#1Piracicaba-Panorama ("PiPa") Lot Roadshow Presentation September 2019 SÃO PAULO GOVERNO DO ESTADO CARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP ✓ BNDES IDB#2CONTEXT São Paulo Port of Santos Guarulhos Aeroport Railways Highway Waterways Source: Agency of Investment and Competitiveness Promotion of SP SÃO PAULO GOVERNO DO ESTADO ARTESP IFC International Finance Corporation WORLD BANK GROUP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO BNDES Economic development: the São Paulo economy is responsible for about 32,6% of the national GDP (R$ 2,2 trillion in 2018), which is higher than countries like Argentina or Chile. GDP per capita is R$ 51 thousand. Vs. 32 thousand (Brazil) Industry: About 32% of the national industry is concentrated in São Paulo. Annual government budget: the state budget is R$ 216,5 billion, more than two times higher than the second largest state in Brazil (Minas Gerais). Strategic Location: São Paulo shares borders with Minas Gerais, Mato Grosso do Sul, Paraná and Rio de Janeiro. With 645 municipalities, Sao Paulo's regional dynamic is composed of a big metropolis surrounded by several urban centers. Infrastructure: The state has the most modern highways and major airports in the country, in addition to the Port of Santos, the largest container terminal in Latin America, accounting for 25% of the country's trade flow. The transport network is complemented by railways, waterways and duct networks Standard of Living: 90% of the state's municipalities have a high Human Development Index (HDI). The Municipalities around the PiPa lot have a lower HDI (approx. 0.748) than the state average (0.783). For example, Cabrália Paulista, which is contemplated in the lot, has an HDI of 0.694, and the Municipality of São Paulo, outside of the lot, has an HDI of 0.805. IDB#3PRIVATE PARTICIPATION IN THE STATE OF SÃO PAULO The 2019 Picture 40 ONGOING PROJECTS 29 Concessions 11 PPPS SECTOR SHARE Housing, 2.50% Leisure, 5% Health, 5% Sanitation, 5% BRL 156 BILLION in private and public investments BRL 4.5 BILLION in fees SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP Energy, 7.50% BNDES IDB Transportation, 75% 3#4PRIVATE PARTICIPATION IN THE STATE OF SÃO PAULO The 2019 Picture 21 PROJECTS IN PIPELINE 16 Concessions 5 PPPS SECTOR SHARE Education, 5% Supply, 5% Environment, 5% Health, 5% with BRL 38 BILLION in expected investments Leisure, 24% SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB Transportation, 52% 4#5PRIVATE PARTICIPATION IN THE STATE OF SÃO PAULO Projects in pipeline 8-30 Concession of Coastal Ferry Boat System Concession of Metropolitan Bus State Penitentiary PPPs Concession of Intermunicipal Bus Concession of Zoo and Botanical Garden Concession of Ibirapuera Arena Concession of Metropolitan Train - Lines 8 and 9 Concession of Intercity Train Concession of São Sebastião Port Concession of State Parks CPTM CAF SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC =871 = International Finance Corporation WORLD BANK GROUP Concession of Airports BNDES IDB 5#6PRIVATE PARTICIPATION IN THE STATE OF SÃO PAULO Pipeline Projects Concession of Coastal Ferry Boat System Concession of the ferry-boat transportation services currently rendered by the state- owned company Dersa, comprising: 8 ferry boat lines • 34 ships Average daily volume of 30 thousand vehicles and 32 thousand pedestrians and bicycles Tender date: June 2020 Concession of Metropolitan Bus Concession of passenger bus transportation services within the metropolitan area of the city of São Paulo (MRSP). The concession comprises the lines' operation and infrastructure maintenance. • 3,800 buses 5 Concession areas BRL 3.3 Billion in expected investments Tender date: January 2020 State Penitentiary PPP Project in preliminary stage comprising the design of a public-private shared management model. The private partner will be in charge of facilities internal management. Tender date: March 2020 Concession of Intermunicipal Bus Concession of intercity passenger bus transportation services within