AES

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

AES Oasis
Confidential Information Memorandum
3 May 2009
Confidential
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

Confidential Information Memorandum
This Confidential Information Memorandum has been prepared by Citigroup Global Markets Limited (Citi) and HSBC Bank Middle East
Limited (including where relevant its parent and subsidiary companies and affiliates) (HSBC), at the direction of and from materials and
information supplied by The AES Corporation (AES), the IDB Infrastructure Fund L.P. (IDB), and AES Mid East Holdings 2, Ltd. (together
the Sellers each a Seller). Citi and HSBC have been appointed co-advisers by IDB and AES for the sale of AES Oasis Limited (AES Oasis
or the Company) which is the controlling shareholder of AES Barka SAOG (Barka), Amman East Power Company (Amman East), AES Lal
Pir Ltd. (Lal Pir) and AES Pak Gen Company (Pak Gen) (together the Plants and each a Plant).
This Confidential Information Memorandum (references to which shall be deemed to include any information which has been or may be
supplied in writing or orally in connection herewith or in connection with any further enquiries) is being delivered pursuant to a separate
Confidentiality Agreement to a limited number of parties who, it is believed, may be interested in acquiring the Company and / or one or
more of the Plants. This Confidential Information Memorandum is for the exclusive use of the persons to whom it is addressed and their
advisers.
By its acceptance hereof, each recipient agrees (subject to the terms of any Confidentiality Agreement it may have entered into with AES
and IDB) that neither it nor its agents, representatives, directors, employees, managers, officers, advisers or financiers will copy, reproduce
or distribute to others this Confidential Information Memorandum, in whole or in part, at any time without the prior written consent of the
Sellers (as relevant) or Citi and HSBC and that it will keep permanently confidential all information contained herein not already in the public
domain and will use this Confidential Information Memorandum for the sole purpose of deciding whether to proceed with a further
investigation of AES Oasis.
While the information contained herein is believed to be accurate, Citi and HSBC have not conducted any investigation with respect to or
independent verification of such information. No representation or warranty, express or implied, is or will be given by any of the Sellers or
Citi or HSBC or their respective affiliates, directors, partners, shareholders, employees or advisers or any other person as to the accuracy,
completeness or fairness of this Confidential Information Memorandum and, so far as permitted by law and except in the case of fraud by
the party concerned, no responsibility, obligation or liability whatsoever is accepted for the accuracy or sufficiency thereof or for any errors,
omissions or misstatements negligent or otherwise relating thereto. Only those particular representations and warranties which may be
made by the relevant Seller in a definitive written purchase agreement, when and if one is executed, and subject to such limitations and
restrictions as may be specified in such purchase agreement, shall have any legal effect.
Any prospective purchaser of the issued share capital, assets or business as described herein will, so far as permitted by law and except in
the case of fraud by the party concerned, be required to acknowledge, in the purchase contract or in any offer made by it for the issued
share capital, assets or business as described herein, that it has not relied upon or been induced to enter into such contract or to make
such offer by any representation or statement contained herein.
Except where otherwise indicated, this Confidential Information Memorandum speaks as of the date hereof. Neither the delivery of this
Confidential Information Memorandum nor the purchase of the Company or one or more of the Plants, under any circumstances, creates
any implication that there has been no change in the affairs of the Company since the date hereof. In furnishing this Confidential Information
Memorandum, neither of the Sellers, Citi or HSBC undertakes any obligation to update any of the information contained herein or to correct
any inaccuracies which may become apparent.
This Confidential Information Memorandum shall remain the property of the Sellers (as relevant). Each of the Sellers and Citi and HSBC
reserves the right to require the return of this Confidential Information Memorandum to each of the Sellers and/or Citi and HSBC (together
with any copies or extracts thereof) at any time.
This Confidential Information Memorandum does not constitute an offer, invitation for offer, or invitation for the sale or purchase of shares,
assets or business described herein and shall not form the basis of any contract. Further, this Confidential Information Memorandum is not
any form of commitment or recommendation by either the Sellers or Citi or HSBC and does not contain all the information that a prospective
purchaser may wish to have in determining whether to enter into the proposed transaction.
The Sellers and Citi and HSBC reserve the right to negotiate with one or more prospective purchasers in relation to the Company and / or
one or more of the Plants at any time and to enter into a definitive agreement for the sale of the issued share capital, assets or business
described herein without prior notice to other prospective purchasers. The Sellers and Citi and HSBC also reserve the right, without
advance notice, to change the procedure for the sale of any or all of the issued share capital, assets or business as described herein or to
terminate negotiations at any time prior to the entry into of any binding contract for the purchase of any or all of the issued share capital,
assets or business as described herein. The issue of this Confidential Information Memorandum shall not be taken as any form of
commitment on the part of the Sellers to proceed with any transaction and nor does it place any Seller (or any of its parent or subsidiary
companies or affiliates) or Citi or HSBC under any obligation to consider or accept any offer, irrespective of whether such offer is the only
offer or one of a number of offers, representing the highest price.
Each recipient of this Confidential Information Memorandum undertakes that it will not, in connection with its consideration of the possible
purchase of shares, assets or business described herein, approach or enters into discussions with any shareholder, director, officer,
manager, affiliate, employee, customer, agent, supplier or other representative of any of the Sellers, the Company or the Plants. All
approaches by or on behalf of the prospective purchasers should be directed to Citi and HSBC.
The purpose of this Confidential Information Memorandum is to assist each recipient in deciding whether it wishes to proceed with a further
investigation of the shares, assets or business as described herein but it is not intended to form the basis of any investment activity or any
decision to purchase. In all cases, interested parties should conduct their own investigation and analysis of the Company and the
information contained in this Confidential Information Memorandum. This Confidential Information Memorandum includes certain
statements, targets and projections provided by each of the Sellers with respect to the anticipated future performance of the Company.
Such statements, estimates targets and projections reflect significant assumptions and subjective judgments by each of the Sellers
management concerning anticipated results. These assumptions may or may not prove to be correct and there can be no assurance that
any estimates, targets, or projections are attainable or will be realized. Neither Citi nor HSBC assumes any responsibility for verifying any of
such statements, targets, estimates and projections.
Without any prejudice to any liability for fraudulent misrepresentation, each of the Sellers, Citi and HSBC and their respective affiliates,
directors, partners, employees and advisers and any other person expressly disclaims any liability for any direct, indirect or consequential
loss or damage which may arise from relying on any statement in this Confidential Information Memorandum, or any other written or oral
information provided in connection therewith, and any errors contained therein and/or omissions there from.
Citi and HSBC are acting for the relevant Seller and no one else in connection with the sale of the issued share capital, assets or business
described herein and will not be responsible to any other person other than the relevant Seller for providing the protections afforded to
clients of Citi or HSBC or for providing advice in relation to any such sale.
By accepting this Confidential Information Memorandum, the recipient agrees to be bound by the foregoing limitations.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

No securities commission or regulatory authority in the United States or any other country has in any way opined upon the merits of a
potential acquisition of an interest in the Company or any of the Plants or the accuracy or adequacy of this Confidential Information
Memorandum or the materials contained herein. This Confidential Information Memorandum is not, and under no circumstances is to be
construed as, a prospectus, a public offering or an offering memorandum as defined under applicable securities legislation and shall not
form the basis of any contract. It is not intended that any securities of the Company or any of its subsidiaries will be registered under the US
Securities Act of 1933, and any such securities may not be offered or sold within the United States except pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Act.
In the UK, this Confidential Information Memorandum is being distributed only to and is directed at (a) persons who have professional
experience in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the Order) or (b) high net worth entities, and other persons to whom it may otherwise lawfully be communicated,
falling within Article 49 of the Order (all such persons together being referred to as relevant persons). The shares of the Company are
available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares will be engaged in only
with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Outside the UK, the distribution of this Confidential Information Memorandum in certain jurisdictions may be restricted by law, and persons
into whose possession this Confidential Information Memorandum or other information referred to herein come should inform themselves
about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any
such jurisdiction and neither the Sellers nor Citi or HSBC accept any liability for any such persons failure to comply with any such
restrictions.
HSBC Bank Middle East Limited is incorporated in J ersey, Channel Islands and is regulated by the J ersey Financial Services Commission.
HSBC Bank Middle East Limited, Dubai International Financial Centre Branch, PO Box 506553 is also regulated by the Dubai Financial
Services Authority (DFSA). For the purposes of HSBC Bank Middle East Limited, this Confidential Information Memorandum is considered
marketing material and is directed at professional clients whom HSBC Bank Middle East Limited is satisfied meet the regulatory criteria of a
professional client under the DFSA rules and should not be acted upon by any other person.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

1

Table of Contents

1 Executive Summary 10
1.1 Overview of AES Oasis 11
1.2 History 15
1.3 Management Philosophy 16
1.4 Market Opportunity 17
1.4.1 Macroeconomic Overview 17
1.4.2 Power Market Overview 18
1.5 Financial Highlights 20
2 Investment Highlights 21
3 Barka 24
3.1 Barka Overview 25
3.2 Omani Market Overview 26
3.3 Technical Specifications 32
3.3.1 Overview 32
3.3.2 Construction History 32
3.3.3 Major Equipment 33
3.4 Operating Performance 35
3.5 Contract Framework 37
3.5.1 Overview 37
3.5.2 Key Counterparties 38
3.5.3 Post-PWPA Period 38
3.6 Management and Employees 40
3.7 Consents and Permits 42
3.7.1 Key Contractual Consents 42
3.7.2 Permits and Regulatory Consents 42
3.8 HSE, Litigation and Insurance 43
3.8.1 Health and Safety 43
3.8.2 Environmental Performance 43
3.8.3 Litigation and Contingent Obligations 43
3.8.4 Insurance 43
3.9 Financial Performance 44
3.9.1 Summary Assumptions 44
3.9.2 Summary Financial Statements 45
4 Amman East 46
4.1 Amman East Overview 47
4.2 J ordanian Market Overview 48
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

2

Table of Contents

4.3.1 Overview 53
4.3.3 Plant Layout 53
4.5.1 Overview 57
4.5.3 Post-PPA Period 58
4.7.1 Contractual Consents 62
4.8 HSE and Insurance 63
4.8.2 Insurance 63
4.9.2 Summary of Financials 65
5 Lal Pir and Pak Gen 66
5.1 Lal Pir and Pak Gen Overview 67
5.2 Pakistan Market Opportunity 68
5.3.1 Overview 76
5.3.3 Plant Layout 76
5.5.1 Overview 82
5.5.3 Post-PPA Period 83
5.7.1 Key Contractual Consents 87
5.8 HSE, Litigation and Insurance 88
5.8.1 Health and Safety 88
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

3

Table of Contents

5.8.3 Litigation and Contingent Obligations 88
5.8.4 Insurance 89
5.9.2 Summary Financial Statements 91
6 Consolidated Financial Performance 92
6.1 Basis of Preparation 93
6.2 Consolidated Financial Statements 94
6.3 Consolidated Financial Analysis 95
7 Other Key Considerations 98
7.1 Legal Structure 99
7.2 Consents and Approvals 100
7.3 Litigation and Contingent Obligations 101
7.4 Carve-out Issues 102

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

4

Index of Tables
Table 1 AES Oasis Management Biographies 14
Table 2 Summary of Barka Key Contracts 37
Table 3 Barka Management Biographies 41
Table 4 Barka Key Contractual Consents 42
Table 5 Barka Regulatory Consents 42
Table 6 Barka Macroeconomic Indicators 44
Table 7 Barka Operating Assumptions 44
Table 8 Barka Financial Summary 2006/2013E 45
Table 9 Amman East Capacity 56
Table 10 Amman East Key Contracts 57
Table 11 Management Biographies 61
Table 12 Regulatory Consents in J ordan for Power Project 62
Table 13 Amman East Macroeconomic Indicators 64
Table 14 Amman East Operating Assumptions 64
Table 15 Amman East Financial Summary 2009/2013E 65
Table 16 Pakistan IPPs with COD in 2009 73
Table 17 Tariff Structure Under the Pakistan 1994 Power Policy 74
Table 18 Summary of Lal Pir and Pak Gen Key Contracts 82
Table 19 Lal Pir and Pak Gen Management Biographies 85
Table 20 Lal Pir and Pak Gen Key Consents 87
Table 21 Lal Pir and Pak Gen Regulatory Consents 87
Table 22 Macroeconomic Indicators 90
Table 23 Lal Pir Operating Assumptions 90
Table 24 Pak Gen Operating Assumptions 90
Table 25 Lal Pir Financial Summary 2006/2013E 91
Table 26 Pak Gen Financial Summary 2006/2013E 91
Table 27 AES Oasis Combined Financial Performance 2006/2013E 94
Table 28 AES Oasis Revenue Breakdown by Type and Asset 95
Table 29 AES Oasis Corporate Overheads 96
Table 30 AES Oasis Debt and Leverage 96

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

5

List of Figures
Figure 1 AES Oasis Ownership Structure 11
Figure 2 Key Operating Statistics 12
Figure 3 AES Oasis Organizational Chart 13
Figure 4 Timeline of AES Oasis Development 15
Figure 5 Middle East and Pakistan Macroeconomic Statistics 17
Figure 6 Brent Forward Curve Evolution vs. Long-term Historical Averages 17
Figure 7 Major Power Markets Dynamics 18
Figure 8 Power Consumption per Capita 18
Figure 9 Installed Capacity in GW by Country 2008/2012E 19
Figure 10 Consolidated Summary of Historical and Projected Financial Data of AES
Oasis 20
Figure 11 Barka Ownership Structure 25
Figure 12 Barka Location 25
Figure 13 Oman Macroeconomic Statistics 26
Figure 14 Oman Power Market Structure 28
Figure 15 Oman Power and Water Demand/Supply 29
Figure 16 Oman IPP Assets 30
Figure 17 Barka Equipment Layout 33
Figure 18 Barka Availability 35
Figure 19 Barka Load Factor 35
Figure 20 Barka Heat Rate 36
Figure 21 Barka Contractual Framework 37
Figure 22 Barka Management Organization 40
Figure 23 Amman East Ownership Structure 47
Figure 24 Amman East Location 47
Figure 25 J ordan Macroeconomic Statistics 48
Figure 26 J ordan Power Market Structure 49
Figure 27 J ordan Power Demand/Supply 50
Figure 28 J ordanian Power Source Mix
(1)
50
Figure 29 J ordan IPP Assets 51
Figure 30 Typical Equipment Layout 54
Figure 31 Contractual Framework for Power Projects in J ordan 57
Figure 32 Typical Management Organization Structure 60
Figure 33 Lal Pir and Pak Gen Ownership Structure 67
Figure 34 Lal Pir and Pak Gen Location 67
Figure 35 Pakistan Macroeconomic Statistics 69
Figure 36 Pakistan Power Market Structure 70
Figure 37 Pakistan Power Demand/Supply 71
Figure 38 Pakistani Primary Power Source Mix 72
Figure 39 Pakistan IPP Assets 72
Figure 40 Pakistan Fiscal Deficit vs. Power Subsidies 75
Figure 41 Pakistan Plants Equipment Layout 77
Figure 42 Lal Pir and Pak Gen Availability 80
Figure 43 Lal Pir and Pak Gen Load Factor 80
Figure 44 Lal Pir and Pak Gen Heat Rate 81
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

6

Figure 45 Lal Pir and Pak Gen Contractual Framework 82
Figure 46 Lal Pir and Pak Gen Management Organization 84
Figure 47 AES Structure Chart 99

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

7

Important Information
Any questions or comments regarding this Confidential Information Memorandum should
be communicated via email and addressed exclusively to the individuals at Citi and
HSBC listed below. Under no circumstances should contact be made directly with the
shareholders, directors, officers, managers, affiliates, employees, customers, agents,
suppliers or other representatives of either of the Sellers, the Company or the Plants
without the prior written consent of Citi and HSBC and the relevant Seller.
CITIGROUP GLOBAL MARKETS LIMITED
Citigroup Centre, 33 Canada Square
Canary Wharf, E14 5LB
London
UK

Dubai International Financial Centre (DIFC)
The Gate District
Precinct Building 2, Suite 1, Level 7
PO Box 506560
Dubai
UAE

William Craig Reisser
Director
Tel: +44 (0) 20 7986 7508
Fax: +44 (0) 20 8043 0572
Mob : +44 (0) 77 8875 2959
Email: william.craig.reisser@citi.com
Omar Iqtidar
Director
Tel: +971 (0) 4 5099 782
Fax: +971 (0) 4 3700 280
Mob: +971 (0) 50 5540 252
Email: omar.iqtidar@citi.com
HSBC BANK MIDDLE EAST LIMITED
Dubai International Financial Center (DIFC)
The Gate District
Precinct Building 4, Level 4
PO Box 506553
Dubai
UAE

Grant Thomas
Director
Tel: +971 (0) 4 509 3636
Fax: +971 (0) 4 509 3570
Mob: +971 (0) 50 459 1472
Email: grant.x.thomas@hsbc.com
Karin Barry
Associate Director
Tel: +971 (0) 4 509 3349
Fax: +971 (0) 4 509 3572
Mob: +971 (0) 50 551 6683
Email: karinbarry@hsbc.com
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

8

Glossary of Terms
ADWEA Abu Dhabi Water and Electricity Authority
AES The AES Corporation
AESPO AES Pakistan Operations Ltd.
AES Oasis or the Company AES Oasis Limited
Amman East Amman East Power Company
Barka AES Barka SAOG
BLS US Bureau of Labor Statistics
BOO Build Own Operate
BOP Balance of Plant
CAGR Compound Annual Growth Rate
CCGT Combined Cycle Gas Turbine
CEGCO Central Electricity Generation Company
CIS Confederation of Independent States
COD Commercial Operation Date
CPP Capacity Purchase Price
DEWA Dubai Electricity and Water Authority
DFO Distillate Fuel Oil
DSRA Debt Service Reserve Account
ECRA Electricity and Cogeneration Regulatory Authority Saudi Arabia
ERC Electricity Regulatory Commission
EIU Economist Intelligence Unit
FEMA Federal Electricity and Water Authority
FSA Fuel Supply Agreement
FOMC Fixed O&M Charge
GCC Gulf Co-operation Council
GoJ Government of the Sultanate of J ordan
GoO Government of Oman
GoP Government of Pakistan
GDP Gross Domestic Product
GWh Giga Watthour
HFO Heavy Fuel Oil
HP High Pressure
HSE Health, Safety and Environment
HRSG Heat Recovery Steam Generator
IDB IDB Infrastructure Fund L.P.
IFC International Finance Corporation
IP Intermediate Pressure
IPP Independent Power Producer
IWPP Independent Water and Power Producer
IDECO Irbid District Electricity Company
J D J ordanian Dinar
J EPCO J ordanian Electric Power Company
KPI Key Performance Indicators
Lal Pir AES Lal Pir, Limited
LNG Liquefied Natural Gas
LP Low Pressure
LTA Lost Time Accident
M Meter
MEED Middle East Economic Digest
MENA Middle East and North Africa
MHEW Ministry of Housing, Electricity and Water
Middle East Bahrain, Iran, Iraq, J ordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia,
Syria, UAE, Yemen
MIGD Million Imperial Gallons per Day
MHI Mitsubishi Heavy Industries
MW Megawatt
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

9

MIGA Multilateral Guarantee Agency
MIS Main Interconnected System
MOG Ministry of Oil and Gas
MoWPP Ministry of Water and Power of Pakistan
NEPCO National Electric Power Company
NFPA US National Fire Protection Agency
OPWPC Omani Power and Water Procurement Company
O&M Operation & Maintenance
Pak Gen AES Pak Gen (Private) Company
Pakistan Plants Lal Pir and Pak Gen
Plant Either Amman East or Barka or Lal Pir or Pak Gen
Plants Amman East, Barka, Lal Pir and Pak Gen
PPIB Private Power and Infrastructure Board
PKR Pakistan Rupees
PPA Power Purchase Agreement
PSO Pakistan State Oil
PWPA Power and Water Purchase Agreement
QEWA Qatar Electricity and Water Authority
Region Middle East and Pakistan
Rupee Pakistani Rupee
Sellers AES Mid East Holdings 2, Ltd. together with IDB
SEWA Sharjah Electricity and Water Authority
SMBC Sumitomo Mitsui Banking Corporation
TFC Term Finance Certificates
TSA Technical Service Agreement
TWh Tera Watthour
UAE United Arab Emirates
UNDP United Nations Developmental Program
VOMC Variable O&M Charge
WAPDA Water and Power Development Authority (of Pakistan)
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

10

1 Executive Summary
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

11

1.1 Overview of AES Oasis
AES Oasis has one of the largest portfolios of power plants in the Middle East and Pakistan (the
Region), consisting of controlling stakes in four power plants with a balanced exposure across the
Middle East and Pakistan. AES Oasis was established in 2003 by AES Corporation (AES) to
develop, own, operate and manage its power generation and water desalination assets in the
Region. AES Oasis owns controlling stakes in and manages one power generation and
desalination plant in Oman (Barka), and two power generation plants located in Pakistan (Lal Pir
and Pak Gen) and one power generation plant located in J ordan (Amman East), with total
generation capacity of 1,561MW (gross) and desalination capacity of 20 MIGD (gross). AES
Oasis is headquartered in Dubai, UAE and has a lean and efficient organization which employs
19 individuals in Dubai with the employees at its subsidiaries based at the Plants. AES Oasis is
projected to generate US$143 million of EBITDA and US$44 million of Free Cash Flow to Equity
in 2010, which includes the first full year of operations at Amman East.
Figure 1 AES Oasis Ownership Structure

61.11%
AES Oasis
58.0% 90.0% 90.0% 60.0%
38.89%
IDB Infrastructure
Fund L.P.
Barka
(1)
(Oman)
2003
Gas
CCGT
456 MW
20 MIGD
15 years
55
40 years
BOO
Operation:
Fuel:
Plant Type:
Name Plate Capacity:
Water Capacity:
PPA Terms:
Employees:
Expected Life:
Contract Type:
Lal Pir
(2)
(Pakistan)
1997
Fuel Oil
Thermal Steam
362 MW
NA
30 years
116
35 years
BOO
Pak Gen
(2)
(Pakistan)
1998
Fuel Oil
Thermal Steam
365 MW
NA
30 years
0
(4)
35 years
BOO
Amman East
(3)
(Jordan)
2009
Gas / DFO
CCGT
378 MW
NA
25 years
45
(5)
40 years
BOO
61.11%
AES Oasis
58.0% 90.0% 90.0% 60.0%
38.89%
IDB Infrastructure
Fund L.P.
IDB Infrastructure
Fund L.P.
Barka
(1)
(Oman)
2003
Gas
CCGT
456 MW
20 MIGD
15 years
55
40 years
BOO
Barka
(1)
(Oman)
2003
Gas
CCGT
456 MW
20 MIGD
15 years
55
40 years
BOO
Operation:
Fuel:
Plant Type:
Name Plate Capacity:
Water Capacity:
PPA Terms:
Employees:
Expected Life:
Contract Type:
Lal Pir
(2)
(Pakistan)
1997
Fuel Oil
Thermal Steam
362 MW
NA
30 years
116
35 years
BOO
Lal Pir
(2)
(Pakistan)
1997
Fuel Oil
Thermal Steam
362 MW
NA
30 years
116
35 years
BOO
Pak Gen
(2)
(Pakistan)
1998
Fuel Oil
Thermal Steam
365 MW
NA
30 years
0
(4)
35 years
BOO
Pak Gen
(2)
(Pakistan)
1998
Fuel Oil
Thermal Steam
365 MW
NA
30 years
0
(4)
35 years
BOO
Amman East
(3)
(Jordan)
2009
Gas / DFO
CCGT
378 MW
NA
25 years
45
(5)
40 years
BOO
Amman East
(3)
(Jordan)
2009
Gas / DFO
CCGT
378 MW
NA
25 years
45
(5)
40 years
BOO

