Companhia Energética de Minas Gerais (CIG): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at Companhia Energética de Minas Gerais (CIG) and need a clear roadmap to deploy capital effectively, moving beyond just keeping the lights on. As someone who's seen market shifts up close, I can tell you the Ansoff Matrix lays out four distinct paths for your next move, from shoring up the core business-like investing BRL 1.5 billion in grid modernization to cut losses-to making bold diversification bets, such as entering the green hydrogen market. Honestly, the plan is right here, mapping out everything from capturing market share with better tariffs to exploring energy storage for industrial clients. Dive in below to see the precise, actionable strategies we've mapped for Companhia Energética de Minas Gerais (CIG) across all four growth vectors.

Companhia Energética de Minas Gerais (CIG) - Ansoff Matrix: Market Penetration

You're looking at how Companhia Energética de Minas Gerais (Cemig) can deepen its hold on the existing Minas Gerais market, which is the core of its business. This is about squeezing more value from the customers you already serve by improving service and offering better deals. It's the lowest-risk path, but you still need concrete action.

To increase distribution network reliability in Minas Gerais to reduce service interruptions, you need to look at the massive capital deployment underway. Companhia Energética de Minas Gerais (Cemig) announced a record investment of R$ 4.7 billion specifically to modernize the distribution system across 774 municipalities by the end of 2025. This is part of a larger planned capital expenditure (capex) of about R$ 6 billion for the full year 2025. The focus on resilience is critical, especially since the company reported total energy losses for the 12 months ending June 2025 at 11.43%, just under the regulatory limit of 11.48%. The overall investment plan between 2025 and 2029 exceeds R$ 39 billion, with a significant portion focused on distribution network modernization.

For industrial clients, capturing market share from smaller generators hinges on tariff competitiveness. You know that in 2023, there was already a 15.33% reduction in energy billed to industrial consumers due to migration to the free market and distributed generation. The average energy sale price in 2025 was reported in the range of R$ 200-R$ 210 per MWh. The distribution segment remains the powerhouse, accounting for 54.9% of the company's EBITDA as of the second quarter of 2025. Offering competitive tariff packages must directly address the cost pressures driving industrial customers away.

You've set a clear digital goal: launch a promotional campaign to migrate 5% of residential customers to digital billing and smart meter programs. While the base data from 2023 showed only 3.56% of the 10,188,645 installed meters were smart meters (AMI), hitting that 5% target for digital billing adoption in 2025 is an achievable operational win. This aligns with the strategic pillar of capturing efficiency through modernization and simplification.

The prompt specifies an investment of BRL 1.5 billion in grid modernization to lower technical and commercial losses. This specific amount should be tracked as a dedicated tranche within the broader modernization efforts. For context, by September 2025, R$ 993 million had already been invested in overhead, underground, and high-voltage power lines as part of preventive and corrective maintenance, which by year-end 2025 is expected to total R$ 1.377 billion. Furthermore, the company reported a Recurring EBITDA of R$ 1.5 billion in the third quarter of 2025, which shows the scale of operational performance you are aiming to protect and enhance with these investments.

Enhancing customer service response times to improve retention and reduce churn defintely requires tracking specific operational metrics. While I don't have the exact 2025 response time targets or churn rates here, the strategic driver is clear: to be a reference for client satisfaction, transforming their experience. This focus on the customer experience is a direct lever for reducing customer attrition within the existing service territory.

Here's a quick look at the key operational and financial data supporting this Market Penetration push:

The execution of these market penetration tactics relies on disciplined spending and operational excellence:

• Target migration of 5% of residential customers to digital billing.
• Ensure maintenance spending of R$ 1.377 billion is on track by year-end 2025.
• Leverage the 7.78% tariff adjustment for revenue stability.
• Focus on automation for immediate fault detection and reduced recovery time.
• Maintain total energy losses below the 11.48% regulatory cap.

Finance: draft the 13-week cash flow view incorporating the Q3 2025 Recurring EBITDA of R$ 1.5 billion by Friday.

Companhia Energética de Minas Gerais (CIG) - Ansoff Matrix: Market Development

You're looking at how Companhia Energética de Minas Gerais (CIG) can take its existing energy business-generation, transmission, and distribution-and push it into new geographic areas. This is Market Development, moving established services to new markets.

Companhia Energética de Minas Gerais (CIG) is a major player, with 2024 revenue hitting R$ 39.82 billion and earnings at R$ 7.12 billion. The company's current footprint is heavily concentrated, serving 96% of the population in Minas Gerais. The strategy here is to leverage this operational base outside that state border.

The overall investment plan from 2025 through 2029 totals R$ 39.2 billion. While the bulk, R$ 23.2 billion, is earmarked for distribution within the core area, the Market Development focus would pull from the R$ 4.3 billion allocated to transmission and the R$ 4.2 billion for generation.

Bid aggressively for new transmission line concessions in other Brazilian states, like São Paulo or Rio de Janeiro.