the State of São Paulo. BRL 2.5 billion expected investments Tender date: December 2019 Concession of Zoo and Botanical Garden Concession of the public visitation areas of the Zoo and the Botanical Garden of the State of São Paulo. BRL 152 million in expected investments Tender date: August 2020 Concession of Ibirapuera Arena Concession of Conjunto Desportivo Constâncio Vaz Guimarães, with 105,000 m². More than 20,000 spectators BRL 200 million in expected investments Tender date: June 2020 Concession of Metropolitan Train - Lines 8 and 9 Concession of metropolitan train services currently operated by CPTM. The project comprises the operation, maintenance, modernization of existing facilities and the construction of new train stations. 40 stations 67 km BRL 2.5 Billion in private investments Tender date: April 2020 Concession of Intercity Train Concession of the Intercity Passenger Train services in the metropolitan region of São Paulo. The project comprises the section between São Paulo - Campinas - Americana. 135 km • 470 thousand passengers per day BRL 5.6 billion in expected investments Tender date: August 2020 São Sebastião Port Privatization Port of São Sebastião privatization project. Public Consultation: 1st semester of 2021 Concession of State Parks Concession to promote ecotourism activities in several areas in the state parks of Intervales, Carlos Botelho and Petar. Tender date: October 2020 SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO Concession of Airports Concession of up to 20 airports under state (Daesp) or federal administration (Infraero), among them São José dos Campos, Barretos and Guaratinguetá. Tender date: June 2020 International IFC Finance Corporation BNDES IDB WORLD BANK GROUP 6#7Piracicaba-Panorama Lot SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB#8HIGHLIGHTS The Piracicaba-Panorama ("PiPa") Lot A Reliable Model The PiPa Lot counts with 50% of the revenues coming from reliable and stable traffic historic (Centrovias - with 20 years of proven cashflows), mitigating risks and increasing reliability. São Paulo has always been in the forefront of public-private partnerships structuring, developing models that have won prizes and international reputation. The State of São Paulo Road Concession Program brings international best practices combined with local knowledge, enabling investment and world class service and road safety for users. For this transaction, innovations are being introduced, but not jeopardizing the already successful and reliable model. A landmark transaction in the global road sector The Pipa Lot is 2019's main transaction in the global road sector. Confirming the State of São Paulo's successful road concession program, the transaction aims at enabling relevant and quality investment in the State, bringing innovation, balanced provisions and attractive returns for an international standard partnership with the private sector. A new moment Brazil has recently moved to a different approach in terms of beliefs, objectives and relationship with the global market. A favorable political and economic environment is being confirmed through an administration that prioritizes fiscal balance, reforms (including the social security reform that has been approved in first round by the parliament) and opening the Brazilian markets to international investment. Therefore, the mid and long term perspectives are consistently improving - controlled inflation, low interest rates and sustained growth are a reality. A trustworthy Public Partner São Paulo is the country's main financial and industrial center, being the largest Brazilian state in terms of GDP (more than 30% of the country's total) and accounting for approximately 20% of its population. With more than 8,000 kilometers of privately managed roads and 20 years of experience in road concessions, the State has proven expertise and a reliable model, with sustainable projects that started, lived (through several crisis periods) and some of them handed over. Noteworthy, the last transactions of the program attracted for the 1st time in Brazil a Private Equity fund in a standalone basis and players with strong global participation. A significant transaction in size The Pipa Lot is Brazil's largest transaction in the road sector, both in terms of investments (~USD 3.7 bln) and extension (1,200+ km, with a main segment of ~490km), enabling different profiles of players and financial/funding structures. In the road stretches contemplated in the transaction, approx. 