London 10 August 2006

1
Interim Results
6 months ended 30 June 2006
London10 August 2006
2
Philip Cox
Chief Executive Officer
3
Highlights

• Strong financial performance
• profit from operations of 392m up 69 (H1 2005
  232m)
• EPS of 11.9p - up 83 (H1 2005 6.5p)
• Significant growth in European earnings
• key drivers - Saltend (acquired in H2 2005)
• higher earnings at First Hydro, Rugeley IPO
  (Czech Republic)
• Continued improvement in US earnings
  particularly Texas
• Free cash flow doubled
• 268m up from 134m in H1 2005
• Coleto Creek acquisition (Texas) complete
• Expect 2006 to be a year of strong growth

4
Financial Review
Mark Williamson
Chief Financial Officer
5
Income statement
Six months ended 30 June
Year ended31 December
2005
2006
m
2005
PBIT from subsidiaries PAT from JVs and
associates Profit from operations Interest PBT Tax
Minority interest Profit for the periodEPS
(basic, pre-exceptional)
137 95 232 (89) 143 (30) (17) 96 6.5p
345 191 536 (202) 334 (68) (52) 214 14.6p
275 117 392 (112) 280 (64) (40) 176 11.9p
All numbers exclude exceptional items and
specific IAS39 mark to market movements
6
Effective tax rate and interest cover
Six months ended 30 June
Year ended31 December
2005
2006
m
2005
PBIT from subsidiaries PBIT from JVs and
associates PBIT Total interest Interest
cover Profit before total tax Total
tax Effective tax rate
137 172 309 (140) 2.2x 169 (55) 33
345 342 687 (299) 2.3x 388 (121) 31
275 191 466 (156) 3.0x 310 (94) 30
Includes tax and interest charges for
subsidiaries and JVs and associates
7
Income statement
Six months ended 30 June
Year ended31 December
2005
2006
m
2005
PBIT from subsidiaries PAT from JVs and
associates Profit from operations Interest PBT Tax
Minority interest Profit for the periodEPS
(basic, pre-exceptional)
137 95 232 (89) 143 (30) (17) 96 6.5p
345 191 536 (202) 334 (68) (52) 214 14.6p
275 117 392 (112) 280 (64) (40) 176 11.9p
All numbers exclude exceptional items and
specific IAS39 mark to market movements
8
Geographic analysis
Six months ended 30 June
Year ended31 December
Profit from operations
2005
2006
m
2005
North America Europe Middle East Australia
Asia Regional total Corporate costs Profit from
operations
8 116 13 70 46 253 (21) 232
48 283 24 140 100 595 (59) 536
28 242 24 64 56 414 (22) 392
Note Profit from operations PBIT from
subsidiaries plus PAT from JVs and AssociatesAll
numbers exclude exceptional items and specific
IAS39 mark to market movements
9
North America
Merchant markets
H1 2006
H1 2005
New England
Achieved spark spread (/MWh) Load factor
8 60
8 30
Profit from operations up 250
m
Texas - Midlothian
H1 2006
H1 2005
28
Achieved spark spread (/MWh) Load factor
12 55
8 40
Texas - Hays
H1 2006
H1 2005
Achieved spark spread (/MWh) Load factor
12 55
n/a n/a
8

• Market responding to tightening reserve margin
• Improvement in off peak spreads and load factors
  in both markets
• Hays returned to service May 2005

H1 2006
H1 2005
10
Europe
UK merchant markets
H1 2006
H1 2005
Rugeley
Profit from operations up 109
m
Achieved dark spread (/MWh) Load factor
20 60
13 60
Deeside
H1 2006
H1 2005
242
Achieved spark spread (/MWh) Load factor
17 25
8 60
Spreads exclude the cost of CO2
116

• Strong performance from all plants
• Full six month contribution from Saltend
• First Hydro high demand for reserve and
  response capacity
• Saltend has major planned outage in Q3 2006

H1 2006
H1 2005
11
Middle East

• First time contributions from
• Tihama two sites of four operational in H1
• Ras Laffan B two units operational in H1
• Hidd acquired in January
• Development fee received for Hidd acquisition

Profit from operations up 85
m
24
13
H1 2006
H1 2005
12
Australia
Merchant markets
Profit from operations down 9
m
H1 2006
H1 2005
Hazelwood
Achieved price (A/MWh) Load factor
A33 75
A36 80
64
70

