Sustainable Development

May 2013

Business Portfolio

Wind Power 31% of EBITDA

Listed subsidiary: EDP Renovveis (EDP has 77.5%) IPO in Jun-08 Wind & Solar Power: 7.7GW # 3 wind operator worldwide (present in 11 countries)

EDP Brasil 14% of EBITDA

Listed subsidiary: EDP Brasil (EDP has 51%) Presence since 1996 Power generation: 2.0 GW (from which 1.8GW is hydro) 2 electricity distribution concessions
Note: Data as of Mar-13

Portugal 36% of EBITDA

Privatisation in 1997 (IPO) Single electricity distributor Power generation: 8.9 GW (ex-wind) (from which 5.4GW is hydro)

Spain 20% of EBITDA

Presence since 2001 Power generation 3.9 GW (ex-wind) # 2 in gas distribution

Sustainability as one of EDPs commitments

EDP is committed with
Environment and Society
Assumption of social/environmental responsibilities (Involvement/alignment with communities and their representatives ) Sustainable reduction of greenhouse gas emissions Energy efficiency

People
Professional conduct combining rigour, enthusiasm and initiative to emphasizing team work Development of individual skills, capture of talent; Ensure safety and welfare at work Balanced private/professional life is key for success

Results
Fulfilment of commitments embraced with our stakeholders; Ensure transparency and trustful relationship Focus on anticipation and implementation Demand for excellence at all levels

Clients
Customers view is important for the decision making process Listen to customers, providing simple/clear answers Anticipate customers needs

Sustainability indicators are part of EDPs management Key Performance Indicators (KPIs) The Executive Board of Directors assesses internal sustainability indexes every 3 months
2

Dow Jones Sustainability Indexes: EDP ranked with the same score as the sector and supersector leaders
Results of Sustainability Assessment
(Absolute points 0-100)

Best score in the following categories: Economic Dimension:

EDP

Best Score (Electric Utilities Worldwide) 83 75 84 82 84 86 87

- Risk Management - Supply Chain Management - Scorecards/Measurement Systems Environmental Dimension: - Environmental Reporting - Biodiversity Social Dimension: - Stakeholder Engagement - Social Reporting - Human Capital Development - Corporate Citizenship/Philanthropy

76

79

77 68

81 74

65

49

2004

2005

2006

2007

2008

2009

2010

2011

2012

The most detailed/intense sustainability assessment process among the ones that evaluate EDP EDPs Ranking in this index is part of EDPs management KPIs since 2006
3

Sustainability Recognition Corporate until 2013

Since 2006 Since 2007 Since 2008 Since 2012

Corporate Environmental Management System

Since September 2008 Since 2009: CDP and OEKOM Since January 2010 Since 2011 (EDP SA and EDP Renovveis)

1st Time in 2011

EDP Corporate Governance

EDP Corporate Bodies
General and Supervisory Board:

Remuneration of Executive Board of Directors

Remuneration policy for the members of the Executive Board is
defined by a Remuneration Committee appointed by the General and Supervisory Board;

Oversees management activity and guarantees permanent

monitoring and supervision of the executive board.

Elected by the shareholders in the General Meeting; The

appointment of a representative of a shareholder that can be considered a competitor needs the approval of >2/3 of shareholders meeting present voting rights;

The payment to be made reflect the performance of each board

member in each year of term of office (annual variable remuneration), as well as performance for the duration of the term of office through the fixation of a variable component that is consistent with maximization of the long-term performance of the Company:

Composed of 23 members, 12 are independent and 11 are direct

representatives of major shareholders (>2%). Executive Board of Directors:

Fixed Remuneration; Annual Variable Remuneration between 0% and 80% of

annual gross fixed remuneration;

Elected by the shareholders at the General Meeting, all the

members are independent and responsible for the management of the companys business activities.

Multi-annual Variable Remuneration between 0% and 120%

of annual gross remuneration, depending on the annual accumulated assessment of the performance of the directors in achieving the economic sustainability of the EDP Group.

7 executive board members: CEO and 4 other Board Member in

place since 2006; current mandate term is 2012-2014.

May 6th 2013: EDP Shareholders Meeting approved payment of multi-annual remuneration with a lag of three years regarding the exercise concerned February 20th 2012: EDP Shareholders Meeting approved increase of voting rights cap from 20% to 25%
(1) According to EDPs Articles of Association: The shareholder that individually holds at least 20% of the share capital of EDP, and that, directly or through a legal person which is in a domain relationship with it, enters into and maintains a medium or long term strategic partnership of business cooperation in the activities of generation, distribution or supply of electricity or natural gas, approved in accordance with legal and corporate provisions, with prior favourable opinion of the General and Supervisory Board shall not be deemed to be a legal person that is a competitor of EDP.

Sustainability within EDPs corporate governance

General and Supervisory Board Corporate Governance & Sustainability Committee (CGSC)
Purpose: monitor and supervise issues related with strategic sustainability and internal codes of ethics/conducts

Executive Board of Directors

Corporate Area: Office of the Ethics Ombudsman

Purpose: ensure ethical procedures are conducted within EDP, aiming at maintaining confidentiality and rights protection

Environment & Sustainability Board

Purpose: advise the Executive Board of Directors in environment & sustainability related matters (namely on sustainability & environmental strategy definition and reports preparation) Purpose: analyse, propose and ensure proper implementation of sustainability & environmental strategy

Ethics Committee

Purpose: works with the CGSC; propose regulatory guidelines on issues for which it is responsible for, promote their correct and issue opinions in matters of the code of conducts.

Corporate Area: Sustainability Department

Companies/ Business Units

Approval of Sustainability & Environmental projects/targets

Office/ Coordinator / Environment Responsible

Operational responsibility for the execution of approved projects/targets

Sustainability Committee

Purpose: namely share information upon and discuss major legislative packages; share the development of environmental performance indicators; monitor the development of the action plans and activities of the sustainability management structures of EDP Group

Shareholder structure after last privatisation stage

EDP Shareholder Structure
(30-Apr-2013)

Dec-11: CTG was the winner of the privatization of a

CHINA THREE GORGES, 21.35%

21.35% stake in EDP (price offered of 3.45/share: 50% above market price on date of announcement). Deal closed in May-12.

FREE FLOAT, 37.70%

IBERDROLA, 6.79% OPPIDUM, 6.18% JOS DE MELLO, 4.60% SENFORA (ABU DHABI), 4.06% MFS, 2.02% BES, 2.38% CAPITAL INCOME BUILDER, 2.06% QATAR, 2.27% BCP Pension Fund, 3.35% SONATRACH, 2.38%

Commitment to a 4-year lock-up and standstill period and limitation on voting rights of 25.0%; CTG represented by 4 members in the General and Supervisory Board

TREASURY STOCK, 0.84% BLACKROCK, 2.00% CAPITAL RESEARCH, 2.01%

Feb-13: Parpblica (Portuguese State) sold its remaining 4.14% through an accelerated book building at 2.35 per share Mar-13: Liberbank and Corporacin Masaveu combined their stakes into a new company (Oppidum)

Shareholder stability and corporate governance, in the defense of best interests of all shareholders
7

Delivery: EDPs 2005-2012 growth performance

EBITDA (Bn)
3.2 2.0 2.3 2.6

77% 3.4

3.6

3.8

3.6

2005

2006 44% 51% 3.8x 12.0% 0.18 0.11

2007 51% 58% 4.2x 13.8% 0.24 0.125

2008 49% 61% 3.8x 14.5% 0.25 0.14

2009 52% 60% 3.9x 14.0% 0.28 0.155

2010 55% 61% 4.1x 13.7% 0.30 0.17

2011 54% 63% 4.1x 13.9% 0.31 0.185

2012 54% 65% 4.3x 12.4% 0.28 0.185

% 05-12 +17% +38% ~0.0x +5% +78% +85%

8

% EBITDA outside Portugal % Installed capacity hydro & wind Adjusted Net Debt/EBITDA Recurrent ROE EPS (/Share) DPS (/share)

46% 47% 4.3x 11.8% 0.16 0.10

Delivery: Clear outperformance with accumulated total return 51% above the Euro Utilities Index
Total Shareholder Return EDP vs. SX6E (Jan-06/May-13) (%)
EDP SX6E Index

