Equatorial Energia : Notice to the Market - Construction License SPVs 1, 2 and 3

EQUATORIAL ENERGIA S.A.

Publicly Held Company

Corporate Taxpayer ID (CNPJ/MF): 03.220.438/0001-73

Company Registry (NIRE): 2130000938-8

NOTICE TO THE MARKET

Equatorial Energia S.A. ("Company"), having shares traded in the Novo Mercado segment at B3 S.A. - Brasil, Bolsa, Balcão under "EQTL3", informs its shareholders and the market that, on October 31, it has obtained the Construction License (Licença de Instalação, in Portuguese) from IBAMA (Brazilian Environmental Agency), to its transmission line projects: lots 08, 09 and 12 (Block 2), jointly, from ANEEL's Auction held on October, 2016.

Lots 08, 09 and 12 are part of Block 2, with total annual revenues reaching R$ 271 million (as of Sep/18) and total investment of R$ 1,580 million, as per ANEEL estimates.

In June, a Financing Agreement was signed between, SPVs 1, 2 and 3 ("Lots 08, 09 e 12") and Banco do Nordeste do Brasil S.A. ("BNB"), to provide R$ 1,121 million (one billion and one hundred and twenty-one million reais) in financing lines, funded by the Constitutional Financing Fund for the Northeastern Region (FNE, in Portuguese), corresponding to roughly 70% of the Capex forecast by ANEEL for these lots.

In the table below, we show all the transmission lines under implementation by Equatorial:

GREENFIELD

Lot

State

kmRegulatoryEnvironmentalConstructionSubstations

Capex

Licence

WorksAnnual RevenuesBLOCK 1

Lot 23

Pará

125

2

462

Partial Construction

BLOCK 2

Lot 08

Bahia

Lot 09

Lot 12

Bahia Bahia / Piauí

251 213 380

482

Construction

84

1

505 593

Construction Construction

76 111

BLOCK 3

Lot 14

Lot 15

Bahia / Minas Gerais Bahia / Minas Gerais

Lot 16

Minas Gerais

594 257 330

1

1.148 469 546

Preliminary Preliminary Preliminary

201 93 115

BLOCK 4

Lot 31

Pará

436

3

719

Construction

Started

135

Brasília, November 1st, 2018.

Eduardo Haiama

CFO Equatorial Energia S.A.