1. W02/5517 Korea Midland Power Co., Ltd. Management Presentation to Standard & Poor’s November 14, 2002

2. W02/5517 2 Agenda  Executive summary  KOMIPO overview  Key profit drivers and KOMIPO advantages  Assessment of deregulation and privatization  Robust financial profile

3. W02/5517 3 IssueKey objectives Credit rating  Obtain confidential long-term foreign currency issuer ratings for Korea Midland Power Co., Ltd from S&P  Establish a ratings platform for future fund-raising activities in the global debt market Information Memorandum  Highlight KOMIPO’s exceptional creditworthiness through its: forward-looking management approach to changes in the industry leading market position due to its superior operating efficiency and cost control strategy very strong cash flows resulting from the most competitive unit cost of generation; and strong financial discipline and sound debt protection measures KOMIPO seeks to obtain confidential foreign currency issuer credit ratings from S&P

4. W02/5517 4 Key highlights of KOMIPO’s business profile  KOMIPO represents the gencos on 10 of 14 deregulation committees  Proximity to major end- user markets  Seoul and Jeju plants play key local roles  Proximity to major end- user markets  Seoul and Jeju plants play key local roles  Plants under construction will enhance KOMIPO’s competitiveness in 2005, 2006 and 2008  Active fuel supply management  Base and middle load plants among Korea’s most competitive  Boryeong Thermal is Korea’s lowest unit cost thermal power plant  Overall efficiency will increase with new Boryeong CC  Boryeong Thermal is Korea’s lowest unit cost thermal power plant  Overall efficiency will increase with new Boryeong CC Robust demand for power Quality of personnel Strategically sited facilities Attractive base load/ peak load mix Solid operating efficiency Competitive, low-cost fuel supply KOMIPO is distinguished by its operational competitiveness and structural advantages …

5. W02/5517 5 KOMIPO stands at the leading edge of Korea’s thermal generation sector as differences in credit quality become increasingly clear 1 FFO = Net income + Depreciation and Amortization Includes capitalized interest Key highlights of KOMIPO’s financial profile … which are underscored by KOMIPO’s industry-leading financial performance

6. W02/5517 6 Agenda  Executive summary  KOMIPO overview  Key profit drivers and KOMIPO advantages  Assessment of deregulation and privatization  Robust financial profile

7. W02/5517 7 Seocheon (400) Boryeong CC (1,800) Boryeong (3,000) Incheon (1,150) Incheon CC (450) Seoul (387.5) Seoul Incheon BukJeju (255) Seoul Thermal  Only power plant located in Seoul City  Valuable contributor of heat and power  Strategic location Incheon Thermal  Environmentally-friendly Incheon CC  To be completed by 2005  Low variable unit cost Boryeong Thermal  Named as world’s best coal power plant  Track record of lowest unit costs Seocheon Thermal  Uses domestic anthracite coal  Strategic to local industry Boryeong CC  Korea’s largest LNG combined-cycle plant  Low variable unit cost  High utilization Jeju Thermal  Captive demand  Rapid economic growth  Will benefit from unbundling of transmission costs Yangyang (1,000) Yangyang Hydro To be completed by 2006 Korea’s largest pumped- storage power plant Each of KOMIPO’s plants contribute valuable operational and strategic strengths

8. W02/5517 8 EBITDA margin Net income margin 2H2001 and 1H2002 genco margin comparison KOMIPO is one of Korea’s strongest and most profitable generation companies

9. W02/5517 9 KOMIPO is organized along two co-ordinating business divisions KOMIPO’s organizational structure President & CEO Executive Auditor Administration DivisionEngineering Division Corporate Planning Department Administration Department Business Department Power Generation Department Power Construction Department Boryeong Thermal Power Seoul Thermal Power Incheon Thermal Power Seocheon Thermal Power Jeju Thermal Power Yangyang Pumped Storage Power

10. W02/5517 10  Cost reduction  Implement eGen system to optimize facility operation and management  Preparation for electricity trading under TWBP Strengthening internal capability 2001 - 04 2004 - 09 2009 and after Securing competitive position  Optimize efficiency together with cost reduction  Improve overall organization and management system to enhance competitiveness Global best practices  Raise overall capacities to global standards  Growing market share as new facilities are completed Start privatization process for five gencos Split transmissio n companies from KEPCO Adopt full scale of retail contestability Begin two way bidding pool system KOMIPO is currently in the first phase of its medium-term business plan

