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IPR in the Middle EaJanuary 2006

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IntroductionMark Williamson

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Our commitment to the region

Creating value thro

Project developmconstruction

Offtake contract dexecution

Project financing

Plant operation -

66%

Merchant(short/medium

term contracted)

Contract Type(by ne

0

500

1,000

1,500

2,000

2,500

2001 2003

Net MW

2002 2004

Net MWunderconstruction

200620052000

Set up inregion

Al Kamil,Oman

Shuweihat,UAE

Umm Al NarUAE

TihamaSaudiArabia35% Al

Kamil IPO

Ras Laffan BQatar

Al HiddBahrian

MW ME Net MW

Middle East . . . in the IPR portfolio

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Contribution to IPR from the region

Only includes equity from

2001 2003

EBIT

2002 2004

Middle East EBIT (m)

1-1

9

22 23

54

29

85

Equity

Middle East . . . in the IPR portfolio

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OverviewRanald Spiers

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IPR in the Middle East

Six projects in six years with an enterprisevalue of US$6.5 billion

~ current IPR equity commitment ofnearly

US$400m

Creation of new region - 29m PBIT by2004

Existing assets performing well Construction is the other major

regional activity

Power and desalination

~ IPR largest private supplier ofdesalinated water in the world

Pi eline of future ro ects

UAE

USaudiArabia

Qatar

Bahrain

Al Hidd

Tihama

Shuweihat

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0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

2002 2003 2004 2005 2006A

Ue

S

T

650 MW

285

2008

R

(1)

2007

A

U

MW

870 870 870 650 650 650

1,500 1,5001,500 1,500 1,500

700 1,550 1,550 1,550

1,075 1,075 1,075

1,025900600

910910 910

285 285 285 285 285 285

1,155

2,655

3,355

6,5706,870 6,995

(1)

285

The Middle East - a growing asset portfol

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The Middle East Team

Abu Dhabi Development Office~ project selection, bidding, negotiating, project

development and management

Project companies

~ construction, asset management, client and partnerelationships, operations and maintenance

Operating companies

~ operations and maintenance, owner and partnerrelationships

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Key markets

Primary target markets: UAE

Qatar

Saudi Arabia

Oman

Bahrain

Kuwait

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Macro environment

Stable Governments, low country risk rankings and goratings

Massive oil and gas reserves

Petrodollar economies

Strong economic growth driven by high oil prices anddiversification away from oil

Growth rates between 5% to > 10% pa

Drivers for power and water demand

~ infrastructure development / tourism

~ replacement vs incremental demand

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Regulatory overview

Pragmatic regulation, primary method of control vialong-term contracts

Markets unlikely to liberalise in the short or medium te

Environmental regulation

~ most new plants gas-fired

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Commercial structure

Long-term contracts which set in stone all major revencosts

Major risks laid off wherever possible

PWPAs, PPAs, ECAs, NGSAs

EPC costs fixed with LDs for delays in construction anperformance

Long term operations and maintenance service agreeOEMs

Interest rates and currencies hedged

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Return on investment

Return profile similar across the region UAE local shareholder return 13%

Seek to enhance returns by O&M, success fees and T

Cash generation, use of Equity Bridge Loans

Scope to increase return once project has beencommissioned, for example by refinancing

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Financial structuring

Projects structured using project finance~ carried out in conjunction with London-based proje

team

Maximise use of senior debt

Availability of local capital and international debt with MLAs /JBIC

High leverage is not a problem

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Competitive environment

Projects becoming increasingly competitive but IPRstill winning regularly

New players from Japan, Korea, Malaysia

Traditional competitors (Suez/Tractebel, AES,Marubeni)

Fewer EPC contractors tends to limit competition

Competitors or partners (eg Mitsui)

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Partnerships

Partnering is a key element of risk diversification andgaining local knowledge

ADWEA, CMS, Saudi Oger, QEWC, Mitsui, TEPCO,Sumitomo, Chubu, Suez

We choose the right partners to help us win the deal

Each partner brings something different to the table

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Desalination

Strong power demand and even stronger water dema Most Gulf projects are designed to offer both power a

water

Increases the overall efficiency of the plant

Uses waste heat from the steam IPR has assets with the major thermal desalination

processes

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Agenda

Contract Structures David Wadham

Financing our Growth Peter BarlowDesalination Jaideep Sandu

Coffee Break

Oman Tom Mackay & Kevin Cox

Abu Dhabi David Barlow & Ed Metcalfe

Saudi Arabia David Barlow, Jeff Wright & Stev

Qatar Tom Mackay

Coffee Break

Bahrain John Hurst

Summary Ranald Spiers

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Contract structuresDavid Wadham

