Alupar Investimento S A : Dados Econômico-Financeiros

(Convenience Translation into English from the Original Previously Issued in Portuguese)

Financial Statements

Individual and Consolidated

December 31, 2022

Alupar Investimento S.A.
Financial statements
Summary
Management report	03
Independent Auditor's Report on Financial statements	19
Balance Sheets	26
Statements of income	28
Statements of Comprehensive Income	29
Statements of Changes in Equity	30
Statements of Cash Flows	32
Statements of Value Added	33
Notes to the Financial statements	34
Officer's Statement on the Financial statements	107
Officer's Statement on Independent Auditor's Report	108
Audit Committee's Opinion	109

2 | 109

Management report

Management report

To our Shareholders

The Alupar Investimento S.A. Management, pursuant to the relevant legal and statutory provisions, presents its Management Report and the Individual and Consolidated Financial Statements of the Company for the year ended December 31, 2022, accompanied by the report of the independent auditors. All documentation relating to the accounts presented herein is at the disposal of the shareholders, to whom the Board of Executive Officers will be pleased to provide the necessary additional clarifications.

1. About Alupar

Alupar Investimento S.A. is a holding company operating primarily in the electric power generation and transmission segment, for the main purpose of developing and investing in infrastructure projects involving the energy industry in Brazil and other Latin American countries. Additionally, Alupar one of the largest company in terms of Annual Allowed Revenue (RAP) and the largest publicly-held company in the Brazilian electric power transmission segment.

The Company's expansion is based on a great technical capacity in addition to a strong financial discipline, considering not only the Company's credit quality (AAA (bra) for national scale and BB for international scale, from Fitch Ratings) but also a solid mindset aimed at generating shareholder value. And, in line with these pillars, Alupar relies on four courses of action to carry on its sustainable growth:

• Take part in auctions for transmission assets;
• Develop own projects for energy generation, such as Small Hydroelectric Plants (SHPs), wind farms and photovoltaic installations;
• Develop generation projects and take part in transmission tender offers in selected countries in Latin America;
• Analysis of brownfield projects - M&A.
  Transmission
  Alupar have a stake in 30 transmission concessions, totaling 7,964 km of transmission lines, through 30-year concessions located in Brazil and a perpetual one located in Colombia, 27 of which are operational and 3 are in the process of being implantation.
  Generation Alupar is also involved in generating of renewable energy through HPPs (hydroelectric power plants), SHPPs (small hydroelectric power plants), wind farms and photovoltaic installations in Brazil, Colombia and Peru. Its total asset portfolio has an installed capacity of 673.8 MW in operation. Currently, we have 23.0 MW of hydraulic generation in the environmental licensing phase, 63.0 MW of wind energy and 61.7 MWp of solar energy, under implementation.

2. Corporate Governance

Alupar promotes the development of its activities based on high corporate governance standards, following the practices adopted by companies listed on Level 2 governance segment of B3, such as:

• Retaining independent auditors to audit the financial statements, being hired only for this purpose;
• 100% tag along ensured to holders of common and preferred registered shares;
• Board of Directors comprising independent directors;
• Fiscal Council;
• Existence of a Governance, Succession and Compensation Committee, of a Finance, Audit and Related Party Contracts Committee; Audit Committee and Sustainability Committee;
• No poison pills clause included in the Company's Articles of Incorporation;
• MSCI ESG Ratings - A Rating;
• Conflicts that may arise between the Company, its shareholders, management and Supervisory Board members shall be resolved by means of arbitration procedures.

3 | 109

Management report

3. Shareholding structure

The fully subscribed and paid up capital is R$ 2,981,995,690.0 is divided into common and preferred shares as shown below. Each share is entitled to one vote in the General Meeting.

Shareholders	Common Shares	%	Preferred Shares	%	Total	%
Controlling	456,905,633	76.54%	1,676,184	0.59%	458,581,817	52.16%
Group
Others*	140,050,335	23.46%	280,479,102	99.41%	420,529,437	47.84%
Treasury	2	0.00%	13	0.00%	15	0.00%
Total	596,955,970	100.00%	282,155,299	100.00%	879,111,269	100.00%

*free float

4. Economic and Financial Performance

On July 12, 2022, Homolagtory Resolution No. 3,067 was published, establishing the new RAPs of Alupar's subsidiaries and affiliates, for a 12-month cycle, from July 1, 2022 to June 30, 2023, establishing readjustment of 11.73% for contracts indexed by the IPCA and 10.72% for contracts indexed by the IGP-M.

In 2022, Net Revenues reached R$3,833.7 million, compared to the R$5,234.2 million recorded in 2021. EBITDA reached R$3,015.5 million, compared to the R$3,919.6 million recorded in 2021 and Net Income totaled BRL 918.5 million, compared to BRL 1,115.4 million recorded in 2021.

