric power plants reservoirs and
reduction of emissions deriving from thermal
generation, amongst others.
In 2016, Eletrobras signed an agreement with
Bolivian state-owned company (Ende) and
Development Bank of Latin America (CAF),
aiming at starting the studies necessary for
eventual project development of a binational
hydroelectric power plant on Madeira river.
Cepel
Eletrobras innovation management aims
at promoting a favorable environment for
creativity, experimentation and implementation
of new ideas of the company’s interest. In this
regard, Eletrobras companies rely on the Electric
Power Research Center (Cepel), considered the
largest one in South hemisphere in its category.
Its operations cover seven relevant areas:
energy optimization and environment; electric
grids; systems automation; lines and stations;
distribution technology; materials, alternative
sources and energy efficiency; and laboratory
infrastructure and experimental research.
Cepel conducts several experimental researches,
including the solar and wind power reference
center Sérgio de Salvo Brito (Cresesb), the
efficient technologies application center (Cate)
and the Efficient Solar House. With support of
Ministry of Mines and Energy, Cepel is building
a laboratory and research infrastructure for
development and assessment of smart grids
solutions.
Cepel has several projects concerned with
maintenance of reliability and extension
of useful life of equipment, generation,
transmission and distribution systems, which
are relevant to improve Eletrobras technical
and economic performance. In monitoring and
managing company asset, its systems (SOMA,
DianE and IMA-DP) assist in the optimization
of investments, maintenance and safety in
operations.
One of the most relevant investments is the
Ultra High Voltage Time Laboratory (External
UHV Lab), which started operations in November
2016 with capacity to carry out experimental
researches, developments and tests in
configurations of transmission lines and related
equipment, until voltage classes between ± 1000 KV CC
and 1200 kV CA. The laboratory activities not only give
support to Eletrobras companies, but also to electricity
sector and manufacturers, acting in partnership with
universities, domestic and international research centers.
Concurrently, Eletrobras plans a new laboratory to
conduct tests in Ultra High Voltage under controlled
conditions, the Sheltered UHV Lab. It is worth mentioning
that characteristics of the National Interconnected
System (SIN) raise the need of specialized, reference,
laboratory infrastructure for experimental researches
and tests in large-sized equipment, involving high and
current voltages and other relevant sizes, essential
factor to confer sustainability to SIN operation and
development. In order to meet such demand, Cepel
implemented the South Hemisphere’s largest set of
electric laboratories.
Processes improvement
Operational Excellence is one of Eletrobras’ strategic
cornerstones. In this regard, the Company has been
investing in projects to reduce waste, increasing
productivity gains and optimizing processes.
One of the actions developed is Eletrobras Processes
Improvement Program, which aims at contributing
to creating a culture of continued improvement at
Eletrobras. Therefore, employee voluntarily may
submit an improvement project for the program. Once
concluded, participants are certified as improvement
agents and are qualified to develop any improvement
in their areas of expertise. In 2016, 11 projects were
selected, and five of them were concluded and six are
in progress. The implementation of a new cycle of the
program is scheduled for 2017.
Investments in R&D of Eletrobras companies, totaled
approximately R$ 534 million, as per table below.
Investments in research and
development (R$)
2016
Management Technology
R$ 74,966,898.17
Distribution technologies
R$ 359,720,296.31
Innovation for sustainability
R$ 18,023,491.96
Renewable energy
Energy efficiency
Total
R$ 5,916,380.44
R$ 16,185,521.09
R$ 534,663,727.84
* These figures represent 58% of the company’s Net Operating
Revenue coverage.
Innovation highlights
One of the outstanding projects in 2016, relating
to Research and Development is the electric power
generation by means of floating photovoltaic panels. The
Company inaugurated a prototype in Balbina hydroelectric
power plant reservoir, in Amazonas and then at the
Sobradinho hydroelectric power plant in Bahia. The
objective is to mix the production of two types of energy
in order to bring greater efficiency in generation and
transmission and solve potential bottlenecks in situations
of low reservoir, caused by dry conditions – recurring
condition, related to climate factors, which mainly The
study is conducted by researchers of federal universities
of the states of Amazonas and Pernambuco, monitored by
federal government and will analyze several issues, from
economic feasibility for large scale expansion to potential
environmental impacts.
Another highlight in 2016 is the inauguration of Chapada
do Piauí II wind farm, located in the Piaui state, in the
municipalities of Marcolândia, Simões, Padre Marcos and
Caldeirão Grande - with an installed capacity of 172.40
MW. The project conducted by Eletrobras Chesf and
ContourGlobal, is composed of the wind farms Chapada
do Piauí I and II, with installed capacity of 205 MW and
172.4 MW, respectively, sponsored by both organizations
In the Social and Environmental Performance
chapters, know the details on the initiatives
and results of the Company’s programs and
management to continue generating value
for sustainability.
and Salus FIP; and Chapada do Piauí III, with 59.2
MW, from investment made by ContourGlobal.
The wind farm, with potential to provide power to
more than 1 million homes, is composed of 247
GE 1.85 MW and GE 1.7 MW turbines and created
1,500 thousand direct jobs and 3,000 indirect jobs
during construction period.
Besides generating renewable energy to supply
Brazilian market, the Chapada do Piauí Wind
Farm brings development for local economy, by
hiring local workforce, through land regularization
of small owners and generation of income via
leasing of land. The wind farm also has been
enabled the improvement of health, education
and professional qualification programs in the
project’s neighboring communities.
Another innovative event was the inauguration of
substation Mirueira II, one of Brazil’s most modern
substations, built with hybrid technology, which
ensures higher compression of equipment, cost
savings and maintenance easiness. The substation
will reinforce supply to the metropolitan region of
Recife, especially Olinda, Rio Doce, Pau Amarelo,
Santo Amaro and São Benedito. Approximately
450,000 inhabitants are estimated to benefit
from such project.
Eletrobras | Annual Report 2016 Strategy and vision of the future
44
45
Promontar - Marine Turtle Monitoring Program, by Eletronuclear
Voluntary
commitments
G4-15; G4-16
To reaffirm its commitment with the sustainable
development of its companies, Eletrobras voluntarily
participates in domestic and international initiatives
which discuss social, environmental, economic and
human rights issues in businesses. Amongst them, we
point out:
•
•
•
Statement of Commitment for the Protection
of Children and Adolescents Against Sexual
Exploitation;
UN Global Compact;
Pro-Gender and Race Equality Program;
• Women’s Empowerment Principles;
•
•
Sustainable Development Goals – SDGs;
Carbon Disclosure Program – CDP;
• Mão Certa Program;
•
Environmental Agenda in Public Administration
(A3P).
In this regard, Eletrobras also voluntarily
participates in following organizations:
•
•
•
•
•
•
•
•
•
•
•
Climate Change Brazilian Forum (FBMC);
Brazilian Electricity Sector Environment
Forum (Fmase);
Brazilian Nuclear Program Protection
Commission (Copron);
Brazilian Business Council for Sustainable
Development (Cebds);
Brazilian Association of Concessionaires
(Abce);
Electric Power Trade Chamber (CCEE);
Brazilian Association of Thermoelectric
Generators (Abraget);
Brazilian Association of Electric Power
Distributors (Abradee);
Cier Brazilian Committee – Bracier;
Utilities Telecomunicatin Council America
Latina - UTC-AL;
Brazilian Committee of Electric Power
Production and Transmission - Cigré-
Brasil;
•
•
•
•
•
Ethics Management Forum of State-Owned
Companies;
Brazilian Committee of Dams (CBDB);
Brazilian Association of Electric Power Generation
Companies (Abrage);
Brazilian Association of Electric Power
Transmission Companies (Abrate);
Brazilian Association of Wind Power (ABEEólica);
• World Energy Council;
• National Management Forum of Ethics at State-
Owned Companies;
•
•
•
•
•
•
•
CBCME - Brazilian Committee of World Energy
Council;
EPC - Companies for Climate;
IHA - International Hydropower Association;
Global Compact Brazilian Network;
ABDAN - Brazilian Association for Development of
Nuclear Activities;
ABEN - Brazilian Association of Nuclear Energy;
International Association for Volunteer Effort -
IAVE (Brazilian representation);
• Member of Leadership Group WEPs (Global
Compact and UN Women);
•
•
•
•
•
Permanent Committee for gender issues
of the Ministry of Mines and Energy and
Related Companies;
Border Committee between Brazil,
Paraguay and Argentina to fight against
violence and women trafficking;
Ethos Institute of Companies and Social
Responsibility;
Global Reporting Initiative - GRI Gold
Community;
Brazilian Global Compact Committee;
• World Water Council (WWC).
Eletrobras | Annual Report 2016 Strategy and vision of the future Chapter 4
Operating
performance
The challenge is: originality
Decades of experience in hydraulic generation drive Eletrobras to improve and to seek new
ways of doing. Inaugurated in 2016, the Jirau hydroelectric power plant, - in which Eletrobras
holds a 40% stake, through its subsidiaries Eletrosul and Chesf - brings a major contribution
to the Brazilian energy sector by opting to use bulb type turbines, developed to operate with
low falls and high flows, taking advantage of the full potential of the Madeira River.
The plant features the world’s most powerful bulb-type turbines and was built with an
unprecedented amount of 50 turbines with water line operation - a concept that consists
mainly in operation with no need of large reservoir and, consequently, decreases the
environmental impacts. Bulb type turbines weren’t common in the Brazilian generating plants
and training teams for installation, operation and maintenance of this type of generating
units is an important addition to our expertise.
Jirau Hydroelectric Power Plant
48
49
Generation
G4-EU1
Installed capacity
In 2016, Eletrobras reached an installed capacity of
46,856 MW in generation projects, representing 31%
of the 150,338 MW installed in Brazil. Of the company’s
total installed capacity, 69% are company projects, 14%
are projects developed through Special Purpose Entities
(SPEs), and 17% are jointly owned projects, including half
of Itaipu Binacional’s capacity (7,000 MW, or 15% its total
capacity).
The map below shows all Eletrobras plants that were
operative in 2016:
Nearly 94% of the company’s installed capacity derives from low greenhouse gas (GHG) emission sources, making
Eletrobras one of the largest companies in the world in the generation of clean and renewable energy, the largest
provider of the Brazilian electricity matrix, and the second in the ranking of the cleanest and most renewable
companies in the world. Eletrobras’ overall installed capacity in low greenhouse gas emission projects corresponds
to 40% of the Brazilian capacity.
Eletrobras installed capacity by source
Brazil installed capacity by source
Electric power production
G4-EU2
In 2016, the Eletrobras companies, including SPEs, generated 170,917 GWh, up 2.9% when compared to 2015. The
highlights were wind, hydro, and nuclear sources. Regarding the hydro source, the highlights were the record high
production at the Itaipu hydroelectric power plant, which has set a new global benchmark, and the deployment of the
Belo Monte hydroelectric power plant and of new generating units at the Jirau, Teles Pires, and Santo Antônio plants.
Generation from wind power sources rose over 100% year-over-year with the deployment of the Sento Sé III and
Chapada do Piauí II wind farms, and the expansion of the Capão do Inglês, Galpões, and Hermenegildo III wind farms.
Electric power production from oil and gas sources were significantly reduced after the decommissioning of Amazonas
GT, and the reduction of generation by Eletronorte’s thermal power plants.
Electric power net production
(wholly-owned, co-owned, including Itaipu Binacional)
Primary
source
Hydro
Uranium
Oil
Coal
Natural Gas
Wind
Solar
Total
Net
generation
(MWh) - 2016
Net
generation
2016
Net
generation
(MWh) - 2015
125,865
15,864
2,113
2,281
3,448
462
1
150,034
83.89%
10.57%
1.41%
1.52%
2.30%
0.31%
0%
100%
126,129
14,808
4,138
2,212
4,170
299
0
151,757
Net
generation
2015
83.11%
9.76%
2.73%
1.46%
2.75%
0.20%
0%
100%
Net
generation
(MWh) - 2014¹
Net
generation
2014
148,072
15,433
6,039
2,910
2,463
788
1
175,706
84.27%
8.80%
3.40%
1.70%
1.40%
0.40%
0%
100%
¹ Figures have been restated from the 2015 report (G4-22).
Eletrobras | Annual Report 2016 Operating performance 50
Electric power net production
(Special Purpose Entities - SPEs)
Primary source
Net generation
(MWh) - 2016
Net generation
2016
Net generation
(MWh) - 2015
Net generation
2015
Hydro
Wind
Oil
Total
17,961
2,921
0
20,883
86.01%
13.99%
0.00%
100%
13,176
1,176
0
14,352
91.81%
8.19%
0.00%
100%
All plants (wholly-owned and SPEs)
Electric power net production
(wholly-owned, co-owned, including Itaipu Binacional and Special
Purpose Entities - SPEs)
Primary source
Net generation
(MWh) - 2016
Net generation
2016
Net generation
(MWh) - 2015
Net generation
2015
Hydro
Uranium
Oil
Coal
Natural Gas
Wind
Oil
Total
143,827
15,864
2,113
2,281
3,448
3,383
1
170,917
Planned capacity
G4-EU10
One of the key tools for planning
the country’s expansion in energy
is the Ten-Year Energy Expansion
Plan (PDE), prepared by the
Brazilian Energy Research Agency
(EPE) and the Ministry of Mines
and Energy (MME). The latest plan
was published in 2015, the PDE
2024. Considering the installed
capacity of the Eletrobras
plants that are connected to the
National Interconnected System
(SIN), which includes those that
the company has concession/
authorization or those pending
approval (whether wholly or
jointly owned), compared to the
evolution of the planned installed
capacity, as contained in the PDE
2024, the following result
is obtained:
84.15%
9.28%
1.24%
1.33%
2.02%
1.98%
0.00%
100%
139,305
14,808
4,138
2,212
4,170
1,475
0
166,108
83.86%
8.91%
2.49%
1.33%
2.51%
0.89%
0.00%
100%
Evolution of the installed capacity in the SIN
Capacity of the Eletrobras System vs. Total Planned Capacity
(2024 PDE)
SOURCE
Coal
Oil
Nuclear
Natural gas
Hyro
Biomass + Wind +
SHPP + Solar
Process gas
Total
2016
Brazil - SIN
(MW)
3,064
4,855
1,990
11,486
92,152
28,714
687
142,948
Eletrobras
System
Share
(MW)
733
632
1,990
1,123
40,828
1,046
0
46,352
(%)
24
13
100
10
44
4
0
32
•
•
•
Includes the Brazilian half of Itaipu Binacional (7,000 MW).
For jointly owned plants, the installed capacity considered was proportional to the
ownership interest held by the parties.
There is a difference between the installed capacity in nuclear power estimated for Brazil
and for the Eletrobras System in 2021 because the Eletrobras estimate was made after
the publication of the 2024 PDE, and considers the deployment of the Angra 3 plant, with
1,405 MW, after 2021.
51
Average availability by source
G4-EU30
Availability factor by primary
energy source (%)
Considers Corporate Plants, Shared
Ownership and Itaipu Binacional
Average Efficiency of
Thermoelectric Generation
by Energy Sources and by
Regulatory Regime (%)*
G4-EU11
2021
Brazil - SIN
(MW)
3,404
4,325
3,395
17,619
103,549
Eletrobras
System
(MW)
350
30
1,990
1,091
46,045
41,005
1,948
687
0
173,984
51,455
Share
(%)
10
1
59
6
44
5
0
30
2024
Brazil - SIN
(MW)
3,404
4,325
3,395
21,219
109,972
56,445
687
199,447
Eletrobras
System
Share
(MW)
350
30
3,395
1,091
46,045
1,948
0
52,860
(%)
10
1
100
5
42
3
0
27
•
•
•
The table considers the decommissioning of some thermal power plants planned by Eletrobras companies, according to the Monthly Operation
Program (PMO) of January 2017, prepared by the Brazilian Electric System Operator (ONS).
Eletrobras companies do not have plants running on biomass. However, the 2024 PDE aggregates the amounts of the biomass, wind, solar, and
small hydroelectric power plants sources.