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Similarities across contracts

Part-owned in conjunction with other international or lpartners

Financed on a highly leveraged, project finance (limitebasis

Operate with the security of a long-term power (and wcontract for the plants available capacity and output

Contract with sovereign/quasi-sovereign counterparty

~ states single buyer of power and water

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Differences across contracts

PWPAs structured on an energy conversion basis (ECfuel supply agreement (FSA)

Most projects are BOO, some BOOT

Sub-contracted O&M or combined owner/operator str

Government interest in some projects

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PWPAs and PPAs

Project company responsible for:

~ design~ construction

~ commissioning

Offtaker obligation to provide connections to power anand purchase available capacity and output

Flat tariff with capacity charge to recover debt serviceand equity return; pass-through output charge to coveand fuel

Payment is in local currency (except Tihama) but inclu

rate protection

~ ownership~ operation

~ maintenance

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PWPAs and PPAs (cont.)

Capacity or termination payments guaranteed by the government

Revenue protection for offtaker defaults and political f(war, change in law, government action/inaction)

Commercial documents subject to local law but intern

arbitration

Finance and construction documents subject to Englis

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PWPAs and PPAs (cont.)

Energy conversion (Abu Dhabi, Tihama) or separate fsupply arrangements (Oman, Qatar, Bahrain)

BOO (Abu Dhabi, Oman, Bahrain), BOOT (Tihama anQatar), with a transfer to the offtaker

Accounting treatment: always an operating or finance

Terms vary from 15 years (Oman), through 20-23 yea(Tihama, Abu Dhabi and Bahrain) to 25 years (Qatar)without market liberalisation renegotiation clauses

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Operation and maintenance

Abu Dhabi

Requires a separate operator owned by foreign inves

Payment on a fixed price basis

Ability to generate Operator fees and bonuses againsequity stake (e.g. Umm Al Nar, 20% stake in the gene70% stake in the operator)

Others

More flexibility (e.g. Al Kamil, Ras Laffan)

Advantages of a combined owner/operator

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Gas turbine maintenance

Long-term arrangements with the OEM (Al Kamil, UmNar, Tihama with GE and Shuweihat and Ras Laffan Siemens)

For one or two maintenance cycles

The benefits of an LTSA include:

All scheduled maintenance sub-contracted for a fixedwith a degree of unscheduled outage cover provided the price

Based on a term warranty concept, i.e. OEM guarante

replace all program parts as needed

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Shareholding structure

Abu Dhabi IWPPs have 60% holding retained by thegovernment

Al Kamil initially 100% owned by IPR, now 65% owne

following a mandatory IPO on the Muscat Stock Mark Ras Laffan has no direct state involvement, although

holds 55% and is in turn listed on the DSM

Tihama and Bahrain owned entirely by private investo

The advantages of a government shareholding and the n

generate local investment opportunities

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Umm Al Nar Shareholders Agreement

Foreign shareholder has the ability to manage the proand enjoys significant minority protection

~ coupled with government partner with shared goainvestor

Board of 7 directors (4 ADWEA and 3 foreign investo

Foreign investor appoints the Executive Managing Di

~ Ed Metcalfe

Voting on all significant matters at board and sharehorequires approval of both ADWEA and the foreign inv

Government IPO provisions (Taqa was listed on the A

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Conclusion

Long-term off take arrangements with single state buyguaranteed by sovereigns with investment grade ratin

strong economic future

Robust contractual terms offering secure future returnrevenue protection for supplier and offtaker defaults aforce majeure events

Projects are embedded in the region, with governmenparticipating as co-investors or encouraging direct pub

Key cost risks (financing and gas turbine parts and mwell mitigated through long-term hedging and supply

Upside remains through refinancing opportunities, the

reduce costs over time and merchant tail on BOO ro

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Financing our growPeter Barlow

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Project finance

Fundamental part of IPRs financial strategy Objective is to finance on a non-recourse basis at the

level

S

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Structure of Middle East IPPs/IWPPs

