0. Investor Presentation
Good [Morning/Afternoon]. My name is [ ], [Title] of Korea South-East Power Financing Team, and I will be going through this presentation with you today.
May 2012
Strictly Private and Confidential

1. Disclaimer
This document has been prepared by Korea South-East Power Co., Ltd. (the "Company"). This document does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with the document.
This presentation material is not an offer of securities for sale in the United States. Any securities referred to in this material ("Securities") may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and will contain detailed information about the company and management, as well as financial statements. No public offering of the Securities will be made in the United States, and the issuer does not intend to register any part of the offering in the United States.
This document contains “forward-looking statements”, which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words “targets”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “would”, “could” or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the economic, political and legal environment of Hong Kong, volatility in stock markets or in the price of our shares, financial risk management and the impact of general business and global economic conditions.
Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. These forward-looking statements speak only as at the date as of which they are made, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
Neither the Company, nor any of its agents, employees or advisors intends or has any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this document.
The information contained in this document is provided as at the date of this document and is subject to change without notice.
This document contains data sourced from and the views of independent third parties such as Ministry of Knowledge Economy. In replicating such data in this document, the Company makes no representation, whether express or implied, as to the accuracy of such data. The replication of any views in this document should be not treated as an indication that the Company agrees with or concurs with such views.
This document may not be taken away by you. The contents of this document may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
By participating in this presentation or by accepting any copy of the slides or documents presented, you agree to be bound by the foregoing limitations.

2. Table of Contents 1. Company Overview 2.
Industry and Regulatory Environment 3.
Business & Operations 4.
Financial Overview
Appendix. Financials
For today’s presentation, I will begin with an overview of company and the Industry and Regulatory Environment, followed by a detailed description of our Business and Operations. I will then cover our financial performance.
Should you have any questions, we would be happy to answered them at anytime of the presentation.

3. 1. Company Overview
Please allow me to first introduce our company.

4. Company Snapshot
KOSEP is a company specialized in power generation which had been a generation sector of KEPCO. KOSEP possesses 5 power plants with capacity of 8,396MW (As of Dec 31, 2011).
Major Business Area
Transmission & Distribution
Generation
KOSEP Introduction
Key Stats
Company Name
Korea South East Power Co.
Business Type
Power generation and etc.
Main Production Items
Electric power, heat
Establishment Date
April 2, 2001
Number of Employees
1,871
Assets
W6,457.6 billion
Liabilities
W3,272.8 billion
Sales
W4,394.6 billion
Capacity of Equipment
8,396MW
Power Generation Quantity
61,145Gwh
Credit Rating
A1 (Moody’s)/A (S&P)/ A+ (Fitch)
Thermal
(100%)
KOSEP
Republic of Korea
(A1/A/A+)
(51%)
(A1/A/A+)
KOMIPO
(100%)
(100%) WP
Position in the Power Generation Industry(2)
(100%)
EWP
KOSEP engages in the generation of electricity and development of electric power resources and sells all generated electricity to KEPCO through the Korea Power Exchange.
KOSEP is one of the 100% owned subsidiaries of KEPCO which in turn is 51% owned by the Korean government.
As of December 31, 2011, the company operated five power plants in the aggregate capacity of 8,396MW. Based on the actual power sales in 2011, KOSEP maintained 13% market share.
[One thing to note however is that on January 1, 2011, the company spun-off its water-pumped storage power operation which was merged into Korea Hydro & Nuclear Power (KHNP) which will be explained in further detail in section 3.]
(100%)
KOSPO
Nuclear & Hydro
(100%)
KHNP
Note: (1) As of December 31, 2011 (Unless specified otherwise).
(2) Based on power sales.

5. Leader of Korean Gencos
KOSEP holds an advantage of the lowest fuel cost and highest operating margin compared to other thermal Gencos.
Net Income
Operating Margin
(Unit: KRW billion)
(Unit: %)
Note: As of December 31, 2011 (K-IFRS Consolidated).
Note: As of December 31, 2011 (K-IFRS Consoildated).
Capacity Factor
Fuel Cost
(Unit: %)
(Unit: KRW/kWh)
When compared to other thermal GENCOs, KOSEP has been a consistent leader due its advantage in operational efficiency and cost control which is reflected in our financial performance – both in net income and operating margins.
We will further provide details of our operations and cost efficiently later in the presentation.
Note: As of December 31, 2011 (K-IFRS Consolidated).
Note: As of December 31, 2011 (K-IFRS Consolidated).