Considering the installed capacity of the Eletrobras companies connected to the SIN plus those in Standalone Systems (504 MW, including 15 MW
in natural gas and 489 MW in oil), the total generation installed capacity of the Eletrobras companies was 46,856 MW in 2016.
Eletrobras | Annual Report 2016 Operating performance
52
53
Strategic expansion
in generation
Eletrobras holds concession and
authorization for the construction
of several electric power generation
projects, including company
projects and partnerships. The
installed capacity of these
projects, which will start operating
in 2017, equals to 14,000 MW, of
which approximately 8,100 MW is
equivalent to Eletrobras’
equity interest.
This expansion is being mostly made
through hydropower sources, which
correspond to nearly 77% of the
installed capacity. The largest plant
in implementation is the Belo Monte
HPP, in which Eletrobras has 49.98%
stake. This plant, which has already
started operations, will add more
than 9,000 MW to the electricity
system from 2017.
In addition, the HPPs São Manoel
(700 MW) and Sinop (408 MW) are
expected to be deployed in the next
few years. The installed capacity in
wind power should add more than
1,200 MW. Also, the company is
currently implementing a thermal
power plant run on gas -Mauá 3
-, (591 MW), which will operate in
combined cycle, generating power
more efficiently and the nuclear
power plant Angra 3 is expected to
be deployed after 2020 (1,405 MW).
Seeking new business opportunities,
Eletrobras companies participates
in hydroelectric power plant studies
and projects, directly or through
partnerships, that amount to a
generation installed capacity
of 21,300 MW. Of all projects
undergoing studies, nearly 10,700
MW are projects that are still
pending bidding, but that have been
included in the supply expansion of
the 2024 Ten-Year Energy Expansion
Plan (PDE 2024), prepared by the
Brazilian Energy Research Agency
(EPE) and the Ministry of Mines and
Energy (MME), equivalent to 83%
of the capacity of all hydroelectric
power plants pending bidding in
the Plan.
Generation expansion historical profile
For the past three years, the company’s installed capacity has
been growing at an average of 1,290 MW per year, especially
through SPEs.
Annual growth of installed capacity by type of
development (MW)*
*Considers Eletrobras’ proportionate interest in SPEs.
Trading in Itaipu
Eletrobras has become Itaipu’s Electric Power Trader, under Act #
10,438/2002. Using a quota regime, the company has allocated to
concessionaires connected to the National Interconnected System (SIN)
in the South, Southeast and Mid-West 67,460 GWh relating to contracted
power, corresponding to revenue of nearly US$ 3.4 billion.
Under Decree 8,401/2015, the hydrological risks associated with Itaipu’s
generation are taken by the distribution utilities in the proportion of
the amount of electric power allocated to each one, in the Account for
Resources from Time-of-Use Rates, the cost of which is passed through
to the rates.
Transmission
Transmission lines
Eletrobras’ transmission lines network totaled nearly 70,201 km in 2016. Of that amount, 6,545 km are wholly
owned by Eletrobras, 57,027 km refer to corporate assets under O&M agreements, and 6,629 km correspond to its
ownership interest in projects developed by Eletrobras companies through SPEs.
Considering only the basic network of the National Interconnected System (SIN), that is, voltages of 750,
±600, 525/500, 345, and 230 kV, the company is responsible for 63,387 km of transmission lines, or 47% of all
transmission lines in Brazil in said voltages.
Transmission lines 2016 (km)
Eletrobras
Companies
Wholly-
owned (a)
Corporate
assets
under O&M
agreements (b)
SPEs –
Eletrobras
ownership
interest (c)
Total (a+b+c)
Leveraged by
Eletrobras (d)
Total -
Leveraged
(a+b+d)
Eletronorte
Chesf
Furnas
Eletrosul
1,767
1,346
1,464
1,565
Amazonas GT
403
Total -
Eletrobras
6,545
10,011
18,967
18,623
9,426
-
57,027
2,072
1,653
1,817
1,088
-
6,629
13,849
21,966
21,904
12,079
403
70,201
4,219
3,075
4,250
1,741
-
13,285
15,996
23,388
24,337
12,733
403
76,857
(c) Considers only Eletrobras’ proportionate interest in SPEs;
(d) Total - Leveraged means the total of km in lines of projects where Eletrobras holds an interest.
Substations
Eletrobras closed 2016 with transformation capacity of 218,922 MVA in its wholly-owned substations, and
17,020 MVA in SPEs, totaling 235,942 MVA.
Substations existing in 2016 – Transformation Capacity (MVA)
Eletrobras
Companies
Wholly-
owned (a)
Eletronorte
12,169
10,527
12,175
4,438
1,365
Chesf
Furnas
Eletrosul
Amazonas
GT
Total
Eletrobras
Corporate
assets
under O&M
agreements (b)
20,512
43,700
92,624
21,413
-
Total (c)
32,681
54,227
104,798
25,851
1,365
SPEs –
Eletrobras
ownership
interest (d)
1,151
8,788
6,118
962
-
Total (c+d)
Leveraged
by
Eletrobras
(e)
Total -
Leveraged
(c+e)
33,832
63,015
110,917
26,813
1,365
2,332
13,868
13,607
2,351
-
35,013
68,095
118,405
28,202
1,365
40,673
178,249
218,922
17,020
235,942
32,158
251,080
Eletrobras | Annual Report 2016 Operating performance 54
55
Quality and efficiency
G4-EU6
Losses
G4-EU12
The transmission lines availability rate is calculated
based on Network Proceedings. This rate considers all
disconnections on Eletrobras companies’ transmission
lines, including those that cannot be managed by the
company, such as in expansions, or random or force
majeure cases. The table below shows the Operational
Availability rate of the Eletrobras companies, which
represents the percentage of hours in one year that the
lines remain available for the transmission system.
Transmission Line Availability Rate (%)
The company recorded an increase of 0.2%
in transmission technical losses compared to
2015. To calculate losses, the company uses a
methodology based cases of power-flow. The
current regulatory model in Brazil provides for
the cost of losses to be split between consumers
and generators, with no burden for the
transmission company.
Transmission technical losses (%)
Disconnections for 100 km transmission line
Includes corporate transmission lines
G4-22: Data for 2015 have been corrected and are different
from what was reported in the 2015 annual report.
Expansion
Strategic expansion in transmission
In 2016, transmission lines wholly-owned by the
company and through partnerships rose by 1,766 km,
out of which 1,561 km are lines above 230 kV. The
Eletrobras companies invested in wholly-owned and
partnership projects nearly R$ 14 billion in 2016. The
highlights were the following:
• Expansion of transmission systems in the
South, adding 1,952 km of 230 kV and 500 kV
transmission lines, and eight new substations
and expansion in other substations, in an
estimated investment of R$ 3 billion by
Eletrosul.
• First circuit of the Belo Monte Plant
Interconnection, with a 4,000 MW
transmission capacity, which will bring
electric power from Pará to Minas Gerais
through a 2,092 km line, in an investment of
R$ 4.5 billion.
• Manaus-Boa Vista interconnection, an R$ 1
billion investment in a 715 km transmission
line to be implemented with the participation
of Eletronorte.
• Brazil-Uruguay interconnection, deployed
in 2016, is the first large scale connection
between the two countries and includes a
new substation in Candiota, and a 63 km
transmission on the Brazilian side. This
Interconnection has capacity to transmit 500
MW in both ways.
• Completion of the 987 km Jauru-Porto Velho
transmission line, in the states of Mato Grosso
and Rondônia, and expansion of associated
substations by Eletronorte, which has
invested R$ 923 million in the project.
• Luiz Gonzaga-Garanhuns-Pau Ferro
transmission line, in 799 km covering the
states of Alagoas, Pernambuco, and Paraíba.
This project, carried out by SPE Interligação
Elétrica Garanhuns (49% Chesf and 51%
CTEEP), was energized in October 2016, and
investment corresponded to R$ 942 million.
Regarding substations, Eletrobras’ transformation
capacity rose by 1,959 MVA, out of which 1,875 MVA
correspond to wholly-owned substations, and 85
to SPEs. The total transformation capacity of the
projects where Eletrobras holds an interest added
2,041 MVA in Brazil.
Transmission expansion historical profile
Eletrobras has been expanding its operations at an average of
2,804 km per year of transmission lines for the past five years,
especially through SPEs, showing the company is committed
to its strategic guidance of being an important player in the
transmission sector, keeping its leading position.
Annual transmission expansion by type of
enterprise (km)*
*Considers Eletrobras’ proportionate interest in SPEs
In order to attract more investments to the sector, Aneel
set new conditions for transmission auctions in 2016.
Therefore, profitability has increased in the generation and
distribution segments, especially due to the increase in
the weighted average cost of capital (WACC). This increase
(from 8.26% in 2015 to 9.73% in 2016) was important in
reflecting the current funding conditions for transmission
projects, leading the Allowed Annual Revenue (RAP) of the
lots to rise an average 20% compared to 2015. There was
also an extension in the deadline for the execution of the
lots in the auction, significantly contributing to reducing
the risk of delays in project deployment. This measure
benefits the transmission sector, even though Eletrobras
did not participate in any auction in 2016.
Eletrobras | Annual Report 2016 Operating performance 56
Distribution
Residential disconnections
G4-EU27
57
Eletrobras’ electric power distribution companies located in Acre, Alagoas, Amazonas, Rondônia, Roraima, and
Piauí operate in the North and Northeast and serve over 7 million consumers. In December 2016, these companies
used a low-, medium-, and high-voltage distribution network extending for 478,768 km and a total of 555
substations, spanning across 700 municipalities. As informed in the Strategy section, Eletrobras has sold its whole
interest in distributor Celg-D, but the consolidated data regarding the distribution of energy still include the
company.
In order to reduce the power disconnection rate, the Eletrobras distribution companies contact customers directly
to investigate the causes of their debts and attempt settlement.
The table below shows a comparison between the number of consumer units and the time it takes for
reconnection, in the period between disconnection and payment of overdue bills, for the past four years.
Operation and trading
Eletrobras’ distribution companies reported lower operating results in 2016 than in previous years, reflecting
factors such as the economic slowdown, low GDP growth, the political crisis, and reduced funds from CDE, CCC,
and RGR. As we have already mentioned in this publication, all distribution utilities will be sold by the end of this
year. For now, they will continue to operate and maintain the distribution services in their locations up to when the
transfer of their controlling stock is completed.
Nationwide consumption of electricity dropped 0.9% when compared to 2015, according to data by the Brazilian
Energy Research Agency (EPE). In the same period, the Eletrobras distribution companies recorded a decrease of
2.45% in the captive market, supplying 29,010.6 GWh to 7,090,252 consumer units (considering Celg-D).
In 2016, 231,399 new units were added, an increase of 3.4% year-over-year, reaching 700 cities in the states of
Amazonas, Acre, Alagoas, Piauí, Rondônia, Goiás, and in the city of Boa Vista. In order to achieve this performance,
distributors invested R$1.13 billion. Distribution lines and networks gained 12,284 additional kilometers in 2016.
Electric power trading by distribution companies
Energy sold (MWh)
Consumption class
2016
Residential
Industrial
Commercial
Rural
Government
Public lighting
Utilities
11,525,285
4,599,425
6,027,120
2,180,302
1,863,806
1,480,825
1,028,885
Company consumption
75,884
TOTAL captive
consumers
Suprimento
TOTAL E. Vendida
28,781,533
229,057
29,010,590
2015
11,527,085
5,262,677
6,253,194
2,076,915
1,888,990
1,443,519
1,021,913
42,845
29,517,140
207,542
29,724,682
(%)
-0.02%
-12.60%
-3.62%
4.98%
-1.33%
2.58%
0.68%
77.11%
-2.49%
10.37%
-2.40%
Number of consumer units vs. Length of time between payment
of installment plan and reconnection
2016
35,260
23,924
11,679
13,547
84,410
2015
14,879
8,153
4,955
9,684
37,671
2014
8,063
5,045
1,880
1,707
16,695
2013
19,324
5,281
1,496
4,029
30,130
Under 24 hours
Between 24 and 48 hours
Between 49 and 72 hours
Over 7 days
Total
* Figures in this table do not include Celg-D.
Quality and efficiency
G4-EU28
Quality of distribution services is monitored by changes in the DEC ratio (Equivalent Outage Duration per
Consumer Unit), which measures how many hours a consumer unit experienced power outage; and the FEC ratio
(Equivalent Outage Frequency per Consumer Unit), which indicates how many times, on average, there was a
disruption in the supply of energy to consumers.
In 2016, the Eletrobras distribution companies recorded a positive variation, according to the graph below:
Quality of distribution services indicators evolution
*Years 2014, 2015 and 2016 were consolidated with Celg-D figures; the company is not consolidated in other years.
Eletrobras | Annual Report 2016 Operating performance 58
59
Electric power losses
G4-EU12
Losses in the distribution of electric power are
measured by the difference between the power
injected in the distributor’s network and the total
power supplied. Losses can be either technical,
that is, losses in distribution inherent to the
transportation process, voltage transformation,
and metering of energy in the utility company’s
network; or non-technical, that is, electricity
theft or fraud, metering errors, billing errors, and
unmetered consumer units.
In 2016, Eletrobras’ distributors recorded an
increase of 1.52 p.p. in losses year-over-year.
As for delinquency, in the period covered by the
report, there was a 1.5 p. p. reduction in relation
to the previous year.
Distributors’
consolidation
Class
Delinquency
Revenue
INAD
2016 (R$
thousand)
2015 (R$
thousand)
2016 (R$
thousand)
2015 (R$
thousand)
2016
2015
Residential
Industrial
Commercial
Rural
486,223
98,070
180,856
41,921
City Government
96,866
State Government
60,421
20,822
58,197
52,375
18,215
Federal
Government
Utilities
Public lighting
Other
TOTAL
CELG - D
463,270
79,889
165,939
44,215
70,111
56,281
10,405
191,273
37,357
5,877
4,374,676
3,886,623
11.1%
1,128,779
1,065,896
2,464,242
2,215,667
300,090
301,247
324,579
180,807
288,800
285,378
106,233
290,471
250,108
268,299
154,843
241,356
272,464
77,240
8.7%
7.3%
14.0%
32.2%
18.6%
11.5%
20.2%
18.4%
17.1%
11.4%
1,113,965
1,124,618
9,754,831
8,722,966
587,891
612,265
7,936,130
7,998,524
7.4%
11.9%
7.5%
7.5%
15.2%
28.0%
21%
6.7%
79.2%
13.7%
7.6%
12.9%
7.7%
appliances in the market, and is managed
by Eletrobras with the support of Inmetro.
With this initiative, Procel promotes the
technological development and improvement
of manufacturers, and helps in the qualification
of labs and research centers. Supported by the
program, manufacturers are also encouraged
to comply with maximum energy consumption
rates for devices, under the Energy Efficiency
Act # 10,295/2001, and receive subsidies for
the preparation of technical energy efficiency
standards. Eletrobras Cepel plays an important
role in this project.
Procel Education
This project contributes to building a knowledge
base in energy efficiency and sustainability,
by disseminating information and making
educational resources available to the country’s
formal educational system, encouraging
citizens to develop skills, competences, and
attitudes towards the efficient use of energy.
Through Procel in Schools, Procel Education
seeks to expand education for the country’s
sustainability. The “Energy that Transforms”
and “Nature of the Landscape” methodologies
have been developed and made available, with
resources that support teachers and students
in approaching the energy, energy efficiency,
and sustainable development themes in the
classroom. The implementation actions of
Procel in Schools are carried out through the
Energy Efficiency Program (PEE), regulated
by Aneel, and executed by the electric power
distribution utilities in a partnership with state
and city government education departments.
In the professional education front, Eletrobras
and Procel have been investing in creating a
network of energy efficiency labs and research
centers. 44 educational and research labs
and 3 excellence centers have already been
created, focusing on creating and disseminating
advanced energy efficiency educational tools,
and on developing and monitoring energy
optimization studies. The priority audience for
this program are undergraduate and graduate
students, and energy professionals.
