Interim Results

1
Interim Results
6 months ended 30 June 2007
2
Phil Cox
Chief Executive Officer
3
Highlights

• Good financial performance
• profit from operations of 416m - up 6.1 (H1
  2006 392m)
• EPS of 13.4p - up 12.6 (H1 2006 11.9p)
• Strong contributions from UK assets
• higher earnings at First Hydro, Rugeley Deeside
• Lower profits in Australia in H1 outlook strong
• Free cash flow
• 309m up 15.3 (H1 2006 268m)
• Interim dividend introduced
• 2.77p per ordinary share for 2007
• Sustained delivery of growth opportunities
• Fujairah F2 Middle East
• Trinergy Italian and German wind farms
• 2007 on track as year of further growth

4
Financial Review
Mark Williamson
Chief Financial Officer
All numbers in this presentation exclude
exceptional items and specific IAS39 mark to
market movements, unless stated otherwise
5
Income statement
Six months ended 30 June
2007
2006
m
change
PBIT from subsidiaries PAT from JVs and
associates Profit from operations Interest PBT Tax
Minority interest Profit for the periodEPS
(basic)
316 100 416 (140) 276 (41) (34) 201 13.4p
6 (1) 14 13
275 117 392 (112) 280 (64) (40) 176 11.9p
6
Effective tax rate and interest cover
Six months ended 30 June
m
2007
2006
PBIT from subsidiaries PBIT from JVs and
associates PBIT Total interest Interest
cover Profit before total tax Total tax Effective
tax rate (including restatement) Underlying
effective tax rate
275 191 466 (156) 310 (94) 30 30
316 174 490 (187) 303 (68) 22 30
3.0x
2.6x
(1)
(1)
(1)
(1)
Includes subsidiaries and JVs and associates
7
Income statement
Six months ended 30 June
2007
2006
m
change
PBIT from subsidiaries PAT from JVs and
associates Profit from operations Interest PBT Tax
Minority interest Profit for the periodEPS
(basic)
316 100 416 (140) 276 (41) (34) 201 13.4p
6 (1) 14 13
275 117 392 (112) 280 (64) (40) 176 11.9p
8
Geographic analysis
Profit from operations
Six months ended 30 June
2007
2006
m
change
North America Europe Middle East Australia
Asia Regional total Corporate costs Profit from
operations
42 268 29 46 55 440 (24) 416
50 11 21 (28) (2) 6 6
28 242 24 64 56 414 (22) 392
9
North America

• Texas
• H1 contribution from Coleto Creek
• dust emissions control installation
• Mild weather
• Hays extended outage
• New England
• Forward Capacity Market
• Fewer ancillary services contracts in off-peak
  hours

Profit from operationsup 50
42m
13m
28m
29m
14m
14m
H1 2006
H1 2007
PAT JVs and Associates
PBIT of Subsidiaries
10
Europe

• Strong contribution from Deeside, Rugeley and
  First Hydro
• Higher gas prices accelerated amortisation at
  Saltend
• Lower heat sales impacted Czech business
• First full H1 contribution from Levanto and
  Indian Queens
• ISAB impacted by change in fuel indexation

Profit from operationsup 11
268m
242m
30m
41m
238m
201m
H1 2006
H1 2007
PAT JVs and Associates
PBIT of Subsidiaries
11
Middle East

• Additional capacity on-line at Tihama, Ras
  Laffan B and Umm Al Nar
• Hidd development fee received in H1 2006
• Successful refinancing at Tihama

Profit from operationsup 21
29m
24m
9m
9m
20m
15m
H1 2006
H1 2007
PAT JVs and Associates
PBIT of Subsidiaries
12
Australia

• Interconnector constraint due to bushfire
• Planned outages at Pelican Point and Hazelwood
• Unplanned outages at Loy Yang B
• Inter-regional pricing differences
• Strong outlook for 2008

Profit from operationsdown 28
64m
3m
46m
1m
45m
61m
H1 2006
H1 2007
PAT JVs and Associates
PBIT of Subsidiaries
13
Asia

• KAPCO impacted by end of tax holiday
• Good performance at TNP, Uch and HUBCO
• Completed sale of Malakoff

