Philip Cox Chief Executive Officer Investor Presentation September

Philip Cox Chief Executive Officer Investor Presentation September 2005

A leading global power generator Portfolio approach - regional focus North America First Hydro Deeside Rugeley Milford Hays Midlothian I & II Blackstone Bellingham Turbogás Europe EOP Spanish Hydro Uni-Mar Pego Hartwell ISAB Oyster Creek Shuweihat Eco. Eléctrica Key Saltend Derwent Middle East Hydro Coal Gas Other Umm Al Nar Al Kamil KAPCO Uch HUBCO Asia Pluak Daeng Malakoff Paiton Note: This map shows net capacity for IPR and excludes assets under construction Gross capacity in operation Net capacity under construction 28, 181 MW 16, 372 MW 1, 706 MW Synergen Kwinana SEAgas pipeline Pelican Point Canunda Valley Power Hazelwood Loy Yang B Australia 2

Capacity analysis Net MW geography and fuel type Geography North America Asia 13% Australia Fuel Gas 62% 28% 20% 4% Middle East 35% Europe 25% Wind 0. 5% Hydro 0. 5% 9% Pumped storage Oil 3% Coal As at 30 June 2005 3

North America § Merchant & contracted capacity § Key merchant markets - Texas & New England – emerging from oversupply driven down turn § Merchant capacity - key competitive advantages – modern, highly efficient – solid capital structure § Improved spark spreads, particularly in Texas – improved trading liquidity § Positive PBIT contribution from US merchant fleet in Q 2 § Confident of full market recovery in 2007 - 2009 § Contracted assets performing well Plant name Market (Zone) Status Merchant Midlothian Hays Bellingham Blackstone Milford Gross MW IPR Own% Net MW Ercot (North) Ercot (South) Nepool (Sema) Merchant Merchant 1, 650 1, 100 570 160 100% 100% 1, 650 1, 100 570 160 Contracted Hartwell Oyster Creek Eco. Electrica Serc (Southern) Ercot (Houston) Puerto Rico PPA 2019 PPA 2014 PPA 2022 310 425 524 5, 309 50% 50% 155 213 183 4, 601 4

North America 2006 Texas peak spreads 40 High gas price environment - a plus for IPR’s modern plants Spark Spread ($/MWh) ERCOT 2006 June to August Peak Spreads 35 30 North 25 South 20 15 10 Jan 2005 Feb Mar Apr May Jun Jul Based on 7. 375 Heat Rate, Heat Rates vs. Henry Hub Gas 5

Europe § Largest region by installed capacity § Significant growth in capacity and profits – EME acquisition – Turbogas and Saltend acquisition § Contracted portfolio performing well UK § Key merchant market – 7 th largest generator with 7% market share § Improving market conditions § Portfolio benefiting from fuel diversity Plant name Country UK Rugeley Derwent Saltend Deeside First Hydro Gross MW Net MW Fuel Type England Wales 1, 050 214 1, 200 500 2, 088 1, 050 50 840 500 1, 462 Coal Gas Gas Hydro Rest of Europe Pego Turbogas EOP Unimar ISAB Spanish Hydro Portugal Czech Republic Turkey Italy Spain 600 990 585 480 528 84 8, 319 270 594 580 160 181 57 5, 744 Coal Gas Asphalt Hydro 6

Europe Saltend acquisition § 1200 MW CCGT cogeneration facility located in Hull § Highly efficient modern plant (53. 6%) – commissioned in 2000 § Acquired in partnership with Mitsui (IPR share 70%) – acquired at significant discount to new build Saltend Deeside First Hydro Derwent Rugeley § Revenue from power and steam sales § Favourable gas supply contract § Earnings enhancing in first full year § Immediately cash generative § Complements existing UK portfolio – total UK portfolio 5, 052 MW (gross) - gas: 1, 914 MW - coal: 1, 050 MW - pumped storage: 2, 088 MW Saltend 7

Europe UK merchant portfolio § High coal spreads principally driven by – high gas and carbon prices driving up power prices – stable cost of coal ($65 - $70 per tonne-delivered ARA) § Improved gas spreads – still below new entrant § First Hydro benefited from favourable market conditions – higher system demand for reserve and response services – high plant availability - ensuring maximum value § CO 2 - currently trading at € 20 - € 25 per tonne – £ 5. 50 - £ 7. 00/MWh gas, – and £ 12. 50 to £ 15. 00/MWh coal Market Spread* 2004 Peak Baseload 7 3 * Pre cost of CO 2 (August 2005 data) Coal 2005 25 18 2006 2004 37 29 8 4 Gas 2005 15 8 2006 17 9 8

Middle East § Creation of new region since 2000 – five projects in five years – portfolio of long-term contracted assets § Power and desalination § All operational assets performing well § 3. 6 GW (gross) construction programme on track § Opportunity rich markets – pipeline of further projects Plant name Country Gross MW Net MW Al Kamil Shuweihat Umm Al Nar Oman UAE Under Construction Ras Laffan B Tihama Umm Al Nar 285 1, 500 870 2, 655 185 300 174 659 Net Desal/ Heat Capacity (MIGD) 20 32 52 Qatar Saudi Arabia UAE 1, 025 1, 074 1, 550 3, 649 410 644 310 1, 364 5 5 Fuel Type Power Contract Expiry Gas Gas 2017 2025 2026 Gas Gas 2033 2026 9

Middle East Desalination § § Strong growth in demand - a growing business Now the largest private producer of water in the Middle East Excellent construction and operational track record Future desalination opportunities in the Gulf Plant Desal. capacity (MIGD) Shuweihat 100 Umm Al Nar 187 Ras Laffan B 60 Total 347 Shuweihat 10