Sector programs
G4-EU7; G4-EU23
Eletrobras supports important initiatives of the
federal government on universal access to electric
power, energy efficiency, sustainable development,
and expansion of science and technology in the
country. The following are the highlights among
the programs the company participates in
and/or manages:
National Program For The
Preservation Of Electricity –
Procel
Procel is an initiative of the federal government to
promote the efficient use of electric power and fight
energy waste. Eletrobras is responsible for executing
the activities, and for technical and financial support,
under the coordination of the Ministry of Mines and
Energy. The results of this program, in addition to
promoting the technological development of pieces of
equipment that consume electricity, have enabled the
postponing of investments in the energy sector and the
reduction in equivalent carbon emissions (CO2 eq), thus
mitigating environmental impacts.
Procel operates nationwide, and promotes energy-
efficiency programs in different sectors of the
economy, in connection with education, information
dissemination, buildings, environmental sanitation,
municipal energy management, public lighting, and
industry, in addition to the Procel Seal, helping the
country save energy and generating benefits for the
whole society.
The benefits for the society include both the saving
of energy, and the investments postponed in the
expansion of the electric power sector. In 2016, Procel
contributed, mostly through the Procel seal, to savings
of 14 million megawatt-hour (MWh), equivalent to
the annual consumption of 7.21 million homes, and
preventing the emission of 1.14 million CO2 equivalent.
One of Procel Seal’s programs helps consumers identify
the most efficient pieces of equipment and home
3,722 equipment models from 39
categories received the Procel
Seal in 2016.
7 laboratories for equipment
testing were incorporated
into the network, totaling 37
laboratories.
Difference
2016 vs
2015 (p.p.)
12.6%
5.9%
11.2%
3.3%
20.4%
21%
16.8%
19.7%
4.7%
37.5%
-11.4%
-3.2%
Eletrobras | Annual Report 2016 Operating performance 60
61
Through this program, Eletrobras executed 18 agreements related to special projects with enabling agents (based
on ordinance 60/2009 of the Ministry of Mines and Energy), using CDE resources for R$ 7.61 million, between 2010
and 2012. The goal is to serve 377 consumer units located in extremely remote areas using renewable sources. Of
that amount, by the end of 2016, 328 consumer units were connected, according to on-site inspections.
The table below shows the number of connections contracted and registered with the Project Management System
of the Luz Para Todos Program (LPT), and special projects connections confirmed on-site by Eletrobras, by 2016,
broken down by region:
Region
North
Northeast
Mid-West
Southeast
South
Brazil
Number of connections by 12/31/2016
Contracted between Enabling
Agents(*) and Eletrobras
Registered with the LPT System +
Confirmed on-site in Special Projects
672,861
1,524,783
212,039
429,048
184,783
3,023,514
576,015
1,464,254
202,900
424,748
185,293
2,853,210
*Enabling Agents are power utilities, licensed distribution companies, and rural electrification cooperatives.
257 thousand students were benefited in 2016 by the educational projects executed by the energy distributors anies
The following are among the results
recorded in 2016:
Procel Info
The Brazilian Energy Efficiency Information Center (Procel Info)
was created to systematically disseminate information on the
efficient use of electric power. It gathers, generates, and disclose
important information originating in Brazil or abroad relating
to energy efficiency. Launched in 2006, the Procel Info website
was developed by Eletrobras with resources from the Global
Environment Facility, through the World Bank, and supported by
the United Nations Development Programme (UNDP).
•
•
1,774 schools, 5,678 teachers,
and 257,696 students benefited
from the educational projects
executed by electric power
distribution utilities through the
Energy Efficiency Program (PEE).
Two classes completed the
Efficient Use and Conservation of
Energy Program (Energe, distance
learning), totaling 240 students
from universities throughout
the country.
• New module created for the
Energe program: “Energy
efficiency – context and current
affairs,” covering fundamental
concepts in energy efficiency.
The key highlights of the website in 2016 are as follows:
Proinfa
•
•
6,101 new user registrations, up 14.6% year-over-year,
totaling 47,763 registered users.
1.061 million page views, corresponding to a monthly
average of over 88,000 views, and 828 tickets solved via
e-mail and the Contact Us channel.
The goal of the Alternative Energy Source Incentive Program (Proinfa) is to leverage the diversification of the
Brazilian energy matrix by increasing the share of projects based on wind, small hydroelectric power plants (SHP),
and biomass sources.
Since 2004, Proinfa has contributed to diversify the country’s energy matrix by using local energy sources, and has
helped create nearly 150,000 direct and indirect jobs in the whole country, enabling large industrial demands and
the internalization of cutting-edge technology.
A total of 131 new projects, shared among 60 PCHs (1,159.24 MW), 52 wind farms (1,282.52 MW), and 19 biomass-
fired thermal power plants (533.34 MW), have been added to the Brazilian energy matrix by Proinfa, amounting to
an installed capacity of 2,975.10 MW. By 2016, Proinfa’s contribution to the system in terms of energy generated
totaled approximately 79 million MWh.
Luz para todos
The purpose of the Luz Para Todos (LPT, Light For All Program) is to take, by 2018, electricity to the Brazilian rural
population that does not have access to this public service. Resources for this program come from the federal
government as subsidy—through the Energy Development Account (CDE)—and from credit facilities—through
the Global Reversion Reserve (RGR) and Caixa Econômica Federal. State governments also invest in the program, as
well as enabling agents.
By the end of 2016, these resources totaled R$ 23.21 billion, 73% of which refer to sector-specific resources
managed by Eletrobras. Up to 2016, 84% of a total of R$ 16.90 billion had been released.
In 2016, a total of 73,641 connections were made, adding to a total of 3,331,727 since 2004, when the program
began. 99.5% of the targets set for the year were met.
Energy contracting ended on December 31, 2011.
In 2016, the program generated 9.4 million MWh, at a cost of R$ 3.65 billion.
Sources
SHP
Wind
Biomass
Other Sources
Total
Projects deployed in 2015 and 2016
Projects
Power (MW)
60
52
19
-
131
533.34
1,282.52
1,159.24
2,975.10
Eletrobras | Annual Report 2016 Operating performance Chapter 5
Economic
and financial
performance
The challenge is: overcoming
Eletrobras has been working to reverse the negative financial results of the last periods
and registered a profit of R$ 3.426 billion in 2016, after four years of successive losses. The
financial market has also reacted positively. Eletrobras’ common shares ranked second in a
ranking made by consulting firm Economatica that listed the 16 stocks that rose over 100%
in 2016. Eletrobras’ common shares rose 288% in the period, and its preferred shares also
ranked ninth in the same ranking, with a 141% rise.
Financial discipline is one of the pillars of Eletrobras Business and Management Master
Plan for the 2017-2020 period, focused on initiatives such as reduction in investments;
privatization of distributors; sale of administrative real estate; sale of interests in Special
Purpose Entities; tax optimization and corporate restructuring aiming at the use of
tax credits.
Bovespa
64
Eletrobras | Annual Report 2016
65
e
c
n
a
m
r
o
f
r
e
p
l
a
i
c
n
a
n
fi
d
n
a
c
i
m
o
n
o
c
E
Pimental electric gallery
Results
Operating revenue
Gross operating revenue amounted to R$ 70,988 million
in 2016, up 64.2% when compared to 2015, broken down
as follows:
Gross revenue by business segment (in million)
Net revenue totaled R$ 60,749 million, up 86.4% year-
over-year. This increase was mainly due to the following:
Generation
Transmission
Revenue from generation was down by 5.1%,
mostly due to a decrease in the Difference
Settlement Price (PLD), causing the sale of energy
in the spot market to fall from R$ 1,812 million
to R$ 1,242 million. Revenue from supply also
dropped, by 18%, reaching R$ 2,946 million, due
to the following:
•
•
•
A change in contracted terms for the supply
of Northeast manufacturers by Eletrobras
Chesf, under Act # 13,182/2015, which
determined the extension of the concession
of the Sobradinho hydroelectric power plant
and applied an additional rate adjustment
that remained in force only during the
second half of 2015.
The de-verticalization of Eletrobras
Distribuição Amazonas, because the electric
power sold from generation assets, which
used to be recognized as supply within
Amazonas D, started being recognized in the
supply account of Eletrobras Amazonas GT,
with no effect in the consolidated profit or
loss for 2016.
Billing of contracts with Albras and South 32
(former BHP Billiton) made by Eletronorte,
whose contracts are influenced by the
foreign exchange rate and the price of
aluminum in the international market (LME).
Revenue from transmission increased by nearly 500%.
This result mainly reflects Ordinance 120 (April 20,
2016) of the Ministry of Mines and Energy, which
determined the payment and compensation conditions
relative to the Existing System’s Basic Network (RBSE),
allowing for the recognition of this credit. This had
a direct impact on revenue from transmission, and
restated the transmission rate of return by
R$ 28,601 million.
Distribution
The decrease of 0.8% in distribution is mainly due
to the calculation of the constitution share, which
was affected by over contracting, and the difference
between the average price considered for the
Regulated Contracting Market (ACR) on rates and
the average price of energy purchase agreements
in 2016. Eletrobras Celg-D, Amazonas Energia, and
Distribuição Alagoas stand out in this scenario. The
increase of 2.5% in revenue from supply was due to
rate adjustments. Energy sold rose from 29.8 TWh to
30.4 TWh in 2016.
Costs and expenses
Operating costs amounted to R$ 16,211 million
in 2016, down 4.6%, and operating expenses
totaled R$ 29.699 million, up 3.4%. Learn more
about the key influences on these results on
pages 99 and 100 of the Financial Statements,
available at the Eletrobras website.
Equity interest
Equity interest rose 486% in 2016, to R$ 3.114
million. The highlight was the recognition of
RBSE by CTEEP, with an impact on Eletrobras’
equity accounting in the amount of R$ 1,603
million, partially offset by the derecognition
deriving from investigation findings at SPE Belo
Monte (R$ 91 million).
Financial result
The net financial result went from a net expense
of R$ 1,699 million in 2015 to a net expense of
R$ 5,929 million in 2016. The key factors that
contributed to this increase of 249% include
the foreign exchange variation and net inflation
adjustment—down 164%, from revenue of
R$ 2,403 million in 2015 to an expense of
R$ 1,600 million in 2016.
66
67
Income tax and social security
The provision for income tax and social security went from an expense of R$ 710 million in 2015 to an expense of
R$ 8,511 million in 2016, due to an increase in deferred tax, especially the effect of the recognition of the RBSE. The
RBSE provision totaled R$ 9,724 million.
Value-added statement (DVA)
G4-EC1
(R$ million)
Profit or loss
G4-9
Eletrobras recorded net profit attributed to controlling
shareholders of R$ 3,426 million in 2016, up 124% versus
a net loss of R$ 14,442 million in 2015. In managerial
terms, the company closed 2016 with a net loss of R$ 522
million, versus net loss of R$ 705 million in 2015.
Net Profit (in R$ million)
Consolidated
Net Operating Revenue
Energy purchased for resale
Use of the electricity grid
Fuel for electricity production
Construction
Gross income
Personnel, material, services, and other
Remuneration and reimbursement
Depreciation and amortization
Operating provisions/reversals
Operating result before equity interest
Equity interest
Profit or loss before financial result
Income from interest and financial investments
Inflation adjustment, net
Exchange variation, net
Debt charges
Charges on shareholders’ funds
Compensation referring to Act 12,783/2013
Other financial results
Profit or loss before income tax and social security
Income tax and social security
Net profit or loss for the period
Minority interest
Net profit or loss payable to controlling shareholders
Note: the values in the table are in R$ million.
2016
60,749
-11,264
-1,805
-760
-2,382
44,538
-12,768
-363
-1,844
-14,724
14,839
3,114
17,953
2,241
-1,600
138
-6,376
-201
0
-131
12,024
-8,511
3,513
87
3,426
2015
32,589
-10,766
-1,738
-1,250
-3,238
15,597
-11,842
-349
-1,843
-14,639
-13,076
531
-12,545
2,251
2,403
33
-6,340
-41
115
-120
-14,244
-710
-14,954
-512
-14,442
Learn more about the profit or loss per business segment on page 104 of the Financial Statements, available on the
Eletrobras website.
In 2016, the value added to shareholders recorded a positive variation of R$ 3,513 million, up from a negative
R$ 14,954 million in 2015 to a positive R$ 3,513 million in 2016.
The decrease of R$ 2,494 million in amounts to third parties is mainly due to the foreign exchange impact on debt
denominated in foreign currency, referring to foreign exchange variations (a decrease of R$ 5,371 million).
The rise of R$ 7,166 million in taxes reflects the increase in income taxes caused by Ordinance 120/2016 of
the Ministry of Mines and Energy, which determined the payment and compensation conditions relative to the
RBSE, allowing for the recognition of this credit. This measure impacted the revenue from transmission, and the
restatement account of the transmission rate of return by (R$ 28,601 million).
The increase of 9% in the personnel account—up from R$ 6,005 million to R$ 6,549 million—was influenced by the
adjustment of the 2016 collective bargaining and by Eletronorte’s expenses referring to the end of the hazardous
duty lawsuit (R$ 49 million) and the administrative agreement for uninterrupted alternating shifts (R$ 38 million).
Ebitda
Ebitda totaled R$ 19,797 million in 2016, up from negative Ebitda of R$ 10,702 million in 2015. The managerial
Ebitda margin reached 12.8%, 2.4 p.p. year-over-year.
Eletrobras | Annual Report 2016 Economic and financial performance 69
68
Consolidated debt
G4-9
Net debt totaled R$ 23,438 million in 2016 – increase of 37.6% over 2015. The Eletrobras holding chose not to
access the capital market in Brazil or overseas in the year, and not contract debt locally or internationally. These
decisions were mainly made based on the current interest rates paid by the government in fixed income securities,
rising the cost of opportunity of creditors and making credit more expensive. Regarding Chesf, Eletronorte and
Furnas subsidiaries, funds were raised with Caixa Econômica Federal through bank bills of credit (CCB) (learn more
about this on page 109 of the Financial Statements, available here).
Eletrobras shareholding structure
Capital markets
Stock performance
In 2016, the Bovespa Index, the main
indicator of the São Paulo Stock and
Futures Exchange, rose 38.9%, and
Eletrobras’ stock also recorded a
significant rise. Common shares rose
296%, closing the year at R$ 22.81, and
preferred shares rose 148%, closing at R$
25.89.
At the NYSE, common share ADRs rose
404% year-over-year, closing at US$
6.86, and preferred share ADRs rose
205% to US$ 7.88.
In Madrid, common shares in the Latibex
program rose 419%, closing the year
at €6.69, and preferred shares rose
221.85%, closing at €7.70.
Therefore, Eletrobras’ capital stock was
R$ 31,305,3 million, represented by
1,352,634,100 shares— 1,087,050,297
common shares and 265,583,803
preferred shares—according to the graph
below:
Eletrobras | Annual Report 2016 Economic and financial performance Chapter 6
Environmental
performance
The challenge is: efficiency
Allied to the consumer when choosing an appliance, the Procel Seal indicates those that
are more efficient and consume less energy. The result goes far beyond what is seen in the
energy bills.
The Seal is the result of the National Program for The Preservation of Electricity (Procel), an
initiative of the federal government implemented by Eletrobras, whose actions contribute
to the knowledge about the efficient consumption of energy and to the development of
habits to avoid waste, while reducing environmental impacts and collaborating for a more
sustainable Brazil.
In 2016 alone, Procel contributed to savings of 14 million MWh, equivalent to the annual
consumption of 7.21 million homes. Therefore, it has prevented the emission of 1.14 million
tCO2 equivalent.
The Procel Seal informs the consumer about
energy saving appliances
72
73
Management system
So that the Eletrobras companies can keep track of all environmental actions carried out, they rely on an
environmental management system comprised by three elements: Environmental Policy, Environment Committee
(SCMA) and Corporate Sustainability Management Indicators System (IGS system).