This involves competing for assets outside the current operational territory. The company is already studying transmission assets, though the search results indicate a current focus remains on Minas Gerais state for transmission auctions. However, the upcoming transmission auctions in 2026 are significant; the first one is expected to require investments around R$ 5.8 billion (US$1.07bn). This represents a clear, large-scale market opportunity to pursue in neighboring states.

Explore commercialization of energy in the free market (ACL) to large consumers outside of Minas Gerais.

The free market (Ambiente de Contratação Livre or ACL) allows energy trading outside regulated contracts. Companhia Energética de Minas Gerais (CIG) has a Trading Planning and Marketing unit. The company's 2024 EBITDA was impacted by trading activity, with a reported EBITDA for IFRS higher by 380% before removing trading effects. Expanding ACL sales outside Minas Gerais means tapping into the energy demand of large industrial and commercial users in states like São Paulo and Rio de Janeiro, where the competitive energy market is more mature.

Establish a dedicated subsidiary to pursue power generation projects in neighboring South American countries.

Companhia Energética de Minas Gerais (CIG) has substantial existing capacity, including 36 hydro plants totaling 4,449.0 MW as of December 31, 2024. The CEO has stated plans to use hydropower expertise to invest in clean energy technologies across the country. While the immediate focus is on pumped storage and battery projects within Brazil, a dedicated subsidiary would target new greenfield or acquisition opportunities in South America, leveraging the R$ 4.2 billion allocated for generation investment through 2029.

Partner with large industrial groups to supply energy directly to their facilities across Brazil.

This is a direct sales strategy within the ACL. Companhia Energética de Minas Gerais (CIG) is involved in the sale and trading of energy. The company has a segment for the sale and trading of energy. This strategy would involve securing long-term Power Purchase Agreements (PPAs) with large industrial consumers in states where Companhia Energética de Minas Gerais (CIG) does not hold a distribution concession, effectively selling energy generated or procured elsewhere in Brazil.

Target municipalities outside CIG's concession area with public lighting efficiency contracts.

Companhia Energética de Minas Gerais (CIG) is involved in energy efficiency services. The company has a subsidiary, Cemig SIM, which is involved in distributed generation. Furthermore, the company has a program, the More Energy Program, which includes building over two hundred new substations to enable city growth. Targeting public lighting efficiency contracts in other municipalities is a service-based market development, utilizing existing technical expertise in infrastructure management and energy solutions.

Key Operational and Financial Metrics for Market Expansion Context

Potential Areas for Non-Minas Gerais Focus

• Bid for transmission assets in auctions like the one scheduled for March 2026.
• Target large industrial consumers in the ACL outside Minas Gerais.
• Pursue generation projects in South American countries leveraging hydropower knowledge.
• Secure energy supply contracts with industrial groups across Brazil.
• Offer energy efficiency services for public lighting in new municipalities.

The company's current investment focus is heavily weighted toward its core, with 80% of the BRL 49 billion planned investment through 2029 being in regulated businesses (Distribution, Transmission, Gas). Expanding into new markets requires a strategic shift in capital allocation away from the core Minas Gerais distribution focus, where R$ 23.2 billion is planned.

Finance: draft a sensitivity analysis on the R$ 5.8 billion transmission auction requirement versus current transmission allocation by next Tuesday.

Companhia Energética de Minas Gerais (CIG) - Ansoff Matrix: Product Development

You're looking at how Companhia Energética de Minas Gerais (CIG) can build new offerings on its existing utility base. This is about developing new products and services for the current customer base in Minas Gerais, so the risk profile is generally lower than outright diversification.

For distributed generation solutions, like rooftop solar subscriptions through Cemig SIM, the company already has a foothold. As of the end of 2024, Cemig SIM had reached 33 thousand solar energy subscription consumer units. The total installed capacity in distributed generation for Cemig was 207 MW at the end of 2024. Looking ahead, Companhia Energética de Minas Gerais plans to invest, between 2025 and 2026, approximately R$ 442 million in the distributed generation segment. Furthermore, the total planned investment for Distributed Generation between 2025 and 2029 across the group is R$ 2.6 billion. This is part of the overall planned capital expenditure of R$ 39.2 billion for the 2025 to 2029 period.

Developing and commercializing energy storage solutions, specifically batteries for industrial clients to manage peak demand, aligns with regulatory interest. Companhia Energética de Minas Gerais highlighted that it has interesting projects with good synergies for the battery auction (BESS), which is anticipated in 2026. This move supports the broader goal of maintaining a 100% renewable matrix while adding flexibility.

Offering energy efficiency consulting and audit services to medium-sized businesses is a natural extension, as Companhia Energética de Minas Gerais, through its subsidiaries, is already involved in energy efficiency activities as of December 31, 2024. This service development can be supported by the R$ 1.0 billion allocated for Innovation/IT in the 2025-2029 investment plan.

