Centrais Eletricas Brasileiras : Market Announcement - 11.08.17 - official letter 361

CNPJ: 00.001.180/0001-26 COMPANHIA ABERTA

In compliance with the abovementioned Official Letter, the Company clarifies that, according to Markets Announcements released on August 22, September 18 and October 3, 2017, as well as the Relevant Facts dated on August 21 and 22, 2017, the Company clarifies to its shareholders and to the market in general that the subject concerning the Eletrobras' potential privatization is being handled by its controlling shareholder, without having any information regarding the news published by the press.

Pursuant to CVM Instruction 358/02, the Company has already sent correspondence to its controlling shareholder reiterating the need that the relevant acts or facts involving the Company should be disclosed to the market, pursuant to said regulations.

Rio de Janeiro, November 08, 2017.

Armando Casado de Araujo

Free Translation of the Official Letter nº 361/2017/CVM/SEP/GEA-1

Dear Officer,

1. In reference to the news published on 11.07.2017, in Valor Econômico newspaper, under the title "Shareholders will have a maximum of 10% of the capital of Eletrobras", in which summarizes the following statements:

   The government will send to Congress three draft legislations with an urgent request to privatize Eletrobras and the distribution companies of the group and define the new regulation model of the electric sector. The first project to be submitted to the Legislative will deal with the sale of distributors in the North and Northeast regions.

   The project that defines the format of the privatization of the Eletrobras group was discussed yesterday with President Michel Temer and several aspects of the proposal are already decided. In the issuance of shares of the company, each investor may have a maximum of 10% of the common shares, so that the control is effectively pulverized.

   The Federal Government, which loses control of the state-owned company, will maintain a "golden share" that will give it veto power on strategic issues. One of the government's concerns about maintaining this special share is to prevent the sale of the company's subsidiaries, which could harm some regions of the country.

   Eletrobras' new controllers will have to commit to a revitalization program for the São Francisco River, which will require investments of R$ 350 million annually for a period of 30 years.

   In this same project will include the "decotization" of 14 hydroelectric plants that had the concessions extended in 2012, according to Provisional Measure 579, edited by the then Dilma Rousseff government. This means that the concession contracts for these plants will be zeroed, renewed for another 30 years and companies will be able to charge market prices.

   The changes will incrase the value the hydroelectric plants and the expectation of the government is that the revenues from the grants reach approximately R$ 36.6 billion, a figure much higher the original estimates, around R$ 22 billion. In the proposal for the 2018 Budget, the government already had its stake of R$ 12.2 billion.

   The project provides for the apportionment of the granting in three parts: one third for the Federal Government, one third to capitalize Eletrobras and the remainder for the Energy Development Account (CDE), a sectoral fund that holds the subsidies in the electricity bill.

   The Ministry of Mines and Energy, which conceived the model approved by the Federal Government, expects a voluntary adhesion of the Eletrobras Shareholders meeting to this set of decisions. The new regulatory framework for the electricity sector, whose proposal was placed in public consultation by the ministry, will consist of a third bill, also with an urgent request.

   President Temer urged the economic team to finalize the texts, so that they begin to be sent to the Congress until Thursday. The economic area works with the end of February as the deadline for the proposal of privatization to be approved by the parliamentarians, in order to allow the operation to be done still in 2018.

2. In reference to the news stated above, we request a statement from the company regarding the highlighted statement, commenting about the informations considered important about this subject.

3. In addition, as stated in CVM Instruction No. 358/2002, article 4, sole paragraph, provides for the obligation to inquire of the company's management and controlling shareholders, as well as all other persons with access to relevant acts or facts, whether they are aware of information that must be disclosed to the market in order to ascertain whether they know information that should be disclosed to the market;

4. The answer should be submitted through the Empresa.NET System category: Market Announcement, type: Clarifications Inquiries CVM/B3, subject: News disclosed in the media, which should include a transcript of this Official Letter.

5. The Superintendence of Corporate Relations will be responsible for, in the use of its legal attributions and, based on Law No. 6,385/1976, article 9, item II, and CVM Instruction No. 452/2007, the determination of the application of a fine, in the amount of R$ 1,000.00 (one thousand reais), without prejudice to other administrative sanctions, for failure to comply with the requirements of this official letter, sending exclusively by email, until 11/08/2017, notwithstanding the provisions of the sole paragraph of art. 6 of CVM Instruction 358/02.

Sincerely,"