Investor Presentation June 2011 KOWEPO – Korea’s Leading Power Generation Company Strictly Private and Confidential

Investor PresentationInvestor PresentationJune 2011June 2011

KOWEPOKOWEPO – Korea’s Leading Power Generation Company– Korea’s Leading Power Generation Company

Strictly Private and Confidential

2

Disclaimer

This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Korea Western Power Co., Ltd (the "Company") or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity.

This presentation is not an offer of securities for sale in the United States. Any securities referred to in the presentation ("Securities") may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and will contain detailed information about the company and management, as well as financial statements. No public offering of the Securities will be made in the United States, and the issuer does not intend to register any part of the offering in the United States.

No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document. This document is highly confidential and being given solely for your information and for your use and may not be shared, copied, reproduced or redistributed to any other person in any manner.

This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the economic, political and legal environment of Korea, volatility in stock markets or in the price of our shares, financial risk management and the impact of general business and global economic conditions.

This document contains data sourced from and the views of independent third parties. In replicating such data in this document, the Company makes no representation, whether express or implied, as to the accuracy of such data. The replication of any views in this document should be not treated as an indication that the Company agrees with or concurs with such views.

Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.

The information contained in this document is provided as at the date of this document and is subject to change without notice.

3

Table of Contents

Regulatory Environment & Industry Regulatory Environment & Industry

Operation Overview Operation Overview

Financial Management Financial Management

Appendix Appendix

22

33

44

11 Company Overview Company Overview

4

4

Company Overview

Company Name Korea Western Power Co. Ltd.

Establishment Date April 2, 2001 (spun off from KEPCO)

Ownership 100% owned by KEPCO (51% owned by the Korean government)

Number of Employees 1,667

Assets KRW 4,975 bn

SalesKRW 4,767 bn in 2010

KRW 1,477 bn in 1Q 2011

Capacity of Equipment 8,404 MW, 5 Power plants with 44 units

Power Generation53,032,818 MWh in 2010

15,600,410 MWh in 1Q 2011

Credit Rating A1 (Moody’s) / A (S&P)

Source: FSS (Financial Supervisory Service in Korea), Bloomberg (as of March 2011)

5

5Source: company data (as of March 2011)

Base load, intermediate load, and peak load account for 48%, 17% and 35% respectively in terms of generation capacity in operation

Over 91% of capacity is located in or near the Seoul metropolitan areas– Seoul metropolitan areas comprise approximately 40% of total national demand

Power Plants Portfolio

Note: T/P denotes “Thermal Power Plant”, C/C denotes “Combined Cycle”Note: T/P denotes “Thermal Power Plant”, C/C denotes “Combined Cycle”

Generation Capacity by Type of Plant

Base Load Intermediate Load Peak Load

Taean T/P(4,000 MW)

Pyeongtaek T/P(1,400 MW)

4,000MW

Seoincheon C/C(1,800 MW)

PyeongtaekC/C (480 MW)

GunsanC/C (718 MW)

2,998MW

1,400MW

Location of Plant Complex

CoalLNGBC Oil

TaeanPyeongtaek

Gunsan

Seoincheon

Samrangjin

Hydro Solar

Metropolitan Area

Power Plant Region

Seoul & Gyunggi-do

6

6

Sales Volume Market ShareGeneration Capacity Market Share

Total Generation Capacity78,235 MW

Total Electricity Sales120,797 GWh

(MW) (GWh)

KOWEPO’s Market Position - 1Q 2011

Source: FSS (Financial Supervisory Service in Korea) (as of March 2011)