Profit from operationsdown 2
55m
56m
47m
50m
8m
6m
H1 2006
H1 2007
PAT JVs and Associates
PBIT of Subsidiaries
14
Free cash flow
Six months ended 30 June
m
2007
2006
change
Operating cash flow from subsidiaries Dividends -
JVs and associates Capex - maintenance Cash
generated from operations Interest paid Tax
paid Free cash flow
411 42 (58) 395 (109) (18) 268
476 53 (34) 495 (155) (31) 309
26 25 15
15
Movement in net debt
Six months ended 30 June
2007
2006
m
Free cash flow Growth capex Acquisitions and
investments Disposals Exceptional receipts - TXU
and contract compensation Dividend paid Funding
from minorities, FX other Decrease in net
debt Opening net debt Closing net debt
268 (52) 2 - 19 (67) 106 276
(2,979) (2,703)
309 (99) (140) 417 - (118) (19) 350
(3,494) (3,144)
16
Balance sheet
31 December
30 June
m
2007
2006
Non-current assets Intangibles and tangibles
Investments Other long-term assets Net
current (liabilities)/assets Provisions and
creditors gt 1 year Net debt Net
assetsGearing Debt capitalisation Net debt of
Associates and JVs
4,894 1,380 1,448 7,722 (729) (1,345) (3,144)
2,504 126 56(1,256)
4,860 1,290 1,270 7,420 72
(1,258) (3,494) 2,740 128 56(1,524)
17
Net debt structure
As at 30 June 2007
JVs / Associatesoff-balance sheetnet debt
IPRCorporate
Project cash/(debt)
m
(1)
(1)
Total
Maturity
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 Total net cash/(debt)
1,441 (113) (126) (239) (249) (148) (908) (1,7
31) (311) (964) (35) (4,346) (3,144)
798 (113) (126) (239) - - - - -
- - - 559
643 - - - (249) (148) (908) (1,731) (
311) (964) (35) (4,346) (3,703)
- - (168) (162) (576) (73) (277) (1,2
56) (1,256)
2023 2013 2012 2008 2010-2019 2009-2020 2016
-2026 2008-2016 2008-2020
(2)
(2)
(1)
Project debt is secured solely on the assets and
cash flow of the project concerned (non
recourse) The convertible bonds are shown at
their final maturity date although they can be
converted earlier
(2)
18
Interim dividend

• Introduction of Interim dividend
• Calculated as 35 of previous years full year
  dividend
• 2007 Interim dividend of 2.77p per ordinary share
  
• Dividend policy remains unchanged progressively
  moving towards a dividend payout ratio of 40

19
Financial summary

• Good H1 performance and strong cash flow
• strong contribution from newly acquired assets
• good underlying growth from US, Europe and Middle
  East
• Australia performance expected to improve in H2
• 2007 Interim dividend of 2.77p per ordinary share
  
• Well positioned for future growth in 2007

20
Phil Cox
Chief Executive Officer
21
Texas - market environment
Projected reserve margin - ERCOT
Peak Reserve Margin

• Market remains on track for full recovery
• reserve margin continues to tighten
• new capacity required in near-term
• Continued demand growth
• peak demand up 2.7 on 2006
• cooler summer temperatures in 2006
• lower average demand

20
August 2006
15
10
July 2007
5
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
August 2006
Assumptions
July 2007
2.7
Demand Growth
2.7
(1)
(1)
Currentinstalled capacity
81,772 MW
80,998 MW
3,142 MW operationalby 2010
Capacityunder construction
2,675 MW
14,200 MW TXU, NRG, other
New buildannouncements
7,600 MW
5,174 MW all retired by 2010
5,711 MW
Mothballed
(1)
Adjusted for low wind load factor and non
load-serving cogen
22
Texas - 2007 summer temperatures
2007
2006
Days over 90F
1
11
May
17
28
June
23
31
July
Days with Load gt 50,000 MW
17
43
May and June
10
26
July
Average Loads (MW)
39,085
43,345
May
45,676
49,721
June
45,735
49,671
July

• 2007 summer clearly cooler than 2006
• peak and average demand reflect this trend
• lack of volatility has kept spot and forward
  prices subdued

23
Texas - commercial update

• Hays load factor down through lower demand and
  extended outage (high pressure welds)
• Coleto Creek dust emission control equipment
  installed
• returned to full load in May
• Strong forward contracted position for 2007
• Coleto Creek expansion under review

Full Year
(1)
Midlothian
2006
2007
Achieved spark spread (/MWh) Load factor Forward
contracted
14 60 n/a
15 55 80
(2)
Full Year
(1)
Hays
2006
2007
Achieved spark spread (/MWh) Load factor Forward
contracted
14 55 n/a
12 45 80
(2)
Full Year
(1)
Coleto Creek
2006
2007
(3)
Achieved dark spread (/MWh) Load factor Forward
contracted
24 98 n/a
28 80 95
(1)
IPR forecast of anticipated output for the full
year Excludes cost of SO2
(2)
(2)
(3)
24
New England - market commercial update
Projected reserve margin - New England