11. W02/5517 11 2001 net generation GWh Installed capacity of gencos 1 MW 1 Includes capacity under construction Note: Base = all coal-fired (imported and domestic) plants, Peak = Oil, LNG and Hydro plants KOMIPO’s share of peak load generation will increase as new competitive power plants under construction are completed, such as Boryeong CC and Incheon CC KOMIPO enjoys an attractive slice of the base load market

12. W02/5517 12 1H02 sales revenue by power plant 1H02 sales volume by power plant Source: Company data, January to June 2002 GWhKRW bn The Boryeong power plant is KOMIPO’s flagship facility and major earnings driver

13. W02/5517 13 Power projects under construction Power projects under consideration Yang Yang Pumped Water Power Project (1,000MW) Incheon Combined Cycle Project (450MW) Boryeong Thermal Power Project (1,000MW) Boryeong Thermal Power Project (1,600MW) KOMIPO’s capacity will expand from 2005 onwards

14. W02/5517 14 Agenda  Executive summary  KOMIPO overview  Key profit drivers and KOMIPO advantages  Assessment of deregulation and privatization  Robust financial profile

15. W02/5517 15 KOMIPO has demonstrated strong results with its “power up, cost down” approach Increased power generation Reduced operating expenses Robust demand for power Quality of personnel Strategically sited facilities Attractive base load/ peak load mix Solid operating efficiency Competitiv e, low-cost fuel supply Profitable generation is determined by a genco’s ability to increase utilization and reduce costs

16. W02/5517 16 Source: MOCIE, First Basic Plan for Demand and Supply of Electricity, 2002-2015, most probable plan Peak power demand and capacity projections GW Reserve margin % Robust demand for power The electricity industry is characterized by rapid demand growth and capacity growth  Power demand is expected to grow rapidly at a rate of 3.3% p.a. from 2002-2010  Tight reserve margins of 15%  Planned capacity expansion of 23,813MW between 2002- 2010  Tight reserve margins underline individual importance of all 6 power gencos to maintaining the stability of supply

17. W02/5517 17 Present installed capacity of gencos MW KOMIPO forecast generation capacity MW KOMIPO has started construction on an additional 1,000MW baseload thermal power plant in Boryeong and is considering another 1,600MW at the same site Note: Base = all coal-fired (imported and domestic) plants, Peak = Oil, LNG and Hydro plants Source: Company data Robust demand for power Construction underway will expand KOMIPO’s peak generation capacity in 2005 and 2006

18. W02/5517 18 Accumulated number of 1H2002 SMP merit order determination Accumulated number of 1H2002 BLMP merit order determination Source: KPX After KHNP’s nuclear facilities, Boryeong is the country’s most efficient power plant Attractive base load/ peak load mix The flagship 3,000MW Boryeong Power Plant is Korea’s most competitive thermal generation facility

19. W02/5517 19 Attractive base load/ peak load mix Merit order as of October 2002 Source: KPX Attractive base load/ peak load mix KOMIPO enjoys good representation across base, middle and peak load segments

20. W02/5517 20 Source: KPX 1H 2002 SMP merit order Attractive base load/ peak load mix The Boryeong CC and Seocheon plants also have a solid position in the middle and peak load markets

21. W02/5517 21  Unbundling of transmission costs  Lower transmission costs: particularly Seoul, Incheon and Jeju island  Peak periods of transmission congestion Trend of power sold by province Advantages of location Cheongpyong (79.6) Muju PS (600) Seocheon (400) Boryeong CC (1,800) Boryeong (3,000) Taean (3,000) Tangjin (3,000) Pyongtaek (1,880) Pundang (900) Cheongpyong PS (400) Incheon (1,150) Youngheung (1,600) Puchon (450) Incheon CC (450) SeoIncheon 3,4 (1,800) SeoIncheon 1,2 (1,800) Hanhwa (1,500) Anyang (450) Seoul (387.5) IIsan (900) Seoul Incheon H Paldang (120) Strategic ally sited facilities KOMIPO’s facilities are close to Korea’s major energy end-user markets

22. W02/5517 22 Power generation forecast GWh Utilization and thermal efficiency forecast % Source: Company data Decrease due to completion of Yang Yang hydro and Incheon CC in 2005/6 Solid operating efficiency Going forward, efficiency is expected to increase as the new Boryeong CC increases its generation * Note that Yangyang Hydro distorts utilization rate because of its size (1,000MW). Hydro power plants do not typically operate beyond a 10% utilization rate * ‘05E and ‘06E utilization rates exclude Yang Yang