• Higher availability at Loy Yang B
• Hazelwood contracts placed in prior years roll
  off
• Loy Yang B refinancing improves debt amortisation
  profile

H1 2006
H1 2005
13
Asia

• Strong performance from all assets
• Increased payments under PPA due to higher
  availability at Paiton
• KAPCO tax holiday expires June 2006

Profit from operations up 22
m
56
46
H1 2006
H1 2005
14
Free cash flow
Six months ended 30 June
Year ended31 December
2005
2006
m
2005
Operating cash flow from subsidiaries Dividends -
JVs and associates Capex - maintenance Cash
generated from operations Net interest paid Tax
paid Free cash flow
215 41 (23) 233 (91) (8) 134
492 92 (72) 512 (196) (31) 285
411 42 (58) 395 (109) (18) 268
15
Movement in net debt
Six months ended 30 June
Year ended31 December
2005
2006
m
2005
Free cash flow Growth capex Acquisitions,
disposals investments TXU recovery -
exceptional Receipt of compensation -
exceptional Refinancing costs - exceptional
Funding from minorities, FX other Decrease/(inc
rease) in net debt Opening external
debt Transitional IAS32/39 adjustment Acquired
cash Closing net debt
134 (95) 102 44 - - (115) 70 (2,745) 44
- (2,631)
285 (188) (360) 58 - (5) (95) (305) (2,745) 44
27 (2,979)
268 (52) (10) 14 5 - 51 276 (2,979) - -
(2,703)
16
Balance sheet
31 December
30 June
m
2006
2005
Fixed assets Intangible and tangibles
Investments Other long-term assets Net
current liabilities Provisions and creditors gt 1
year Net debt Net assetsGearing Debt
capitalisation Net debt of Associates and JVs
4,214 1,421 791 6,426 (212) (921) (2,703) 2,5
90 104 51(1,386)
4,590 1,379 623 6,592 (327) (911) (2,979) 2,3
75 125 56(1,625)

• Proforma debt capitalisation post Coleto Creek
  acquisition at 56

17
Net debt structure
JVs / Associatesoff-balance sheetnet debt
As at 30 June 2006
IPRCorporate
Project cash(debt)
m
Total
Maturity
Cash and cash equivalents Recourse debt
Convertible bond (2023) Non recourse debt
IPM - acquisition debt IPM - Mitsui preferred
equity North America Europe Middle
East Australia Asia Total net
cash/(debt)
729 (117) (117) (279) (161) (481) (1,159) (286)
(917) (32) (3,315) (2,703)
- - (194) (221) (400) (53) (518) (1,386
) (1,386)
2023 2012 2008 2010 2007- 2021 2017-
2026 2009 - 2013 2008 - 2020
313 (117) (117) - - - - - -
- - 196
416 - (279) (161) (481) (1,159) (286) (917) (3
2) (3,315) (2,899)
Project debt is secured solely on the assets
and cash flow of the project concerned (non
recourse)
18
Corporate liquidity - proforma
IPRCorporate 30 June 2006
Convertible Bond
ColetoCreek
Issue of Convertible bond
m
Proforma

• Maintains liquidity at Corporate post Coleto
  Creek
• Accesses convertible market at opportune time
• Achieved low coupon (3.25) and high conversion
  price (391p/share)

Cash and cash equivalents Recourse debt
Convertible bond (2023) Convertible bond
(2013) Non recourse debt IPM - acquisition
debt IPM - Mitsui preferred equity North
America Europe Middle East Australia
Asia Corporate net cash/ (debt)
313 (117) - (117) - - - - - -
- - 196
159 - (159) (159) - - - - - -
- - -
(160) - - - - - - - - -
- - (160)
312 (117) (159) (276) - - - - -
- - - 36
19
Financing activity

• Loy Yang B refinancing (March 2006)
• replaced amortising tranche with a bullet
  repayment, improving project distributions
• decrease in margins
• A617m, 6 year term
• Hidd financing (April 2006)
• acquisition and construction facility
• US990m, 20 year term
• Pego refinancing (June 2006)
• eliminates cash sweep and extends term, improving
  project distributions
• FGD construction facility included
• 646m, 14 year term
• Coleto Creek financing (July 2006)
• acquisition facility - US935m, 7 year term
• also US230m letter of credit/working capital
  facilities
• Convertible bond (July 2006)
• replenished corporate funds following acquisition
  of Coleto Creek
• Coupon rate of 3.25 and conversion price of 391p
• 230m, 7 year term