Others11,84915%

KHNP 23,15929.6%

EWP8,81211%

KOSPO9,23812%

KOWEPO8,40411%

KOSEP8,37511%

KOMIPO8,39811%

Others9,7498.1%

KHNP36,85730.5%

EWP13,86711.5%

KOSPO16,55213.7%

KOWEPO15,11312.5%

KOSEP14,66012.1%

KOMIPO13,99911.6%

7

Constantly growingpower consumption

12.5% of the sales volume share for domestic power market in 1Q 2011

Strengtheningcompetitivenessthrough domestic &overseas investment

Cancelled in privatization plan of Gencos

Market-oriented publicenterprise

Application of the cost-reflecting pricing mechanism

Investment Highlights

Continuous cash flows from operating performance - EBITDA : KRW159bn

Balanced and flexible

debt portfolio /Well-diversified maturity profile

Solid Capital Base /Second lowest among Gencos- Debt to Equity : 36%

Improving facility utilization /Highest among Gencos with 85.9%

Minimizing unplanned stoppage /The lowest compare to other Gencos

Long-term and short term raw material contracts

Industry Dynamics & Market Position

Supportive Regulatory Environment

Cost Effective Operating

Solid Financial Profile


8

Table of Contents




Appendix Appendix

22

33

44


9

Assets: 99.61Revenues: 39.43

Transmission & Distribution

Holding 100% Ownership of

Gencos

91.9% market share of

generation

51%

Ownership

100% Ownership


Thermal &Renewable


Nuclear &Hydro

KHNP


Thermal &Renewable

KOSEP


Thermal &Renewable

KOMIPO


Thermal &Renewable

KOSPO


Thermal &Renewable

EWPKOWEPO

Domestic Power Industry Structure

11.6% Sales Volume Share 11.6% Sales Volume Share

KEPCO

Gencos

Public Corporation Act

Electricity Business Law

Basic Plan for Energy

Development

Environmental Policy Law

Strong Government Support

Unit : KRW in trillions

Source: FSS (Financial Supervisory Service in Korea) (as of FY 2010)

10

1999 2000 20022001 2003 2004 2005 2007 20082006 2009

MOCIE * announced restructuring plan for power industry

Incorporation of generation companies

Cost-based pool bidding (“CBP”) mechanism

Initiation of KOSEP privatization

Plan to separate KEPCO’s distribution sector was halted due to substantial risk and uncertain benefits from the separation plan

Update on Gencos Privatization and Consolidation Plan Privatization plan for KEPCO and its Gencos was cancelled in July 2008 Gencos have been designated as market oriented public firms by government to create a more efficient

management structure and enhance their competitiveness in 2011

The power industry restructuring plan delayed and the former privatization plan for Gencos cancelled

2010

Gencos were designated as market-oriented public firms

IPO of KOSEP was delayed

Privatization plan for Gencos cancelled

Latest Power Industry Operating Environment

2011

Implementation of TWBP was suspended

Introduction of vesting contracts for Gencos deferred

Wholesale competition was put on a hold

* MOCIE: Ministry of Commerce, Industry and Energy (currently renamed as MKE (Ministry of Knowledgy Economy))

11

Electric Power Industry Reorganization - Transfer of Water Pump Generators to KHNP Purpose: Exclude water pump generator from competition and seek stability in electricity system network at the same time

achieving synergy from integration of the water pump generation and water generation Timeline: All assets have been transferred as of 1 Jan 2011 Effect on governance: No change in corporate governance – KEPCO will continue to hold 100% of respective GENCOs

Transfer of water pump generators to Korea Hydro Nuclear Power

Genco GeneratorPower Capacity

(MW)

South East Mooju 600

Mid Yangyang 1,000

Samrangjin

Chungsong

600

600

South Chungpyung 400

East West Sanchung 700

Total 6 Generators 3,900

Industry Reorganization

Source: company data (as of 1st Jan 2011)

Implication for Korea Western Power

Site AssetRev

(% M/S)Net Inc.

Generation (% M/S)

Samrangjin1,335

685 (1.44%)

92298GWh (0.56%)

Chungsong3,592

1,264 (2.65%)

217607GWh (1.14%)

Based on 2010FY total asset of KRW 4,498.6bn, water pump generator is 10.9% of total asset

As a result of the transfer of water pump generator, we expect approximately 10.9% decrease in asset size, but given profit and generation consists of only 2-8%, the decrease relative to asset size is small

Unit : in KRW100mn

12

Nationwide Power Consumption

Source: “Statistics of Electric Power in Korea”, KEPCO / The Bank of Korea (as of Jan 2011) / “Electricity Supply and Demand Basic Plan #5”, MKE (as of Dec 2010)

193

214

240

258

278

294

312

349361

385 390

425

332

8.5%

7.2%

-6.9%

0.2%

4.0%

4.6%

2.8%3.8%

9.5%

2.3%

5.1%

5.2%

5.8%

150

200

250

300

350

400

450

2000 2005 2010-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Power consumption GDP growth rate