Assets backed by long-term (20yrs+) Power (and WaPurchase Agreements (PPAs/PWPAs)

Contractual Structure designed specifically fornon-recourse financing

Clients obligations backed by Government guarantee

Predictable, long-term cashflows allow high leverage sponsors support

L d i IPP/IWPP i k/

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Lenders view on IPP/IWPP risk/country risk

No merchant risk Excellent track record of project financed IPPs/IWPPs

success stories / accepted model in the banking mar

Loan syndication allows diversification of lending acrodifferent projects/countries: lower risk

Project financed IPPs/IWPPs include security on assestricter covenants than corporate loans

ME countries hydrocarbon-rich, financially sound andpolitically stable: country risk acceptable to most inter

PF lenders

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IPR biliti i d bt it l i i

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IPR capabilities in debt capital raising

Core skill - IPR takes lead role in every project financ To date 5 IPPs/IWPPs project financed in the region

Raised $3.9 billion in non-recourse bank debt

IPR successfully financed first large scale IPP in Saud

Arabia Financing also achieved in potentially adverse market

conditions(e.g. Shuweihat syndication launched on 12 Sept.2001; Umm Afinancing arranged at start of 2nd Iraq war)

In 2004 successful IPO of Al Kamil on Omani stock ex

IPR biliti i d bt it l i i

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IPR capabilities in debt capital raisingNon recourse long-term debt

Al Kamil: $100m

Shuweihat: $1.2 billion (of which $100m Islamic T

Umm Al Naar: $1.1 billion (of which $250m IslamiTranche)

Tihama: $510m

Ras Laffan: $663m

Al Hidd $1.0 billion (in negotiation)

L d tit f f t d l

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Lenders appetite for future deals

Competitive pricing and increasing level of interest sularge appetite for future IPP/IWPP deals in the region

Virtually all major international project finance lenderspresent in the region and display appetite for more de

More regional players are becoming familiar with proj

finance through participation in loan syndications

Case st d

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Case study:Umm Al Nar

Largest IWPP in the world:

~ existing net capacity: 870 MW (power) + 162 MIGD (wate

~ after construction net capacity: 1,550 MW (2,200 MW for 2construction) + 95 MIGD

23 year PWPA with ADWEA: proven contractual structure (4thAbu Dhabi, but longest tenor to date);

Largest ever project finance deal at the time, when lenders apregionwas limited;

Financing plan structured to maximise liquidity and included ufinancing,short and long term conventional debt;

Lon -term debt tenor: 20 ears

Case study:

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Debt FacilitiesAmounts

US$ million Main Features

1) Equity Bridge Facility 441 Tenor / Repayment: Bullet repayment on July 2

Of which: Islamic Tranche 291

Of which: Conventional Tranche 150 Other: 100% guaranteed by Shar

2) Short Term Facility 232 Tenor / Repayment: July 2006 to July 2008

Of which: Islamic Tranche Nil

Of which: Conventional Tranche 232 Other: Ranking Pari-Passu with L

3) Long Term Facility 1,105 Tenor / Repayment:

Of which: Islamic Tranche 250

Of which: Conventional Tranche 855 Other:

Total Debt Facilities 1,778

Door-to-door 20 years; Pro

repayments: Jan 2009 to J

"True-Up Advance": Drawd

of availability period to repa

EBF and achieve 80:20 ge

to cover ratio covenants)

Case study:

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Capital Structure

Amounts

US$ millio

Total Funding Requirements: 2,116Of which: Acquisition Purchase Price 1,000Of which: EPC Contract 736

Sources of Funds

US$m % US$m %Short Term Facility 231 10.9% 0 0.0%Long Term Facility 978 46.2% 1,102 52.1%Equity Bridge Facility 440 20.8% 0 0.0%Equity Injection 0 0.0% 315 14.9%Cash Flow From Operations 468 22.1% 698 33.0%

Total Sources of Funds: 2,116 2,116 2,116

Before

"Refinance"After

"Refinance"

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DesalinationJaideep Sandhu

Introduction

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Introduction

Removal of salts from seawater

~ suitable for human consumption, agriculture or induse

Desalination Processes

~ Thermal Distillation Processes

- Multi Stage Flash (MSF)- Multi Effect Distillation (MED)

