H04/1630 Korea Midland Power Co., Ltd. Investor Presentation April 2004

H04/ Investment highlights Strong credit rating of A3/A- Solid fundamentals Leading financial profile Robust demand of electricity Proven operational track record Competitive mix of base and non-base load power plants

H04/1630 Agenda  KOMIPO Overview  Business Operation  Korean Power Industry  Financial Highlights

H04/ KOMIPO’s origins are linked to successfully supplying power to Korea for over 100 years Future “Jump to the Best Power 2008 Plan” Strategic initiatives:  Price competitiveness  Financial soundness  Knowledge management  Results-oriented management system  Improved research and development  Environment- friendly corporate culture  Employee friendly corporate culture 1898  Korea’s first electric power company founded 1982  KECO was renamed Korea Electric Power Corporation (“KEPCO”) 1961  Korea Electric Company (“KECO”) was established by merging regionals to form one national electric company 2000  Laws to reform the Korean electric power industry were passed in congress 2001  Korea Midland power Co., Ltd. (“KOMIPO”) was founded and began its power generation business 2002  “Power Up Cost Down” campaign to lower production costs while maximizing profits  Awarded gold medal from President  Award grade prize for management innovation among gencos

H04/ KOMIPO is 100% owned by KEPCO KEPCO KOMIPOKOSEPEWPKOWEPOKOSPOKHNP KOMIPO is wholly owned by KEPCO We will update logos

H04/ Financial snapshot Credit Ratings  International: A3 (Moody’s) / A- (S&P)  Domestic: AAA (KR) / AAA (KIS) Debt  KRW 401 billion (US$334 million)  Debt-to-Equity Ratio : 19.3% Equity  KRW 2,082 billion (US$1,739 million)  Stake is Wholly Owned by KEPCO Revenues  KRW 1,811 billion (US$1,512 million)  EBITDA : KRW 509 billion (EBITDA margin: 28.1%) Profitability  Net Income : KRW 347 billion (US$290 million)  Net Margin: 19.2 % Assets  KRW 2,741 billion (US$2,289 million)  Fixed Assets/Total Assets Ratio : 88.14% Note: Figures as of December 31, 2003 US$1=KRW1,197.8

H04/ KOMIPO ratings are equivalent to the sovereign A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 A- BBB+ BBB BBB- BB+ BB BB- B+ Moody’sS&P KoreaA3A- KDBA3A- KEPCOA3A- KOMIPOA3A- Moody’s and S&P script/excerpts  Text Moody’s Standard & Poor’s

H04/ FFO/debtDebt/capitalFFO/interest cover* %x KOMIPO’s credit is characterized by dramatic improvements… EBIT/interest cover*EBITDA margin Return on permanent capital x%x * Interest includes capitalized interest Source: Company data

H04/ FFO/debtDebt/capitalFFO/interest cover* %x … and KOMIPO compares favourably to its genco peers EBIT/interest cover*EBITDA margin Return on permanent capital x%x 2003 Financial ratios * Interest includes capitalized interest Source: Company data

H04/1630 Agenda  KOMIPO Overview  Business Operation  Korean Power Industry  Financial Highlights

H04/ Overview of Korea Generation Capacity National Generation Network KHNPKOSPO EWPKOMIPO KOWEPCO Seoul Busan Ulsan Daegu Kwangju Daejon Incheon KOSEP KOMIPO Non-Nuclear Capacity Share: 21% Note:As of September 30, 2003 Source:KOMIPO Total Generation Capacity: 53,801MW Source:Statistics of Electric Power in Korea, KEPCO (2003) KOMIPO is one of 5 thermal gencos spun off from KEPCO in 2001

H04/ Seoul Boryeong Seocheon Incheon Jeju Each Power Plant Has A Unique Advantage Seoul Thermal Only power plant in Seoul Provides district heating to Seoul Incheon Thermal Strategic location in metropolitan area Environmentally-friendly Boryeong Thermal Named World’s Best Power Plant (Electric Power International, 1996) Korea’s first long-term trouble free plant Boryeong CC Most efficient CC plant Low variable unit cost Seocheon Thermal Strategic to local coal industry Yangyang Hydro Largest pumped storage hydro power plant Each KOMIPO power plant has strong competitive fundamentals Jeju Thermal Major generator on Jeju island Yangyang