425444

462

482

503521

536551

567582

598612

626640

654

300

400

500

600

700

2010 2015 2020 2024

Power consumption

History of Power Consumption Electricity Demand Forecast

Power consumption has continued to rise on the back of strong economic growth at an average rate of 5.7% per annum from 2000 to 2009

Power demand is expected to grow at an average rate of 3.1% per annum from 2010 to 2024

(Unit: TWh) (Unit: TWh)

13

Power Price Comparison

Price type Price Remarks

Capacity Payment

(CP)

Base Load

KRW 7.46/kWh KRW 7.46/kWh as a base price, CP is

differentiated by regions, by seasons and by hoursNon Base Load

Energy Price

Base Load

[Max {(SMP-Fuel Cost), 0} x

The Adjusted Coefficient + Fuel Cost]

The Adjusted Coefficient (Jan. 2011 ~ )

Nuclear : 0.2597 (←0.1963)

Coal : 0.1881 (←0.1315)

Anthracite : 0.5000 (-)

Others/General : 0.3033 (←0.3200)

Non Base Load

Application of The Adjusted Coefficient of SMP KOWEPO can pass through 100% of its fuel cost through the energy price Electricity Generation Cost Evaluation Committee annually determines The Adjusted Coefficient

※ SMP : System Marginal Price

Introduction of “The Adjusted Coefficient of SMP” will motivate Gencos to construct base load power plants and lead to fair competition among Gencos. It will increase the efficiency of the power market by stimulating cost reduction

Newly raised Adjusted Coefficient will increase KOWEPO’s operating income by KRW 69 billion for 6 months (Jan ~ Jun 2011)

Updating on Electricity Pricing Mechanism

Source: company data (as of March 2011)

14




Appendix Appendix

22

33

44


Table of Contents

15

KOWEPO operates 44 generation units with total generation capacity of 8,404MW.


Power Plant Facilities in Operation

Type Fuel TypeNumber of

UnitsCapacity

(MW)Sales(GWh)

Utilization Rate (%)

Taean Thermal Bituminous 8 4,000 8,314 100.7

Pyeongtaek Thermal BC Oil 4 1,400 1,055 36.1

PyeongtaekCombined

CycleLNG

GT : 4ST : 1

320160

611 59.5

GunsanCombined

CycleLNG

GT : 2ST : 1

718 1,552 101.7

SeoincheonCombined

CycleLNG

GT : 8ST : 8

1,200600

3,578 92.9

Taean Solar - 1 0.1 0.04 13.9

Samrangjin Solar - 2 3 1.02 15.9

Gunsan Solar - 1 0.3 0.1 13.8

Taean Hydro - 4 2.2 0.98 20.6

TOTAL 44 8,404 15,113 85.9

16

45.1

440.9

14.1

502.9

7.70.0

100.0

200.0

300.0

400.0

500.0

600.0

KOWEPO KOSEP KOMIPO KOSPO EWP


Operational Strength

Highest Facility Usage Ratio Lowest Unplanned Stoppage Ratio Lowest Unplanned Stoppage Time

Unit : Hour

85.1%

80.6%

85.9%

76.3%

85.9%

70%

77%

84%

91%


0.020%

0.140%

0.003%

0.170%

0.002%0.00%

0.06%

0.12%

0.18%


17

KOWEPO plans to maintain its leading market position and superior operating performance promoting growth with new plant constructions and new business


New Business - Domestic

Power Plant TypeGeneration Capacity

CompletionDate

Remarks

New Plant

Taean IGCC IGCC 300MW Nov. 2015 Integrated Gasification Combined Cycle R&D project supported by Government

Taean #9, 10 Thermal 2000MW Dec. 2016 Largest unit capacity in Korea

Equity Investment

Garorim Tidal 520MW Dec. 2015

Consortium With Posco E&C, Daewoo E&C, Lotte E&C Project Financing KOWEPO to be in charge of construction management, operation and maintenance

Dongducheon Combined Cycle 1500MW Dec. 2014

Consortium with Samsung E&C, Hyundai Development Company Project Financing KOWEPO to be in charge of construction management, operation and maintenance

18

Power Plant TypeGeneration Capacity

Remarks

Equity Investment

Philippines Kanan Hydro 150MW

Consortium with SK E&C (Korea) Build, Own, Operate Project Financing KOWEPO to be in charge of construction management, operation and maintenance