6. Historical Milestones
KOSEP was spun off from KEPCO as a part of the government’s reorganization plan.
2001
Established in April
Declared corporate vision and ethical guidelines
2003
Stopped the attempt to sell its controlling stake, and instead made a decision to pursue an initial public offering
Received A3 from Moody’s
Issued $150 million
Euro bond
2007
Completed 250kW Bundang Hydrogen-fuel cell power generation system
First ignition of Yonghung Thermal Power Plant #3
2011
Issued $300 million Euro bond
2001
2002
2003
2004~05
2006
2007
2008~09
2010
2011
2002
Selected as the first GENCO to be privatized
Obtained the highest domestic credit ratings of AAA
2004
Postponed IPO
Completed Yonghung Plant #1, 2
2005
Moody’s upgraded its ratings to A2
2006
Moody’s upgraded its ratings to A1
Issued $300 million Global bond
2008
Completed Yonghung Plant #3, 4
Officially ceased the IPO plan
S&P upgraded its rating to A
2009
Moody’s downgraded its rating to A2
Acquired 0.3% of PT Adaro Indonesia
2010
The government declared a new plan to restructure the electricity industry
Moody’s upgraded its rating to A1
KOSEP was incorporated on April 2, 2001 through a spin-off of the power generation division of Korea Electric Power Corporation (KEPCO).
Since its incorporation, there were attempts to privatize the company through an IPO but was officially scrapped in 2008.
During the past decade, KOSEP has issued three foreign currency bonds, with the latest one in July 2011 (US$300mm 3.625% Reg S notes due Jan 2017).
Source: Company data.

7. Key Credit Highlights Strong Government Support
KOSEP plays a key role in national electricity supply as one of the key power generators in Korea and was newly designated as
a market-based public
enterprise in 2011
KOSEP’s profit margins was higher than other thermal gencos ’s operating income margin was 6.1% and net income margin 3.3%
Strong Government Support
Strong Financial Performance
KOSEP is one of the most cost-effective thermal gencos with low unit cost
With a power generation capacity of 10.6% (8,396MW) out of total capacity, KOSEP generated 12.6% of the domestic power market in 2011
Cost -Effective Operation
Solid Market Position
There are 4 factors that I would like to highlight.
One, KOSEP receives strong government support as it plays a key role in the nation’s power supply.
Two, KOSEP maintains strong financial performance, and when compared to other thermal gencos, KOSEP had the highest profit margin.
Three, KOSEP has been cost-effective as evidenced by the lowest unit cost in producing electricity power.
Lastly, KOSEP maintains a solid market position in Korea’s power market – last year, KOSEP contributed 12.6% of the domestic power market in terms of power sales.
Note: As of December 31, 2011 (K-IFRS Consolidated). 7 7

8. 2. Industry and Regulatory Environment
In this section, I will provide an overview of electricity industry and the regulatory environment with a focus on the latest developments.

9. Committed and Continued Government Support
KOSEP plays a key role in national electricity supply as one of the key power generators in Korea.
Strong Government Support
Public Corporation Act
Electricity Business Law
Public corporation governed by the Public Corporation Act
Continued government support pursuant to legal framework
Oversight of the Ministry of Knowledge Economy and the Ministry of Strategy and Finance
Legal Framework for KOSEP
Basic Plan for Energy Development
Environmental Policy Law
Solid Credit Profile
International Credit Rating
Local Credit Rating
KOSEP enjoys continuous and unwavering support from the Government given its essential role in the nation’s electricity supply.
The Government’s strong support is evidenced by its recognition of the importance of stable and continuous power supply in the overall economy, and thus the establishment of a legal framework in which KOSEP operates in.
Also in late August, the Government announced the Korea’s power industry structure development plan, allowing KOSEP to remain independent from KEPCO, which will preserve market efficiency and add more autonomy.
We are rated A1 and A from Moody’s and S&P respectively, which are equal to the sovereign ratings of Korea and also top notch rating among Korean corporates.
ROK
KOSEP 9 9 9 9

10. Robust Demand Growth in the Future
Korea’s power sector is expected to enjoy robust demand growth.
Continuous economic growth will be a primary driver of power demand growth – expect GDP to grow at an annual rate of 3.9% on average between 2010 and 2024
Power demand is expected to grow at a rate of 4.3% per annum on average between 2010 and 2017 and 2.5% between 2018 and 2024
Electricity Demand Projections (2010–2024)
Total Utility Capacity Projections (2010–2024)
(Unit: GWh/%)
(Unit: MW)
In terms of the overall power market, we expect economic growth to be the primary driver of power demand growth.
According to forecast by the Ministry of Knowledge Economy, power consumption is expected to grow at a rate of 4.3% per annum on average between 2010 and 2017 and 2.5% between 2018 and 2024.
Source: The Fifth Basic Plan of Long Term Electricity Supply and Demand, December 2010, by MKE. (Base case scenario). Contents on this page, including the projections, are based on information published or released by the Korean government. Actual results may differ materially from the projections above.