EDPs dividend performance 2006-2012

Dividend per share ( cent) Dividend Payout Ratio (%)

6.00

67% 55% 58% 60%

5.00

50%
4.00

47% 14.0 15.5

+43%

42% 11.0 12.5

17.0

18.5

18.5

3.00

2.00

-9%

1.00

Jan/06

Jul/06

Jan/07

Jul/07

Jan/08

Jul/08

Jan/09

Jul/09

Jan/10

Jul/10

Jan/11

Jul/11

Jan/12

Jul/12

No capital increase since 2004, no scrip dividend, 3.9bn in cash dividends paid in 2006-12 (1) (1.07/share) Flat dividend of 0.185 per share fully in cash assumed in 2012-15 Business Plan
(1) Including dividend from 2012 to be paid on May 23rd 2013

Jan/13

2006

2007

2008

2009

2010

2011

2012

Sustainable Financial Gearing: consistent with low operating risk and long asset maturity
European Utilities: 2012 Net Debt/EBITDA vs. Business Mix (1) (x;%)

6.0

Net Debt/ EBITDA 2012 (x)

5.0 A2A 4.0 3.0 2.0 Centrica 1.0 0.0 0% 10% 20% 30% 40% 50% 60% 70% 80% Verbund Fortum EDF SSE Gas Natural E.ON RWE Enel GDF Suez Iberdrola

Nat Grid Terna 2015E

REN Snam REE Enags

90%

100%

Weight of 2012 EBITDA from Regulated Networks + PPAs (%)

High weight of regulated and long term contracted revenues, portfolio of assets with long residual useful life Slight increase of exposure to energy markets as hydro plants under PPA/CMEC gradually move to market prices Focus on free cash flow & strengthening of credit ratios in 2013E-2015E: Target Net Debt/EBITDA <3.0x(2) by 2015E
(1)

Source: Bloomberg and Company Reports

(2) Excluding regulatory receivables

10

Major Strategic targets by Principles of Sustainable Development

Economic & Social value: 26 GW of clean capacity by 2015 (>70% of total capacity) Social Development and Citizenship: Increase the number of Volunteering partnerships by 50% Eco-efficiency & environmental protection: Reduce CO2 emissions by 70% until 2020 (vs. 2008) Innovation: Keep the financing in 20m/year

PRINCIPLES OF SUSTAINABLE DEVELOPMENT Major Targets 2013-2020

Access to Energy: Ensure that ICEIT and EIDC are above the levels set by Regulators

Integrity and Good Governance: Keep the recognition of the World Most Ethical Companies of Ethisphere Institute

Human Capital and diversity: Keep the Global Satisfaction level of employees above 80%

Transparency and dialogue: complete the report of GHG emissions, scope 3

Note: for more detail on defined targets see slide [ ] of Annexes.

11

Climate change: EU has adopted the 20/20/20 energy and environmental policy package with objectives for 2020
Objectives for 2020
1

Binding?

Efficiency

Reduce primary energy consumption by 20% against BaU projections through increased energy efficiency

12

Renewables

Generate 20% of final energy consumption from renewable sources Reach a 10% share of renewables in transports

Emissions

Cut greenhouse gas (GHG) emissions by 20% relative to 1990 levels

EDP strategy to respond to environmental challenges

Wind & hydro: 67% of installed capacity in 2012, more than 2/3 in 2015E

Reduce exposure to CO2 + nuclear

Invest in Energy efficiency, smart grids and R&D

13

Installed capacity: +83% in 7 Years driven by greenfield investments

EDP Group Capacity by Technology: 2005-2015E
(GW; %)
Hydro Wind CCGT Other

EDP Group Capacity by Geography: 2005-2012

(GW; %)
Portugal USA Spain Brazil

+17% +83% 22.6 16% 12.3 40% 13% 44% 2005 3% 34% 2012 (1) 17% 38% 33% 35% 2015E 73% 26.4 13% 14%

Rest of Europe

22.6 4% 10% 12.3 4% 23% 72% 16% 27%

42%

2005

2012 (1)

More than 2/3 of capacity is now hydro & wind

EDP expanded its presence to 5 new geographies US, France, Belgium, Italy, Poland and Romania

Installed capacity growth driven mostly by greenfield wind power capacity additions outside Iberia
(1) Including Pecm 2nd group (180MW synchronized to the electric system in Feb-13); and excluding Setbal (946MW of fuel oil capacity decommissioned PPA ended Dec-12) 14

EDP portfolio of assets with a long average residual life

Average Residual Useful Life of EDPs Generation Portfolio by Technology Dec-2012(1) (Years)
Hydro Wind & Solar CCGT Nuclear Coal with DeSOx Coal without DeSOx

Average Residual Useful Life of EDPs Generation Portfolio (Years)

GW

(% weight on total GW)

Concession End Dates

7.5

(34%)

37

24

7.6

(35%)

21

4 years avg. age of portfolio (2)

16

3.7 0.2 2.4 0.6 0

(17%) (1%) (11%) 10 (2%) 6 10

16

20

25 years total asset life

20

30

40 Years

Dec-2005

Dec-2012

Hydro concession rights in Portugal extended up to 2047 Sustainable cash flow stream over the next 24 years on average, without need of replacement capex
(1) Reference Date: Dec-12; Excluding: Special Regime (Mini-hydro, Cogeneration and Biomass), Tunes and Carregado (for systems backup), and Setbal (fuel oil which PPA ended in Dec-12); Including: Pecm 2nd group (180MW that started the synchronisation with the electric system in Feb-13); (2) Including ENEOP (390MW Equity Consolidated) 15

CO2 specific emissions: -52% in 2005-2015E

CO2 emissions
(ton/MWh)
Accumulated growth

-52% 0.6

0.32

0.29

2005 Wind & Hydro: % of Total output Hydro factor Portugal (x) 47% 0.4

2012 60% 0.5

2015P 62% 1.0

CO2 specific emissions: -52% in 2005-15E backed by higher weight of Wind & Hydro
16

Capex: execution of selective growth

Consolidated Capex Breakdown(1) ( bn)
Other - Expansion Brazil - Expansion Portugal Hydro - Expansion Wind - Expansion Maintenance

3.6

2013 Expansion Capex: EDP Brasil: 2 hydro plants under construction to be commissioned in 2015/17: ~600MW New hydro plants in Portugal: 5 hydro plants under construction to be commissioned in 2014-16: ~1,450MW Wind: ~500MW to be installed in 2013 mostly in Poland and Romania.

2.1 1.5 0.2 0.4 0.8 0.8 2006 2008 2011

2.0 0.3 0.4 0.6 0.7 2012

~2.0 0.2 0.4 0.6 0.7 2013E

Avg. Capex 2014-15E: cap of ~2.0bn/year with significant downside flexibility namely at the level of EDPR

(1) Capex net of investment subsidies, namely cash grants received in USA

17

New Hydro Plants in Portugal: the largest hydro program in Europe

Plant Picote II Bemposta II Alqueva II Ribeiradio Baixo Sabor Type Repowering Repowering Repow., Pumping New plant New pl., Pumping MW 246 191 256 81 172 756 207 252 2,161 Total Net of output pumping (GWh) (GWh) 239 134 381 134 405 1,337 274 585 3,489 239 134 30 134 230 18 81 275 1,141 Start-up date Nov-11 Dec-11 Dec-12 2H14 2H14 2H15 2H15 2H16 Inst. Capacity in Iberia Ongoing Investments Under Development 5.6

EDPs Investment Plan in Hydro Portugal

(GW) +56% +31% 1.4 1.7

Venda Nova III Repow., Pumping Salamonde II Foz Tua Total Repow., Pumping New pl., Pumping

Dec-2011

2012/2016

Post 2016

Hydro: 2.3bn of total capex in new capacity, of which ~55% was already incurred EBITDA contribution: ~100m in 2015E or ~175m on the 1st full year of operation of all plants

18

Pumping profitability is mainly backed by spreads between peak and off-peak prices
Distribution of Hourly Pool Prices in Spain (/MWh)
Jan/Apr 2013 Jan/Apr 2012

EDP Pumping activity Spreads versus avg. Pool price (/MWh ; avg. 2010/11)
Premium / (Discount) versus pool price

