2013 was marked by a steady return of Portuguese issuers to global capital markets,
in stark contrast to the period between April 2011 and September 2012, during which
the bond markets were closed to them. This increase in the availability of international
investors was, in 2013, logically accompanied by a reduction in spreads required to
national issuers. This situation allied to historically low base interest rates, created ideal
conditions for the success of a large number of international bond issues carried out by
Portuguese issuers.

REN took advantage of this situation to continue improving its debt profile, as well as reinforce its profile of financial liquidity and solidity.

The restructuring of REN’s debt focused on three main principles:

• Diversifying the funding sources and expanding the base of financial financiers
• Reducing the refinancing risk
• Creating the conditions for a sustained average debt costs reduction

2013 saw important challenges for the financial management of REN, especially
the refinancing of the 800 million euro bond issue of 2008, which matured on
December 10^th.

The bonds issued on the international market in January and October, for
amounts of 300 million and 400 million euros respectively, and the drawdown
of 100 million euros under the first tranche (400 million euros) of China
Development Bank (CDB) credit facility, ensured the refinancing of the
aforementioned 800 million euros bond. Due to current market conditions, the
refinancing was carried out at much lower interest rates.

The following funding operations were carried out in 2013:

• In January, a 150 million euros bond took place with a maturuty of seven years.
• Also in January, a 300 million euros international bond issue took place with a maturity of five years.
• In March, a 75 million euros international bank loan was signed with a three years maturity.
• In April, a 400 million euro credit facility was signed with CDB, with a eight years maturity. This is the first tranche of 1 billion euros funding commitment, following the agreement with State Grid International Development as part of the second phase of REN’s privatisation.
• In October, a second international bond issue was issued with an amount of 400 million euros and a seven years maturity.
• In November, a 160 million euro credit facility was signed with ICBC – Industrial and Commercial Bank of China with a five years maturity.
• During the year, five commercial paper programs were renegotiated, with a total value of 675 million euros, aiming to extend their maturity and to improve their financial conditions.

The amount of new funding operations and renegotiations in 2013 came to
approximately 2 200 million euros. REN’s debt structure was thereby profoundly
reshaped, with the aim of creating conditions to comply with the principles set out
by REN as part of debt management and financial risk strategy. Thus, decisive
actions included: (i) the extension and diversification of the lenders base (the current
shareholder structure allows financing in non-European lenders); (ii) the extension of the average debt period; (iii) the rescheduling of refinancing needs, and (iv) the increased flexibility of certain financial instruments.

Bond issues were the primary source of funding during 2013, representing
almost 60% of the total gross debt, followed by bank loans with a weighting of
almost 32%.

Net funding costs increased by 5.1 million euros as compared to 2012, rising from 143.0 million euros to 148.1 million euros. This increase was due to a significant strengthening of REN’s liquidity position, and consolidated in large part by the establishing of a reserve of bank deposits remunerated at lower rates than the funding obtained.

The average cost of gross debt in 2013 was 5.54%, 16 base points less than in 2012.

Interest rate risk management policy continued to be aimed at reducing the volatility of financial costs. REN's fixed rate debt represented 52.2% of the total debt.

With regard to liquidity position, the company’s funding requirements are completely covered until the end of 2016.

By the end of 2013, REN’s risk ratings with Fitch, S&P and Moody's were BBB, BB+ and Ba1 respectively.