• Reserve margin continues to tighten
• 80 forward contracted position for 2007
• Forward Capacity Market (FCM) continues to
  provide greater revenue security
• revenues from the FCM more than offset the fall
  in load factor
• We intend to participate in FCM auctions in 2008
• peaking plant opportunities at IPR sites

Peak Reserve Margin
18
15
Indicative Reserve margin with FCM
12
9
Current projected reserve margin
6
3
0
2006
2007
2008
2009
2010
2011
2012
Full Year
(3)
New England
2006
2007
(1)
Achieved spark spread (/MWh) Load factor Forward
contracted
21 45 80
12 60 n/a
(2)
(1)
IPR forecast of anticipated output for the full
year Includes FCM receipts
(2)
(3)
25
UK reserve margin

• Reserve margin trending to new entrant
• planned retirement of over 14.8 GW
  coal/oil/nuclear by 2015
• Additional CCGT capacity recently announced will
  partially meet the additional requirements
• under construction 1.7 GW
• newly committed capacity of 2.8 GW
• Dutch interconnector 1.0 GW
• Reserve margin will remain below 20 even with
  these additions
• Reserve margin subject to increasing pressure
• uncertain generation by wind power
• restricted running regime of opted out coal plant
• uncertain conditions for new investment CO2
• Future price volatility as reserve margins tighten

IPR Reserve Margin Forecast
Peak Reserve
25
20
IPR Aug 2007
15
10
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
AssumptionsFurther growth in CHP of 2.4 GW and
2.0 GW of Wind is assumed BritNed interconnector
assumed to be partially available at peak. Demand
growth 1.5 p.a.
26
Europe - UK commercial summary
Rugeley
Deeside
Saltend
2006
2007(1)
2006
2007(1)
Full Year
2006
2007(1)
(2)
Spread /MWh Load factor Forward contracted
20 65 55
22 40 n/a
34 65 95
28 55 n/a
n/a 90 95
n/a 80 n/a
(3)
(2)
(1)
(3)
of anticipated output for the full year
Pre cost of CO2
IPR forecast

• Rugeley and Deeside have benefited from higher
  spreads
• Rugeley forward contracted at attractive prices
  during 2006
• improving spark spreads for gas fired generation
  (Deeside)
• First Hydro benefited from increased demand for
  ancillary services and reserve capacity

27
European growth update

• Rugeley and Pego FGD
• both developments remain on track
• Rugeley - completion Q3 2008
• Pego - completion Q2 2008
• Tejo II CCGT (800 MW)
• pre-construction permitting process complete
• financial close planned end 2007
• commercial operation planned mid 2010
• long-term offtake
• Enecogen CCGT (800 MW)
• partnership with Eneco (45 IPR)
• all main permits in place
• financial close planned mid 2008 commercial
  operation planned 2011
• long-term offtake with Eneco

28
Europe - Trinergy

• 648 MW wind portfolio, Italy and Germany
• 87 in Italy 13 in Germany
• excellent sites and load factors
• Italy and Germany attractive markets
• significant planned renewable growth
• growth underpinned by clear regulatory framework
• Immediately earnings accretive and cash flow
  positive
• Completion by Q3 2007
• International Power now has significant scale in
  wind generation
• 1,053 MW operational
• 99 MW under construction
• Established market positions provide stronger
  platform for growth
• improved access to developers
• extended life and increased capacity through
  refits/repowering

Germany
Italy
22 17 8,000
12.5 10.0 7,000
Renewable target as of total supply
(2010) Current renewable supply Wind capacity
requirement (MW)
Based upon 22 load factor for wind plant. MW
requirement calculated assuming that only wind
capacity is commissioned to meet 2010 renewable
targets.
29
Middle East

• Strong performance at Tihama (Saudi Arabia)
• full commercial operation in Q4 2006
• successful debt refinancing (550m non-recourse)
• Umm Al Nar (Abu Dhabi)
• now operating at full total capacity - 2,200
  MW, 143 MIGD - final 458 MW came online in
  July
• 650 MW and 48 MIGD of the original plant due to
  retire in 2010 - represents a two year
  extension
• Construction programme on track
• Ras Laffan B (Qatar) second construction phase
  of 300 MW complete (900 MW in operation)
• Hidd (Bahrain) construction of 60 MIGD desal
  extension progressing - COD expected by end 2007
• Medium and longer term project pipeline remains
  strong