100 80 60 40 20 0 1 1001 1201 1401 1601 1801 2001 2201 2401 2601
Hours

+5%

-70%

+10%

-60%

28

36

2801

Selling Price

Pumping Spread Cost 2010

Selling Price

Pumping Spread Cost 2011

201

401

601

The increasing weight of wind in the system boosts price volatility Pumping has storage value: is paid for its ability to close gap between supply and demand

801

Margins on pumping depend on the spreads between off-peak and peak prices, rather than absolute prices

Pumping enhances hydros high value even in dry years

19

EDP has the 2nd highest exposure to hydro in Southern Europe

Hydro Capacity in the Conventional Mix in Southern Europe Major Players in the region

52% 45% 43%

29% 24% 20% 15%

EDP 2016

Peer 1

EDP 2012

Peer 2

Peer 3

Peer 4

Peer 5

2016E

2012

In 2016, EDP will have the largest exposure to hydro amongst Southern European Players
Source: Companies reports 20

Hydro Plants in Portugal: Starting point for long term sustainable involvement with local communities
Reduce environmental and social impacts from new plants: Achieve no net loss or net gain on biodiversity; Shared decision-making process Minimisation and Compensation Measures Environment & Agriculture, based on a local socio-economic dynamic as development factor Creating new business opportunities and promoting local job creation Agriculture/ecosystem services
Guaranteed purchase of local products by contractors workers canteens (for 8 years in average) Enhance new models of agriculture A multiple-purpose agriculture, based on eco-system services provider Develop new distribution channels to be in place after the end of construction works

Handcraft
Deploy design products Develop adequate distribution channels Promote higher proximity from large consumption centres Improve professional skills of local communities

Entrepreneurship
Training for entrepreneurship Support to new businesses brainstorming sessions Support to new business analysis and set-up

21

EDPR: Diversified portfolio and stable revenue stream

Canada US 3,637 47% 57 France 266 54 314 Portugal Brazil 615 (1) 84 1% 4 8% Spain 4% Italy 350 2,310 30% 40 1% 28 Includes solar (39MW) 5% Romania 3% 1% Poland 60% stake in 2.4GW wind offshore project UK Belgium

Other Europe: Long Term PPAs or market price + green certificates

~80% LT PPAs/Hedged ~20% Merchant price

Long term PPAs (15 years)

Fixed tariffs indexed to inflation: Spain: for 20 years Portugal: for 15 +7 years France: for 15 years

Installed Capacity (MW)

7,673

% total installed capacity

MW Under construction 86

Note: Data as of Mar-13

(1) Does not include EDPR 40% stake in ENEOP consortium (equity consolidated, 390MW)

22

Wind & Solar: selectively executing the most attractive opportunities

EDPR Growth Breakdown by markets (MW; %)

Ability to capture opportunities and execute growth in most attractive countries

New + Markets

20%

12%

US, Poland and Romania

Capturing short-term opportunities and adjusting plan to regulatory and fiscal environment

48%

45-60%

New Markets
Electing new markets with attractive wind/solar resources and political and regulatory stability

33%

23-45% 5%

Solar PV
Stronger focus, also in US: implementing dual teams for wind and solar development

2008-2012

2013-2015E

Pipeline of projects with high quality and diversified towards markets with potential allows EDPR to flexibly manage its growth plan
23

Solar: intensify activities as a result of the fast technology improvements

Levelised Cost of Energy (LCoE) reduction (2011 vs. 2009; %) Solar PV

C-Si PV

-40%

Technology Cost Solar PV is the technology with the fastest cost decline among renewable energy sources

Thin film PV

-20%

Levelised Cost of Energy (LCoE) Capex has dropped strongly in the last years leading to LCoE of c100/MWh in the sunniest regions

STEG parabolic through w/storage

-13%

CTG Partnership Preferred access to the main PV suppliers in China, that have dominated the module market in the last years

Currently tracking opportunities in the most attractive solar markets

Source: New Energy Finance

24

R&D in wind offshore

UK Wind Offshore Partnership
EDPR is leading the development of up to 2.4 GW of wind offshore projects with a 60% stake
Moray Firth 1.5 GW

Wind Float Project

EDP installed a wind floating turbine in northern Portugal coast (Aguadoura Pvoa do Varzim)

Inch Cape 0.9 GW

Partnering with Repsol, 1st class company in Energy Sector with strong commitment to wind offshore capacity development Sites to be developed in transitional waters (30-60m of depth) , 15-25 km shore distance Upon getting key consents, construction and operation could begin between 2015 and 2020

Innovative floating structure to support offshore turbines with great stability at depths below 40 m Phase I: Large scale demonstration prototype with a 2 MW turbine connected to the grid which already generated ~5GWh (3.4GWh in 2012) Phase II: Pre-commercial phase with ~27MW (5 Wind Float units) is being prepared

Joint development of wind offshore project in UK

First wind offshore project in the world without any heavy load support
25

EDPs Thermal Power Generation Fleet: Diversified portfolio allowing to balance markets short term risks
EDP Conventional generation Installed capacity in Iberia (MW in Mar-13)
Others (1) 5%

Highly competitive technical features in a context of low working hours: - Minimum operating level of 20%-40%, allowing to concentrate in the best hours; - Capable to move up/down by 100MW in 15 min, boding well with ancillary services; - Start-up time from idle of 20 min., boding well with ancillary services. By working fewer hours in a balanced manor, the useful lives of our CCGT fleet can be extended 55% of capacity is merchant; 45% remunerated at 8,5% RoA real pre-taxes 78% of capacity with DeSOx Our coal fleet is the most efficient in Iberia: lower transportation costs and heat rates

CCGT

29%

Coal

21%

Hydro

45%

Lower-cost blast-furnace gases partially meet our Aboo needs Favourable location: Plants located close to heavy energy consumption areas Spanish coal - Our Soto 3 plant operates under RDL 134/2010 (Spanish coal): remuneration is guaranteed until 2014

Mar-13

EDP benefits from short term weakness of CO2 prices through higher load factors at coal plants Merchant thermal output: CCGTs output focused in the best hours and ancillary services Our portfolio of clients enhances the integrated management generation & supply activities in Iberia
26

Brazil: Electricity demand expected to grow at a an average annual rate of 4.2% in 2011-2021
EDP Brasil: Geographical footprint
Hydro Power Plant Thermal power plant Distribution Concession Area

Jari (under construction) 374 MW End of PPA: 2044 To start operations in 2015

Cachoeira Caldeiro (under construction) 219 MW End of PPA: 2047 To start operations in 2017 Pecm 360 MW coal plant End of PPA: 2026 Concession: 2043

Key drivers for strong growth in volume of electricity distributed: New clients (better housing conditions, population growth) Increase in consumption per capita (home appliances, etc.) Better public infrastructures, industrial growth

Lajeado 903 MW End of PPA: 2030 (avg.) Concession: 2033 Mascarenhas + Suia 227 MW End of PPA: 2016 (avg.) Concession: 2025

Peixe Angical 499 MW End of PPA: 2016 Concession: 2036

Generation capacity Additions: 2015: +373MW of hydro capacity Jari 2016: +120MW of wind power 2017: +219MW of hydro capacity Cachoeira Caldeiro

Escelsa (Esprito Santo) Bandeirante (part of So Paulo state)

Sustainable and sound regulatory framework: Return of RAB in Distribution, long term PPAs in generation
27

Energy Efficiency: A strong focus on DSM and energy services

Voluntary actions (Portugal): 2.2m
Projects to mobilize consumers in all sectors to improve energy efficiency , supported by the regulator. Ex: distribution of efficient light bulbs, ECO bills, ECO website Since 2007 until 2012: 9 million efficient light bulbs distributed 5,2 TWh cumulative savings, corresponding to 1.84 Mton of CO2 emissions avoided.

