ENGIE Energía Perú Results as of December 2016
2016 HIGHLIGHTS Total Installed Capacity grew 723MW reaching 2,673 MW � In December, Chilca 2 combined cycle project entered into commercial operation , reaching a total installed capacity of 113 MW � In October, Nodo Energetico project entered into commercial operation , reaching a total installed capacity of 610MW (dual fuel diesel / gas) � In June, EEP raised 250MPEN ( ~76MUSD ) through a 10 year bond in the local capital markets at a final fixed rate in dollars of 3.38% � In February, EEP won a bid to build and operate a 40 MW solar plant , planned to enter into commercial operation during Q4 2017 � Recurrent EBITDA reached a record of 330MUSD while Net Recurrent Result totalized 175MUSD . After changes in the income tax rate and the impairment of assets, the final Net Result accounted for 132MUSD 2
2016 INDUSTRY HIGHLIGHTS Total Installed � Installed capacity grew 26% to 12,135MW, among projects entering into operation: + Additional Hydro (+975MW), Cerro del Aguila (+514MW) & Chaglla (+461MW) in Q3 2016 + New Cold reserves (+1,242MW) dual plant in Ilo & Moquegua (Q3-Q4 2016) � Demand grew 8.5% , mostly explained by the start of operations of two mining projects: Cerro Verde (300MW) & Las Bambas (150MW) � Non renewable auction was awarded for 430MW (1,740 GWh), including mainly 160MW of wind, 180MW of solar, 80MW of mini-hydro. These projects should enter into operation before December 2018 � Government of Peru cancelled the contract of the Gas to South pipe project because the consortium did not meet the financing deadline 3
MAIN FINANCIAL RESULTS Solid recurrent results. Net Result affected by extraordinary events EBITDA Net Result Debt Recurrent EBITDA MUSD Net Recurrent Result MUSD Total Debt MUSD +1% +1% +6% 330 325 1009 954 175 173 2015 2016 2015 2016 2015 2016 EBITDA MUSD Net Result MUSD Net Debt / EBITDA x -4% +13% -28% 321 3.18 181 309 2.81 132 2015 2016 2015 2016 2015 2016 * Does not include impairments of fixed assets 4 ** Does not include impairments nor changes in income tax rates and their effect on the deferred tax liability
2016 SNAPSHOT Operations • Higher generation of Ilo plants (Ilo1, Ilo 21 & Ilo 31) due to transmission congestion in the south of the country • Successful full year operation of Quitaracsa hydro power plant • Maintenance optimization program Commercial • New contracts with free & regulated clients for 440MW • Net buyer position in the spot balance • Low PPA prices due to oversupply and low prices in the spot market Finance • Successful 10 year bond issuance in local capital market at a final rate of 3.38% • Reduction of average cost of debt (4.9%) • Focus on cost control and process optimization Sustainability • 3,500 people benefited by infrastructure improvements in our areas of influence • Training programs improved the technical and commercial capabilities of 900 entrepreneurs and small businesses • High health & safety and environmental standards 5
AGENDA 1 Peruvian Electricity Market 2 Company Overview 3 2016 Financial Results 4 Capital Structure 6
PERUVIAN ELECTRICITY MARKET Market Clients Generation Market share 18% 29% 2% 47% 46% Installed capacity 46% 54% 21% 14% 12,135 MW 17% 4% +26% Enel Government Hydro Renewable ENGIE Kallpa Regulated Clients Free Clients Natural Gas Coal & diesel Others Peak demand • Main regulated clients are 6,492 MW • Natural Gas generation is • Market share in terms of Edelnor and Luz del Sur concentrated in Chilca energy generation (Distribution companies in district (60km from Lima) +3.5% Lima) • Others include: Fenix • Diesel plants dispatch in Power, Duke, Statkraft, • Main free clients are case of emergency and Termochilca, among Mining and industrial transmission congestion others Energy companies Generation • Clients with a consumption 48,326 MW above 0.2MW are able to contract directly with generation companies +8.5% (free clients) 7
SUPPLY & DEMAND � System is based mainly on hydro and natural gas from Camisea Field � 2 seasons: wet (from November to April) and dry (from May to October) � Electricity demand increased on average 7% annually between 2005 and 2016 (YTD) and is expected to have an average annual growth of 4-5% between 2017 and 2019; Balance Supply - Demand - Wet Season Balance Supply - Demand - Dry Season Reserve MW MW Reserve 14,000 100% 14,000 100% 90% 90% 12,000 12,000 80% 80% 10,000 10,000 70% 70% 60% 60% 8,000 8,000 50% 50% 6,000 6,000 40% 40% 30% 30% 4,000 4,000 20% 20% 2,000 2,000 10% 10% - 0% - 0% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Hydro Dry Season Renewable Hydro Renewable Natural Gas (CC) Natural Gas (OC) Natural Gas (CC) Natural Gas (OC) Coal Oil and Fuel Oil Coal Oil and Fuel Oil Max Demand Reserve Wet Season (%) Max Demand Reserve Dry Season (%) 8
MARGINAL COST New hydro (+975MW) supports low level of marginal cost 9
AGENDA 1 Peruvian Electricity Market 2 Company Overview 3 2016 Financial Results 4 Capital Structure 10
ENGIE ENERGIA PERU OVERVIEW Valuable team & assets � 519 employees Quitaracsa � 8 Power Plants totalizing 2,673MW � 1 Substation and +200km Yuncan Transmission Lines ChilcaUno � Our first solar power plant under ChilcaDos construction Intipampa Solid Financials Ilo1 Nodo Energetico Ilo21 20 years operating in the � ~750MUSD revenue Ilo31 (Cold Reserve) country � ~300MUSD EBITDA � ~ 1,600 -1,800 MUSD Market Cap Diesel 8% Coal 5% Natural Gas 36% 2,673 Dual fuel Sponsored by a global player Hydro 42% 9% Market data source: ENGIE as of December 2016 11 CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | HPP: Hydro Power Plant.