~ Membrane Processes- Reverse Osmosis- Electro Dialysis

~ Hybrid Plant (Thermal with RO)

IPR Middle East Desalination portfolio

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100

181.5

-

30

311.5

52.5

IPR Middle East Desalination portfolio

Shuweihat S1 IWPP

MSF (Fisia)Umm Al NarMSF & MED (Fisia, IHI, Sidem,Doosan, Hitachi Zosen)*

Ras Laffan Facility B

MSF (Doosan)Al Hidd, BahrainMSF & MED (Fisia, Sidem)

Total Desalination capacity

Potential opportunity:

Abu Dhabi Reverse Osmosis Plant

100

95

60

90

345

Assumeconstruction

2006 2008

Typical Power/Water Revenue Split

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Typical Power/Water Revenue Split

Dependant on power and water capacities and load fa

Power/Water capacity ratio of 15:1 (1,500 MW/100 M

~ e.g. Shuweihat, water contributes around 40% of tand profit

Power/Water capacity ratio of 5:1 (1,000 MW/100 MIG

~ e.g. UAN, water contributes around 68% of the revprofit

Multi Stage Flash Technology - 1

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Steam

Condensing

Brine

Vapour &Brine Droplets

Vapour

DesalinatedWater

Vapour &Brine Droplets

Vapour

Vacuum


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Well proven track record

Large capacity units

Low O&M cost

High quality product water

Used in IWPPs where

adequate steam and poweris available

Technology - Doosan,Hitachi Zosen,HHI/Sasakura and Fisia

Multi Effect Distillation Technology - 1

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Multi Effect Distillation Technology 1

1St Effec

Vapour

2nd Effect

Vapour

Condenser

DesalinatedWater

Desalinated

Water

Vacuum

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Reverse Osmosis Process - 1

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Reverse Osmosis Process 1

Reject Brine

Chemicals

PotableWater

Posttreatment system

MembraneRacks

DesalinationWater

PHigh

pressurepump

Reverse Osmosis Process - 2

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Reverse Osmosis Process 2

Preferred option for standalone water plants

Low capacity units

Easy O&M

Lower installation cost

Higher O&M Cost

Standardisation ofmembranes

Integrated Power and Water Plant

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Integrated Power and Water Plant

Combined Power and Water Plant

G

Gas/Oil

Air

G

Gas Turbines

HRSGs

Steam Turbines

MSF/MEDdistillers

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Middle East IWPP Desalination market

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0

500

1000

1500

2000

2500

MIGD

Abu

Dhabi

Oman Qatar Bahrain Saudi

Arabia

20052015

Middle East IWPP Desalination market

Anticipated Inteand Water Plan

Abu Dhabi

Oman

Qatar

Saudi ArabiaBahrain

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OmanTom Mackay & Kevin C

Macro environment

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Ruled by Sultan Qaboos since

1970 GDP in 2004: US $24.4 billion

Currency: Omani Rial pegged toUS$

Codified legal system, existingalongside a Sharia system

Oil dominated economy - provenreserves of 5.5bbl

Recent diversification utilising gas

GDP growth rate

Credit rating

Inflation

Population grow

(3)

(2)

(1

(2

(3

Market structure

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Electricity and Water Sector deregulated in 2003

~ separation of generation, transmission and distribu

Independent Regulator overseas power and water se

Transmission Company (Transco) dispatches plant baeconomic merit order and system requirements

Government owned Power and Water Procurer (PWP

purchaser of power and water - then onsells to Distribcompanies

Government owned Electricity Holding Company (EHshares in 100% government owned companies pendiprivatisation

Power and Water Sector

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Peak demand 2,500 MW in2005 growing at 6% in both

power and water Market shares :

3,326Total

200Gas/OilSalalah

585Gas/OilSohar (in construction)

427Gas/OilBarka 1

285Gas/OilAl Kamil

280Gas/OilAl Manah

334Gas/OilWadi Al Jizzi

688Gas/OilRusayl

527Gas/OilGhubrah

PoweMW

FuelType

Facility(2004 figures)

PWP estimates 2004

ElectricityHoldingCompany

46%

13%

Suez Energy

IPR5%

6%Dhofar

Other smallerinvestments

6%

AES

24%

Al Kamil asset overview

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Location: Sharquiya region

Gross capacity: 285 MW OCGT

Fuel: Gas with oil back-up

Employees: 30 plant and 7 Muscat

office

Configuration: Dual fuel plant using GEframe 9E turbines (3 units)

