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J . P . M O R G A N E N V I R O N M E N T A L M A R K E T S

Odin Knudsen, Global Head of Origination

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English_General

This presentation was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by JPMorgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan.

The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. JPMorgan’s opinions and estimates constitute JPMorgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. JPMorgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects.

Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by JPMorgan.

JPMorgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. JPMorgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors.

IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

JPMorgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan plc, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A. JPMorgan deal team members may be employees of any of the foregoing entities.

This presentation does not constitute a commitment by any JPMorgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services.

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Market size

Carbon Market Overview Regulatory framework Tradable units 2007 2012E

EU ETS EU Emissions Trading Scheme

Largest multi-national, GHG emissions trading scheme globally

Commenced operation on 01/01/05

JI and CDM credits eligible via “Linking Directive”

Compliance EUAs (EU Emissions Allowance)

46 325

Other Kyoto compliance

Protocol to the UN Framework Convention on Climate Change (UNFCCC)

Assigns mandatory emission limitations for the reduction of GHG emissions to the signatory nations Key nations include:

Japan

Canada

Kyoto driven compliance CERs (Certified Emissions Reduction/ERUs (Emission Reduction Units)

20 140

North America pre-compliance voluntary

Entities (including corporations, governments, and individuals) voluntarily participate in the reduction of their GHG emissions

U.S. is key market

Potential compliance market based on cap-and-trade bills in the senate

Voluntary/pre-compliance

Compliance

VERs (Verified Emissions Reduction)

0.2 3

42—1501

Total 66 510—618

$bn$bn

1 [Market value with carbon prices seen in EU-ETS, $30/tonne could be $150bn in 2012 and $250bn in 2015 (Warner-Lieberman Bill—Point Carbon Analyst Feb 2008]

Size of the environmental markets (update to 2008)

With growing linkages between these markets and the advent of a regulated US market, the environmental products market could approach $550+bn by 2012

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Ene-06 Abr-06 Jul-06 Oct-06 Ene-07 Abr-07 Jul-07 Oct-07 Ene-08 Abr-08 Jul-08 Oct-08

Dec07 (Phase I) Dec08 (Phase II)

€/t€/t

EU-ETS: EUA price hits 18-month low as economic woes are internalized in the carbon market

Release of ’05 data

Phases decouple as phase II is confirmed to be short

Source: JPMorgan, data as of October 27, 2008

2005 actual emissions were far lower in several countries than the number of allowances allocated. This combined with the inability to bank credits between the phases meant that the Dec07 heads to 0 and pulls Dec08 with it

EUA and CER prices may see recovery over the long term, but not until recession works its way through industry and the markets feels a continuing commitment to Phases II and III of the EU-ETS.

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0

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May-07 Jul-07 Ago-07 Oct-07 Nov-07 Ene-08 Feb-08 Abr-08 Jun-08 Jul-08 Sep-08

0%

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20%

30%

40%

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70%

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(€/t)(€/t)

Spread (%)

Dec 08 EUA/CER Spread

CER Dec08 (€/t)EUA Dec08(€/t)

Source: JPMorgan, data as of October 27th, 2008

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Some headlines:

— Dutch government takes over Fortis units (October 3, 2008– Financial Times)

— Financial Crises Spread in Europe (October 6, 2008– New York Times)

— Europe's €1,873bn bail-out boost (October 13, 2008– Financial Times)

— Europe acts to rescue banks (October 12, 2008– Financial Times)

— Bleak Numbers Stoke Fears of Recession in Europe (October 15, 2008– New York Times)

Major European utilities have seen strong decline in share prices since credit crunch emerged as crisis issue, and ultimately evolved into an economic recession

Decline of productivity in industrial sector in Europe and less demand for electricity will mean less emissions and therefore downward movements in EUA prices and less demand for CERs

— EUA price collapse unlikely due to bankability of EUAs throughout Phases II and III of EU-ETS, despite last week movements caused by overall commodities selling

Credit crunch deepens: Europe’s bleak outlook

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Compared value of the CER portfolios to the shareholder equityCompared value of the CER portfolios to the shareholder equity

Equity to Carbon Assets

Market players show stable decline in their share price since mid-2007… what are the causes?

Slower than expected registration of projects and issuance of credits by CDM-EB is reducing expected value of CER portfolios

Credit crunch is raising borrowing costs that could hurt ability to back forward contracts

Expected economic slowdown will reduce demand for credits delivered in 2009-2010, and possibly longer

AgCert was first casualty, but others could follow…

Source: Lehman Brothers; Companies’ websites

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-500

0

500

1,000

1,500

2,000

2,500

A1 A2 A3 A4 A5 A6

ShareholdersEquity mid 2008CER Portfolios

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Carbon

Company 1

Carbon

Company 2

Carbon

Company 3

Does it matter who do you contract with?

Market players show stable decline in their share price since mid-2007… what are the causes?

Slower than expected registration of projects and issuance of credits by CDM-EB is reducing expected value of CER portfolios

Credit crunch is raising borrowing costs that could hurt ability to back forward contracts

Expected economic slowdown will reduce demand for credits delivered in 2009-2010, and possibly longer

AgCert was first casualty, but others could follow…

Source: Google Finance

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European

Utility 1

European

Utility 2

European

Utility 3

Does it matter who do you contract with?