30
Middle East - Fujairah F2

• IPR successfully bid in partnership with Marubeni
• IPR 20, Marubeni 20, ADWEA 60
• 2,000 MW, 130 MIGD greenfield IWPP
• Situated in the United Arab Emirates
  strengthens links with ADWEA
• 20 year Power and Water Purchase Agreement (PWPA)
• Financial close expected in Q4 2007
• Full commercial operation expected by end 2010
• early power and water in Q2 2010
• An important large scale addition to our growing
  Middle East portfolio

31
Australia

• A difficult half year
• Drought conditions a major impact on power market
• hydro output restricted
• lack of water for cooling has restricted thermal
  plant generation - over 1,000 MW withdrawn in
  Queensland
• significantly increased price volatility
• price correlation between States has been
  disrupted
• Hazelwood and Loy Yang B water supplies
  sufficient through 2008 and into 2009
• mine aquifer at Hazelwood provides 50 of water
  requirement
• Pelican Point is seawater cooled water supply
  secure

32
Australia - market outlook
Victoria and SA forward price

• Outlook is strong
• Merchant markets often need a catalyst for change
• drought has been that catalyst for 2007
• Forward prices remain strong
• 2008 baseload A60/MWh
• 2009 baseload A52/MWh
• Reserve margin continues to tighten

Contract price (A/MWh)
80
Victoria cal 2008
70
60
50
SA cal 2008
40
30
Jan
Feb
Mar
Apr
May
Jun
2007
Victoria and SA forecast reserve margin
Reserve Margin ()
30
25
20
Reserve Margin (1)
15
10
Target reserve
5
0
2006/07
2014/15
2008/09
2010/11
2012/13
(1) IPR View
33
Australia - commercial update

• Portfolio largely contracted for 2007 (95)
• Hazelwood now 75 contracted for 2008
• average achieved price for 2008 estimated at
  circa A45/MWh
• Retail
• option exercised to acquire remaining 50
• expect to complete by end of August

Full Year
Victoria, Hazelwood
2007(1)
2006
Achieved price (A/MWh)
34
33
Pelican Point
Hazelwood
Loy Yang B
2007(1)
2006
2007(1)
2006
Full Year
2007(1)
2006
(1)
IPR forecast of anticipatedoutput for the full
year
Load factor Forward contracted
80 n/a
80 95
95 n/a
95 95
55 n/a
75 95
(2)
(2)
34
Asia

• Demand growth in the region remains high
• high availability and increased load factors
• Operating performance remains strong
• Continued focus on expansion opportunities
• Paiton 3, Indonesia 800 MW
• Tanjung Jati A, Indonesia 1,320 MW
• Malakoff sale process now complete with proceeds
  of 249m

35
Summary

• Overall business performance in line with
  expectations
• Well positioned to benefit from continued
  merchant market recovery
• Continue to pursue growth opportunities
• financial flexibility retained
• Introduction of interim dividend
• 2007 on track to be a year of further growth

36
Appendix
37
Exceptional items and specific IAS 39 MTM
Six months ended 30 June 2007
Six months ended 30 June 2006
SpecificIAS 39 MTM
Exceptional Items
SpecificIAS 39 MTM
Exceptional Items
m
Total
Total
North America Europe Middle East Australia
Asia Regional total Corporate PFO Disposals
(see below) - Malakoff sale - Disposal to
Mitsui Net finance (expense)/income (Loss)/profit
before tax Income tax credit/(expense) (Loss)/prof
it for the period
(3) (24) - (433) - (460) - (460) - -
(19) (479) 143 (336)
- (9) - - - (9) - (9) 115 153 -
259 - 259
(3) (33) - (433) - (469) - (469) 115 153
(19) (220) 143 (77)
(2) 43 - 6 - 47 - 47 - - 4 51
(15) 36
- 19 - - - 19 - 19 - - - 19
(4) 15
(2) 62 - 6 - 66 - 66 - - 4 70
(19) 51
38
Geographic analysis Quarterly breakdown
Q1
Profit from operations
Q2
2007
2006
m
2007
2006
North America Europe Middle East Australia
Asia Regional total Corporate costs Profit from
operations
12 159 14 26 29 240 (12) 228
4 158 5 33 28 228 (11) 217
30 109 15 20 26 200 (12) 188
24 84 19 31 28 186 (11) 175