80,000 vehicles (year 1) will go through the toll plazas. SÃO PAULO ARTESP IFC International Finance Corporation BNDES IDB GOVERNO DO ESTADO WORLD BANK GROUP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 8#9EXECUTIVE SUMMARY The New Phase of the SP Road Concessions Program This transaction belongs to a broader program that started with the tender of the so-called Mid-west Roads Lote. IFC has been mandated by ARTESP/State Government of São Paulo to structure five transactions under the program, with almost 3.000 km of highways in strategic areas of the State of São Paulo. SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 201 São Paulo Mid-West Roads Km A tuba São José do Rio Preto Catanduva 1200 Piracicaba-Panorama Lot km Presidente Prudente, Marilia Bauru 570 Assis Franca beirão Preto qua So Carlos 275 Km A Rio Claro Mogi Guaçu Pirackaba Campinas km 600 Km A Atibaia 720 North Beltway 48 o Paulo km km Roads of the Shoes Industry Capão Bonito Registro São Paulo Coast Roads Peruibe 232 km IFC International Finance Corporation WORLD BANK GROUP Taubaté São José dos Campos tos 89 Km A BNDES IDB Successfully tendered 9#10EXECUTIVE SUMMARY New Phase of The São Paulo Road Concessions Program A The New Phase of the Sao Paulo Road Concessions Program, considering the lots granted since 2016, consists of the structuring and subsequent bidding of approximately 3.000 km of highways in strategic areas of the State of São Paulo, which are divided into 5 lots. On these roads, millions of vehicles circulate daily, including loaded trucks headed to the main points of outflow, such as the Port of Santos, São Paulo International Airport, the South, Northeast and Central-West regions of Brazil and the main centers of the state of São Paulo. Main objectives of the program • • • Create a new paradigm to attract players to the country's infrastructure market, offering credibility, legal security and attractive returns, through improvements in the bankability of projects in national and international markets and eliminating barriers to international and different profiles of players. To attract the best operators of road concessions and other profile of investors through a competitive, transparent and international competitive bidding process, taking into account international standards. Maintain high standards of quality and safety by introducing innovative features in road management to benefit users, including innovative ITS capabilities and services, creating better and safer road traffic. O SÃO PAULO GOVERNO DO ESTADO ARTESP IFC International Finance Corporation BNDES IDB WORLD BANK GROUP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 10 10#11EXECUTIVE SUMMARY Results and Innovations After 3 successful tender processes, the Program already has significant results: BRL 10 billion in secured investments Introduction of the Three-party Agreement, regulating the rights of lenders based on international best practice $ BRL 3,6 bn in upfront concession fees, 131%, 438% and 91% of premium in each of the concessions tendered First highway concession awarded to a Private Equity fund in a standalone basis (Pátria Investimentos in association with Blackstone) First logistics project exclusively financed through the capital market (Entrevias) & ONFER CO PPP 2017. ERENCE + Auctions were attended by major players in the sector on a global scale Inclusion of improvements to the attractiveness and bankability of the Projects (eg indemnification clauses, risk matrix, among others) Development of FX risk Protection Mechanism based on the