Elettrogen: Presentation to analysts

24th July 2001

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 presentation contains 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. 2

Transaction 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

Implementation of Endesas European Strategy The Elettrogen acquisition is an excellent investment opportunity
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%
4

Implementation of Endesas European strategy The Elettrogen bid is the result of an in-depth analysis of the available opportunities in Europe that fit Endesas strategic objectives
11 were disregarded as they did not meet minimum required returns Endesa has been analysing 28 potential investment opportunities in Europe 10 were analyzed in depth but no binding offers were submitted 4 of them were successful (NRE, REMU, SNET, Elettrogen)

We have achieved 100% of our capacity target in Europe for 2005

5

Italy: a strategic priority

Electricity rpices in Neighboring countries

Attractive prices based on generation structure

40% of domestic electricity production based on oil plants. No nuclear and little coal-fired capacity.
2005 2010 Austria 2015 France Price 100%

150%

Defined tariff framework for 2001 -2004

Saturated interconnection with neighbouring countries: no levelling effect on prices A progressive renewal of the generation assets will
c/kWh

Italy

Switzerland

Variable generation costs

10

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
0 0%

Peak demand

50% Italy France

100%

Italy: a strategic priority

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 Calendar for the deregulation
1998 Electricity in EU. 1999 2000 2001 2002 2003 >9GWh/a 33%

>40 GWh/a 22%

>20 GWh/a 27%

Transposition to Italy (Bersani Decree)

>30 GWh/a 30%

>20 GWh/a 35%

>9GWh/a 40%
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Elettrogen: an excellent investment opportunity

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
8

Meeting profitability requirements An IRR that meets Endesas profitability requirements for its strategic plan

Euro 3.69 bn (EV)

IRR: 9.5%

Source of value creation

Current IRR from Elettrogen

6.5%

Operating efficiencies (+1%)

7.5%

Additional revenues (+0.5 - 1%) (trading/supply/CTCs) Tax optimisation (+1.5%)

8 - 8.5%

9.5 - 10%

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Return on Endesas investment Shareholding structure of the winning consortium

ENDESA
45% Euro 986 M

BSCH
40% Euro 876 M

ASM BRESCIA
15% Euro 328 M

NEWCO CAPITAL: Euro 2,190 M 100%

MERGER NEWCO AND ELETTROGEN:

EQUITY: Euro 2,190 M DEBT: Euro 1,500 M

ELETTROGEN DEBT: Euro 1,500 M

ENDESAs return on investment: 14%

Expected improvement of EBITDA, ROIC

ROIC*
+389 pb 10,6 6,7

EBITDA
CAGR 12,3% 356

(Euro M)

635

2001

2006

2001

2006

With the price offered for Elettrogen the transaction is expected to be EPS neutral in 2002 and 2% accretive in 2003
*ROIC = FCF/IC, FCF = EBITDA - CAPEX-TAXES
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Expected improvement in Elettrogens profitability Increasing EBITDA and ROIC

Generation revenues
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

Operating costs

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.

Investments

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
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Expected improvement in Elettrogens profitability Increasing EBITDA and ROIC

Tax effect

Asset revaluation allows the elimination of goodwill and its tax deductable. Positive impact on the valuation of Euro 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 Other sources in 2004 and 100% in 2008. of value 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

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Transferring Endesas best practices

Endesa vs.current Elettrogen Efficiency Endesa has shown its ability to reduce costs and improve its efficiency

Employees/MW
0.26 0.22 0.22

-15%

Generation O&M Costs (Euro/MWh)

Endesa Current 2007 Elettrogen

9.26

-38%
6.19 5.77

...

