A cleaner utility with bigger build risk
- AXIA says its post-privatization turnaround is now officially complete.
- The company sold its last thermal plant and is now a 100% clean and renewable generator.
- Growth depends on a BRL 12 billion to BRL 14 billion annual capex plan for 2026 and 2027.
- The company completed its migration to the Novo Mercado to improve governance and liquidity.
- Generation is cleaner, but it is also more exposed to water levels, wind, sun, and spot power prices.
Turnaround over, buildout begins
AXIA has moved past the classic privatization story. Management said the traditional turnaround is concluded, and the 2026 budget reflects that new phase. The company cut old legal liabilities, simplified its structure, sold its last thermal power plant, and exited Eletronuclear.
The bull case is now about growth with a cleaner asset base. AXIA expects annual capex of BRL 12 billion to BRL 14 billion in 2026 and 2027. That money is aimed at transmission auction wins, grid reinforcements, and more renewable capacity. Management is also holding early talks with data center operators looking for clean power in the Northeast. Meanwhile, the company allocated BRL 7.7 billion for shareholder returns in the first half of 2026.
The bear case is that clean power is not the same as safe power. AXIA is now fully tied to renewable generation, mainly hydro. That exposes earnings to water levels and to price swings inside the day as wind and solar change supply. A strong El Nino is expected to persist until early 2027, heightening this risk.
Two events matter next. The completed move to the Novo Mercado in Q2 2026 removes a governance overhang. Now, the company must prove it can execute its massive transmission upgrades on time and on budget.
Power sales plus regulated wires
AXIA makes money in two main ways. It sells electricity from generation assets, and it earns regulated revenue from transmission lines that move power across Brazil.
Generation can be profitable, but it is exposed to the weather and to spot power prices. AXIA's portfolio is now based entirely on water, sun, and wind. That removes thermal fuel and nuclear issues, but it raises the importance of hydrology and price timing.
Transmission is steadier. The regulator ANEEL sets allowed revenue for transmission projects, called RAP. This revenue is adjusted over time and reviewed by the regulator, so it can act like a more predictable base for the company.
The model can break if the growth plan is poorly executed. AXIA is stepping into a large capex cycle, and management has already pointed to pressure from equipment demand, raw materials, and limited supplier capacity.
What AXIA owns and builds
Hydroelectric generation
Hydro is the core of AXIA's power fleet. It is low carbon, but earnings can move with rainfall, reservoir levels, and hourly market prices.
Wind generation
Wind adds clean capacity and fits the company's renewable strategy. It also adds intermittency, which can increase price swings in the system.
Solar generation
Solar is a smaller clean power source for AXIA. It can grow with Brazil's demand for renewable energy, but output changes with daylight and weather.
Transmission lines
Transmission assets move electricity from generators to the grid. Revenue is regulated, which makes this business steadier than merchant power sales.
Grid reinforcements and improvements
AXIA is putting more capital into upgrades and new works linked to auction wins. These projects can add long-term revenue if built on time and on budget.
Two engines, one big mix issue
The mix uses 2024 Form 20-F segment revenue for generation and transmission, normalized between those two lines. AXIA disclosed generation revenue of R$28.1 billion and transmission revenue of R$19.3 billion.
What could break the story
Hydrology and modulation risk
High impact · High oddsAXIA is now a fully renewable generator, and hydro is the main source. Management expects a strong El Nino to persist until Q1 2027, increasing price volatility, particularly in the North and Northeast sub-markets. That can hurt results when the company must sell or buy power at bad hours.
Large capex execution
High impact · Medium oddsAXIA expects annual capex of BRL 12 billion to BRL 14 billion in 2026 and 2027. That is a much larger build program than a pure cost-cutting turnaround. Delays, permitting issues, or weak project controls could lower returns.
Equipment and supplier pressure
Medium impact · High oddsManagement has flagged higher costs from raw materials, strong demand for equipment, and limited producer capacity. A tight supply chain can push up the cost of transformers, cables, towers, and other grid equipment. That risk matters more as AXIA increases spending.
Remaining compulsory loan liabilities
Medium impact · Medium oddsAXIA has reduced compulsory loan liabilities sharply, bringing the provision down to BRL 11.1 billion by the end of 2025. This issue is much less central than before, but the remaining balance still requires cash settlements and court approvals.
In one breath
Is AXIA the same company as Eletrobras?
Yes. AXIA is the former Eletrobras. The current story is shaped by what happened after privatization, including cost cuts, asset sales, lower legacy liabilities, and a shift toward renewable generation and transmission growth.
Is AXIA fully renewable now?
Yes. Management said the company sold its last thermal power plant in October 2025 and is now 100% clean and renewable in generation. The mix is mainly hydro, with wind and solar also in the portfolio.
Why does transmission matter for AXIA?
Transmission revenue is regulated, so it is usually steadier than power generation revenue. It also gives AXIA a place to invest large sums through auction wins and grid upgrades.
What is the biggest risk for AXIA shareholders?
The biggest risk is that AXIA moves from a successful cleanup into a harder build phase. A large capex plan, volatile renewable power prices, and supplier pressure all need to be managed at the same time.
