Agenda. 1. Environment. 2. Our business. 3. Current and future scenario

Transcription

1 Chile Trip September

2 Agenda 1. Environment 2. Our business 3. Current and future scenario 2 2

3 Investment Opportunities room to grow Opportunities: Improvement in Latam regulations contribute to meet strong growing electricity demand Perú Chile Argentina Brazil Colombia Electricity Demand 1H08 vs. 1H07» Peru: 10.1%» Chile: 1.1%» Argentina: 3.1% 80.0» Brazil: 3.7% Jun-08» Colombia: 2.1% 1998: base 100% 3

4 Historic Fuel Prices 4 14/09/07 14/09/07 14/10/07 14/10/07 14/11/07 14/11/07 14/12/07 14/12/07 14/01/08 14/01/08 14/02/08 14/02/08 14/03/08 14/03/08 14/04/08 14/04/08 14/05/08 14/05/08 14/06/08 14/06/08 14/07/08 14/07/08 14/08/08 14/08/08 Coal (USD/ton) Petroleum WTI (USD/bbl) US$140/ton is the average price during 2008 US$113/barrel is the average price during 2008

5 Generation Matrix and Electricity Capacity Chile Generation Mix 2007 Capacity Mix Capacity Mix % 13 % 13 % 25% 40% 36% 31% 10% 33% 30% 22% 3% 16 % 3% 23% Hydro Diesel Natural Gas Coal Others Source: Electroconsultores y Comisión Nacional de Energía 5

6 Situation in the SIC Situación en el SIC Diesel 15%» Decrease in sales Jan. July 2008 was 1%» Hydrology between April August 2008: 33% humid season» Gas restrictions in the SIC Installed Capacity Aug 2008 Gas 23% Others 3% 74% 94% 80% 96% Coal 9% Hydro 50% Jan-Aug/07 Jan-Aug/ Diesel 28% (Considers 100% restriction since Sept 08)» Increase of generation cost using Fuel Oil Jan. August 2008 was US$714 million Production Jan Aug 08 Gas 2% Others 3% Coal 16% Hydro 51% Source: CDEC-SIC 6

7 Situación en el SING Situation in the SING» Jan Aug/2008: increasing gas cuts in the SING Restriction of Gas SING Restriction of Gas SING 91% 89% 62% 67% Jan-Aug/07 Jan-Aug/ » Increase of generation cost using Fuel Oil US$ million Jan-Aug/07 Jan-Aug/08 Source: CDEC-SING 7

8 Seguridad de Suministro Reserve Margin of Energy 46% 47% 49% 48% 39% 29% 37% 38% 39% 38% 31% 21% Criteria Reserve Mg Energy 25% Expected Dry 95% Exp. Reserve Mg = MaxThermGen + ExpedctedHydroGen 1 of Energy Yearly Demand Reserve Mg of = MaxThermGen + HydroGenDry 1 Energy (Dry) Yearly Demand» Period presents a relatively tight supply.» System recovers reliability starting year Source: National Commission of Energy + New projects informed 8

9 Agenda 1. Environment 2. Our business 3. Current and future scenario 9 9

10 Emgesa Installed cap. : 2,895 MW Hydro Cap.: 85% 21% market share 11 power plants Edegel Installed cap. : 1,467 MW Hydro Cap. : 51% 28% market share 9 power plants Chile Installed Cap. : 4,893 MW Endesa Chile: 2,786 MW Pangue: 467 MW Pehuenche: 699 MW San Isidro I&II: 732 MW Celta: 182 MW Endesa Eco: 27 MW Hydro Cap. : 71% 38% market share 26 power plants Figures as of June 2008 Important Presence in 5 countries Endesa Brasil Affiliate Cachoeira (Gx): 665 MW Fortaleza (Gx): 322 MW Ampla (Dx): 2.4 m clientes Coelce (Dx): 2.7 m clientes Cien (Tx): 2,100 MW Argentina Installed Cap. : 3,644 MW Costanera: 2,324 MW El Chocón: 1,320 MW Hydro Cap. : 36% 14% market share 5 power plants Total Consolidated: 12,899 MW Number of Power Plants: 51 Hydro: 61,9% Thermal: 38,0% Wind: 0,1% 10

11 Well diversified EBITDA throughout the Region Colombia 30.7% EBITDA June 2008 Peru 10.0% Chile 51.0% EBITDA per Country (US$ million) Jun-07 Jun-08 Var. % Chile % Argentina % Colombia % Peru % Total % Figures expressed in US$ as of June Argentina 8.3% 11

12 Solid Financial Ratios US$ m Veces Times 2, ,600 1,540 1, , , , Jun 08 TTM Ebitda Interest Expense Debt/Ebitda Ebitda/Int. Exp. 0 EBITDA growth 13.3% over the past 5 years 12