Australia § Largest private power generator in Australia § Diverse and multi-state business – blend of fuel types § Scale player – 27% market share in Victoria Energy. Australia § Retail partnership § EA one of the largest retailers in Australia § Growing customer base § Excellent strategic fit - increased access to domestic market Plant name State Gross MW Net MW Fuel Type Hazelwood Loy Lang B Valley Power* SEA Gas Pelican Point Synergen Canunda Kwinana Victoria SA & Victoria SA SA SA WA 1, 635 1, 000 300 n/a 485 360 46 118 3, 944 1, 500 700 126 33. 3% 485 360 46 58 3, 275 Coal Gas Pipeline Gas & fuel oil Wind Gas * Being sold to Snowy Hydro 11

Australia Merchant markets § Key merchant market § No major change in electricity price environment – supply/demand balance remains attractive – liquid forward market – sustained demand peaks/trigger required to expedite price increases – mild weather continues § Portfolio well hedged for the balance of 2005 (>75%) 12

Asia § All long term contracted assets – IPR plant operator for most assets § Operational performance - key for contracted assets – robust performance – high availability and high reliability § All assets delivering solid financial performance – good cash flow Plant name Country Gross MW Net MW Fuel Type Paiton Malakoff HUBCO KAPCO Uch Pluak Daeng Indonesia Malaysia Pakistan Thailand 385 567 214 575 234 118 2, 093 Coal Gas/Oil Gas Under Construction Malakoff 1, 230 3, 130 1, 290 1, 600 586 118 7, 954 Malaysia 1, 890 342 Coal 13

Global portfolio Portfolio approach delivers: § Risk mitigation across 5 core regional markets § Access to optimum growth opportunities – greenfield – acquisitions § In depth regional market knowledge/customer contracts § Balance of contracted (stable return) and merchant (upside potential) markets § Knowledge/skills transfer 14

Financial highlights - H 1 2005 § Good financial performance – EPS of 6. 7 p - up 40% (H 1 2004: 4. 8 p*) – profit from operations £ 233 m up 96% (H 1 2004: £ 119 m) § Profit from operations up in all regions – significant increase in Europe and Asia – improved performance in the US § Cash flow strong across the portfolio – free cash flow significantly up at £ 134 m (H 1 2004: £ 41 m) § EME integration complete § 2005 earnings guidance upgraded – revised 2005 EPS range of 12. 0 p - 13. 0 p *adjusted for Rights Issue 15

Capital structure § Non-recourse project debt the fundamental building block § Liquid resources at IPR corporate – cash – headroom – borrowing capacity § Free Cash Flow generation strong and consistent § Debt capitalisation 56% (at 30 June 2005) 16

Summary § A leading global power generator – regional balance - 5 core regions – contracted and merchant markets § Core competencies – greenfield development – acquisitions – financing – plant operations – trading and commercial structuring § Asset management – delivery of results § Growth opportunities § Portfolio performing well – operationally and financially 17

Appendix

Income statement Six months ended 30 June Year ended 31 December 2004 £m 2005 2004 PBIT from subsidiaries 138 64 109 95 55 113 Profit from operations 233 119 222 Interest (91) (42) (77) PBT 142 77 145 Tax (27) (15) (25) Minority interest (16) (2) (8) Profit for the period 99 60 112 EPS (basic, pre-exceptional) 6. 7 p 4. 8 p* 8. 6 p PAT from JVs and associates All numbers exclude exceptional items * 2004 EPS is restated to reflect the Rights issue and IFRS 19

Geographic analysis Profit from operations Six months ended 30 June Year ended 31 December 2004 2005 2004 8 (10) (21) 112 47 97 Middle East 13 11 20 Australia 65 59 98 Asia 53 28 60 Regional total 251 135 254 Corporate costs (18) (16) (32) Profit from operations 233 119 222 £m North America Europe Note: Profit from operations = EBIT from subsidiaries plus PAT from JV’s and Associates All numbers exclude exceptional items 20

Free cash flow Six months ended 30 June Year ended 31 December 2004 £m 2005 2004 Operating cash flow from subsidiaries 215 86 198 Dividends - JV’s and associates 41 45 69 Capex - maintenance (23) (42) (59) Cash generated from operations 233 89 208 Interest paid (91) (34) (8) (14) (20) 134 41 104 Tax paid Free cash flow 21

Cash flow Six months ended 30 June £m Free cash flow Growth capex Acquisitions, disposals & investments TXU recovery - exceptional Rights issue Refinancing costs - exceptional Funding from minorities, FX & other Decrease/(increase) in net debt Opening external debt Transitional IAS 32/39 adjustment Acquired debt Closing external debt * Including capitalised finance costs on acquisition debt 2005 2004 134 (95) 97 44 (110) 70 (2, 739) 44 (2, 625) 41 (81) (10) 64 14 (692) (678) Year ended 31 December 2004 104 (158) (1, 261) 286 (26) 227 (828) (692) (1, 219) (2, 739) 22

Net debt structure As at 30 June 2005 £m Total IPR Corporate Project cash (Debt)* Cash and liquid resources 699 290 Recourse debt Convertible bond (2005) Convertible bond (2023) (32) (117) (149) - Non recourse debt IPM – Acquisition debt IPM – Mitsui preferred equity North America Europe Middle East Australia Asia Total net debt (349) (166) (487) (872) (181) (1, 097) (23) - 409 Maturity JV’s / Associates offbalance sheet net debt* n/a (349) (166) (487) (872) (181) (1, 097) - 2023 - 2012 2008 2010 2007/08 2017 2012/13 2015 (218) (273) (321) (28) (581) (3, 175) - (3, 175) (1, 421) (2, 625) 141 (2, 766) (1, 421) * Project debt is secured solely on the assets of the project concerned (non recourse) (23) 2005 23