Source: Company Information.
(1) 35% publicly traded, 7% owned by Multitech L.L.C. (Suhail Bahwan Group).
(2) 10% owned by IFC and both plants are located next to each other at a well-secured site.
(3) 40% owned by Mitsui Corp.
(4) Lal Pir has an internal agreement for shared services with Pak Gen, and the costs of employees is shared equally
between Lal Pir & Pak Gen.
(5) Details in Section 4.6
All of the Plants benefit from attractive long-term power purchase agreements (PPA) or power
and water purchase agreements (PWPA). As Build-Own-Operate (BOO) plants they have
additional value after the expiration of their contracted periods. The risk allocation attributable to
the Plants is typical of GCC IWPP and IPP projects which include an availability capacity
payment, foreign exchange indexation, CPI indexation and Government guarantees.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

12

Figure 2 Key Operating Statistics
Gross MW: 1,553MW Net MW: 1,146MW 2010E EBITDA: US$143m

Pakistan
47%
Oman
29%
J ordan
24%

Pakistan
58%
Oman
23%
J ordan
19%

Pakistan
32%
Oman *
43%
J ordan
25%

Source: Company information.
(*) Includes 20 MIGD water desalination capacity.
BARKA
Barka is a 456MW gas-fired (out of which 427MW are contracted under the PWPA), combined
cycle gas turbine (CCGT) power and 20 MIGD water desalination facility. Barka is located on the
coast approximately 60km northwest of Muscat on a site leased from the Government of Oman
(GoO) under a 25 year usufruct agreement which is extendible for a further 25 years at Barkas
option. The Plant commenced full commercial operation on 11 J une 2003.
Barka was the first independent power and water producer (IWPP) in Oman, providing power and
desalinated water to the Omani Power and Water Procurement Company (OPWPC) under a
15-year PWPA. Barka has an existing project finance debt of US$264 million which is repayable
by 2018. The Plant provides over 13% of the countrys installed generation capacity and 22% of
the installed water desalination capacity. The obligations of OPWPC are supported by a
GoO guarantee.
AMMAN EAST
Amman East is a 370MW CCGT facility with the capability to operate on Distillate Fuel Oil (DFO).
This Plant is currently in the final stages of construction. Amman East is located at a site leased
from the Government of J ordan (GoJ ) at Al Manakher, approximately 25km east of Amman under
a 25-year land lease agreement. The Plant began operations of 247MW of contracted capacity in
simple cycle mode in J uly 2008 and is on schedule to achieve combined cycle operations in J uly
2009.
Amman East was the first independent power plant (IPP) in J ordan. National Electric Power
Company of J ordan (NEPCO) is the sole off-taker in J ordan and purchases Amman Easts
electricity output under a 25-year PPA. The obligations of NEPCO are supported by a guarantee
from the GoJ . The Plant provides approximately 15% of the countrys installed generation
capacity.
LAL PIR AND PAK GEN
Lal Pir and Pak Gen are two oil-fired thermal power plants with a capacity of 362MW and 365MW
respectively. Both plants are located adjacent to each other on a single site owned by AES Oasis
in the Province of Punjab, 38 miles from the city of Multan, close to the industrial heart of Punjab.
The Lal Pir and Pak Gen site has sufficient land to construct additional units. Lal Pir started full
commercial operation on 6 November 1997 and Pak Gen started full commercial operation on
1 February 1998.
Lal Pir and Pak Gen were developed under the Government of Pakistans (GoP) 1994
Power Policy and were among the first IPPs in Pakistan. The Water and Power Development
Authority (WAPDA) is the sole off-taker of the plants power under two 30-year PPAs and
WAPDAs obligations are supported by a Pakistan Government guarantee. Lal Pir has repaid its
initial project finance debt and Pak Gen has approximately US$4 million of remaining project
finance debt repayable by 2010. Lal Pir and Pak Gen together represent the third largest IPP in
Pakistan and are key to the Pakistani power system.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

13

AES OASIS
The Company and the Plants operate with a lean structure with substantially all functions located
within the Plants. The plant managers of Barka, Amman East and Lal Pir and Pak Gen are
responsible for day to day operations of their respective Plants. Each plant manger reports to the
CEO of AES Oasis who is based in Dubai.
AES Oasis has centralized the main finance functions of the Plants (financial reporting,
accounting month-end closing process, treasury, payroll, financial planning, and analysis and tax)
in Dubai under one CFO in order to:
Increase financial control and enhance plant reporting (efficient flow of information)
Increase the overall efficiency of the finance function
Develop staff by increasing specialization of skills through development of a centre
of excellence
Increase flexibility and responsiveness to changing business needs/environment
Only transactional accounting (accounts payable, accounts receivable, inventory and fixed assets
reporting) remains at the plant level.
Figure 3 AES Oasis Organizational Chart
Steve Walsh
CEO *
Nadeem Rizvi
Barka Plant Manager
Shahid Khan
Lal Pir & Pak Gen Plant
Manager
Meftaur Rahman
Amman East Plant
Manager
Ahsen Saeed
CFO *
Steve Walsh
CEO *
Nadeem Rizvi
Barka Plant Manager
Shahid Khan
Lal Pir & Pak Gen Plant
Manager
Meftaur Rahman
Amman East Plant
Manager
Ahsen Saeed
CFO *

Note: Steve Walsh is an employee of AES and is seconded to AES Oasis.
(*) Based in Dubai.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

14

Table 1 AES Oasis Management Biographies
Professional/Title
Years of Experience
(with AES) Key Relevant Experience
Steve Walsh
Chief Executive
Officer
30
(10 with AES)
Steve joined AES in 1999, serving in both the distribution and
generation sectors and in 2001 he became head of AES
operations in Bogota, Colombia
Before assuming responsibility for all AES operations in the
Middle East (with power stations in Oman, J ordan, Pakistan,
and Qatar) in March 2009, Steve was President/CEO for
AES operations in all the Confederation of Independent
States (CIS) with responsibility for some 11 independent
business operations with annual revenues of over
US$900 million
Prior to AES, Steve served as an active duty US Marine
Officer for 20 years
Ahsen Saeed
Chief Financial
Officer
14
(10 with AES)
Ahsen has been in his current role at AES Oasis since
April 2009
He joined AES in 1999 as a Financial Accountant in Pakistan
and then moved to become the CFO of Barka
He worked for 2 years with AES Europe and Africa business
development team based in London
Prior to joining AES, he was the Financial Manger for
Toyota Pakistan
He qualified from the Institute of Cost and Management
Accountants of Pakistan
Yahya Sheikh
Sub Regional
Financial
Controller
13
(2 with AES)
Yahya has been with AES Oasis since August 2008
He joined AES in 2007 as Chief Financial Officer at Ras
Laffan Power Company
Prior to joining AES, Yahya worked at Coca Cola and
Faisalabad Bottling Corporation as an assistant to the
Financial Controller
He holds a Master of Commerce in Finance from the
University of Punjab, Pakistan
Toqeer Sharif
Financial
Controller Asia
and Middle East
15
(6 with AES)
Toqeer has been with AES Oasis since November 2003 and
reports to the regional CFO while based in Dubai
Prior to joining AES, Toqeer worked at Ernst & Young as
an auditor and McDonalds Corporation as an
Accounting Manager
He holds a Bachelor of Commerce from the University of
Punjab, Pakistan
Usman Anwar
Financial
Controller
15
(6 with AES)
Usman has been with AES Oasis since J anuary 2009
He joined AES in 2003 as financial controller and company
secretary at Barka
Prior to joining AES, Usman worked for Occidental Petroleum
for 2 years and before that he was an Auditor with
Deloitte & Touche and KPMG
He holds a Bachelors of Commerce from the University
Of Karachi
Usman Aleem
Financial
Controller
5
(3 with AES)
Usman has been with AES Oasis since J an 2009
Prior to joining AES, Usman worked for Deloitte for 2 years
as an Audit Supervisor
Ali Asif Qayyum
Manager FP&A
13
(3 with AES)
Ali has been with AES Oasis since J anuary 2009
He joined AES in 2006 at the head office of Lal Pir/Pak Gen
based at Islamabad where he was the manager FP&A
treasury for Lal Pir and Pak Gen
Prior to joining AES he worked as a Corporate Banker for
10 years
He qualified as a Cost and Management Accountant from
Pakistan in 1996
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

15

1.2 History
Upon establishing AES Oasis in December 2003, AES transferred its interest in the Pakistani and
Omani assets into AES Oasis and sold a 38.89% stake in the Company to the IDB Infrastructure
Fund L.P. (IDB). The mandate of AES Oasis is to develop, own, operate and manage selected
power generation and water desalination assets in the Middle East and Pakistan. Figure 4
highlights the timeline of the AES Oasis development.
AES started operations in Pakistan in 1997 (incorporated into AES Oasis in December 2003) and
is one of the largest IPPs in the country. In 2000, AES was awarded the right to develop and
construct the first independent water and power facility of its kind in Oman which started
commercial operations in J une 2003 (also incorporated into AES Oasis in 2003). AES Oasis then
pursued the development of Amman East in J ordan in 2006 with a successful bid. The Amman
East site has adequate land to develop a new power plant of a similar size to the existing power
plant and similarly the Lal Pir and Pak Gen site has sufficient land to construct additional units.
Figure 4 Timeline of AES Oasis Development
P
r
o
j
e
c
t

D
e
v
e
l
o
p
m
e
n
t
s
A
E
S

O
a
s
is

D
e
v
e
l
o
p
m
e
n
t
s
AES and IDB partner to
create AES Oasis
(Dec 03)
AES Oasis / Mitsui sign 25-year
PPA for Amman East
US$225mfinancing signed
(Apr 07)
Barka IPO
(Nov 04)
Lal Pir starts
operations
(Nov 97)
Pak Gen
starts
operations
(Feb 98)
Barka starts
commercial
operations
(J un 03)
Barka construction
starts
(J un 01)
1997 2009 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
P
r
o
j
e
c
t

D
e
v
e
l
o
p
m
e
n
t
s
A
E
S

O
a
s
is

D
e
v
e
l
o
p
m
e
n
t
s
AES and IDB partner to
create AES Oasis
(Dec 03)
AES Oasis / Mitsui sign 25-year
PPA for Amman East
US$225mfinancing signed
(Apr 07)
Barka IPO
(Nov 04)
Lal Pir starts
operations
(Nov 97)
Pak Gen
starts
operations
(Feb 98)
Barka starts
commercial
operations
(J un 03)
Barka construction
starts
(J un 01)
1997 2009 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

16

1.3 Management Philosophy
Drawing upon the expertise and processes of AES, AES Oasis has established a self sufficient
management strategy that has two principal components:
Operational Excellence: AES Oasis seeks to achieve world-class operating performance
through a focus on constantly improving performance against efficiency, availability, safety,
environmental, cash flow and income generation benchmarks. AES Oasis delegates significant
authority to regional business units supported by cross-regional execution teams while ensuring
the sharing of best practices.
Best-in-Class Management: AES Oasis seeks to achieve operational expertise and efficient
management of project companies through its Best-in-Class management teams and workers. It
provides attractive work conditions and has adopted an effective retention strategy. Its business
development philosophy involves leveraging its operational workforce from within the existing
assets to evaluate a range of opportunities. Furthermore, AES Oasis grooms its future leadership
through extensive training programs in specialized training centers and through rotations within its
businesses. Many AES Oasis employees have worked with other AES businesses, which result in
a workforce of broad experience and diversity of backgrounds. AES Oasis evaluation and
compensation strategy is aimed at maintaining a highly motivated work force by linking
compensation to the achievement of annual plant objectives and Key Performance Indicators
(KPI) that are set at a level exceeding industry standards.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

17

1.4 Market Opportunity
1.4.1 Macroeconomic Overview
The macroeconomic outlook for the Region continues to be favorable with economic growth
expected to substantially exceed global averages in developed economies. This positive
economic outlook is supported by several factors:
The Region has favorable demographics with a growing population expected to reach
approximately 396 million by 2013 of which over 60% will be under the age of 30
The growth and ageing of the population in the Region will create strong demand for goods
and services and economic activity
Oil and gas prices are projected to be higher than the historical averages which prompted the
regional economic boom
Re-investment in the Region of the surpluses coming from high oil and gas prices will further
drive economic growth and development
Figure 5 Middle East and Pakistan Macroeconomic Statistics
195
166
217
179
Middle East Pakistan
P
o
p
u
l
a
t
i
o
n

(
m
)
2008 2013
CAGR: 2.2% CAGR: 1.5%

1.6%
1.3%
4.7%
5.0%
US EU Middle East Pakistan
G
D
P

C
A
G
R

2
0
0
9

-

2
0
1
3

(
%
)

Source: EIU forecasts.

Figure 6 Brent Forward Curve Evolution vs. Long-term Historical Averages
0
25
50
75
100
125
150
1999 2001 2003 2005 2007 2009 2011
B
r
e
n
t

p
r
i
c
e
s

(
U
S
$
/
b
b
l
)
IPE Brent Close FWC (March 2007)
FWC (March 2008) FWC (March 2009)
5 Year Average $65.1/bbl
10 Year Average $45.8/bbl

Source: FactSet.
Note: FWC is a three-year Forward Curve.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

18

1.4.2 Power Market Overview
The Middle Eastern and Pakistani power markets are among the fastest growing sectors in the
world due to fast economic development, rapid population growth, and continued investments in
energy-consuming industrial projects and major real estate projects (especially in Qatar and
Saudi Arabia). This growth trend is expected to continue over the next 20 years. The Regions
installed capacity of 170GW (97% of this capacity in thermal generation represents around 4.0%
of global electricity generation. Power demand growth for the Region has been c.6% (CAGR) for
the last five years relative to c.2.5% (CAGR) for the US and Europe.
Figure 7 Major Power Markets Dynamics
0
10
20
30
40
50
Iran Saudi
Arabia
Pakistan UAE Kuwait Qatar Oman J ordan
(
G
W
)
0%
2%
4%
6%
8%
10%
A
v
e
r
a
g
e

5

y
e
a
r
s

(
%
)
Peak Demand Installed Capacity Demand Growth
US / EU Growth Benchmark

Source: ADWEA, DEWA, ECRA, FEWA, Kuwait Ministry of Energy, Private Power and Infrastructure Board (PPIB),
SEWA, Tavanir, UNDP, Zawya.
The majority of the Region has per capita consumption of electricity far below developed market
levels which creates opportunities for growth in most of these markets.
Figure 8 Power Consumption per Capita
0
5,000
10,000
15,000
20,000
25,000
Qatar Kuwait UAE KSA Oman Iran J ordan Egypt Pakistan US
K
w
h

p
e
r

C
a
p
i
t
a

Source: EIU; UNDP 2008 report.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

19

Figure 9 Installed Capacity in GW by Country 2008/2012E
0
10
20
30
40
50
Iran KSA UAE Pakistan Kuwait Qatar Oman J ordan
I
n
s
t
a
l
l
e
d

C
a
p
a
c
i
t
y

(
G
W
)
2008 2012
Capacit y Incr ease: 34GW

Source: ADWEA, DEWA, ECRA, FEWA, Kuwait Ministry of Energy, MEED, PPIB, SEWA, Tavanir, Zawya.
In order to develop the power and water sector and attract international expertise, the Middle East
and Pakistan have seen a focused effort from governments and state owned utilities to attract
significant private investments to the generation sector. According to MEED, private international
and regional power developers have been the main beneficiaries of the upsurge in activity.
Currently, 9 out of the 13 countries in the Region have already opened up their power sector to
private participation via the development of either IPPs or IWPPs. The countries that still do not
allow private participation in the power sector are Kuwait, Lebanon, Syria and Yemen.
Private power investments in the Region have been largely dominated by international investors
from outside the Region. However, local strategic and financial investors are increasingly active in
this market and are looking to establish development platforms to take advantage of the
significant growth opportunities.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

20

1.5 Financial Highlights
The Companys financial statements (presented below) consolidate AES Oasis head office
expenses with the results of its Barka, Amman East, Lal Pir and Pak Gen projects. The results are
based on audited financial statements, to the extent available, and are prepared in accordance
with IAS. All information on individual assets has been sourced from relevant
management accounts.
Figure 10 Consolidated Summary of Historical and Projected Financial Data of AES Oasis
SUMMARY FINANCIAL STATEMENTS
Fiscal Year Ending December 31,
(US$ millions) 2006A 2007A 2008A 2009E 2010E 2011E 2012E 2013E
Income Statement
Revenues 473 543 757 560 583 602 636 642
EBITDA 144 141 139 156 143 135 140 136
Margin 30.4% 26.0% 18.3% 27.9% 24.5% 22.5% 22.1% 21.2%
EBIT 133 137 125 132 118 109 110 106
Margin 28.2% 25.2% 16.5% 23.6% 20.3% 18.1% 17.3% 16.5%
Net Income to Minorities 17 15 15 18 17 17 18 19
Net Income to AES Oasis 67 62 48 69 51 48 48 45
Total Net Income Margin 17.8% 14.2% 8.3% 15.5% 11.6% 10.7% 10.4% 9.9%
Balance Sheet
Cash & Cash Equivalents 11 18 22 40 16 17 14 13
Net PP&E 368 438 542 593 593 598 598 572
Total Assets 898 941 1,020 967 938 932 904 876
Debt 339 399 594 578 520 479 449 419
Total Liabilities 395 482 749 712 656 616 587 557
Minority Interest 79 64 57 64 74 85 89 93
Total Shareholders' Equity 503 460 271 255 282 316 317 319
Cash Flow
Free Cash Flow to Equity 69 83 81 122 61 56 72 69
Total Dividends paid (66) (76) (84) (106) (33) (30) (64) (61)
Cash at End of Period 11 18 22 40 16 17 14 13

PROFITABILITY AND CASH GENERATION
Stable cash flows with a predictable and high EBITDA margin
Large scale business with 2010E consolidated revenues of US$583 million and EBITDA
margin of 24.5%
High quality cash flows given the strength of the underlying contracts, including
sovereign guarantees
BALANCE SHEET
All debt is at the project level
AES Oasis on a consolidated basis has additional leverage capacity which complements any
development strategy
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

21

2 Investment Highlights
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

22

UNIQUE PLATFORM
With 1,561MW (gross) of generation capacity spread across the Middle East and Pakistan, AES
Oasis offers a sizeable and balanced portfolio of controlling stakes in regional power and water
plants and comprises a unique platform for further expansion and development throughout the
Region and beyond. AES Oasis owns and operates:
The first IWPP facility in Oman, providing c.13% (427MW) of the countrys installed generation
capacity and converting up to 20 million gallons of seawater into fresh water each day (22% of
Omans installed capacity)
Two state-ofthe-art thermal steam plants in Pakistan, providing 727MW of the countrys
installed generation capacity, making AES Oasis one of the largest IPPs in the country
A new gas-fired power plant in J ordan which has one of the lowest costs in the market. It is on
schedule to achieve full commercial operations by J uly 2009 and provide 370MW of the
countrys contracted generation capacity
The sale of AES Oasis provides investors aspiring to achieve critical mass in the Region a unique
transformational opportunity to acquire a power plant portfolio with an attractive geographical
footprint and strategic positioning. We believe there is no other similar portfolio of assets available
for sale in the Region. Furthermore, the Amman East and Lal Pir and Pak Gen sites offer future
project development opportunities through expansion.
AES Oasis has an experienced workforce of 235 individuals with the cross functional knowledge
and ability to operate multiple technologies including simple cycle, combined cycle, thermal, and
desalination plants. The workforces demonstrated ability to switch from operational roles to
supporting business development activities and assisting in the project construction phase, along
with their experience of managing regulators and off-takers, will be a valuable asset to any buyer.
BEST-IN-CLASS OPERATIONS
The Plants are efficient large scale facilities with an average age of less than seven years. Due to
effective planning and implementation of preventive and routine maintenance programs
throughout the years the Plants have consistently shown a high level of availability and
performance against key operational benchmarks (outperforming the top decile of the comparable
power plants globally).
The management of these Plants benefit from good relationships with the relevant off-takers and
regulatory bodies in their respective countries.
All of the Plants were designed and constructed by world leaders in power plant and related
facility construction (Enelpower for Barka, Doosan Heavy Industries and Construction for
Amman East and Nichimen Corporation and Mitsubishi Heavy Industries (MHI) for Lal Pir and
Pak Gen).
BOO CONTRACTS PROVIDE POST-PPA UPSIDE
Each of the Plants was developed on a BOO basis, with expected plant lives exceeding contract
terms of the relevant PPA or PWPA. Given the likely deficit in energy and water supply in their
respective markets, the Plants have a significant opportunity in their respective post-PPA periods
to operate as merchant plants or to benefit from profitable extensions of their current
PPAs / PWPAs.
The attractive position that the Plants have in their respective electricity supply markets has a
positive impact on their long-term viability. Barka is a base load power and desalination plant that
is critical to the overall power system and fresh water supply of Oman. Amman East is critical to
the J ordanian power system and is the lowest generation cost plant in the country. Due to their
size and the substantial power deficit in the country, Lal Pir and Pak Gen are well positioned to
continue to play an important role in the Pakistani power market.
FUNDAMENTALLY ATTRACTIVE MARKETS
AES Oasis benefits from a balanced presence in some of the fastest developing economies in the
world. The macroeconomic outlook of the Middle East and Pakistan continues to be favorable,
with economic growth expected to exceed global averages (4-year CAGR of 4.7% vs. 1.6% for
the US and 1.3% for the EU). This positive economic outlook is supported by favorable
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

23

demographics, with a growing population expected to reach approximately 396 million by 2013, of
which over 60% will be under the age of 30. This robust macroeconomic growth is expected to
drive strong and growing demand for power. More than 34GW of new capacity will need to be
provided in the next 3 years in the geography comprising GCC, Iran and Pakistan.
VALUABLE POWER AND WATER PURCHASE AGREEMENTS CONTRACTS
Compared to PPA and PWPA contracts currently being tendered in the Region, the Plants
contracts have very attractive economics and are based on a strong and consistent risk allocation
framework. The Plants PPAs and PWPA benefit from sovereign guarantees and long-term fuel
supply contracts which mitigate fuel price risk. In the case of Amman East, the Plant benefits from
a tolling arrangement and takes no fuel supply or price risk. Barka and Lal Pir and Pak Gen rely
on governmental or semi-governmental fuel suppliers. The Plants tariffs consist of capacity and
energy purchase charges which are US Dollar and inflation indexed.
TECHNICAL SERVICE AGREEMENT (TSA) CONTRACTS PROVIDE ADDITIONAL UPSIDE
AES Oasis and wholly owned subsidiaries of AES provide technical advisory services to Amman
East and Barka respectively under TSAs. Revenues under the TSAs offer attractive incremental
economics and this revenue stream will be available to a buyer of AES Oasis or the relevant
Plant. The TSA revenues are in the form of (i) fixed fees for the services provided plus (ii) yearly
bonus payments that are structured to provide incentives to maximize availability and efficiency.
As part of the implementation of the TSAs, AES has trained the management and personnel of
the Plants. The management and operations team at the Plants posses the expertise and skill to
operate each Plant safely and reliably while maximizing the revenues under the TSAs for a
potential buyer.
EXPERIENCED WORKFORCE
All of the Plants have experienced and highly trained management and workforces.
Many employees have had international operating experience with AES and other international
energy companies.
To achieve best-in-class operations, AES Oasis ensures that management employees have
experience in multiple disciplines and experience in operating a diversified set of technologies
including CCGT, simple cycle and desalination plants and different fuel and energy sources. In
addition, almost all plant managers and team leaders have participated in various business
development activities.
In order to maintain the Plants as Top performers in their respective markets, AES Oasis provides
regular internal and external training (safety, environmental, leadership, heat rate and financial) to
all its employees. In addition, team leaders and managers are sent to specialized training centers
around the world (including in the US, J apan, Italy and Korea).
The Plants have had very low employee attrition. For example, the majority of the Lal Pir and Pak
Gen workforce have been with Lal Pir and Pak Gen since 1997 and have worked within the wider
AES network.
Operations and maintenance staff are fully integrated within the Plants. This workforce will form
part of any sale, enabling investors to have a seamless operational transfer as well as the ability
to acquire a high class workforce.
STRONG FINANCIAL PERFORMANCE
The Companys strong financial performance reflects the well-structured nature of the underlying
contracts which are guaranteed by the governments of the countries where the Plants
are located.
AES Oasis projects have stable and secure cash flows and strong balance sheets. This creates
good recapitalization opportunities particularly at Lal Pir and Pak Gen, whose project finance debt
is negligible, and also at Barka and Amman East, whose cash flows can support significant
incremental debt (declining debt levels as project matures). The Company expects a consolidated
2010E EBITDA of US$143 million with a 24.5% margin and consolidated Free Cash Flow to
Equity of US$44 million in 2010, which will include cash flow from the first full year of operations
at Amman East.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