H04/ Key highlights of KOMIPO’s business profile KOMIPO is distinguished by its operational competitiveness and structural advantages Robust demand for power Robust demand for power Attractive base load/peak load mix Attractive base load/peak load mix Solid operating efficiency Solid operating efficiency Competitive, low-cost fuel supply Competitive, low-cost fuel supply Effective labor management Effective labor management

H04/ The electricity industry is characterized by rapid demand and capacity growth… Source: The First Basic Plan of Long Term Electricity Supply & Demand (Aug 2002), MOCIE. Supply and demand have historically been regulated and well-balanced. Reserve margins will range between 14% and 25% over the next 10 years

H04/ Plants under construction will enhance KOMIPO’s competitiveness in 2005, 2006 and 2008 … on which KOMIPO leverages via our optimal capacity expansion plan KOMIPO forecast generation capacity MW Note: Base = all coal-fired (imported and domestic) plants, Peak = Oil, LNG and Hydro plants Source: Company data

H04/ Base and middle load plants among Korea’s most competitive Attractive base load / peak load mix 1 Includes capacity under construction as of December 31, 2003 Note: Base = all coal-fired (imported and domestic) plants, Non-base = Oil, LNG and Hydro plants 2003 Power sold GWh Installed capacity of gencos 1 MW

H04/ Capacity (MW) # of units Load type Fuel Efficiency (%) Utilization (%) Weighted avg. age (yr) Seoul Thermal Incheon Thermal Jeju Thermal Incheon CC Yangyang Hydro Seochon Thermal Boryeong Thermal Jeju Thermal Solid operating efficiency All major power plants have a proven track record and are fully depreciated 3,0001, , , Base Non- base Base Non- base Base Non- base CoalLNGCoalLNG OilLNGHydroCoalOil To be complete Jun To be completed Jun 2006 To be completed Dec 2008 To be completed Jun Source: Company data Boryeong Thermal Boryeong CC Over 85% of salesUnder construction

H04/ “Power Up, Cost Down” Initiatives “Power Up”  Optimize facilities operation Major Activities Impact Achieved (example)  Genco facility improvement (KRW 20 bn) - Plant efficiency  and auxiliary power  - Installed soot blower at Boryeong CC - Introduced plant efficiency and operation optimization program KOMIPO has reduced cost and increased efficiency through its “Power Up, Cost Down” initiatives  Improve efficiency for construction project management  Design improvement for Yangyang plant (KRW 30 bn)  Maximize power trading sales  Realization of Jeju capacity payment (KRW 29 bn) “Cost Down”  Pursue economic efficiency in purchasing and supply management  Reduced bituminous coal freight cost (KRW 13 bn)  Localization of equipment/material (KRW 11 bn)  Develop e-P&I for total generation facilities management  Reduced maintenance lead time and systemized integration of design and maintenance information (KRW 7 bn)  Awarded first place among KEPCO and gencos for management innovation (Dec 2002)  Strengthen health of financial structure  Significantly reduced debt to one-third of the size from 2001  Shortened overhaul period (KRW 5 bn) - Decreased the period for design drawing - Applied automatic boiler tube inspection method  Improve maintenance method

H04/ KOMIPO is engaged in active fuel supply management Competitive low-cost fuel supply  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 Source: Company data KOMIPO 2003 fuel costs 874,985Amount Total Kogas 339,647843,293TonLNG 51,24179,390 ㎘ Diesel 2,0374,475 ㎘ Heating 38,378164,431 ㎘ HSFO Local Refiners 90,379326,564 ㎘ LSFO Oil Domestic 62,091809,744TonAnthracite Overseas 291,2127,893,985TonBituminous Coal Procurement sourceAmount (KRW million)VolumeUnitFuel

H04/ Competitive low-cost fuel supply (cont’d) Source: Company data  Spot coal prices as well as transport costs have risen dramatically: Rise in China domestic demand for coal Strengthening of Australian dollar Sharp rise in shipping demand from China’s import of iron ore  KOMIPO’s exposure to spot coal purchases in 2004 is expected to be 12.5% of total coal purchases due to effective fuel management  In 2004, KOMIPO will take additional measures to optimize this ratio to compensate against further rise in spot coal prices Australia FOB coal price trend US$/ton Coal transport price trend US$/ton2003 Monthly price: US$/ton