variable concession fees of the project (there is no fiscal impact for Government) Winning Project of the "PPP Awards & Conference Brazil" Award in 2017 in the category "Most Innovative Idea of the Year" for the improvement of bankability in the concession agreement SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB 11#12EXECUTIVE SUMMARY Piracicaba-Panorama Lot | Overview DBFOM contract Brownfield 30-year road concession Total length: 1.273 km 218 km of Currently Concessioned Stretch 1,055 km under Public Administration i Granting Authority ARTESP - GOSP Transportation Agency Revenues: Expected total revenue (30 years) of USD 10.9 bln 16 new toll plazas | 5 existing toll plazas Investments Estimated total capex (30 years) of approx. USD 3.7 bln. Operation Estimated total opex (30 years) of approx. USD 1.5 bln. Bataguassu 267 Brasilândia Pauliceia Paporama Paraná River Presidente Epitácio Caluá Marabá Paulista 158 upi Baulista Ouro Verde Dracena P12 SP 294 Pacuen Presidente Venceslau Planalto do Sul Mirante do Paranapanema 158 da Teodoro Sampaio ista 158 Santo Anastácio Santo Expedito P13 valparaiso Guararapes Tabajara Rubiácea Birigui Bilac 154 Penápolis Avanhandava Sabino Braúna Promissão Guaiçara Lins 153 267 Arco-Íris Queiroz Getulina Cafelândia Gabriel Monteiro Piacatu 267 Adam P10 Osvaldo C Pracinha P22 SP425 SP 294 Basto Presidente SP 425 inalis Regente Feijó, São Paulo Pirapozinho Taciba Narandiba Estrela do Norte Santo Inácio lepė P16 SP 284 Pompe P09 Sao Tietê Rive Bacuriti Novo Horizonte Santa Adélia Itajobi Itápolis Borborema 267 Jaboticabal Guariba Taquaritinga 364 Guatapará Dobrada Matão 456 Rincão Cajuru de Minas Cravinho 155 km of access roads 050 Luis Antonio Existing Toll Plazas Moco de Viterbo New Toll Plazas e do ardo Santa Rita do Passa Quatro 369 Pongal Cambaratiba Ibitinga Tabatinga Nova Europa Gavião Peixoto 267 Santa Eudoxia Araraquara 050 Casa Branca Santa Cruz Guaimbé Reginópolis Pirajul Agua Vermelha Porto Ferreira das Palmeiras. 369 Vargem Grande do S Descalvado Ibaté São J Ale P08 SP 331 Alvinandia SP 294 SP 293 P31 Aval Mali rca P07 Baur Pederneiras Boa Esperança do Sul Arealva Jacuba Bariri Ribeirão Bonito Bocaina São Car RC02 Pirassununga Boa Agual 050 Pirauninga Agudos 153 Ubirajara 369 Paulistánia Espírito Santo do Tunin SP 261 Lençóis Paulista PC05 SP 225 Barra Bonita, São Paulo Dois Córregos PC04 P05 SP 197 P04 SSP 304 Col dos Pescadores San Ped Ch SP 191 CRO3 P02 SP 308 373 CFC03 nalândia Leme Esp SP 310 PC01 Araras Mogi Guaçu Claro Moji-Mirim Itapi Col olis Limeira 374 Agissé PPP 115 Maracai Lutécia Echapora Campos Novos Paulista Assis SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB 12#13EXECUTIVE SUMMARY Piracicaba-Panorama Lot | Overview Bataguassu 267 DBFOM contract Brownfield 30-year road concession Total length: 1.273 km 218 km of currently concessioned stretch 1,055 km under public administration 490 km primary segment Brasilândia P23 Pauliceia Panorama Di Baulista Paraná River Presidente Epitácio Caluá Ouro Verde Dracen St P12 Presidente Venceslau Marabá Paulista 158 Planalto do Sul Mirante do Paranapanema 158 da Teodoro Sampaio ista 158 Santo Anastácio Santo Expedito valparaiso Grapes Tabajara Rubiácea P13 Adam P10 Osyaldo C Pracinha Bilac Gabriel Monteiro 267 Piacatu P22 SP425 S94 Basto Presidente SP 425 inalis Regente Feijó, São Paulo Pirapozinho Taciba Narandiba Estrela do Norte lepė P16 i Birigui Braun Granting Authority ARTESP - GOSP Transportation Agency Revenues: Expected total revenue (30 years) of USD 10.9 bln 16 new toll plazas | 5 existing toll plazas AQUITO Santa Adélia Despite the total length, it is worth noting that the primary stretch is approximately 490 km long, hence the operation radius is perceived as reasonable.