24

3 Barka
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

25

3.1 Barka Overview
Barka is an Omani Public J oint Stock Company incorporated in the Sultanate of Oman on
19 November 2000, under a trade license issued by the Ministry of Commerce and Industry.
Barka operates a 456MW CCGT (out of which 427MW are contracted), and 20 MIGD water
desalination facility, located on the coast approximately 60km northwest of Muscat, the capital city
of the Sultanate of Oman. The Plant commenced commercial operations on 11 J une 2003.
Barka is the first IWPP in Oman, providing power and desalinated water to the OPWPC under a
15-year PWPA. The Plant provided c.14% of the countrys peak system capacity in 2008.
The PWPA can be extended if mutually agreed between OPWPC and Barka or, in the event that
a planned merchant power market is established by that time, the power could be sold into the
market. AES Oasis estimates the Plant to have a useful life of 40 years, allowing it to operate
until 2043.
In an Initial Public Offering in December 2004, Barka offered 35% of its existing shares to the
public and was transformed from a privately held joint stock company to a public joint stock
company listed on the Muscat Securities Market. The public shareholdings of Barka are
widely distributed.
Barka also benefits from a 25-year usufruct
1
agreement granted by GoO contract that is
extendable for a further 25 years.
Figure 11 Barka Ownership Structure Figure 12 Barka Location

AES Oasi s Multi tech LLC Free Float
AES Barka
58% 7% 35%
AES Barka
Services
TSA
AES Oasi s Multi tech LLC Free Float
AES Barka
58% 7% 35%
AES Barka
Services
TSA

Muscat
AES
BARKA
Sohar
Bahla
Ras as
Daqm
Salalah
Hayma
Muscat
AES
BARKA
Sohar
Bahla
Ras as
Daqm
Salalah
Hayma

INVESTMENT HIGHLIGHTS
Secure revenues through fixed price power off-take arrangements
Margin depends on Plant availability (not its production)
Negligible credit risk as payment obligations of OPWPC are guaranteed by the GoO which
has a long-term credit rating of A / stable / A- with S&P
Fuel supply arrangement with a GoO-owned company mitigates fuel price risk
Track record of efficient operations
Consistently reliable provider of service to its customer
Qualified and experienced in-house management team
Contributed to the successful development of Barka operations
Available for implementing future business development strategies
Located in a growing country with high energy and water demand expectations and one of the
most advanced power markets in the Middle East

1 Usufruct is the legal right to use and derive profit or benefit from property that belongs to another person, as long as
the property is not damaged.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

26

3.2 Omani Market Overview
Omans impressive economic performance over the past few years has been due to supportive
Government policies including a liberal trade regime. Oman has achieved a high real GDP
average growth rate of average 6.2% from 20042008 (EIU 2008) and has maintained surpluses
in both its overall fiscal position and external current account.
The Omani economy is still heavily dependent on hydrocarbons, with crude oil accounting for
around 25% of GDP in real terms (EIU 2008). This proportion is now slowly declining and Omans
oil resources are relatively limited and increasingly difficult to extract. Such concerns have added
urgency to the GoOs long-standing drive to diversify the economy away from its reliance on oil
exports. To this end, Oman has been promoting downstream industries and tourism, improving
education and health services, modernizing its infrastructure and addressing some structural
issues, including privatizing State-owned Enterprises (SOEs). Efforts to increase the role of the
private sector are expected to intensify, especially in electricity, water and telecommunications.
According to the EIU, in 2009 GDP growth is forecasted to decelerate to 4.9% and increase again
in 2010 to 5.2%, on the back of a global economic recovery. In the period to 2011, the economy
should strengthen its resilience to volatility in oil prices with increased output from the industrial
manufacturing facilities at Sohar, as well as growth in tourism and other services.
The EIU estimates that consumer price inflation will have risen to an average of c.13% in 2008,
up from 5.9% in 2007. The rising cost of imports has had an effect on local food prices and there
has been inflationary pressure from increased wages. However, with oil and non-oil commodity
prices expected to continue to be under pressure in 2009, inflation is estimated to drop to an
annual average of 7.5% in 2009 and 5.1% in 2010.
Figure 13 Oman Macroeconomic Statistics
4.5%
4.2% 4.0%
6.4%
5.2%
4.9%
2008 2009E 2010E 2011E 2012E 2013E
R
e
a
l

G
D
P

G
r
o
w
t
h
US CAGR: 0.6%

3.0
3.1
2.9
3.4
3.3
3.2
2008 2009E 2010E 2011E 2012E 2013E
P
o
p
u
l
a
t
i
o
n

(
m
)
US CAGR: 0.9%
Oman CAGR: 3.5%

5.5%
5.0%
5.0%
6.3%
6.0%
4.5%
2008 2009E 2010E 2011E 2012E 2013E
G
o
v
e
r
n
m
e
n
t

C
o
n
s
u
m
p
t
i
o
n

5.0%
4.8%
4.8%
12.6%
5.1%
7.5%
2008 2009E 2010E 2011E 2012E 2013E
C
P
I


The GoOs vision for economic development in the country is based on achieving an average
GDP growth rate of 7.4% through 2020. Adopting policies for the further development of the
private sector is a priority for optimum utilization of natural and human resources.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

27

Omans electricity generation capacity has grown significantly over the past three decades due to
the GoOs focus on extending access to rural and mountainous areas. Now that most of the
population has access to electricity, a significant problem facing the GoO is the need to increase
capacity to meet higher demand in urban areas as the population expands and as Omanis
become more affluent.
POWER MARKET STRUCTURE
At present, the power system in Oman can be viewed as three discrete networks:
The Main Interconnected System (MIS), comprising the former Muscat system, Wadi-al-J izzi
system and the Sharqiya system, all located in the north of Oman
The Salalah system located in the South of Oman and (the town of Salalah and its surrounding
areas represent the major load centre in the Region)
A number of isolated rural systems
The GoO completed the interconnection of the Central System in 2002. The Salalah system has
been transferred to the private sector as a vertically integrated concession. It is not proposed to
be connected to the transmission system in the foreseeable future due to the
geographical distance.
Whilst the Sector Law provides for the power system to have functional separation of the
generation, transmission, distribution and supply of electricity, it permits the Salalah system to
have a vertically-integrated industry within the Salalah concession area. OPWPC now intends to
achieve standardization of the structure of the power market across the Sultanate of Oman and in
this respect has put forward draft proposals for the possible restructuring of the Salalah system.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

28

Figure 14 Oman Power Market Structure
Al Rusail
Wadi Al J izzi
United Power
Al Kamil
Al Ghubrah
Barka
Sohar Power
Generation
Power & Water
Procurement
Transmission
& Dispatch
Distribution &
Supply
Oman Power & Water
Procurement
Company
Oman Electricity
Transmission
Company
Muscat Electricity
Distribution
Majan Electricity
Company
Mazoon Electricity
Rural Systems
Generation Transmission Distribution & Supply
Salalah Power System
Main Interconnected System
Al Rusail
Wadi Al J izzi
United Power
Al Kamil
Al Ghubrah
Barka
Sohar Power
Generation
Power & Water
Procurement
Transmission
& Dispatch
Distribution &
Supply
Oman Power & Water
Procurement
Company
Oman Electricity
Transmission
Company
Muscat Electricity
Distribution
Majan Electricity
Company
Mazoon Electricity
Rural Systems
Salalah Power System
Main Interconnected System

Source: AER.
In December 1999, the Council of Ministers approved the introduction of a Government Policy
designed to encourage private sector participation in the electricity and related water sector in
Oman. As part of this policy, the GoO tendered the Al Kamil, Barka and Sohar projects and
awarded them to private sector participants. In addition to encouraging private sector participation
in generation, the GoO began the process of restructuring the electricity and related water sector
in Oman. As a result, on 21 J uly 2004 a new law for the sector, the Sector Law was promulgated.
The new Sector Law resulted in the unbundling of the electricity sector and the transfer of
generation, transmission and distribution assets previously owned by the Ministry of Housing,
Electricity and Water (MHEW) to newly formed companies. Pursuant to Royal Decree 92/2007,
the electricity and water functions and assets of MHEW (now named the Ministry of Housing)
were transferred to the Public Authority for Electricity and Water (PAEW).
The new industry structure resulting from this process involves
Three distribution companies: Muscat, Majan, Mazoon
A number of generation and desalination companies: Al Rusail, Wadi Al J izzi,
United power, Al Kamil, Al Ghubrah
An independent electricity transmission and dispatch operator, the Licensed Transmission
System Operator (OETC)
A central buyer of power and desalinated water, OPWPC
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

29

OVERVIEW OF DEMAND AND SUPPLY FOR ELECTRICITY IN OMAN
Oman is a market with a high demand profile. The electricity and desalinated water consumption
is expected to surge over the next few years with peak demand for electricity expected to grow on
average by around 8.5% annually until 2015.
According to the OPWPC projections, the maximum power demand in the MIS will grow from
3,031MW in 2008 to 5,348MW in 2015 while annual energy demand in the MIS will grow at a
similar rate, from 14.0TWh in 2008 to 25.6TWh in 2015.
Demand for desalinated water in the regions covered by the MIS is expected to increase from
102 million m
3
in 2008 to 234 million m
3
by 2015, reflecting a policy of reduced reliance on
groundwater resource, as well as the effects on demand of population growth and
economic development.
Given the current available capacity, OPWPC foresees that between 2,100MW and 3,000MW of
additional power generation resources will be needed by 2015 in the MIS. Further additional
capacity may be required to support enhanced security of supply.
The country is currently looking for new investments to ensure that requirements for new capacity
and output are met. One of the most important is the greenfield Barka 2 IWPP currently in
development by Suez and Mubadala combined with the acquisition of Al Rusail. Furthermore, the
GoO in conjunction with OPWPC is considering new greenfield power projects at J alalah 2
(currently being tendered), Barka 3, Al Ghubrah and 1,000MW of coal at Al Duqm. Currently, gas
is the primary fuel for power and desalination plants in Oman.
Figure 15 Oman Power and Water Demand/Supply
Power Water
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2009 2010 2011 2012 2013
(
M
W
)
Available Capacity (1) Demand Forecast

400
450
500
550
600
650
700
2009 2010 2011 2012 2013
(
T
h

m
3

p
e
r

d
a
y
)
Available Capacity (1) Demand Forecast

Source: OPWPC seven years statement 20092015.
(1) Supply declines over the years due to a reduction of available capacity from some of the existing plants.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

30

Figure 16 Oman IPP Assets
1
2
3
4
5
6
8
7
1
2
3
4
5
6
8
7

1
2
3
4
5
6
7
8
Company
Installed
Capacity
(MW)
Desalination
Capacity
(MGD/day) Key Shareholders
Fuel
Source
Year
Built
PPA
Terms
Barka 427 20
AES Oasis (58%)
Omani Investors (7%)
Public (35%)
Gas 2003 15
Al Kamil 285 -
IPR (65%)
Public (35%)
Gas 2000 15
Dhofar 240 -
OTPL
(1)
(45%)
Public (35%)
Gas 2001 20
Sohar 585 33
Suez (50%)
Gas 2004 20
Al Manah 270 -
Suez (33%)
Public (40%)
Gas 1995 20
Al Rusail 668 -
Suez (48%)
Mubadala (48%)
Gas 2007 NA
Al Ghubra 500 35 Govt (100%) Gas 1976 NA
Al J izzi 222 - Govt (100%) Gas NA NA
1
2
3
4
5
6
7
8
Company
Installed
Capacity
(MW)
Desalination
Capacity
Fuel
Source
Year
Built
PPA
Terms
Barka 427 20
AES Oasis (58%)
Public (35%)
Gas 2003 15
Al Kamil 285 -
IPR (65%)
Public (35%)
Gas 2000 15
Dhofar 240 -
OTPL
(1)
(45%)
Public (35%)
Gas 2001 20
Sohar 585 33
Suez (50%)
Gas 2004 20
Al Manah 270 -
Suez (33%)
Public (40%)
Gas 1995 20
Al Rusail 668 -
Suez (48%)
Mubadala (48%)
Gas 2007 NA
Company
Installed
Capacity
(MW)
Desalination
Capacity
Fuel
Source
Year
Built
PPA
Terms
Barka 427 20
AES Oasis (58%)
Public (35%)
Gas 2003 15
Al Kamil 285 -
IPR (65%)
Public (35%)
Gas 2000 15
Dhofar 240 -
OTPL
(1)
(45%)
Public (35%)
Gas 2001 20
Sohar 585 33
Suez (50%)
Gas 2004 20
Al Manah 270 -
Suez (33%)
Public (40%)
Gas 1995 20
Al Rusail 668 -
Suez (48%)
Mubadala (48%)
Gas 2007 NA

Source: OPWPC, Zawya, Advisors research.
(1) OTPL comprises Malakoff (43.4%), AGCC Energy Fund of Dubai (28.3%) and Dabat Power of Oman (28.3%).
LEGAL AND REGULATORY FRAMEWORK
The Authority for Electricity Regulation (the Authority) was established pursuant to Article (19) of
the Sector Law and is charged with regulating the electricity and related water sector pursuant to
Article (2) of the Sector Law. The Authority is administratively and financially independent
from GoO.
The Sector Law designates certain activities as Regulated Activities. These include
The generation, transmission and distribution of electricity
The generation of electricity combined or co-located with the desalination of water
The functions assigned to OPWPC
Any person undertaking, or seeking to undertake a Regulated Activity requires an authorization
from the Authority. Authorizations can take the form of a license or a license exemption.
Under the Sector Law it is not permissible for any person to undertake a Regulated Activity
without a license or license exemption. Any person undertaking a Regulated Activity is required to
comply with the conditions of its license or license exemption.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

31

The Sector Law requires licensees to secure the prior written approval of the Authority to create
or agree to create any security or interest over any of the project assets, liabilities or interests.
The market liberalization provisions of the Sector Law which provide for further changes to the
structure of the electricity and related water sector in Oman are based on recommendations of the
Authority and are subject to the approval of the Council of Ministers.
Market liberalization can include one or more of the following
Disposal by the GoO of any economic interest in the Electric Holding Company, the entity
holding the GoOs interest in Wadi Al J aizzi, Al Ghubrah, and the Omani and transmission
distribution companies
Sale of output by licensed generators and licensed generators/desalinators to a person
other than OPWPC
Import or export of electricity by a person other than OPWPC or Rural Areas
Electricity Company
Competition amongst licensed suppliers
OPWPCs license requires it to conduct a fair and transparent competition when tendering for new
capacity and output. OPWPC is required to ensure that the competition is open to international
and domestic investors. In performing the licensed activities, OPWPC cannot create any undue
preference in favor of, nor unduly discriminate against, any person.
The Authority has a duty, pursuant to the Sector Law, to secure the conduct of fair and
transparent competition by OPWPC when procuring new capacity and output. The Authority has
advised that it is committed to ensuring that solicitations for new capacity and output are
conducted in a fair and transparent manner and that any applicant with concerns about the
manner in which the process for the Project is being conducted may notify the Authority of
such concerns.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

32

3.3 Technical Specifications
3.3.1 Overview
The power section of the Plant uses two V94.2 Ansaldo gas turbines (to drive electrical
generators) operating on gas fuel with Heat Recovery Steam Generators (HRSGs), which utilize
the exhaust heat of the gas turbines to produce steam, and some of this steam is supplied to a
Steam Turbine to complete the combined cycle.
The balance of the steam produced by the HRSGs is supplied to the desalination section of the
Plant to produce desalinated water in three identical multi-stage flash evaporator desalination
units. The desalination units were supplied by Hitachi and have a capacity to produce 6.67 MIGD
each. The desalination section also includes seawater intakes and outfalls.
The land for the Plant is owned by the GoO which has granted a usufruct to Barka for 25 years
(renewable for a further 25) under a Usufruct Agreement. The plot of land measures
about 87,000sqm.
Gas is supplied through pipelines by MoG and received at a pressure reduction terminal near the
Plant. There are storage facilities for a minimum of three days of standby fuel oil.
3.3.2 Construction History
In April 2000, the Ministry of National Economy (MNE) of the GoO issued a Request for Proposals
to tender for the Barka Power and Desalination Project. A consortium comprising AES and
Multitech LLC (Multitech), a wholly-owned subsidiary of the Bahwan Engineering Group of Oman,
was the successful bidder. AES through its wholly owned subsidiary, AES Barka Holdings
Limited, and Multitech signed the definitive PWPA in November 2000 and construction
subsequently commenced in J une 2001.
The project involved the implementation of a gas-fired 427MW CCGT and 20 MIGD water
desalination plant on a BOO basis. The project also included the construction of the seawater
intake/outfall facilities and the access road.
The Plant was constructed on a fixed price turnkey basis by a consortium of EPC contractors led
by Enelpower and comprising Hitachi Zosen. The Plant started commercial operations on
11 J une 2003.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

33

3.3.3 Major Equipment
Figure 17 Barka Equipment Layout
Demineralization
Plant
Demineralization
Plant
Generator
117MW
Generator
117MW
Generator
222MW
Distillatewater
GT 1
GT 2
Steam
Internal
Consumption
29MW
Seawater
Seawater
Seawater
Product Water
(To OPWPC)
O
P
W
P
C
4
2
7
M
W
HRSG1
HRSG2
Desalination Unit 13
6.67 MIGD
6.67 MIGD
6.67 MIGD
L
P

S
t
e
a
m
Demineralization
Plant
Demineralization
Plant
Generator
117MW
Generator
117MW
Generator
222MW
Distillatewater
GT 1
GT 2
Steam
Internal
Consumption
29MW
Seawater
Seawater
Seawater
Product Water
(To OPWPC)
O
P
W
P
C
4
2
7
M
W
HRSG1
HRSG2
6.67 MIGD
6.67 MIGD
6.67 MIGD
L
P

S
t
e
a
m

Note: All relevant equipments comply with all Omani environmental laws and are regularly tested.
GAS TURBINES
Barka has two V94.2 combustion turbines, supplied by Ansaldo. Each gas turbine is rated at
117.3MW gross capacity, at 50C, fired on gas and in new condition. The gas turbines utilize
diesel oil as the back-up fuel.
They operate at a speed of 3,000 R.P.M., an ambient pressure of 1.013 bar, an R.H. of 100% and
a cooling water temperature of 35 degrees Celsius. The gas turbines have an
electro-hydroelectric governor.
HRSGs
Two HRSGs, supplied by Ansaldo, are equipped with a supplementary duct firing system working
on gas and have bypass stacks and exhaust stacks.
The HRSGs have an outdoor natural circulation and post-firing capabilities. They operate at a
maximum continuous rating of 436t/h and under steam conditions of 79.37 bar/542 degrees
Celsius. The firing system consists of duct burners and operates on gas.
STEAM TURBINE
The Plant utilizes a condensing, sliding pressure, controlled extraction, axial exhaust, two casing
single flow type steam turbine.
The steam turbines have a rated output of 222MW. The main stop valve operates under
conditions of 77 bar and 543 degrees Celsius. The LP ST extraction takes places under
conditions of 2.6 bar and 133 degrees Celsius.
GENERATORS
There are two GT generators rated at 159MVA at 50C (guarantee conditions). Each generator
has its own step up transformer with a range of 15.75220KV. The generators are horizontally
mounted with a rotating field type.
One ST generator rated at 280MVA at 50C (Guarantee conditions). The Generator has its own
step up transformer with a range of 19220KV. The generator is also horizontally mounted with a
rotating field type facility.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

34

CONDENSER
Two pass once through horizontal seawater condensers are installed and are designed to
accommodate 102 kg/s of LP turbine exhaust flow, 178 kg/s of HP by-pass flow and 35 kg/s of LP
by-pass flow. Condenser tube material is B338-2 (titanium welded). System is provided with
2x 50% condenser cooling water pumps and 3x 50% condensate pumps during normal
operating conditions.
FUEL SUPPLY
The gas system feeds the Unit 1 and 2 GTs, and the supplementary firing with clean and dry gas
at the required pressure and temperature.
WATER SUPPLY AND DESALINATION
Desalination Island
The desalination plant consists of seawater intake and outfall facilities, three identical MSF
desalination units, a remineralization plant and their auxiliaries. The desalination units are
designed to generate a total of 20 MIGD of water and each unit will have a guaranteed net
capacity of 6.67 MIGD, based on a seawater temperature of 35C.
Remineralization Plant
The remineralization plant is designed to harden the distillate water up to 50 mg/l of CaCO
3
by the
limestone dissolution process. Required CO
2
gas is taken from the vent gas exhausted from the
MSF units.
FIRE PROTECTION SYSTEM
The Plant contains state of the art fire protection system that includes:
Carbon dioxide (CO
2
): For all the three generators enclosures
Foam system: For diesel oil unloading area, diesel oil storage tanks, diesel oil pumping station
and turbine hall area on gas turbine combustion chamber
Deluge system: For all transformers, GT and ST lube oil tanks, ST waste oil tank and GT and
ST bearings
FM 200: 11 KV switch gear, marshalling panel room and cable gallery of electrical control building
and Gas Turbine & desalination local control rooms
Water sprinklers system: For all buildings as required by NFPA
Portable fire extinguisher: Appropriate types of extinguishers are provided in all areas of
the Plant
Fire fighting pumps: The Pant is equipped with one J ockey pump to handle routine pressure
drops in the system. One electric driven main fire fighting pump and a standby diesel engine
driven fire fighting pump is also provided to handle any emergency situation. A second stand by
diesel engine pump is also provided at the seawater intake
GRID CONNECTION
Each turbine generator unit is connected to its respective generator step-up transformer via an
isolated phase bus duct; the step-up transformers are then connected to Oman Electricity &
Transmission Companys (OETC) 220kV switchyard (located next to the Plant). Each generator
is equipped with a generator circuit breaker. Each gas turbine is provided with one unit
auxiliary transformer.
The nominal value of the grid frequency is 50Hz with the system frequency set points between
49.95Hz and 50.05Hz. During exceptional steady state conditions, Frequency deviations will not
exceed 49.90Hz to 50.1Hz unless disturbed circumstances prevail. Under disturbed conditions,
system frequency could rise transiently to 51.50Hz or fall to 48.00Hz. The voltage on the 220kV
parts of the Transmission System at each Connection Site will remain within the limits of a
minimum voltage of -10.0% and a maximum voltage of +10.0%.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

35

3.4 Operating Performance
Barka is designed to operate as a base load power and water production plant. To improve plant
flexibility, a certain number of features have been added to maximize independence between the
station electrical output and the desalination plant water production. The control system operates
the power output and desalinated water plant under automatic control within the scenarios chosen
by the Plant operators. Furthermore, in the event that there is a failure of a material plant
component, or a disturbance in the electrical system, the control system reacts by stabilizing the
Plant and setting it into a safe operating mode until the problem can be rectified. When the Plant
is operating at full power and water output, the auxiliary power consumption of the total Plant is
estimated to be 28.17MW.
The project agreements require the power plant to achieve 100% availability in the summer and
85% availability in the winter. Similarly the desalination plant is required to achieve 95%
availability in the summer and 87% availability in the winter.
Barka has consistently proven to be a reliable provider of electricity and water to its customer.
During the year 2008, Barka achieved a reliability factor of 99.4%. Barka exported 2,312GWh
during 2008. Cumulatively, the Plant has produced 13,837GWh since commencement of
commercial operations in J une 2003.
Figure 18 Barka Availability
Power (Availability %) Water (Availability %)
89.0%
93.2%
91.2%
82.8%
92.1%
2004 2005 2006 2007 2008

90.5%
92.7%
90.3%
88.4%
89.1%
2004 2005 2006 2007 2008

Note: 2007 availability was affected by a cyclone (Gonu) that hit Oman and due to scheduled Major Maintenance.
Figure 19 Barka Load Factor
Power (Load Factor %) Water (Load Factor %)
79.0% 78.5%
75.0%
70.2%
68.0%
2004 2005 2006 2007 2008

88.5%
89.0%
96.1%
98.7%
100.0%
2004 2005 2006 2007 2008

Source: Company info; Annual Reports.