Indonesia Takalar Thermal (Coal) 200MW

Consortium with SAMBU, Yooho and MSC (Indonesia) Build, Own, Operate Project Financing KOWEPO to be in charge of construction management, operation and maintenance

Laos Xe-Namnoi Hydro 390MW

Consortium with SK E&C (Korea), Ratchaburi (Thai) and LHSE (Laos) Build, Own, Operate, Transfer Project Financing KOWEPO to be in charge of construction management, operation and maintenance

Saudi Arabia Rabigh

Thermal (Heavy Oil)

1,204MW

Consortium between KEPCO and ACWA received order for Build, Own, Operate Consortium between KOWEPO and NOMAC (Saudi) received mandate for O&M from KEPCO–ACWA consortium

KOWEPO plans to diversify its revenue sources through overseas expansion by leveraging its proven experiences and track records in operating and maintaining power plants

Project financing as a key funding source to minimize the financial risks


New Business - Overseas

19

Capital Expenditure Schedule

Capital Expenditure Plan


-

500

1,000

1,500

2,000

2,500

2011 2012 2013 2014 2015 2016

Taean #9,10 Taean IGCC Other Constructions Facility Improvement Equity Investment Others

Unit : KRW billions

639

1,044

1,392

2,1801,989

1,090

20

Coal, 39%

LNG, 44%

Oil, 17%

Fuel Cost Composition

Cost Efficiency


38

5546

142

114

150

92

50

165

109106

115

136

76

110

0

20

40

60

80

100

120

140

160

180

2008 2009 2010 1Q 2011

Coal Heavy Oil Combined(LNG) Pumped Storage

Production Cost

Unit : KRW / kWh

Fuel costs account for 86.5% of production costs Long-term supply contracts assure adequate supply

of the raw materials Hedging risks by adjusting portion of long-term

contracts with market volatility

6230

3670

520 510 410 410 290 1400

1500

3000

4500

6000

7500

Major Suppliers of Coal

Unit : kiloton

Total 12,180 kilotons

Coal

Long-term70%

Long-term70%

Short-term30%

Short-term30%

LNG

Long-term100%

Long-term100%

21




Appendix Appendix

22

33

44


Table of Contents

22

Capital Structure

Capital Structure

Assets

Liability

Shareholders Equity

Revenue

EBITDA

KRW 4,975 bn - Non-Current Assets/Total Assets Ratio : 80.1%

KRW 2,028 bn - Debt/Capital Ratio : 26.4%

KRW 2,947 bn - wholly owned by KEPCO

KRW 1,477 bn

KRW 159 bn - Net Income : KRW 51 bn

4,482 4,499

4,975

4,199

2,273 2,3542,567

2,947

1,926 2,127 1,9322,028

0

1,000

2,000

3,000

4,000

5,000

6,000

2008 2009 2010 1Q2011

(KR

W b

illio

n)

Total Assets Total Shareholders' Equity

Total Liability


23

EBITDARevenue

Financial Performance (1)


273

423

732

159

249

0

200

400

600

800

2008 2009 2010 1Q 2010 1Q 2011

LeverageCoverage

-1.6

2.0

4.8 5.1

8.7

4.73.5

1.8

4.5

6.6

-3

0

3

6

9

12

2008 2009 2010 1Q 2010 1Q 2011

EBIT / Gross Interest Expense Debt/EBITDA

56.762.5

51.4

35.834.536.2 38.533.9

25.7 26.4

0

20

40

60

80

2008 2009 2010 1Q 2010 1Q 2011

Debt/Equity Debt/Capital

3,700 3,817

4,767

1,4771,271

0

2,000

4,000

6,000

2008 2009 2010 1Q 2010 1Q 2011

(KRW billion) (KRW billion)

(Times) (%)

24

EBITDA / Revenue

Financial Performance (2)


Debt / EquityEBITDA / Net Interest Expense

11.3 11.310.8

14

13.1

0

4

8

12

16


54.851.7

38.4

24.5

35.8

0

15

30

45

60


19.5

14.3

10.4

12.6

10.8

0

4

8

12

16

20

24


High-Cost Facility Ratio

21%

52%57%

49%52%

0%

25%

50%

75%

100%


Sensitive to international fuel cost fluctuation due

to

high-cost facility ratio (Heavy oil, Combined)

Seeking for fuel cost saving through aggressive

strategy to get target profit and lowering fixed costs

via enhancing utilization ratio

25

(KRW billion)

Note :1. Total debt in 2011 represents the remaining outstanding debt as of end of 2011 1Q.

