Clase8 Endesa Eurogen

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24th July 2001

ElettrogenElettrogen::

Presentation toPresentation toanalystsanalysts


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Forward-looking Statements:

Cautionary Statement for Purposes of the Safe Harbor Provisions of the United States Private Securities Litigation Reform Act of

1995. The U.S. Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. This presentationcontains certain forward-looking statements regarding the proposed acquisition of Elettrogen (the Acquisition), including the timing thereof and

the financial and other results expected to be achieved following the Acquisition, that are subject to risks and uncertainties. Forward- looking

statements include information regarding: the timing of necessary regulatory approvals; the timing of the consummation of the Acquisition;

estimated future revenues, earnings, EBITDA, return on invested capital, return on equity and other financial targets; the structure of the

Acquisition; management strategy; synergies; operational efficiencies; cost and tax savings; tariffs and pricing structure; capital expenditures

and other investments; asset disposals.

For all of these forward- looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private

Securities Litigation Reform Act of 1995.The following important factors, in addition to those discussed elsewhere in this presentation, could

affect the timing of the Acquisition and the future financial and other results of Endesa and Elettrogen, including after the consummation of the

Acquisition, and could cause the Acquisition to be delayed or not to be consummated, or those results or other outcomes to differ materially

from those expressed in our forward-looking statements:

Economic and Industry Conditions: materially adverse changes in economic or industry conditions generally or in our markets; the effect of

existing regulations and regulatory changes; tariff reductions; the impact of any fluctuations in interest rates; the impact of fluctuations in

exchange rates; natural disasters; the impact of more stringent environmental regulations and the inherent environmental risks relating to the

companies business operations; the potential liabilities relating to the companies nuclear facilities.

Transaction or Commercial Factors: any delays in or failure to obtain necessary regulatory, antitrust and other approvals for the Acquisition,

or any conditions imposed in connection with such approvals; our ability to integrate the businesses of Endesa and Elettrogen successfully; the

challenges inherent in diverting management's focus and resources from other strategic opportunities and from operational matters during the

integration process; the outcome of any negotiations with partners and governments.

Political/Governmental Factors: political stability in Latin America; changes in Spanish and foreign laws, regulations and taxes.

Operating Factors: technical difficulties; changes in operating conditions and costs; the ability to implement cost reduction plans; the ability to

maintain a stable supply of fuel and the impact of fluctuations on fuel prices; other acquisitions or restructurings;the ability to implement an

international and diversification strategy successfully.

Competitive Factors: the actions of competitors; changes in competition and pricing environments; the entry of new competitors in our

markets.


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Transaction HighlightsTransaction Highlights

l

Consortium led by ENDESA with a 45% stake

l Final price to be paid: Euro 2.63 bn (Euro 3.69 bn EV)

l ENDESAs total investment: Euro 990 m

l IRR = 9.5%. ENDESAs return on investment= 14%

l EPS neutral in 2002, 2% accretive in 2003

l Consolidated by the equity method.

l EU approval expected in 60 days

l Completion expected in 4Q 2001


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4 Endesa has developed a strategic plan for Italy platform on Elettrogens power plants

and geared towards value creation:

4 in competitive terms (repowering of plants)

4 focusing on energy supply and trading

4 Elettrogen (5.5TW) in Italy, together with SNET (2.6TW) in France and TEJO (0.6TW)

in Portugal will allow:

4 to complete the construction of a competitive business base with growth potential

4 to balance the country risk of Endesas portfolio

4 to achieve a unique position in a priority market (southern Europe)

4 Plans for Elettrogen foresee:

4 a 12.3% EBITDA annual growth over next five years

4 earnings accretion for Endesa from year 1

4 achieving a return for shareholders of 14%

The Elettrog enThe Elettrog enacquisi t ion is an excellent investmentacquisi t ion is an excellent investment

opportuni tyopportuni ty

Implementation of Endesas European StrategyImplementation of Endesas European Strategy


