1. INTERNATIONAL POWER PLC Prepared by: Burakova Anna Kukina Elizaveta Kush Konstantin Smirnova Evgenia Moscow 2009

2. 2 Summary Buy! International Power PLC presents an effective object for shareholder investments. The company has a great potential in value creation for investors.

3. Contents Description of the company Financial policy analysis Operational efficiency Investment efficiency Market performance Expectations

4. International Power PLC is an international energy company It operates in 34 countries. The main region of its presence is Europe. Activities:  Electricity generation from traditional and inexhaustible resources;  Mining coal;  Transporting gas. In 2004 it made investments in additional capacity by making acquisitions in core regions of its operations

5. Financial policy: company saves tries to have stable capital structure In 2004 company financed its investments with both debt and additional shares. High portion of debt belongs to the acquired company. At the same time the other part of debt is restructured and secured by operations of the company Dynamics of interest coverage ratio presents strong position in the costs of debt Risks are under control!

6. Operational efficiency Company controls its liquidity; Operational indicators  Positive tendencies in Holding except US’s capacities  We believe, that company’s expectations will come true by 2009-2010 years  Otherwise the debt is non-recourse and the company will continue without US portfolio Assume client’s equity position will allow him to influence such decisions Existing investments are managed effectively!

7. Investments of 2004 will improve efficiently Sales/Capacity, F’000/MW 2001 2004 Company changed its area of allocation; Deals in 2004 will improve its investments efficiently; North America is still a problem region and presents a risk for the company. Its future stability is secured by the long contractors and recourse long term debt. New investments are being chosen thoroughly!

8. Multiples dynamics shows that Markets already takes into account changes in 2004 but financial statements do not. Market prices include investors’ expectations connected with acquired targets in 2004 Market anticipates changes positively!

9. Expectations based on Simple Valuation Model show that P 2005 =19.5$ Assumptions Risk free rate=5% Beta=0.9 Risk premium=4% Cost of capital=8.6% Sales in 2005=$2060m Net margin=12% Dividend repayment=40% Expected growth rate=5.16% P=$19.55 by the end of 2005 Base scenario (the highest probability) Market Value will anticipate future success!

10. Attachment 1. Sensetivity analysis