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

36

Figure 20 Barka Heat Rate
Power and Water combined Heat Rate (Btu/kWh)
9,096
8,997
10,155
10,894 10,861
2004 2005 2006 2007 2008

Source: Annual Reports.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

37

3.5 Contract Framework
3.5.1 Overview
Figure 21 Barka Contractual Framework
Barka Services I
Barka Services II
AES Oasis Multitech LLC
Syndicate of Banks Enel SpA
AES Corporation
Enelpower SpA
Hitachi Zosen
Corporation
OPWP
Government of Oman
(MOF)
AES Barka SAOG MOG
AES Services Agreement
Project Founders Agreement
Shareholders Agreement
Term Loans
EPC Contact
PWPA
ECA and WCA
Government Guarantee
Usufruct
for the
Temporary
Area
Usufruct for
the Sea
Water
Facilities
Usufruct for
the Site
NGSA
Technical
Services
Agreement
Equity
Parent
Company
Guarantee
PAEW
Barka Services I
Barka Services II
AES Oasis Multitech LLC
Syndicate of Banks Enel SpA
AES Corporation
Enelpower SpA
Hitachi Zosen
Corporation
OPWP
Government of Oman
(MOF)
AES Barka SAOG MOG
AES Services Agreement
Project Founders Agreement
Term Loans
EPC Contact
PWPA
ECA and WCA
Government Guarantee
Usufruct
for the
Temporary
Area
Usufruct for
the Sea
Water
Facilities
Usufruct for
the Site
NGSA
Technical
Services
Agreement
Equity
Parent
Company
Guarantee
PAEW

Source: PPA and Project Information Memorandum dated February 2001.
Table 2 Summary of Barka Key Contracts

Duration Counterparty Key terms
PWPA
15 years OPWPC OPWPC provides both
revenue and fuel cost
assurances for Barka
(agreement novated to the
OPWPC since May 2005)
Fuel Supply
Equivalent to PWPA Ministry of Oil
and Gas (MOG)
MoG delivers 100% of
requirements of fuel at a fixed
price per MMBTU
TSA
Equivalent to PWPA AES Barka
Services 1 and 2
Technical services advisory is
responsibility of AES Barka
Services Company
Financing
Debt at start of
operations: US$332m
Debt as of 31 December
2008: US$264m
Repayable by 2018
Consortium of
local and
overseas banks
Repayable by 2018 through
semi annual installments
Bullet payment of 10.49% at
the end of term
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

38

3.5.2 Key Counterparties
MHEW / OPWPC
Prior to May 2005, the MHEW owned all electricity and related water infrastructure in Oman, with
the exception of a few IPPs and IWPPs. MHEW was responsible for the O&M of the GoO-owned
generation plants and the entire transmission and distribution system. Following the promulgation
of a Sector Law in J uly 2004 (effective August 2004), the electricity sector was unbundled and
divided into newly created corporate entities. A new regulatory authority was formed to oversee
the power sector. Effective 1 May 2005, the rights and obligations of MHEW under the PWPA
were transferred to the newly created OPWPC.
OPWPC is obliged to ensure that production capacity and all other goods and services which are
purchased by it are purchased or acquired and managed on an economic purchase basis. The
license to OPWPC requires it to undertake its responsibilities efficiently and economically and in
accordance with directions of the Regulatory Authority. OPWPC has the right to contract for the
purchase of all production capacity and output in Oman unless the Regulatory Authority
decides otherwise.
MOG
The Gas Sales Agreement, signed on 26 November 2000, is with the MOG of the GoO. The Gas
Sales Agreement expires on the same date as the PWPA.
In the event that MOG does not provide the required quantities of gas during normal operation,
MOG is required to compensate Barka for the additional cost of the Plant running on liquid fuel.
LENDERS
The bank syndicate is led by Standard Chartered Bank and Arab Banking Corporation and
includes Bank Muscat SAOG, Arab Bank Plc, Mitsubishi UFJ , BNP Paribas, Calyon, HSBC Bank
Middle East, National Bank of Oman.
3.5.3 Post-PWPA Period
The OPWPC is responsible for ensuring that sufficient generation resources are available to meet
growing demand and compensate for capacity falling out of contract.
OPWPCs intention is to ensure that these requirements are met on the basis of firm, contracted
capacity. Based on OPWPCs demand projections and considering the present portfolio of
contracted capacity, shortfalls in firm generation and corresponding excesses in load hours
(above the 24-hour government mandated limit) are expected to occur and increase during
20102015.
To this extent, OPWPC will look to secure the required generation either through new greenfield
projects or from existing non-contracted resources and interconnected systems. Moreover in
developing plans for procuring power generation resources OPWPC is required to consider the
opportunity for combining power generation with water desalination so as to benefit from
economies of co-location and co-procurement.
Given the need for additional power generation in the MIS and the requirements of the water
department for desalination capacity, there is clearly an opportunity for procuring the capacity
together.
All PWPAs / PPAs in Oman have a duration of 15 years and the projects that started later than
Barka have a much higher tariff in their contract, as a result of an increase in construction cost
after Barka was awarded in 2000. Barka also benefits from having a usufruct agreement of 25
years, extendable for further 25 years.
Under the existing market structure, OPWPC would have an incentive to negotiate with Barka and
the other contracted generators to extend all or only some of the PWPA / PPA contracts before
they expire. The starting point for OPWPC in negotiations would most likely be either the current
tariff or the price of a new market entrant. As a power and desalination plant with a relatively
lower tariff, Barka is likely to have a better negotiating position than its peers.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

39

The introduction of a merchant market, with the ability to enter into bilateral contracts as in most
merchant electricity markets, is also considered a possibility.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

40

3.6 Management and Employees
The Barka management and employee team comprises 55 individuals that strive to operate the
Plant in a safe, clean, cost effective and reliable manner. Omani nationals comprise 47% of the
team (in line with the Omanisation requirements) and most employees have either an accounting
or engineering background. All Plant employees are employed by Barka and are intended to be
part of the sale.
Barkas Board of Directors consists of seven members. AES Oasis controls the board and the
Chairman of the Board is an AES Oasis nominee. The Barka senior management team comprises
five individuals.
Figure 22 Barka Management Organization
CEO / Plant Manager
Maintenance
Team Leader
Operations
Team Leader
Power Block
Team Leader
Desalination
Team Leader
HSE Team
Leader
Support Internal Audit
Audit
Committee
CEO / Plant Manager
Maintenance
Team Leader
Operations
Team Leader
Power Block
Team Leader
Desalination
Team Leader
HSE Team
Leader
Support Internal Audit
Audit
Committee

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

41

Table 3 Barka Management Biographies
Professional/Title
Years of
Experience
Nadeem Rizvi
Chief Executive
Officer, Board
Member and
Plant Manager
19
(14 with AES)
Nadeem has been in his current role at Barka since 2007.
He joined AES in 1994 at the development stages of Lal Pir
and Pak Gen
After working through the development, construction and
operation of Lal Pir and Pak Gen, he moved to AES Dubai in
1999 as a regional finance manager. He joined Barka in 2001
as CFO
Prior to joining AES he held various finance positions in the
textile industry in Pakistan
He has qualified as a Cost and Management Accountant from
the Institute of Cost and Management Accountants of Pakistan
Zafar Yasin
Operations
Manager
18
(14 with AES)
Zafar has been in his current role at Barka since
September 2007
He joined AES in 1995 in construction as a project engineer
and in 1997 became an operations engineer at Lal Pir and
Pak Gen
He joined the AES Ras Laffan bid team from Lal Pir in 2001
and was promoted as Operations Manager for Ras Laffan. He
was involved in negotiations of the PWPA, FSA and the
EPC contract
He graduated from University of Engineering and Technology
in Lahore with a degree in Civil Engineering
Salim Al-Hatmi
Desalination
Team Leader
8
(8 with AES)
Salim has been in his current role at Barka since 2007
He joined Barka in 2001 and worked as I&C Engineer
until 2005
He graduated from Sultan Qaboos University with Honours in
Electrical Engineering
Hamoud Al Amri
Power Block
Team Leader
14
(7 with AES)
Hamoud has been in his current role at Barka since J uly 2007
He has significant historical experience from working as a
control room engineer at Barka during the
commissioning period
Prior to joining AES, he worked in Al Ghubrah power and
desalination plant as Assistant Shift Engineer
He graduated from Glasgow Caledonian College with a B.Sc.
in Mechanical Engineering
Ahmed Ali
Maintenance
Manager
14
(9 with AES)
Ahmed has been in his current role since February 2009
He joined AES in 2000 at Lal Pir and then worked as
Operations Team Leader at Ras Laffan, Plant Manager at AES
Bohemia in Czech Republic and Technical Project Manager at
AES Kilroot, Northern Ireland
Prior to joining AES, he worked at Pak Arab Fertiliser Ltd. and
INET, Lahore
He graduated from UET, Lahore with a B.Sc. in
Salman Pervez
Support Service
Team Leader
13
(13 with AES)
Salman has been in his current role in September 2008
He joined AES in 1996 at Lal Pir and Pak Gen and worked as a
Commercial and Finance Officer, before moving to Barka
in 2002
He graduated from Punjab College of Business Administration,
Lahore with an MBA
Abdullah Ali Al-Nofi
Health Safety
and Environment
Team Leader
8
(8 with AES)
Abdullah has been in his current role in October 2008
He joined AES in 2001 at Barka and worked as a
Project Engineer during construction and then as an O&M
Engineer during operation
He graduated from Sultan Qaboos University with a Degree in
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

42

3.7 Consents and Permits
3.7.1 Key Contractual Consents
A sale of the shares in AES Oasis or any of its relevant subsidiaries other than in Barka will
trigger contractual consent requirements from Barkas project finance lenders.
Table 4 Barka Key Contractual Consents
Agreement Consents Needed Consenting Party
Loan Agreement dated
02/05/01 (As Amended by
the 1st Amendment
Agreement Dated 26/10/06)
If AES Oasis Ltd does not own and control
directly or indirectly at least 26% of AES
Barka SAOG
Majority Lender
(1)

ESRA Dated 02/05/01 Waiver needed until the date the loan under the
loan agreement has been discharged (i.e. the
End Date) if, amongst other things, AES ceases
to own 26% shareholding in Barka
Majority Lender
(1)

(1) Standard Chartered Bank (SCB) as facility and security agent acting on the instructions of the majority lenders.
3.7.2 Permits and Regulatory Consents
Barka is required to obtain and maintain the various relevant consents, permits and authorizations
for the operation of the Plant, all of which are currently in place subject to their respective terms
and conditions.
The Sector Law provides a licensed generator with a right to construct, own, finance, operate and
maintain the Production Facilities specified in its license provided that it is performed in a
safe manner.
Barkas consents, permits and licenses are all renewable and it is not expected that any extension
would be unreasonably refused.
All the issued share capital of Barka is admitted to listing on the primary market of the Muscat
Securities Market and Barka is in full compliance with the regulations of the Capital Market
Authority and has paid all listing fees in connection therewith, including shareholders registry fees
due to Muscat Depository and Securities Registration Company S.A.O.C.
A sale of the Sellers interests in Barka (however structured) will require the consent of the
Authority for the Regulation of Electricity (AERO) under the terms of Barkas Generation and
Desalination License.
Table 5 Barka Regulatory Consents
Authority Basis
Authority for the Regulation of
Electricity in Oman
Generation and Desalination License, granted on 1 May 2005 for a
period of 25 years
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

43

3.8 HSE, Litigation and Insurance
3.8.1 Health and Safety
Barka has consistently proved to be a safety leader.
In 2008 a total of 136,844 man hours were completed at the site without a Lost Time Accident
(LTA) and with zero fatalities. Total man hours at site since COD and without an LTA are over
773,400. Barka has focused on providing safety training not only to the team but also to
its contractors.
Since COD, Barka has reached the following major achievements in this area:
Six years without LTA completed in May 2008
Launching a behavior based safety program
Effectively maintaining OSHAs 18001:1999 certification on Health and Safety Performance.
3.8.2 Environmental Performance
Barka is committed to produce safe, clean, reliable and cost effective electricity and water for its
consumer. The fuel used at Barka is Omani gas which has a low sulphur content of 5 parts per
million or less.
The GTs used are equipped with Dry Low NOx burner technology to control air emissions levels
of NOx. Barkas NOx emissions for 2008 averaged approximately 30% of the permitted values
and continued to be controlled in an effective manner.
A continuous emissions monitoring system (CEMS) provides real time air quality measurements
while ambient air monitoring system tracks air quality and the effects on the environment from
plant operations.
Effluent water is being discharged back to the sea and routinely monitored for compliance with all
regulations and standards while other waste streams are also monitored in accordance with all
standards and regulations relative to the business operating permits.
Barka is effectively maintaining ISO 14001:2004 certification for its environmental management
system since 2006. Barka remains committed to environmental compliance in its operation and
continues to develop process and program to proactively prevent and mitigate possible adverse
impacts on the environment.
3.8.3 Litigation and Contingent Obligations
The Company is not aware of any material litigation or contingent obligations outstanding
at Barka.
3.8.4 Insurance
ALL RISKS INSURANCE
All plant, buildings and properties belonging to Barka are insured for a sum up to US$492 million,
subject to a deductible of US$1 million. The company has also insured business interruption
losses up to US$25 million, which is subject to a time deductible of 60 days.
THIRD-PARTY INSURANCE
Covering the Companys legal liability against accidental injuries to persons and tangible property
belonging to third-parties. The insured value is US$50 million per occurrence.
TERRORISM INSURANCE
The Company also subscribes to terrorism insurance, for an amount of US$200 million per
occurrence and an excess of US$500 thousand in respect of property damage and 60 days in
respect of business interruption.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

44

3.9 Financial Performance
3.9.1 Summary Assumptions
Table 6 Barka Macroeconomic Indicators
Macroeconomi c Indi cators
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
CPI (US) 3.40% 3.30% 4.50% (0.60%) 1.10% 1.90% 2.00% 2.10%
PPI (US) 1.02% 7.98% 3.80% 15.53% 0.90% 2.20% 2.40% 2.40%
Omani inflation 3.30% 4.71% 12.20% 9.00% 5.10% 5.10% 5.10% 5.10%
Exchange Rate (US$/RO) 0.3851 0.3851 0.3851 0.3851 0.3851 0.3851 0.3851 0.3851

Source: Company Financials; US Bureau of Labor Statistics (BLS); and projections from EIU.
Table 7 Barka Operating Assumptions
Barka Operating Assumptions
Fi scal Year Endi ng December 31,
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Gas price (US$/GJ ) 1.58 1.58 1.58 1.58 1.58 1.58 1.58 1.58
Heat Rates (Btu/KWh) 10,155 10,894 10,861 9,983 10,004 10,024 10,052 10,065
Dispatch Levels (GWh) 2,624 2,169 2,312 2,299 2,220 2,220 2,224 2,220
Days Receivables 30 34 32 32 30 30 29 30
Days Payables 26 62 68 62 43 43 43 43

Source: Company Financials and Projections.
KEY ASSUMPTIONS
2007 financials were restated in 2008 due to a change in the recognition of revenues
according to the IFRS guidelines. Financials for 2006 were not restated and are therefore not
fully comparable
Barka is expected to function as a base load plant and load factor in projected periods is
based on current electricity demand forecasts. Guaranteed availability in forward periods is
91%
Gas price is fixed at US$1.58 per GJ which mitigates any fuel price risk. Volume risk is
mitigated because of the reasonable and achievable heat rate negotiated in the PWPA
Currently, Barka is experiencing a failure of its steam turbine generator due to the loss of
brazing on one of the half phase end winding joints for the generator stator windings (the point
at which the generator bar is connected to the end connection). One Top generator bar which
is associated with this damage requires replacement as do all six terminal bushings. According
to the original equipment manufacturer, Ansaldo, the equipment can be repaired and brought
back to its original efficiency levels. It is expected to be rectified by mid May 2009 and no
significant issues are expected in the future
The foreign exchange rate is US$0.3851 per Omani Rial
The entire investment charge element of the capacity charge is indexed for foreign exchange
variation, linked to the US$ per Omani Rial exchange rate. The fixed and variable operation
and maintenance charges for power and water are linked to the US$ per Omani Rial exchange
rate, the US inflation rate and the Omani inflation rate
Hedges: The existing 100% interest rate hedge has been in place since the project was
refinanced, in October 2006 expires in 2012. Thereafter interest will be calculated on the basis
of prevailing 6 months LIBOR. Interest rates in our forecast represent the 6-month LIBOR
forward curve
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

45

3.9.2 Summary Financial Statements
Table 8 Barka Financial Summary 2006/2013E
Source: Audited Financial Statements and Company Projections.
(US$ millions) 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Net Income to AES Oasis 15.7 8.5 11.6 10.0 13.0 13.0 16.4 17.3
Distributions to AES Oasis 12.0 4.1 6.0 4.1 4.1 2.9 6.2 7.1
TSA Fee (Payable to AES Corp) 3.7 3.5 4.1 4.0 4.0 4.1 4.2 4.3
DSCR 1.7 2.8 1.3 1.2 1.4 1.5 1.5 1.7
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

46

4 Amman East
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

47

4.1 Amman East Overview
Amman East, a 370MW gas-fired/DFO plant, is in the final stages of construction and is located
approximately 14km east of the village of Al-Manakher which is about 25km east of Amman,
J ordan. The Plant has a land lease of 25 years from Phase 1 COD (J uly 2008). The Plant is
expected to function primarily on gas from the Egyptian pipeline, but will be capable of switching
to DFO if needed.
Operations are commencing in two stages:
Phase 1: Initial operations of 247MW in simple cycle mode which began in J uly 2008
Phase 2: Full commercial operations of contracted 370MW in combined cycle which is on
target to be achieved by J uly 2009
NEPCO is the sole off-taker of the electric capacity and energy of Amman East through a 25-year
PPA. The GoJ guarantees the NEPCO obligations under the PPA. The PPA is structured as a
tolling agreement with gas and DFO supplied to the Plant free of charge by NEPCO for
conversion into electricity for delivery to NEPCO. In return, Amman East is paid a fixed capacity
payment (adjusted for availability) and is compensated for its fixed and variable operating costs.
The project is the first IPP facility in J ordan.
Figure 23 Amman East Ownership Structure Figure 24 Amman East Location
AES Jordan
HoldCo
(Cayman)
Amman East
60% 40%
AES Oasi s Mitsui Corp
AES Oasis Ltd.
TSA
AES Jordan
HoldCo
(Cayman)
Amman East
60% 40%
AES Jordan
HoldCo
(Cayman)
Amman East
60% 40%
AES Oasis Ltd.
TSA

Amman
AMMAN EAST
Ar Ruwayshid
Irbid
Kerak
Maan
Aqaba
Al J afr
Amman
AMMAN EAST
Ar Ruwayshid
Irbid
Kerak
Maan
Aqaba
Al J afr

25-year PPA ensuring long period of dependable earnings
Amman East is expected to achieve combined cycle operations in J uly 2009
TSA with AES Oasis provides additional cash flow
Newly built plant with estimated 40-year asset life will have estimated 15 years of useful life
post-PPA
Risks mitigated through contracts and guarantees
Tolling arrangement with the offtaker mitigates fuel price risk
International Bank for Reconstruction and Development provides a guarantee, in respect of
the commercial lenders debt
Located in a growing economy, with high energy demand expectations
Based on recent market news, the GoJ is expected to issue a RFP for a new power plant in
the Amman area
Amman East presents an opportunity to expand existing facilities to adjacent land for a
developer wishing to take advantage of cost and operational synergies
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

48

4.2 Jordanian Market Overview
In recent years, the J ordan economy has been on a solid growth path where broad economic
reforms have been applied in an effort to improve the business environment over the long-term.
J ordanian economic activity is primarily based on the services sector (about 70% of GDP).
According to EIU estimates, J ordan GDP for year 2008 stands at US$31 billion (+5.8% vs. 2007).
In the medium-term, growth prospects remain robust as they are driven by strong domestic
demand, healthy export growth and expectations of continued foreign investment in the services
sectors. Since the 1990s, J ordans exports have significantly increased under the free trade
accord with the US and the establishment of J ordanian Qualifying Industrial Zones (QIZ). J ordans
prudent monetary policies continue to underpin the stability of the exchange rate to the USD. In
2006 and 2008, J ordan used privatization proceeds to significantly reduce its debt-to-GDP ratio.
These measures have helped improve productivity and have made J ordan more attractive for
foreign investment, supporting the countrys overall economic growth. The GoJ has received a
credit rating of Baa3 from Moodys and BB from Standard and Poors.
The industrial sector received the largest share of gross investments in J ordan in 2007. Industry,
in particular manufacturing, has expanded rapidly in recent years, strengthening export growth.
The export sector has diversified away from a reliance on phosphates toward textiles, apparel,
footwear, pharmaceuticals and light manufacturing. The GoJ investment strategy is also focused
on key sectors that significantly contribute to the overall growth and development of the country,
such as tourism and telecom. Over recent years, there has been a marked increase in tourist
numbers and receipts as more visitors are attracted to J ordan. The GoJ has also adopted a
production sharing policy to encourage investment in the oil and gas sector of the country.
In 2008, J ordans population was estimated at 6.1m up by 2.9% vs. 2007. In the medium-term,
population growth is expected to slow down progressively (2.7% growth projected for 2010). Both
increases in tourism as well as immigration from neighboring countries contribute to increased
demands on the countrys infrastructure.
Figure 25 Jordan Macroeconomic Statistics

4.4%
4.7%
4.5%
5.8%
3.0%
3.5%
2008 2009E 2010E 2011E 2012E 2013E
R
e
a
l

G
D
P

G
r
o
w
t
h
US CAGR: 0.6%

6.6
6.8
7.0
6.1
6.4
6.3
2008 2009E 2010E 2011E 2012E 2013E
P
o
p
u
l
a
t
i
o
n

(
m
)
J ordan CAGR: 2.7%
US CAGR: 0.9%

2.5%
2.2%
5.9%
2.9%
3.0%
3.1%
2008 2009E 2010E 2011E 2012E 2013E
G
o
v
e
r
n
m
e
n
t