Credit crunch and fear of economic recession has affected valuation of utilities in Europe

Fears of recession generates expected reduction in energy sales and industrial production

Major EUA sale during last week from industry and utilities (price dropped EUR 3)

CER08 futures trading at higher prices than CER09-10, indicates expected reduction in emissions and reduced liability for capped actors

Source: Google Finance

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Given these problems, the market welcomes the entrance of large investment banks, who could provide liquidity and stability given their high credit ratings

But, fall of Bear Stearns, Lehman Brothers and decline of investment bank sector as a whole complicates this outlook

— Shift for Goldman and Morgan (Stanley) Marks the End of an Era (Sep 21, 2008 - New York Times)

As a result, the banking sector flies from risk and seeks to secure assets and positions by selling their carbon assets

— Lehman Brothers to sell carbon credit portfolio (Sep 15, 2008 - Point Carbon)

Investment banks moving in

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Big Bank 1

Big Bank 2

Big Bank 3

(JPM)

Banking sector

Banking sector’s decline prompted structural adjustment in the sector

Pure investment bank will cease to exist, as remaining investment banks applied for commercial licenses

This change will necessarily impose stricter regulations on banks and delay their foray in the carbon markets

Flight from risk has prompted banks to sell risky assets and focus on core business

Source: Google Finance

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Economic slowdown

AAU purchasing by sovereigns

No International Agreement post 2012: Economic crisis affecting the negotiation process

Oversupply of CERs

US limits CDM linkage?

EB delays in registration and issuance in key sectors

New participants

Australia: ETS to cover 450 Mt per annum

NZ: ETS to cover

Post 2012 International Agreement

US participation with linking to CDM

Potential shortfall of 0.53 Gt by 2012, rising to 2.04 Gt by 20201

CER Price Drivers

1Based on Lieberman-Warner, Source: World Bank, 2008

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The further threat to global market -- if resolve for post-Kyoto weakens, why would not Russia and Ukraine sell AAus at low price while they still have value?

Analysis suggests 1.5 Gt of probability adjusted AAUs will come to the market in 2008-2012 from eastern European countries (Point Carbon, 2008)

The potential surplus of AAUs is around 7.3 Gt (World Bank, 2008)

Downward pressure on CER prices towards 2011 as EU ETS demand is satisfied and the market is dominated by governments who have a lower willingness to pay for a CER, as they have the option of purchasing AAUs

— Downward forcing in price of 0.8 Gt of AAUs coming into market could amount to EUR 7 per CER (New Carbon Finance)

The threat of AAUs is more real than ever

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Political commitment has weakened even in North America -- Canadian liberal party loses election on carbon tax. US candidates stop taking about Cap and Trade but on Energy Security and Renewables

— Both US candidates have ambitious targets for climate mitigation

— CCX prices collapse (price)

EU summit renews commitment to ETS (despite giving essentially veto to Poland and Italy or any other country). Possible further increase of CER demand for Phase 3 of EU-ETS – from 1.68 Gt to 1.8 Gt

Financial crisis will possibly delay action on climate change

How is the financial crisis affecting the political mood towards a post- 2012 commitment?

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J.P.Morgan emerges as largest bank in the world

— JPMorgan passes Citigroup as largest U.S. bank (16 Oct, 2008 – Reuters)

J.P.Morgan’s model, a strong balance sheet and risk management systems, backed by a continuous cash flow from commercial banking, is being adopted by the rest of the investment banking sector

This positions J.P.Morgan as a prime counterparty for both buyers and sellers looking to trade their carbon assets

What is J.P.Morgan’s role?

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As a large global bank, we have a long term commitment to the environment - financial economic crisis will end, but climate change is here to stay as crisis issue

Climate Change and mitigation measures will generate both opportunities and impacts for businesses in the longer term - it fits into our core business to serve our clients’ needs, including in offsetting their obligations under any climate regime and in taking advantage of opportunities to derive value from their assets

We have a global business in energy commodities closely related to carbon -- we cannot extract pricing of energy from the pricing of carbon

Our sophisticated management of risk - we seek quality and hedge market risk to minimize impact of delivery

Clients of J.P.Morgan want to do business with us and trust us

Buy to order deals with major European utilities

Long-term carbon assets management agreements and partnerships with reputable project owners and developers

We also service the pre-compliance market and corporate social responsibility by providing VERs (such as in cook stoves, energy efficiency etc) to our customers

Why are we engaged?

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JPMorgan ContactsJPMorgan Contacts

JPMorgan Environmental Markets Latin America - Contacts

Santiago de Chile

Fernando CubillosHead of Latin America OriginationEmail: fernando.p.cubillos@jpmorgan.com

Matias SteinackerLatin America OriginationEmail: matias.x.steinacker@jpmorgan.comTelephone: +56 2 4255251

Why J.P.Morgan Environmental Markets?

Our people – the most experienced and reputable origination team in the market

Our global spread – dedicated local presence in 6 continents

Our financial strength – strong balance sheet and AA credit rating

Our customer philosophy – first class business in a first class way

J.P.Morgan Environmental Markets is the premier platform to facilitate the decarbonization of the world economy

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