23. W02/5517 23  e-Gen planning committee was formed in Jan. 2002  Task force teams have been formed  Responsibility for repair, maintenance management and improved procurement of raw materials  In the next step, KOMIPO will appoint a consulting firm  Setup of a 2-phase Employee Information System  Development of a “one-stop” generation maintenance management system  Establishment of an integrated management system  Full electronic purchasing Core strategic objectivese-Gen master plan The e-Gen management strategy will integrate and optimize all management systems in operation and maintenance of power plants, mobilization of materials and fuel, power trading, and financial affairs and accounting Solid operating efficiency KOMIPO’s e-Gen initiative will help to catalyze further improvements in efficiency while lowering costs

24. W02/5517 24 KOMIPO LNG usage Thousand tons KOMIPO bituminous coal usage 1 April-December 2001 LNG consumption is expected to increase as Boryeong CC comes onstream Competitive, low-cost fuel supply KOMIPO’s fuel requirements are expected to grow steadily as generation capacity increases KOMIPO anthracite coal usage Million tons KOMIPO heavy oil/crude petroleum usage Thousand kL

25. W02/5517 25 Source: Company reports Comparison of operating expenses (1H 2002) % of sales Competitive, low-cost fuel supply KOMIPO’s active fuel supply management provides a cost advantage over the other thermal gencos  Bituminous coal. Fuel procurement strategy takes advantage of current market dynamics and the projected industry cycle to lock in fuel prices at low prices  Anthracite coal. Determined by the Korean government  Oil. Calculated as FOB (linked to the spot market price) + an additional bid cost, determined quarterly through a competitive contract  LNG. Procured from KOGAS through a long-term contract  KOMIPO minimizes fuel supply risk by diversifying suppliers, daily verifying inventory volume and imposing penalties on short supply

26. W02/5517 26 Procurement cost per Gcal Jan-Jul 2002 Bituminous coal KRW/Gcal  The fuel purchase price of each company depends on its purchasing techniques and experience. The keys to success are timing and volume  KOMIPO has a demonstrated competitive advantage in fuel supply management. In 2001, the company enjoyed the second-lowest unit cost of generation (KRW7,300/Gcal, versus KOWEPO’s KRW7,290/Gcal)  In 2002, KOMIPO has secured the lowest fuel purchase prices overall  For 2003, KOMIPO has already secured 1,320,000 metric tons of coal at low market prices Competitive, low-cost fuel supply As a result, KOMIPO enjoys the lowest variable unit cost of generation among the thermal gencos

27. W02/5517 27  KEPCO experience. KOMIPO has a large proportion of former KEPCO specialists  Recognized leadership. KOMIPO represents the gencos on 10 committees out of a total of 14 committees, including the genco expense evaluation committee and transmission fee committee  Innovation. KOMIPO was the first genco to develop a settlement program for power trading  Location advantages. KOMIPO is highly sought after due to its plant locations  Management commitment. KOMIPO is focused on human resource development: by providing overseas exposure or spot study opportunities to junior resources KOMIPO subsidizes 50% of the total tuition for selected workers who go to business school Attracting and retaining talentExceptional experience KOMIPO will capitalize on its understanding of power market dynamics as it models power demand, supply and its own bidding strategy Quality of personnel KOMIPO’s experienced personnel are a key advantage as it forms its prepares for increased market deregulation

28. W02/5517 28 Training InternalExternal Collective training On-site training Rotational training Domestic Abroad  Central Training Center  Generation Training Center  Specialist Training Agencies Orientation Training Personal Development Training Strategy/ Management Training Cultivation of Core Specialists Working Level Specialist Training  New employees  Senior employees –New junior managers –New mid-level managers  Management strategy  Organizational culture  Understanding reform  Business management  Quality management  Manager course  Business management  Labor- management relations  Power exchange  Financial management  Project management  Senior management  General employees  Functional employees  Government employees  E-learning –Job –Language –Others Quality of personnel KOMIPO aims to cultivate its human resource competitiveness through its training system

29. W02/5517 29 KOMIPO hopes to further build upon its competitive advantages going forward Strengthening management analyses for efficient resource allocation Managing new capacity construction Focusing on negotiating lower prices Leverage experienced personnel in TWBP preparation Robust demand for power Quality of personnel Strategically sited facilities Attractive base load/ peak load mix Solid operating efficiency Competitive, low-cost fuel supply Improved understanding of industry demand for TWBP Improving maintenance programs and shutdowns