C
o
n
s
u
m
p
t
i
o
n

3.0%
2.3% 2.8%
14.9%
5.5%
3.8%
2008 2009E 2010E 2011E 2012E 2013E
C
P
I

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

49

Over the past years, J ordan has experienced a rapid increase in electricity consumption driven by
strong economic growth which has led to increased use of electricity for heating
and air-conditioning.
According to NEPCO, the electrical energy generated and imported in J ordan in 2007 amounted
to 13,209GWh (up by +10.3% vs. 2006) and is forecasted to grow significantly in the next years,
reaching 32,110GWh in 2020.
To meet these high electricity demand growth forecasts, J ordans electricity sector went through
an in-depth restructuring of its power industry. The Electricity Power Authority has been converted
to National Electricity Power Company, the single buyer and seller of wholesale power and the
transmission company. Distribution and generation have been unbundled from NEPCO and
privatized. J ordan has been importing gas from Egypt since 2003 and most of the plants operate
on gas. J ordan benefits from a long-term fuel supply agreement with Egypt at prices below market
rates. This arrangement helps NEPCO manage electricity retail tariffs at rates that can absorb gas
price and foreign exchange fluctuations. The J ordanian power system is interconnected with the
Egyptian and Syrian power systems through 400kV cables and uses these sources to meet
supply shortfalls. Plans are in place to reinforce the transmission system to permit better sharing
of power between the southern and northern border.
MARKET STRUCTURE
The J ordanian power sector is divided into generation, transmission, and distribution companies.
Figure 26 Jordan Power Market Structure
Central Electricity Generating Co.
(Generation)
Independent Power Producers
(IPP)
(Private Generation)
Large Industries
(Generation)
International Power Grids
(Power Sharing)
Egypt and Syria
N
a
t
i
o
n
a
l

E
l
e
c
t
r
i
c

P
o
w
e
r

C
o
m
p
a
n
y
(
N
E
P
C
O
)
N
a
t
i
o
n
a
l

T
r
a
n
s
m
i
s
s
i
o
n

C
o
m
p
a
n
y
Jordan Electric Power Company
(J EPCO) Amman & Central Areas
(Distribution)
IRBID District Electricity Company
(IDECO) North of J ordan
(Distribution)
Electricity Distribution Company
(EDCO) Central and Southern Areas
(Distribution)
Large Consumers
C
o
n
s
u
m
e
r
s
Central Electricity Generating Co.
(Generation)
Independent Power Producers
(IPP)
(Private Generation)
Large Industries
(Generation)
International Power Grids
(Power Sharing)
Egypt and Syria
N
a
t
i
o
n
a
l

E
l
e
c
t
r
i
c

P
o
w
e
r

C
o
m
p
a
n
y
(
N
E
P
C
O
)
N
a
t
i
o
n
a
l

T
r
a
n
s
m
i
s
s
i
o
n

C
o
m
p
a
n
y
Jordan Electric Power Company
(J EPCO) Amman & Central Areas
(Distribution)
IRBID District Electricity Company
(IDECO) North of J ordan
(Distribution)
Electricity Distribution Company
(EDCO) Central and Southern Areas
(Distribution)
Large Consumers
C
o
n
s
u
m
e
r
s

Source: NEPCO.
Generation is dominated by the Central Electricity Generating Company (CEGCO) with an
installed capacity of 1,755MW. CEGCO generates electrical energy throughout the Kingdom
using multiple fuel sources (traditional, modern or renewable power). The two other players in
the market are Samra Electric Power Generating Company, which is 100% owned by the
government and has a 550MW cogeneration plant (expected capacity to increase by 2010 to
850MW) and Amman East, a gas fired/DFO plant with a capacity of 370MW
The high voltage transmission network is operated by NEPCO, the single buyer company
responsible for (i) country-wide transmission to regional distribution companies and large
industrial customers, (ii) import and export of electricity from/to neighboring countries and
(iii) the purchase and sale of gas on a pass-through basis to generating companies. NEPCO is
100% owned by the GoJ , which is in charge of bulk supply tariffs regulation (including capacity
charge, day-time and night-time tariffs). Since 2005, the bulk supply tariffs to distribution
companies have been differentiated to better reflect the regional consumption behavior and
supply constraint
The distribution network is operated by three main companies: The J ordanian Electric Power
Company (J EPCO), Electricity Distribution Company (EDCO) and Irbid District Electricity
Company (IDECO), as well as other large industrial players (representing less than 10%).
J EPCO serves the most urban greater Amman area. EDCO covers the largest geographic
area to the south of Amman. IDECO serves the northern part of the country
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

50

International investors are increasingly interested in the J ordanian power sector with
controlling interests of three of the largest J ordanian companies were sold to private investors
in recent years
In September 2007, the J ordanian Government had successfully concluded the
privatization of CEGCO by selling 51% of CEGCOs shares to ENARA, a company
established by J D Energy and Infrastructure, the energy investment arm of J ordan
Dubai Capital
In J uly 2008, J D E&I, Kuwait Privatization Projects Holding Company and UAE Investors,
acquired 100% of EDCO and 55.4% of IDECO, at a total value of US$104 million
OVERVIEW OF DEMAND AND SUPPLY FOR ELECTRICITY IN JORDAN
During the past five years, J ordan has experienced an increased demand for electricity due to
factors such as population growth (including natural growth and immigration of a large number of
citizens from other Arab countries) as well as economic growth.
J ordans installed capacity includes a range of generation technologies including: gas turbine
units (burning gas and diesel, for respectively 34.3% and 10.6%), combined cycle units (25.2%),
and steam Units (9.7%). In 2007, energy imported from Egypt and Syria accounted for 18.6%.
In 2007, the system peak load of 2,130MW led to pressure on the generation sector and the
electric network and resulted in several short power outages. The generation sector and the
electric network worked at full capacity to cover the demand for electricity. Despite the steady
increase in demand, there has been no large scale power outage since 2007, indicating that the
GoJ has been successful in meeting recent demand growth, at least for now.
Figure 27 Jordan Power Demand/Supply
0
1
2
3
4
5
2009 2010 2011 2012 2013
G
W
Available Capacity Demand Forecast

Source: NEPCO.
Figure 28 Jordanian Power Source Mix
(1)

Gas
81%
Oil
18%
Hydro
and Wind
1%

Source: NEPCO.
(1) 2007.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

51

Figure 29 Jordan IPP Assets
1
2
3
4 9 10
6
5
7
8
11
12
1
2
3
4 9 10
6
5
7
8
11
12

ENARA Energy
Arabia (51%) ,
GoJ (40%),
Social
Security (9%)
11
10
9
8
7
6
5
4
3
2
1
(1)
Project Name
Capacity
(MW)
Key
Shareholders
Fuel
Source
Year
Built
PPA
Terms
Aqaba 656
Fuel Oil /
Hydro
1985-96 -
Hussein 396 Fuel Oil 1975-84 -
Rahab 357 Fuel Oil 1994-05 -
Al Risha 150 Gas 1989-05 -
Marka 92 Fuel Oil 1978-80 -
Amman South 60 Fuel Oil 1984-95 -
Karak 25 Fuel Oil 1982 -
Aqaba Central 10 Fuel Oil NA -
Al Ibrahimiyah 21 Wind NA -
Hafa 1 Wind NA -
Amman East 370
AES Oasis (60%)
Mitsui (40%)
Gas 2008-09 25
C
E
G
C
O
ENARA Energy
Arabia (51%) ,
GoJ (40%),
Social
Security (9%)
11
10
9
8
7
6
5
4
3
2
1
(1)
Project Name
Capacity
(MW)
Key
Shareholders
Fuel
Source
Year
Built
PPA
Terms
Aqaba 656
Fuel Oil /
Hydro
1985-96 -
Hussein 396 Fuel Oil 1975-84 -
Rahab 357 Fuel Oil 1994-05 -
Al Risha 150 Gas 1989-05 -
Marka 92 Fuel Oil 1978-80 -
Amman South 60 Fuel Oil 1984-95 -
Karak 25 Fuel Oil 1982 -
Aqaba Central 10 Fuel Oil NA -
Al Ibrahimiyah 21 Wind NA -
Hafa 1 Wind NA -
Amman East 370
AES Oasis (60%)
Mitsui (40%)
Gas 2008-09 25
C
E
G
C
O

Source: Companies websites, Zawya, NEPCO.
(1) J D Energy (65%), Malakoff (25%) and CCC (10%).
The regulatory authority for the power sector is the Electricity Regulatory Commission (ERC). The
ERCs main mandates are (i) to promote investment and competition in the power sector; (ii) to
license the entities engaged in generation, transmission, supply, distribution and operation of the
transmission system; and (iii) to organize the generation, transmission, supply, distribution and
operation of the transmission system in the Kingdom so as to provide durable electrical services
for consumers in an effective and efficient manner utilizing the latest technological developments
and (iv) to contribute in putting in place certain performance standards and codes that apply
to licensees
The ERC is mandated to ensure that tariffs charged by a licensee are sufficient to finance its
activities and to realize a reasonable return on investment. In the wake of the privatization of the
power sector, ERC has launched a full scale tariff review to ensure that NEPCO will not have to
subsidize the end-customers. In 2007, the ERC conducted all the necessary studies for the new
cost reflective tariffs that were approved in March 2008.
In line with its privatization strategy, the Government has adopted the BOO model for all future
power plants including Amman East, which is the first IPP in the country. In 2008, a
KEPCO-Xenel consortium won the tender for Al Qatrana, a gas-fired combined cycle power plant
with a capacity of 280400MW. Al-Qatrana will be operated under a 25-year BOO contract.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

52

The electricity sector in J ordan is currently regulated by Temporary Law No. 64 of 2001 (General
Electricity Law) as well as regulations issued thereunder. The GoJ is currently considering
passing a new Energy Law that covers (i) electricity; (ii) renewable energy; (iii) petroleum; and
(iv) mineral resources. The proposed Energy Law is based on the existing General Electricity law
as it related to the electricity sector. The new Energy Law is expected to be passed within the
next 36 months.
Under the General Electricity Law, the Ministry of Energy in J ordan is responsible for setting the
policy of the electricity sector and is considered the representative of the GoJ in the contractual
relationships relating to IPPs.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

53

4.3.1 Overview
On 7 J une 2005, the Ministry of Energy and Mineral Resources on behalf of the GoJ issued the
request for tender for a CCGT power plant rated at 280400MW for the Amman East-Al
Manakher area. The concession was awarded to Amman East, a project company comprising
AES Oasis and J apans Mitsui and Company.
Amman East consists of two gas turbines and one steam turbine combustion turbine generator,
two associated HRSGs, one non-reheat steam turbine having air cooled condenser, and all
necessary Balance of Plant (BOP) equipment and support systems. The facility is designed for a
minimum 30-year life with an expected 40-year life. All turbines and their auxiliary and ancillary
equipment including transformers are in compliance with World Bank guidelines and J ordanian
environmental standards.
Commercial operation of the project to be achieved in two phases Phase 1 (simple cycle) in J uly
2008 and Phase 2 (combined cycle) in J uly 2009. As per the base financing plan, the project cost
is expected to be US$300 million.
Doosan Heavy Industries and Construction Co. is the EPC Contractor for Amman East and is
responsible for the design and construction of the 370MW combined-cycle facility.
4.3.3 Plant Layout
Gas is provided by NEPCO from the operating Arab gas pipeline, which exports Egyptian gas,
with DFO as a back-up fuel. The primary tee off will be 1.2km from the main pipeline. One of the
key criteria for selection of this location was the proximity to the fuel source. Air-cooled
condensers are being used and water is supplied by Water Authority of J ordan (WAJ ) via a 25km
pipeline. The 400kV transmission grid is looped into the substation via a 6.5km double circuit line
provided by NEPCO.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

54

Figure 30 Typical Equipment Layout
Generator
Generator
Generator
GT 1
GT 2
Steam
Internal
Consumption
N
E
P
C
O
HRSG1
HRSG2
Generator
Generator
Generator
GT 1
GT 2
Steam
Internal
Consumption
N
E
P
C
O
HRSG1
HRSG2

The Plant is expected to operate in combined cycle mode most of the time. However, each flue
gas path is equipped with a bypass stack that allows operation of the two gas turbines in simple
cycle mode in case of forced or planned outages of the steam plant (includes the HRSGs, steam
turbine, condenser or other steam path plant). There is a bypass damper system installed to
switch the flue gas to exit through the bypass stack or through the HRSG.
GAS TURBINES
Amman East has two v94.2 Ansaldo GTG combustion turbine manufactured by Ansaldo Energia
S.p.A. under a license from Siemens AG.
HRSGS
Manufactured by Doosan, the HRSGs are designed to meet ASME Sec 1 standards.
STEAM TURBINE
The steam turbine is a FEK model one casing, non-reheat condensing steam turbine
manufactured by Fuji Electric System Co.
GENERATORS
Two 2,400KW black-start diesel-generators with total capacity of 4,800KW set provides for
black-start and safe shutdown of the Plant in case of system blackout. The facility will be started
on normal operation by importing electrical energy from the 400Kv grid. The generators are
directly coupled to a 50Hz generator. One 750 KVA black start generator is connected to the low
voltage (400V) bus.
AIR COOLED CONDENSERS
The use of air-cooled condensers helps avoid consumption of large quantities of water that is at a
premium in J ordan as a whole. The condenser units are positioned above the fan units and about
30.5m above ground.
FUEL SUPPLY
The primary fuel for the power plant is gas which is delivered to the Plant from the Arab gas
pipeline through a 1.2km pipeline. To mitigate any fuel supply disruption risk, the units are being
designed to run also on DFO. A 14-day supply of DFO for emergency use will be stored on site.
The fuel gas system consists of a fuel gas metering station and pressure reducing station. The
fuel oil system is comprised of distillate oil unloading pumps, two fuel oil storage tanks and
distillate oil forwarding pumps.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

55

WATER SUPPLY
Raw water is transported to the Plant via a 12km pipeline being constructed and maintained by
the WAJ . Amman East will reimburse WAJ J D 1 million for the cost of design and construction of
the pipeline. The raw water system consists of storage tank, transfer pumps, service water tank,
and distribution system.
COOLING WATER SYSTEM
The cooling water system consists of an auxiliary (closed circuit) cooling water system for the
turbine auxiliaries and other Plant auxiliaries.
WATER TREATMENT PLANT
Amman East includes a reverse osmosis water treatment plant to produce demineralized water
and associated distribution system. The water treatment plant, using drinking quality raw water
supplied by WAJ as source water, meets the facility demand for the steam cycle makeup, potable
water, if required, and all other facility water requirements.
GRID CONNECTION
Each turbine generator unit is connected to its respective generator step-up transformer via an
isolated phase bus duct; the step-up transformers are then connected to NEPCOs 400kV
switchyard. Each generator is equipped with a generator circuit breaker and provided with a unit
auxiliary transformer.
The 400kV transmission grid will be looped into the substation, which will be adjacent to the
power plant via an incoming 6.5km and outgoing 6.5km double-circuit line. Standard double circuit
steel towers and twin steel-cored aluminum conductors are used.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

56

The Plant is designed primarily for base load operation but is capable of cyclic duty (two shifting)
if required. Amman East is expected to have a 95% plant availability factor.
Table 9 Amman East Capacity

Stage
Net Capacity
(in MW) Fuel Type
Phase I Simple Cycle Commissioning 247 Gas
Phase II Combined Cycle
Commissioning
370 Gas
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

57

Figure 31 Contractual Framework for Power Projects in Jordan
Project Company
Water Authority of
J ordan
Water Supply
Agreement
NEPCO
Power
Purchase
Agreement
TSA
Ministry of Energy and Natural
Resources
(on behalf of GoJ )
Implementation
Agreement
Transmission
Connection
Agreement
Ministry of
Finance/Dept of
Lands (on behalf of
GoJ )
Land Lease
Agreement
EPC Contract
Technical
Services
Plant
construction
Lenders
Shareholders
Equity
Loan
Project Company
Water Authority of
J ordan
Water Supply
Agreement
NEPCO
Power
Purchase
Agreement
TSA
Ministry of Energy and Natural
Resources
(on behalf of GoJ )
Implementation
Agreement
Transmission
Connection
Agreement
Ministry of
Finance/Dept of
Lands (on behalf of
GoJ )
Land Lease
Agreement
EPC Contract
Technical
Services
Plant
construction
Lenders
Shareholders
Equity
Loan

4.5.1 Overview
Table 10 Amman East Key Contracts
Duration Counterparty Key Terms
PPA 25 years NEPCO Obligations of NEPCO guaranteed by GoJ
Fuel Supply 25 years NEPCO NEPCO will serve as fuel provider and off-taker
Water Supply 25 years WAJ Obligations of WAJ guaranteed by the GoJ
TSA 25 years AES Oasis Advisory and support services. Includes
personnel recruitment and training
MITSUI AND CO LTD.
Mitsui has a strong track record of power and water investments in the Middle East, especially in
the last two years, and intends to continue to develop further projects in the Region. These
projects include large scale IPP / IWPPs where Mitsui can leverage its experience in the power
and water industries around the world.
ELECTRICITY REGULATORY COMMISSION (ERC)
The electricity sector in J ordan is governed by the General Electricity Law, which empowers the
ERC to establish policies and general rules for the power sector. ERC is the independent
regulatory commission mandated to protect the interest of consumers and investors, approve
tariffs and grant licenses for generation and distribution of electricity, including tariffs for IPPs.
NEPCO
NEPCO is a J ordanian public shareholding company licensed as a wholesale power provider and
as a single buyer pursuant to the General Electricity Law No (64) of 2002 to purchase and
transmit electricity in J ordan. NEPCO is mandated by the J ordanian Government to plan, develop,
operate and maintain electrical transmission grids, the national grid and the process of
transmitting electricity in J ordan and to neighboring countries. NEPCO is also responsible for
importing and exporting electric power, and buying and redistributing Gas to power companies.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

58

NEPCO is the successor of the J ordan Electricity Authority (J EA), which was established by the
Government in 1967 to supply power to the nation. In September 1996, the Government
transformed J EA to NEPCO in an attempt to upgrade the national transmission network and the
electric interconnection networks with neighboring countries, in order to purchase and sell energy
directly and through licensed distribution companies. In 1999, NEPCOs activities were
un-bundled whereby generation was assumed by CEGCO and distribution was assumed by
EDCO and NEPCO remained responsible for the transmission of electrical power. Now there are
three distribution companies, all of which are privatized. NEPCO is the single buyer company
responsible for country-wide transmission to regional distribution companies and large
industrial customers.
JAPAN BANK FOR INTERNATIONAL COOPERATION
J apan Bank for International Cooperation (J BIC) is the international wing of J apan Finance
Corporation (J FC) established on 1 October 2008. Their mission is to contribute to the sound
development of the J apanese and international economy by conducting international finance
operations. In conducting its operations to fulfill this mission, the role of J BIC is to complement the
financing provided by private sector financial institutions. J BIC has three key areas of focus:
(i) promoting overseas development and acquisition of strategically important natural resources to
J apan, (ii) maintaining and improving the international competitiveness of J apanese industries
and (iii) responding to disruptions in financial order in the international economy.
OVERSEAS PRIVATE INVESTMENT CORPORATION
The Overseas Private Investment Corporation (OPIC) was established as an agency of the US
Government in 1971. OPIC helps US businesses invest overseas and fosters economic
development in new and emerging markets. OPIC complements the private sector in managing
risks associated with foreign direct investment and also supports the US foreign policy.
OPICs financing and political risk insurance help US businesses of all sizes to compete in
emerging markets and meet the challenges of investing overseas when private sector support is
not available. OPIC promotes US best practices by requiring projects to adhere to international
standards on the environment and worker and human rights.
WATER AUTHORITY OF JORDAN
Most of the areas in J ordan are covered by WAJ (an independent legal entity established by the
Water Authority Law No. 18 of 1988) which offers water and sewerage services. WAJ assigned its
rights and obligations to distribute water and to provide waste water services in Amman to
Miyarhana LLC (100% owned by WAJ ) and in Aqaba to Aqaba Water Company LLC (85% owned
by WAJ ). WAJ and its subsidiaries serve 98% of the population for water provision and 65% of
the population is captured by their wastewater network.
In 1997, due to the increasing water demand, the Ministry of Water and Irrigation (MWI) adopted
a new water strategy. MWI supplemented the water strategy with different policies in water sector
aiming to balance water demand and supply. The water strategy was also designed to give the
private sector a role in water provision and services. The GoJ also embarked upon a privatization
program, the goal was to increase the efficiency of management and attracting private investment
into the economy.
DOOSAN HEAVY INDUSTRIES AND CONSTRUCTION CO., LTD
Established in 1962, Doosan Heavy Industries and Construction Co., Ltd. have been developing
technologies for power generation facilities and various industrial plant facilities. Doosan has a
capability to construct a wide range of power plants, from nuclear, thermal, hydroelectric,
combined cycle and co-generation power plants to diesel power plants on a turnkey basis.
4.5.3 Post-PPA Period
J ordan is currently in a power supply deficit situation which is expected to continue. It is expected
that the GoJ will take advantage of the functioning Plant throughout its useful life.
Due to the continuing economic expansion of J ordan and the corresponding increase in electricity
demand, J ordan is expected to depend on the Plants capacity after expiry of the PPA rather than
build a new plant.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

59

It is expected that after the expiry of the original PPA term in 2033, NEPCO and Amman East will
either extend the PPA or enter into a new off-take agreement or participate in a merchant power
market if one has been implemented in J ordan by this time.
There is significant value attributable to the post-PPA life of the Plant with an expected life of
15 years beyond the term of the PPA.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

60

Based on AES experience of operating power plants it is expected that, when fully operational,
the Amman East operations and management team will comprise of approximately 45 individuals.
Power project companies in J ordan are expected to employ J ordanian workers to the extent
practically possible; however such companies can generally employ non-J ordanians in
accordance with the laws of J ordan.
Figure 32 Typical Management Organization Structure
Plant Manager
CFO OPS Manager Maint. Manager
Admin Assistant
Engr. Manager
HSE
Plant Manager
CFO OPS Manager Maint. Manager
Admin Assistant
Engr. Manager
HSE

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

61

Table 11 Management Biographies
Professional/Title
Years of
Experience
Meftaur Rahman
CEO and Plant
Manager
12
(9 with AES)
Meftaur joined AES in J uly 2000 as engineering manager and worked
through development, engineering and construction. He was
previously Plant Engineer for AES Haripur, a 360MW CCPP, and
Operations Manager for AES Meghnaghat, a 450MW CCPP both
in Bangladesh
He was closely involved with business development as Project
Director for new IPP Qatrana 370MW project and Amman
Easts expansion
Prior to joining AES, he had a business development role as country
manager for OMS Business Solutions Bangladesh Ltd.
He graduated from Bangladesh University of Engineering and
Technology in 1996
Fawad Ameen
Qazi
Plant CFO
9
(2 with AES)
Fawad joined AES in August 2007 as Financial Controller
Prior to joining AES, he worked for Coca Cola and Horwath
International in Pakistan as a Senior Accountant
He graduated from Punjab University, Pakistan with a B.Com
Anwar Shafiq
Operations
Manger
19
(8 with AES)
Anwar joined AES in 2001 at Barka. He has been involved in
business development activities including Barka, Barka 2 and Rusail
(all in Oman) and previously has been a Performance and Efficiency
Engineer at Barka
Prior to joining AES he has been involved in operational roles at a
variety of power companies including the Dadri 817MW CCGT
in India
He graduated with a Bachelor of Science in Mechanical Engineering
Feras Hammad
Mechanical
Team Leader
12
(1 with AES)
Prior to joining AES, he was a Mechanical Maintenance Engineer in
J ordan and has been extensively trained in Egypt and Switzerland
He graduated from Muta University in J ordan with a Bachelors in
Mechanical Engineering
Golam Yeasdan
E-I&C
Team Leader
15
(7 with AES)
Golamjoined AES in 2005 at AES Meghnaghat, a 450MW CCPP and
served as Maintenance Manager
He worked on business development for the construction and
commissioning of Meghnaghat and managed communications with
the EPC contractor
Prior to joining AES, he served as a Senior Engineer for a Tissue and
Cigarette paper company
He graduated from Bangladesh University with a Degree in Electrical
Engineering in 1993
Khalid Salemah
Engineering and
Technical
Services Manager
13
(3 with AES)
Khalid was involved with the negotiation of the PPA, Water Supply
Agreement, Land Lease Agreement and the Generation License for
Amman East
Prior to joining AES, he worked as an Electrical Maintenance
Engineer at CEGCO-J ordan and Al-Fanar Construction Company in
Saudi Arabia
He graduated with an engineering degree from Yarmouk University
in J ordan
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

