CTEEP - COMPANHIA DE TRANSMISSÃO DE ENERGIA ELÉTRICA PAULISTA

Publicly Held Company

Corporate Taxpayer ID (CNPJ/MF) 02.998.611/0001-04

Company Registry (NIRE): 35300170571

NOTICE TO THE MARKET

Startup of IE Itaquerê

CTEEP - Companhia de Transmissão de Energia Elétrica Paulista ("ISA CTEEP", "Company") hereby announces that IE Itaquerê, a wholly-owned subsidiary of ISA CTEEP, has obtained Partial Release ("TLP") from the National Electricity System Operator ("ONS") to start operations, 11 months in advance of the ANEEL deadline.

IE Itaquerê was set up to execute the project of Lot 6 of transmission auction 005/2016 held in April 2017. Located in the state of São Paulo, it includes the installation of three 500 kV (-180/+300) MVAr synchronous compensators at the Araraquara 2 substation. The installation of this equipment in the substation benefits the National Interconnected System (SIN) as a whole and, especially, provides voltage control for the 440 and 500 kV systems in the state of São Paulo. The first synchronous compensator started up on July 28, the second on September 6 and the third on September 15, 2020.

IE Itaquerê capex totaled around R$250 million, approximately 40% lower than ANEEL's capex. EBITDA margin is estimated at ~95%. IE Itaquerê comes under the presumed income tax regime. The Permitted Annual Revenue (RAP) is R$52 million (2020/2021 tariff cycle). The Company has been receiving 90% of proportional RAP since their respective start up. The Final Release ("TLD") is expected to be obtained in 4Q20 for full receipt of RAP.

The project has been financed through debentures issued by ISA CTEEP, which has so far raised BRL65 million from the 7th issue (IPCA + 4.7% p.a.) and BRL110 million from the 8th issue (IPCA + 3.5% p.a.) Considering the proceeds from these two issues, the Company has already financed around 70% of the project.

The Company reiterates its commitment to creating value through projects that contribute to the expansion of the electricity transmission system in Brazil.

São Paulo, October 29, 2020.

Alessandro Gregori Filho

Chief Financial and Investor Relations Officer

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CTEEP - Companhia de Transmissão de Energia Elétrica Paulista published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 October 2020 10:34:02 UTC