20
Financial summary

• Strong financial performance in H1
• profit from operations of 392m, up 69
• EPS of 11.9p, up 83
• Strong positive cash flow in H1
• free cash flow of 268m, up 100
• Key H2 drivers
• first time contribution from Coleto Creek
• major planned outage at Saltend
• First Hydro performance depends on market
  volatility
• Continue to expect strong growth in full year
  2006

21
Philip Cox
Chief Executive Officer
22
Texas Commercial update

• Strong demand growth
• new peak demand of 62,396 MW up 3.5 on 2005
• 5,500 MW of mothballed capacity unlikely to
  return
• 1,100 MW of mothballed plant recently approved
  for retirement
• New proposed capacity
• required to maintain sufficient reserve margin
• will offset retirement of mothballed units
• We remain confident of market recovery

Full Year
(1)
Texas - North Zone
2005
2006
Achieved spark spread (/MWh) Load factor Forward
contracted
12 55 n/a
16 55 85
(2)
Full Year
Texas - South Zone
2005
2006 (1)
11 65 n/a
Achieved spark spread (/MWh) Load factor Forward
contracted
14 50 85
(3)
(2)
(1)
IPR forecast of anticipated output for the full
year Hays was mothballed till May 2005
(2)
(3)
23
Texas Reserve margin analysis
ERCOT reserve margin analysis
Reserve Margin
18
15 Reserve margin
16
14
12
10
8
6
4
2
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
Assumptions
2006 peak demandDemand growth2006 installed
capacityCapacity under constructionNew build
announcementsMothballed
62,396 MW2.7 80,998 MW (1)3,142 MW
operational by 2010 phased build out of all
known projects 14,200 MW TXU, NRG, other5,174
MW progressively retired by 2010

• (1) Adjusted for low wind load factor and non
  load-serving cogen

24
Coleto CreekAcquisition highlights

• Acquisition successfully completed in July
• 632 MW Pulverized Coal Unit
• located in ERCOT South Zone
• Purchase price 1.14 billion
• 7525 debt equity ratio
• financing package supports favourable equity
  return
• includes significant collateral support
• Attractive long-term return and immediately
  earnings and free cash flow enhancing
• Earnings and cash flow secured through long-term
  contracts
• 90 contracted through to 2009
• 75 contracted in 2010
• 50 contracted from 2011 to mid 2013

25
Coleto CreekAcquisition highlights

• Access to low cost and low sulphur coal from
  Powder River Basin (PRB)
• a clear economic advantage
• coal transportation agreement in place till 2012
• Investing in emission control system to enable
  100 use of PRB coal
• good for compliance under future mercury emission
  standards
• Acquisition provides fuel diversity and expanded
  presence in Texas
• immediate access to Texas market recovery
• Option to expand
• site designed to accommodate a second 600 MW plant

26
New EnglandCommercial update

• Strong load growth in 2006
• new peak demand of 27,971 MW up 4.2 on 2005
• Forward Capacity Market Settlement approved by
  FERC in June
• Defined capacity payments during a transition
  period from December 2006 to mid 2010
• Annual bidding for capacity beyond 2010
• pricing signal for new plant

Full Year
New England
(1)
2005
2006
Achieved spark spread (/MWh) Load factor Forward
contracted
6 40 n/a
12 55 95
(2)
(1)
IPR forecast of anticipated output for the full
year
(2)
Forward Capacity Market(/kW month)
Period
December 2006 to May 2008 June 2008 to May
2009 June 2009 to May 2010
3.05 3.75 4.10
27
Europe

• Excellent growth in earnings
• UK merchant portfolio delivering a robust
  performance
• earnings driven by Saltend, First Hydro and
  Rugeley
• spark spreads for merchant gas generation
  (Deeside) below new entrant level - calendar
  2006 baseload spread at 9/MWh
• Contracted assets performing well
• Turbogás continues to deliver a good financial
  performance
• FGD equipment being installed at Pego

pre cost of CO2
28
UK - key contributors
Saltend
First Hydro

• High quality asset
• indexed gas contract with BP through to 2015
• base load operation with H1 load factor 92
• high availability - 94 in H1
• good health and safety record
• Major planned outage in Q3
• major overhaul on all 3 units
• major outages undertaken once every six years
• 2006
• 90 of anticipated output contracted
• H2 expected load factor of 75
• Takes Q3 outage into account