62

4.7.1 Contractual Consents
Amman East is set up in a similar manner to other projects of this type and accordingly,
depending on the structure of the proposed transaction, various contractual consents will be
required.
Amman East is required to obtain and maintain the various relevant consents, permits and
authorizations for the operation of the Plant, all of which are currently in place subject to their
respective terms and conditions. Such consents and authorizations are renewable, where
applicable, in accordance with their terms.
Nothing in the General Electricity Law requires procuring any permits or consents to give effect to
the indirect transfer of AES and IDBs interests in Amman East. However, Electricity Companies
Licensing Regulation No. 76 of 2001 governs a licensees ability to enter into ventures with other
electricity companies as well as its ability to purchase another similar electricity company with the
approval of the ERC. Potential purchasers of the interest in Amman East who are already
licensed by ERC should consider this requirement.
Sale of the shares in AES Oasis or AES J ordan Holdco will require notification to ERC.
Table 12 Regulatory Consents in Jordan for Power Project

Authority Basis
Electricity Regulatory
Commission
Power Station Generation License
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

63

4.8 HSE and Insurance
Amman East has established a complete Environmental Management and Monitoring Plan
(EMMP). EMMP has been implemented and all activities being carried out on site are in
accordance with EMMP.
Amman East is monitoring and taking mitigation measures for the Plants impact on air quality,
water quality, soil quality, noise emissions, traffic flows.
The impact of the atmospheric emissions from the proposed Plant is expected to be within the
J ordanian limits and World Bank guidelines.
4.8.2 Insurance
Amman East has commercial policies of insurance as are customary for private power projects,
which include contractors all risk, general liability, employer liability, workers compensation,
automobile and business interruption insurance.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

64


KEY ASSUMPTIONS
Amman East is expected to achieve full operations as a combined cycle plant in J uly 2009.
This accounts for the 2009/2010 increase in dependable capacity
Tariffs follow guidelines as reflected in the PPA and fuel costs are mitigated by tolling
agreement with the offtaker. Contracts are foreign exchange indexed
Forecasts are currently derived using revenue on a billed basis
Table 13 Amman East Macroeconomic Indicators
Macroeconomic Indicators
2009E 2010E 2011E 2012E 2013E
US$ Inflation -0.6% 1.1% 1.9% 2.0% 2.1%
J D Inflation 4.2% 5.8% 3.0% 2.3% 2.8%
Exchange Rate (US$/J D) 0.708 0.708 0.708 0.708 0.708

Source: Company Projections.
Table 14 Amman East Operating Assumptions
Amman East Operating Assumptions
2009E 2010E 2011E 2012E 2013E
Capacity - MW 247.3 / 370.0 * 370.0 370.0 370.0 370.0
Dispatch Levels assumed (GWh) 2,170 3,093 3,090 3,005 3,103
Days Receivables 60 60 60 60 60
Days Payables 60 60 60 60 60
* Indicates that 247.27MW for 5 months and 370MW for 5.5 months

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

65

4.9.2 Summary of Financials

Table 15 Amman East Financial Summary 2009/2013E
(US$ millions) 2009E 2010E 2011E 2012E 2013E
Net Income to AES Oasis 7.0 5.6 7.1 5.4 6.6
Distributions to AES Oasis (11.9) 22.6 9.3 9.1 8.1
Senior TSA Fee (payable to AES Corp) 0.5 0.6 0.6 0.6 0.6
J unior TSA Fee (payable to AES Oasis) - 0.6 0.6 0.6 0.6
DSCR NA 2.8 1.8 1.7 1.7

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

66

5 Lal Pir and Pak Gen
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

67

5.1 Lal Pir and Pak Gen Overview
Lal Pir is a 362MW oil-fired thermal power plant which achieved commercial operations on
6 November 1997. Adjacent to Lal Pir is Pak Gen, a plant similar in design and construction to
Lal Pir with a capacity of 365MW. Pak Gen achieved commercial operations on 1 February 1998.
Both plants are located in the Muzaffargarh district in the Province of Punjab and cover a land
area of 63,700m
2
, which is in close proximity to the economic centre of Punjab and the
National Grid.
Both Lal Pir and Pak Gen were constructed pursuant to the Pakistan 1994 Power Policy through
which an upfront tariff was offered to potential investors. The Policy also provided special fiscal
and financial incentives to attract private investment in the sector. The investors were free to
select the site and opt for the optimum technology and fuel.
Under this policy, WAPDA is the sole off-take purchaser and Pakistan State Oil Company (PSO)
the sole fuel supplier. The GoP guaranteed the availability and convertibility of foreign exchange
through the State Bank of Pakistan (SBP).
Figure 33 Lal Pir and Pak Gen Ownership
Structure
Figure 34 Lal Pir and Pak Gen Location
AES Oasi s IFC
Lal Pir
90% 10%
Pak Gen
90% 10%
Shared Facility
Agreement
AES Oasi s IFC
Lal Pir
90% 10%
Pak Gen
90% 10%
Shared Facility
Agreement

Islamabad
AES
LALPIR and
AES PAK GEN
Lahore
Karachi
Faisalabad
Multan
Islamabad
AES
LALPIR and
AES PAK GEN
Lahore
Karachi
Faisalabad
Multan

The projects are well structured with a proven contractual structure
Capacity Purchase Price (CPP) is paid out by WAPDA irrespective of dispatch level as long
as dependable plant capacity is available
Fuel cost is a pass-through to WAPDA and obligations of both WAPDA and PSO are
guaranteed by GoP
Track record of efficient operations
Consistently proved to be a reliable provider of service to WAPDA; maintaining availability
above 80% (minimum contracted under the PPA is 60%) over the last two years and forced
outages lower than the average Top 10% of the Pakistan power industry
AES Oasis has management and operational control of the Pakistan Plants
Almost all of the project finance debt has been repaid, which allows for a significant
recapitalization opportunity
Qualified and experienced in-house management team
One of the largest power sector assets and development platform within a supply constrained
local market
A total uncovered area of 1,150,000m
2
available on the present site, the plants can
expand operations
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

68

5.2 Pakistan Market Opportunity
The Pakistan economy witnessed a surge in economic growth in the last eight years with
impressive GDP growth at a CAGR of 6.8% over FY0307. During this period Pakistan was
ranked as one of the fastest growing economies in Asia. The Pakistan growth story attracted
interest from international investors across many sectors and FY0407 witnessed an
unprecedented rise in FDI.
Following relative stability from FY0307, the Pakistani Rupee (Rupee) weakened against the US
dollar by 28% over J anuaryDecember 2008 partly due to increasing international oil prices and
pressure on the countrys balance of payments. Other oil-importing, emerging market nations in
the Region have experienced similar currency devaluation due to global oil prices increasing by
over 40% in 2008. Foreign exchange reserves dropped as low as c.US$6.7 billion in September
2008 and since have grown to US$10.37 billion in February 2009. In December 2008, Pakistan
entered the IMF stabilization program which lowered the risk of sovereign default whereby the
S&P sovereign rating was improved to CCC+/Developing in December 2008. Under the IMF
stabilization program a US$7.6 billion stand-by facility was agreed in November 2008, of which
US$3.1 billion has been disbursed and the second tranche of c.US$800 million is expected to be
disbursed in April 2009.
Despite continued challenges, the economy has shown some signs of stabilization. With the
sharp fall in international commodity prices, pressure on external balances has reduced and
lending by the IMF and other foreign inflows have lent stability to the Rupee.
In addition to assistance from the IMF, external foreign assistance from the Asian Development
Bank and China has helped to improve the foreign exchange reserve position.
Further assistance is expected from the US. President Obamas administration has shown a
renewed commitment to Pakistans economic development with the recent announcement to
provide US$1.5 billion per annum of non-military aid, which should help provide stability to the
countrys external balance and potentially increase growth through development spending.
A strong economic team is in place to implement the IMF stabilization program, which includes
strict monitoring of macroeconomic targets. The EIU expects inflation to decline from the record
highs of 2008 and expects government consumption to fall over 2009, which should have a
beneficial knock-on effect on liquidity available to the private sector.
More encouragingly, the current account balance recorded a surplus of US$146 million in
February 2009, the first time in the last 20 months.
Workers remittances, an important source of foreign exchange flow into the country, have
continued to remain strong growing by 19% year-on-year to US$4.9 billion in the first
eight months of FY09.
Inflation has shown some signs of easing since November 2008, although it remains above 20%.
This combined with the austerity measures required under the IMF package is expected to keep
GDP growth slower over the next two years. As per EIU, GDP growth of 1.2% is expected in
2009E, down from 6% in 2008. However, growth is expected to recover in 2010E onwards
reaching back up to 5.1% in 2011E.
According to projections by the EIU, Pakistan has the sixth largest population in the world and is
expected to reach 230 million by 2030 growing at a CAGR of 1.6%, which makes it one of the
fastest growing populations relative to comparable countries.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

69

Figure 35 Pakistan Macroeconomic Statistics
5.5%
5.8%
5.5%
6.0%
3.2%
1.2%
2008 2009E 2010E 2011E 2012E 2013E
R
e
a
l

G
D
P

G
r
o
w
t
h
US CAGR: 0.6%

169
172
166
179
177
174
2008 2009E 2010E 2011E 2012E 2013E
P
o
p
u
l
a
t
i
o
n

(
m
)
Pakistan CAGR: 1.5%
US CAGR: 0.9%

4.3% 4.6%
5.0%
5.1%
3.8%
3.2%
2008 2009E 2010E 2011E 2012E 2013E
G
o
v
e
r
n
m
e
n
t

C
o
n
s
u
m
p
t
i
o
n

5.8%
5.7%
6.8%
20.3%
5.9%
10.1%
2008 2009E 2010E 2011E 2012E 2013E
C
P
I

Until the 1990s, power generation was exclusively owned by the GoP through two public sector
entities: (i) WAPDA, which was responsible for power generation, transmission and distribution of
electricity in Pakistan, excluding Karachi, and (ii) the Karachi Electric Supply Corporation (KESC),
which was subsequently privatized (with its 74% shareholding owned by the private sector, 26%
by public entities and the remainder by private minority shareholders). Pakistans current
nameplate generation capacity is 19.5GW and while the majority is owned by the public sector,
substantial operating capacity is owned by the private sector.
Although it is estimated that Pakistan has a total hydroelectric potential of 46GW, hydroelectric
capacity is a mere 6.5GW constituting only one-third of the supply. The largest source of power
generation in the country remains thermal with a total installed capacity of 12.6GW. Of this,
6.1GW is provided by IPPs.
Existing IPPs in the country which are governed under the 1994 Power Policy, are efficient and
well managed and continue to be an important component of the countrys energy mix. Most of
these IPPs were commissioned to run on heavy oils but some have been converted to natural gas
in the last few years.
On the back of rapid economic growth and increasing urbanization, electricity consumption in
Pakistan has been growing at 9.5% per annum over the last four years. In FY06, electricity
demand was approximately 15.5GW leading to a supply deficit of 0.5GW, which in FY07 grew to
1.5GW and is currently hovering at around 2.6GW.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

70

MARKET STRUCTURE
The Pakistani market is currently divided into three main channels:
Figure 36 Pakistan Power Market Structure
National Electric Power Regulatory Authority (NEPRA)
4 Generation Companies
(GENCOs)
16 Independent Power
Producers (IPPs)
Hydel Power Projects
Ministry of Water and
Power
(MoWP)
Consumers
Karachi Electricity
Supply Corporation
(KESC)
WAPDA entities
National Transmission &
Dispatch Co. (NTDC)
9 Distribution Companies
(DISCOs)
2 Nuclear Power Projects
Pakistan Atomic Energy
Commission (PAEC)
Pakistan Power &
Infrastructure Board
(PPIB)
Pakistan Electric Power
Company (PEPCO)
Captive Power Projects
(CPPs)
Federal Ministries / Authorities Autonomous bodies of the MoWP Originally part of WAPDA; nowwholly owned subsidiaries Private Sector
Alternative Energy
Development Board
(AEDB)
National Electric Power Regulatory Authority (NEPRA)
4 Generation Companies
(GENCOs)
16 Independent Power
Producers (IPPs)
Hydel Power Projects
Ministry of Water and
Power
(MoWP)
Consumers
Karachi Electricity
Supply Corporation
(KESC)
WAPDA entities
National Transmission &
Dispatch Co. (NTDC)
9 Distribution Companies
(DISCOs)
2 Nuclear Power Projects
Pakistan Atomic Energy
Commission (PAEC)
Pakistan Power &
Infrastructure Board
(PPIB)
Pakistan Electric Power
Company (PEPCO)
Captive Power Projects
(CPPs)
Federal Ministries / Authorities Autonomous bodies of the MoWP Originally part of WAPDA; nowwholly owned subsidiaries Private Sector Federal Ministries / Authorities Autonomous bodies of the MoWP Originally part of WAPDA; nowwholly owned subsidiaries Private Sector
Alternative Energy
Development Board
(AEDB)

Source: PPIB.
Regulatory Bodies
Ministry of Water and Power of Pakistan (MoWPP) oversees all policy matters relating to
development of Water and Power in the country, and carries out strategic and financial
planning for the long-term master plans in public and private sector
National Electric Power Regulatory Authority (NEPRA), established through an ordinance in
1995 and subsequently an Act of Parliament promulgated in 1997. NEPRA is an independent
institution which regulates the entire power sector of Pakistan including generation,
transmission, distribution and license matters
PPIB, created in 1994, operates under the umbrella of the MoWPP as a one-stop investment
facilitation window for private sector projects
Alternative Energy Development Board (AEDB) was created in 2003 and operates under
MoWP as a focal institution for development, promotion and facilitation of renewable energy
technologies, formulation of plans, policies and development of technological bases for
manufacturing renewable energy equipment in Pakistan
Public Sector
WAPDA was established as a semi autonomous body in 1958. In 1992, the GoP approved a
strategic plan for the privatization of the power sector. Bodies created from this corporatization
program include:
Four thermal power generation Companies (GENCOs); combined capacity of 4.9GW
National Transmission and Dispatch Company (NTDC); purchases power from GENCOs
and IPPs
Nine Distribution Companies (DISCOs); regional corporates purchasing power from NTDC
for onward distribution to end customers
Residual Power Wing (hydro); remaining WAPDA entity
PEPCO has been mandated by the GoP for implementation and the management of the
reforms and restructuring of countrys power sector except Karachi. It is the umbrella
organization overseeing operations of the ex-WAPDA entities
Private Sector
Includes 16 IPPs set-up under the 1994 Power Policy with combined capacity of 6.0GW
KESC an integrated utility servicing the Karachi area; privatized end-2005
OVERVIEW OF DEMAND AND SUPPLY IN PAKISTAN
Despite lower projected GDP growth in the current year, electricity demand in Pakistan continues
to grow with the demand gap expected to increase to 3.7GW in FY10. As a result, increased
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

71

power generation capacity remains a high priority for the GoP. With limited large scale public
sector expansions in the pipeline, IPPs, both existing and future, will continue to play an important
role in the energy mix.
During the last two years, the GoP has revised certain key commercial features for power projects
under the Power Policy 2002, based on investor feedback, which has resulted in renewed
investments in the private sector
13 projects, with a total capacity of 2,673MW, have achieved financial close and are expected
to come online by 2010. In addition, 13 IPPs are currently at an advanced stage of completing
negotiations on concession and financing documents, cumulatively representing 2,673MW
of capacity
30 power generation projects mostly through the private sector will increase capacity by
5.7GW in 2012
GoP has recently invited tariff bids for establishing fast track rental power projects
On a more long-term basis, hydro power and coal based generation capacity additions have
also been announced
Dams such as Basha and Neelum J helum have been announced (with a capacity 3.5GW and
1.0GW respectively), while two imported coal based projects of 1.2GW each have been issued
Letters of Interest from PPIB
Figure 37 Pakistan Power Demand/Supply
0
5
10
15
20
25
2009 2010 2011 2012 2013
(
G
W
)
Available Capacity Demand Forecast

Source: PPIB.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

72

Figure 38 Pakistani Primary Power Source Mix
Hydro 30%
& Nuclear
Imported 3%
Gas 34%
Oil 32%

Source: Pakistan Energy Year Book 2008.
Figure 39 Pakistan IPP Assets

1
2
3
5
4
6
13
2
12
8
10
7
14
15
11
16
9
1
2
3
5
4
6
13
2
12
8
10
7
14
15
11
16
9

2
Project Name
Installed
Capacity
(MW) Key Shareholders
Fuel
Source
PPA
Signed
PPA
Terms
Lal Pir 365 AES Oasis (90%) Fuel Oil 1994 30
Pak Gen 365 AES Oasis (90%) Fuel Oil 1995 30
Altern 11 Descon Engineering Gas 1995 30
Fauji Kabirwala 157 Tanjong / Al J omaih (42%) Gas 1995 30
Gul Ahmed 136
Bashir Family
Toyota Tsusho
Fuel Oil 1995 22
Habibullah 140 El Paso (50%) Gas 1996 30
Hub 1,292
Intl Power (17%)
Xenel Industries (12%)
Fuel Oil 1992 30
J apan 135 Pak Oman (44%) Fuel Oil 1995 30
Kot Addu 1,595 Intl Power (36%)
Gas /
Fuel Oil
1996 25
Kohinoor 131
Toyota Tsusho (36%)
Saigol Family (26%)
Fuel Oil 1995 22
Liberty 235 Tenaga National (40%) Gas 1995 25
Rousch 450 Descon Engineering Fuel Oil 1996 30
Saba 134 El Paso (94%) Fuel Oil 1994 30
Southern Electric 117 Mahmood Family (37%) Fuel Oil 1995 30
Tapal 126 Marubeni Fuel Oil 1995 25
Uch 586 Intl Power (40%) Gas 1995 30
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
2
Project Name
Installed
Capacity
Fuel
Source
PPA
Signed
PPA
Terms
Gul Ahmed 136
Bashir Family
Toyota Tsusho
Fuel Oil 1995 22
Hub 1,292
Intl Power (17%)
Fuel Oil 1992 30
Gas /
Fuel Oil
1996 25
Kohinoor 131
Toyota Tsusho (36%)
Saigol Family (26%)
Fuel Oil 1995 22
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Project Name
Installed
Capacity
Fuel
Source
PPA
Signed
PPA
Terms
Gul Ahmed 136
Bashir Family
Toyota Tsusho
Fuel Oil 1995 22
Hub 1,292
Intl Power (17%)
Fuel Oil 1992 30
Gas /
Fuel Oil
1996 25
Kohinoor 131
Toyota Tsusho (36%)
Saigol Family (26%)
Fuel Oil 1995 22
Project Name
Installed
Capacity
Fuel
Source
PPA
Signed
PPA
Terms
Gul Ahmed 136
Bashir Family
Toyota Tsusho
Fuel Oil 1995 22
Hub 1,292
Intl Power (17%)
Fuel Oil 1992 30
Gas /
Fuel Oil
1996 25
Kohinoor 131
Toyota Tsusho (36%)
Saigol Family (26%)
Fuel Oil 1995 22
1
3
4
5
6
7
8
9
10
11
12
13
14
15
16

Source: Pakistan Energy Yearbook, PPIB.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

73

Table 16 Pakistan IPPs with COD in 2009
Project Name Installed Capacity (MW) Fuel Source Expected COD
Attock Power 165 Fuel Oil 1Q09 (commissioned)
Atlas Power 225 Fuel Oil 2Q09
Karkey Rental 249 Fuel Oil 2Q09
Walters Power 230 Fuel Oil 2Q09
Gulf Rental 81 Fuel Oil 3Q09
Independent Power 221 Fuel Oil 3Q09
Nishat Power 202 Fuel Oil 4Q09
Orient Power 225 Gas 2Q09
Sapphire Power 235 Gas 3Q09
Saif Power 225 Gas 2Q09
Fauji Mari Power 179 Gas 3Q09
Engro Power 227 Gas 4Q09
Green Power 188 Gas 4Q09
Source: PPIB.
Existing IPPs are governed under the 1994 Power Policy (the Policy) which was devised for
attracting overseas investment and to facilitate local financing for power projects
The main characteristics of the Policy were the introduction of internationally competitive terms
and simplification of procedures
Salient features of the Policy were
The investors were free to propose the site and opt for the technology and fuel
Investors could propose projects based on hydro or other renewable and/or
non-conventional sources of energy
Power is purchased by WAPDA / KESC under the long-term contracts covering the
concession period
Exemption from corporate income tax on income earned from sale of electricity, sales tax
and custom duties on import of plant and equipment
The tariff was structured to allow for most cost (e.g. fuel and debt) as a pass-through and
provided the IPP with US dollar real returns through its indexation mechanism
(discussed below)
Tariff Components
There are two major components of the tariff structure
Energy Purchase Price (EPP)
This is the tariff for the actual production of power, with fuel being the main component
(thermal). The tariff is based on per kilowatt hour (kWh) basis and any increase in fuel cost
automatically translates into higher tariff. EPP is the highest for oil fired projects, followed
by gas fired, coal fired, and then hydro
The tariff assumed a certain efficiency/heat rate and the IPPs could potentially either gain
or lose on account of such heat rate depending on the actual plant efficiency
CPP
This is the tariff for the components that are independent of actual power generation. The
main components are debt servicing cost (including principal repayment), fixed O&M costs
and return to the equity investors. The tariffs are in PKR or US dollar values; however, they
are converted into kWh by assuming capacity utilization. Under the Policy the capacity
utilization was assumed at 60% utilization for the purposes of tariff calculation
There were also supplemental charges to cover Unit Start-up Charges, Hot Standby
Charges and Pass through items, Turnover Tax on revenues and charges in a number
of listed tariff assumptions

