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 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 2001  € 115 million investment  Capacity 4.4 m 3 /s La Farfana:  Operation start-up: September 20 th 2003  € 240 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