5. Investments

In 2022, total investments in our companies reached approximately R$1,116.1 million, of which R$543.3 million were invested in the transmission segment, R$566.7 million in the generation segment, and R$6.1 million in new businesses development, compared to the R$1,165.2 million recorded in 2021, when R$1,024.1 million were invested in the transmission segment, R$138.4 million were invested in the generation segment and R$2.7 million in new businesses development.

6. Capital Markets

Alupar was listed on the São Paulo Stock Exchange - B3 on April 23, 2013. Its UNITS are traded under the code ALUP11 and are composed of 1 common share and 2 preferred shares (1 UNIT = 1 ON + 2 PN).

Alupar's units (B3: ALUP11) ended 2022 at R$ 28.24, an appreciation of 17.2% compared to the end of 2021. In the same period, the Electricity Index (IEE) appreciated by 3.1% and the Ibovespa index an appreciated by 4.7%. The Company's market capitalization, as of December 31, 2022, reached R$8.3 billion.

Alupar Units (ALUP11) performance charts compared to Ibovespa (IBOV) and Electric Power Companies Index (IEE):

Performance ALUP11 x IBOV x IEE - Base 100

ALUP11 IBOV IEE

Throughout 2022, Alupar's Units had an average daily trading volume on B3 of BRL 25.6 million, against an average daily trading volume of BRL 22.2 million in 2021.

4 | 109

Management report

7. People management

The employees are considered strategic partners in exceeding the targets set by Alupar, whose main challenge is to retain this important asset - the human being. Alupar has been continuously concerned with the well-being of its employees, and for this reason has developed a Benefits Policy that is part of the Integrated Human Resources Management, with an approach that adds value to the Company's business. This policy is designed to promote the recognition and integration among employees, aiming at expanding and appreciating the Company's human capital. In order to attain its goals, the HR department drives its efforts to:

• Developing and retaining key personnel;
• Preparing managers for people management;
• Managing the organizational climate and establishing monitoring plans on improving the climate.

8. Social and environmental responsibility

Reinforcing our commitment to sustainability, since 2021, Alupar has been a signatory to the UN Global Compact. As a signatory, it is committed to following the ten universal principles and contributing to the 17 Sustainable Development Goals (SDGs). In order to maximize our impact, in 2022 we constituted the Sustainability Committee and prioritized the SDGs for the company (SDG 4, SDG 7, SDG 8, SDG 12, SDG 15), which will be part of our sustainability strategy.

In the social pillar, Alupar believes in building a more just and humane society. In this way, it is engaged in the development of social projects that bring significant improvements to the lives of the members of the communities where it operates: such as centers dedicated to artistic creation, cultural incentive and social development. In this sense, aiming to minimize and monitor the interference that its projects may generate in the lives of members of the communities where it operates, the Company develops educational and informative actions, covering both public health and environmental issues.

9. Macroeconomic scenario

The accelerated pace of growth observed in the first half of 2022, mainly resulting from the greater dynamism in the labor market due to the cooling of the Covid-19 pandemic, was interrupted throughout the second half of the year by the increase in uncertainties raised by economic agents facing international challenges (global inflationary pressures linked to supply chains, as well as the impacts of the conflict between Russia and Ukraine on international oil prices, with influence on the main components of inflation) and domestic challenges (election year and uncertainties regarding the fiscal trajectory, with greater pressure for spending and stimulus on demand). The scenario of deteriorating confidence indicators culminated, among other factors, in an increase of 4.50 p.p. in the Selic rate, which ended the year at 13.75% p.a.

The economic slowdown, following the deceleration in industrial production, trade and services indicators, led, in turn, to the accommodation of local inflation indices with a reduction of 4.27 p.p. in the Broad Consumer Price Index (IPCA) which ended 2022 at 5.79% compared to 10.06% recorded in 2021 and the General Market Price Index (IGPM) recorded 5.45% in 2021, against 17.79 % last year. Even so, the indicators remained above the range compatible to the inflation target, preventing the start an interest rate reduction cycle.

Finally, despite the current challenges, market estimates point to a positive GDP in 2022.

10. Relationship with the independent Auditors

In compliance with CVM Instruction 381/2003, we hereby inform that we hired Ernst & Young Global Limited ("EY") to provide audit services for our individual and consolidated financial statements, as well as reviews of quarterly information ("ITR"), prepared in accordance with the accounting practices adopted in Brazil and the international accounting standards International Financial Reporting Standards ("IFRS"), issued by the International Accounting Standards Board ("IASB"). We adopted the rotation system of Independent Auditors with a periodicity of five years, and the services provided by Ernst & Young Global Limited ("EY") were contracted for the period of 2019 - 2023. The remuneration of the independent auditors for the fiscal year ended December 31, 2022 corresponds to the amount of BRL 2,004,933.31 referring to the service related to the independent audit of the financial statements for the year 2022 and the Quarterly Information ("ITR") of Alupar Investimento S.A..

5 | 109