11. Update on Electricity Pricing Mechanism
Introduction of “The Adjusted Coefficient of SMP” motivates Gencos to construct base load power plants and led to fair competition among Gencos. New pricing system has helped KOSEP, with the highest base load proportion, to be more profitable and competitive.
Regulatory Change in Electricity Pricing Mechanism (May 2008 ~ Present)
Regulated Market Price (RMP) System
New Power Pool Market System
Existing regulated market prices acted effectively as price caps on coal-fueled and nuclear power sold to KEPCO, deteriorating the profitability of the GENCOs that primarily rely on coal sources for electricity generation
Through the new power pool market system, KOSEP can pass through its fuel cost through the energy price
Concept of Electricity Pricing Mechanism
Price of Electricity
Energy Payment (Variable Cost)
Capacity Payment (Fixed Cost)
Price of Electricity that GENCOs sell to KEPCO
Provide adaptable price caps under the concepts of a “System Marginal Price (SMP)” and an “adjusted coefficient” of the SMP
To compensate for the costs of constructing power generation facilities and to provide incentives for new construction
Price Type
Price
Remarks
Energy Payment (EP)
Base Load
Fuel Cost + [Max {(SMP-Fuel Cost), 0} x
The Adjusted Coefficient]
The Adjusted Coefficient (Jan ~ )
Nuclear: (←0.2086)
Coal: (← )
Anthracite: (← )
Others/General: (← )
Non Base Load
Capacity Payment (CP)
KRW 7.46/kWh
KRW 7.46/kWh as a base price, CP is differentiated by regions, by seasons and by hours
The price of electricity in the Korean electricity market is determined principally based on the cost of generating electricity using a system known as the “cost-based pool” system.
As a way to stabilize the cost of generating electricity against external factors such as movements in fuel costs and currency exchange rates, the power pricing mechanism has changed to compensate for variable and fixed costs incurred by different power plants rather than superimposing a regulated market price which had acted as a price cap.
The new system provides for adaptable price caps under the concepts of a “system marginal price (SMP)” and an “adjusted coefficient” of the system marginal price.
This new pricing system has helped KOSEP, with the highest base load proportion, to be more profitable and competitive. 11 11

12. Introduction of Market-based Public Company
On 24 August 2010, Korean government determined KOSEP as a market-based public company. 1
KEPCO’s Oversight Function
Under the market-based public company system, KEPCO will continue to oversee the generation companies’ financial and ownership structure and take the lead in exports of nuclear power plants and overseas energy resources development 2
Management Autonomy
Individual generation companies will have management autonomy in areas such as construction and management of power plants and procurement of fuel 3
KEPCO’s Relationship with GENCOs
According to the plan, relationship between KEPCO and the power generation companies changes
Selection of executives and evaluation of performance will no longer be the purview of KEPCO
Instead, the President of Korea will select the CEO and the statutory auditor of the generation companies and the Minister of Strategy and Finance will select the non-executive directors
In August 2010, the government announced a plan to restructure the domestic electricity industry through the introduction of market based public company system.
Through this, KEPCO will retain its oversight function of the GENCOs including KOSEP but the GENCOs will have management autonomy in areas such as construction and management of power plants as well as procurement of fuel.
At the same time, the selection of executives and evaluation of business performance will not lie with KEPCO. Instead, the President of Korea will have the authority to appoint the CEO. 12

13. 3. Business & Operations
Let us now move onto the update on KOSEP’s business and operations.

14. Power Generation Portfolio
KOSEP has the largest base load capacity and competitive site locations near high-electricity-consuming areas among the thermal gencos.
Location of Power Plants
Generation Portfolio as of 2011
“Operation Units”
“Fuel Type”
Capacity (MW)
Samchonpo 6
Bituminous
3,240
Yonghung 4
3,340
Bundang 10
LNG
922
Yeosu 2
Oil
529
Yongdong
Anthracite
325
Renewables 25
Fuel Cell, Small Hydro 40
Total
8,396
BUNDANG
YONGDONG
YONGHUNG
Note: Muju plant transferred to Korea Hydro & Nuclear Power as of January 1, 2011.
Power Generation in 2011
(In GWh)
SAMCHONPO
YEOSU
The map on the left shows the locations of our operating plants in Korea, and the table on the right outlines the details of each plant.
Currently, a total of five power plants are in operation with total generation capacities of 8,396MW.
Please note that the Muju plant, which is the water-pumped storage plant was transferred to KHNP on January 1, 2011.
Metropolitan Area
Major Industrial/Chemical Complex
Source: Company Data.