Operational: Q4 2002

UAE

SaudiArabia

Al Kamil commercial overview

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Publicly listed on Muscat Securities Exchange

IPR own 65%, balance held by local shareholders

15 year PPA and GSA expiring April 2017

~ backed by Oman Governmentguarantees

PPA is US$ and PPI linked with

capacity payments based onavailability

Original investment of $133m,funded 80/20 debt/equity

O&M subcontracted to an IPR

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Future prospects / outlook

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Regional and international finance available for Oman

deals

New project opportunities:

~ 685 MW Rusayl / 550-700 MW, 30 MIGD Barka II due 27th March 2006

~ future privatisation of Ghubrah (527 MW and 42 MWadi Al Jizzi (334 MW)

~ expansion of Al Kamil

~ standalone IWP programme in Oman

Summary

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Economically and politically stable

Committed to privatisation programme

Well structured, low risk business at Al Kamil

Excellent technical and commercial performance

Real potential to enhance returns of existing businessadd additional projects

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Abu DhabiDavid Barlow & Ed Metca

Macro environment

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UAE - federation of 7 Emirates~ political power Abu Dhabi

GDP in 2004: $103bn

Currency: UAE Dirham pegged to US$

Oil: 98 bbls proven reserves~ 8% of proven world reserves

Gas - 212 TCF proven reserves- 5th largest in world

Codified legal system~ existing alongside a Sharia system

GDP growth rate

Credit rating

Inflation

Population grow

(2)

(1)

(1

(2(3

(3)

(3)

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Demand growth

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Abu Dhabi Power Demand 1993 - 2004

0

1000

2000

3000

4000

5000

6000

7000

8000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Power,MW

Installed Power Capacity Peak Power Demand

Abu Dhabi Power Demand Fo

0

2000

4000

6000

8000

10000

12000

2005 2006 2007 2008 2009 201Yea

Power,MW

Installed Power Capacity

Demand growth

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Abu Dhabi Water Demand Fo

0

100

200

300

400

500

600

700

800

900

2005 2006 2007 2008 2009 2010

Year

Water,MIGD

Installed Water Capacity

Abu Dhabi Water Demand 1993 - 2004

0

100

200

300

400

500

600

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Year

Water,MIGD

Water Capacity Water Demand

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Umm Al Nar commercial overview

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IPR 20%, ADWEA 60%, TEPCO 14%, Mitsui 6%

23 year PWPA with ADWEC

$2.1 billion investment (80% debt and 20% equity)

Financing - $1,100m 20yr loan, $230m 5yr loan, $440equity bridge facility: balance from existing plant reve

O&M ownership - 70% IPR and 30% TEPCO

Arabian Power Company;$2 1 billion project

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$2.1 billion project

Purchase and operation of current Umm Al Nar, Old EAssets and New Existing Assets

Construction of Umm Al Nar New Plant Extension andintegration with New Existing Assets

Closure of old existing assets in 2008

Old Existing Assets

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Capacity payments - generous availability targets

UAN East Station (commissioned in 1979-84);

~ 4 Gas Turbines, total 250 MW

~ 6 MSF Desalination units, total 41.7 MIGD

UAN West Station (commissioned in 1981-86) consis

~ 10 Steam Turbines, total 790 MW~ 10 MSF Desalination units, total 53.2 MIGD

Decommissioned 2008

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Contractor for UAN Plant Extension

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Mitsui single EPC Contractor

Toshiba power plant (Toshiba main sub-contractor)

Hitachi Zosen Desalination Plant

TM T&D 400kV switchyard

COD expected Q3 2006

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Shuweihat

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Power and water industry

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Ministry of Water and Electricity

Saudi Electricity and Cogeneration Regulatory Author

Saudi Electricity Company

~ existing power generation, transmission and distrib

~ responsible for new build IPPs

Saline Water Conversion Company

~ existing desalination capacity

Water & Electricity Company

~ jointly owned by SEC and SWCC

~ responsible for new build IWPPs

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Saudi Aramco Saudi Oger

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The client, off-taker and fuelsupplier