13 Investment Grade Company International Recognition» Investment Grade by main international rating agencies» Current international ratings: S&P Fitch Moody s BBB with Stable Outlook BBB with Stable Outlook Baa3 with Stable Outlook Financial position proven to be solid 13 13

14 Conservative commercial policy» Hydrology risk» Exchange rate risk» Electricity demand growth Minimize variation of margin» Portfolio of generation assets» Evolution of fuel prices 27% Physical sales as of June 2008 Chile Argentina 21% Variable Margin MMUS$ Few contracts and very dry Expected Margin Many contracts and very humid Expected Margin with higher price Exp.Margin 10% 63% 79% 15% Colombia 54% Peru Few contracts and very humid Hydro: 65% Expected Energy Therm. Effic.: 95% Firm Energy 98% Therm. No Effic.: 0% Firm Energy Many contracts and very dry MaR 95% 32% 53% 4% 42% 100% production sold at spot GWh Contracts with minimum risk (min. MaR) GWh Contracts with fixed prices (Without transfer of risk) Regulated Unregulated Spot 14

15 Agenda 1. Environment 2. Our business 3. Current and future scenario 15 15

16 Current and Future Reality in Chile 51% of Endesa Chile s total EBITDA Solid performance» Increasing trend of demand, however there is a temporary reduction during 2008 due to measures taken by authorities.» No natural gas available» Better hydrology starting in May 2008» Approximately 60% of non regulated contracts include pass through of marginal cost risk» Optimum volume of contracts against dryer hydrology» Assure electricity supply in S/M/L term 37% of the Chilean market, 49% of the SIC 16

17 Current and Future Reality in Chile» Commitment to energy supply Sustainable Efficient Responsible» Important portfolio of projects under development» All technologies of energy sources will be considered in the short and medium term 17

18 Current and Future Reality in Argentina 8.3% of Endesa Chile s total EBITDA Future perspective expected to improve» Increasing energy demand: 3,1% en 1H08 vs. 1H07» Lack of supply, tight market» Market intervened by the authority» Incipient tariff improvements» Dry hydrology and high fuel costs» High participation in the spot market, still conservative to consider long term energy contracts» Low leveraged operations» Participation in FONINVEMEM» Expecting better market and regulatory conditions 15% of the Argentine market 18

19 Current and Future Reality in Colombia 30.7% of Endesa Chile s total EBITDA Largest private operator in Colombia» 2,1% increase of energy demand in 1H08 vs. 1H07» Better hydrology in 1H08 vs. 1H07» Transparent and market oriented framework» Solid financial position» Sufficient reserve margin up to 2013» Hydroelectric project El Quimbo (400 MW) recently awarded to Emgesa» Start up Date: End of 2014» Estimated investment El Quimbo: US$ 600 million 21% of the Colombian market 19

20 Current and Future Reality in Peru 10% of Endesa Chile s total EBITDA Regulatory framework very similar to Chile» Electricity demand over 10%» Abundance of natural gas» Dry hydrology during 1H08 vs. 1H07» Operation of thermal plants with natural gas from Camisea» Constraint in Camisea s pipeline due to increasing demand of gas; working to expand capacity» Future opportunities expansion of Santa Rosa power plant (188 MW) and studying hydroelectric projects) 28% of the Peruvian market 20

21 Our future based on growth MW 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Projected Near 2,000 MW of new capacity in the next 5 years Almost half of new capacity is already under construction Total Investment of approximately US$ 3.5 billion in the next 5 years Hydr o Thermal Renewable Generation assets are mostly hydro based company s competitive advantage Increase of renewable energy: expansion of the Canela wind farm plant and other mini hydro plants currently under study. Total investment includes the LNG Project, part of the Aysen project, and studies of other hydro projects in Chile and abroad. This presentation may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements may appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of Endesa Chile and management with respect to, among other issues: (1)Endesa Chile business and cost-reduction plans; (2) trends affecting Endesa Chile financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (3) supervision and regulation of the electricity sector in Chile or elsewhere; and (4) the future effects of any changes in the laws and regulations applicable to Endesa Chile and its affiliates. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates. Endesa Chile undertakes no obligation to release the results of any revisions to these forward-looking statements. 21

22 Contributing with more generation capacity Start up during San Isidro II 248 MW Chile Palmucho 32 MW Chile 2010, onwards Canela 18 MW Chile San Isidro II 105 MW Chile Taltal 120 MW Chile Quintero 240 MW Chile Santa Rosa 188 MW Peru Bocamina II 350 MW Chile El Quimbo 400 MW Colombia Choshuenco 128 MW Chile Ojos de Agua 9 MW Chile Canela II 60 MW Chile LNG Plant 9.5 million m3/d Chile (Fast track) Los Cóndores 150 MW Chile Neltume 473 MW Chile HidroAysen 2,750 MW Chile 22

