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Roma, 6th June2007

Maritza East 3 Refinancing. Sylvie Leclercq Head of structured Export Finance. Roma, 6th June2007. Index. Project description Original Structure Original Financing Rationale for Refinancing Refinancing Structure R easons for the success Conclusion. Project Description.

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Roma, 6th June2007

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  1. Maritza East 3 Refinancing Sylvie Leclercq Head of structured Export Finance Roma, 6th June2007

  2. Index • Project description • Original Structure • Original Financing • Rationale for Refinancing • Refinancing Structure • Reasons for the success • Conclusion

  3. Project Description • Maritza East 3 is a lignite-fired 840 MW existing Power Plant (4 independent units of 210 MW each) • Refurbishment necessary to ensure competitiveness and long term future of the Power Plant • Improvement of environmental impact to comply with local and EU regulations • First Bulgarian IPP based on a long term Power Purchase Agreement (PPA) signed with NEK, Bulgarian national electricity utility

  4. Original Structure • In October 1998, a consortium comprising Entergy Power development Corporation (US-utility company) and NEK was awarded the ownership, refurbishment and operation of the Maritza 3 Power Plant. • EPC contract awarded to DSD Dillinger Stalhbau and RWE-IN in 2003 • Entergy replaced by ENEL • Main Project Agreements : • 15 year post completion Power Purchase Agreement (PPA) with NEK • 15 year post completion Lignite Supply Agreement (LSA) with MMI • Bulgarian Government Letter of Support

  5. Original Structure Domestic Customers NEK Exports 27% Equity PPA in Euros and Leva Intergy Replaced by ENEL Letter of Support Maritza East 3 Power Co Government of Bulgaria LSA 73% Equity MMI EPC Contractor

  6. Original Financing • EUR 348 million financing closed in February 2003 • Multi-source financing involving 18 institutions : International Banks supported by EBRD and MIGA and Local Banks • EBRD A + B Loans : EUR 132 million (9 year repayment period) • MIGA covered tranche : EUR 141 million (6 year repayment period) • Local tranche : Eq EUR 75 million (6 year repayment period) • Pricing exceeding 3%, reflecting « novelty » factor, power sector and Bulgaria country risk premium in 2003 • SG involved as one of the Mandated Lead Arranger and as Agent

  7. Rational for Refinancing • Pricing reflecting mid-2006 improved risk profile • Bulgaria country risk • 60% of the refurbishment works completed* • Lower debt cost to reduce tariffs payable by the offtaker • Maximize tenor • More flexible covenants and limited number of parties involved to simplify the operational management of the Project Company * The original EPC contractor faced serious technical problems which led to significant deals (18 months) and a dispute between the Sponsors and the Contractor. A new EPC Contractor was appointed (a consortium consisting of ENEL and RWE-IN) in early 2006.

  8. New debt : EUR 450 million • Flexibility on covenants (increased leverage, dividends distribution on completion of each unit) • Extended tenor (17 ½ year door to door, 14 year repayment) • SACE 100% comprehensive guarantee • Main conditions : • Debt to Equity : 75:25 • Security package including pledge of assets, shares accounts, direct agreements assignment of receivables • Enel Ownership clause Refinancing Structure

  9. Reasons for the success • Sound project economics (mini DSCR at 1.86 under the Base Case) • Efficient Due Diligence process involving advisors already engaged in the original transaction (lenders legal advisor and technical advisor) • Extremely good coordination between the Project Company, ENEL, SACE and SG • SACE ‘s strong support and expertise of the team • SG sole lender and agent • Arranging mandate signed at the end of May 2006 for a drawing to be made on September 30th 2006

  10. Conclusion • One of the Trade Finance Deals of the Year • Strong incentive given to Sponsors to consider ECA involvement under Project Finance structures • SACE « untied » product particularly well designed for refinancing (other transactions closed or to be closed)

  11. Contacts Thank you for your attention Tel.: +39 06.6736264 - 267 business.school@sace.it Sylvie Leclercq Head of structured Export Finance Tel 33 (0)1 42 14 50 20 sylvie.leclercq@sgcib.com

  12. Disclaimer • This presentation has been prepared solely for information purposes and should not be used or considered as an offer to sell or a solicitation of an offer to buy any insurance/financial instrument mentioned in it. • The information contained herein has been obtained from sources believed to be reliable or has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, SACE does not represent or warrant that the information is accurate and complete.

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