Endesa can transfer these improvements to Elettrogen

O&M/ MWh (Euro)

8.0

-46%
5.8 4.3

1996

1999 2000
Endesa Current 2007 Elettrogen 15

Comparable Italian listed companies

EV/EBITDA 2002 Enel Edison ACEA Roma AEM Milano Elettrogen 8.1 9.5 6.3 16.8 9.3
CAGR 02-06

PER 2002 27.1 41.3 26.7 68.4 23.1

CAGR 02-06

12.3%

42.4%

Source: Consensus brokers estimates

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Comparable Transactions in other European markets

Generation transaction multiples Target Saltend Humber Rye House Sutton Bridge Killingholme Roosecote Yorkshire CoGen Bidder Calpine Centrica ScottishPower EDF/London NRG Energy Edison Mission PowerGen Plant Type Gas Gas Gas Gas Gas Gas Gas Total Capacity MW 1.200 1.260 715 790 650 220 176 EV/MW Euro mn 0,779 0,606 0,713 0,933 0,998 0,920 0,781 0,818 0,328 0,325 0,517 0,721 0,568 0,492 Sandanska Stora Enso Fortum (plants ) Fortum (plants ) Energo Fortum Kemijoki Helsinki Energia Hydro Hydro, nuclear Hydro Hydro 56 1.511 68 240 0,680 1,224 2,904 0,367 1,294 Total EV 2.872,8 590,9 1.312,1 4.775,7 904,0 3.871,7

Rugeley Cottam Eggborough Drax Ferrybridge Fiddler's Ferry

International Power EDF/London British Energy AES Edison Mission

Coal Coal Coal Coal Coal Coal

1000 2.000 1.960 3.945 1.504 1.960

Elettrogen (after repowering)

Plant Total Type Capacity MW Gas (CCGT) 3510 Fuel/Coal/Orimulsion 1201 Hydro 1014 EV after repowering 5725 Repowering capex EV before repowering

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Comparable Transactions in other European markets

Generation transaction multiples Target Unin Fenosa Hidrocantbrico Bidder National Power ENbW Plant Type Hidro/Coal Hidro/Coal Total Capacity MW 5.500 2.160 EV/MW Euro mn 0,805 0,900 - 1,000*

* dependiendo de la valoracin de los clientes

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In Summary The right asset at the right price

4 A very significant step in the 2001-05 expansion program in Europe has been succesfully completed 4 The price paid (3.69bn Enterprise Value) represents a discount against the most directly comparable transaction 4 Transaction 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
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Back-up slides

Overview of the Italian market

Main agents
0% 0% 1% 3% 2% 50% 9% 3% 9% 7% 16%
Enel Elettrogen Eurogen Interpower Edison Sondel Eni AEM Milano Amga Genova ACEA Roma Otros France 3,941 Slovenia 1.174

(% share in generation)

Interconnection capacity
Capacidad de las interconexiones MW Switz. 4,182 Austria 285

Capacity of
Interconnection: 9,582 MW % on peak demand: 18%

Total installed capacity in the Italian market is 74,956 MW

Gas Infrastructure

Current fuel mix

Oil 28% Gas 40%

Hydro 10% Coal 11% Orimulsion 11%

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De-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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Italy: a CTC scheme already proposed

CTC calculation A. Gross CTCs

Applicable to thermal plants from 2000 - 2006 Compensates the difference between revenues from previous regulatory framework and from new competitive environment (less an efficiency factor) Plant by plant analysis CTCs are calculated as a difference between the pool price (less cost of fuel) and a 46.9 Lit/Kwh remuneration

B. Hydro Penalty
Hydro plants will pay 12 Lit/Kwh as a compensation for their low variable costs

CTCs = A - B
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
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Description of the Italian market

The expected Italian pool

Fundamental regulatory issues

Market deregulation according to EU Directive 35 % of consumption to be liberalized in 2000 The figure of the Single Buyer is created to protect tariff clients from volatility in pool prices Generators sell at a regulated price to ENEL Distribuzione, until the creation of the Single Buyer, who will continue to purchase the electricity at regulated prices until the creation of the competitive pool The small distributors who sell to regulated customers may group their energy purchases through the Single Buyer

Generation

Enel Produzion e (<50%)

