BELO HORIZONTE, Brazil, September 5, 2026, 1:20 p.m. BRT — Cemig (BVMF:CMIG4; NYSE:CIG) has secured 30 more years for the Sá Carvalho hydroelectric plant. Yet the approval clears only 4.4% of the generating capacity in its three-plant renewal queue.
That is the useful number for shareholders. Sá Carvalho contributes 78 megawatts, while Emborcação and Nova Ponte contribute 1,702 MW. Their concessions expire in 2027.
The first decision establishes a regulatory path, but does not settle the larger exposure. Those two plants alone equal 49.5% of Cemig’s 3,439 MW of owned generation capacity, based on its May investor presentation.
Most of the renewal question remains
Installed capacity in Cemig’s three-plant concession basket
Source: Cemig investor presentation. Percentages calculated from company figures.
Cemig’s board accepted the Sá Carvalho extension on August 28. The company disclosed the approval in an August 31 material fact.
The plant carries 54.4 average MW of assured energy. Cemig now has 210 days after a summons from Brazil’s Mines and Energy Ministry to sign the concession addendum.
Preferred shares closed at 11.26 reais on Friday. They gained 7.1% over the six sessions beginning August 28, according to official B3 daily trading files. The move cannot be assigned to one headline alone.
CMIG4 gained 7.1% across six sessions
Daily close, Brazilian reais
Trading activity did broaden after the announcement. CMIG4 volume reached 28.3 million shares on Tuesday, versus 9.8 million on August 28. Friday’s volume was 16.3 million.
The contract’s economics matter as much as its length. Sá Carvalho enters Brazil’s quota regime, where regulators set annual generation revenue and allocate the electricity to distributors.
That structure can reduce merchant-price swings. It also limits the upside that comes from selling freely when spot prices rise, as Brazil’s electricity regulator explains.
One renewal, two possible economics
The chosen framework changes Cemig’s revenue exposure
Quota regime
- Regulated annual revenue
- Energy allocated to distributors
- 30-year concession term
Independent producer
- Market-price exposure
- Concession fee required
- Supplemental rules still relevant
Sources: ANEEL generation regulation, Cemig investor presentation and Fitch Ratings report.
Fitch’s August 25 review had assumed all three concessions would expire. The agency expected the full cash-flow effect in 2028 and forecast negative free cash flow through that year, partly because Cemig plans 20.4 billion reais of investment.
Sá Carvalho changes only a small part of that test. Fitch estimates the generation and transmission division supplies about 30% of consolidated EBITDA. Its contracted generation price averages 247 reais per MWh through 2028.
Management had signaled confidence. In May, generation chief Marco Soligo told Broadcast he expected the renewals “nos próximos meses, antes dos vencimentos” — in the coming months, before expiry.
Investors still need the price of the bigger extensions. Banco Safra recently cut its CMIG4 target to 11.90 reais from 12.50 and kept a Neutral rating, citing risks through 2028. That target sits 5.7% above Friday’s close.
The immediate risk is contractual. Renewal fees, regulated revenue and final addendum terms can alter returns, while delays would leave most capacity unresolved. Hydrology, political oversight and the heavy investment plan add further pressure.
Sá Carvalho is real progress. For the equity case, however, Emborcação and Nova Ponte remain the decisive assets.