çara Bacuriti Itápolis Jaboticabal Guariba Taquaritinga 364 Investments Estimated total capex (30 years) of approx. USD 3.7 bln. Operation Estimated total opex (30 years) of approx. USD 1.5 bln. Guatapará Dobrada Matão 456 Rincão Cajuru de Minas Cravinho 155 km of access roads 050 Luis Antonio Existing Toll Plazas Moco de Viterbo New Toll Plazas Borborema 267 153 267 Pongal Arco-Íris Queiroz Getulina Cafelândia e do ardo Guaimbé P09 Reginópolis Pirajul Boa Esperança do Sul Arealva Jacuba Ale P08 Bariri Ribeirão Bonito Aval Bocaina PC04 P07 SP 261 Santa Rita do Passa Quatro 369 Cambaratiba Ibitinga Tabatinga Nova Europa Gavião Peixoto 267 Santa Eudoxia Araraquara 050 Casa Branca Santa Cruz Ibaté Agua Vermelha Porto Ferreira das Palmeiras. 369 Vargem Grande do S Descalvado São J São Car PC02 Pirassununga Boa Agual 050 nalândia 69 Leme Esp Baur Lutécia Echapora 153 SP 331 Alvinandia Ubirajara SP 293 P31 369 SP 294 reras P05 Dois Córregos Piraninga SP 197 Agudos Barra Bonita, São Paulo P04 Ch Paulistánia Campos Novos Paulista Assis Lençóis Paulista SSP 304 Col dos Pescadores Espírito Santo do Tunin PC03 SP 310 PC01 SP 191 CRO3 P02 Claro Col olis Limeira SP 308 373 Araras Mogi Guaçu Moji-Mirim Itapi SP 284 374 Agissé PPP 115 Maracai Santo Inácio SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB 13#14EXECUTIVE SUMMARY Piracicaba-Panorama Lot | Main Features and Innovations. $ Improvement of the FX Protection Mechanism provided by the Government € Cash Waterfall Mechanism Cash Waterfall Mechanism to transparently operationalize the Contract Administration Improvement of the performance monitoring framework Design of new performance indicators, with the use of technology, clarity, detail and objectivity as cornerstones Three-Party Agreement Provisions for clear alignment between lenders and grantor; cure rights, step-in-rights and substitution Frequent User Discount System The concession will include an innovative system with progressive tariff discounts, according to frequency of use, available only to users with electronic payment system (risk borne by the Authority). Adoption of iRap methodology for road safety First Concession of the country to use the IRAP methodology Zero Carbon Program for Highway Operation Neutralization of Greenhouse Gas (GHG) emissions related to the operation of the concession (provisions include GHG inventory and Certification of GHG neutralization) More transparency Greater range of information in the data room, bidding documents and annexes, all available in Portuguese and English Revision and reorganization of contract provisions and annexes Proposal of objective structure, with aggregation of correlated themes and definition of applicable procedures, as well as general improvements in wording and rules. Use of new project approval and monitoring models e.g., BIM, SGP and certification SÃO PAULO ARTESP IFC International Finance Corporation >>BNDES IDB GOVERNO DO ESTADO WORLD BANK GROUP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 127-day period for submission of proposals CO2 14#15EXECUTIVE SUMMARY Piracicaba-Panorama Lot | Financials Summary ooooO Investments (30 years) • • Total Capex: USD 3.7 billion Main Interventions: USD 1.5 billion Economic Results FCFF Unlevered IRR: 9.35% $ $ Approximate figures; Real terms $ Operation (30 years) Total Opex: USD 1.5 billion • Revenues (30 years) • Tariff Revenue: USD 10.9 billion Ancillary Revenue: USD 330 million • Granting Authority Payments • • • Minimum Upfront Concession Fee: USD 4 mln Variable Concession Fee: 9% (of total revenues) | from year 2 5% exclusively attributable to the Frequent User Discount protection mechanism 4% exclusively attributable to the FX Protection mechanism. Inspection Fee: 3% (of total revenues) (paid to the authority for the sake of contract monitoring) Toll Plazas • 5 Existing Toll Plazas Operation Start: Effective date of Contract 16 New Toll Plazas Operation Start: 13th month of Contract SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation BNDES IDB WORLD BANK GROUP 15#16EXECUTIVE SUMMARY Traffic and Revenues Equivalent Axles Projections (millions of axles p.a.) Growth x GDP (in equivalent axles) 350 300 250 200 150 145 0 136 141 146 151 155 158 164 169 175 183 189 195 201 208 215 222 229 236 245 252 262 272 280 287 296 305 314 323 332 100 50 91 83 86 89 93 95 97 101 104 108 113 118 122 126 131 136 140 145 151 157 162 170 177 183 189 195 201 208 214 221 55 54 55 57 58 60 61 63 65 67 69 71 73 75 77 79 81 83 85 88 90 93 95 97 99 101 104 106 108 111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Type of Vehicle (in equivalent axles) Average Growth Traffic/GDP Traffic GDP Light Vehicles 2.45% 0.98 Commercial Vehicles 3.13% 2.5% 1.25 Total 2.89% 1.15 Light x Commercial Breakdown | Total 36% Light Vehicles Commercial Vehicles O Total Equivalent Vehicles 64% Revenues | Existing x New Toll Plazas (BRL mln) 2,500 In the 1st year, only existing toll plazas operate. 