EDP Investor Day

November 6th, 2008 powered by naturepowered by naturepowered by naturepowered by nature

Ana Maria FernandesEDP Renováveis, CEO

1

EDPR: #4 wind player in the world with a sound asset baseEDPR: #4 wind player in the world with a sound asset baseEDPR: #4 wind player in the world with a sound asset baseEDPR: #4 wind player in the world with a sound asset base…………

-

MW Installed Capacity

MW Under Construction

625

1,733

14(1)

78

517

783

1,761

20

-

49

14457

-

MW Pipeline + Prospects

17,923

Installed Capacity

Under Construction

Pipeline + Prospects

Gross MW

4,155 1,612 27,615

216

738

5,669

1,256

74

1,002

(1) Pending on local approvals

-

-

737

Spain

USA

Portugal

France

Belgium

Poland

Romania

Brazil

2

…………and well positioned to capture longand well positioned to capture longand well positioned to capture longand well positioned to capture long----term profitable growthterm profitable growthterm profitable growthterm profitable growth

The sector for renewable energy experiences solid fundamentals and a positive trend for long term growth

1

Pure renewable player, with a balanced asset base in attractive markets, and a robust pipeline to feed future growth through a selective approach

2

Recent IPO provides for a solid short-term balance sheet, with future needs supported by EDP parent company

3

3

Importance of energy dependency, COImportance of energy dependency, COImportance of energy dependency, COImportance of energy dependency, CO2 emissions and time to emissions and time to emissions and time to emissions and time to market drives the need for market drives the need for market drives the need for market drives the need for renewablesrenewablesrenewablesrenewables…………

Coal

Natural Gas

Nuclear

Wind

• Unfavorable economics

• Obsolescence risk

• Lack of public support

• Low timely availability

• Uncertain economics

• Not clear public support

• Increasing fuel dependency

• High price and volatility

• No CO2 cost

• Growing regulatory and public

support

Energy dependency

CO2

emissionsTime to market

5-7 yrs

~10 yrs

2-3 yrs

1-3 yrs

Currently, wind is the most attractive renewable technology both in terms of cost and scalability

Better Worst

4

…………creating growing regulatory and public support in USA and EUcreating growing regulatory and public support in USA and EUcreating growing regulatory and public support in USA and EUcreating growing regulatory and public support in USA and EU

Stable regulatory environment: growth conditions created to meet local government

and EU 2020 targets

Growing momentum at State and Federal levels for more strict renewable policy initiatives to

underpin wind support

US Elections / New Administration support

Establish a federal Renewable Portfolio Standard (RPS) of 10% by 2012

escalating to 25% by 2025

Extension of PTC for 5 years at a time

Increasing support at national level

Mature markets: Germany increased wind on-shore tariff to revive investments

Growing markets: Romania enhanced the remuneration attributed to wind projects

European Commission continues to support 2020 targets even under current environment

USA willing to re-launch economy based on sustainable investments

Sector with solid fundamentals and positive trend for the long term

1

Pure renewable player, with a balanced asset base in attractive markets, and a robust pipeline to feed future growth through a selective approach

Recent IPO provides for a solid short-term balance sheet, with future needs supported by EDP parent company

2

3

6

0 (0) €160(2) +0.7 GW+85% CAGR

Green Certificates, PPA

Strong presence in attractive marketsStrong presence in attractive marketsStrong presence in attractive marketsStrong presence in attractive markets…………

Country 9M08 Price/MWh

Country growth potential 2007-2015(4)

9M08 Gross MWIn operation (under construction) Remuneration Scheme

Note: (1) Base on PPA signed (2) Base on 9M08 power prices + green certificates; in Romania assuming prices of green certificates in new regulation(3) Including sale of interests in institutional partnerships (grossed-up for taxes) (4) Source: EER, European Wind Power Market Forecasts, June 2008 and EER, US/Canada Wind Power Market Forecasts, June 2008

4,155 (1,612)

Wind Resource

144 (49)Feed-in tariff, 1 year accelerated fiscal depreciation

€73.2+ 11 GW

+24% CAGR

Green Certificates, PPA0 (57) €112(1) +1 GW+18% CAGR

517 (78) Feed-in tariff€100.1+5 GW

+17% CAGR

+16 GW+10% CAGR

1,761 (783) Feed-in tariff + market option€99.4

0 (20) Green Certificates, PPA€126(2) +3 GW+35% CAGR

1,733 (625)•PPA and REC contracts•PTCs + MACRS

$87.0(3) +70 GW+23% CAGR

Spain

USA

Portugal

France

Belgium

Poland

Romania

<25% 25-30% >30%

7

…………with top quality load factors to deliver premium assetswith top quality load factors to deliver premium assetswith top quality load factors to deliver premium assetswith top quality load factors to deliver premium assets