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

74

Table 17 Tariff Structure Under the Pakistan 1994 Power Policy
Tariff Component Indexation
Energy
Purchase Price
Fuel Cost Indexed for actual fuel
price variation
Indexed for actual fuel
price variation
VOMC Foreign currency portion of
VOM eligible for US CPI
inflation and PKR / USD
exchange rate indexation
Foreign currency portion of
VOM eligible for US CPI
inflation and PKR / USD
exchange rate indexation
CPP Escalable
Component
Equity return portion
US CPI inflation indexation
Return allowed in US
dollars; all equity converted
into US dollars and adjusted
for exchange rate variations
FOMC to compensate for fixed
O&M, insurance and cost of
working capital
Indexation of foreign currency
portion of FOMC eligible for
USI and foreign exchange
Tariff front-loading limitation;
Equity return portion and FOM
to be constant or increase over
project life
In addition to the incentives
listed in the 1994 policy, the
following were added in the
2002 policy:
PKR portion of FOM
eligible for Pak
WPI inflation
Post-tax equity return of
15% p.a. over project
life
Non-escalable
Component
Foreign exchange indexation
only allowed for actual foreign
currency portion of debt finance
Debt service portion of CPP to
match loan repayment profile
Minimum Debt: Equity ratio
of 80:20
Foreign exchange
indexation only allowed for
actual foreign currency
portion of debt finance
Debt service portion of
CPP to match loan
repayment profile
Minimum Debt: Equity ratio
of 80:20
CIRCULAR DEBT
As discussed below, recent Government initiatives have resolved the circular debt issue for Lal
Pir and Pak Gen; however, the issue of the circular debt has been the power sectors key concern
over the last two years.
The GoP has historically subsidized consumer electricity tariffs, disallowing WAPDA from
increasing consumer tariffs to match generation costs. The differential has historically been met
through subsidies earmarked annually by the GoP. However, post-FY06, with rapidly rising oil and
(to a lesser extent) gas prices, retail tariffs did not keep pace, causing an increase in the
Governments subsidy levels which were released only periodically to the loss-making
DISCOs / KESC.
As a result, payments to the IPPs were delayed and caused knock-on effects on the rest of the
energy chain as well. The shortfall in cash flows was met via bank borrowings, both by the IPPs
and by OMCs, resulting in a significant build-up in receivables and consequent ballooning of bank
debt in the sector.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

75

Figure 40 Pakistan Fiscal Deficit vs. Power Subsidies
2.9%
2.0%
3.2%
4.2%
4.5%
5.4%
6.7%
3
6
04
4
6
3
1
3
3
8
8
3
1
0.8%
0.6%
0.7%
1.4%
0.0%
0.5%
0.7%
FY03 FY04 FY05 FY06 FY07 FY08 FY09
Power Subsidy Power Subsidy (% of GDP) Fiscal Deficit (% of GDP)
Target
2.9%
2.0%
3.2%
4.2%
4.5%
5.4%
6.7%
3
6
04
4
6
3
1
3
3
8
8
3
1
0.8%
0.6%
0.7%
1.4%
0.0%
0.5%
0.7%
2.9%
2.0%
3.2%
4.2%
4.5%
5.4%
6.7%
3
6
04
4
6
3
1
3
3
8
8
3
1
0.8%
0.6%
0.7%
1.4%
0.0%
0.5%
0.7%
Power Subsidy Power Subsidy (% of GDP) Fiscal Deficit (% of GDP) Power Subsidy Power Subsidy (% of GDP) Fiscal Deficit (% of GDP)
Target

Source: ML Research, EIU.
RECENT GOVERNMENT INITIATIVES
With the IMFs J une 2009 deadline for retirement of the circular debt between the IPPs and
WAPDA, the GoP is taking corrective measures by reducing the electricity tariff subsidy; average
consumer tariffs have been raised by 35% in the last 12 months as opposed to 12% hike in tariffs
over the entire five-year period prior to this. Presently, the GoP has committed to withdraw tariff
subsidies entirely by J une 2009. Additionally, NEPRA has been authorized to adjust WAPDA
consumer tariffs monthly on the basis of actual generation and power purchase cost realized.
For immediate relief the government has floated c.US$1.0 billion Term Finance Certificates (TFC)
on 30 March 2009 to partially offset the effects of circular debt. The IPPs have received the
benefit of a sizable chunk of funds generated. As a result of issue, Lal Pir and Pak Gen were able
to repay all current outstanding working capital loans..
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

76

5.3.1 Overview
Lal Pir and Pak Gen are adjacent to each other and are identical in design as both were
constructed by the same EPC contractor, Nichimen of J apan and MHI. Both plants were brought
online three months apart from each other. Major technical specifications and description of
equipment is included below, with variances noted as applicable.
Construction of both plants commenced in 1995 under a turnkey EPC contract with Nichimen
Corporation and equipment was supplied by MHI, as subcontractor. The O&M of the projects is
supported by AES Pakistan Operations Ltd. (AESPO), a subsidiary company of AES Corporation,
under a services agreement.
5.3.3 Plant Layout
The total land area for both Pakistan Plants is approximately 728,280m
2
. The buildings structures
have been arranged to facilitate process interconnections. Each Plants layout comprises a
turbine generator, a steam boiler, fuel oil storage and handling facilities, a cooling tower, water
treatment facilities, a 220 Kilovolts switchyard, and an electrical and control building.
The site has more than sufficient space available to cater for a possible expansion in operations.
An expansion would have no significant issues in power evacuation given the proximity to the
national grid. Similarly, Lal Pirs existing fire water system could provide support for a
further expansion.
Storage capacity of HFO at site is 150,000 tones. Lal Pir and Pak Gen are required to maintain 30
days stock of oil (c.120,000 tones). Thus, an additional 30,000 tones capacity can be used for
any extension.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

77

Figure 41 Pakistan Plants Equipment Layout
Tank-1
30,000 m
3
Tank-2
30,000 m
3
Tank-3
30,000 m
3
Tank-4
30,000 m
3
Tank-5
30,000 m
3
High
Pressure
H
o
t

R
e
h
e
a
t
C
o
l
d

R
e
h
e
a
t
Main Steam
Condenser
High
Pressure
H
o
t

R
e
h
e
a
t
C
o
l
d

R
e
h
e
a
t
Condenser
Internal
Consumption [24 MW]
Internal
Consumption [22 MW]
Generator
[362 MW]
Generator
[365 MW]
Switch Yard
[220 kV]
Switch Yard
[220 kV]
Pak Gen
Boiler
Lal Pir
Boiler
Intermediate
Pressure
Intermediate
Pressure
Low
Pressure
Low
Pressure
Low
Pressure
Low
Pressure
Main Steam
Tank-1
30,000 m
3
Tank-2
30,000 m
3
Tank-3
30,000 m
3
Tank-4
30,000 m
3
Tank-5
30,000 m
3
High
Pressure
H
o
t

R
e
h
e
a
t
C
o
l
d

R
e
h
e
a
t
Main Steam
Condenser
High
Pressure
H
o
t

R
e
h
e
a
t
C
o
l
d

R
e
h
e
a
t
Condenser
Internal
Consumption [24 MW]
Internal
Consumption [22 MW]
Generator
[362 MW]
Generator
[365 MW]
Switch Yard
[220 kV]
Switch Yard
[220 kV]
Pak Gen
Boiler
Lal Pir
Boiler
Intermediate
Pressure
Intermediate
Pressure
Low
Pressure
Low
Pressure
Low
Pressure
Low
Pressure
Main Steam

BOILERS
Each Plant has a single boiler burning heavy fuel oil (furnace oil) with a maximum continuous
rating of 1,200 tones/hour at a drum pressure of 200 bar and steam temperature of 540 degrees
centigrade at the high pressure super heater outlet. The boilers are equipped with low NOx HFO
burners and associated, HFO filters, pumps, HFO preheating station and HFO piping.
The stacks are 150 meters high, with a reinforced concrete stack enclosing a metallic gas flue.
The heat input rate is maintained at 3,062.5 million British Thermal Units (MMbtu) per hour and
the stack gas flow rate is 1,300.2 tones/hour.
STEAM TURBINE GENERATORS
At each plant a two cylinder tandem compound double exhaust, condensing reheat turbines made
by Mitsubishi Heavy Industries is used which is designed for high operating efficiencies and
maximum reliability. The rated capacities are 362 MW and 365 MW for Lal Pir and Pak Gen
respectively at a speed of 3000 rpm.
The high pressure (HP) - intermediate pressure (IP) turbine at each unit is of the combination
impulse (Rateau stage) and reaction type with 12 and 10 stages respectively; while the low
pressure (LP) turbine is reaction, double flow type with 6 stages in each end.
Steam enters HP turbine at 538 C and 169 kg/cm2 and LP turbine at 538 C and the exhaust
pressure is 692 mmHg. A total of 8 extractions are taken for feed water heating.
The generator is of the liquid/hydrogen cooled type, 426 MVA three phase two poles and exited
from a static system.
FUEL SUPPLY
Both plants have an average daily fuel oil consumption of 1,080 tones each assuming 60% load
or 1,800 tones assuming 100% load.
Fuel storage comprises five heavy fuel oil tanks with 30,000 tones capacity each and both plants
are connected to PSO Depot, Lal Pir and Pak-Arab Refinery Company which is Pakistans
largest refinery.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

78

WATER SUPPLY
Both plants have two sources of water, canal and ground water. The primary source of water is
the Muzaffargarh Canal with the ground water system being used as a secondary source when
the canal is closed for maintenance or other emergency purposes. The total water requirement of
the plants is estimated to be an average of 2,000 cubic meters per hour (35 cusecs) in aggregate
for the two units. The canal capacity is over 4,000 cusecs. The water supply system is designed
for a simultaneous demand of 1,750 cubic meters per hour for each unit. This meets the
requirements of the condenser cooling water make-up, the auxiliary coolers, the water treatment
plant, service water and potable water systems, fire fighting, and domestic water for the
residential colony.
COOLING WATER SYSTEM
Canal and well water intake consists of two canals and six well water pumps, each providing
water to both plants for all requirements.
WATER TREATMENT PLANT SYSTEM
The waste water and effluent systems of both plants are designed to meet the treated water
requirements for cooling tower make-up, boiler make-up and the auxiliary cooling water system.
The design of the water treatment plant includes clarifiers, filters and demineralisers.
CHLORINATION PLANT
To control the biological growth in cooling water and service water system, and to disinfect the
potable water system, chlorine injection is carried out with continuous and shock dosing. To
eliminate the hazards of chlorine gas, sodium hypochlorite dosing system is currently in
testing phase.
WASTE WATER DISPOSAL
The waste water and effluent systems of both plants are designed to ensure that discharges are
collected and treated to protect surface and ground water.
The demineralize regenerate, cooling water blowdown and oily water effluents are collected and
treated in an on-site neutralizing tank to bring its pH range within limits (610pH) specified by the
Pakistan Environmental Protection Agency. The treated effluents are then discharged into the
Muzaffargarh Canal or the drainage channel running parallel to it.
Oily water from the Plant is drained and routed to the oily-water separators. The oil is collected
and burned in the boiler or is hauled offsite for disposal in a Government licensed disposal facility.
FIRE PROTECTION SYSTEM
Fire protection/fighting systems, including fire detectors and alarms, meet the NFPA Standards.
Fixed foam, sprinkler and hydrant systems are provided where appropriate and, in addition,
potable fire extinguishers are placed throughout the facilities.
Fire protection systems are installed to protect the steam turbine hall, oil filled transformers,
electrical and control building, lubricating/control oil system, fuel unloading and storage areas, fuel
pump house, boiler burner systems, air heaters, water treatment systems, diesel generator
building, administration building, workshop and store.
GRID CONNECTION
Each Plant is connected to the WAPDA 220kV grid at Muzaffargarh via a double circuit 220kV
transmission line approximately 20km in length.
SHARED FACILITIES AND INTERDEPENDENCE
Due to their close proximity, Lal Pir and Pak Gen share a limited number of auxiliary facilities. The
common facilities are:
Fire Fighting Pump-Station and Tank: Pak Gen is equipped with its own fire mains, hydrants,
automatic sprays, sprinkler and fire control systems and it shares Lal Pirs fire pump station and
tank. The pump station includes three pumps: a main, a jockey and a diesel driven pump.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

79

Stand-by (Canal Water) Settling Tank: Lal Pir is equipped with two 100% capacity settling tanks,
one main and one stand-by, to remove silt from the Muzzaffargarh canal plant make-up water.
Pak Gen is equipped with 100% capacity settling tank and shares Lal Pirs stand-by tank.
Stand-by (Canal/Well Water) Clarifier: Lal Pir is equipped with two 100% capacity clarifiers, one
main and one stand-by, to remove suspended solids from the canal and well make-up water
sources. Pak Gen is equipped with 100% capacity clarifier and shares Lal Pirs stand-by clarifier.
Hydrogen Generators: Lal Pir is equipped with a hydrogen generating station with the capacity to
produce hydrogen for both Pakistan Plants.
Diesel Truck Unloading Facility: The diesel tanker truck facility of Lal Pir is also used to unload
tankers for Pak Gen.
Turbine Overhead Crane: The steam turbine buildings of both plants are connected to improve
operating access and safety. The single overhead crane in the building, provided by Lal Pir, is
used to service both turbines during the maintenance overhauls.
Laboratory Equipment: Pak Gen shares Lal Pirs laboratory equipment for the sampling and
testing of fuel, water, waste water and stack gases.
Other shared facilities include the Administration building, Workshop and Residential Colony for
the both plants employees and families.
These facilities are owned by Lal Pir and are shared with Pak Gen via a Shared
Facilities Agreement.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

80

Lal Pir and Pak Gen remain one of the best run and most efficient plants in Pakistan.
Both plants have high availability factors owing to the high standard of maintenance at the Plants
and availability has never fallen below contracted levels under the PPA. As a result, the Pakistan
Plants have not had any issues with CPP payments to date.
Figure 42 Lal Pir and Pak Gen Availability
Lal Pir (Availability %) Pak Gen (availability %)

88%
91% 91% 91%
82%
2004 2005 2006 2007 2008

86%
89%
82%
90%
88%
2004 2005 2006 2007 2008

Note: 2006 and 2007 were major maintenance years for Lal Pir and Pak Gen respectively.
Figure 43 Lal Pir and Pak Gen Load Factor
Lal Pir (Load Factor %) Pak Gen (Load Factor %)

19%
12%
51%
59%
35%
2004 2005 2006 2007 2008

34%
25%
61%
68%
54%
2004 2005 2006 2007 2008
Load factors for both plants display an increasing trend from 2004 and 2005 levels as the
Pakistan market continues to face an acute power supply deficit with IPPs increasingly supplying
more of the power mix.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

81

Figure 44 Lal Pir and Pak Gen Heat Rate
Lal Pir (Heat Rate Btu/kWh) Pak Gen (Heat Rate Btu/kWh)
10,565
10,057
10,211
9,888
9,945
2004 2005 2006 2007 2008

10,040
10,228
10,132
9,843
9,695
2004 2005 2006 2007 2008

Historical heat rates for Lal Pir and Pak Gen have remained higher than optimal rates defined in
the PPA. Based on an internal AES study, there remains a possibility of improving performance
by investing in turbine retrofitting for US$28 million. This should improve heat rates and improve
cash flows for the Pakistan Plants.

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

82

5.5.1 Overview
Lal Pir and Pak Gen are subject to the 1994 Power Policy and sell electricity to WAPDA under a
30-year PPA. Fuel is supplied by PSO under a 30-year FSA to both plants.
Figure 45 Lal Pir and Pak Gen Contractual Framework

WAPDA
AES Corporation
AES Pakistan
Operations
Power Purchase
Agreement
Services
Agreement
Fuel Supply
Agreement
Shared Facilities
Agreement
(Between LP and
PG)
Pakistan State Oil
(PSO)
International
Finance
Corporation
Nichimen
Corporation
J apan Export
Import Bank
EPC Contract
Land Transfer
Agreement
(Between LP and
GP)
Implementation
Agreement with
Government of
Pakistan

AES Lal Pir
and AES Pak Gen
Technical
Support
Equity
Loan
Equity
Loan

Source: Preliminary Information Memorandum prepared for lenders dated J anuary/September 1995.
Table 18 Summary of Lal Pir and Pak Gen Key Contracts
Duration Counterparty Key Terms Expiry
Implementation
Agreement
30 years GoP Guaranteed and signed
by GoP
Lal Pir: 2025
Pak Gen: 2026
PPA 30 years WAPDA Guaranteed by GoP Lal Pir: 2025
Pak Gen: 2026
Fuel Supply 30 years Pakistan State Oil Matching the PPAs Lal Pir: 2025
Pak Gen: 2026
O&M 30 years AES Pakistan
Operations
O&M of the Plant is the
responsibility of AESPO
Lal Pir: 2025
Pak Gen: 2026
Financing
(1)
ECA Based Two IFC loans
Two J EXIM loans
(J apanese Yen)
March 2010
(1) Relevant for Pak Gen only; Lal Pir Project Finance debt has been repaid in 2008.
Contracts for both Lal Pir and Pak Gen are similar in nature given that they were negotiated at the
same time. The following are summaries of the contracts on a consolidated basis with differences
noted where relevant.

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

83

WATER AND POWER DEVELOPMENT AUTHORITY
WAPDA was established as a semi autonomous body in 1958. In 1992, the GoP approved a
strategic plan for the privatization of the power sector. WAPDAs obligations are guaranteed by
the GoP under the WAPDA Act of 1958. Please refer to Section 5.2.2 for more details.
PAKISTAN STATE OIL
PSO is the leading oil marketing company in Pakistan and is engaged in the storage, distribution
and marketing of various oil products. PSO has the largest strategic oil distribution network,
comprising of 29 storage depots and 9 installations, 860,000 metric tones of capacity i.e. almost
81% of total national storage, extensive pipeline network and equity partnership in the White Oil
Pipeline Project (WOPP) which runs from Karachi to Mehmood Kot in Central Punjab. The
company also has the largest network of retail outlets to serve the automotive sector and is the
major fuel supplier to aviation, railways, power projects, armed forces and agriculture sector.
JAPAN EXPORT IMPORT BANK (JEXIM)
J EXIM bank merged with Overseas Economic Cooperation Fund, J apan (OECF) in 1999 to form
the J apan Bank of International Cooperation (J BIC). Please refer to the previous section 4.5.3 for
the full description.
INTERNATIONAL FINANCE CORPORATION (IFC)
IFC is the private sector arm of the World Bank Group and promotes economic development
worldwide by providing loans and equity financing for private-sector investment. IFC typically
focuses on small and mid-sized businesses, financing projects in all types of industries, including
manufacturing, infrastructure, tourism, health, education, agribusiness and financial services.
IFC offers its clients a diverse range of financial tools including loans for IFCs account, IFC also
provides advisory services for a wide range of sectors including for financing, the environment,
social sustainability and infrastructure, and provides corporate advice in support of private sector
development in developing countries.
5.5.3 Post-PPA Period
Pakistan is currently in a power supply deficit situation which is expected to continue. It is
expected that both plants will continue to play an important role in the Pakistan power system.
Due to the continuing economic expansion of Pakistan and the corresponding increase in
electricity demand, Pakistan is expected to depend on Lal Pir and Pak Gens capacity after expiry
of the PPA.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

84

The Lal Pir and Pak Gen management and employee team comprises 116 individuals that strive
to operate both plants in a safe, clean, cost effective and reliable manner. All employees are
employed by Lal Pir, which has an internal agreement for shared services with Pak Gen, and so
the cost of employees is shared equally. All employees are Pakistani nationals and are intended
to be part of the sale.
Lal Pir and Pak Gens Boards of Directors consists of five members each, all nominated by
AES Oasis. The Lal Pir and Pak Gen senior management team comprises eight individuals.
There are five employees seconded to AES Philippines from Pakistan. These employees will be
returned to Pakistan Projects at the end of their assignment in the Philippines.
Figure 46 Lal Pir and Pak Gen Management Organization

Plant Manager
CCR Team Leader
Turbine, Safety &
Security Team
Leader
BOP Team
Leader
E&I Team Leader
P&E and
Procurement
Team Leader
Commercial. &
Business Dev.
Team Leader
Boiler &
Environment
TeamLeader
MM & SS Team
Leader
Plant Manager
CCR Team Leader
Turbine, Safety &
Security Team
Leader
BOP Team
Leader
E&I Team Leader
P&E and
Procurement
Team Leader
Commercial. &
Business Dev.
Team Leader
Boiler &
Environment
TeamLeader
MM & SS Team
Leader

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

85

Table 19 Lal Pir and Pak Gen Management Biographies
Professional/Title
Years of Experience
Shahid Khan
Plant Manager
21
(15 with AES)
Shahid has been in his current role at Lal Pir and
Pak Gen since 2009.
He joined AES in 1994 in senior management positions
He has a long experience in business development as
he has served as a general manager and CEO in
private and public power/water companies in Pakistan
and Sri Lanka
He graduated from the University of Punjab with a Cost
and Management Accountant Degree
Muhammad Ali Nawaz
Team Leader
(Performance,
Engineering and
Procurement)
12
(12 with AES)
Muhammad has been in his current role at Lal Pir and
Pak Gen since 2008
He joined AES in 1997 at Lal Pir as an
Operations Engineer
He was previously Operations Manager for Lal Pir and
Pak Gen and Project Engineer for Ras Laffan A in
Qatar. He was involved in the business development of
Ras Laffan during the erection and open cycle
commissioning Phase
He graduated from University of Engineering and
Technology, Lahore with a degree in
Faqir Muhammad
Team Leader
(BOP)
22
(12 with AES)
Faqir has been in his current role at Lal Pir and Pak
Gen since August 2008
He was previously CRE Team Leader for Lal Pir and
Pak Gen and a Sub Engineer for the Karachi Nuclear
Power Plant
He joined Lal Pir and Pak Gen in 1997
Prior to joining AES, he worked at DUBAL and
MEW Kuwait
He graduated with a Bachelors in Electrical Engineering
Muhammad Saqib Khan
Team Leader
(Boiler Operation)
12
(6 with AES)
Saqib has been in his current role at Lal Pir and Pak
Gen since J uly 2008
He joined AES in September 2003 at Ras Laffan. He
was previously P&E Team Leader and BOP Team
Leader for Lal Pir and Pak Gen
Prior to joining AES, he worked at KAPCO and
Descon Engineering
He has an MBA in Project Management and a BSc
(Hons.) in Electrical Engineering
Shahid Mahmood
Team Leader
(Electrical and Instrument
and IT)
14
(12 with AES)
Shahid has been in his current role at Lal Pir and Pak
Gen since March 2005
He joined AES in May 1997 at Lal Pir and Pak Gen. He
was previously an Instrument and Electrical Engineer
for Lal Pir and Pak Gen and Site Engineer for E&I
during Lal Pir construction for Descon
Prior to joining AES, he worked at Descon Engineering
He graduated with Honors in Electrical Engineering
Muhammad Yasin
Ahmad
Team Leader
(Operation)
32
(12 with AES)
Muhammad has been in his current role at Lal Pir and
Pak Gen since May 1997
He was previously Operation Team Leader and
Performance and Control Room Engineer for Lal Pir
and Pak Gen
Prior to joining AES, he was worked at DUBAL and
Karachi Nuclear Power Plant
He graduated with a Bachelor of Science and holds a
diploma in Mechanical Engineering

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

86

Professional/Title
Years of Experience
Mohammad Ashraf
Mansha
Team Leader
(Maintenance)
29
(11 with AES)
Mohammad has been in his current role at Lal Pir and
Pak Gen since February 1997
He has business development experience from working
as Commissioning Leader at Barka and was part of the
construction and contractual execution team
Prior to joining AES, he worked as Unit Supervisor at
Hub Power station and Operations Supervisor at
Karachi Nuclear Power Plant
He graduated from the Govt. College of Technology,
Sahiwal as an Associate in Mechanical Engineering
Amjad Ali Sheikh
Operations Manager
31
(6 with AES)
Amjad has been in his current role at Lal Pir and Pak
Gen since 2003.
He manages relationships with WAPDA, PSO and other
agency for agreement execution
He was previously Senior Project Engineer,
Maintenance Manager, Outage Manager and Operation
Manger for Kot Addu Power Company in Pakistan
He holds a Masters Degree in Mechanical Engineering
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

