ENGIE Energía Perú September 2016
Highlights Q3´16: EEP Total Installed Capacity reached 2,638 MW September 30 th EEP signed an EPC contract with Solairedirect for the construction of its first � solar project “Intipampa” (40MW). EEP won this project on the auction launched by the Peruvian government on February 2016. Under the concession agreement with the Government of Peru, EEP will supply 108.404 GWh to the Peruvian system for 20 years. Expected Commercial Operation Date: Q4 2017 October 21 rst EEP announced the commercial operation of Nodo Energético project . This power � plant (610MW) is located in Moquegua (next to our existing operations in the south) and is a dual fuel (diesel / gas) plant. It is expected to operate with diesel as a back up plant for the system until the gas pipe to the south project is completed. The project started operations 5 months ahead of the scheduled contractual date and total investment cost was below the announced budget. � EBITDA (9m) increase by 2% with respect to 2015 figures and totalized 256MUSD . The increase was mainly explained by higher generation and lower expenses that was partially offset by higher fuel costs. Net Result totalized 137MUSD , 3% less than in 2015, mainly as a consequence of higher depreciation and interest expenses. � In 2016 approx. 975MW of new hydro capacity entered into operation: Cerro del Aguila, a 514 MW hydro power plant started operations in August 2016 & Chaglla, a 461MW hydro power plant started operations in September 2016. 2
AGENDA Peruvian Energy Industry Section 1 Company Overview Section 2 Section 3 Strategy Financial Results Section 4 Capital Structure Section 5 3
PERUVIAN ELECTRICITY MARKET Market Growth Clients - MW Installed ~ 5% Capacity Average 9,614 Annual 46% MW (2010-2015) 54% Demand SEIN 6,275 Quitaracsa HPP Free clients MW Regulated clients Production – GWh Market Share % Yuncán HPP 1% 0% 16% 33% ChilcaUno CCGT ChilcaPlus CCGT 46% 53% 19% 11% 2,638 MW IN OPERATION 21% 77 MW IN CONSTRUCTION Ilo1 Ilo21 Coal Peruvian State ENGIE Ilo31 OCGT Renewable Natural gas Edegel Kallpa Nodo Energético Coal Fuel oil Others Intipampa Solar Market data source: ENGIE as of December 2015 4 CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | HPP: Hydro Power Plant.
STRUCTURE & ACTORS Energy – Capacity Consumed by EnerSur COES SEIN Clients Ranking Energy – Capacity “Dispatched” CVC/CVNC Fuel Cost Operational Cost (« Opex ») Dispatch Capex Administrative Expenses (« SG&A ») CVC: Fuel Variable Cost CVNC: Non-Fuel Variable Cost 5
ELECTRICITY MARKET CONCEPTS Generation � Centralized dispatch � Spot Price: Zonal, cost-based, calculated every 15 minutes based on the marginal cost to supply demand � Volatility on spot price is mainly driven by hydro conditions, gas transport availability, main plants availability and high voltage transmission restrictions � If a generation company goes into unbalance it has to go to the spot market Transportation � Open access � Regulated market 100% � Tolls are pass-through costs and are paid by the demand Distribution � 100% of the demand must be provided with electricity � Regulated market 100% � Distribution grid costs are paid by the demand 6
SUPPLY & DEMAND � System is based mainly on hydro and natural gas from Camisea Field � Electricity demand increased on average 7% annually between 2005 and 2016 (YTD) and is expected to have an average annual growth of 5-6% between 2016 and 2019; Balance Supply - Demand - Wet Season Balance Supply - Demand - Dry Season Reserve Reserve MW MW 100% 100% 14,000 14,000 90% 90% 12,000 80% 12,000 80% 70% 70% 10,000 10,000 60% 60% 8,000 8,000 50% 50% 6,000 40% 6,000 40% 30% 30% 4,000 4,000 20% 20% 2,000 2,000 10% 10% - 0% - 0% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Hydro Renewable Hydro Dry Season 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 (%) 7
AGENDA Section 1 Peruvian Energy Industry Section 2 Company Overview Section 3 Strategy Financial Results Section 4 Capital Structure Section 5 8
