AES Tiete : Notice to the Market - Expansion Agreement

AES TIETÊ ENERGIA S.A.

Public Company

Corporate Taxpayer ID (CNPJ/MF): 04.128.563/0001-10

Company Registration (NIRE): 35.300.183.550

NOTICE TO THE MARKET

AES TIETÊ ENERGIA S.A. ("AES TIETÊ" or "Company") (B3: TIET11, TIET3, TIET4), hereby announces to its shareholders and the general market that, on the date hereof, it entered into an agreement with the State of São Paulo ("Agreement") regarding the Expansion ("Expansion") of its installed capacity in the state arising from the stock purchase agreement entered into by and between AES GERASUL EMPREENDIMENTOS LTDA., the predecessor of AES TIETÊ, and the State of São Paulo, on November 11, 1999 ("Contract").

The Contract envisaged the expansion of the installed capacity of AES TIETÊ by a minimum of 15% in the State of São Paulo, which corresponds to expansion of 398 MW.

The Company has delivered approximately 80% of the expansion, considering: (i) 150 MW via the acquisition of the Guaimbê solar project, (ii) 75 MW via the acquisition of the Boa Hora solar project in the 2015 auction, (iii) additional 75 MW from the AGV Solar project acquired in the auction held in December 2017, (iv) 7 MW via small hydroelectric power plants ("SHPPs") and (v) 10 MW via long-term power purchase agreements involving sugarcane biomass.

For the remaining 81 MW, the Company shall deliver in up to six years, as of the present date. Once the Expansion is fulfilled, the Company is exempted from the payment of any penalties for delay.

This Agreement is another example of our commitment to actively act to mitigate the Company's risks. With the 150 MW of solar power that started operating in 2018 and the other 150 MW that will begin operations until 2019, we were able to reach approximately 80% of the Expansion undertook upon the privatization of the Company.

The Company will keep the market and its shareholders duly informed of subsequent events.

Barueri, October 1, 2018

AES TIETÊ ENERGIA S.A.

Clarissa Della Nina Sadock Accorsi Executive Vice-President and Investor Relations Officer