Energy Services (Portugal and Spain): more than 30m

Offering new DSM consulting services regarding energy efficiency, load and tariff optimization, fuel switching and distributed generation: energy auditing and certification, energy efficiency measures, management of assets to capture savings in buildings, solar thermal and PV solutions, micro and mini generation

Energy Efficiency Programme (Brazil): R$28,4m

In 2012, projects realized 25 GWh estimated savings (corresponds to an average consumption of 14,714 houses by year) and reduction of peak demand of 14,4MW: Good Energy for the Community, Good Solar Energy and Good Energy in Schools project Efficient and safe-oriented use of Energy Replacement of inefficient lamps and appliances Solar heating systems installation Consumption reduction in public buildings, traffic lights, hospitals, etc. Load shifting
28

Smart Grids: key to cope with challenges of increased renewables, distributed generation and electric vehicles

Benefitting costumers and offering a technological leap forward in network service and capabilities Operational Efficiency Energy Efficiency Service Quality Renewable Energy Electric Vehicles
inovgrid is aligned with the most important world technological trends and already a reference in Europe Cutting-edge Smart Grid project (30.000 EDP Boxes that substituted the old meters) is being commercially tested in the Portuguese city of vora, the 1st Iberian inovcity, with a total investment of 15m In 2013/14, a broader pilot will be implemented, with the installation of 100 000 EDP Boxes in seven locations with different grid characteristics The municipality of Aparecida do Norte (state of So Paulo, Brazil) will be the first Brazilian city equipped with a smart grid. The project, lead by EDP Brasil, will include the installation of 15,000 smart meters.
29

Electric mobility: EDPs on the frontline of innovation and technology

Electricity Network
Electric Vehicle

Electricity Supply

Slow Charging Posts

Fast Charging Posts

Other Mobility Services

Growth potential in the medium/long-term Strong rationale for development (decarbonisation, storage, reduce imports)

EDPs Project for Electric Vehicle Chargers

Pilot project for electric vehicles: 1,030 charging stations activated and currently around 500 users

Strengths
Know-how and expertise; Synergies within the group Close relationship with relevant entities

Weaknesses
Project involves several entities outside of EDP Group

Opportunities
Natural positioning within EDPs business / industry / market Leverage on existing commercial relationships New service: sale of equipments for home charging, etc.

Threats
Uncertainty on potential interest from auto industry Lack of rules and of technological definition; Low acknowledgement from potential users/agents

Electric Vehicles to become relevant for the electric utilities business over the medium/long-term
30

EDP: Reinforcing corporate culture and motivation, seen as key competitive advantages
Training: EDP group universe books 503k hours of training 2012 (+5,5% YoY). EDP University: seven schools, two of which are transversal in nature and 5 are business oriented (generation, distribution, gas, renewables and supply). Since mid-2012 UEDP has been responsible for defining and monitoring the EDP Group Training Plan and Budget and coordinating the initiatives for professional development.

HR Development

Mobility: Mobility involved 588 employees in the EDP Group in 2012 (EDPs mobility includes intra-company, inter-comany and international mobility). Assessment of potential and performance based on Key Performance Indicators (KPIs) benchmarks: 2005: no program implemented. 2011: applied to over 50% of employees in EDP group and to 86% of employees in Portugal. 2012: applied to 100% of employees. Labour indicators above the sectors average; stability of companys performance evaluation by RobecoSAM. Absenteeism down from 3.35% in 2011 to 3,16 in 2012. Reduction of EDP and Contractors frequency rate (from 4,65 in 2012 to 4,17 in 2012); increase of the number of death accidents involving service providers (4 in 2011 to 13 in 2012) Increased installed certified power (from 58% in 2011 to 72% in 2012).
31

Employment

Health & Safety

EDP is increasing its commitment with Energy Access for Development

EDP A2E Projects around the world

Venezuela

Guine Bissau Kakuma, Kenya Angola Mozambique East Timor

Brazil

South Africa

Executed To be implemented

32

Kakuma: a pilot project intended to empower vulnerable people and to cover basic energy needs
2008-2009
Opportunity ID Site survey Intervention proposal by EDP On-site Community Engagement Contract between EDP and UNHCR (UN Refugee Agency)

2010
Execution start-up UNHCR Highcomissioner and EDP CEO visit Execution wrap-up

2011-
Maintenance by Local Partner Yearly visits by FEDP (Technical Assistance)

Non-refundable social investment of 1.3 million by EDP to implement a 50kWp project in a UNHCR camp with 75.000 refugees
33

Kakuma: a pioneer example of how energy can make a nowhere land into a place to live

SOLAR PV SYSTEMS FOR LIGHTING AND ICT 50 kWp | 11 public buildings; 31 street lights with 147 homes; Capacity building

Direct Impact
6.000 refugees 300 families Savings of 50.000 l/year of diesel 700 tCO2 emissions avoided

SOLAR LANTERNS FOR STUDENTS 4500 units | School attendance; Study by night; School-home safety

SOLAR COOK STOVES, SOLAR WATER PURIFIERS & AGRO-FORESTRY Women capacity in solar cooking; Potable water; Kitchen garden

For the first time in 9 years, there are A and B students, and there were no E grades 48% of students had A, B or C grades, while the average of the previous 8 years was 25%
34

Conclusions
EDP is listed for the 5th year in a row in DJ Sustainability Indexes and being a top ranked utility worldwide Responding to climate change through a strong improvement of environmental performance #3 player worldwide in wind ; #1 largest hydro program in Europe EDP is present in 13 countries; 29 nationalities of employees Energy efficiency: campaigns encouraging efficient behaviors, development of energy services, promotion of installation and use of distributed energy resources and electric vehicles Keep-on investing in innovation: wind offshore (wind float), smart grids, electric vehicles, etc. Commitment towards the protection of nature and biodiversity, social engagement, enhancement and achievement of certain levels of responsibility and accountability
35

Annex

EDP strategic agenda: follow up for 2012-15 controlled risk, superior efficiency and focused growth
Strategic Priorities Business Plan 2012-2015 highlights
Keep unique low risk business profile

Capex <50% of EBITDA (1) EBITDA CAGR 11-15: ~5% 130m/year OPEX III savings by 2015 Adj. Net debt (2) / EBITDA <3.0x in 2015

Proactive management of legal and regulatory agenda Competitive refinancing and accelerated deleveraging Focus on Opex and Capex efficiency Value creating growth Successful partnership with CTG

Increase cash-flow generation

Becoming greener: >70% clean installed capacity in 2015 Keeping low risk: ~85% of EBITDA in 2015 is LT contracted/regulated Diversifying geographically: >60% of EBITDA outside Portugal in 2015

Create sustained long term growth and optionalities

Hydro, Renewables and Brazil New geographies: i.e. adjacent markets, off-shore & solar

Deliver stable and attractive Shareholders return

1) For the complete Business Plan period 2) Excludes Regulatory Receivables

Dividend policy: Payout ratio of 55%-65% (3) Net profit CAGR 11-15: low single digit
3) Based on recurrent net profit. Dividend per share from 2011 as floor. 37

Internal EDP sustainability index(1) flat in 2012

EDP Sustainability Index (points)
~0% 130 130 146

EDP Sustainability Index: Environmental Dimension (points)

-1,5% 143 Weight: 36%

2011

2012

2011

2012

EDP Sustainability Index: Economic Dimension (points)

-1% Weight: 33%

EDP Sustainability Index: Social Dimension (points)

5% 131 137 Weight: 31%

111

109

2011

2012

2011

2012
38

(1) Developed by EDP based on 26 sustainability performance indicators

Summary of indicators: 2012

Economic
Revenues Net Income Market Capitalization(1) Distributed Economic Value* Accumulated Economic Value** Total Community Contribution(2) Community Contribution (% of EBIT) 16,340 1,012 8,373 17,488 2,124 21 1 million million million million million million % Installed Capacity Renewable Installed Capacity(3) ISO 14001 Environ. Certification Primary Energy Consumption CO2 specific emissions(4) SO2 specific emissions(4) NOx specific emissions(4)

Environmental
23,380 15,247 17,665 197,793 MW MW MW TJ

0.323 ton/MWh 0.29 0.29 g/KWh g/KWh

Social
R&D Spending Employees(5) Collective Employment Agreements Training hours Average age Male / Female Ratio EDP frequency rate Absentee Rate 31 12,275 83 503,272 46 3.54 1,82 3.16 million nb. % hours years nb. nb. %

Some major events

DJSI-For the fifth consecutive year, EDP is distinguished in the publication world, "Sustainability Yearbook 2012" SAM, obtaining the rank of gold for the third time and EDP in the top of world sustainability in the Dow Jones Index for the fifth year in a row, obtaining the same absolute score of the utilities leader. Brand - EDP awarded as the most valuable Portuguese brand according to a study from the Brand Finance consultant, with a brand value of EUR 2.4 billion. Wind farms - EDPR agrees with CTG on the first investment in minority stakes in wind farms.

