1

Henrique ValladaresODEBRECHT – Senior VP.

henriquevalladares@odebrecht.com

Brazilian – American Chamber of Commerce, Inc. June 23rd, 2008

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OutlineOutline

• Global energy challenges• Hydropower in the world• Hydropower in South America• Hydropower in Brazil

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The challengeThe challenge

The new challenges of energy environment have placed energy at the top of the world’s agenda

The supply of an energy-hungry society has by itself been one of the world’s greatest challenges

Quadrillion BTU

Source EIA

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The role of hydropowerThe role of hydropower

• Hydropower may play a significant role in all two dimensions of the energy challenge

– Economics

– Environment

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Global hydro potentialGlobal hydro potential

HYDROELECTRIC RESOURCES HYDROELECTRIC RESOURCES TOTAL THEORETICAL TOTAL THEORETICAL

CAPABILITYCAPABILITYReferred Countries(26,294 TWh/year)

Remaining Countries(14,410 TWh/year)

65%65%Worldwide

(40,704 TWh/year)

Souce WORLD ENERGY

TWh/yr

Hydro potential: geographical Hydro potential: geographical distributiondistributionMain technically available Main technically available potentialspotentials

Canada 7%

USA 4%

Brazil 10%

Congo 5%India 5%

China 13%

Russia 12%

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% of hydro development% of hydro development

Opportunity for emerging countries

World exploited capacity World exploited capacity % of technically feasible power% of technically feasible power

Based on Based on World Energy World Energy Council.Council.

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South AmericaSouth America

Population: 370 millionGDP: US$ 4.3 trillion*Installed capacity: 270 GW

51% hydro49% thermal

* 2007 Figures, Power Purchase Parity

Brazil

Guyana

Suriname

French Guyana

UruguayChile

Bolivia

Paraguay

Argentina

Peru

Ecuador

ColombiaVenezuela

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Brazil: highlightsBrazil: highlights

Surface area: 8.5 million km2

(= continental US + 1/2 Alaska)Population: 185 million (50% S. America)Installed capacity (2007): 100 GWProduction (2006): 50 average GW(55% of South America)

Peak load: 64 GW(Comparable to UK or Italy)

BrazilBrazil

Argentina

Peru

Colombia

Venezuela

Bolivia

Uruguay

Paraguay

Chile

Ecuador

Suriname

Brazil – ExpansionBrazil – Expansion

72

77

82

87

92

97

102

107

112

MW

h x

1000

2003 2004 2005 2006 2007 2008 2009 2010

83,8

101,5 105,3106,9

96,8

3,81,6

3,3

101,5

105,3106,9

110,2

90,7

92,9

Source: Secretaria de Planejamento e Desenvolvimento Energético - MME

GENERATION EXPANSION: 3,771 MW AVERAGE/YR UP TO 2010

JAN / 2006

Mainly hydroelectricity:

DEC / 2015

93.728 MW

134.667 MW

73%

INCREASE OF 44% DURING NEXT 10 Yrs.

ENERGY MATRIX

Brazil – ExpansionBrazil – Expansion

Brazil – New FrontiersBrazil – New Frontiers

SOUTHPOTENTIAL 43 GW 16%Exploited 46.3%

SOUTHEASTPOTENTIAL 45 GW 17%Exploited 52.2%

NORTHEASTPOTENTIAL 26 GW 10%Exploited 42%

CENTER - WESTPOTENTIAL 35 GW 13%Exploited 28.1%

BRAZILIAN HYDROELECTRIC POTENTIAL

BRAZIL POTENTIAL: 261 GWEXPLOITED: 28.2%50% Itaipu, included

Source: Potential Total EPE 2006Potential Exploited: EPE/MME, 2006

NORTHPOTENTIAL 112 GW 43%Exploited 8,9%

Brazil - EnviromentBrazil - Enviroment

Projects Km2/MW

EXISTING 0,51

PLANNED (AVERAGE PERIOD 2007-2016 analyzed) 0,29

MAIN NEW PROJECTS

BELO MONTE 0,04

JIRAU 0,11

SANTO ANTÔNIO 0,11

Flooded area / Installed capacity - ratio

Brazil - BasinsBrazil - Basins

HYDROELECTRIC INVENTORIES IN EXECUTION

TAPAJÓS 14.000

JUREANA 5.000

ARAGUAIA 3.100

ARIPUANÃ 3.000

TROMBETAS 3.000

BRANCO 2.000

JARI 1.100

SUCUNDURI 650

JATAPU 650

ITACAIÚNAS 450

T O T A L

HYDROGRAPHIC BASIN

ESTIMATED POWER (MW)

ITACAIÚNAS

ARAGUAIA

BRANCO

JATAPU

TAPAJOS

SUCUNDURI

ARIPUANÃ

JURUENA

TROMBETAS

JARI

32.950

Brazil – projects in feasibility studiesBrazil – projects in feasibility studies

CACHOEIRA PORTEIRA

BELO MONTE

APIACÁS

S.JOÃO DA BARRA

PRAINHA

TABAJARA

SÃO LUIZ

TELES PIRES

MARABÁ

PROJECT POWER(MW)

BELO MONTE 11.182

SÃO LUIZ 9.080

TELES PIRES 3.422

MARABÁ 2.160

S.JOÃO DA BARRA 1.800

PRAINHA 1.600

C. PORTEIRA 1.400

TABAJARA 350

APIACÁS 275

T O T A L 25.768

FEASIBILITY STUDIES IN AMAZON REGION

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GenerationGeneration

Thermal and others (27%)

System dispatchHydro plants are operated as aportfolio

Hydro (73%) Large plants in cascade over different basins

Interconnections with Argentina and Paraguay total of 16.000 MW

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Transmission networkTransmission network

The country is interconnected by 80,000 km of HV lines (>230 kV)2,200 MW interconnection with Argentina (>230 kV)Long transmission lines(> 1,000 km) (>230 kV)15,000 km of new lines added in the past five years (>230 kV)40,000 km to be added up to 2015 (>230 kV)

Source: ONS, www.ons.org.br

4395

km

4320 km

Brazil - InvestmentsBrazil - Investments

2004 2005 20061.6

2.0 1.8

2004 2005 2006

3.53.9

GO

VER

NM

ENT

(ELE

TRO

BR

AS)

PRIV

ATE

(AC

END

E B

RA

SIL)

32.02008-10

12.17After 2010

38.8TOTAL

6.72007

Investments for energy generation (US$ billions)

Investments in energy (US$ billions)

2.3* * WORLD BANK

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Importance of hydropower in Importance of hydropower in BrazilBrazil

• It is 73% of the energy matrix

• Substitutes importation and consumption of fossil fuels

• Diminishes CO2 emissions

• Integrates different hydrologic regimes

• It is a renewable asset

• Increases the fluvial transportation

BRAZILIAN CAPABILITIES

• Brazil has full capability for engineering any Hydroproject.

• Brazil has full capability for the civil and erection services nedded and for performing abroad.

• Brazil has full capability of supplying the electromechanical equipment for his projects and export

Odebrecht

• Odebrecht has participated in the construction of a Total of 52.3 GW (49.7 GW in Brasil and 2.6 GW abroad )

Odebrecht has been for the last 5 years the number one in the ranking of International Contractors in Hydroplants (ENR)

Hydroelectricity – Brazil - ODEBRECHT

Thank You