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6.MANAGERS

joão manso neto

What is your assessment of 2017? What were the major challenges?

1. 2017 was particularly difficult as a result of the combination of two highly unfavorable factors: It was a year of much lower than average rainfall, with the consequent reduction in the margins available to Portuguese hydroelectric power stations and the negative regulatory environment in Portugal, with decisions taken on a number of objective criteria and where it was not possible for us to present our arguments.

Given this environment, EDP’s results were positive to the extent that:

On the one hand, the policy of diversification and expansion into new businesses and countries confirmed the importance of the choices made over the past 15 years, with EDPR and ENBR successfully overcoming many of the unfavorable events in Portugal;

The portfolio rotation capacity - the sale of Naturgas Energia (NGE) and the enhancement of asset rotation policies at EDPR - have allowed us to consolidate our value at opportune times.

What facts stand out in the different areas for which you are responsible?

Looking at Table 1., we note the following factors in the areas for which I am responsible:

At EDPR, the significant increase in reported and recurring results that can be seen in the continuation of growth in solid projects, the maintenance of high operational efficiency, and the continued reduction in funding costs, especially in the latter context, was the mobilization of more than 500 million dollars’ worth of US tax equity investments in the context of change to the fiscal regime in the United States. In terms of growth, it should also be noted that, in addition to the important successes at auctions in Canada and Brazil, we obtained a long-term UK offshore contract, which has generated a critical mass for the future growth of this technology;

At UNGE, which is perhaps the Group’s business unit most affected by the hydrological crisis in Portugal, I would note that prudent hedging policies have made it possible to reduce the impact of these uncontrollable phenomena by more than 30%;

Because of its hard work and proactive stance, the Grid Sales Department (DCR) has ensured that EDP’s positions cannot be disregarded whenever regulation calls for objective discussions, thereby keeping the doors to open dialogue open;

In addition to the work carried out – with the Grid Sales Department and other parts of the Groups – in discussion with stakeholders, particularly those in Europe, in relation to the new European Energy Framework, the DPE continues to allow EDP to anticipate the future, highlighting in particular: development of a new Group position in the area of energy poverty; and the reformulation of medium-term modelling with the assimilation of a new renewable capacity.