Prosperity

The Basic Environmental Plan for the Indigenous Component (PBA-CI), part of the Belo Monte HPP environmental licensing process, covers an area of approximately five million hectares, in which 11 indigenous lands and one indigenous area are located. In this territory, nine ethnic groups speak nine different languages. In December 2022, according to data from the DSEI (Special Indigenous Health District) Altamira, this population was distributed in 124 villages and totaled approximately 5,000 indigenous people. In addition to this audience, the PBA-CI also serves more than 3,400 non-village indigenous people, called riverside and city dwellers, in the Altamira region.

We carried out a series of actions with the local communities of Volta Grande do Xingu, in order to promote socioeconomic development, generate jobs and income and improve living conditions.

Within the scope of the Term of Environmental Commitment (TCA), in 2022, we strengthened health care and sanitation conditions with the construction of wells and septic tanks for more than 100 families, renovations in the Basic Health Units and the financing of mobile teams, medicines and inputs. With regard to production and subsistence activities, progress was made in the projects financed by us, with the donation of agricultural inputs to families that work with cocoa plantations, as well as the installation of fish farming tanks for another 45 families.

In terms of social and infrastructure, we continued interventions in land accesses, which reached the 290 km mark. Added to navigation support measures, these interventions contribute to the improvement of the population's mobility conditions, enabling access to school, health center, church, in addition to improving the flow of local production. In the course of the entire TCA, R$ 157 million will be invested, of which 91 million have already been invested by the end of 2022.

Within the scope of Norte Energia's initiatives, Belo Monte Comunidade and Belo Monte Empreende deserve special mention. Belo Monte Comunidade that promotes social responsibility actions in favor of the populations that live around the plant, Belo Monte Community works on the following items: Citizenship, Preventive Health, Environmental Education, Art and Culture, Education, Sports, Volunteering, Digital Inclusion and Job and Income Generation.

Belo Monte Empreende, which began in 2022, is a program carried out in partnership with the Amazon Entrepreneurship Center (CEA). Aimed at young people in the Middle Xingu region, this initiative aims to create shared value and encourage the formation of a new generation of entrepreneurs for sustainable business in the region. The training lasts 24 months and has an entrepreneurial journey in four stages: Awakening, Pre-Acceleration, Demoday (Project Demonstration Day) and Acceleration.

As determined by federal legislation nº 12.334/2010, amended by Law 14.066/2020, which provides for the safety of dams in Brazil, the Belo Monte Complex has a Dam Safety Plan (PSB) and an Emergency Action Plan (PAE), which walk in partnership with the activities of the Civil Defenses of the municipalities where we operate. PSB actions are periodically inspected by Aneel, and the program has a support system for dam safety management. Structure monitoring, one of the preventive measures contemplated in the PSB, is carried out with 2,640 instruments of 12 different types, which periodically assess the performance of the concrete structures – water intake, spillway and two powerhouses – of the 28 dykes that form the intermediate reservoir and the Pimental and Belo Monte dams.

Norte Energia continuously carries out R&D projects to develop innovative solutions for the electricity sector, in line with our strategic objectives, generating value for the Company, partners and society.

Pursuant to Law No. 9,991/2000 and its amendments, we annually invest a percentage of our Net Operating Revenue (NOR) in Research and Development (R&D) projects.

In 2022, we invested R$16.9 million in 16 projects, of which 13 are related to alternative sources, energy efficiency, operation of electric energy systems, safety, environment and management of basins and reservoirs.

R&D activities are guided by the following guidelines:

• Develop innovative solutions in line with the national productive sector, universities and science, technology and innovation institutions aimed at the needs of the electricity sector;
• Prioritize the participation of executing institutions in the North, Northeast and Midwest regions;
• Promote cooperation with agents in the electricity sector;
• Allocate resources to projects aligned with the Company's business plan Prioritize projects that deliver practical results through innovation;
• Promote the culture of innovation.

Through the promotion of dialogues, the celebration of alliances and multisectoral partnerships such as governments, academia, the private sector and third sector institutions, we continue to focus on expanding a network of partnerships.

Therefore, in2022, the Company became a member of the Brazilian Business Council for Sustainable Development (CEBDS) and actively participates in the Thematic Chambers of Social Impact (CT Social), Biodiversity and Biotechnology (CT Bio), of Water (CT Água) and the Thematic Chamber on Climate, Energy and Sustainable Finance (CT Clima), as well as the Amazon Working Group. We consolidated strategic partnerships that made it possible to mobilize financial resources for the Xingu region.

In order to support the Belo Monte Complex's operation and maintenance projects, energy sales and the execution of socio-environmental and sustainability actions, we manage a base with more than eight thousand suppliers of products and services, of which 3,222 are active. In 2022, 918 new registrations and 117 supplier updates were carried out.

The permanence of suppliers in Norte Energia's active base is conditioned to technical performance and adherence to the Company's policies. Thus, aware of the potential for the multiplication of good practices in our chain of suppliers and business partners, Norte Energia shares its corporate guidelines with that audience, in particular the Code of Conduct and Ethics and the Sustainability Policy through specific contractual clauses.

In 2022, we developed a pilot project to register, approve, select and contract suppliers considering ESG and integrity aspects, based on risk analysis, in order to prevent and mitigate risks in these contracts.

Due to the importance of Belo Monte HPP, our engagement in energy planning and regulation discussions related to the generation and sale of electricity is essential. In 2022, we acted directly and/or indirectly in the following actions or processes:

• Investments in research and development in the electricity sector.
• Delivery of the Stochastic model of Weekly Policies for the SIN Hourly Dispatch, developed by the R&D project SPARHTACUS II;
• Conducting a study on the constrained-off situation⁹ of generators, presented in the second phase of Public Consultation Aneel 045/2019, coordinated by the Brazilian Association of Independent Electric Power Producers (Apine) and sponsored by Norte Energia, which discusses criteria for the ONS (National Electric System Operator) to reduce or limit the generation of power plants

Our tax strategy is based on the principles of the Company's Code of Conduct and Ethics, which values the integrity of actions aimed at the best performance of Norte Energia. The execution of the tax strategy and tax compliance is the responsibility of the Tax Management, an area that is part of the Superintendence of Finance, Control and Investor Relations (RI), subordinated to the Financial and Investor Relations Department.

The main tax incentive adopted by the Company comes from Profit from Exploration, granted by the Superintendence for the Development of the Amazon (Sudam), according to Explanatory Note 24 of the Financial Statements.

It should be noted that in 2022, within the scope of Financial Compensation for the use of water resources (royalties), R$ 229,960,687.22 were passed on to the State of Pará; to the municipalities of Altamira, Brasil Novo and Vitória do Xingu; the National Scientific and Technological Development Fund; the Ministry of the Environment (MMA); the Ministry of Mines and Energy (MME); and the National Water Agency (ANA).

The Company's financial statements were prepared based on the accounting practices adopted in Brazil, which include the rules of the Brazilian Securities and Exchange Commission (CVM); the pronouncements, interpretations and guidelines of the Accounting Pronouncements Committee (CPC), approved by the Federal Accounting Council (CFC); and international financial reporting standards (IFRS), issued by the International Accounting Standards Board (IASB).

The Company also uses the guidelines contained in the Brazilian Electricity Sector Accounting Manual and the standards defined by Aneel, when these are not in conflict with the accounting practices adopted in Brazil and/or with international accounting practices.