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Endesa has been

analysing 28 potentialinvestment

opportunities in Europe

Implementation of Endesas European strategyImplementation of Endesas European strategy

The Elettrogen bid is the result of an in-depth analysis

of th e avai lable opportun i t ies in Euro pe that f i t Endesasstrategic ob ject ives

11 were disregarded as they did not

meet minimum required returns

10 were analyzed in depth but no bindingoffers were submitted

4 of them were successful (NRE, REMU,

SNET, Elettrogen)

We have ach ieved 100% of ou r

capacity target in Europe for 2005


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Attractive prices based on generation structure

Defined tariff framework for 2001 -2004

40% of domestic electricity production based on oil

plants. No nuclear and little coal-fired capacity.

Saturated interconnection with neighbouring countries:

no levelling effect on prices

A progressive renewal of the generation assets will

begin to take place.

Solid historical and expected demand growth

Annual electricity demand growth in last 20 years:

>3% vs. 2% EU average

Per capita consumption 50% below France

Italy: a strategic priorityItaly: a strategic priority

Electricity rpices in Neighboring countries

100%

150%

2005 2010 2015

Price

Italy Austria Switzerland France

Variable generation costs

0

10

0% 50% 100%

c/kWh

Italy France

Peak demand


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Beginning of its deregulation process

Regulatory environment similar to Spain

Endesa has experience in a similar deregulation process

Italy shows both cultural and industrial affinities with Spain

Pool expected for mid- 2002

Meanwhile generators will continue to sell electricity at regulated prices.

Enough gas supply with a large number of competitors that ensure its

availability at competitive conditions

1998

Electricity in EU.

>40 GWh/a 22% >20 GWh/a 27% >9GWh/a 33%

1999 2000 2001 2002 2003

Transposition to Italy

(Bersani Decree)

>9GWh/a 40%>20 GWh/a 35%>30 GWh/a 30%

Calendar for the deregulationCalendar for the deregulation

Italy: a strategic priorityItaly: a strategic priority


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It allows Endesa:

To achieve immediately critical mass in Italy benefiting from current attractive prices

and capture market share in the profitable Italian supply market

Difficulties for the development of greenfield projects will delay the entry in 4 - 5 years

Elettrogens assets provides:

Good locations across Italy

Favourable generation mix (similar to the countrys average)

Good access to the grid

Good positioning regarding future environment of lower prices (first units to be

repowered in Italy)

Elettrogen - a platform for integrated activities in Italy:

Opportunities for additional development: new assets and customers

Support from local partner: ASM Brescia (4th largest Italian municipality-owned utility)

with agreements to develop new projects:

generation

supply and trading

Possibility of alliances with other strategic partners

Elettrogen: an excellent investment opportunity


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Euro

3.69 bn

(EV)

IRR: 9.5%

An IRR that meets Endesas profitability requirements for its

strategic plan

Meeting profitability requirements


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Current IRR from Elettrogen 6.5%

Operating efficiencies (+1%) 7.5%

Additional revenues (+0.5 - 1%) 8 - 8.5%

(trading/supply/CTCs)

Tax optimisation (+1.5%) 9.5 - 10%

Source of value creation


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ENDESA BSCH

NEWCO

CAPITAL: Euro 2,190 M

ELETTROGEN

DEBT: Euro 1,500 M

45%

Euro 986 M

40%

Euro 876 M15%

Euro 328 M

100%

MERGER NEWCO AND ELETTROGEN:

EQUITY: Euro 2,190 M

DEBT: Euro 1,500 M

ASM BRESCIA

Shareholding structure of the winning consortium

Return on Endesas investment

ENDESAs return on

investment: 14%


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With the price offered for Elettrogen the transactionis expected to be EPS neutral in 2002 and 2% accretive in 2003

Expected improvement of EBITDA, ROIC

*ROIC = FCF/IC, FCF = EBITDA - CAPEX-TAXES

ROIC*

2001 2006

+389 pb

EBITDA (Euro M)

2001 2006

CAGR12,3%

6,7

10,6

356

635


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Generationrevenues

Tariff fixed for 2001 and 2002.

