FELIPE LARRAIN A. CEO – AGUAS ANDINAS ISTANBUL – MARCH 2009 EFFICIENCY AND GOOD PRACTICES IN SANTIAGO DE CHILE

I. CHILEAN WATER SANITATION SECTOR II. AGUAS ANDINAS – DESCRIPTION III. AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS IV. FINAL COMMENTS

PRIVATIZATION PROCESS CHILEAN WATER SANITATION SECTOR Privatization process began in 1998 –until then all companies were State-owned Today: 95.3% of customers are serviced by privatized companies Two concession models: - Unlimited period - 30 years Ownership of water rights and assets

Regulatory framework –set forth by Law- has approved the stability and transparency of the system during its 20 years operation CHILEAN WATER SANITATION SECTOR REGULATORY FRAMEWORK Main Features: Role of regulator separate from the service provider role Clear and transparent rules -same for all operators Government subsidies for low-income families Low level of non-payment Total Privatizations 6 Concessions 8

Aguas Andinas supplies over 6.2 million residents in Greater Santiago and rest of the country, with 100% drinking water coverage, 98% sewage and 74% waste water treatment AGUAS ANDINAS, DESCRIPTION GRUPO AGUAS Revenues Drinking Water Volume Customers 46% 53% 43% 345 million 492 million m 3 1,828,328 customers MARKET SHARE (2008) R.M. Santiago Aguas Andinas X y XIV Regi ó n Puerto Montt Essal OWNERSHIP STRUCTURE

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS Efficient Management of Total Water Cycle Adoption of state-of-the-art Technology Continuous improvement of service to Our Customers Major Investments in sewage treatment

EFFICIENT MANAGEMENT OF THE TOTAL WATER CYCLE AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS World Class service at our facilities raw water Capture/Regulation drinking water Production drinking water Distribution waste water Collection waste water Purification Return to the environment customer Service

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS 82% surface and 18% underground sources El Yeso Dam 220 Hm 3 Laguna Negra 600 Hm 3 TOTAL WATER CYCLE MANAGEMENT raw water Capture/Regulation

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS TOTAL WATER CYCLE MANAGEMENT Over 720 million m 3 of drinking water produced per year 16 production plants Las Vizcachas Plant 16 m 3 /s La Florida Plant 4.5 m 3 /s 214 wells in operation drinking water Production

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS TOTAL WATER CYCLE MANAGEMENT 100% drinking water coverage 530 km of large aqueducts 14,845 km network 188 deposits - 957,000 m 3 81 pumping plants drinking water Distribution

1,828,328 subscribers 18 Commercial Agencies: 700,000 queries per month Call Centre: 125,000 calls per month AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS TOTAL WATER CYCLE MANAGEMENT customer Service

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS TOTAL WATER CYCLE MANAGEMENT 12,100 km network 98 % sewage coverage 700 km preventive maintenance per year 20 hydro wash and collector cleaning trucks waste water Collection

Waste water treatment coverage: -Today74% -Late % % 15 waste water treatment plants Main waste water treatment plants: -La Farfana – mean flow 8.8 m 3 /s -El Trebal - mean flow 4.4 m 3 /s waste water Treatment Return to the environment AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS TOTAL WATER CYCLE MANAGEMENT

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS ADOPTION OF STATE-OF-THE-ART TECHNOLOGY Technological Contribution by AGBAR World Class tools and latest developments -Operations Control Centre -Adoption of SAP throughout Grupo Aguas -Geographic Information System New Customer Service (CRM by Oracle) and Integrated Commercial Management Platform

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS Drinking Water Service: -Continuity: 99.8% Waste water Collection Service: -Continuity : 99.9% Commercial Management: -Mean Claim Response Time: 0.5 days/claim Regular community surveys 18 Commercial Agencies: 700,000 queries per month Call Centre: 125,000 calls per month CONTINUOUS IMPROVEMENT OF SERVICE TO OUR CUSTOMERS

Source: Estudio Imagen 2008 AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS CONTINUOUS IMPROVEMENT OF SERVICE TO OUR CUSTOMERS WHICH ARE THE MOST IMPORTANT BASIC HOUSEHOLD SERVICES? 1 ST SPONTANEOUS MENTION WHICH OF THESE COMPANIES DO YOU CONSIDER THE BEST?

Environmental Problem in 90s Decade Raw Sewage discharged to Natural Sources: Public Health problems. Impact on flora and fauna. Disruption of agriculture. AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS METROPOLITAN REGION WATER SANITATION PLAN Localities Existing Plants Future Plants Future Collector N o of Plants61516 Flow Treated0.48 m 3 /s13.7 m 3 /s15.5 m 3 /s Biosolids0 ton/day794 ton/day814 ton/day Residents Served 180,0005,500,0006,300,000 Coverage3%87%100% Total Accumulated Investment MM 488MM 654

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS METROPOLITAN REGION WATER SANITATION PLAN El Trebal: Operation start-up in October million investment Capacity 4.4 m 3 /s La Farfana: Operation start-up: September 20 th million investment Capacity : 8.8 m 3 /s MAIN PLANTS:

AGUAS ANDINAS – MANAGEMENT ACHIEVEMENTS METROPOLITAN REGION WATER SANITATION PLAN Treatment Outputs WASTE WATER TREATED WATER irrigation and health BIOSOLIDS nutrients soil recovery BIOGAS renewable energy WASTE WATER TREATMENT PLANTS

CONCLUSIONS FINAL COMMENTS Having a stable and transparent regulatory framework in Chile has reassured investors and created an atmosphere of trust and understanding with the regulator In the water sanitation sector, Aguas Andinas is the leading company in Chile and a benchmark for Latin America Total Water Cycle Management for over 6.2 million people leads to operational optimization and synergy Agbar has played a fundamental role in the technological development and management of Aguas Andinas