Environmental policy
Environment committee (SCMA)
System of indicators for
Corporate Sustainability
Management (IGS System)
and Tocantins, which had much-below-average precipitation, leaving the levels of the São Francisco, Tocantins
and Xingu rivers much lower than normal. Southern Brazil had much-above-historical average precipitation due
to frequent and intense rains in several areas. The year 2016 ended with the influence of a weak La Niña without
significant consequences to the country.
At the Eletrobras companies there are three hydroelectric power plants whose reservoirs are among the largest in
the country: Sobradinho (in the São Francisco river), Furnas (in Rio Grande river) and Tucuruí (in the Tocantins river).
The image below shows these reservoirs’ usable storage capacity in the past five years of operation.
Reinforces the company’s
commitment to the respect
for the environment and the
sustainable development of
the country.
Steers the treatment of
social and environmental
issues associated with
Eletrobras companies.
Space for discussing practices
and guidelines for the social
and environmental issues.
It is composed of managers of
the environment department
of the companies, who
convene at least three times
each year.
Currently has 11 working
groups and a topic-specific
committee.
Since 2010, strategic
tool monitoring the
environmental indicators of
all Eletrobras companies.
It covers topics such as water,
energy, waste, biodiversity,
volunteer actions, and
compliance.
Currently, it has 233
performance indicators
and 358 variables, with 597
registered users.
In 2016, new variables were
added to the IGS System
to monitor water reuse in
administrative activities and
in thermal generation, and a
new activity related to wind
generation was created.
The following Eletrobras operations are also ISO 14001 certified: Tucuruí HPP, Samuel HPP, Coaracy Nunes HPP
and associated 138kv transmission lines, circuits I and II and substations Central and Santana - of Eletrobras
Eletronorte; and substations Foz do Iguaçu and Ibiúnas - of Eletrobras Furnas; substation maintenance service of
Paulo Afonso - of Eletrobras Chesf; Eletrobras Furnas thermoelectric power plants and Almirante Álvaro Alberto
nuclear power plant (CNAAA) - of Eletrobras Eletronuclear . External audits are also carried out as required by
State Act # 1,898/91.
Water
G4-EN8; G4-22
The rational use of water resources is essential for the maintenance of the services provided to the energy market
and for the development of the activities carried out by Eletrobras companies.
Since 2012 the electricity sector has faced challenges due to variability of precipitation events of some river
basins that pose significant problems for hydroelectric generation. In 2016, the country felt the effects of El Niño
with impacts in most of northeastern Brazil and some parts of the northern regions, such as the states of Pará
Source: Electric System National Operator (ONS).
The volumes are the result of the system operation carried out by the ONS, according to the flows occurred,
considering the storage capacity of the reservoirs and the operational restrictions of the SIN. In the case of the
Sobradinho HPP, the volume is also the result of the exceptional measures for flow reduction taken at the reservoirs
in the basin of the São Francisco river, under authorization of the National Water Agency (Ana) and the Brazilian
Institute for the Environment and Renewable Natural Resources (Ibama). In relation to 2016, the Tucuruí reservoir,
different from previous years, did not reach the maximum volume at the end of the flood season (April). The volume
of the reservoirs of Sobradinho and Furnas, meanwhile, was higher than in 2015.
Eletrobras | Annual Report 2016Environmental performance
74
75
In order to illustrate the situation of water availability, the following graphs present the natural flows at the
Sobradinho, Furnas and Tucuruí HPPs, in 2015 and 2016, as well as the historical average of flows (1931 to 2016):
As for the other projects, Itaipu HPP (in the Paraná River) stands out with one of the largest flow rates in history in
2016 and reported record-breaking power generation in one year.
Theme Monitoring
In order to monitor the theme ‘water’, the company relies on its working group on water resources and
hydroelectric potential of Eletrobras companies (GTRH-EE), which since 2005 has been responsible for addressing
issues related to water resources that impact its performance and bottom line.
GTRH-EE has been monitoring this theme and prepared a report on the available historical river flow records
provided by the Brazilian electricity sector (1931-2016), of all fully-owned Eletrobras projects to assess the
behavior of hydro basins in recent years.
Considering the relevance of the natural water resource for their businesses, Eletrobras participates in hydro
basin committees, water councils, and technical chambers, in addition to participating in debates on the subject in
technical forums. For that matter, in 2016, Eletrobras took the vice-chair role at the working group on water of the
Brazilian Business Council for Sustainable Development (CEBDS).
Water Consumption
In 2016, 4,315,860.01 m³ of water were used for administrative purposes, including the volume used by the
Eletrobras Furnas fish farm, and 7,322,602,03 m³ for thermal power generation, as shown in the table below. In
the PDNG 2017-2021, Eletrobras has set the goal of reducing by 1.5%, by 2021, the administrative consumption of
water supply network.
Volume of water used by Eletrobras companies (in m³)
Administrative
activities
Source
Surface water
Ground water
2016
20151
2014
3,396,683.48
3,611,235.02
3,609,999.68
Water Supply Network
643,463.63
275,712.90
230,428.69
598,452.43
184,769.65
579,773.41
Thermoelectric
power generation
Surface water
Ground water
5,061,349.32
20,531,665.54
35,879,025.70
3,574.20
193,229.30
207,900
Water Supply Network
204
-
-
Seawater
3,315,363,666.00
3,176,016,885.00
3,199,396,000.00
1G4-22 - The volume of water withdrawn directly from surface sources, groundwater (wells, springs), and the water supply network from water utilities
for use in administrative activities of 2015 have been adjusted by the companies in IGS System.
Note: The ground water consumption for Eletrobras Chesf and Amazonas GT for administrative activities and thermoelectric power generation is not
accounted for.
The seawater used by Eletrobras Eletronuclear (around 3,315 million m³) for cooling the secondary system of
Angra 1 and 2 nuclear power plants is fed completely back to the sea at Saco Piraquara de Fora with a slight
increase in temperature.
In 2016, thermoelectric power generation reduced significantly the volume of water withdrawn from surface and
ground water sources, around 65%, due to the deactivation of the Eletrobras Distribuição Amazonas thermal
power plant.
The water used by the hydroelectric plants for generating energy is only diverted to power turbines and therefore
does not add up to the total volume of water consumed shown in the table above. It is worth mentioning that
operations are continuously monitored to ensure they meet the standards established by environmental legislation
and do not affect aquatic ecosystems.
Likewise, all companies reported the total volume of water used in administrative activities based on information
provided by the water/sewage services. All other uses of water have been reported according to the location of the
administrative units and operations.
As seen in the graphs, in these three reservoirs, the flow in 2015 and 2016 remained below historical averages.
Despite that, 2016 was not among the years with the least available water resources at Furnas. As for Sobradinho
HPP, due to a streak of years with low inflow, Eletrobras Chesf has been working together with the authorities to
define minimum effluents flow rates for the reservoir. The idea is to optimize operations, store water for power
generation and other uses in the region, in order to ensure water security in the São Francisco river basin.
Eletrobras | Annual Report 2016Environmental performance 76
77
those technologies, activities and sectors that
contribute to the reduction of GHG emissions.
Clean and renewable energy companies will
add more benefits by contributing to the
reduction of GHG emissions. In this context,
the management of risks and opportunities
related to climate change at Eletrobras is based,
therefore, on the constant identification and
analysis of exposure to different threats, as well
as on the adoption of strategies to maximize
economic, social and environmental results,
considering the trade-offs while keeping risks
within pre-established and supervised limits.
If, in the future, there is a taxation of CO2
emissions in the country’s productive activities,
with the result of the annual GHG emissions
from its main thermoelectric power plants,
Eletrobras, since 2013, has been evaluating the
financial impact of this tax on the Cash flow
of the projects sensitive to it. The initiative to
adopt an internal carbon price placed Eletrobras
as one of the benchmark companies in the
Carbon Disclosure Project (CDP), in the Utilities
category.
Financial Compensation
The Eletrobras companies pay financial compensation
for the use of water resources at their HPPs as per
federal legislation. The amounts paid by the companies
are calculated based on how much power is generated
each year. In 2016, the company recorded the lowest
amount paid since 2012 - around R$ 460 million.
Such a drop, in the last five years, is mainly the result of
the water crisis hitting Brazil, notably the northeast and
southeast regions, causing Eletrobras Chesf
and Eletrobras Furnas, which have most of their
operations in those regions, to generate less hydro
power and, as a consequence, pay lower financial
compensation amounts.
Energy
G4-EN6; G4-EN7
In line with its commitment with environmental
conservation and business sustainability, Eletrobras
carries out actions aimed at power consumption
mitigation and monitoring.
The direct consumption of energy from renewable
sources (such as ethanol and biodiesel) and non-
renewable energy sources (such as gasoline, coal,
liquefied petroleum gas, diesel oil, fuel oil and aviation
fuel) takes place in the operation of thermoelectric
power plants and emergency diesel groups, as well
as in the supply of the own fleet of vehicles. Indirect
consumption refers to consumption by intermediary
sources, i.e., energy consumed in the form of electricity.
In its PDNG 2017-2021, the company set the goal of
reducing the consumption of fossil fuels in its own
vehicle fleet and the consumption of electric energy by
1% until 2021.
Power Consumption
In 2016, the Eletrobras companies registered
101,763,662 GJ in energy consumption, of which
6,670,394 GJ in electricity and 95,093,268 GJ in direct
energy. The figures represent a small increase of 6% in
electricity consumption compared to the previous year,
and a 21% saving in direct energy - the largest share
of which comes from thermoelectric generation and
emergency generator groups.
and environmental responsibility (PRRS)
project that consists of inspecting units at
the end of the day to make sure any lights and
equipment are turned off if not in use. The
action helps to save energy and to create new
habits among employees. Each company carries
out the necessary actions to reduce energy
consumption, in line with the company’s goals.
Fuel indicators are managed by a special
department that collects data on a monthly
basis and tabulates that to calculate the total
annual figures. An internal committee monitors
electricity consumption and meets regularly
to evaluate the outcomes reported by the
department, and recommends improvement
actions to further reduce the total energy
consumption . The indicators follow the rules
of PROCEL, set forth by Act # 9,991/2000 on
energy efficiency.
For electricity consumption, the Integrated
Energy Efficiency Committee of the Eletrobras
System (Cieese) works to seek technological
solutions for all subsidiaries, technical
cooperation and excellence in energy efficiency
business.
Climate change
G4-EC2; G4-EN15; G4-EN16; G4-EN17; G4-EN18;
G4-EN19; G4-EN21
Eletrobras is committed to transitioning its
operations more and more towards a low-
carbon economy. In 2012, the company made
a public commitment to guide its operations
with particular reference to climate change.
That statement has been incorporated into the
Eletrobras Companies’ Environmental Policies.
In that regard, Eletrobras has been working
towards identifying risks related to climate
change and greenhouse gas emissions from
the production processes and administrative
activities of all subsidiaries with the adoption
of measures to bring down those emissions.
This task is carried out by a working group that
prepares the necessary studies and prepares/
adapts the impacts caused by climate change
at the Eletrobras companies and
surrounding areas.
Among the internal actions aimed at reducing power
consumption at Eletrobras offices, the following stand
out: awareness campaigns, preference for video
conferences (that helps to cut down on employee trips),
monitoring of local goals. At Eletrobras Distribuição
Acre, for instance, there is a sustainability and social
Ensuring the implementation of actions to
manage greenhouse gas emissions, prioritizing
renewable energy projects and promoting
studies are some of the commitments
undertaken by Eletrobras related to this theme,
especially when we know that climate changes
can impact the amount of water available in the country
and, consequently, energy generation by hydroelectric
power plants, and might require more intensive use of
thermoelectric power plants, especially those powered
by fossil fuels.
In this sense, Eletrobras has been seeking to understand
and evaluate the risks and opportunities related to
climate change - considered one of the great challenges
of the 21st century. The main aspects covered are the
following:
•
•
•
physical risks on the generation, transmission
and distribution of electricity: changes in
rainfall and wind patterns, extreme events and
natural disasters - which have repercussions on
socioeconomic activities.
regulatory risks related to the change of the
legal framework of the country due to both
international agreements and the emergence
of new legislation that directly affects sectors
or intensive activities, carbon emission and
contribute to intensify global warming. In the
first case, Brazil is a signatory to the Paris
Agreement (COP 21/2015), and its NDC [1]
is committed to reduce its greenhouse gas
(GHG) emissions by 37% by 2025 and to reduce
emissions by 43% % by 2030 (based on the
values measured in 2005). In the second case, in
the current global and national context, there is
a strong trend towards adopting carbon pricing
as an efficient and effective alternative to reduce
GHG emissions.
financial risks are closely related to the previous
two risks, and are translation of physical and
regulatory impacts on financial parameters
commonly used to attest the feasibility of
projects and operation of projects, among
others. Taxation of GHG emissions, for example,
may have a major financial impact on the
company’s operation that is intensive in fossil
fuels use, and may even change its investment
portfolio. In contrast, a company that invests
heavily in low-GHG technologies will be little
affected by this taxation, and may have financial
gains in an environment that is restrictive of GHG
emissions, whether through direct investments
or carbon market transactions.
From a business perspective, in addition to risks,
climate change also offers many opportunities for
Eletrobras | Annual Report 2016Environmental performance 78
Emissions
The GHG Emissions Inventory of Eletrobras companies follows the IPCC (2006) methodology and the Greenhouse
Gas Protocol - GHG Protocol guidelines (WRI, 2004). Each subsidiary accounts for 100% of the GHG emissions
of the units they have operational control, thus not account for emissions from operations where they only
hold corporate interest (SPEs). The necessary information to prepare the inventory is provided by the company
representatives participating in the Working Group on Climate Change Strategy (GT 3) of the Eletrobras Companies
Environmental Committee (SCMA).
The image below explains how the GHG inventory is prepared, its scope, general structure and sources recorded.
GHGs Inventory - Eletrobras Companies
79
To calculate emissions from electricity consumption, transmission and distribution losses, the company employs
the National Interconnected System (SIN) emission factors, which are calculated monthly and published by the
Brazilian Ministry of Science, Technology and Innovation (MCTI).
CO2 emissions from bio-fuel consumption (biodiesel, ethanol added to gasoline, and alcohol fuel) are reported
separately from the calculations in this inventory because emissions are reabsorbed during photosynthesis in
sugarcane and soybean crops among other plants used in the production of these bio-fuels.
Thermoelectric power generation emissions from independent power producers (IPP), whose power is acquired by
Eletrobras concessionaires and resold to the end consumers, are quantified under scope 3 and therefore recorded
separately from Eletrobras’ own thermoelectric generating plants, recorded under scope 1.
The total energy content of the consumed fuels is calculated based on the conversion factors provided by the
Brazilian national energy balance (BEN).
GHG emissions from hydroelectric reservoirs that belong to Eletrobras companies are not considered because
there is currently no international scientific consensus in regards the methodology to estimate such emissions and
to determine emissions (or net emissions) from water bodies.
In addition to GHG emissions, sulfur oxides (SOx), nitrogen oxides (NOx) emissions and particulates are also
estimated.
Results
In 2016, Eletrobras companies registered an decrease in Scope 1, due to the decrease of the energy generation
in the Furnas, Chesf and Amazonas GT thermoelectric plants. With regard to Scope 2, although emissions from
transmission losses fell by 26.7%, emissions from distribution losses increased by 106.47%. The growth was
verified at Eletrobras Distribuição Amazonas and Distribuição Alagoas and is attributed to the expansion in
data coverage.
Emissions of Greenhouse Gases - GHG
2016 (tCO2e)
2015 (tCO2e)
Scope 1
Scope 2
Scope 3
TOTAL (tCO2e)
6,954,216
2,109,075
2,112,499
11,175,791
8,413,795
1,839,372
2,991,807
13,244,974
%
-17.35%
14.66%
-29.39%
-15.62%
Source: General Calculation GHG inventory base year 2015 and 2016, Table S5. Result by GHG Emission Source
Note: For more information, see the full table in the Eletrobras GHG Emissions Inventory, available on the company’s website, on the Climate
Strategy page.