15. Operations Highlights
Our efforts to effectively utilize the company’s resources along with ongoing stability of the electricity market in Korea provide a competitive advantage to KOSEP.
Generation Capacity (1)
Power Generation
Sales
(In MW)
(In GWh)
(In GWh)
Generation Capacity as % of Market(1)
Power Generation as % of Market(1)
Sales Amount as % of Market (2)
(In %)
In reviewing our operations, KOSEP has maintained a steady level of generation capacity over the past three years.
The actual power generated, and the sales amount in contrast has increased over the same period to reflecting increased demand.
In terms of power generated and sales amount relative to the total market in Korea, KOSEP has generated and sold 12.3% and 12.6% as of 2011 year end.
Source: FSS Filing
Note:
Data as of December 31, 2011.
Muju plant transferred to Korea Hydro & Nuclear Power as of January 1, 2011.

16. Operational Efficiency
Efficient Operations
Capacity Factor
Capacity factor has improved every year due to KOSEP’s efforts to procure fuel at the lowest price and operate its facilities more efficiently
Comparing among thermal Gencos, capacity factor is the highest
More and larger capacity facilities with less operating manpower makes KOSEP one of the highest productive companies
(Unit: %)
Note: Company data.
Unplanned Outage Rate
Productivity (Revenue per Head)
(Unit: %)
(Unit: Million Won/person)
KOSEP’s operational efficiency is top-notch as we have more facilities with larger capacity with less operating manpower.
Top right table shows steady increase in our capacity factor and bottom right table shows a rapidly increasing trend of revenue per employee over the past few years.
At the same time, our unplanned outage rate has continued to decrease.
Note: Company data.
Note: Company data.

17. Cost Efficiency Efficient Cost Management Fuel Cost Composition
KOSEP has extensive and deep knowledge in procuring fuels
- Fuel cost has remained low among thermal Gencos
In 2009~2011, KOSEP was the fuel integration purchasing center among Korean Gencos
In spite of higher depreciation cost with the completion of Yonghung power plant, KOSEP’s production cost has been lowered
Note: For the year ended December 31, 2011.
Fuel Purchasing Cost Trend by Product
Production Cost
(Unit: KRW/kWh)
Fuel Type
2011
2010
Change
Bituminous Coal (KRW/ton)
113,445
94,852
18,593
Anthracite (KRW/ton)
134,083
127,759
6,324
Oil (KRW/barrel)
128,704
98,324
30,380
LNG (KRW/ton)
885,881
777,262
108,619
KOSEP has extensive and deep knowledge in procuring fuels and as a result, fuel cost has remained the lowest for 10 consecutive years among thermal Gencos in Korea.
Despite higher depreciation cost with the completion of Yonghung power plant, KOSEP’s production cost has actually been lowered.
Note: Company data.
Note: Company data.

18. Expansion Plan
We are prudently expanding our business to maintain sustainable growth and meet the environmental regulations to control carbon emission.
Expansion Plan
(KRW in Billions)
Expansion Plan Details
Yonghung No. 5, 6
Yosu No. 1
Construction Period
2010~2014
2012~2016
Capacity
870MW * 2
350MW * 1
We plan to construct units no.5, no.6, no.7 and no.8 of Yonghung thermal plant and units no.1 of Yeosu thermal plant with an aggregate installed capacity of 2,090 megawatts.
Units no.5 and no.6 of Yonghung plant will be completed by 2014.
We budgeted Won 1,728 billion, Won 1,736 billion and Won 1,418 billion for capital expenditures for 2012, 2013 and 2014, respectively.
We are expanding our business to maintain sustainable growth and at the same time, meet the environmental regulations to control carbon emission.
Total expected investment related to expansion of Yonghung and Yosu plants amounts to approximately [2.9] trillion won.
Meanwhile, investments related to ramp up of renewable business and other new businesses are expected to amount to approximately 1.8 trillion won.
Renewable and New Business
We invested Won 70 billion in 2010 to develop renewable energy sources, such as wind power and solar energy.
Under the RPS system, we expect to incur Won 5.0 trillion in additional capital expenditure over the next 10 years.
We budgeted Won 65 billion, Won 460 billion and Won 367 billion for development of renewable energy sources for 2012, 2013 and 2014, respectively.