Historic and long-term load factors

(%) Premium site selection

28% 27%24%

32%

Market average

25% 25%24%

+2.7pp

28% 28% 25% 35%

+2.1pp

+0.6pp

2004-2007 2004-2007 2004-2007 2004-2007

Long-term expected on current assets + under construction A clear competitive advantage:

key value driver to maximize returns

Second-to-none wind assessment team

Designing premium projects by optimizing site layout

Selecting the best fit turbine

8

EDP RenovEDP RenovEDP RenovEDP Renovááááveis is on track to execute shortveis is on track to execute shortveis is on track to execute shortveis is on track to execute short----term growthterm growthterm growthterm growth…………

2008 additions and capacity under construction

(Gross MW)

37%

63%

2008 2009

2008 additions

Under construction

+1.4 GW

Total capacity: installed + under construction

(Gross MW)

5,1155,767

3,640

+1,612

+515

2007 9M08 add. Under

constr.

Total

Gross

MW

Total

EBITDA

MW

Installed Capacity

Under construction

• On track to install 1.4 GW in 2008 and visibility on 2009 new capacity

• Back-end weighted of new installations in 2008 follows historical civil works investment cycle

• Execution of short-term growth through pipeline development

€1.0bnalready

invested (1)0.7 GW

(1) Excludes turbines deposits for future projects of €250m

9

…………and is adapting its growth strategy to current environmentand is adapting its growth strategy to current environmentand is adapting its growth strategy to current environmentand is adapting its growth strategy to current environment

Decrease of electricity prices

from a peak level

Increased cost of capital on

current economic environment

Recent trends on key value drivers EDP Renováveis mitigating levers

Possible downward pressure on

turbine prices

Low risk profile in a balanced and diversified asset portfolio

Enlarged and robust pipeline providing optionalities to value oriented growth

Un-contracted position and flexibility on turbine delivery

1

2

3

10

Actively improving portfolio risk profileActively improving portfolio risk profileActively improving portfolio risk profileActively improving portfolio risk profile

Revenues breakdown

(EBITDA MW)

5%8%

5% 13%

37%34%

19% 16%

19% 13%

14%15%

9M08 9M08 + Under constr.

Feed-in Tariff

Market w/ Cap&Floor

Long-term PPA

PPA to be signed

Fixed tariffs indexed to inflation

Long-term PPA at fixed prices or fixed escalator

Revenues Sensitivity

Market

Total exposure to electricity market prices until 2012

(Spain): By 2013 a cap&floor will be introduced

(premium on this assets is reduced to 30€/MWh)

Exposure to green certificate prices:In regions with strong mandatory green quotas the “green

price” hedges “brown price”.

Fixed premium attributed in Spain: €38/MWh on old

regulation; €30/MWh on new regulation

Currently, >85% of EBITDA MW have limited to no exposure to volatility in power prices.

1

Fixed PremiumMarket prices with a cap and floor on final realized price

11

Benefit from a robust pipeline of 29GW providing Benefit from a robust pipeline of 29GW providing Benefit from a robust pipeline of 29GW providing Benefit from a robust pipeline of 29GW providing optionalitiesoptionalitiesoptionalitiesoptionalities to short/medium term valueto short/medium term valueto short/medium term valueto short/medium term value----oriented growthoriented growthoriented growthoriented growth

1,612

5,156

1,668

29,227

10,580

10,211

Total Prospects Tier 3 Tier 2 Tier 1 Under

const.

Portfolio of projects

(Gross MW)

+8.4 GW

2012 target: 10.5 gross GW;

+6.3 GW vs. 9M2008

Europe43%

(of under construction,

Tier I and Tier II)

USA57%

(of under construction,

Tier I and Tier II)

Spain: Target top-quality sites

Portugal: awarded tender with

assets in premium locations

Rest of Europe: growth options on

high yield markets

Accelerate development in

attractive liquid markets with

strong RPS

Mandatory demand for green

electricity is the main driver for

prices settlement and profitability

2

Time-to-market

12

Flexibility on turbine delivery and hold mediumFlexibility on turbine delivery and hold mediumFlexibility on turbine delivery and hold mediumFlexibility on turbine delivery and hold medium----termtermtermtermunununun----contracted positioncontracted positioncontracted positioncontracted position…………

Turbines commitment until 2012

(GW)

Contracts at fixed prices (or inflation): without indexation to past commodity escalation

c35% of the contracted turbines with flexibility on geography and year at limited cost