23 Commitment» Maintain efficient assets distributed within South America» Portfolio of projects add value to Endesa Chile» High level of technical and quality standards.» Gain confidence of investors and authorities. Commitment with regulatory authorities Commitment with the environment Corporate governance best practices» Solid balance sheet and stable cash flow to face upcoming challenges and strategic plan 23

24 Conclusions Multinational private electricity generator with leading market positions in most countries where we operate. Efficient assets distributed within South America Portfolio of projects add value to Endesa Chile Excellent reputation and high level of technical standards. Through its vast experience, the Company has gained the confidence of investors and authorities. Commitment with regulatory authorities Commitment with the environment Corporate governance best practices Solid balance sheet and stable cash flow to face upcoming challenges 24

25 Chile Trip September

26 EXHIBIT 26 26

27 Liquefied Natural Gas Terminal, Chile» LNG reliable generation source» Responsible from an environmental stand point» British Gas will supply LNG» 20% participation of Endesa Chile in re gasification terminal» Total investment of terminal: US$ 1.1 billion Starting Operations: mid 2009 in fast track track 27

28 Quintero Power Plant, Chile» Open cycle 240 MW with Diesel» Located alongside LNG re gasification terminal» Turbines awarded to General Electric» Estimated investment: US$ 120 million Starting operations: 2Q 2009 with diesel 28

29 Bocamina II Coal Power Plant, Chile» Installed Capacity: 350 MW» Estimated investment: US$ 625 million» State of the art technology in reduction of gas emission» Near the city of Coronel Starting operations: mid

30 Los Cóndores Hydroelectric Power Plant, Chile» EIA approved» Run of the river with 150 MW» Takes advantage of water from Laguna del Maule, in San Clemente, Talca» Estimated Investment: US$ 273 million» Approved in Board of Directors of March 2008 Starting operations:

31 Development of Renewables Through Endesa ECO Wind farm plant Canela I» Installed Capacity: 18,15 MW» Investment: US$ 43 million» 11 wind generators» Started operations: Dec Works in Canela II» 40 wind generators» 60 MW of installed capacity» Investment: US$ 147 million» Start up of operations: 3Q

32 Ojos de Agua Mini hydroelectric power plant, Chile» Located in Región del Maule, 100 kilometers from Talca, Chile» Downstream of Laguna La Invernada» Installed Capacity: 9.5 MW» Investment: US$ 28 million» Registered under United Nations Framework Convention on Climate Change» Reduces 20,870 tons of CO2 per year Started operations: May

33 Hydroelectric Project Aysen, Chile» Endesa Chile 51% and Colbún 49% of the company» Installed Capacity: 2,750 MW» Strong hydroelectric potential» Clean generation and renewable» Environmental Impact Study in progress» Mitigates impact of high fuel prices» Reduces hydrology risk glaciers» Total investment: US$ 3.2 billion 33

34 Hydroelectric Project Aysen, Chile Location of the Project Baker 1 Capacity: 660 MW Average Gx: 4,420 GWh Baker 2 Capacity: 360 MW Average Gx: 2,540 GWh Pascua 2.1 Capacity: 770 MW Average Gx: 5,110 GWh Pascua 1 Capacity: 460 MW Average Gx: 3,020 GWh Pascua 2.2 Capacity: 500 MW Average Gx: 3,340 GWh Average production/year 18,430 GWh Total Installed Capacity 2,750 MW 34

35 Hydroelectric Project Aysen, Chile How will the Transmission work? DIRECT CURRENT SYSTEM Energy Transmission: LT HVDC» Project to be developed by a company specialized in transmission of energy.» Length of approx. 2,000 kms.» A conversion station in Cochrane and another in Santiago. 35

36 Hydroelectric Project Aysen, Chile HidroAysen Superior Energy Efficiency The power plants of the Baker and Pascua rivers will be more efficient in hydroelectric generation worldwide, as it will have the best equation between generation and flooding surface. Energy generated/flooding surface GWh/year/km ,5 12, , Yaciretá Rapel Tucuruí S. de Caxias Colbún Machicura Segredo Itaipú Ralco+Pangue PH Aysén 36

37 Hydroelectric Project Aysen, Chile HidroAysen Superior Energy Efficiency For the same installed capacity of this project (2,750 MW for 5,910 hectares):» With wind energy it would require between 90,000 and 100,000 hectares» With solar energy it would require between 160,000 and 180,000 hectares» Using mini hydro technology with identical load factor it would require around 275 power plants, with their respective transmission lines up to the main transmission. 37

38 Santa Rosa, Natural Gas Thermal Plant, Peru» Installed capacity: 188 MW» Estimated investment: US$ 90 million» Natural gas from Camisea» Expansion of existing power plant Starting operations: 1Q