1,989 2,000 1,876 41,130 45,000 2,107 40,000 Light Vehicles ■Commercial Vehicles 1,765 1,596 35,000 1,500 1,049 1,137 1,214 1,294 850 902 962 1,000 405 426 471 525 500 ㅁ 412 445 476 491 524 561 599 639 [ l l l l l l l l l l l 742 1,379 1,468 Existing x New Toll Plazas 30,000 929 1,009 1,070 1,133 Revenue Breakdown 25,000 697 20,000 681 726 774 836 867 920 974 15,000 10,000 5,000 49% 51% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 SÃO PAULO GOVERNO DO ESTADO Existing Toll Plazas ■New Toll Plazas ● Total Accum. Revenue Existing Toll Plazas ■New Toll Plazas ARTESP IFC International Finance Corporation BNDES IDB WORLD BANK GROUP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 16#17EXECUTIVE SUMMARY Capex & Opex Opex Breakdown | Yearly (BRL min) 250 Capex Breakdown | Yearly (BRL mln) 1,200 200 177 178 179 181 182 182 185 187 187 187 ▼ 189 190 190 191 189 190 192 194 197 199 199 202 204 205 205 205 207 205 995 1,000 951 901 156 150 100 50 120 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 ■Labor Routine Maintenance Consumables Transportation E&S Others Insurance & Guarantees Total SÃO PAULO GOVERNO DO ESTADO ARTESP IFC AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO International Finance Corporation WORLD BANK GROUP 789 800 683 623 604 600 ៣ 400 200 0 164 432 383 351 349 330 316 254259 111 Real terms 726 691 672 646 548 483 331 298 273 B 254 142 76 24 日 24- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Main Interventions Initial Works Other Invertentions E&S Special Conservation Ressetlements Equip. Vehicles & System Total BNDES IDB 17#18EXECUTIVE SUMMARY Cash Flow Projection Unlevered 2,500,000 2,000,000 1st Capex cycle in 7 years Negative cashflows up to year 7 1,500,000 1,000,000 500,000 0 1 2 3 4 5 6 7 8 9 10 Capex SÃO PAULO ARTESP IFC GOVERNO DO ESTADO AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO 2nd Capex cycle from year 16 ✓ Debt can be fully repaid before the 2nd cycle's start; 2nd cycle can be fully funded with cash generation Real terms; BRL mln 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Opex Taxes Tariff Revenue Ancillary Revenue International Finance Corporation WORLD BANK GROUP BNDES IDB 18#19EXECUTIVE SUMMARY Bidding Process Bidding modality International Competition Selection Criteria Highest Bid (highest premium over minimum upfront concession fee) ✓ Minimum upfront concession fee: BRL 15 million Concession Term ✓ 30 years from the date of signature of the Initial Transfer Term (road stretches are transferred to the concessionaire). Variable Concession Fee ✓ 9% of total revenues - from year 2 Inspection Fee ✓ 3% of total revenues Dynamics of the Auction ✓ Phase inversion: tender session starts by evaluating the commercial proposals. Only the winning bidder will have its qualification documents analyzed (please refer to bidding process section) In case of tie or close commercial proposals (diff. of BRL 15 mln), an auction phase is possible. Participation ✓ Participation equally open to Brazilian and foreign companies, investment funds and supplementary pension entities, without restrictions, except those resulting from the legislation. Rules for Consortia ✓ No limitation on the number of members Each consortium member must meet individually the legal, tax and labor requirements Terms ✓ Period between RfP issuance and tender session: 127 days ✓ Formal Q&A process: from RfP issuance until November 5th SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB 19#20SCHEDULE Oxel SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP BNDES IDB#21SCHEDULE Next Steps Public Hearings *127 days between RfP launch and Tender Session Attorneys Office Approval Privatization Formal Q&A Committee Approval Commercial Close Feb-2019 | Mar-2019 | Apr-2019 |May-2019 | Jun-2019 | Jul-2019 | Aug-2019 | Sep-2019 | Oct-2019 |Nov-2019 | Dec-2019 | Jan-2020 | Feb-2020 | Mar-2020 Public Consultation Start 18/2 Public Consultation End 31/3 RfP Launch 25/7 SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation WORLD BANK GROUP Tender Roadshow Session* 28/11 BNDES IDB Operation Start 21 22#22FUTURE OPPORTUNITIES IN THE ROAD SECTOR SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation BNDES IDB WORLD BANK GROUP Oxel#23E Piquina FUTURE OPPORTUNITIES IN THE ROAD SECTOR Lote A - São Paulo Coastal Roads Cajamar Caleiras SP 268 Araçoiabinha SP-075 Araçariguama Santana de Parnaiba ANHANGUERA SP-021 Parque Estadual da Cantareira - Núcleo. SP-008 Sorocaba Extension of approx. 230 km 374 Votorantim Aluminio São Roque Marque BRL 3.2 billion of expected investments Barueri 050 Jandira Carapicuiba 374 116 Osasco BRÁS Itapevi São Paulo ose JARDINS Vargem GRANJA VIANA Grande Paulista Cotia Significant improvements in road safety impacted Municipalities Parol Grande ☑ Public Consultation: October 2019 8888 Tender Date: August 2020 478 Tapiral 478 165 478 Miracatu Google Earth 478 Image Landsat / Copernicus Data SIO, NOAA, U.S. Navy, NGA, GEBCO Santa Rita do Ribeira Vila Batista Col. de Férias Juquitiba Peruibe 381 São José dos Campos 125 回 Jacare 12 SP-070 de Jacarel Aruis Paraibuna SP-066 Guararema Santa Branca AEROPORTO Guarulhos CUMBICA SÃO MIGUEL PAULISTA Itaquaquecetuba 116 PENHA DE FRANÇA SPOT ITAQUERA ITAIM BIBI 116 BROOKLIN Taboão da Serral São Caetano do Sul Embu ose das Artes SANTO AMARO 10 SP421 116 SOCORRO 公司 Mauá INTERLAGOS A São Bernardo do Campo Itapecerica da Serra 1954 [116 1214 PARQUE AMERICA PARELHEROS Embu Guaçu Lo Lourenço da Serra Juu Cipó-Guaçu dem GRALIAU 33 BATISTIN 050 1050] GUAIANASES Poá Suzano Modas Cru AQUATEM SP-031 SP-04) SP-045 Ribeirão Pires Rio Grande da Serra 101 RESIDENCIAL Cubatão 050 São Vicente Grande Santos Guarujá Sabouna Cezar de Souza ertioga Nossa Sra do Remédio Salesópolis [ Binitiba-Minim Wo CIMO JUQUE 101 Parque Estadual Restinga Bertiog Estação Ecológica Tupinambas Refugio de Vida Silvestre do Arquipélago SP099 101 MARESIAS Parque Estadual Marinho da Laje de Santos 50 km <Z N₁₂#24FUTURE OPPORTUNITIES IN THE ROAD SECTOR New Round of the Road Concessions Program 464 DIVIN Jales Ferran Ferrandópolis 050 Barretos Franca São José do Rio Preto Olimpi 354 050 265 369 Catanduva 3 Ribeirão Preto. Renovias lot ~ 485 km Água Clara 262 Três Lagoas 158 Andradina Araçatula a lina Rosana Dracena 267 Pres. Epitácio Pres. PoeIME Northwest lot ~ 1,720 km Marilia 158 Araraquara Sao Carlos Bauru 369 374 Assis SP Vias lot 884 km ~ 374 The State of São Paulo is currently studying 4 lots for the 5th Round of Road Concessions, comprising existing concessions that will expire over the upcoming years. Five Concessions ~ 3,300 km Extension of expiring concessions: 1.627 km Extension of DER roads: ~1.678 km Av 478 491 146 267 381 459 460 381 Campinas Aparecida São José dos Campos Sorocaba 383 São Paulo Santos 47. 116 Marginais and ViaOeste lot ~241 km 24#25FUTURE OPPORTUNITIES IN THE ROAD SECTOR New Round of the Road Concessions Program Lot Concession Extension (km) Expiry Date* Toll Revenue in 2018 (BRL MM) Northwest Sun's Triangle 442 07/2021 494 Northwest Tebe 156 03/2025 84 Renovias Renovias 345 06/2022 442 Marginais and ViaOeste Via Oeste 170 12/2022 993 SP Vias SP Vias 514 10/2027 646 SÃO PAULO GOVERNO DO ESTADO ARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO IFC International Finance Corporation >>BNDES IDB WORLD BANK GROUP *Expiry date may be reviewed 25#26SÃO PAULO GOVERNO DO ESTADO CARTESP AGÊNCIA DE TRANSPORTE DO ESTADO DE SÃO PAULO THANK YOU IFC International Finance Corporation WORLD BANK GROUP ✓ BNDES IDB