Launching electric vehicle (EV) charging station infrastructure and subscription services across major highways in Minas Gerais taps into a high-growth area. While São Paulo leads, recent activity shows partnerships like the one between ABB and the Graal Group setting up over 40 fast and semi-fast chargers across five key states, including Minas Gerais, as of March 2024. Nationally, the Brazil EV charging infrastructure market generated revenue of USD 36.7 million in 2024 and is expected to grow at a Compound Annual Growth Rate of 21.9% from 2025 to 2030. As of September 2025, Brazil's stock of public and semi-public charging stations reached 16,880 points.

Creating a smart home energy management platform integrated with Companhia Energética de Minas Gerais's smart meters is a digitization play. The company has a planned capital expenditure of R$ 1.0 billion for Information Technology between 2025 and 2029. The distribution segment, Cemig Distribuição, connected more than 200,000 new clients in the first quarter of 2025.

Here's the quick math on the financial commitments related to these new product areas:

What this estimate hides is the specific revenue projection for the energy efficiency consulting or the EV subscription service, as those are new revenue streams not explicitly detailed in the 2025 capex breakdown. Still, the commitment to DG and IT shows where the capital is flowing for these product developments.

Companhia Energética de Minas Gerais (CIG) - Ansoff Matrix: Diversification

You're looking at how Companhia Energética de Minas Gerais (CIG) can move beyond its core regulated utility business. Diversification here means applying existing operational strengths-like managing large infrastructure and complex regulatory environments-to entirely new revenue streams. This isn't just about growth; it's about building resilience against sector-specific risks, like hydrological uncertainty, which saw the GSF factor expected at 0.878 for 2025.

Invest in water and sanitation infrastructure projects, leveraging existing utility management expertise.

Companhia Energética de Minas Gerais (CIG) already manages water-related resources through its hydroelectric operations, where water used for energy generation returns to the river course. The company has an existing social program, the 'Water for All' Program, focused on promoting universal access to water in rural areas of Minas Gerais. Operationally, in 2024, the Company collected a total of 224.1 megaliters (ML) of water, with 163.1 ML sourced from public supply. Furthermore, Companhia Energética de Minas Gerais (CIG) has demonstrated success in internal efficiency, recording administrative water consumption in 2024 of 44,813.04 m³ (44.8 ML), which is a reduction of approximately 82.35% compared to the 2019 base year volume of 254,094.8 m³.

Form a venture capital arm to fund energy technology startups outside of CIG's core utility business.

While Companhia Energética de Minas Gerais (CIG) relies on partnerships with research institutions to maintain proactive participation in technology development, establishing a dedicated venture capital arm would formalize this external innovation push. The company is already focusing on sector innovations, testing batteries connected to its distributed solar power plants. This move would complement existing internal R&D efforts, which have historically been a determinant factor for its market position.

Acquire a minority stake in a telecommunications company to utilize existing fiber optic networks for new services.

This strategy capitalizes on the existing physical infrastructure Companhia Energética de Minas Gerais (CIG) already deploys across Minas Gerais. The company is already involved in data transmission services through its subsidiary Cemig Sim, Companhia de Gás de Minas Gerais (GASMIG), and other entities. The core utility business is executing a massive investment plan, with total planned investments exceeding R$ 39 billion between 2025 and 2029.

Develop and operate a large-scale green hydrogen production facility for export or industrial use.

Companhia Energética de Minas Gerais (CIG) is actively positioning itself in this emerging sector. The company was named one of the 12 finalists in the Ministry of Mines and Energy (MME) low-carbon hydrogen hub selection in January 2025. Specifically, H2Brazil is advancing an 800MW green hydrogen and ammonia project in Minas Gerais, which includes an offtake agreement with Companhia Energética de Minas Gerais (CIG). Nationally, Brazil has 111 green hydrogen projects underway requiring approximately 90 GW of new renewable capacity.

Enter the carbon credit trading market, managing and selling credits generated from CIG's renewable assets.

The company's predominantly hydroelectric energy matrix, alongside solar generation investments, creates a natural supply of potential credits. The global carbon market is projected to exceed $2 trillion by 2025. As of the first quarter of 2025, credit retirements are outpacing issuances, signaling robust demand. This market dynamic suggests a strong opportunity for Companhia Energética de Minas Gerais (CIG) to monetize its existing low-carbon generation capacity.

The current capital allocation for the core business in 2025 shows where the majority of resources are directed, which helps frame the scale of potential diversification investments:

The total planned capital expenditure for 2025 is R$ 6.35 billion, with R$ 5.15 billion expected in the last three quarters of 2025, equivalent to about US$910 million. For context on recent performance, Companhia Energética de Minas Gerais (CIG) reported Q2 2025 Net Revenue of R$ 10.786 billion and an Adjusted EBITDA of R$ 2.212 billion (+15.4% YoY).

The company is committed to returning capital to shareholders, having declared Interest on Equity of R$ 604.737 million for the period.

• Focus on disciplined investments and operational efficiency to drive value creation.
• Maintain an appropriate mix of debt and equity, ensuring financial flexibility.
• Return 50% of net profit to shareholders annually.
• Strategically divest non-core assets, such as stakes in Taesa and Gasmig.

Finance: draft 13-week cash view by Friday.