30. W02/5517 30 Agenda  Executive summary  KOMIPO overview  Key profit drivers and KOMIPO advantages  Assessment of deregulation and privatization  Robust financial profile

31. W02/5517 31 Wholesale market Discos Retail Market regulation Gencos Phase IPhase IIPhase III Phase IV 1999200120042009 Preparation of Cost Based Pool (“CBP”) Establishment of KPX Launch of CBP Preparation of Two- way Bidding Pool (“TWBP”) Launch of TWBP Vesting contracts Separation of assets into Gencos Separation of Gencos effective First phase of Genco sales program Second phase of Genco sales program Establishment of separate distribution companies Disco sales programContinuation of Disco sales program (if not completed in Phase III) Implementation of new T&D tariff Full fledged retail competition Establishment of KOREC Introduction of retail competition Necessary legislation enacted Note: KOREC: Korean Electricity Commission KPX: Korea Power Exchange CBP: Cost Based Pool TWBP: Two-way Bidding Pool The electricity industry restructuring plan will introduce competition in the power sector

32. W02/5517 32 Forecast and management of new capacity  Power industry growth projections are detailed in the First Basic Plan. KOMIPO makes its own plans/forecasts accordingly, which are reviewed every two years  The decision to construct new facilities at Incheon and Yang Yang was decided by KEPCO. In contrast, KOMIPO independently decided to build Boryeong #7 and #8, and #9 and #10 are under consideration Prepare for Two-Way Bidding Pool  KOMIPO believes that the key to successful bidding is the ability to understand and forecast system demand under a competitive pool market  The Electricity Supply/Demand Comprehensive System is being adjusted for the TWBP  KOMIPO team members include members formerly from the KEPCO forecasting team Expectations on vesting contracts  Prepare for large-scale contracts with customers in the next 3-5 years  Vesting contracts will be enacted as a transition toward an open and stable market. Volume and price of vesting contracts will be determined in 2003, and vesting contracts are expected to go into effect April 2004. Vesting contracts will initially account for about 95% of sales, then gradually decline as they are phased out by 2009 Key next steps KOMIPO has begun to prepare for the next stage of industry deregulation

33. W02/5517 33 Agenda  Executive summary  KOMIPO overview  Key profit drivers and KOMIPO advantages  Assessment of deregulation and privatization  Robust financial profile

34. W02/5517 34 KOMIPO base case financial projections (2002-2006) Stable revenuesHealthy marginsLow gearingHigh liquidity Revenue growth % Revenue KRW tr EBITDA margin % EBITDA KRW tr Total debt/capital % Debt KRW tr EBITDA interest coverage x EBIT interest coverage x KOMIPO’s solid financials are expected to rapidly strengthen further over the near term

35. W02/5517 35 KOMIPO base case financial projections (2002-2006) Key underlying assumptions

36. W02/5517 36 Debt/ capital  Below 30% (currently 38%) 1 EBITDA interest coverage  Above 10.0 x (currently 6.1x) 1 Return on equity  Above 10.5% (currently 18.4%) 1 Key financial targets KOMIPO believes its business profile can support a conservative financial policy 1 As of June 30, 2002

37. W02/5517 37 KRW mm CAPEX and investment plan KOMIPO will remain free cash flow positive over the medium-term

38. W02/5517 38 KRW mm Key financial data and credit statistics

39. W02/5517 39 AAA AA A Business and financial profiles of generation companies Financial profile Business profile  TransAlta New Zealand Ltd.  KHNP  KEPCO  Singapore Power Ltd. A BB AA BBB A  Chugoku Electric Power Co. Inc.  Manila Electric Co.  National Power Corp.  Tenaga Nasional Berhad  Chubu Electric Power Co. Inc.  Tokyo Electric Power Co. Inc.  Taiwan Power Co.  SPI PowerNet Pty Ltd.  Australian Gas Light Co. (The)  Hongkong Electric Co. Ltd.  CLP Power Hong Kong Ltd.  EGAT  Huaneng Power International Inc.  KOSPO  KEWESPO  KOWEPO  KOMIPO KOMIPO believes that its financial profile, driven by strong operations, is a key differentiating factor

40. W02/5517 40 Thank you We thank S&P for taking the time to understand our financial and business profile