Owned 100% by SaudiGovernment

Number of employees 52,500

Worlds leading producer and

exporter of oil~ circa 3 billion barrels per

annum

Worlds top exporter of natural gasliquids

Established in 1Oger is an inter

construction coin Saudi Arabia

Background in but business distrategy into po

telecoms well u Turnover $1.8 b

annum

Number of emp26,000

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Tihama Power O&M arrangements

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IPR / Saudi Oger Management

Experienced staff recruited from Middle East and Asia

Extensive staff training

IT infrastructure and systems implemented to IPR sta

20 year technical services agreement with IPR

12 year contractual services agreement with General

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Shedgum - GE 7FA

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Ras Tanura - GE7EA

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Juaymah - GE 7FA

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IWPP structure

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IWPP and IPP programme

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Closed Dec 2005 Launched Dec 2005

SEC

SEC

SEC

SEC

SEC

SEC

SEC

WEC

WECWEC

WEC

Sponsor

195 MIGD900 MWShoaiba

24 MIGD700 MWShuqaiq176 MIGD2,500 MWRas Al Zour

75 MIGD1,100 MWAl Jubail

150 MIGD2,400 MWYanbu II

150 MIGD2,400 MWRabigh II

3,600 MWQurayyah II

23 MIGD600 MWShuqaiq III

1,725 MWSubukh

1,725 MWRiyadh PP10 (extn)

WaterPowerProject

1,725 MWMuzahimiyah

(1)

(2)

(1) (2)

Muzahimiyah

Subukh

Rabigh II

Yanbu II

Quray

Shuqaiq III

Shoaiba

Shuqaiq

Ras A

S

A

Saudi Arabia - other opportunities

Marafiq

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q

~ 2,500 MW + 176 MIGD at Jubail (bids due in April

~ 600 MW Yanbu

Aramco

~ possible expansion of existing Tihama assets

~ other cogeneration opportunities

Maaden

~ IWPP supply for Aluminium smelter, mining extrac

Saline Water Conversion Company

~ new build desalination driven projects

Privatisation of existing SEC and SWCC assets

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QatarTom Mackay

Macro environment

Country ruled by the Al Thani family

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Country ruled by the Al-Thani familyfollowing independence from UK

protectorate in 1971 GDP in 2004: US $28.4 billion

Currency: Qatari Rial pegged to US$

Codified legal system alongside a

Sharia system Oil related economy: 15.2 bbls reserves

Gas dominated economy: proven reserves of910 TCF - 3rd largest proven reserves in theworld

GDP growth rate

Credit ratingInflation

Population grow

(3)

(2)

Installed capacity

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Current market share is as

follows:

4304Total

1025GasRas Laffan B

756GasRas Laffan A

567GasRAF B2

376.5GasRAF B1

609GasRAF B970GasRAFASAT

WaM

PowerMW

FuelTypeFacility

2005 figures from Kahramaa

Under Construction

(1)

(1)

(1)

QEWC at 76% Power

IPR at 9.5 % Power

AES at 9.6% Power

Other smallershareholders 4.9% Power

Power and water sector

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Installed capacity of some 2,712 MW and 128 MIGD

~ additional 1,592 MW and 89 MIGD under construc Qatar Electricity & Water Company (QEWC) historica

developed all power generation and water projects

KAHRAMAA sole purchaser and distributor of all powwater in country

Electricity/water demand has growth historically 6-8%annum

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Ras Laffan B commercial overview

Q Power (the project company) is owned 55% by Qat

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Q Power (the project company) is owned 55% by Qat& Water company, 40% by IPR and 5% by Chubu Ele

Power and water capacity and output sold to KAHRAMowned single buyer of power and water)

~ under 25 year BOOT Power and Water Purchase

Plant scheduled to enter commercial operation in threbetween 2006 - 2008

$900 investment - 80% debt and 20% equity

Long Term LTSA signed with Siemens for Gas TurbinMaintenance

Ras Laffan B construction progress

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All three Siemens Gas Turbines are on site and are b

installed. 220kV switchgear for all gas turbines completed

First Doosan Desalination Unit installed and work isprogressing well on its associated pumps and pipe wo

