FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The accounting balances of financial assets and liabilities represent a reasonable approximation of fair value


	CONSOLIDATED
	Level	12/31/2021	12/31/2020
FINANCIAL ASSETS
Amortized cost		21,126,404	26,388,667
Loans and financing		5,843,527	10,924,899
Reimbursement rights		6,396,234	5,588,131
Financial Assets - Generation		2,172,162	2,096,717
Financial Assets - Itaipu		428,865	455,820
Customers		6,088,056	7,033,556
Cash and cash equivalents		192,659	286,607
Marketable Securities		4,901	2,937

Fair value through profit or loss		19,268,020	16,371,727
Marketable Securities	2	15,868,952	13,990,357
Decommissioning Fund	2	2,055,713	1,753,827
Derivative Financial Instruments	2	1,343,355	627,543

Fair value through other comprehensive income		1,878,609	2,093,279
Investments (Equity Holdings)	1	1,878,609	2,093,279

FINANCIAL LIABILITIES
Amortized cost		50,491,870	53,687,417
Loans, financing and debentures		44,015,645	47,002,033
Financial liabilities - Itaipu		578,626	—
Reimbursement Obligations		859,003	1,640,767
Suppliers		4,048,087	3,920,607
Leases		903,484	1,053,194
Concessions payable UBP		87,025	70,816

Fair value through profit or loss		—	10,014
Derivative Financial Instruments	2	—	10,014

Level 1 - quoted prices (unadjusted) in active, liquid and visible markets for identical assets and liabilities that are accessible on the measurement date;

Level 2 - quoted prices (whether or not they can be adjusted) for similar assets or liabilities in active markets, other unobservable inputs at level 1, directly or indirectly, under the terms of the asset or liability; and

Level 3 - assets and liabilities whose prices do not exist or these prices or valuation techniques are supported by a small or non-existent, unobservable or liquid market. At this level, the estimate of fair value becomes highly subjective.

Assumptions adopted


		12/31/2021
		Balance at 12/31/2021		Effect on result
		Foreign		Scenario I	Scenario II	Scenario III
		Currency	Real	Probable 2021¹	(+25%)¹	(+50%)¹
	Loans and Financing	(1,439,182)	(8,031,354)	(272,726)	(2,348,746)	(4,424,766)
USD	Loans granted	123,445	688,883	23,395	201,464	379,533
	Financial asset – Itaipu	125,006	697,587	23,698	204,019	384,340
	Impact on income	(1,190,731)	(6,644,884)	(225,633)	(1,943,263)	(3,660,893)

EURO	Loans and Financing	(45,592)	(288,187)	(14,339)	(89,970)	(165,602)
	Impact on income	(45,592)	(288,187)	(14,339)	(89,970)	(165,602)

Impact on income of exchanges rates				(239,972)	(2,033,233)	(3,826,495)

(¹) Assumptions adopted			12/31/2021	Probable	+25%	+50%
	USD		5.58	5.77	7.21	8.66
	EURO		6.32	6.64	8.29	9.95

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Impact of each scenario on company results, sensitivity analysis


				Effect on income
		Balance as of		Scenario I		Scenario II		Scenario III
		12/31/2021		Probable 2021¹		(-25%)¹		(-50%)¹
	Loans, Financing and debentures	(4,885,610)		272,392		204,294		136,196
IPCA	Loans granted	116,253		(6,482)		(4,861)		(3,241)
	Right of reimbursement	5,813,512		(324,126)		(243,095)		(162,063)
	Impact on income	1,044,155		(58,216)		(43,662)		(29,108)

Impact on income of the indexes				(58,216)		(43,662)		(29,108)

^(¹) Assumptions adopted		12/31/2021		Probable		-25%		-50%
	IPCA	9.63	%	5.58	%	4.18	%	2.79	%

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Assumptions adopted


		Debt balance /Notional Amount
		on 12/31/2021			Effect on the result - income (expenseve)
					Scenario I		Scenario II		Scenario III
		in USD	In real		Probable 2021¹		(+25%) ¹		(+50%) ¹
LIBOR	Loans and Financing	(75,530)	(421,496)		(1,040)		(1,300)		(1,559)
	Impact on income or loss - TJLP	(75,530)	(421,496)		(1,040)		(1,300)		(1,559)

	(¹) Assumptions adopted:		12/31/2021		Probable		25	%	50	%
	LIBOR		0.34	%	1.38	%	1.72	%	2.06	%