In its PDNG 2017-2021, Eletrobras presents the goal of
reducing emissions of greenhouse gases by 0.2% a year, by
persevering in the effort to cooperate in fighting climate
change on the planet.
The intensity of the GHG emissions of the Eletrobras companies
is measured according to net generation of energy (MWh)
and also to the Net Operating Revenue (ROL in R$) that in this
case allows a uniform comparison between all generation,
transmission and distribution companies. In 2016, the emission
intensity for energy generated was 0.047 tCO2e / MWh, about
30% less than in 2015, which shows that the generation matrix
of the Eletrobras companies was cleaner in terms of
carbon emission.
Intensity
of the GHG
Emissions
By Net
Operating
Revenue
(tCO2/ROL)
By Net
Generation
(tCO2/MWh)
2014
2015
2016
0.29
0.23
0.16
0.072
0.068
0.047
Eletrobras | Annual Report 2016Environmental performance 80
Eletrobras | Annual Report 2016
81
SOx and NOx Emissions
In 2016, SOx and NOx emissions from own TPPs totaled 27,436.60 tons and 11,712.00 tons
respectively. The Particulate Matter (PM10) emission totaled 4,3643 tons, 46% less than in 2015.
e
c
n
a
m
r
o
f
r
e
p
l
a
t
n
e
m
n
o
r
i
v
n
E
Nota: The numbers for 2015 are different from what was reported in the last annual report due to the non-consideration of Eletrobras
Eletronuclear emissions for SOx and NOx in the GHG Emissions Inventory base year 2015, available for consultation at Eletrobras website. (G4-22)
As for the continuous monitoring of coal-fired power plants emissions, the company uses an extractive CEMS
method based on NDIR absorption for SOx and NOx. Such emissions are calculated based on factors disclosed by
the European Environment Agency. On the other hand, for the isokinetic particle sampling the company uses the
following methods: for SOx, Cetesb L9, 228 and for NOx, Cetesb L9, 229.
Printed hard-copy monthly reports with validated air emission data, diagnosis of flaws and monitoring conclusions
are sent out to Ibama, authenticated with the signature of the designated area in charge. Isokinetic stack samples
are taken monthly and subject to operational availability of each generating station in order to validate the
continuous monitoring performed.
Biodiversity
Environmental issues are directly related to the nature of the Eletrobras operations, for that reason, managing and
mitigating impacts on biodiversity are strategic guidelines that must be followed from the planning to operational
phase of its businesses.
The Eletrobras companies carry out biodiversity recovery and protection actions aligned with the principles
and guidelines of the company’s environmental policies. The rational use of energy resources to help maintain
a balanced relationship between environmental, engineering and socio-environmental aspects are a premise
adopted throughout all project phases. In addition, the Eletrobras companies favor the maintenance of a
systematic and continuous improvement process of management practices based on compliance with public
policies and international agreements to which Brazil is a signatory.
The IGS System also allows monitoring the environmental performance of companies regarding the theme
‘biodiversity’. In 2016, Eletrobras started through its working group on water resources and biodiversity of the
environmental committee (SCMA) a study on risk exposure related to biodiversity, with the objective of identifying
the dependencies/impacts of the business on this theme and vice-versa, as well as the opportunities presented by
such an interaction, with the purpose of improving the management and performance of companies.
Also in 2016, through its role in the technical committee on biodiversity (CTBio) of the Brazilian Business Council
for Sustainable Development (CEBDS), the company devised a critical analysis of biodiversity indicators, the CEBDS
wrote a White Paper with all the information collected and submitted it to the GRI.
³ Value related to the emissions from the Candiota Thermoelectric Complex, of Eletrobras CGTEE, which uses coal to generate electricity.
To monitor the coal-fired thermoelectric plants, the
non-dispersive infrared absorption method is used
for SOx and NOx
82
83
Waste
G4-EN23; G4-EN25
Data from the monitoring of effluents and waste
generated by Eletrobras operations is also used by the
IGS system, which can detect potential inconsistencies.
In 2016, the companies disposed of 1,385,795 tons of
waste, mostly in industrial landfills and for reuse; of
the total waste disposed of in 2016, only 2,359 tons
were included in Class I, deemed hazardous, most of
it (1,383,436) generated by thermal power generation
activities from Eletrobras Amazonas GT and CGTEE,
destined for recovery.
Boiler ash is now classified as reusable waste, as when
it is not sold to the cement industry, it is used to recover
mine pits. As a consequence, reusable waste volumes
increased as opposed to being disposed of in industrial
landfills. Most ash is generated by coal-fired power plants
located in Candiota (RS).
It is worth mentioning that all solid waste is treated
by Eletrobras companies as per the current legislation
and the Brazilian health regulatory agency (Anvisa)
regulations. Waste classified as hazardous is collected
and stored selectively at the generating sources,
according to their main characteristic and sent out to
companies specialized in transportation, treatment
and disposal of (oil residues, batteries, solvents, expired
chemical products, fluorescent lamps, packaging of
contaminants and healthcare waste).
Total weight of waste transported by destination (in tons)
Destination
2016
1,839.28
15,699.51
3,642.47
1,272.55
2,305.26
City Waste Service
Industrial Landfill
On-Site Waste Storage
Co-Processing
Recycling
Reuse
Incineration
Healthcare Waste
Total
Radioactive waste generated by
Eletrobras Eletronuclear is included into
three categories:
Low level waste - materials used in the
regular operation of the plant such as
gloves, overshoes, protective clothing,
equipment, etc. are collected and sorted.
Some undergo decontamination and
others are shredded and compressed
to save space and are then stored in
containers that shield radiation;
Medium level waste - such as filters,
solidified liquid effluents and resins. They
are packed in a solid cement matrix and
kept in appropriate steel containers while
radioactivity of these materials decay;
and
High level waste - spent fuel elements
that have been used in nuclear power
plants to generate electrical energy. They
are reprocessed so they can be reused
in the future and stored in special pools
inside the plant’s secured buildings.
Total¹
2015
3,292.35
2014
3,079.90
1,028,934.17
1,049,531.34
4,259.04
589.71
1,128.52
6,223.62
331.80
2,750.43
1,360,022.01
391,582.75
383,397.09
80.51
331.22
37.42
1,616.31
1,385,350.26
1,431,619.92²
-
2,172.56
1,446,467.52
¹ Data does not include all Eletrobras companies.
² Quantity adjusted by the Eletrobras Companies IGS System regarding what has been disclosed in the 2015 report (G4-22).
Solidary Selective Waste Collection Program
Pursuant to Act # 5,940/2006, Eletrobras carries out a selective waste collection of recyclable
materials at the group’s companies on behalf of associations and cooperatives, thus contributing
towards the social inclusion of hundreds of waste-picking families. In 2016, the company destined
more than 23 tons of recyclables.
sustainable development.
Such initiatives include social
actions developed by the
companies to meet the needs
and demands of the surrounding
communities as well as actions
aimed at protecting and
managing biodiversity.
In addition to communicating
the impacts of the best
practices in the development of
mitigation and environmental
compensation projects,
Eletrobras incentivizes projects
that can make a difference in
the management of social and
environmental issues in the
companies, and that can bring
benefits to the region in which
the project was implemented.
Eletrobras companies have
also been acting as knowledge
production drivers by carrying
out projects, diagnoses about
biodiversity, archaeological
heritage, traditional
populations, among others,
in their environmental impact
studies. You can learn about
some of the best practices on
Eletrobras’ website.
Preventive
measures
G4-EU21
Due to the risks inherent
to Eletrobras’ business,
every operation counts on
a specific contingency plan
that is continuously updated
and includes social and
environmental aspects related
to natural disasters, spills, fire,
information technology issues,
workers strikes and company
image crises, among others.
So all employees can implement
those plans in an emergency,
some Eletrobras companies
invest in training and education,
involving emergency brigades
and employees who work in risk
areas.
At Eletrobras Eletronuclear,
the employees undergo annual
drills. At Eletrobras Chesfthe
hydroelectric power plants have
basin flood control manuals
that give instructions in case of
flood events and the measures
that must be taken should this
happens.
The emergency plan, in
turn, comprises different
organizations such as Civil
Defense, Military Police and
the Fire Brigade. Drills are
performed on a regular basis
and certified by the competent
authorities.
As for Eletrobras Furnas,
Eletronorte e Eletrosul they
rely on the transmission line
emergency response plans,
based on analyzes that detected
some sort of flaw - such as relief,
access conditions, number of
damaged towers, etc. In the case
of a blackout, service must be
reestablished in order of priority
of the loads (what should get
energized first), transmission
and distribution lines re-closed
by sector, and power plants
synchronized.
In addition to the plans
described earlier, all the
employees who work in risk
areas wear individual and
collective protection equipment.
Such actions abide by the rules
and regulations of the Ministry
of Labor and Employment
(MTE), the Fire Department,
Civil Defense and environmental
entities.
As a way of raising awareness
to the dangers of energized
equipment, the companies carry
out several communication
actions such as putting up
warning signs and posters.
The subsidiaries’ contingency
plans are not disclosed to
the public on their respective
sites, except for Eletrobras
Eletronuclear.
Best practices of
Eletrobras companies
Given the importance of
developing distinguishing socio-
environmental management
actions that can benefit the
region where project are
implemented, since 2001
Eletrobras has been developing
a Best Practices Project.
Until 2015 many of the
environmental actions carried
out by the company were to
enforce the environmental
legislation. The outcomes
of the monitoring carried
out by the holding company
pointed out, however, to a
shift in the development of
socio-environmental actions
of the Eletrobras companies.
There was an increase in
voluntary actions carried out
by the subsidiaries. That is
an important indicator of the
company’s commitment to
promoting environmentally
Eletrobras | Annual Report 2016Environmental performance 84
85
Cultivando Água Boa Program
(Cultivating Good Water)
As a result of the permanent community
participation movement created in 2013,
in which Itaipu Binacional, in addition to
mitigating and correcting environmental
liabilities, develops several socio-
environmental actions related to the
conservation of natural resources and
biodiversity. The program also fosters
the promotion of quality of life in the
communities of the Paraná Watershed 3,
which has more than 1 million inhabitants.
Promontar - Marine Turtle
Monitoring Initiative
Created in 2013 by Eletrobras Eletronuclear
to monitor the presence of sea turtles in the
Angra 3 Plant influence area and to treat the
animals eventually found debilitated, over
181 sea turtles have already been rescued
on the beaches of the region. With the help
of local residents and Ilha Grande State Park
employees, the team identified, in 2015,
spawning of the loggerhead turtle (Caretta
caretta) species, an unprecedented event in
Ilha Grande bay.
Residents of the Paraná Basin region participate
in environmental education and revitalization of
springs activities, promoted by the Cultivando
Água Boa Program
Eletrobras | Annual Report 2016Environmental performance Chapter 7
Social
performance
The challenge is: universalization
It has already been considered by the United Nations as one of the largest social programs in
the world, promoting universal access to electricity, and an example to be followed by other
nations. The Luz para Todos (Light For All) program - an initiative of the Ministry of Mines and
Energy managed by Eletrobras - has already served around 15.9 million rural dwellers across
the country. The initial target of reaching 10 million people was reached in May 2009.
More than figures and distances surpassed, the program big challenge is to change people’s
lives. In addition to bringing energy, the program offers solutions for its use as a vector for
social and economic development in low-income communities, contributing to poverty
reduction and increasing family income. Access to energy makes easier to integrate with
health services, education, water supply and sanitation, favoring the permanence of families
in the countryside.
Family served by the Luz para
Todos project in Ponta Porã,
Mato Grosso do Sul
88
89
sexual harassment and other forms of discrimination
based on sex/gender, race, religion or ideology.
Considering those premises, the Eletrobras staff at the
end of 2016 comprised:
Employee profile
Health and safety in the workplace
As for workplace health and safety management, Eletrobras focuses on anticipating, recognizing, evaluating and
controlling hazards in the workplace and promoting employee health in accordance with current legislation and
technical, legal and ethical recommendations made by government agencies and scientific entities.
The developed actions are in line with the workplace health and safety policy, which determines the continuous
maintenance of good working conditions and employee well-being as per the Eletrobras companies’ sustainability
policies.
Health, safety and quality of life main practices
Robust and trained
management structure
Close dialogue and monitoring
Promotion of health and
well-being
Specialized Occupational Health
and Safety Engineering Service
(SESMT) in the companies’
facilities and/or strategic
situations
Internal Accident Prevention
Committees (Cipa) to prevent
occupational accidents and
diseases
Ergonomics committee
Environmental Risks Prevention
Program (PPRA) to neutralize
the potential risk of accidents,
disease and/or unfavorable
workplace conditions
Compliance with environmental
risks and hazard standards
Occupational accident and
disease prevention programs
Vaccination and awareness
campaigns on serious diseases
Stimulating sports, healthy eating
and cultural and leisure activities
Support for physical, emotional,
social and organizational balance
Annual medical examinations
Monitoring of employees that
carry out external activities and
construction work, projects and
or service inspection
Internal Accident Prevention
Week (SIPAT) at least once a year
Rigorous and specific monitoring
of risks related to nuclear energy
at Eletrobras Eletronuclear
workplace, including safety and
emergency plans
Employees
Eletrobras understands that its employees are
essential to achieve the expected results. For
that reason, it promotes several actions aimed
at improving workplace conditions, professional
development and work-life balance.
Such actions are guided by the Eletrobras
people management policy that establishes
the guidelines for optimal development,
appreciation and retention of talents.
The holding company is responsible for
aligning those guidelines and seeking the best
market practices.
The people management policies at Eletrobras
include guidelines on acting in an integrated
manner and monitoring people management,
ensuring equal rights, opportunities and
obligations, while respecting the specific
characteristics of each region, tapping
the synergies between employees and the
Eletrobras companies.
In order to hear the voice of its employees
regarding the actions developed by the people
management area, Eletrobras performs an
organizational climate survey every two years.
The last edition was held in 2015 and the current
management is expected to discuss the criteria
for the upcoming survey.
Workforce profile
G4-9; G4-10; G4-LA12
Eletrobras has full-time and part-time
employees and, due to its legal status as a
government-controlled company, it holds public
service entrance exams to select employees as
required by the 1988 Federal Constitution.
It is also committed to promoting the federal
government Special Secretariat for Women’s
Gender Equality Policy by adopting the
Gender and Race Equality Program intended
to curb violence and sexual harassment in the
workplace. In order to curb potential non-
compliances with its commitment to equality
and the principles of its Code of Ethics and
Conduct, Eletrobras promotes Gender and
Race Committees in its companies, which
are committed to promoting awareness and
guidance on issues such as moral harassment,
Eletrobras | Annual Report 2016Social performance 90
Career and people
development
G4-LA9; G4-LA10; G4-EU14
Corporate Education
The Eletrobras corporate education model is based
on the integrated and cooperative performance of
companies aligned with the company’s strategic
objectives in terms of integration, competitiveness,
profitability and sustainability and the challenges
arising from the Brazilian electric sector’s regulatory,
technological and structural environment.
The model is comprised by the Eletrobras System
Corporate University (Unise) and the associated
corporate education units, corresponding to each
of the companies, and aims to develop employees’
professional skills to boost the strategic reach of the
Eletrobras companies.
Unise develops general skills, managerial skills and
specific skills that are critical to the viability of the
strategy, special business training, dissemination of the
culture and values of the Group.
In order to make activities possible at the Eletrobras
companies, in 2016, Unise focused its activities in the
following:
• Use of centralized installations that help to
reduce/eliminate travel and lodging costs while
maintaining corporate integration. This way,
whenever possible, educational actions are
offered in: Rio de Janeiro, Brasilia, Recife and
Florianópolis;
•
Strengthening of the University by means of
strong and recognized partnerships that can
bring value to educational actions and keep
quality standards in their offerings;
• Negotiating activities in a unified way, creating
economies of scale and synergies;
•
Providing online courses, inspired by the
Integrity and Ethics course taken by around 4
thousand students at the close of 2016. The
average time spent by employee in educational
initiatives was 74.9 hours.
