President Bachelet unveils the foundation stone for the first run-of-river hydro project to be developed in the Cachapoal Valley in over 20 years.

Construction of infrastructure in the valley started in March 2008. A key milestone during the year was the Corema Region VI approval of the EIA for the first project, Chacayes, in August 2008.

Chacayes will be the first of five plants that Pacific Hydro Chile plans to develop and deliver in the Alto Cachapoal Valley that together will provide an expected 560MW of clean, renewable and environmentally sustainable energy.

Machali, October 8th 2008 - In the presence of the President of the Republic, Michelle Bachelet; and Minister of Energy, Marcelo Tokman, Australian company Pacific Hydro installed a commemoration stone to mark commencement of works projects in Chacayes, in Alto Cachapoal Valley in VIth Region.

The first of these projects, Chacayes, is in final stages of development and financing before the EPC Contract commences later in 2008. It is expected to be in operation by 2011 and have an installed capacity of 111MW.

In the peak of construction the project will generate 4,000 direct and indirect jobs in the region. Pacific Hydro has already commenced on the advance works of Chacayes with the Italian-Chilean Consortium Astaldi-Fe Grande. The company is looking forward to a long and mutually beneficial partnership with them for the further development of the Alto Cachapoal Valley.

"The Cachapoal Valley is a very important business opportunity for Pacific Hydro. It is a further commitment by the company to developing renewable energy in Region VI in which it already has to two hydroelectric run-of-river projects in the Tinguiririca Valley, in joint venture, and Pacific Hydro acquisition of the Coya & Pangal plants from CODELCO in 2004. The commitment to the Cachapoal Valley demonstrates our company's confidence in the Chilean power market", said Rob Grant, CEO of Pacific Hydro.

During the ceremony, the Minister of Energy, Marcelo Tokman, said the construction of Chacayes is excellent news for the Interconnected Central System, because in 3 years time it will be providing 111MW of our own clean energy to the system.

"This project, as La Higuera and La Confluencia, takes the advantage from our main resource, the water, that will help us to count with a supply that will not depend on fluctuations of the international prices and on what happens with the external suppliers", commented Tokman.

The Minister also said that "Chacayes leave us a learning: the value of anticipation and disposition to look for solutions that combine the energetic development and the care for environment in a suitable way".

The General Manager of Pacific Hydro Chile, José Antonio Valdés, "the installation of the commemoration stone of Chacayes is a very important milestone for the company and reaffirms our long-term commitment to the sustainable development of Chile.

The establishment of the infrastructure for the development of the valley demonstrates our commitment to moving forward with Chacayes and four other run-of-river hydro plants in the same area, which in total will provide around 560MW of renewable and environmentally friendly energy to the Central Interconnected System".

Pacific Hydro Chile's projects

Pacific Hydro started in Chile in 2002 and acquired 76MW of assets in Coya and Pangal in 2004. From 2005 Pacific Hydro successfully completed Greenfield projects, one 60MW project in Region V and has another two projects in construction in the Tinguriirica Valley with its Joint Venture partner, SN Power of Norway.

Today Pacific Hydro has launched its plans to build five run-of-river hydropower plants in Alto Cachapoal Valley: Chacayes, Nido de Águilas, Las Leñas, Las Maravillas and Coya II, which together will provide around 560MW of clean, renewable energy to the country.

The company already has advanced engineering studies for its second project, Nido de Aguilas and Las Leñas, which will have an installed capacity of 282MW and whose Environmental Impact Study will be presented at the end of the year and be operational in 2013.

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Pacific Hydro is Australia's leading renewable energy company and currently boasts more than 1,800MW of hydroelectric and wind farm projects at varying stages of development, construction and operation in Australia, Latin America and the Asia Pacific.

With a policy of not building any new dams, all our hydro projects have made use of either existing irrigation dams or run-of-water flows, while our wind projects have been sensitive to the existing farming environment and communities of our sites.

A series of small-scale Victorian hydro projects were followed by our award-winning 30MW Ord River Hydro project in 1995. It was a development others had assessed, but failed to capitalize on, and an opportunity we seized upon to build on our experience and portfolio.

The next logical step was our first international development, which got under way in 1997 when we signed a joint venture agreement with Aboitiz Equity Ventures for a 70MW hydro project on the Bakun River in the Philippines. The US$150 million development remains the largest infrastructure project ever built in the Philippines by an Australian company.

In 2001, we diversified into wind energy, the world's fastest growing energy source, with completion of the first privately developed wind farm in Australia: the Codrington Wind Farm in southwest Victoria. We currently have more than 1,000MW of wind projects at various stages of development including the significant Challicum Hills Wind Farm and Portland Wind Project.

In 2004, Pacific Hydro acquired the Chilean Coya and Pangal hydro plants. The acquisition was an attractive investment, diversifying our international hydro portfolio as well as complementing our existing development activity in Chile.

More recently Pacific Hydro moved into the Brazilian market with the acquisition of SES Ltda in 2007. This acquisition followed the Brazilian government's announcement to increase renewable energy to 20 per cent by 2020. While the Brazilian market is currently hydro-dominated it has excellent wind resources like Australia and Pacific Hydro plans to develop over 300MW of wind energy there.

Pacific Hydro was purchased by IFM Renewable Energy under the control of Industry Funds Services Pty Ltd (IFS) in 2005. IFS is an Australian organization that was established in 1994 to provide a range of services and products to industry superannuation funds and their members, and with their backing we're looking forward to taking our company to the next level.

With more than A$4 billion of new hydroelectric and wind farm projects planned for development across Australia, Latin America, North America and the Asia-Pacific over the next five years our projects will continue to reward investors, safeguard the environment and support local communities.

Pacific Hydro has approximately 350MW of operating assets, which includes winds and hydro projects in Australia, Fiji, Philippines, Chile and Brasil.