First HRSG with its associated equipment being erect Progress on connecting to the Seawater intake and o

pipework in advanced stage of completion

Ras Laffan B

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Ras Laffan B

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Ras Laffan B

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Potential future projects

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Mesaieed

~ 2,000 MW, 40 MIGD currently in development~ bids to be in by 15 March 2006

Dukhan 1 & 2

~ 3,000 MW, 60 MIGD

Availability of regional and international finance~ eg Ras Gas LNG train 2 needed US $1.5 billion

received US$3 billion in offers

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Bahrain

John Hurst

Macro environment

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Political

~ stable, liberal, and the mostdemocratic of the Gulf States

Currency pegged to the US$

Legal structure very similar to thatof the UAE

GDP growth rate

Credit ratingInflation

Population grow

(1)

Power and Water industry

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Regulatory framework

~ transmission and distribution is solely Governmen~ MEW is the sole offtaker for power and water back

Government of Bahrain Guarantee

International Power and Suez Energy key players in tmarket

Demand growth 8% power, 10% water

Installed capacity ~2,000 MW (excluding Alba aluminusmelter)

Location: Manama

Al Hidd asset overview

Al Hidd

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Location: Manama

Gross Capacity: 910 MW and

30 MIGD, 60 MIGD underconstruction

Fuel: Natural gas

Employees: 2 IPR, 1 Suez, 1

Sumitomo, 198 Seconded fromMEW

Configuration:Phase I - 2 x 13E2 + 30 MIGDwater Phase II - 3 x 13E2

UAE

UASaudiArabia

Qatar

Bahrain

Al Hidd

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Al Hidd commercial overview

Hidd P C IPR S S i

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Hidd Power Company : IPR 40%, Suez 30%, Sumitom

22-year PWPA with Ministry of Electricity and Water; NGSA with Bahrain Petroleum Company (BAPCO)

$1.25 billion investment - 85% debt, 15% equity

Lenders - JBIC, 6 MLAs led by Royal Bank of Scotlan

Combined Owner/O&M structure

Prospects / outlook

IPR ti h b ti Hidd l t f 2

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IPR consortium has been operating Hidd plant from 22006

Financial close expected in July 2006

~ payment of purchase price in July

Immediate earnings

MEW / MOF are both pragmatic and fair clients 2,000 MW IPP to be released by Government of Bahr

shortly

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Summary

Ranald Spiers

Demand groNew capacityCapacity

Middle East Regional IWPP markets

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5,000 MW4,000 MWKuwait

2,000 MW2,000 MWBahrain

5,000 MW2,700 MWQatar

30,000 MW26,000 MWSaudi Arabia

2,000 MW3,000 MWOman

8,000 MW8,000 MWUAE

Demand gro(pe

New capacityrequired by 2014

Capacity2004Country

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UAE

Shuweihat S2 new build

Bahrain

2 000 MW IPP

Middle East Region - short term prospect

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Shuweihat S2 new build1,500 MW +100 MIGD

Fujairah F2 1000MW + 70 MIGD New Abu Dhabi island development

4,000 MW - 7,000 MW

Oman

Barka 2 new build 700 MW +

30 MIGD Rusayl 685 MW existing

Ghubrah sale of existing 527 MW+ 42 MIGD

Wadi Al Jizzi 334 MW

2,000 MW IPP

Qatar

Mesaieed 2,000

Dukhan 1&2 3,00MIGD

Saudi Arabia

Shuqaiq 700 MW

Marafiq 2,500 M

Ras Al Zour 2,50MIGD

2500MIGD

Desalination - growth potential

Scope for further

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0

500

1000

1500

2000

2500

Abu

Dhabi

Oman Qatar Bahrain Saudi

Arabia

2005

2015Anticipatedand water p

Abu Dhabi

Oman

Qatar

Saudi Arabi

Bahrain

Scope for furtherdesalination

projects in theMiddle East

Operatingdesalination plants- a key skill for IPR

Ability to capitaliseon the MEexperienceelsewhere(Australia, USA)

Strategic focus

Extract maximum value from current projects

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Extract maximum value from current projects

Maintain geographic focus on Gulf States and Saudi A Seek selective opportunities in North Africa (Morocco

etc) markets with similar commercial and risk profile

Target to win one project each year over the next fouryears

Success factors

Best in class operation

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Best-in-class operation

~assets performing in accordance with contracts

World class project finance capabilities

High quality people to implement and run new project

Excellent reputation

~ delivered assets on time and within budget Robust relationships with key clients, partners and

contractors

Documents

Mideast 06