Maximize projects’ value creation through the negotiation of new contracts at competitive prices

Total

Not

Contracted

Contracted

Under

Constr.1.6

1.8

3

Flexibility to serve a global pipeline and maximize projects’ value

13

1.1

1.3

2005 2006 2007 2008 2009-10 2011 2012 2013

...to manage project profitability and maximize value creation...to manage project profitability and maximize value creation...to manage project profitability and maximize value creation...to manage project profitability and maximize value creation

EDPR: capex cost evolution

(€m / MW)

Escalation of commodities and

seller’s market WTG efficiency

Signed 2006-2008 To be signed 2009-2010

7%• Turbines: cost is driven by

raw material prices and by the balance between supply and demand (global deals)

• Balance of Plant (BoP):construction cost driven by local market dynamics

Capex main inputs:

Typical capex brekdown

1

2

2

1Current drop in commodities and

re-balancing supply and demand70-80%

30-20%

CAGR

Depending on

economic scenarios

3

-€100th +100bps

Capex/MW

IRR unlevered

Sector with solid fundamentals and positive trend for the long term

1

Pure renewable player, with a balanced asset base in attractive markets, and a robust pipeline to feed future growth through a selective approach

Recent IPO provides for a solid short-term balance sheet, with future needs supported by EDP parent company

2

3

1515

Funding terms were already contracted for the current capacity Funding terms were already contracted for the current capacity Funding terms were already contracted for the current capacity Funding terms were already contracted for the current capacity under constructionunder constructionunder constructionunder construction

Total capacity: installed + under construction

(Gross MW)

5,767

4,155

+1,612

9M08 Under constr. Total Gross

MW

Installed Capacity

Under construction

Capex already incurred

(€ million)

Already

spent

To be

paid

Under construction Capex needs covered

For 20080.9 GW

For 20090.7 GW

1

2

1 Capital expenditures already financed through debt arrangements with EDP parent or IPO proceeds

1.6 GW

2 Terms already contracted in the former agreements with EDP parent to finance projects under construc. at fixed price for 10Y

Total of 5,767 MW not financially impacted by the increase of cost of capital

Notes: (1) Excludes €250m of turbine deposits already spent

(1)

Remaining

IPO proceeds

16

2. Tax equity

markets in US

EDP RenovEDP RenovEDP RenovEDP Renovááááveis sources of fundingveis sources of fundingveis sources of fundingveis sources of funding

1. EDP parent

company loans

3. Project finance or

other instruments

Rational

•EDP to support the funding for EDP Renováveis to

finance business growth

•EDP to finance EDP Renováveis at market prices

•Mostly used in cases of wind farms in new geographies,

minority shareholders, …

• If and when terms are better than EDP’s conditions

•EDPR monetizes tax benefits of first 10 years of the

projects so that the value of taxable benefits are

realized as they are generated

•Monetization represents approx. 50% of projects’ initial

capex

17

Monetization of tax credits in US has become more challenging Monetization of tax credits in US has become more challenging Monetization of tax credits in US has become more challenging Monetization of tax credits in US has become more challenging but 2008 structure is expected to be close by yearbut 2008 structure is expected to be close by yearbut 2008 structure is expected to be close by yearbut 2008 structure is expected to be close by year----end end end end

Illustrative: capital structure of US wind

activity (%)

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Life-time

Institutional partners liability

Once construction is done Partners pay lump-sum

equivalent to the tax benefits of the first 10 years

Partners receive tax credits (PTC +

MACRS) and cash-flow from the

project between flip-dates to achieve

agreed IRR

Partnership structures to allow to capture the

full value of the projects

New structure: Vento III – 604 MW

The lack of taxable base postpones the benefit from

the tax credits granted: tax partnerships will enable

to capture the time value of money of tax credits

177 MW 358 MW 71 MW

Installed

Under

construction

end-2008

Under

construction

1Q09

Vento III undergoing due diligence process

Equity

Financial Debt

Conclusion

1919

Current share price not even discounts the replacement cost of Current share price not even discounts the replacement cost of Current share price not even discounts the replacement cost of Current share price not even discounts the replacement cost of the existing assetsthe existing assetsthe existing assetsthe existing assets

Enterprise Value

(€ millions)

Equity @ 4.50 3,925

Net Debt 9M08 513

Minorities 9M08 343

Enterprise Value 5,551

Institutional Partners 9M08 769

EV / MW

(€m/MW)

Works in progress 9M08 1,229

Capex already incurred with projects under construction

and development

-

1.23

3,502 EBITDA MW

0.78

@ 4.50

Price to Book

(x)

9M2008

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