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6.Managers

NUNO ALVES

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

2017 was extremely challenging because of weather conditions in the Iberian Peninsula. The drought worsened during a year in which we had less than half the average rainfall, which had a very serious negative impact (about €300 million) in the generation of hydroelectric power. However, this negative situation was partially mitigated by the positive results at EDPR and in Brazil which had above expectation performances that confirmed the importance of our diversification strategy. It is also worth mentioning the efforts made to reduce costs that once again resulted in EDP having the best operational efficiency ratios of all Iberian electricity companies. Consolidation of the company’s business allows us to look to the future with optimism and to increase the shareholder dividend for 2016 to €0.19 per share.

It should also be noted that the sale in 2017 of our Spanish and Portuguese gas distribution assets, Naturgás and Portgás, respectively, was applauded by the market. These two transactions enabled allowed a significant contribution to reducing EDP’s debt to 2008 levels (to less than €14 billion), improving its financial ratios, and increasing its rating by the three main international rating agencies to investment grade.

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

As head the EDP Group finances, I consider the most important events in 2017 to be the sale of Naturgás, the ratings increase by Standard & Poor's, the continued success securitizing the tariff deficit, and the issue of long-term debt at historically low rates (especially the 10-year fixed coupon with the lowest ever rate of 1.5%), which, combined with the repurchase of the most expensive US dollar debt ever has allowed a reduction of EDP’s financial charges for the next few years.

In its relationship with the market in 2017, EDP has again won several awards from the investment community, of which we are very proud, that recognize the effort that goes into and the quality and transparency of the financial information we provide.