87

5.7.1 Key Contractual Consents
In the case of Pak Gen, a sale of the shares in AES Oasis or any of its relevant subsidiaries other
than Pak Gen will trigger contractual consent requirements from IFC and Pak Gens project
finance lenders and, in both the cases of Lal Pir and Pak Gen, a put option by IFC.
Table 20 Lal Pir and Pak Gen Key Consents
Agreement Consents Needed Consenting Party
Amended and Restated
Disposal of AES Oasis (or any of its relevant
subsidiaries) will trigger change of control of
Pak Gen and Lal Pir under the relevant
shareholders agreements
Upon a change of control, IFC has a put
option to oblige AES or its relevant
subsidiaries to acquire shares held by IFC
in AES Pak Gen Holdings, Inc. and Lal Pir
at a purchase price equal to 120% of the
appraised value of such shares
Put option can be exercised within 90 days
of the change of control
IFC
Pak Gen Sponsors
Support Agreement
AES Corporation no longer maintains 51%
direct or indirect shareholding of Pak Gen
AES Pak Gen (UK) Ltd., AES Pak Gen
Holdings, Inc., AES Pakistan Holdings or
AESPO cease to be indirect subsidiaries of
AES Corporation
Transfer of Shares in Pak Gen
Majority Lenders
IFC
Pak Gen Master Security
Agreement and
Supplemental Agreement
Disposal by AES Corporation, AES Pak Gen
UK Ltd. or AES Pakistan Holdings
Agreement reads that consent only required
in instance that the disposal has material
adverse effect on the Project
Majority lenders
IFC
Lal Pir and Pak Gen are required to obtain and maintain various relevant consents, permits and
authorizations for the operation of both plants, all of which are currently in place subject to their
respective terms and conditions. Lal Pir and Pak Gens consents and authorizations are
renewable, where applicable, in accordance with their terms.
A transfer of the shares in AES Oasis or in any of its relevant subsidiaries other than in Lal Pir or
Pak Gen would not trigger any consent requirements under the existing permits or applicable
regulations in Pakistan, other than the prior consent of the Competition Commission of Pakistan if
the sale falls within certain specified thresholds
Table 21 Lal Pir and Pak Gen Regulatory Consents
Authority Basis
Competition Commission
of Pakistan
Merger Approval potentially required from Competition Ordinance 2007
(more specifically under Section 11 of the Ordinance)
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

88

5.8 HSE, Litigation and Insurance
5.8.1 Health and Safety
Lal Pir and Pak Gen have completed more than eleven years without an LTA. Together they have
completed more than 5 million man-hours without any LTA.
During 2008, Lal Pir and Pak Gen:
Won Association of Chartered Certified Accountants (ACCA) World Wide Fund (WWF) Best
Environment Reporting Award 2008, held by the ACCA-WWF
Received the award of excellence in Best Practices Occupational Safety and Health 2008
held by Employers Federation of Pakistan under UNDP and ILO
Successfully completed Recertification for ISO-14001 & OSHAS 18001 in J une 2008
Lal Pir and Pak Gen have developed and implemented an Environment Management System
(EMS) covering environment policy planning and implementation, checking and corrective
actions. The EMS includes a management review of the environmental performance of
the organization.
Lal Pir and Pak Gen are committed to fulfill the requirements of the Pakistan National
Environment Quality Standard. In addition, Pak Gen is following World Bank guidelines for
effluents and industrial gas emissions. Priority parameters are reported to EPA as under the
SMART II (Self Monitoring and Reporting Tool) program on a monthly basis. The following online
systems are used to monitor air emissions and effluents:
CEMS (Continuous Emission Monitoring System) to monitor stack emissions
Online monitoring system to check the chemistry of discharge effluents
The operational controls taken by Lal Pir are:
NOX Emission Control
Fugitive Emission Control
Effluent Treatment
Noise Management Program
SO
2
Emission Control
FLUE GAS DESULPHURISATION (FGD) SYSTEM
Pak Gen is the first power plant in Pakistan to have a FGD plant. The FGD plant removes 90% of
the sulphur dioxide (SO
2
) from flue emissions. The by-product of the process (gypsum) is used in
the cement industry.
2008 MILESTONES
Lal Pir was awarded the ACCA-WWF Environment Reporting Award in the
Multinational Category
Best Environment Excellence by National Forum for Environment and Health
Lal Pir and Pak Gen successfully cleared the third-party Recertification Audit of OHSAS 18001
and ISO 14001 Financial Information
5.8.3 Litigation and Contingent Obligations
Lal Pir: A case is pending in the High Court, Lahore which was initiated in 13 J une 1998 through a
lawyer (Dr. Ikram-ul-Haq), Lal Pir has questioned the tax authorities in respect of tax allegedly
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

89

imposed on the shares issued to the sponsors for consideration other than cash
(US$14 million claim).
Lal Pir & Pak Gen: A case has been pending with the High Court, Lahore since November 2003
and is being handled by M/s Rizvi, Isa, Afridi & Angell Advocates. The applicability of tax imposed
under the laws of the Workers Profit Participation Fund Act (Act) have been challenged on the
basis that the Act does not apply to Lal Pir and Pak Gen, as these plants do not have workers
which fall under the jurisdiction of the Act.
Lal Pir & Pak Gen: A case has been pending in the appellate forums of the tax authorities since
September 1998 and is being handled by M/s Anjum Asim Shahid Rehman & Co (Chartered
Accountants). The tax (approximately US$12.7 million) imposed on the interest income has
been challenged.
The cases listed below pertain to the ex-employees of Lal Pir and Pak Gen or the City Council
handling the community affairs and are pending in the labor courts:.
A case has been pending with the local labor courts since December 2005 and is being
handled by the local lawyer Rafiq Goreja. A grievance petition was filed by the kitchen helper
against the Plant Manager and Community Manager for his reinstatement. The Companys
plea is that the kitchen helper is not an AES Oasis employee. A counter civil suit was initiated
before the Civil J udge for the recovery of a loan made by the company to the kitchen helper for
the procurement of a motor bike and is still outstanding against him.
A case has been pending with the local labor courts since February 2007 and is being handled
by the local lawyer Rafiq Goreja. A grievance petition was filed by a driver against the Plant
Manager for his reinstatement.
5.8.4 Insurance
ALL RISKS INSURANCE
All real and personal property owned by Lal Pir and Pak Gen is insured for a sum of up to
US$304.4 million and US$333.4 respectively against all risks of direct physical loss or damage.
Lal Pir and Pak Gen have also insured business interruption losses (with respect to reduction of
turnover and an increase in the cost of working) up to US$750 thousand, which are subject to a
time deductible of 60 days.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

90

Table 22 Macroeconomic Indicators
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
CPI (US) 3.4% 2.9% 3.8% (0.6%) 1.1% 1.9% 2.0% 2.1%
CPI (Pakistan) 7.9% 7.6% 20.8% 16.3% 6.0% 5.8% 5.7% 6.8%
PKR KIBOR 9.9% 10.2% 13.0% 13.0% 13.0% 13.0% 13.0% 13.0%
Exchange Rate (US$/PKR) 59.5 60.1 61.8 79.4 82.7 83.4 84.0 85.0

Table 23 Lal Pir Operating Assumptions
Lal Pir Operating Assumptions
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Furnace Oil Cost (US$/MT) 300 357 461 359 416 450 471 482
Dispatch Levels (MWh) 1,070 1,573 1,819 1,840 1,686 1,840 1,840 1,840
Inventory Levels (tonnes p.a) 38,985 23,042 2,725 62,000 62,000 62,000 62,000 62,000
Days Recievables 23 91 76 25 25 25 25 25

Table 24 Pak Gen Operating Assumptions
Pak Gen Operating Assumptions
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Furnace Oil Cost (US$/MT) 300 357 461 359 416 450 471 482
Dispatch Levels (MWh) 1,644 1,884 2,079 1,840 1,840 1,686 1,840 1,840
Inventory Levels (tonnes p.a) 43,562 17,311 7,888 62,000 62,000 62,000 62,000 62,000
Days Recievables 83 93 102 25 25 25 25 25

KEY ASSUMPTIONS
After a decline in fuel prices in 2009, costs increase in line with current forward curves;
effecting the top line as fuel recovery charge forms a part of the revenue recovered
Dispatch levels are assumed at higher than historical levels given that Pakistan continues to
be a power deficit market with limited capacity expansion in the short-term and IPPs will
continue to remain significant part of the energy mix
Both Lal Pir and Pak Gen undergo Capex of US$28 million each to improve heat rate; which is
assumed to come online in 2011 for Lal Pir and in 2012 for Pak Gen, after the major
maintenance for the projects in the respective years
A fall in days receivables is assumed for both Pakistan Plants as the circular debt issue is
resolved via the TFC and improvement in WAPDA cash flows, leading to an easing of the
plants liquidity situation
Inter-company payable from Pak Gen to Lal Pir of c.US$14 million is assumed to be repaid
in 2009
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

91

The assumption of higher inventory levels is consistent with companys assumption for
WAPDA to meet its contractual payment obligation of 25 days
5.9.2 Summary Financial Statements
Table 25 Lal Pir Financial Summary 2006/2013E
DSCR 1.6 4.4 1.8 NA * NA * NA * NA * NA *
(*) No Debt Outstanding.

Table 26 Pak Gen Financial Summary 2006/2013E
Fi scal Year Endi ng December 31,
(US$ mil lions) 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
DSCR 1.3 24.2 4.4 6.8 NA * NA * NA * NA *
(*) No Debt Outstanding.


S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

92

6 Consolidated Financial Performance
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

93

6.1 Basis of Preparation
The historical (FY06) financial information prepared is presented in the form of audited income
statements, balance sheet and cash flow. Audited financial statements for FY07 and FY08 will be
available after consolidation of financial statements based on the Barka restated financials and
finalization of the Amman East accounts. The Companys financial statements consolidate its
interests in its Projects which consist of Barka, Amman East, Lal Pir and Pak Gen.
The forecasted financial data presented herein is a Pro Forma aggregation of the Companys
ownership interests in the various projects in operations.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

94

6.2 Consolidated Financial Statements
Table 27 AES Oasis Combined Financial Performance 2006/2013E
INCOME STATEMENT
(US$ mill ions) 2006 2007 2008 2009E 2010E 2011E 2012E 2013E
Total Revenues 473 543 757 560 583 602 636 642
Total Costs (329) (402) (618) (404) (440) (466) (496) (506)
EBITDA 144 141 139 156 143 135 140 136
Depreciation and Amortization (10) (4) (14) (24) (25) (27) (30) (30)
EBIT 133 137 125 132 118 109 110 106
Interest Expense (27) (27) (43) (36) (44) (38) (35) (33)
Other Income 7 1 1 1 1 1 1 1
Finance Costs (13) (1) (1) (1) (0) (0)
Other (24) (30) 2 2 - 1 1 -
Profi t Before Tax 89 81 72 99 75 72 77 73
WHT (6) (8) (2) (2) (5) (4)
Taxes (5) (4) (3) (5) (5) (6) (6) (5)
Net Income 84 77 63 87 68 64 66 64
Parent 67 62 48 69 51 48 48 45
Minorities 17 15 15 18 17 17 18 19

BALANCE SHEET
(US$ millions) 2,006 2007 2008 2009E 2010E 2011E 2012E 2013E
Assets
Cash & Cash Equivalents 11 18 22 40 16 17 14 13
Accounts Receivables 84 131 179 44 48 50 52 52
Inventory 48 43 27 74 84 91 94 95
Other Current Assets 64 32 61 44 43 39 28 38
Current Assets 209 224 288 202 191 196 188 199
Net PP&E 368 438 542 593 593 598 598 572
Finance Lease Receivables 248 236 184 172 154 137 118 105
Other Long-TermAssets 73 43 5 0 0 0 0 0
Total Assets 898 941 1,020 967 938 932 904 876
Liabilities & Shareholders' Equity
Accounts Payables 24 36 35 15 15 15 16 16
Working Capital Facility - 0 138 76 83 89 92 94
LT Debt 339 399 456 502 436 391 356 325
Other Liabilities 32 47 120 120 121 121 122 122
Total Liabilities 395 482 749 712 656 616 587 557
Share Capital 363 359 208 212 212 212 212 212
Retained Earnings 275 256 217 192 215 237 235 232
Other Reserves (214) (219) (212) (214) (219) (219) (219) (218)
Minority Interests 79 64 57 64 74 85 89 93
Total Liabilities & Shareholders' Equi ty 898 941 1,020 967 938 932 904 876

CASH FLOW STATEMENT
Profit Before Tax 89 81 72 99 75 72 77 73
Adjustments for the year
Depreciation and Amortization 10 4 14 24 25 27 30 30
Taxes (1) (2) (6) (8) (2) (2) (5) (6)
Other 22 30 (2) 4 (4) (4) (4) (4)
Changes in Working Capital (18) 4 (56) 121 4 4 5 7
Operati ng Cash Flow 102 118 22 241 98 97 103 100
Contribution to Reserves & Investing Activities (2) (78) (113) (100) (25) (27) (18) (13)
Finance Lease Differential 16 10 6 11 12 15 18 12
Cash from Investing Activities 15 (69) (107) (89) (12) (11) 0 (1)
Debt (47) 60 73 32 (31) (35) (35) (32)
WC Facility - - 92 (62) 7 5 4 1
Capital Reduction - (26) - - - - - -
Free Cash Flow to Equity 69 83 81 122 61 56 72 69
Shareholder Loans & Equity - 28 20 (34) (12) - -
Dividends Pai d
Parent (53) (47) (72) (92) (28) (24) (49) (46)
Minorities (13) (30) (12) (14) (6) (6) (15) (14)
Cash from Financing Activities (113) (43) 89 (134) (109) (85) (106) (100)
Net Increase / (Decrease) in Cash (3) 6 4 18 (24) 1 (3) (1)
Cash & Cash Equivalents, Beginning of Period 14 11 18 22 40 16 17 14
Cash & Cash Equivalents, End of Period 11 18 22 40 16 17 14 13

Note: 2007 numbers are based on financial data for Barka prior to restatement.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

95

6.3 Consolidated Financial Analysis
INCOME STATEMENT
Revenues
For the financial year-ending 31 December 2007, AES Oasis recorded revenue of
US$543 million, an increase of 14.9% from FY06.
The increase in revenue in 2008 over 2007 is primarily due to the effect of higher fuel prices in
Lal Pir and Pak Gen as tariffs are indexed to fuel cost and fuel payments for both Lal Pir and
Pak Gen increased by more than 60% over the year. As a result of easing fuel prices it is
expected that revenue will decline in 2009 from 2008 levels.
The revenue stream for AES Oasis is expected to improve on a long-term basis with the
commissioning of Amman East. Overall AES Oasis revenues are expected to increase over the
forecasted period given higher dispatch of Lal Pir and Pak Gen and rising fuel prices after 2009.
However, capacity payments decline slightly over this period as project finance debt is repaid.
See Table 61 for a breakdown of the corporate overhead expense. Also, for purpose of simplicity,
the financial statements for intermediary holding companies have not been considered for
consolidation of accounts for AES Oasis for the forecasted period.
2007 financials for Barka were restated along with 2008 financials, but 2006 financials were not;
and therefore the two are not fully comparable. In addition, the restated audited financial
statements for AES Oasis for 2007 and 2008 are not yet available as the audit for AES Oasis is
still in progress. Financial Statements will be provided when the audit is complete.
Table 28 AES Oasis Revenue Breakdown by Type and Asset
Capacity Payment - Power 176 161 151 152 147
Capacity Payment - Water 36 41 41 42 42
Energy Payment - Power 341 374 403 436 446
Energy Payment - Water 7 6 7 7 7
Other 0 0 0 0 0
Total 560 583 602 636 642

Costs
The increase in fuel costs in 2008 is principally driven by increases in furnace oil prices in
Pakistan, in line with global oil price trends. This trend is expected to ease in 2009 with the
reduction in global oil prices. Amman East is not impacted by these movements in global prices
since the asset is tolling agreement based.
Net Interest and Finance Costs
Finance costs include fees and charges primarily related to debt financing such as letter of credit
charges, bank admin fees, letter of credit fees and security and agency fees.
Interest expense includes interest paid on term loans, working capital facility and any interest
received on cash balances.
Corporate Overheads
Corporate overheads includes wages and benefits, travel and strategy meetings, stock options
and performance unit expense, consultants, office costs and the Equity LC fees, which is a one-
time financing cost.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

96

Table 29 AES Oasis Corporate Overheads
Wages and Benefits 2.4 2.4 2.4 2.5 2.5
Travel and strategy meetings 0.2 0.2 0.2 0.2 0.2
Stock option and performance unit expense 0.3 0.3 0.4 0.4 0.4
Consultants 0.1 0.1 0.1 0.1 0.1
Office costs 0.2 0.2 0.2 0.2 0.2
Other costs 0.1 0.1 0.1 0.1 0.1
Equity LC fees for Jordan project 0.1 0.1 0.1 0.1 0.1
Depreciation 0.0 0.0 0.0 0.0 0.0
Total expense SG&A/BD activities 3.5 3.5 3.6 3.6 3.7
US CPI Estimates (EIU) 1.10% 1.90% 2.00% 2.10%

Other
Management fee income represents reimbursement of the Companys and representative office
expenses from the Companys shareholders, which is equivalent to the annual expense budget
less depreciated expense.
Forward projections are not available as the depreciated expense is expected to equal the
planned budget expense.
Credit Ratios
Debt peaks in 2008 due to increases in working capital facilities for Lal Pir and Pak Gen combined
with Capex associated with Amman East. Coverage ratios are expected to steadily improve in
forward periods as debt is paid down and utilization of working capital facilities declines at Lal Pir
and Pak Gen.
Table 30 AES Oasis Debt and Leverage
538
504
463
435
406
382
572
328
3.1x
3.0x
3.4x
3.5x
3.4x
4.1x
2.9x
2.3x
37
137
237
337
437
537
637
2006 2007 2008 2009E 2010E 2011E 2012E 2013E
(
U
S
$

m
i
l
l
i
o
n
s
)
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
Net Debt Net Debt / EBITDA


Hedges
The financial projections currently incorporate interest rates as locked-in under interest rate
hedges. The unhedged portion in the forecast reflects the recent Bloomberg 6-months LIBOR
forward curve. Given that current level of benchmark rates are at historic lows, there is an
opportunity to lock in long-term low interest rates today.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

97

In addition, unwinding the current interest rate hedge can potentially deliver attractive upfront cost
savings despite mark to market cost which can be amortized over the period of the new hedge.

S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

98

7 Other Key Considerations
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

99

7.1 Legal Structure
AES and IDB own shares in AES Oasis. The Plants are held by AES Oasis through various
intermediate holding companies. All of AES Oasis interests in the Plants are structured on the
basis that the economic, voting and ownership interests are proportionate, meaning there is no
difference between the ownership interest and the economic interest in a Plant.
Figure 47 AES Structure Chart
AES
Corporation
(US)
AES GEH LLC
Delaware
AES GEH Inc.
Delaware
Global Energy
Holdings CV
AES
International
(BVI)
AES MidEast 2
(Cayman)
AES Oasis Ltd.
(Cayman)
AES Oasis Ltd.
Representative Office
(Dubai)
AES J ordon
Imco Ltd.
(Cayman)
AES Pakistan
Holdco
(Cayman)
AES Middle East
Holdco
(Cayman)
AES Barka
Partner (Cayman
Ltd.)
AES Oasis
Mauritius Inc.
(Mauritius)
AES Pakistan
Pvt Ltd.
(Pakistan)
Mitsui & Co.
Ltd.
(J apan)
AES Barka
Holdings (Cayman
Ltd.) (Cayman)
AES Barka
Holdings Ltd.
(UK)
Public Holding
Muscat
Securities Market
(Oman)
Multitech
(Oman)
AES Barka
SAOG
(Oman)
AES J ordon
PSC
(J ordon)
AES J ordon
Holdings Ltd.
(Cayman)
IDB Infrastructure
Fund L.P.
International
Finance
Corporation
AES Pakistan
Power
Holdings
Ltd.
(Cayman)
AES Pakistan
(Holding) Ltd.
(UK)
AES Lal Pir
(UK) Ltd.
(UK)
AES
Lal Pir Ltd.
(Pakistan)
AES Pak Gen
(UK) Ltd.
(UK)
AES
Transpower
(Mauritius)
AES Pak Gen
Holdings, Inc.
(Mauritius)
AES Pakistan
Holdings
(Mauritius)
AES Pak Gen
(Private) Co.
(Pakistan)
99.05% 0.85%
38.891%
61.109%
100%
100%
40%
60%
100%
100%
100%
100%
35%
7%
58%
100% 100%
10%
100% 100%
73.90%
88.05%
11.95%
83.67%
1%
15.33% 16.10%
IFC Effective Ownership in Pak Gen 9.9%
AES Controlled Entities AES IDB Infrastructure Fund
AES Oasis Controlled Entities AES Oasis Third Parties
Plants
AES
Corporation
(US)
AES GEH LLC
Delaware
AES GEH Inc.
Delaware
Global Energy
Holdings CV
AES
International
(BVI)
AES MidEast 2
(Cayman)
AES Oasis Ltd.
(Cayman)
AES Oasis Ltd.
Representative Office
(Dubai)
AES J ordon
Imco Ltd.
(Cayman)
AES Pakistan
Holdco
(Cayman)
AES Middle East
Holdco
(Cayman)
AES Barka
Partner (Cayman
Ltd.)
AES Oasis
Mauritius Inc.
(Mauritius)
AES Pakistan
Pvt Ltd.
(Pakistan)
Mitsui & Co.
Ltd.
(J apan)
AES Barka
Holdings (Cayman
Ltd.) (Cayman)
AES Barka
Holdings Ltd.
(UK)
Public Holding
Muscat
Securities Market
(Oman)
Multitech
(Oman)
AES Barka
SAOG
(Oman)
AES J ordon
PSC
(J ordon)
AES J ordon
Holdings Ltd.
(Cayman)
IDB Infrastructure
Fund L.P.
International
Finance
Corporation
AES Pakistan
Power
Holdings
Ltd.
(Cayman)
AES Pakistan
(Holding) Ltd.
(UK)
AES Lal Pir
(UK) Ltd.
(UK)
AES
Lal Pir Ltd.
(Pakistan)
AES Pak Gen
(UK) Ltd.
(UK)
AES
Transpower
(Mauritius)
AES Pak Gen
Holdings, Inc.
(Mauritius)
AES Pakistan
Holdings
(Mauritius)
AES Pak Gen
(Private) Co.
(Pakistan)
99.05% 0.85%
38.891%
61.109%
100%
100%
40%
60%
100%
100%
100%
100%
35%
7%
58%
100% 100%
10%
100% 100%
73.90%
88.05%
11.95%
83.67%
1%
15.33% 16.10%
IFC Effective Ownership in Pak Gen 9.9%
Plants
Plants

Source: AES.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

100

7.2 Consents and Approvals
AES Oasis has been structured to enable the relative ease of transfer of AES and IDBs interests
in the Plants. There will be certain consent requirements triggered as a result of the indirect
transfer of AES and IDBs interest in the Plants by way of a sale of the shares in AES Oasis or a
relevant subsidiary other than the project companies (i.e. Barka, Amman East, Lal Pir and Pak
Gen). A sale of the shares in each of the project companies would result in the same consent
requirements being triggered as for a sale of AES Oasis or its relevant other subsidiaries, as well
as additional shareholder and governmental waivers and/or consents.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

101

7.3 Litigation and Contingent Obligations
The Company is not aware of any material litigation or contingent obligations outstanding at
AES Oasis.
S
t
r
i
c
t
l
y

P
r
i
v
a
t
e

&

C
o
n
f
i
d
e
n
t
i
a
l
A
E
S

O
a
s
i
s

L
i
m
i
t
e
d
I
s
s
u
e
d

t
o
:

N
i
s
h
a
t

G
r
o
u
p

102

7.4 Carve-out Issues
AES Oasis and the Plants are effectively stand-alone operations with no material support
provided by AES. With minimal exception AES Oasis and the Plants license IT software and
systems in their own name.

AES

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

AES

Uploaded by

Copyright:

Available Formats

S

You might also like