Tariff framework approved for the years 2003 and 2004

O&M costs: meet Endesas ratios (excluding workforce) in 2006

Workforce:

From 2004 onwards meet the benchmark of our domestic operations Expected reduction through early retirement programmes: already

agreed with the unions 290 employees until 2005

Estimated Investment in repowering: Euro 904 M

The EPC contract for Ostiglia signed with Enel Power.

Repowering will allow to maintain margins through time by: a 26% increase in net power of thermal groups

a 5% increase in their availability

a 41% increase in the fuel efficiency

a 57% decrease in fuel cost per kw/h

Operating

costs

Increasing EBITDA and ROIC

Expected improvement in Elettrogens profitability

Investments


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Asset revaluation allows the elimination of goodwill and its tax

deductable. Positive impact on the valuation ofEuro 500 M

DIT (Dual Income Tax): tax benefit (lower corporate tax) for the net

increase in equity (considered in 5 years). Positive impact in valuation:

Euro 90 M.

Supply and trading:

Energy sold to eligible customers reaches 50% of Elettrogens output

in 2004 and 100% in 2008.

CTCs In accordance with the domestic regulator they will cover the

difference between the fixed revenues recognised and the pool prices.

Estimated CTC amount for Elettrogen: Euro 135 M

Tax effect

Other sourcesof value

Increasing EBITDA and ROIC

Expected improvement in Elettrogens profitability


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Endesa has shown its ability to

reduce costs and improve its

efficiency

9.26

6.195.77

1996 1999 2000

-38%

Generation

O&M Costs (Euro/MWh)

...

Endesa can

transfer

these

improve-

ments to

Elettrogen

Endesa vs.currentElettrogen Efficiency

Employees/MW

0.22

0.26

EndesaElettrogen

O&M/ MWh (Euro)

5.8

8.0

Endesa

Elettrogen

Current 2007

2007

0.22

4.3

Current

Transferring Endesas best practices

-15%

-46%


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Comparable Italian listed companies

EV/EBITDA PER

27.1

9.5 41.3

Elettrogen 12.3% 42.4%

Source: Consensus brokers estimates

6.3 26.7

16.8 68.4

2002 2002

8.1

Edison

ACEA Roma

AEM Milano

Enel

9.3 23.1

CAGR02-06

CAGR02-06


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Comparable Transactions in other European markets

Generation transaction mu lt iples

Target Bidder Plant Total EV/MWType Capacity MW Euro mn

Saltend Calpine Gas 1.200 0,779

Humber Centrica Gas 1.260 0,606Rye House ScottishPower Gas 715 0,713

Sutton Bridge EDF/London Gas 790 0,933

Killingholme NRG Energy Gas 650 0,998

Roosecote Edison Mission Gas 220 0,920Yorkshire CoGen PowerGen Gas 176 0,781

0,818

Rugeley International Power Coal 1000 0,328

Cottam EDF/London Coal 2.000 0,325Eggborough British Energy Coal 1.960 0,517

Drax AES Coal 3.945 0,721

Ferrybridge Coal 1.504Fiddler's Ferry Coal 1.960

0,492

Sandanska Energo Hydro 56 0,680

Stora Enso Fortum Hydro, nuclear 1.511 1,224

Fortum (plants) Kemijoki Hydro 68 2,904Fortum (plants) Helsinki Energia Hydro 240 0,367

1,294

Plant Total TotalElettrogen (after repowering) Type Capacity MW EV

Gas (CCGT) 3510 2.872,8

Fuel/Coal/Orimulsion 1201 590,9

Hydro 1014 1.312,1EV after repowering 5725 4.775,7

Repowering capex 904,0

EV before repowering 3.871,7

0,568Edison Mission


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Comparable Transactions in other European markets