Generated Economic Value (GEV): Turnover + other operating income + gains/losses with the sale of financial assets + gains/losses from associated companies + financial income * Distributed Economic Value (DEV): COGS + operating costs + other operating costs + current tax + financial costs + dividend payment; ** Accumulated Economic Value (AEV): GEV DEV
(2) In accordance with London Benchmarking Group (LBG) methodology (1) Market Cap as of Dec-31, 2012 (4) Based on the net generation following the new GRI guidelines sector specific (3) Large hydro; Small hydro and Wind (5) Excluding Corporate Bodies

39

DJSI Index: Assessment method and weights

Economic Dimenson (35%) Index Market Opportunities Risk & Crisis Management Codes of Conduct /Compliance/ Corruption & Bribery Customer Relationship Management (IS) Corporate Governance Price Risk Management Scorecards / Measurement Systems (IS) Index EDP Points Weight (Max. 100) 7% 6% 6% 5% 5% 3% 3% 84 100 99 81 73 93 98 Enivironmental Dimenson (35%) Index Electricity Generation (IS) Operational Eco-Efficiency (IS) Climate Strategy (IS) Biodiversity (IS) Transmission and Distribution (IS) Water Related Risks (IS) Environmental Reporting Environmental Policy / Management System (IS) Index EDP Points Weight (Max. 100) 7% 7% 6% 3% 3% 3% 3% 3% 84 58 100 100 60 66 93 93 Enivironmental Dimenson (30%) Index Labor Practice Indicators Human Capital Development Talent Attraction & Retention Stakeholder Engagement (IS) Occupational Health & Safety (IS) Corporate Citizenship / Philanthropy Social Reporting Index EDP Points Weight (Max. 100) 5% 5% 5% 5% 4% 3% 3% 78 100 65 100 89 90 100

Social Economic Environmental General 41% Industry Specific 59%

40

EDP Policies for Environment and Biodiversity

4 major focus areas Fostering Knowledge Adaptive Management
Biodiversity Chair Biodiversity Fund Long term studies Scientific follow up (monitoring) Habitat and Ecosystems orientation LOAM Landscape Outcomes Assessment Methodology COMPRO Project stakeholder engagement LCA Life Cycle Assessment LTER Long Term Evaluation Research Social and Economic integration EVI Ecosystem Valuation Initiative WBCSD Biodiversity Report Peer Review on scientific work Browsedp repository of biodiversity information Corporate environment management system according to ISO 14001 CDP and WDP disclosed and internationally evaluated

Long term Vision

Transparent Reporting

Increasing stakeholder engagement allows stakeholders to experience the benefits and assume the ownership of the initiatives in a sustainable way
41

Fostering Knowledge
Scientific support for structural decisions: overall impact of new technologies, go/no go implementation based on long term environmental risk management

Biodiversity Chair

Influence the prioritization of biodiversity knowledge: connection corridors between preserved areas; stock evolution of endangered species Development of specific monitoring and other applied studies requiring advanced knowledge: integrated cumulative impact of wind farms on birds; design improvement of fish ladders or in stream flow optimization.

Biodiversity Fund

Volunteer five years program of 2.5m, under EU Business and Biodiversity Initiative (15 projects implemented with partnership of more than 40 scientific entities and ONG ) Promoted concrete actions on biodiversity ,constituting guidance for future actions Capitalizes the goodwill of volunteer regeneration as a way to get an overall positive balance in company activities impacting the environment

Long term studies

Influence of climate change on Iberian fauna (which conservation measure are worse on the long run). Test adaptation to new environments: Reintroduction of osprey nesting in Portugal.

42

Adaptive Management
Tight collaboration with Scientific Institutions
Follow up of implemented measures and adjustment of management to meet the best possible results, optimizing investment

Transform costs of mandatory actions into investment

Maximization of value added to environment and learning from the results of it implementation.

Measures primarily oriented to habitats and ecosystems

Restoration to maximize long term results.

Deep involvement of local stakeholders

Make them our long term partners to preserve environmental improvements, getting economic and social value from better ecosystems and consolidating a sustainable way of life and creating economic benefits to both parts

Promote local stakeholders participation since the very begin of projects

Get their main opinion through the use of LOAM (Landscape Outcomes Assessment Methodology), consultation.

Defining a communication program for every project with significant impact in environment or quality of life
Tailored after a detailed evaluation of local stakeholders identification. A specific methodology for this project communication strategy is in place at corporate level The ComPro project.
43

Long Term Vision

Identify the environmental and social long term trends and regulation risks
To be able to implement in advance measures in a cost effective way and take advantage of being first mover.

Member of WBCSD World Business Council of Sustainable Development

Where sustainability issues are systematically analysed, and worldwide solutions are proposed to governments and regulators.

EDP as Core Team of ecosystems focus area of WBCSD

Pilot test of EVI (Ecosystem Valuation Initiative), which give EDP international visibility, showing willingness to find and stabilize common metrics to evaluate environmental risks.

Partnership with MIT Portugal, for a LCA- Life Cycle Assessment of the Baixo Sabor hydropower project
World pilot project to determine overall impact/benefits during its entire life, compared with others technological solutions.

Having Baixo Sabor Project as LTER Long Term Evaluation Research site
Geo-referenced database with all the information produced of any site, impacts, measures and follow up. Any scientist in the world can review, comment results, and learn from experience.

Promote acceptable life condition for local communities

Invest in creating management skills to improve their wellbeing is a guarantee that good environment performance in long term is going to be maintained.
44

Transparent reporting to improve international credibility

Scientific collaborations are peer reviewed Corporate environmental management certified Sustainability reporting according with GRI CDP Carbon Disclosure Project WDP Water Disclosure Project
EDP is in the first ranking worldwide in reporting to CDP and WDP

Sharing Knowledge with Society

Baixo Sabor Project: Nature Conservancy (Wyoming) Osprey project: University of Gothenburg, Finnish Museum of Natural History LCA project: University of Surrey UK and International Society of Industrial Ecology

ISO 14001 Corporate environmental management certified by Lloyds

Annual report is externally verified

Browsedp: Database solution to share studies financed by EDP, in different geographies

Environment indicators quarterly published in EDP site 72% of generation sites certified under ISO 14001 and/or EMAS A Biodiversity Report is annually published explaining strategy and actions in this specific field Considered by SRI investors Core issue for investment risk management GIS Database, developed to share geographic information collected under EIA processes of Baixo Sabor

45

What does Environment means for our business?

Strengths Strong experience on renewable energies Environment integrated at strategic level High technical competences of our HR Transparency and trust , associated with EMS Environmental Management System High public exposure Member of WBCSD Opportunities International lobby to involve private sector on finding solutions Competitive advantage from external recognition, ex: DJSI Increase efficiency (more tools available to support business, anticipate risks) Increase reputation (high awareness of society) Ability to attract and retain employees Weaknesses High negative impacts on environment Operations on high sensitive ecological regions (Biodiversity Hotspots) and inside protected areas/high ecological habitats. Strong dependences on ecosystem services Internal expertise increasingly externalized High public exposure Threats Increase operational costs due to licensing delays High level international agreements to reduce biodiversity loss Increase regulations constrains Increase lending requirements (access to capital) Damage to brand (external stakeholder pressure) Challenge to social license to operate

46

Environmental dimension: 2012 performance

Corporate Environment Management System (SIGAC): Certification ISO 14 001 since 2008 Higher number of installations certified under ISO 14 001 (235 generation facilities in 2012 (1) (+70 vs. 2011) 135 of 607 electricity substations; gas sector fully certified) Ongoing program for EMAS registration of generation facilities in Iberia (62 in 2012; +15 vs. 2011)

Environmental Management

Electricity Generation Climate Change Atmospheric Emissions

Reduced of electricity generated from CO2 Free Generation (2)(-9% vs. 2011): CO2 Free Generation represent ~61%(1) of EDP total generation in 2012 Increase CO2 emissions: emission factor increase 13% YoY to 0.323 ton CO2/MWh in 2012 ~13% YoY increase of NOX emissions per KWh (0,29g/kWh) and 80% for SO2 emissions (0,29 g/kWh) EDP commitment is explicit in Biodiversity Policy (www.edp.pt/en/sustentabilidade/ambiente/biodiversidade)

Biodiversity

EDP has been publishing a Biodiversity Report since 2009, were explicitly defines its strategy, targets and achievements with respect to those targets. For all generation sites under construction, stakeholder engagement is a process conducted under Environmental Impact Assessment process and Biodiversity is considered.