With regard to the management of skills and continuous
learning of employees, Eletrobras companies also have
programs focused on the development of general and
specific competences - according to the needs of each
function and the actions involve lectures, and training
among others. Unise and the Individual Development
Plan (PDI) are the company’s two main resources in
this regard.
91
And to employees who are in preparation for
retirement, most Eletrobras companies have
initiatives such as the Retirement Preparation
Program (PPA) and the Reflection for
Retirement Program (PRA), which aim to offer
a reflection and planning for the retirement
period. These programs deal with financial
aspects, family relationships and private
pension, among others, besides contemplating
the transfer of knowledge to employees of
the company.
Career Development
Since 2010 the Eletrobras companies’ career
and compensation plan (PCR) brings together
the guidelines and policies on positions,
careers, remuneration and performance. Based
on skills and focused on results, the company
aligns its people management policies and
practices with strategic business drivers, aiming
at enhancing the organizational performance.
An integral part of the PCR, the performance
management system (SGD) defines the
planning, monitoring and result evaluation
processes (based on business and team goals
aligned with the company and Eletrobras
companies’ strategies) and skills, thus helping
to channel the employees’ efforts towards the
achievement of the objectives and outcomes
that ensure profitability, sustainability,
competitiveness and create value.
The evaluation results are useful for diagnosing
the gaps in education/training that can be
addressed to improve employees’ skills. In
addition to that, the SGD results integrate
a series of people management actions
(remuneration, career, internal selection and
development).
In 2016, the Eletrobras holding company started
a selection process looking for a specialized
human resources consulting firm that can
review skill mapping needs, adjust career plans,
propose management succession mechanisms,
improve performance evaluations and employee
potential evaluation processes. The consulting
works are expected to take place throughout
2017, at first at the holding company.
Remuneration and benefits
G4-LA2; G4-LA3; G4-LA13
Eletrobras’ pay policy considers the salary grid of each position, as defined in the career and remuneration plan
(PCR), the collective agreement, and the variable pay in the form of a profit sharing plan (PLR), as agreed with
the unions representing the workers. The guidelines defining pay are based on meritocracy and professional
development, without distinction of gender, race or other features that could hinder access to a career path.
Wage ratio and remuneration of women and men
Company
Management level
University degree
Elementary/Secondary
School
Salary
Remuneration
Salary
Remuneration
Salary
Remuneration
Holding
Cepel
Acre
Furnas
Eletrosul
Eletronuclear
CGTEE
Eletronorte
Chesf
Itaipu
Rondônia
Amazonas
Roraima
Piauí
Alagoas
Amazonas GT
0.90
0.93
0.29
1.02
0.97
0.87
0.74
0.81
0.92
0.93
0.85
0.93
1.16
0.81
1.05
1.00
0.94
0.92
0.03
0.99
0.89
0.90
0.74
0.78
0.85
0.90
1.01
0.93
1.05
0.74
0.85
0.99
0.97
0.83
0.30
0.88
0.93
0.81
0.77
0.84
0.89
0.90
0.90
0.88
0.97
0.97
0.83
1.00
0.93
0.76
0.24
0.78
0.81
0.71
0.77
0.72
0.81
0.82
0.98
0.88
0.92
1.00
0.80
0.92
1.12
1.15
0.09
0.98
1.04
0.94
0.84
0.98
1.09
0.92
0.95
1.14
1.09
1.28
1.84
1.00
1.27
0.98
0.89
0.62
0.84
0.82
0.84
0.84
1.01
0.78
0.80
1.14
1.19
1.06
1.13
0.78
In addition, the company provides the following benefits:
Extended maternity leave up to 180 days and five-day paternity leave, health insurance (also for dependents
of same-sex couples) and dental insurance, group life insurance, private pension fund, daycare allowance,
variable remuneration, meal/food allowance, vacation bonus, long service pay, transportation benefits,
personal leave for victims of domestic violence, personal leaves, bereavement leave, funeral allowance,
educational aid grants, supplementary sick pay, pharmacy benefits/drugs coverage, language courses, and
psychological and pedagogical assistance benefits for children.
In 2016, 540 employees took maternity/paternity leaves, 98% returned to work and, one year later, are still
working in the company.
Eletrobras | Annual Report 2016Social performance
92
93
Customer satisfaction
G4-PR5
Since 2014 the holding company carries out a unified biennial survey for the G&T segments to assess the
satisfaction level of its customers. The results of the companies’ second integrated customer satisfaction survey
taken in August 2016 show that the overall satisfaction and importance rate of the generation and transmission
business customers, with a commercial focus, is 85.31% and 93.05% respectively.
The survey used the Customer Window Quadrant model as a method to measure the customer satisfaction of the
generation and transmission clients based on their perceptions about the value attributes and by relating it to the
importance attributed by the customer.
The Eletrobras distribution companies evaluate their customers’ satisfaction through surveys conducted by ANEEL
(Brazilian Electricity Regulatory Agency), based on the ANEEL Customer Satisfaction Rate (IASC) survey, and also
by ABRADEE (Brazilian Association of Electric Power Distribution Companies), based on the its Perceived Quality
Satisfaction Rate (ISPQ) survey.
ABRADEE Survey – General Satisfaction Rate (ISG) %
ANEEL Customer Satisfaction Rate (%)
Eletrobras Distributors offer several channels to serve the customer
Text in the image: Understanding your electric bill
Customers
Case Studies
Clear and transparent communication
G4-PR3; G4-EU24
The Eletrobras companies are known for the
transparency and accessibility to information about their
services. For that reason, the six distributors that serve
more than four million customers adopted a standardized
electricity bill template, which details consumption,
tariffs, taxes, quality indicators, and brings other useful
and important data. Eletrobras Distribuição Amazonas,
for example, displays on its website information about
the company’s services and service channels.
The bill also features practical information and images
about the safe use of electricity and any additional
information that consumers must be aware of, such as
risks, theft of electricity, low-income social tariff, etc.
Those aspects are also addressed by educational
programs and the promotion of citizenship at the
communities where the companies operate.
As a way to reach different stakeholders and ensure that
safety information reaches all customers, Eletrobras
distributors also invest in publications with safety tips on
the use of electricity; visit educational institutions and
participate in city and state events promoting lectures
with topics such as conscious consumption of electricity,
environment and power grid risk prevention.
Eletrobras Distribuição Rondônia published on
its website an inclusive tool that can translate
texts into Brazilian Sign Language (VLibras).
It is a free open-source tool developed to
improve access to information for Brazilians
with hearing impairment. In addition to adding
the VLibras service access icon on its website,
the concessionaire has been promoting digital
inclusion through ‘O Mundo da Luz’ (or, a world
of light) project, an online multimedia resource
about the conscious use of electricity and safety
measures that should be adopted. That material
is also available in Brazilian Sign Language -
Libras.
As for Eletrobras Distribuição Piauí, the
company is redesigning its website that will be
equipped with features for the visually impaired
and is expected to launch in the first half of 2017.
Customers also count on other channels where
they can get information such as service
stations, toll-free number, company websites
and profiles on Facebook and Twitter.
Eletrobras | Annual Report 2016Social performance 94
95
Supply chain
G4-12, G4-LA14; G4-HR1; G4-HR4; G4-HR5; G4-HR6;
G4-HR10; G4-HR11; EN32
The Eletrobras companies work towards maintaining a
close relationship with their suppliers, keeping track of
their activities, keep up a continuous and transparent
dialogue with them, in addition to sharing their ethical
principles throughout he relationship cycle. In line with
the sustainability policies that guide its businesses,
based on internationally recognized management
practices, the company believes that it can help its
suppliers to comply with sustainability parameters which
can improve their positive environmental and social
impacts and mitigate negative ones. In that sense, the
company required that its suppliers commit to a series of
social and environmental goals:
The main suppliers of the Eletrobras
companies are in the fields of
technology, information technology,
telecommunications, engineering,
manufacturing, transportation,
resale, equipment for electrical power
generation, consulting in different areas,
and cleaning and security services. Those
various-sized contractors -from micro-
companies to large multinationals- come
from across Brazil and abroad. Eletrobras
and its subsidiaries rely on a supply chain
that involves around 58,700 companies.
The contracts signed in 2016 with
approximately 3,400 suppliers totaled
R$ 8,7 billion.
Supplier management socio-environmental commitments
To ensure that these commitments are successfully
carried through, suppliers are continuously
monitored throughout the duration of the contract
and if any event is recorded, the company may start
an administrative proceeding that can prevent
suppliers from participating in public bids with
Eletrobras, and the possibility of a formal complaint
against the supplier to the Public Prosecutor’s
Office. Out of the 2,162 new pre-qualified suppliers,
27% were selected based on environmental criteria
and all also on human rights and labor practices.
With respect to the significant contracts for the
company, 524 included clauses related to human
rights - equivalent to 55% of the total.
To assist in the management process, Eletrobras’
strategic supply logistics committee (Celse)
analyzes good sustainable procurement practices
and disseminates them in guidelines and standards
(Eletrobras’ sustainable bidding practices guide), on
its website and at meetings with those suppliers.
Critical suppliers
At Eletrobras, critical suppliers are those
with access to the organization’s confidential
information, due to their contracts, that impacts
directly the quality of its services, the environment,
employees’ health and safety, and human rights, as
well as information that represents high risk to the
company’s integrity.
In those cases, in addition to the requirements
mentioned earlier and in compliance with the
Integrity Program, the Eletrobras companies are
mobilizing to adopt standard procedures with their
critical suppliers, such as filling out a due diligence
form, statement of integrity, in addition to carry
out continuous monitoring of their activities.
In addition to that, Eletrobras determines in its
contracts that suppliers must comply with the
principles and standards of its anti-corruption
program, whenever applicable, available online for
consultation at , section
Suppliers.
To reduce the risk of noncompliance
with the commitments to
sustainability, integrity and ethics,
as well as generate value to the
relationship with its suppliers,
Eletrobras, through its contracting
oversight section, hold an annual
meeting with suppliers - a joint-action
with companies Cepel, Eletropar,
Eletronuclear and Furnas.
The meeting with suppliers is
a development action aimed at
disseminating and exchanging
information, and answer questions
about the contracting and contract
management processes at Eletrobras
and its companies . The 2016 edition
had the attendance of suppliers
with active contracts, managers
and contract inspectors from the
Eletrobras companies in Rio de Janeiro,
the covered the following topics:
•
•
•
•
The new public bidding scenario
and contracts - State-Owned
Companies Act
The anti-corruption program
Dialogues with the environment
- environment advocates
talked about the importance
of bringing relevant criteria
into the purchasing process
such as climate change and
greenhouse gas emissions,
waste generation and
treatment, water, energy and
fuel consumption and the
preservation of biodiversity.
Dialogues with social
responsibility - the Eletrobras
companies’ gender and race
committees in Rio de Janeiro
raised questions about the
difficulties women and black
Brazilians face to climb up the
corporate ladder, and some
aspects of moral and sexual
harassment.
Eletrobras | Annual Report 2016Social performance 96
97
the projects being developed and allows the
company to come up with their help actions
that are adequate to their needs, which
should be listed in the environmental impact
assessments and also in the preventative
actions that the company might carry out
or promote together with the appropriate
authorities.
The environmental impact studies and
the environmental licenses indicate the
responsibilities and financial resources to
carry out the socio-environmental actions
that are defined during the preparation of
the basic environmental plan, which is also
submitted to the environmental agencies
for analysis. As for the holding company,
in charge of the environmental licensing of
projects such as hydroelectric power plants
and transmission lines, the engagement
actions take place during the environmental
impact and feasibility studies, and are usually
based on specific social communication plan
for each project or set of projects (in the same
area being studied).
Social communication actions are
implemented based on that plan, including
the set-up of local offices, toll-free (0800)
numbers, stakeholder mapping, creation and
dissemination of communication materials
such as folders, videos and radio broadcast,
and meetings with the several social groups to
hear their opinions, disseminate information
and stimulate social interaction. Media
is monitored and opinion polls are also
conducted to identify what those populations
expect and to resolve any social conflicts that
may arise.
At meetings with the local communities, the
holding company publicizes its relationship
channels such as the Ombudsman office
and the contact us channel (Fale Conosco),
and encourages the population to use
them. Eletrobras also encourages the
creation of local committees - spaces
where the community and their appointed
representatives can participate.
Local communities
G4-SO1; G4-SO2;
One of the objectives of the business and management
master plan is to ensure that the Eletrobras System
projects become drivers of sustainable development
in surrounding communities, for example, based on
the alignment of best practices that can promote
sustainable operations.
From study through to operations, the Eletrobras
projects can cause more or less impact depending
on the region where they will be implemented. Local
communities are often hit very hard by negative
impacts. So to mitigate and offset those impacts, and
based on the lessons learned from past operations,
Eletrobras also seeks to update and renew its
commitments already expressed in its environmental
master plan and in its paper published in the early
1990’s, “Processos de Interação do Setor Elétrico
Brasileiro com a Sociedade”, about the interactions of
the electricity sector with society.
In line with the UN Global Compact, which
the company is a signatory, and aligned with
its policies on sustainability, environment,
social responsibility and communication, and
engagement with stakeholders, Eletrobras
seeks to promote ethical and transparent
dialogues with the purpose of building
engagement and qualifying relationships with
the local communities in which it operates,
by recognizing their culture, forms of social
organization, and the representatives
appointed by them.
As an example of such commitment, since
2015, guidelines on the relocation of
populations affected by initiatives carried
out by the electricity sector have been
incorporated into the societal relationship and
environmental communication guidelines of
the company’s environmental policy. Among
other rules, the Eletrobras companies should
track the evolution of the socioeconomic
conditions of the relocating and the host
Chief Ytunti Kayapó,
from the Menkrãgnoti
Re village, gives
an interview to TV
Eletrobras
communities, based on quantitative and qualitative
evaluations at least during the period set forth in the
environmental licenses.
Under a human rights perspective, the UN’s
sustainable development goals (SDGs) have been used
as a reference for the preparation of other corporate
policies such as of Eletrobras companies’ social
responsibility policies, updated in 2016, and guide
the prioritization of projects that might receive the
support of the company, always focused on bridging
gaps and boosting the sustainable development of the
local communities where Eletrobras operates.
That series internal guidelines has been incorporated
by the legal commitments and obligations that the
company must follow throughout the environmental
licensing process. As for legislation, the most
noteworthy are federal decree # 7,342/10 and
interministerial ordinance # 340/12 about the
socioeconomic assessment of the populations affected
by the dams. Such socioeconomic assessment also
tells apart vulnerable groups that can be impacted by
Eletrobras | Annual Report 2016Social performance 98
Case
One of the examples of relationship between Eletrobras and surrounding communities is the
communication and social interaction work that has been developed since 2012 at the hydroelectric
projects of São Luiz do Tapajós and Jatobá.
In 2016, the company updated its stakeholder mapping and diagnosis, produced printed and
audiovisual material, visited community institutions, held 112 meetings attended by 870 local
residents, non-governmental organizations, students and representatives appointed by the Vila
Pimental community.
99
Indigenous Community
Eletrobras gave continuity to projects at 10 Kayapó indigenous villages in the Xingu region in southern Pará, near
to the Belo Monte plant. The time line to implement the West Kayapó support and assistance project that will help
1,500 indigenous people, in partnership with Funai and local organizations, has been pushed back to the end
of 2017.
To give continuity to those actions, a consultant has been hired to assist with the technical cooperation project
with the Inter-American Institute for Cooperation on Agriculture (IICA). Called, “Access and Use of Electric Energy
as a Development Instrument for Communities in Brazilian Rural Areas”, the project identifies socioeconomic
potential that could lead to efficient and productive use of electricity at the Kayapó indigenous communities and
the Menkragnoti and Baú indigenous lands.
