MARKET ANNOUNCEMENT

CENTRAIS ELETRICAS BRASILEIRAS S/A

CNPJ: 00.001.180/0001-26 PUBLICLY TRADED COMPANY

Centrais Elétricas Brasileiras S/A - ( "Company" or "Eletrobras"), aiming to clarify news disclosed by the press, regarding the payment made by the Energy Development Account ("CDE"), to energy generation and transmission concessionaries, relating to the 1st tranche of indemnification of the concessions renewed by Law 12.783/2013, hereby informs its shareholders and the market in general the following:

  1. The Company identified, in December 2015, that there were overpayments to certain concessionaries of transmission and generation and immediately adopted the following measures: (i) has opened internal inquiry process for determining responsibility for the overpayments; (Ii) notified the generation and transmission companies that should return the amounts improperly received, including companies of Eletrobras.

  2. The Company is discussing with the National Electric Energy Agency the return conditions of those values by the companies.

  3. The Company voluntarily informed the Court of Audit ("TCU"), within the supervision process of the sectoral funds management;

  4. The total amount involved is approximately R$ 575 million (five hundred seventy-five million) and not of R$ 1.8 billion (one billion, eight hundred million) as reported by the press, and the amount to be returned by Eletrobras companies is around R$ 523 million (five hundred twenty-three million).

  5. All Eletrobras companies already have a provision in its financial statements for return of the amounts improperly received and are waiting for the definition of the refund criteria of the mentioned resource.

Rio de Janeiro, October 27, 2016.

Armando Casado de Araujo

CFO and Investor Relations

ELET3 & ELET6

LISTED

LISTED

EBR & EBR.B

NYSE

Eletrobrás - Centrais Elétricas Brasileiras SA published this content on 27 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 27 October 2016 21:26:02 UTC.

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