(1) Excluding nuclear (minority participation in Spanish company without management control), representing 156 MW (c1% of total capacity) and 1,230 GWh (c2,3% of total generation) in 2012 (2) Excluded Thermal Generation and nuclear

47

What does Social issues mean for our business?

Strengths Electricity/energy considered a basic need of a modern society High technical competences of our HR, low turnover High public exposure Strategic approach to stakeholder engagement is becoming more robust Opportunities Encourage more informed decision making, based on the expectations of society Enhance reputation fostering greater public trust Demonstrate the total shared value with society beyond financial distribution Recruit, motivate and retain its employees Prevent or reduce potential conflicts with consumers Promote innovation and benefit from partnerships Weaknesses Health and Safety of suppliers Multi geographic and cultural exposure High public exposure Different backgrounds of many business units regarding stakeholder management.

Threats Becoming global raises new social issues Sharing responsibility through value chain is increasingly being considered a core sustainability practice External stakeholder pressure is increasing Many EDPs initiatives seen as philanthropy if not internalized into business practices

48

Social dimension: 2012 performance (1/3)

EDP operates in 4 continents and does business in 13 countries. Has 12,275 employees. Training: EDP group universe books 503k hours of training 2012(~+5% YoY). EDP University: 7 Schools, 2 group wide (oriented towards EDPs culture and personality) e 5 functional (oriented towards business areas). Diversity: EDP initiated its participation in an External Forum, energized by CITE , sharing good pratices ; EDP approved its Diversity Policy. Assessment of potential and performance based on Key Performance Indicators (KPIs) benchmarks: 2005: no program implemented 2011: applied to over 50% of employees in EDP group and to 86% of employees in Portugal 2012: applied to 100% of employees. Labour indicators above the sectors average; stability of companys performance evaluation by RobecoSAM Absenteeism down from 3.35 in 2011 to 3.16% in 2012. Reduction of EDP and Contractors frequency rate (from 4,65 in 2011 to 4,17 in 2012), as well the number of death accidents involving service providers (4 in 2011 to 13 in 2012). Increased installed certified power (from 58% in 2011 to 72% in 2012).
49

HR Development

Employment

Health & Safety

(1) Comisso para a Igualdade no Trabalho e no Emprego

Social dimension: 2012 performance (2/3)

EDP Group overall procurement reached 2,782M. 13% of total procurement are from foreign suppliers.

Suppliers

Most of fuels purchased was come from suppliers that have advanced Corporate Social Responsibility policies and have also signed up to Bettercoal initiative. EDP plans to join this initiative in 2013. Develop a pilot program with Siemens More Sustainability in the Supply Chain in order to improve performance in the supply chain, namely in the areas of health and safety. Implementation of a social accounting system (SAP) in Portugal; it will be extended to all geographies during the next 2 years.

Contribution to the community

Social investment on community represents about 1% of EBIT: more than 400 community projects supported (total contribution amounted to 21M (1) in 2012 in accordance with the LBG (2) method) in the area of social innovation, access to energy and education, cultural, sports and environmental promotion and entrepreneurship Since 2008, EDP has a report that combines economic and financial aspects, with social and environmental performance. Since 3rd quarter semester reports also sustainability information integrated with interim results of EDP Group.

Sustainability Report

Social Report
(1)

Publication of EDP Social Report for the 5th year consecutive

50

Value of 2012 not yet validated by Corporate Citizenship; (2) London Benchmarking Group: for detailed please see: www.edp.pt/en/sustentabilidade/sociedadeecultura/avaliar/Pages

Social dimension: 2012 performance (3/3)

Since 2009, EDP has implemented an internal process to assess the companys maturity level against AA1000 APS(2008) standards. Set up the institutional relations and stakeholder department and a Stakeholders Management Committee. These new structures will enhance the communication of EDPs stakeholders, contributing to a more fluid and systematized information about EDPs activities. To guarantee the total cover of stakeholders, EDP promote different channels to reinforce dialog with all stakeholders, such as the Ethics Ombudsman. This is a channel managed at a corporate level by the Communication office and all issues around stakeholder engagement are forwarded to the Stakeholder engagement office. KPMG verified EDPs report in accordance to AA 1000 AS 2008, Type 2. This verification process includes information disclosed in EDPs Annual Report and the alignment of EDPs practices with the principle of inclusion, materiality and response. EDPs materiality issues were identified, in 2012, through the Accountabilitys methodology, which ensures a balanced and cleared assessment of data collected internally and throughout the different channels opened for different stakeholders. For consult list of stakeholders see next slide.

Stakeholder Engagement

51

Economic dimension: 2012 performance

Consolidation of Internal Ethics Management System: review of the Code of Ethics Regulation and the Internal Regulations of the EDP Group Ethics Committee. Revision of Ethics of Code has begun and will be completed in the first half of 2013.

Ethics

EDP participates in the Gesto Transparente.org initiative. Completed the training program integrated in the ticaedp Programe. This program was been object of public analysis and debate in the program for the international MBA at the Catlica Porto Business School. Mr. Jos Figueiredo Soares is the EDP Group Ethics Ombudsman, replacing Mr. Carlos Loureiro. 9,900,394 customers of electricity and 1,059,436 customers of gas.

Customer Relationship

The levels of satisfaction with electricity improved in 2012 (+5pp than 2011)- 78% declare to be satisfied; the levels for gas didnt change from 2011- 85% declare to be satisfied. EDP has as a ombudsman customer: Mr. Luis Valadares. Consolidated investments amounted to 2,010M in 2012, a ~7% decrease when compared to 2011. This decrease was essentially explained by lower investments in wind operations (less 231M in USA, explained by lower wind capacity targets). EDP invested about ~32m in R&D projects (energy efficiency, renewable energy, clean generation, carbon capture and micro-generation).

Market Opportunities & Energy Efficiency

52

Research and Development: main strategic areas of innovation

Inovation ecosystem
Venture Capital- Risk Capital Fund- by the end of 2012, it had invested about 7M in innovative companies and funds in the clean tech area. Mobi.E: implementation of a grid-integrated electric mobility system; OpenCharge: Development of a low-cost electric vehicle charging station using open-source hardware

Electric Mobility

Smart Grids

InovGrid: smart electricity grids (transform existing distribution system into intelligent system, based on telemanagement)

Energy Efficiency

Home Energy Management services plataform Implementation of new plataform (Upower) for testing different technologies in the area of smart grids Offshore wind energy- EDP reconfirmed is commitment to offshore/ocean energy as one of the areas of focus in its innovation effort- Wind Float project; Solar Photovoltaic energy- Sunlab project; Search for long-term decarbonisation of the sector.
53

Renewable & Generation Technologies

Engaging stakeholders: identification of important sustainability issues

EDPs Important Issues shared with society:

Climate Change Energy Efficiency Environmental Protection Renewables Promotion Good Governance Supply chain empowerment Free Market Local Development Security of facilities Corporate strategy and New Businesses/Markets Human Rights

54

List with the main stakeholder segments and most relevant topics (1/3)
Stakeholder Main consultation channels - Dedicated telephone line and e-mail - External perception study - Surveys sent by Socially Responsible Investors (SRI) - Investors Day - Periodical Confecence Calls and Roadshows on spectific thematics - Dialogue with DECO - Market studies - Complaint communication channel - Focus groups - Customer Ombudsman (Portugal) - Customer Managers - Energy efficiency barometer - Satisfaction surveys - Bi-annual survey on organizational environment - Chairman's direct line - Ethics Ombudsman - Meetings with unions and worker's committees - Specific and thematic surveys - Channel for whistleblowing - Chairman of EBD meets with employees - Performance Evaluation Process Topics of most relevance in 2012 - Macro-economic context - Regulatory framework - Financial debt / Dividend policy sustainability - Liquidity and financing costs - Strategic partnership with China Three Gorges - EDP Group strategy - Market liberalisation - Quality of supply - Price policy - Transparency and proximity - New services and technologies - Energy efficiency - Career evolution and qualification - Professional fulfillment - Appropriate remuneration, recognition and equal opportunities - Occupational health and safety - Ethics at the workplace - Balancing employment and family life
55