The actions also included the distribution of approximately 6,000 copies of the bimonthly
newspaper “Voadeira” about the São Luiz do Tapajós HPP, and over 2,000 copies about Jatobá HPP
with information on the progress of studies, and other materials such as booklets, DVDs, meeting
minutes etc.
The consult identified potential community initiatives that focus on improving the quality of life and the cultural
development of the Kayapó community. One of the studies conducted, for example, is about the structure of
the agro-forestry management of the babassu palm, Brazil nut, and tonka beans, and the production of local
handicrafts.
The projects conducted at the indigenous villages have achieved the following: institutional strengthening of the
entities representing the Kayapó community; promotion of sustainable economic activities such as the 273%
volume increase in Brazil nuts collected by the Western Kayapó group; and appreciation of the local culture by
creating language learning materials in Mebêngôkre.
In 2016, Eletrobras also signed the Eastern Kayapó Support Program, slated to take place during 18 months in 22
indigenous villages, helping 4,500 people. With this project, Eletrobras supports, in all, 32 Kayapó villages in the
Xingu region, thus contributing to the development of sustainable income generation alternatives that protect
territories and natural resources.
Eletrobras Eletronorte keeps programs in partnership with Funai in the Parakanã, São Marcos and
Krikati indigenous lands, carrying out actions to develop indigenous communities and offset social and
environmental impacts caused by the company projects.
In the Waimiri Atroari indigenous land, located in the area of influence of the Balbina HPP in operation
since 1989, the company carries out health, education, protection and environmental programs, in
addition to actions to support local production systems focusing on the sustainable development of
the community. The Waimiri Atroari land comprises 2,585,611.96 hectares and is home to a population
of 1,917 indigenous people living in 45 villages. In 2016, the program received R$ 6.6 million from
Eletronorte destined for mitigation and environmental compensation actions, thus completing the
corrective measures determined by the competent authorities.
Indians of the Kayapó Mekrãgnoti Re village with employee from the Social Responsibility department of Eletrobras
It is worth emphasizing that the environmental impact
studies provide a diagnosis of the social aspects at
the areas impacted by the projects and what those
impacts are. That process involves the participation of
local communities and their representatives through
interviews and meetings. The results of those evaluations
and the projected programs are presented at meetings to
local communities and their representatives, and also at
public meetings defined by the environmental agency.
In 2016, Eletrobras invested approximately
R$ 53.7 million in social, cultural and sports
projects, land development, promotion of
citizenship, children and adolescent rights,
environment, creation of job opportunities
and streams of income, health and food
safety in surrounding communities.
Traditional populations
In line with its commitments and policies, Eletrobras
seeks to promote ethical and transparent dialogues with
traditional populations, more frequently with indigenous
peoples at the communities where operates, recognizing
their culture, forms of social organization and the
representatives appointed by them.
The Eletrobras companies’ environmental committee
addresses the indigenous people’s rights issue at its
indigenous community’s commission created in 2012. In
2016, the second editions of Eletrobras’ corporate social
responsibility policy emphasized that in the process of
building engagement and qualifying relationships with
stakeholders, companies should pay special attention
to vulnerable groups such as traditional and indigenous
communities.
Before applying for an environmental approval,
the Eletrobras companies must comply with the
interministerial ordinance # 60/2015, which determines
the guidelines and criteria that environmental license
applications submitted to Ibama (Brazilian Institute of
Environment and Renewable Natural Resources) must
follow, along with participation of agencies such as Funai
(Brazil’s National Indian Foundation), and Fundação
Cultural Palmares. They must also comply with
Article 231 of the Federal Constitution, with
regard to the rights of the indigenous peoples
involved in the licensing processes.
As for projects that started operating before
the National Environmental System was
created (SISNAMA Act # 6,938/1981), are
required to assess the indigenous element
during the licensing renewal process, under the
coordination of Funai, in addition to adopting
measures to mitigate potential impacts. As
a rule of conduct, the Eletrobras companies
comply with the legal requirements to repair any
damages caused to the indigenous communities
by the implementation of electrical power
generation and transmission line projects, in
addition to supporting cultural development
projects at those communities.
Eletrobras | Annual Report 2016Social performance 100
101
Social and environmental
engagement and development
programs
In addition to mitigating the social and environmental
impacts caused in the areas where the company
operates, Eletrobras is committed to the engagement
and development of local communities. To that end,
the company promotes actions aimed at educating
the population on issues related to health, social
responsibility and environmental responsibility. Below
are the main programs that the Eletrobras companies
developed in 2016.
Volunteer Program
In 2016, the holding developed further
its volunteer program by recognizing the
importance of this initiative to strengthen
the organizational culture and its
relationship with the community where
it operates. For that matter, the company
carried out 33 actions in partnership with
institutions that help socially vulnerable
groups, serving over 680 people.
Internally, the company conducted six
campaigns that engaged volunteers and
employees in initiatives focused on the
communities surrounding the company,
which included blood drives, food
collection drives, among others, for those
impacted by natural disasters and people
fighting cancer, among others.
Aedes Aegypti mosquito
Campaign
CCP Sabores do Tomate –
(CCP Tomato Flavors)
The Eletrobras companies actively
engaged in a country-wide campaign
to combat the Aedes aegypti mosquito,
which includes educational material about
preventive measures published on social
media and communication channels.
Among the main actions carried out—
based on the action plan prepared jointly
with the health and quality of life areas
of the company—are employee training,
especially public-facing agents such as
representatives of the power company,
weekly visits to installations, identification
and elimination of potential places where
the mosquito lays its eggs, systematic
distribution of information material and
actions involving the population living
around the Eletrobras companies.
In Braganey - a municipality with six thousand
inhabitants, featuring one of the largest tomato
productions in the State of Paraná, - the Centro
Comunitário de Produção (Community Production
Center) Sabores do Tomate has made possible since
2011, with the support of Eletrobras, a project so
that the local community may produce food from
tomatoes that are not accepted for sale because of
minor defects or inadequate marketing standards.
The fruit, which would be wasted, is transformed
into products such as tomato syrup, tomato paste,
snacks, candies, jellies, among others. In 2016, the
production was expanded for bakery items.
CCP Sabores do Tomate is the only kitchen in
the municipality to obtain the Sanitary Vigilance
seal, enabling farmers’ families to access good
manufacturing practices and care with sanitary
standards, as well as income generation. Revenue in
2016 was around R$ 37,000.
Action of the Eletrobras Volunteer
Program brought together 40 employees
of the company to donate blood
Braganey producer packing cookies
produced at CCP Sabores do Tomate
Eletrobras | Annual Report 2016Social performance
Chapter 8
GRI index
The challenge is: development
It is not possible to dissociate economic development and quality of life from energy
consumption. In 2016, the National Interconnected System started receiving 2,599.6 MW
from the Belo Monte hydroelectric dam, a power plant in which Eletrobras companies hold
a 49.98% stake. When completed in 2019, it will be the largest 100% Brazilian power plant
and the fourth largest in the world, with an installed capacity of 11,233.1 MW, capable of
generating energy to serve 60 million people in 17 Brazilian states.
Social development is also a trademark of this plant, which in 2016 registered a 99%
decrease in malaria cases in the five municipalities of its influence area in the last five years.
The conquest in the Middle Xingu region of Pará is consequence of the implementation of
the Malaria Control Action Plan, funded by Norte Energia, a consortium responsible for the
project, and implemented by the Public Health agencies.
Belo Monte HPP, view of the spillway
104
GRI index
GRI Indicator
Page / Direct Answer
Pacto
Global
ODS
1. Strategy and analysis
G4-1
G4-2
Statement from the most
senior decision-maker of
the organization about the
relevance of sustainability to the
organization
Description of key impacts, risks,
and opportunities
Page 8 e 9
Pages 38, 39 e 40
2. Organizational profile
G4-3
G4-4
G4-5
G4-6
G4-7
G4-8
G4-9
G4-10
G4-11
Name of the organization
Page 14
Primary brands, products, and
services
Location of the organization’s
headquarters
Pages 14 e 15
Headquartered in Brasília
– Distrito Federal: SCN
Q 4 BL B – sala 203 - Asa
Norte; and its main office
is located in Rio de Janeiro:
Av. Presidente Vargas, nº
409 – Centro.
Number of countries where the
organization operates
Nature of ownership and legal
form
Page 16
Page 14
Markets served
Pages 14 e 15
Scale of the organization
Pages 14, 18, 66, 68 e 88
Total number of employees
Page 87
Percentage of total employees
covered by collective bargaining
agreements
All employees of the
Eletrobras companies
are covered by collective
bargaining agreements.
In addition to permanent
employees, the Collective
Bargaining Agreement
also covers all own and
amnesty / reinstated
employees, who are
assigned to government
agencies.
Pages 94 e 95
Pages 14, 15, 16 e 17
Pages 38, 39 e 40
G4-12
G4-13
Describe the organization’s
supply chain
Significant changes during the
reporting period regarding the
organization’s size, structure,
ownership, or its supply chain
Commitments to external initiatives
G4-14
Report whether and how the
precautionary approach or
principle is addressed by the
organization
105
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
G4-15
G4-16
Pages 44 e 45
Pages 44 e 45
List externally developed
economic, environmental and
social charters, principles, or
other initiatives to which the
organization subscribes or which
it endorses
List memberships of associations
(such as industry associations)
and national or international
advocacy: organizations in
which the organization, holds
a position on the governance
body, participates in projects
or committees, provides
substantive funding beyond
routine membership dues
3. Identified material aspects and boundaries
G4-17
List all entities included in the
organization’s consolidated
financial statements
All companies: Cepel,
Chesf, Furnas, CGTEE,
Eletrosul, Eletronorte,
Itaipu, Distribuição Acre,
Distribuição Alagoas,
Distribuição Piauí,
Distribuição Rondônia,
Distribuição Roraima,
Distribuição Amazonas,
Amazonas GT and
Eletropar.
Pages 4 e 5
Page 5
Page 5
Page 5
Explain the process for defining
the report content and the
Aspect Boundaries
List all the material Aspects
identified in the process for
defining report content
For each material Aspect, report
the Aspect Boundary within the
organization
For each material Aspect, report
the Aspect Boundary outside the
organization
G4-18
G4-19
G4-20
G4-21
G4-22
G4-23
Report the effect of any
restatements of information
provided in previous reports,
and the reasons for such
restatements
There are restatements of
information provided in
previous reports, whose
explanations are pointed
out throughout the text.
Report significant changes from
previous reporting periods in the
Scope and Aspect Boundaries
Page 5
4. Stakeholder engagement
G4-24
G4-25
List of stakeholder groups
engaged by the organization
Report the basis for
identification and selection
of stakeholders with whom to
engage
Pages 4 e 5
Page 4
Eletrobras | Annual Report 2016 GRI index 106
107
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
Page 4
Page 4
Page 4
2015
Annual
sustentabilidade@
eletrobras.com
G4-26
G4-27
Report the organization’s
approach to stakeholder
engagement, including
frequency of engagement
Report key topics and concerns
that have been raised through
stakeholder engagement,
and how the organization has
responded to those key topics
and concerns
5. Report profile
G4-28
G4-29
G4-30
G4-31
G4-32
G4-33
Reporting period
Date of most recent previous
report
Reporting cycle
Contact point for questions
regarding the report or its
contents
Report the ‘in accordance’ option
the organization has chosen,
GRI Content Index and External
Assurance Report
Report the organization’s policy
and current practice with regard
to seeking external assurance for
the report
Page 4
Page 4
6. Governance
Governance structure and composition
G4-34
G4-35
G4-36
G4-37
G4-38
G4-39
Report the governance structure
of the organization, including
committees
Report the process for
delegating authority for
economic, environmental and
social topics from the Board of
Directors to senior executives
and other employees
Report whether the organization
has appointed an executive-
level position or positions with
responsibility for economic,
environmental and social topics,
and whether post holders report
directly to the Board of Directors.
Report processes for
consultation between
stakeholders and the Board
of Directors on economic,
environmental and social topics
Report the composition of the
Board of Directors
Report whether a Board of
Directors member is also an
executive officer (and, if so,
which one?)
Pages 20, 21, 22 e 23
Pages 20 e 21
Page 28
Page 24
Pages 21 e 22
Pages 22 e 23
G4-40
G4-41
G4-42
G4-43
G4-44
G4-45
G4-46
G4-47
G4-48
G4-49
G4-50
Report the nomination and
selection processes for the Board
of Directors and its committees
Report processes for the Board
to ensure conflicts of interest are
avoided and managed. Report
whether conflicts of interest are
disclosed to stakeholders
Report the Board’s and
senior executives’ roles in the
development, approval, and
updating of the organization’s
purpose, value or mission
statements, strategies, policies,
and goals related to economic,
environmental and social
impacts.
Report the measures taken
to develop and enhance the
Board’s collective knowledge of
economic, environmental and
social topics
Report the processes for
evaluation of the Board of
Directors’ performance and
governance
Report the Board of Directors’
role in the identification and
management of economic,
environmental and social
impacts, risks, and opportunities.
Report whether stakeholder
consultation and materiality are
taken to Board.
Report the Board of
Directors’ role in reviewing
the effectiveness of the
organization’s risk management
processes
Report the frequency of the
Board’s review of impacts, risks,
and opportunities.
Report the highest committee
or position that formally reviews
and approves the organization’s
sustainability report and ensures
that all material Aspects are
covered
Report the process for
communicating critical concerns
to the Board
Report the nature and total
number of critical concerns that
were communicated to the Board
and the mechanism(s) used to
address and resolve them.
Pages 22 e 23
Page 28
Pages 22 e 23
Page 23
Page 23
Page 38
Page 38
Page 38
Page 41
Page 27
Page 27
Eletrobras | Annual Report 2016 GRI index 108
109
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
Page 29
Page 29
Page 29
5.06. Permanent
wage types, annual
supplementary bonus,
functional bonus and
other additional items
were considered.
0.80 - Permanent
wage types, annual
supplementary bonus,
functional bonus and
other additional items
were considered.
Page 32
Pages 24, 25, 26 e 27
Pages 26 e 27
G4-51
G4-52
G4-53
G4-54
G4-55
Report the remuneration policies
for the Board of Directors and
senior executives
Report the process for
determining remuneration
Board of Directors and senior
executives
Report how stakeholders’ views
are sought and taken into
account regarding remuneration
Report the ratio of the annual
total compensation for the
organization’s highest-paid
individual in each country
of significant operations
to the median annual total
compensation for all employees
(excluding the highest-paid
individual) in the same country
Report the ratio of percentage
increase in annual total
compensation for the
organization’s highest-paid
individual in each country of
significant operations to the
median percentage increase in
annual total compensation for
all employees (excluding the
highest-paid individual) in the
same country
7. Ethics and integrity
G4-56
G4-57
G4-58
Describe the organization’s
values, principles, standards and
norms of behavior such as codes
of conduct and codes of ethics
Report the internal and external
mechanisms for seeking
advice on ethical and lawful
behavior, and matters related to
organizational integrity, such as
helplines or advice lines
Report the internal and external
mechanisms for reporting
concerns about unethical or
unlawful behavior, and matters
related to organizational
integrity, such as escalation
through line management,
whistleblowing mechanisms or
hotlines
Economic Performance
Disclosures on economic management approach
Economic performance
EC1
Report the direct economic value
generated and distributed
Page 67
EC2
Financial implications and other
risks and opportunities for the
organization’s activities due to
climate change
Environmental global compact
Pages 40, 76 e 77
Disclosures on environmental management approach
Energy
EN6
Reduction of energy
consumption
Page 76
EN7
Reductions in energy
requirements of products and
services
Page 76
Water
EN8
Total water withdrawal by source
Page 75
Eletrobras | Annual Report 2016 GRI index
110
111
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
EN9
Report the total number of water
sources significantly affected by
withdrawal by type
Eletrobras companies
do not significantly
affect water sources by
withdrawal.
EN10
Percentage and total volume of
water recycled and reused
Only Eletrosul and
Eletronorte capture
rainwater for internal
use in service, cleaning,
gardening and
maintenance areas.