• Ancillary Services and Balancing Mechanism
• strong demand for reserve and response capacity
• increased utilisation and margins driven by tight
  system conditionsand unpredictable weather
• Trading revenue (short term contracts)
• driven by market volatility and wide
  peak/off-peak pricing differential

29
EuropeUK
Rugeley
Deeside
Full Year
2005
2006 (1)
2005
2006 (1)
(2)
Spread Load factor Forward contracted
16 40 45
12 60 n/a
25 65 95
15 60 n/a
(3)
(1)
IPR forecast
(2)
Pre cost of CO2
(3)
of anticipated output for the full year

• Phase I CO2 trading at 16.50/t
• price relatively stable
• Phase II
• CO2 allowances currently estimated at 75-80 of
  Phase I (for IPR portfolio)
• current price circa 18.50/t

30
Middle East

• Construction programme on plan
• 600 MW operational at Ras Laffan B, Qatar
• 616 MW in operation at Tihama Power
• UAN extension to commence operation in Q3 2006
• Hidd desalination expansion on track
• Continue to see pipeline of further projects
• 2 bids currently under evaluation (decisions
  expected Q3 2006) - 2,000 MW Mesaieed IPP,
  Qatar - 2,500 MW, 185 MIGD Marafiq IWPP,
  Saudi Arabia - future pipeline remains strong

31
Middle EastTihama - a successful launch in Saudi
Arabia

• 4 cogeneration facilities supplying power and
  steam to Saudi Aramco
• under 20 year Build Own Operate Transfer, Energy
  Conversion Agreement
• Major construction management project for IPR
• single turnkey Engineer Procure Construct (EPC)
  contract with Mitsui for all four plants
• 3,000 people at work during peak construction
  period
• International Power - value addition through an
  active role
• led 640 million project financing
• OM service provider 20 year technical services
  agreement - generating additional revenue
• recruited and trained operational staff from the
  Middle East and Asia
• Tihama Power - a solid platform for future growth
  in Saudi Arabia

32
Australia

• Financial performance in line with expectations
• Strong operational performance by Loy Yang B
• forced outage rate less than 0.5
• 617m of debt refinanced in March 2006
• All consents secured for next phase of Hazelwood
  mine development
• Retail partnership continues to grow

Victoria Hazelwood
Full Year
2006 (1)
2005
Achieved price (A/MWh)
33
34
(1)
IPR forecast
Hazelwood
Loy Yang B
Pelican Point
2006 (1)
2005
2006 (1)
2005
2006 (1)
2005
Full Year
Load factor Forward contracted
80 n/a
80 65
95 n/a
90 80
35 n/a
40 70
(1)
IPR forecast
33
Australia
Victoria Baseload Power
A/MWh
51
49
47
Q1 2007
45
43
41
39
37
Calendar 2007
35
33
31
January
February
March
April
May
June
July
2006

• Base-load (and peak) prices show modest increases
• Recent rise predominantly driven by robust winter
  demand during 2006

34
Asia

• Strong operational performance at Paiton
• high availability triggered incentive payments
• TNP (Thailand) - 23 MW - plant expansion on track
  for completion in Q4 2006
• High levels of generation at IPRs assets in
  Pakistan
• driven by high demand and low availability of
  hydro
• Hubco - direct transmission connection to Karachi
  load centre operational since May 2006
• Malakoff update
• MMC offer - opportunity to monetise investment
• offer at RM10.35 per share equates to 250m for
  IPR
• completion expected in Q2 2007 - subject to
  shareholder, regulatory and other approvals

35
Summary and outlook

• Portfolio performing well
• Improving returns in key merchant markets of the
  US and the UK
• Coleto Creek acquired and integrated
• Earnings underpinned by free cash flow
• We expect 2006 to be a year of strong growth

36
Interim Results
6 months ended 30 June 2006
37
Appendix
38
Updated Asset List
39
IAS 39 regional analysis
Six months ended 30 June
Year ended31 December
IAS 39 impact
2005
2006
m
2005
North America Europe Middle East Australia
Asia Specific IAS39 impact on PFO
- (4) - 1 - (3)
1 (23) - (15) 2 (35)
(2) 43 - 6 - 47

• Specific IAS39 mark to market movements on
  economic hedge contracts are presented separately
  to allow an understanding of the underlying
  business performance
• Specific IAS39 movements are presented separately
  where own use treatment could not be applied,
  cash flow hedging could not be achieved or has
  not been applied
• Mark to Market movements relating to proprietary
  trading activities continue to be included within
  the underlying business results.