In Brazil, we have an extensive portfolio of projects under development and construction including run-of-river hydroelectric and biomass plants. To meet growing energy demand, the government is actively supporting the balanced development of projects from renewable resources. We are currently developing over 500 megawatts of hydroelectric power and over 500 megawatts of other renewable resources. Our development portfolio exceeds 1,000 megawatts across five states in Brazil.

Run-of-River Hydroelectric Plants

We estimate that the untapped potential of run-of-river hydroelectric plants can provide over 10,000 megawatts of power in Brazil. We will build over 500 megawatts of small hydroelectric plants in the next three years. The first of these power plants, our São Domingos II plant, is under construction and will begin operations in 2008. Additionally, we expect to add another 50 megawatts of firm capacity in the same river basin. We are also currently permitting sites in the states of Goías, Santa Catarina and Minas Gerais.

Other Renewable Energy Sources

Brazil has many untapped sources of renewable energy in addition to its rivers including wind and biomass from poultry and other agricultural waste. Brazil is one the largest poultry producers in the world. We are currently developing over 120 megawatts of poultry waste fired generation in Santa Catarina where poultry producers are struggling to find environmentally sound disposal alternatives. Our business will provide a “win-win” solution for the State and its citizens as well as the poultry producers while increasing the overall reliability of the system by adding much needed thermal capacity to Brazil’s hydro dependent electricity grid.

Sustainable Development

In developing our hydroelectric businesses in Brazil we have taken additional measures to protect the native flora and fauna of the region. For example, we have designated a portion of our land as a sanctuary for displaced fauna and have launched a reforestation program.

As well as complying with Brazilian requirements, the São Domingos II project also complies with the requirements of the Kyoto Protocol as a Clean Development Mechanism (CDM) project. When the project is complete and CDM-certified, it will generate carbon credits that can be sold and traded on the carbon-trading markets.

Community Impact

We sponsor lectures, site visits, and other educational activities, and will employ 400 people during the construction phase of the project. A significant share of the projects’ budgets will benefit the residents of the local communities where we are developing power plants.