eProcurement strategy Case: Enel Spa Ermanno Boeris Bratislava, February 2007

1. eProcurement strategy Case: Enel Spa Ermanno Boeris Bratislava, February 2007

2. Enel in brief Our Mission Our mission is to bethe most efficient, market driven, quality focused provider of power and gas creating value for our customers, shareholders and people. Our Strategy • Reducing power generation costs through plants conversion and alignment of our other operating costs with international best practice; • Increasing electricity generated from renewable resources; • Growing natural gas distribution business in Italy, where we are the second largest distributor; • Extracting value from the integrated management of electricity and gas services, and meeting our operating efficiency targets in the distribution and sale of electricity and gas; • Expanding our operations outside Italy particularly in countries where we are already present or where market liberalization and privatization efforts are in progress, allowing us to exploit the skills and experience we have acquired in the Italian market.

3. Enel Group structure Board of directors Chief Executive Officer and General Manager Chairman (P.Gnudi) (F.Conti) Corporate Activities Infrastructures and network Generation and Energy Management Market International (S.Fontecedro) (F.Starace) (L.Gallo) (F.Conti a.i.)

4. Results overview Millions € • 1H05 EBITDA restated • 1H05 net of Euro 328mn capital gain on Terna disposal. 1H06 net of Euro 256 mn income on Wind-Weather share transaction • 1H05 figure as of December 31,2005

5. La presenza di Enel nel mondo Europe: 4.005 MW and 2 million customers North and Latin America 565 MW SPAIN • 1.592 MW Thermal • 671 MW Hydroelectric • 600,000 customers! RUSSIA North Western thermal power plant management contract 450 MW • 286 MW Hydroelectric • 67 MW Wind • 21 MW Biomass and Biogas • 80% of EUFR: • 294 MW Wind • 89 MW Hydroelectric • 62 MW Cogeneration • ROMANIA • 51% of Distribution companies Banat e Dobrogea • 1.4million customers BULGARIA • 67% of Maritza East III: • 732 MW Thermal • 171 MW Hydroelectric • 20 MW Wind • SLOVACCHIA • 66% of Slovenske Elektrarne • 6.881 MW 5% Powernext Data as of Aprile 15 1th 2004 1 – On the regulated market

6. 7 Tasks Strumenti Operativi Scouting/RFI/RFQ Aste e Gare online Catalogue WebEDI Portale Acquisti Abilitatori del processo Sistema di codifica prodotti Linee Guida e Regolamenti eProcurement project brings a common vision on the process • Vendors Scouting • Portal • On-line qualification Vendors Mgmt • Vendors Evaluation • Vendor Rating Enel eProcurement model • Comunication(contractual and managerial) • Enel Portal Technical offers Contract fulfillment Tendering • Economical offer and negotiation • Tender mgmt • On line tender system • Contract Mgmt • Electronic catalogue • Electronic data exchange (EDI)

7. Results of eProcurement projects implementation Before After • Implementation of controlling activities • Extensive use of strategic sourcing • Broader use of Framework Agreements • “Compliance” improvements • Lower fragmentation on spending • Improved efficiency • Centralized management and controland local operational activies • Use of new methodology (Electronic catalogue, e-tender, etc…) • Extensive use of microcontracts • Poor knowledge of contracted amounts • No synergies within the whole group • Low “compliance” on existing Framework Agreement • Split spending • Technical and tactical aspects overcome strategic issues • Lack of efficiency in the process • “Traditional” purchasing approach The new role of buyer

8. INITIAL PHASE - ANNOUNCEMENT (exchange of technical infos ) TECHNICAL OFFER ECONOMIC OFFER (“Closed Envelope”) ECONOMIC OFFER (Tender) NEGOTIATION PHASE AWARDING “On-line” tenders follows traditional procurement steps ENEL uses a web based application that allows any buyer to generate, customize and launch tenders of any kind of goods, services and works. On Line tender follows traditional steps of any negotiation Achievable benefits • Higher interaction with vendors • Better knowledge of markets • Improve efficiency, transparency, traceability

9. Send Order Request for Purchase Requester Issue Request Chief Approve RfP Supplier Receive order Electronic Catalogue The electronic catalogue is a simple and shared tool that allows end-users to order materials listed in the catalogue. The catalogue is the results of a Framework Contract negotiated for all ENEL by Central Procurement Office • Request for purchases issued through catalogue • Electronic approval workshop • Receive goods and control on invoices payments ERP System

10. Improvement area of electronic catalogue Despite the complexity of the implementation path, with the electronic catalogue there is an high rate of return considering price discounts and process efficiency gains. • Reduce micro-contracts • Semplify management of requests and partial contracts Achieved benefits • Rationalize spending • Concentrate spot purchases Scale Economy • Same price applicable to any office or power plant • Extented use of framework agreement Prices dispersion Process costs

11. EDI Enel Partner Internet XML XML Exchange of technical and administrative data The Web-EDI based systems uses internet as communication channel allowing the transmission of data and document with very low costs (almost zero) Major strong points • Semplify realization activities • Reduced management costs • High compatibility between different hardware and software

12. Achieved results WebEDI Catalogue • Exchanged documents: 677.620 • Of those invoices: 178.096 • Other administrative documents: 361.786 • Other technical documents: 137.738 Portal Reduced costs by contract standardization Avg. Visits by month • Ca.60 contracts (with 50 suppliers) • Increased compliance on Framework Agreements • Ca. 80 link/month per visitor • Publishing of tenders • Access to on-line documentation Qualification Tender Over 10.500 suppliers registered and out of those 1.880 already pre-qualified 2.617 tenders (of those ca.78% on-line) for a value of 2.057 mln € and average savings of 15% • Reduced time to qualify vendors • Reduced costs on documentation handling • Increased number of tenderers • Improved quality of process

13. Thank you for the attention