OUR HISTORY Proven track record in driving organic growth and integrating the developed projects. Committed investments for approximately 1.6 BnUSD between 2010 and 2018 Acquisition Ilo1 261MW Chilca 1 Chilca 1 Chilca 1 1. Chilca 1 CCGT 292MW NTP Chilca 1 292 MW Ilo31 500MW COD Chilca 2 Intipampa Nodo 610MW & Coal Plant Ilo21 Yuncán HPP OCGT11 OCGT12 OCGT12 2. Quitaracsa HPP 112 NTP CCGT COD Nodo Energetico 113MW CCGT 40 MW Chilca Dos 113MW 135MW COD 134MW COD 180MW COD 180MW COD 180MW COD 3. Ilo31 500MW NTP (85MW CCGT) 600MW Auction NTP Solar Auction COD 2016 1997-2003 2004-2005 2006 2007-2008 2009 2010 2011 2012 2013 2014 2015 Private Placement 21% OCGT 12 400 MUSD Bond Program Chilca 1 CCGT Cold Reserve Capital Increase Quitaracsa HPP 100 MUSD Chilca 2 4 th & 5 th Offering 17% Financial Corporate 310 MUSD F. Lease 200 MUSD 150 MUSD @ 100% 60 MUSD MTL 125 MUSD First Dividend Payment Lease Bond Program issuances Bond Program Subordinated Subscription Financial Lease Financial Lease 1 st , 2 nd & 3 rd 6 th & 7 th issuance Financial Lease issuances Total Capacity MW 676 836 1,090 1,068 1,068 1,360 1,820 1,860 1,952 2,673 EBITDA* 84 185 134 163 168 188 270 287 325 330 MUSD Net Income* MUSD 42 94 66 81 86 101 127 138 173 175 Dividends MUSD 42 84 59 24 26 30 38 41 54 50 Market Cap 645 870 877 1,600 1,200 1,759 2,005 2,075 1,427 1,611 MUSD *Recurrent Figures MW: Nominal Capacity 12
ORGANIC GROWTH In 2016, ENGIE Energia Peru reached 2,673MW… 3065 MW 2673 MW MW 3,500 Nodo Ilo & Chilca Dos 3,000 +723MW AVERAGE CCGT Nodo GROWTH 18% Quitaracsa +350MW Intipampa 2,500 +112MW +40MW Ilo 31 under construction +500MW 2,000 Chilca 1 Growth options Combined 1068 Cycle Chilca 1 MW 1,500 +292MW +200MW Chilca 1 +180MW Chilca 1 +180MW Hydro 1,000 Yuncan Natural Gas +134MW Dual Fuel 500 Solar 374 Investment Plan1.6 BUSD MW - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2019 … 2022 * In 2015, Ilo1 Steamed Turbine 1 was decommissioned (-22MW) 13
NODO ENERGETICO - ILO, +610MW On October 21 st EEP announced the commercial operation of Nodo Energético project, 5 months ahead of the scheduled contractual date and below budget Key facts • Location the project is located in the south of Peru, in Moquegua Region (adjacent to existing operations) • Description: dual fuel (diesel / gas) plant, expected to operate with diesel as a back up plant for the system until the Gas Pipe to the South Project is completed. Besides the 3 turbines generators, the project includes a 75km transmission line (500kV) to Montalvo Substation and 6 new fuel oil tanks • Economics: t he project is backed by a 20 year Investment Agreement with the Peruvian State for 600 MW at 5.75 USD/kW-month • Construction: construction contracts were performed by Técnicas Reunidas/JJC (power plant) & Abengoa (transmission line) • Financed through Financial Leases for 290 MUSD with BCP and BBVA • Health & Safety: record of 3.4M man hours without disabling accidents • Community and local impact during the project, Engie strengthened relations with the local community, contributing with local employment, specialized trainings to increase employability and working in partnership with the community to achieve the highest environmental standards 14
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