Bolivia

Rurelec's Bolivian subsidiary, Empresa Electrica Guaracachi, S.A. ("Guaracachi"), has excellent relations with the Bolivian Government, not only as the largest power producer in the country but also as the single largest investor in new generation capacity under the presidency of Evo Morales.

Bolivian on grid power demand has been growing at over 10 per cent, whilst GDP in 2008 is expected to grow by 5.3 per cent., its highest level since 1991. This should ensure continued strong growth in demand for electricity. The country has the second highest proven reserves of natural gas in Latin America and this provides a secure source of fuel for Rurelec's Bolivian operations.

The electricity situation has previously been finely balanced and Bolivia would have run out of reserve capacity in 2007 without the 79 MW commissioned by Rurelec in that year. Going forward, the company is very well placed to continue to deliver the energy required to supply Bolivia's economic growth. Capacity is set to increase at both the Santa Cruz and the Aranjuez plants. At Santa Cruz the conversion to CCGT will qualify for carbon credits under the Kyoto Protocol, thereby providing increased revenue as well as extra capacity.