SPONSOR ENGIE is a world energy leader with activities in 3 sectors: electricity, natural gas, and energy services. 9
OWNERSHIP STRUCTURE • ENGIE (former GDF SUEZ) through International Power SA As of 9.30.2016 % has a majority participation and controls ENGIE Energía Perú (former EnerSur) with 61.77% (2 Independent Directors and ENGIE 61.77 5 Directors appointed by ENGIE); Integra – Fondo 2 6.83 • In February 2004, ENGIE (GDF SUEZ) sold 21.05% of its participation in ENGIE Energía Perú to the 4 Peruvian Prima – Fondo 2 5.47 Pension Funds (“AFPs”); Profuturo – Fondo 2 5.27 • In October 2005, ENGIE Energía Perú listed its shares in the Lima Stock Exchange (“BVL”); Others 20.66 On November 24 th 2005 ENGIE (GDF SUEZ) launched an • Offering in the local market and successfully sold 17.3% of its 3% 6% stake in THE Company, mainly to Pension Funds and Insurance Cos; • In April 2012 the Company announced a capital increase 29% through a preferential subscription after the approval by the 62% General Meeting of Shareholders on February 14 th , 2012, by means of new monetary contributions up to the equivalent sum in PEN of 150 MUSD (99.4% in first round...); • As of September 2016, the Company reported 528 institutional and individual shareholders (375 as of December Engie Pension funds Insurance companies Others 2013). 10
HISTORY: OUR BUSINESS 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 Coal Plant Ilo21 Yuncán HPP OCGT11 OCGT12 OCGT12 2. Quitaracsa HPP 112 NTP CCGT COD Nodo Energetico 113MW CCGT 40 MW 135MW COD 134MW COD 180MW COD 180MW COD 180MW COD 3. Ilo31 500MW NTP (85MW CCGT) 600MW Auction NTP Solar Auction 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 EBITDA MUSD 84 185 134 163 168 188 270 287 321 Net Income MUSD 42 94 66 81 86 101 127 138 181 Dividends MUSD 42 84 59 24 26 30 38 41 54 Market Cap MUSD 645 870 877 1,600 1,200 1,759 2,005 2,075 1,427 MW: Nominal Capacity 11
DIVERSIFICATION: OPERATIONS (2,638MW) + PROJECTS (77MW) Chilca 2 Project NTP 4 Q 2014 Estimated Full COD 4Q 2016 Additional 37 MW in CCGT Yuncán Hydroelectric Quitaracsa Hydroelectric 134 MW 114 MW Ilo 1 (Diesel, Fuel & Steam) Chilca 1 CCGT (Natural Gas) 217 MW 852 MW Chilca 2 OCGT (Natural Gas) 76 MW Intimpampa Project NTP 2016 Estimated COD 2018 Additional 40 MW Nodo Energético Project NTP July 2014 Ilo 31 Cold Reserve (Diesel & Gas) COD : 21rst October 2016 Ilo 21 (Coal) 500 MW Additional 610 MW 135 MW 12 CCGT: Combined Cycle Gas Turbines | OCGT: Open Cycle Gas Turbines | HPP: Hydro Power Plant.
ORGANIZATIONAL STRUCTURE 13
AGENDA Section 1 Peruvian Energy Industry Section 2 Company Overview Section 3 Strategy Financial Results Section 4 Capital Structure Section 5 14
STRATEGY A. Development � Portfolio Balance: hydro & non-conventional renewables vis-a-vis thermos � Geographic: diversification and close to our clients � The Company invested more than 700 MUSD during its first 13 years of operations � Then, in 2010 we announced investments in 3 new projects with a total capacity of 904MW and an investment of 1.0 BnUSD � In 2013 ENGIE Energía Perú was awarded with a contract to build a new 600MW Dual Plant (Diesel/Gas) in the south of Peru which required an investment of 375 MUSD � In 2014 announced the construction of a combined cycle plant adding 113MW to existing capacity in Chilca with a total investment of 130 MUSD. The first phase concluded in IH’2016 adding 76 MW in open cycle and we expect to reach full capacity in combined cycle during the IVQ’2016 � In 2016 was awarded with a contract to build a 40MW solar plant in the south Peru with an estimated investment of 55 MUSD � …and we have other projects under analysis (hydro, Open Cycle, Combined Cycle, renewables) B. Commercial � Optimum contracting level Balanced Portfolio: Regulated Clients (Distribution Companies) vis-a-vis Free Clients � Power Purchase Agreements under “ pass-through ” scheme � � Minimize non-manageable risks C. Financing � Maintain a strong position for unexpected events and opportunities 15
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