Edison Elettrogen Sondel Interpower Eurogen

New competitors Municipaliti es Autoproducers

Bilateral contracts Pool Pool Bilateral contracts

Single SingleBuyer Buyer

Distribution and supply

Municipality owned distributors

Enel Distribuzion e

Enel Trade (only supply)

Distribution and supply companies owned by current generators

New competitors

Non-eligible Non-eligiblecustomers customers (Regulated) (Regulated) Eligible EligibleCustomers Customers (Competitive (Competitivesupply) supply)

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Elettrogen: an overview Currently the second largest generator in Italy

Total installed capacity: 5,438 MW
Tavazzano Oil /Gas Year comm.of operations (avge)1992 Generation(GWh) 4,339 Installed capacity (MW) 1,204 Employees 262 Monfalcone Oil / Coal Year comm.of operations (avge) 1984 Generation (GWh) 3,092 Installed capacity (MW) 921 Employees 256

Italian generators per MW

41,9 Capacity (GW)

Ostiglia Oil / Gas Year comm.of operations (avge) 1974 Generation( GWh) 5,796 Installed capacity (MW) 1,251 Employees 216

Nucleodi Terni Year comm. of operations (avge) ---Installed capacity (MW) 530 Fiume Santo Year comm. of operations ( avge) 1983 Installed capacity (MW) 880 Orimulsion Generation (GWh) 4,983 Employees 358

Hydro Generation ( GWh)1,766 Employees 135

7,0

5,5

4,9

2,6

Nucleodi Cotronei Year comm. of operations. (avge)---Installed capacity (MW) 369

Hydro Generation (GWh) 403 Employees 100

ENEL post disposal

Eurogen Elettrogen

Edison/Sondel Interpower

Mix before and after Repowering

Nat Gas -CCGT Nat Gas-Fuel Oil Coal Orimulsion Hydro MW before Repowering* 3.528 321 575 1.014 5.438
Thermal Plants Hydro Plants
Nucleodi Catanzaro Hydro Year comm. of operations (avge)---- Generation ( GWh) 102 Installed capacity (MW) 115 Employess 74

% by fuel type 0% 65% 6% 11% 19%

Trapani Oil Year comm. of operations (avge) 1988 Generation ( GWh) 147 Installed capacity (MW) 168 Employees 3

MW after de Repowering* 3.510 305 321 575 1.014 5.725

% by fuel type 61% 5% 6% 10% 18%

* Net

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Orimulsion
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.

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ASM Brescia
Description: One of the four largest municipality-owned utilities in Italy with its own generation capacity. Ownership: 100% Council of Brescia Activitie: Generation of electricity, distribution and supply of electricity, 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 electric utilities, 1,175 GWh to the grid) Customers: 117,640 Gas supply: 332 million m3 Customers:149,181 water distribution: 46 mm 3 Customers: 132,700 Employees: 1,425 Revenues: Euro 427 m. Investments: Euro 79 m. Net Income: Euro 85 m Strategy: In generation, carry out the repowering of the Mincio and Cassano plants and increase the production capacity through agreements (agreements for greenfields signed with Ansaldo Energia and AEM Cremona)
Plants
Thermoelectric Power Plant of Ponti sul Mincio Power Plant of Cassano Cogeneration Power Plant Sud Lamarmora Power Plant Diesel Nord Power Plant Termoutilizzatore (Waste ) Hydroelectric Caffaro Power Plant (shareholder) Prevalle Chiese Power Plant Prevalle Naviglio Power Plant Ro Volciano Power Plant Pompegnino Power Plant Biogas (Buffalora, Passirano and Calcinato Plants) Photovoltaic Gas Turboexpander (Ponti sul Mincio Plant)

(kW)
221,288 115,538 105,75 221,131 139,161 23,97 58 8,18 1,508 2,13 1 2,2 1,55 5,475 96 1,971

TOTAL

458,349

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Elettrogen: Presentation to analysts

24th July 2001