Investors

Customer / Consumer's Rights Associations

Emplyees / Unions

List with the main stakeholder segments and most relevant topics (2/3)
Stakeholder Local communities Main channels g consultation g p projects - COMPRO project / Local surveys - Environmental Management Systems with EMAS registration - Seminars and conferences - Co-creation innitiative - Partnerships and collaboration agreements Topics of most relevance in 2012 - Environmental management and promotion - Infrastructure safety conditions - Energy efficiency - Promoting renewable energies - Climate change - Innovation and new technologies - Environmental and Biodiversity management - Renewable energies - EDP's intitutional image/Reputation - Renewable energies - Hydroelectric projects - Tariffs and energy prices - Quality and security of electricity supply / Investment on grids - Environmental and Social responsibility - Innovation (smart grids; off-shore wind projects) - Financial performance / Privatization process - Liberalised market

Academic world

Media

- Dedicated telephone line and e-mail - Market studies - Thematic meetings with members the EBD - Press conferences

56

List with the main stakeholder segments and most relevant topics (3/3)
Stakeholder Main consultation channels - Regular meetings with ongoing building/supply contracts - Ethics Ombudsman - Surveys on quality of service - Periodical meetings - Follow-up visits to new projects - Representation of the company in various committees and sectoral - Collaboration agreements - Projects monitoring committees - Consultation channel Topics of most relevance in 2012 - Qualified workforce - Health and Safety - Price policy and quality of service - Strengthening communication channels - Promoting renewable energy - Internationalisation - Market liberalisation - Tariffs and prices - Environmental Management - Renewable energies - Social responsibility - Climate change - Energy efficiency and new technologies - Environmental management, particular focus on - Renewable energies - Responsible marketing - Ethics and transparency

Suppliers

Regulators and Governmental Institutions

NGO

57

China Three Gorges: profile and partnership with EDP

100% owned by Peoples Republic of China (S&P & Fitch: AA- / Moodys: Aa3) CTG credit rating: S&P: A / Moodys: A1; Sound relationship with some of the worlds major banks: ICBC, China Construction Bank, Bank of China, China Development Bank, etc. Generation Capacity (1): 25.2 GW installed + 49.6 GW under construction, mostly large hydros i) Three Gorges Hydro Power Plant: 22.5 GW (largest hydro plant in the world). ii) Other Renewable: 1GW of wind capacity in operation; solar power development projects.

Chinas largest clean energy group with an ambitious renewable energy expansion plan One of the major Chinese Corporates: Sound financials and competitive access to long term capital
EDP-CTG strategic partnership agreed in Dec-11: Committed credit facility of 2bn provided to EDP at corporate level by China Development Bank 2012-15: CTG to invest 2bn in minority stakes in renewable capacity (incl. co-investment)
(1) As of Dec-2011. 58

EDPs Regulatory Receivables in Portugal

Regulatory receivables in the Portuguese electricity system (bn)
+0.3 3.4 1.9 1.5 1Q12 2.2 2012 4.0% 19.0 48.1 0.48 -2.9% 2.6 4.0 1.9 1.9 1.1 2011 3.8% 18.2 50.4 0.92 -3.3% 4.3 1.8 +0.5 4.5

2.1
Already securitized Owed to EDP

2.6 1.9 0.7 2010 2.9% 17.9 37.2 1.31 +4.6%

3.1

2.0 0.1 2009 4.4% 14.4 37.6 0.77 -1.4%

PORTUGAL Avg. Tariff Increase for LV Special Regime Production (TWh) Pool Prices (/MWh) Hydro Coefficient (1.0 = avg. year) Demand Change (% YoY)

1Q13

2013E

4.5 52.0 0.19 -4.0%

6.6 38.2 1.25 -2.3%

Financial sustainability of Portuguese electricity system: Agreement with Portuguese government for gradual recovery of all EDPs regulatory receivables until ~2020 and remuneration based on EDPs marginal cost of funding Improvement of credit market conditions: EDP intends to fully compensate the 2013 increase of its gross regulatory receivables in Portugal through securitisation deals
59

Securitisation options on EDPs regulatory receivables in Portugal

EDP Regulatory Receivables in Portugal: Amortisation Profile (Mar-13 stock + Future 2013 Securitisable Tariff Receivables)
2012 Securitisable Tariff Receivables 2013 Securitisable Tariff Receivables Other

( bn)

Avg. Receivables Maturity Mar-13: 3.1 years

Tariff deficit tranches available for securitisation by EDP: 2012 Securitisable Tariff

1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 2013 0.7

1.4

Receivables: 973m to be collected in 2013-16, 6.32% interest rate (291m securitized in Apr/May-13)
0.6 0.6 0.3

2013 Securitisable Tariff Receivables: 1,421m to be collected in 2013-17 (1,275m in debt by 2013YE); interest rate of ~5.85%

2014

2015

2016

2017

Securitisable deficits with relatively short maturities (3.1 years), low risk and adequate remuneration In Apr/May-13 EDP securitized 291m of 2012 Tariff Receivables. Further deals to be considered in near term
60

Wind: A competitive technology to meet electricity demand

Wind Levelised Cost of Energy (LCoE) (/MWh on Load Factor scenarios) Levelised Cost of Energy by Technology (/MWh, European Case for new investments)
Dismantling CO2

120 100 80 Lower capex cost and higher useful life

Fuel O&M Investment

Excludes intermittency costs

69 58

72

78

79

60 40 20 20% 25% 30% 35% 40%

Hydro

Wind Onshore

Nuclear

CCGT

Coal

Wind is becoming a cost-adequate alternative energy within national long-term electricity system plans
Notes: Analysis based on: Gas 7.0$/Mmbtu, Coal $80/ton, CO2 15/ton, /$ 1.35

61

EU mandatory targets for 2020 indicate strong underlying increase of the wind capacity...
RES in Energy mix (%)
+2.4x 20%

Sector (%)

EU Renewable capacity per technology in 2020 (GW)

172 135 +90 +32 84
New Capacity 2010 Capacity

Electricity
23% Heating and Cooling
47%

8.5%

82 Transport 30% 2005 2020 Wind onshore

103

+58

44 +21

41 +38 7 4 Other

Hydro

3 Solar PV Biomass Wind Solar CSP offshore

26

23

Wind onshore is expected to be the major contributor for renewables capacity growth
Notes: Source: EWEA; NREAP 62

...on which the market has recurrently raised several questions about its sustainability
1 Is wind the most cost competitive renewable technology today?

2 Is wind a cost adequate technology to meet increasing demand?

3 Is wind profitable at current electricity wholesale prices?

4 Is wind tariff generating an over-cost in the electricity systems?

63

Is wind the most cost competitive renewable technology today? Yes

Levelised Cost by technology (/MWh)
Fuel O&M Investment

Weight of renewable generation and premium(1) (%, by technology) 2010

225 244 2% 11% 5% 7% 34% Solar CSP Solar PV Wind offshore 61% 6% 14% 19% 42%

2020E

18%

125 96 69 82%

6%

53%

Wind onshore

22% 18%

Wind Onshore

Biomass

Wind Offshore

Solar PV

Solar CSP

Generation

Premium

Generation

Premium

Wind is the most efficient and mature renewable technology

Notes: Source: EDPR Internal Analysis; (1) EDPR European Countries

64

Is wind a cost adequate technology to meet increasing demand? Yes

Levelised Cost by technology (/MWh)
Dismantling CO2 Fuel O&M Investment

Wind and CCGT Levelised cost (/MWh, $/bbl)

/MWh

110 100 90 79 80 70 60 50 40 Wind Cost CCGT Cost

Wind Cost + Backup

58

69

72

78

Hydro

Wind Onshore

Nuclear

CCGT

Coal

40

50

60

70

80

90

100

110

120

130
$/bbl

Wind is cost competitive considering current Brent prices, providing cost stability and reducing the negative impact of high Brent prices in the electricity system
Notes: Source: EDPR Internal Analysis

65

Is wind profitable at current electricity wholesale prices? No, but...