H04/ Effective labour management  KOMIPO’s management-labour relations are considered to be more cooperative than other gencos  Meetings are held every quarter for the purpose of more active management- labour discussion  KOMIPO actively pursues methods to stimulate employee morale through: Flexible management practices in face of changing work environment Improvement of the incentive program for exceptional employees Realization of a fair and rational promotion and rotation program Cultivation of high-quality personnel through various training and education programs Coordination of unity activities such as Physical Fitness Days, clubs and various cultural events

H04/ Secure long-term competitive edge via “Jump to the Best Power 2008 Plan” 2002— “Power Up, Cost Down” Optimize facility operation Improve maintenance method Improve efficiency for construction project management Maximize power trading sales Pursue economic efficiency in purchasing and supply management Develop e-P&I for total generation facilities management Strengthen health of financial structure Jump Initiatives  Price competitiveness  Financial soundness  Knowledge management  Results-oriented management system  Improve research and development  Environment-friendly corporate culture  Employee-friendly corporate culture Result: The Best Power Company in 2008

H04/1630 Agenda  KOMIPO Overview  Business Operation  Korean Power Industry  Financial Highlights

H04/ Restructuring is aimed at improving efficiency Competition to increase efficiency in the industry Tariff reforms intended to “gradually” liberalize electricity prices to ensure a stable power generation environment Competitive generation and distribution market Provide long-term, inexpensive and stable electricity supply in Korea Consumer choice

H04/ Restructuring has made gradual progress MOCIE announces the restructuring plan for power industry Corporatization of generation companies Initiate privatization process for KOSEP Cost based pool bidding mechanism Introduction of vesting contracts for gencos Spin off distribution sector from KEPCO Expiration of vesting contracts Retail competition Wholesale competition Under Review Planned, conservative phased-in restructuring due to the importance of stability in the power industry

H04/ KOMIPO has begun to prepare for the next stage of industry deregulation Key next stepsKOMIPO response  Privatization process has been reviewed  KOMIPO is in constant contact with the relevant bodies in order to maintain our awareness of the progress of the privatization process  Cost-based pool has been established  Optimization of operation efficiency  Lowest cost fuel procurement  “Power-up Cost-down”  Introduction of vesting contracts is the next step  KOMIPO represents the gencos in 10 of the 14 committees that are responsible for the review and determining of the electricity transaction policies  Separating distribution assets is being reviewed  Due to the strategic location of generation facilities around the metropolitan areas, KOMIPO has the cost-competitive advantage

H04/1630 Agenda  KOMIPO Overview  Business Operation  Korean Power Industry  Financial Highlights

H04/ Key Financial Highlights Exceptional financial fundamentals supported by competitive operations

H04/ Proven Track Record of Stable Financial Performance Revenue (KRW bn) EBIT (KRW bn) EBIT margin (%)

H04/ Capital expenditure plan (Unit : KRW billion) 2004F2005F2006F2007F Generation plant construction Yang Yang Hydro Inchon CC Boryeong Thermal #7 & Jeju Thermal Kunjang Thermal site Recurring investments Improvement of existing generation facilities Other investments Other asset investments Total investments Source: Company data

H04/ Debt Profile Summary Note:As of Sep 30, 2003 No significant contingent liabilities 36.8% (KRW bn) ST debt 63.2% (KRW bn) LT debt 19.7% (KRW 86.4 bn) Foreign 80.3% (KRW bn) Local KRW bn 16.8% (KRW 73.7 bn) Local currency borrowing 19.7% (KRW 86.4 bn) Foreign currency borrowing 69.1% (KRW bn) Fixed rate 30.9% (KRW bn) Floating rate Type of InterestType of Borrowing Debt Maturity Profile Short Term vs Long TermLocal vs Foreign Currency (KRW bn) Bonds 63.6%

H04/ Review of KOMIPO’s investment highlights Solid fundamentals Strong credit rating of A3/A- Competitive mix of base and non-base load power plants Leading financial profile Proven operational track record Robust demand of electricity