Eletronuclear recycles
and reuses water from the
Steam Generator Purge
Purification (GD). The total
quantity is not counted.
Emissions
EN15
Direct greenhouse gas (GHG)
emissions
Pages 78 e 79
EN16
Energy indirect greenhouse gas
(GHG) emissions
Pages 78 e 79
EN17
Other indirect greenhouse gas
(GHG) emissions
Pages 78 e 79
EN18
Greenhouse gas (GHG) emissions
intensity
Pages 78 e 79
EN19
Reduction of greenhouse gas
(GHG) emissions
Pages 78 e 79
EN21
NOX, SOX, and other significant
air emissions
Page 80
Effluents and Waste
EN23
Total weight of waste by type
and disposal method
Page 82
EN25
Page 82
Weight of transported, imported,
exported, or treated waste
deemed hazardous under the
terms of the Basel convention,
annex I, II, III, and VIII, and
percentage of transported waste
shipped internationally
Compliance
EN29
Monetary value of significant
fines and total number of non-
monetary sanctions for non-
compliance with environmental
laws and regulations
Supplier Environmental Assessment
EN32
Percentage of new suppliers
that were screened using
environmental criteria
Eletrobras CGTEE
received, in 2016,
four fines due to
non-compliance with
environmental laws,
totaling R$ 97.8 million.
The sanctions, however,
are being challenged with
Ibama and the amounts
have not yet been paid.
Pages 94 e 95
Social: Labor practices and decent work
Disclosures on social management approach
Employment.
LA2
LA3
Benefits provided to full-time
employees that are not provided
to temporary or part-time
employees, by significant
locations of operation
Page 91
Return to work and retention
rates after parental leave, by
gender
Page 91
Occupational Health and Safety
LA5
Percentage of total workforce
represented in formal joint
management–worker health
and safety committees that
help monitor and advise on
occupational health and safety
programs
100% of the employees of
the Eletrobras companies
are represented by health
and safety committees,
except Eletrobras
Distribuição Alagoas.
Eletrobras | Annual Report 2016 GRI index
112
113
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
LA9
LA10
Training and Education
Average hours of training per
year per employee by gender,
and by employee category
Page 90
Programs for skills management
and lifelong learning that
support the continued
employability of employees and
assist them in managing career
endings
Page 90
Page 88
Diversity and Equal Opportunity
LA12
Composition of governance
bodies and breakdown of
employees per employee
category according to gender,
age group, minority group
membership, and other
indicators of diversity
Equal Remuneration for Women and Men
LA13
Ratio of basic salary and
remuneration of women to
men by employee category, by
significant locations of operation
Page 91
Supplier Assessment for Labor Practices
LA14
Percentage of new suppliers
that were screened using labor
practices criteria
Page 94
Social: human rights
Disclosures on social management approach
Investment
HR1
Page 94
Total number and percentage
of significant investment
agreements and contracts that
include human rights clauses or
that underwent human rights
screening
HR2
Total hours of employee training
on human rights policies or
procedures concerning aspects
of human rights that are relevant
to operations, including the
percentage of employees trained
Eletrobras companies
offered a total of 11,043
hours in 2016, training
1,204 employees -
equivalent to 5% of the
total.
Non-discrimination
HR3
Total number of incidents of
discrimination and corrective
actions taken
In 2016, 5 cases of
discrimination were
received at Eletronorte,
and only one was upheld,
referring to inadequate
clothing of an employee
on the company premises.
The occurrence was
clarified and settled.
Freedom of Association and Collective Bargaining
Pages 94 e 95
HR4
Operations and suppliers
identified in which the right to
exercise freedom of association
and collective bargaining may be
violated or at significant risk, and
measures taken to support these
rights
Eletrobras | Annual Report 2016 GRI index
114
115
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
Child Labor
HR5
Pages 94 e 95
Operations and suppliers
identified as having significant
risk for incidents of child
labor, and measures taken to
contribute to the effective
abolition of child labor
Forced or Compulsory Labor
HR6
Operations and suppliers
identified as having significant
risk for incidents of forced or
compulsory labor, and measures
to contribute to the elimination
of all forms of forced or
compulsory labor
Pages 94 e 95
Security Practices
HR7
Percentage of security personnel
trained in the organization’s
human rights policies or
procedures that are relevant to
operations
Only Chesf and Itaipu
have their own security
personnel. Out the total
192 security personnel
of these two companies,
37.5% received training
on Human Rights in 2016.
The other companies
outsource this service
and it is a prerequisite in
the call to tender that the
service providers provide
training in Human Rights
to their employees.
Indigenous Rights
HR8
Total number of incidents of
violations involving rights of
indigenous peoples and actions
taken
There were no incidents
of violations involving
rights of indigenous and
traditional peoples in
the period covered by
the report. Eletrobras
companies develop
socio-environmental
compensation measures,
which can be found on
page 99.
Assessment
HR9
Total number and percentage
of operations that have been
subject to human rights reviews
or impact assessments
The company does not
have supplier assessment
mechanisms on the
Human Rights subject.
However, Eletrobras
companies require a series
of socio-environmental
commitments from their
contracted suppliers,
foreseen in the contract.
Supplier Human Rights Assessment
HR10
HR11
Percentage of new suppliers
that were screened using human
rights criteria
Pages 94 e 95
Significant actual and potential
negative human rights impacts
in the supply chain and actions
taken
Pages 94 e 95
Eletrobras | Annual Report 2016 GRI index
116
117
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
Human Rights Grievance Mechanisms
HR12
Number of grievances about
human rights impacts filed,
addressed, and resolved through
formal grievance mechanisms
Social: Society
Disclosures on social management approach
Local communities
SO1
Percentage of operations
with implemented local
community engagement, impact
assessments, and development
programs
In 2016, Eletrobras
companies received
30 grievances about
human rights, of which
24 were settled and nine
were filed before the
period covered by the
report. The Ombudsman
Office is responsible for
receiving grievances and
complaints, among other
statements, and intends to
detect, analyze, monitor
and report possible risks
to Eletrobras.
Pages 96, 97, 98 e 99
SO2
Operations with significant
actual and potential negative
impacts on local communities
Anti-corruption
Pages 96, 97, 98 e 99
SO3
SO4
SO5
Total number and percentage
of operations assessed for risks
related to corruption and the
significant risks identified
Communication and training
on anti-corruption policies and
procedures
Confirmed incidents of
corruption and actions taken
Pages 24, 25 e 39
Pages 24, 25 e 39
Pages 24, 25 e 26
Anti-competitive Behavior
SO7
Total number of legal actions for
anti-competitive behavior, anti-
trust, and monopoly practices
and their outcomes
No legal actions for anti-
competitive behavior were
filed at the Eletrobras
companies.
Compliance
SO8
Monetary value of significant
fines and total number of
non-monetary sanctions for
non-compliance with laws and
regulations
In 2016, Eletrobras CGTEE
and Distribuição Rondônia
received fines for non-
compliance with laws and
regulations in the total
amount of R$ 5,7 million.
Social: Product Responsibility
Disclosures on social management approach
Product and Service Labeling
PR3
Page 92
Type of product and service
information required by the
organization’s procedures for
product and service information
and labeling, and percentage of
significant product and service
categories subject to such
information requirements
PR5
Results of surveys measuring
customer satisfaction
Page 93
Compliance
PR9
Monetary value of significant
fines for non-compliance with
laws and regulations concerning
the provision and use of products
and services
No significant fines were
verified (above 1% of NOI).
Sector Supplement
Organizational Profile
EU1
EU2
Installed capacity, broken down
by primary energy source and by
regulatory regime
Net energy output broken down
by primary energy source and by
regulatory regime
Pages 48 e 49
Pages 49 e 50
Availability and Reliability
EU6
Management approach to ensure
short and long-term electricity
availability and reliability
Page 54
Eletrobras | Annual Report 2016 GRI index
118
119
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
GRI Indicator
Page / Direct Answer
Global
Compact
SDG
Provision of Information
EU24
Acesso
EU26
EU27
EU28
EU30
Page 92
Practices to address language,
cultural, low literacy and
disability related barriers to
accessing and safely using
electricity and customer support
services
Percentage of population
unserved in licensed distribution
or service areas
Number of residential
disconnections for non-
payment, broken down by
duration of disconnection and by
regulatory regime
The total percentage of
the unserved population
in areas where Eletrobras
operates in 2016 was
1.10% - 0.10% in urban
areas and 1% in rural
areas. The data is
constructed based on the
total population of the
localities.
Page 57
Power outage frequency in the
year (FEC)
Page 57
Average plant availability factor
by energy source
Page 51
Demand-Side Management
EU7
Demand-side management
programs including residential,
commercial, institutional and
industrial programs
Pages 59, 60 e 61
Research and Development
EU8
Research and development
activity and expenditure aimed
at providing reliable electricity
and promoting sustainable
development
Availability and Reliability
EU10
Planned capacity against
projected electricity demand
over the long term, broken down
by energy source and regulatory
regime
System Efficiency
Pages 41, 42 e 43
Pages 50 e 51
EU11
EU12
Average generation efficiency of
thermal plants by energy source
and by regulatory regime
Transmission and distribution
losses as a percentage of total
energy
Page 51
Pages 54 e 58
Employment
EU14
Programs and processes to
ensure the availability of a
skilled workforce
Disaster/Emergency Planning and Response
EU21
Access
EU23
Contingency planning
measures, disaster/emergency
management plan and training
programs, and recovery/
restoration plans
Programs, including those in
partnership with government,
to improve or maintain access to
electricity and customer support
services
Page 90
Page 83
Pages 59, 60 e 61
Eletrobras | Annual Report 2016 GRI index
120
Assurance report
KPMG Financial Risk & Actuarial Services Ltda.
Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A
04711-904 - São Paulo/SP - Brasil
Caixa Postal 79518
04707-970 - São Paulo/SP - Brasil
Telefone 55 (11) 3940-1500
Fax
55 (11) 3940-1501
Internet www.kpmg.com.br
Limited assurance report issued by independent auditors
To the Board of Directors, Shareholders and Stakeholders
Centrais Elétricas Brasileiras S.A. - Eletrobras
Rio de Janeiro - RJ
Introduction
We have been engaged by Centrais Elétricas Brasileiras S.A - Eletrobras (“Eletrobras” or “Company”) to apply
limited assurance procedures on the sustainability information disclosed in Eletrobras’s 2016 Annual Report,
related to the year ended December 31st, 2016.
Responsibilities of Eletrobras’s Management
The Management of Eletrobras is responsible for adequately preparing and presenting the sustainability
information in the 2016 Annual Report in accordance with the Global Reporting Initiative (GRI) Annual Reporting
Guidelines (GRI-G4), and the “Electric Utilities Sector Supplement”, as well as the internal controls determined
necessary to ensure this information is free from material misstatement, resulting from fraud or error.
Independent auditors’ responsibility
Our responsibility is to express a conclusion about the information in the 2016 Annual Report based on a limited
assurance engagement conducted in accordance with Technical Communication (TC) 07/2012, which was prepared
based on NBC TO 3000 (Assurance Engagements Other Than Audits and Reviews), both issued by the Brazilian
Federal Accounting Council - CFC and equivalent to international standard ISAE 3000, issued by the International
Federation of Accountants and applicable to Non-Financial Historical Information. These standards require
compliance with ethical requirements, including independence ones, and the engagement is also conducted to
provide limited assurance that the information disclosed in the Eletrobras’s 2016 Annual Report, taken as a whole,
is free from material misstatement.
A limited assurance engagement conducted in accordance with NBC TO 3000 (ISAE 3000) consists mainly of
questions and interviews with the Management of Eletrobras and other professionals of the Company involved
in the preparation of the information disclosed in the 2016 Annual Report and use of analytical procedures to
obtain evidence that enables us to reach a limited assurance conclusion about the sustainability information taken
as a whole. A limited assurance engagement also requires additional procedures when the independent auditor
acknowledges issues which may lead them to believe that the information disclosed in the 2016 Annual Report
taken as a whole could present material misstatement.
The selected procedures were based on our understanding of the issues related to the compilation, materiality and
presentation of the information disclosed in the 2016 Annual Report, on other engagement circumstances and also
on our considerations regarding areas and processes associated with material sustainability information disclosed
where relevant misstatement could exist. The procedures consisted of:
(a) Engagement planning: considering the material aspects for Eletrobras’s activities, the relevance of the
information disclosed, the amount of quantitative and qualitative information and the operational systems
and internal controls that served as a basis for preparation of the information in the Eletrobras’s 2016 Annual
Report. This analysis defined the indicators to be checked in details;
121
(c) Analysis of preparation processes of the 2016 Annual Report and its structure and content, based on the
Principles for Defining Report Content and Quality of the Global Reporting Initiative - GRI (GRI-G4);
(d) Evaluation of non financial indicators selected:
• Understanding of the calculation methodology and procedures for the compilation of indicators through
interviews with management responsible for data preparation;
• Application of analytical procedures regarding data and interviews for qualitative information and their
correlation with indicators disclosed in the 2016 Annual Report;
• Analysis of evidence supporting the disclosed information;
• Visits to Eletrobras’s offices for application of these procedures, and items (b) and (c);
(e) Analysis of whether the performance indicators omission and justification are reasonable to be accepted
associated to aspects and topics defined as material in the materiality analysis of the Company;
(f) Comparison of financial indicators with the financial statements and/or accounting records.
We believe that the information, evidence and results we have obtained are sufficient and appropriate to provide a
basis for our limited assurance conclusion.
Scope and limitations
The procedures applied to a limited assurance engagement are substantially less extensive than those applied to
a reasonable assurance engagement. Therefore, we cannot provide assurance that we are aware of all the issues
that would have been identified in a reasonable assurance engagement, which aims to issue an opinion. If we had
conducted a reasonable assurance engagement, we may have identified other issues and possible misstatements
within the information presented in the 2016 Annual Report.
Nonfinancial data is subject to more inherent limitations than financial data, due to the nature and diversity of the
methods used to determine, calculate or estimate these data. Qualitative interpretation of the data’s materiality,
relevance and accuracy are subject to individual assumptions and judgments. Additionally, we have not examined
data related to prior periods, evaluated the adequacy of the company´s policies, practices and sustainability
performance, nor future projections.
Conclusion
Based on the procedures carried out, described earlier in this report, we have not identified any relevant
information that leads us to believe that the information in Eletrobras’s 2016 Annual Report is not fairly stated in
all material aspects in accordance with the Global Reporting Initiative Guidelines - GRI (GRI- G4), and the “Electric
Utilities Sector Supplement”, as well as its source records and files.
São Paulo, June 23rd, 2017
KPMG Assessores Ltda.
CRC 2SP034262/O-4 F-SP
Eduardo V. Cipullo
Contador CRC 1SP135597/O-6
KPMG Financial Risk & Actuarial Services Ltda.
(b) Understanding and analysis of disclosed information related to material aspects management;
Ricardo Algis Zibas
Eletrobras | Annual Report 2016 GRI index 122
The energy of
our team
General Coordination
Strategy, Business Management and Sustainability
Editorial Center
Communication and Institutional Relations of Eletrobras and Ricca
Sustainability Indicators Center and Assurance Report
Executive Committee on Sustainability of Eletrobras Companies
Management and Data Collection
IGS Relat System
Graphic Project, Translation, Layout, and Editing
Ricca
Photos
Eletrobras collection
Eletronorte collection
Eletrosul collection
Alexandre Marchetti
Betto Silva
Eletrobras Distribuição Piauí
Jorge Coelho
Nilton dos Santos
Oswaldo de Lima
Rafael Matsunaga
Solon Pereira
Independent Auditor (Limited Assurance)
KPMG
More information about the Report
Company website: www.eletrobras.com
or
email: sustentabilidade@eletrobras.com
“We thank all the professionals of the Eletrobras companies who
provided the necessary information for the elaboration of the
Annual Report 2016 and all stakeholders that participated in our
research on the relevant topics and contributed substantially
with this work.”