IBERIAN MARKET

Market Price - Levelised Cost

CCGT Clean Spark Spread
/MWh /MWh

Electricity market price

/MWh

CCGT Return
/MWh

Wind Return

40

-22

-38

-29

50

-12

-28

-19

60

-2

-18

-9

70

-8

80

18

11

at market prices providing a sustainable CCGT operation, wind is competitive

Notes: Source: EDPR Internal Analysis; Clean Spark Spread, assumptions: heat rate CCGT 51.4%, emissions factor 0.365 ton/MWh; Forex 1.35/$, C02 15/ton; Brent 102.5$/bbl

66

Is wind tariff generating an over-cost in the electricity systems? Yes, but...

Electricity System with Wind Capacity (Illustrative simulation, Iberian Market)
/MWh

Electricity System without Wind Capacity (Illustrative simulation, Iberian Market)

/MWh

90 Wind over-cost ~2bn (endogenous resource) 47 up to +7 Increase in electricity cost ~2bn (mainly imported)

Market (260 TWh)

Wind (52 TWh)

Total Consumption (312 TWh)

excluding wind from the energy mix translates into higher market electricity prices, mitigating the impact of wind over-cost
Notes: Source: EDPR Internal Analysis based on 2010 Iberian production figures from REE and REN 67

The EU ETS should remain unbalanced in the short-term...

EU ETS supply and demand balance Mton, 2008-2028E Accumulated - Baseline Accumulated - 900Mton set-aside Supply/demand equilibrium by 2018 should sustain price Increased demand from sectors such as aviation and limitation of offsets rebalances the market in Phase IV Accumulated - 30% 2020 cap Annual - Baseline

2.500 2.000 1.500 1.000 500 0 -500 -1.000 -1.500 -2.000

2008 09 10 11 12

Absence of backloading leads to increasing oversupply and lack of short term confidence in the market

905 446 248 288 -35 139 117 89 58 30 -14 -44 -71 -110 -151 -232 -277 -319 -382 -435 -475

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

but structural reform and market dynamics could restore equilibrium in Phase IV
Source: BNEF (Apr-2013); DPE analysis 68

Regulatory update: EDPR to keep benefiting from a diversified portfolio and flexible business model
Portugal
Decree-Law published in Feb-13 respecting the agreement reached between the wind sector and the government to extend the remuneration framework ; 4MW under construction as of Mar-13 Unilateral decision to eliminate the variable option regime; all assets in Spain under fixed tariff regime from Jan-13 onwards Potential postponement of 1 Green Certificate cash collection (out of 2) for wind (2 GC out of 6 for Solar) Potential reduction to 1.5 Green Certificates for new wind assets (clarification to lead to pipeline optimisation in the country) 28MW under construction as of Mar-13 Enactment of the new RES Law has been suffering delays impacting the Green Certificate market prices and new long-term contracts negotiations ; 54MW under construction as of Mar-13 Italy: 1st renewable tender successfully completed in the 1Q13; EDPR secured 40 MW with a 20-year PPA

Win-win solution and improved visibility EDPR still open to dialogue and find constructive solutions

Spain

Romania

Rights preserved, but potential impact on cash collection

Poland

New Law to potentially solve current price environment

Italy & Brazil

Brazil: Exclusive wind tender announced for Ago-13 with stricter rules benefiting long-term players; EDPR secured 120MW with a 20year PPA PTC extension enabling a favourable environment in the US and new RfP for PPAs being setup; EDPR secured in Apr-13 a 250 MW PPA for operating projects

Long-term visibility for new projects

US

New growth opportunities on the short-term

69

Strategic targets by Principles of Sustainable Development (1/3)

Principle of Sustainable Development Keep the SAM Gold Class Target

2013

EBITDA CAGR 5% per year Net Profit CAGR : low single digit Payout ratio between 55% and 65% of recurrent Net Profit (minimum 0.185 per share) Annual average Operational Investment: EUR 2,000m Total investment on renewable energies: 60% annual average Installed Capacity of 26 GW Clean installed capacity higher than 70% of total installed capacity OPEX savings of EUR 130 m in 2015 Ratio Adjusted Net Debt/EBITDA lower than 3.0x

2011-2015

Economic & Social Value

2012-2015

2015

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Strategic targets by Principles of Sustainable Development (2/3)

Principle of Sustainable Development Goals and Targets Increase 426 MW of installed capacity certified by ISO 14 001 Join the Better Coal international Initiative Eco-efficiency and environmental protection Reduce CO2 specific emissions by 70% until 2020, in comparison with 2008 values 2020

2013

Innovation

Keep the financing in 20m per year

2013-2015

Integrity and Good Governance

Keep the recognition of the World Most Ethical Companies of Ethisphere Institute Revision of EDP's Code of Ethics in 2013 Preparation and launching of new training programmes in 2013/2014 Initiate monitoring the performance of EDP's ethics system (according to Code of Ethics Regulations)

2013-2014

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Strategic targets by Principles of Sustainable Development (3/3)

Principle of Sustainable Development Transparency and dialogue Goals and Targets

Complete the report of GHG emissions, scope 3 Obtain and maintain a corporate certification of the Safety Management System Reduce the frequency of on-duty accidents with EDP employees and service providers by 5%, compared to 2012 Keep the Global Satisfaction level of employees above 80% Implement the action plan of the Diversity Policy between 10 and 15 measures Ensure that ICEIT and EIDC are above the levels set by Regulators

2015

Human Capital and diversity

2013

Acess to energy

2013-2015

Social Development and Citizenship

Increase the number of Volunteering partnerships by 50% Budget allocated to Fundao EDP up to 0.1% of the Group's 2011 turnover

2013-2015

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Models of external evaluation

EDP sustainability practice is evaluated by several external entities that create and maintain sustainability indexes, sustainability ratings and databases. EDP has been evaluated and, as a result, integrates the following indexes/databases or received the following recognitions (list not exhaustive): Corporate Indexes:
Dow Jones Sustainability Index World e Enlarged Dow Jones Sustainability Index Europe FTSE4Good Index Series Bloomberg indexes ESG ECPI Ethical Index Euro ECPI Ethical Index MEU ECPI Ethical Index Global Ethibel Sustainability Index CDLI Carbon Disclosure Leadership Index Storebrand (1) Oekom (1)

Databases:
Asset4 Bloomberg Fortune GS Sustain (Goldman Sachs)

Recognitions:
Prmio Cidadania das Empresas e das Organizaes Portugal Prmio Qualidade de Esprito Santo (PQRS)Brasil

Regional Indexes:
Accountability Rating Iberia ndice de Sustainability Empresarial (ISE) - Portugal ndice de Sustainability Empresarial (ISE)- Brasil
(1) ) New evaluation during 2012. The last one dates were in 2009 and 2011, respectively. More details see www.edp.pt/en/sustentabilidade/abordagemasustentabilidade/ 73

Sustainability Performance of EDP (Core Broad(1))

DJSI - EDP World Top in the Electricity Sector
Top 2

OEKOM - EDP is one of the best in the electricity sector

Top 3

SRI: 8 bn USD

SRI: 90 bn Euros

FTSE4Good Index Series

Top 4

Carbon Disclosure Project Global 500 and CDP Iberia (2) Performance and Score: EDP member of CDLI
120 100 80 60 40 20 0 Absolute Score

B
75 90

A85

B
96

Top 5: CDP Iberia

2009 2010 2011 2012

SRI: 8 bn Euros

SRI: 78 bn USD
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(1) Core SRI - is composed of the following strategies (with possible combinations): Norms- and values/ethical- based exclusions (three or more criteria) Positive screening, including Best-in-Class and SRI thematic funds (2) EDP does not integrate the CDP Global 500 index in 2011, but CDP Iberia

Sustainability and IR Contacts

Sustainability: E-mail: sustentabilidade@edp.pt Investor Relations: E-mail: ir@edp.pt Phone: +351 210012834

Visit EDP Website

Site: www.edp.pt Link Sustainability: http://www.edp.pt/en/sustentabilidade/Pages/ HPSustentabilidade.aspx Link Results & Presentations: http://www.edp.pt/pt/investidores/resultados/Pages/ Resultados.aspx

Next Events
May 21st: Edinburgh (Berenberg) May 21st-22nd: Paris (RBS/KeplerCheuvreux) May 23rd: SRI Conference in Zurich (Berenberg)

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