2. Total amount of debt is reflected currency swap in case of foreign currency bond.

Local85.1%

(KRW 824bn)

Foreign14.9%

(KRW 144bn)

Fixed89.3%

(KRW 864bn)

Floating10.7%

(KRW 104bn)

Debt Profile

Debt Maturity Profile Local vs Foreign Currency

Type of Interest


26




Appendix Appendix

22

33

44


Table of Contents

27

Financial Statements

Income Statement

(Unit : KRW Billion)

Note: 1Q10, 1Q11 financial data are based on K-IFRS accounting standard (consolidated basis) while annual data is based on K-GAAP accounting standard (unconsolidated basis)

　 2008 2009 2010 1Q 2010 1Q 2011

Sales 3,700 3,817 4,767 1,271 1,477

Cost of Sales 3,736 3,681 4,393 1,118 1,394

Gross Profit (35) 136 374 153 83

SG&A 38 32 38 8 10

Net Other Operating Income (IFRS adj.) - - - 7 (2)

Operating Profit (Loss) (73) 104 336 153 71

Non-Operating Income 197 141 87 32 14

Non-Operating Expense 248 132 104 35 20

Net Profit from Subs / Affiliates (IFRS adj.) - - - - (2)

Income Tax Expense (Benefits) (22) 25 72 37 13

Income from Discontinued Operations (Loss) - - - 12 -

Net Income (Loss) (104) 88 246 125 51

Other Comprehensive Income (Loss) - - - (73) 6

Comprehensive Income - - - 52 56

28


* These 2 financial data are based on K-IFRS accounting standard (consolidated basis) while other data are based on K-GAAP accounting standard (unconsolidated basis)

2008 2009 2010 2010* 1Q 2011*

Assets 　　　　　

Current Assets 739 843 816 1,349 992

Non-Current Assets 3,460 3,639 3,683 4,040 3,983

Total Assets 4,199 4,482 4,499 5,388 4,975

　

Liabilities 　　　　　

Current Liabilities 740 956 765 994 1,011

Non-Current Liabilities 1,187 1,171 1,167 1,138 1,017

Total Liabilities 1,926 2,127 1,932 2,132 2,028

　

Stockholders’ Equity 　　　　　

Capital Stock 176 176 176 176 159

Capital Surplus 1,267 1,267 1,267 1,267 992

Retained Earnings 809 896 1,116 1,796 1,779

Minority Interest - - - 17 17

Total Stockholders’ Equity 2,272 2,354 2,567 3,256 2,947

Total Liabilities and Stockholders’ Equity 4,199 4,482 4,499 5,388 4,975

Balance Sheet


29


Note: 1Q10, 1Q11 financial data are based on K-IFRS accounting standard (consolidated basis) while annual data is based on K-GAAP accounting standard (unconsolidated basis)

Cash Flow Statement


2008 2009 2010 1Q 2010 1Q 2011

Cash Flows from Operating Activities 　　　　　

Net Income (104) 88 246 125 51

Non-cash Income & Expenses 371 306 410 140 99

Changes in Assets and Liabilities (190) 98 (38) 33 (66)

Net Cash Provided by Operating Activities 77 492 619 298 84

Cash Flows from Investing Activities 　　　　　

Purchase of Fixed Asset (294) (593) (487) (109) (45)

Other, Net (17) (34) (19) (5) (18)

Net Cash Used in Investing Activities (311) (627) (506) (114) (27)

Cash Flows from Financing Activities 　　　　　

Cash Inflows 1,029 1,234 968 99 14

Cash Outflows (924) (1,014) (1,062) (4) (63)

Net Cash Used in Financing Activities 105 220 (94) 95 (49)

Cash and Cash Equiv. at End of Period 47 131 150 424 161

Thank YouThank You

Documents

Investor Presentation June 2011 KOWEPO – Korea’s Leading Power Generation Company Strictly Private and Confidential