Generation transaction mu lt iples

Target Bidder Plant Total EV/MW

Type Capacity MW Euro mn

Unin Fenosa National Power Hidro/Coal 5.500

0,900 - 1,000*Hidrocantbrico ENbW Hidro/Coal 2.160

0,805

* dependiendo de la valoracin de los clientes


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4 A very significant step in the 2001-05 expansion program in Europe has beensuccesfully completed

4 The price paid (3.69bn Enterprise Value) represents a discount against themost directly comparable transaction

4Transaction is 2% EPS accretive in 2003 and neutral in 2002

4 ROIC expected to grow from 6.7% in 2001 to 10.6% in 2006 through:

4 the repowering of several plants

4 the transfer of Endesas best practices to reduce controllable costs

4 100% of the target for capacity in Europe until 2005 has been achieved

4 Acquisition financed by asset disposals both in Spain and Latin America

InIn SummarySummary

The right asset at the righ t price


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Back-up slides


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Interconnection capacity Interconnection capacity

Capacity ofInterconnection:9,582 MW

% on peakdemand: 18%

Switz. 4,182

Austria 285

France

3,941

Capacidad de las interconexiones

MW

Slovenia 1.174

Main agents (% share in generation)Main agents (% share in generation)

50%

7%

9%

3%

9%

2%

3%

1%

0%

0%

16% EnelElettrogen

Eurogen

Interpower

Edison

Sondel

Eni

AEM Milano

Amga Genova

ACEA Roma

Otros

Total installed capacity in the Italian market is74,956 MW

Current fuel mixCurrent fuel mix

Gas

40%

Orimulsion

11%

Coal

11%

Hydro

10%

Oil

28%

Gas InfrastructureGas Infrastructure

Overview of the Italian marketOverview of the Italian market


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De-regulation of the Italian electricity systemDe-regulation of the Italian electricity system

The Bersani Decree, enacted on 1/04/99, transponds the EU Directive 96/92 on energy.

Highlights:

ENEL to divest 15 GW prior to January 2003. Three companies have been set up:

Elettrogen (5,438 MW), Eurogen (7,008 MW) and Interpower (2,611 MW)

ENEL maintains the ownership of the transmission grid

The management of the transmission grid is transferred to an independent entity

(Grid operator , 100% State-owned)

Tariff framework set for 2001 and 2002

Tariff allows the recovery of fuel costs

Fixed costs and capacity remuneration according to availability

Development of competitive wholesale market expected for end 2002

CTC payments to cover the difference between current tariff revenues and future


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This structure allows to modelize CTCs in accordance with the current Italian legislation

A readjustment of the model will be required once some regulatory uncertainties are solved

A preliminary valuation of CTCs would be Euro 135 M

A. Gross CTCs Applicable to thermal plants from 2000 - 2006

Compensates the difference betweenrevenues from previous regulatory frameworkand from new competitive environment (lessan efficiency factor)

Plant by plant analysis

CTCs are calculated as a difference betweenthe pool price (less cost of fuel) and a 46.9

Lit/Kwh remuneration

CTC calculation

B. Hydro Penalty Hydro plants will pay 12 Lit/Kwh as a

compensation for their low variable costs

CTCs = A - B

Italy: a CTC scheme already proposedItaly: a CTC scheme already proposed


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The expected Italian poolThe expected Italian pool

Bilateral contracts

GenerationEnel

Produzione

(


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Mix before and after RepoweringMix before and after Repowering

Total installed capacity: 5,438 MWTotal installed capacity: 5,438 MW

Thermal Plants

Hydro Plants

Italian generators per MWItalian generators per MW

Tavazzano Oil /Gas

Year comm.of operations (avge)1992 Generation(GWh) 4,339

Insta lled capacity (MW) 1,204 Employees 262

Fiume Santo Orimulsion

Yearcomm. of operations (avge) 1983 Generation (GWh) 4,983

Installed capacity (MW) 880 Employees 358

Nucleodi Catanzaro Hydro

Year comm. of operations (avge)---- Generation (GWh) 102

Installed capacity (MW) 115 Employess 74

Nucleodi Cotronei Hydro

Year comm. of operations. (avge)---- Generation (GWh)403


Nucleodi Terni Hydro

Year comm. of operations (avge)---- Generation (GWh)1,766


4,92,6

7,0

41,9

5,5

ENEL postdisposal

Eurogen Elettrogen Edison/Sondel Interpower

Capacity(GW)