19. 4. Financial Overview
In this section, I will provide a general overview of KOSEP’s financial performance.

20. Financial Profitability
Revenue
Operating Profit
(Unit: KRW in billions)
(Unit: KRW in billions)
Operating Profit Margin
Net Profit Margin
(Unit: %)
(Unit: %)
Our income statement shows our outstanding financial profitability.
Revenue and operating profit have shown a steady increased while margins (including operating margins and net profit margins) have improved over the past few years.
In 2011, operating profit and margins decreased from 2010 primarily due to increase in fuel prices.
Note: 2010, 2011 financial data are based on K-IFRS accounting standard (consolidated basis) while 2008, 2009 data are based on K-GAAP accounting standard (unconsolidated basis)

21. Financial Stability EBITDA/Interest Expense Net Debt/EBITDA
(Unit: multiple)
(Unit: multiple)
Note: EBITDA = Operating Income + Depreciation + Amortization
Note: Net Debt = Short-term Debt + Long-term Debt less Cash & Cash Equivalent
Net Debt/Capitalization
CFO/Total Debt
(Unit: %)
(Unit: %)
Thanks to our prudent financial policies, we have been able to maintain a healthy balance sheet, keeping debt levels under control.
EBITDA to interest expense ratio has steadily increased while net debt to EBITDA and capitalization have shown a constant decline, representing our sound financial stability.
Note: Capitalization = Long-term Debt + Shareholder’s Equity
Note: CFO = Cash flow from operating activities
Note: 2010, 2011 financial data are based on K-IFRS accounting standard (consolidated basis) while 2008, 2009 data are based on K-GAAP accounting standard (unconsolidated basis).

22. Debt Profile
KOSEP maintains a balanced debt profile despite increased Capex spending.
Debt Maturity Profile
Short-term vs. Long-term
Local vs. Foreign Currency
(KRW in Billions)
Type of Borrowing
Type of Interest
This slide outlines the breakdown of KOSEP’s debt profile.
In the bar chart on the left, our debt maturity profile shows even distribution over the next 5 years. This will be financed through a mixture of internal cash flow and external funding.
Top right pie charts show that we are maintaining a healthy balance between onshore and offshore funding. All our foreign-currency funding is fully hedged into Korean won, minimizing FX exposure.
Bottom right pie charts show that our borrowings are mostly composed of bonds borrowed at fixed rates.
Note: (1) As of December 31, 2011 (K-IFRS Consolidated).
(2) Total debt as of December 31, 2011 is KRW 2,022 billion.
(3) Debt maturity profile excludes short-term debt.

23. Appendix. Financials
This is the end of our presentation and we will be glad to answer any questions you may have.

24. Financial Statements (Consolidated K-IFRS)
Balance Sheet
Income Statement
(Unit: KRW in Millions)
2010
2011
Assets
Current Assets
1,513,895
792,549
Non-Current Assets
5,345,530
5,665,061
Total Assets
6,859,424
6,457,610
Liabilities
Current Liabilities
1,477,755
1,013,202
Non-Current Liabilities
1,902,795
2,259,571
Total Liabilities
3,380,550
3,272,773
Equity
Issued Capital
1,231,203
1,073,607
Retained Earnings
2,226,808
2,284,359
Other components of equity
20,863
(173,951)
Non-Controlling Interest -
822
Total Equity
3,478,874
3,184,836
Total Liabilities and Equity
2010
2011
Revenue
4,129,199
4,394,577
Cost of Sales
3,650,259
4,076,772
Gross Profit
478,940
317,805
SG&A
35,581
47,151
Net Other Operating Income (Loss)
41,566
(860)
Operating Profit (Loss)
484,925
269,794
Finance Income
154,271
68,503
Finance costs
132,410
135,955
Share of profit (loss) to an associate and joint ventures
(1,353)
2,083
Profit for the year from continuing operations before tax
406,625
204,426
Income Tax Expense (Benefits)
99,863
61,122
Profit for the year from continuing operations
306,762
143,303
Loss for the year from a discontinued operation
3,157 -
Profit for the year
303,605
Other Comprehensive Income (Loss)
(7,597)
(21,039)
Total Comprehensive Income
296,008
122,265
Source: Company consolidated financial statement.