MW before % by fuel type MW after % by fuel typRepowering* de Repowering*

Nat Gas -CCGT - 0% 3.510 61%Nat Gas-Fuel Oil 3.528 65% 305 5%

Coal 321 6% 321 6%Orimulsion 575 11% 575 10%

Hydro 1.014 19% 1.014 18%

5.438 5.725

* Net

Trapani Oil

Year comm. of operations(avge)1988 Generation (GWh) 147


ElettrogenElettrogen: an overview: an overview

Currently the second largest generator in Italy

Ostiglia Oil / Gas

(avge)1974 Generation(GWh) 5,796

Installed cap aci ty (MW) 1,251 Employees 216

Monfalcone Oil / Coal

1984 Generation (GWh) 3,092

921 Employees 256

Year comm.of operations (avge)

Installed capacity (MW)

Year comm.of operations


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Orimulsion: synthetic fuel, similar to fuel-oil, with the same density as water, with a

similar price to coal but with a lower calorific value (6,450-6,900 Kcl/Kg) and higher levels

of sulphur (3%) and water (30%).

This fuel is currently being used at the Fiume Santo plant in Sardinia, with two groups of

160 MW each (fuel-oil) and two other groups of 320 MW each. Enels plant in Brindisi,

with three groups of 660 MW each, also uses this fuel

Fiumesantos groups 3 and 4 were initially designed to burn coal and count on all the

necessary approvals. Additionally the plant counts on a harbour which can receive coal

ships of up to 120,000 tonnes as well as all the necessary transport infrastructure.

None of the coal plants were used as ENEL decided to change the fuel to be used maybe

due to pressures from the local authorities. The presence of nearby industrial facilities

around Porto Torres (ENICHEM, the plant itself) the running of coal-fired facilities should

be accepted.

The use of orimulsion carries some extra costs, since the design of the desulphurisation

equipment contemplates fuels with a lower sulphur content.

Still, there is the possibility that the new buyer negotiates the authorisation to burn coal,

which would result in an important increase in value.

OrimulsionOrimulsion


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ASMASM BresciaBrescia

Description: One of the four largestmunicipality-owned utilitiesin Italy with its own generation capacity.

Ownership: 100% Council of Brescia

Activitie: Generation of electricity, distribution and supply ofelectricity, water and gas. Treatment of water and waste.Lighting, public transport.

Operating data: Generation: 1,695 GWh

Distribution of electricity: 1,680 GWh (505 GWh to electricutilities, 1,175 GWh to the grid)

Customers: 117,640

Gas supply: 332 million m3

Customers:149,181 water distribution: 46 mm3

Customers: 132,700 Employees: 1,425 Revenues: Euro 427 m.

Investments: Euro 79 m. Net Income: Euro 85 m

Strategy: In generation,carry out therepowering of the Mincioand Cassano plants and increase the production capacitythrough agreements (agreements for greenfields signed with

Ansaldo Energia and AEM Cremona)

Plants (kW)

Thermoelectric 221,288

Power Plant of Ponti sul Mincio 115,538

Power Plant of Cassano 105,75

Cogeneration 221,131

Power Plant Sud Lamarmora 139,161

Power Plant Diesel Nord 23,97

Power Plant Termoutilizzatore (Waste ) 58

Hydroelectric 8,18

Caffaro Power Plant (shareholder) 1,508

Prevalle Chiese Power Plant 2,13

Prevalle Naviglio Power Plant 1

Ro Volciano Power Plant 2,2

Pompegnino Power Plant 1,55

Biogas (Buffalora, Passirano and CalcinatoPlants) 5,475

Photovoltaic 96

Gas Turboexpander (Pont i sul Mincio Plant) 1,971

TOTAL 458,349


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