Investors’ BriefingInvestors’ Briefing

08 March 200708 March 2007

2

FY 2006 EXECUTIVE SUMMARYFY 2006 EXECUTIVE SUMMARYFIRST GEN DELIVERED GROWTH AND EXTRACTED MORE VALUE FIRST GEN DELIVERED GROWTH AND EXTRACTED MORE VALUE FROM ITS ASSETS WITH THE RESOLUTION OF THE DISPUTES IN FROM ITS ASSETS WITH THE RESOLUTION OF THE DISPUTES IN 2006. THIS LED TO INCREASED NET INCOME OF US$92 MILLION.2006. THIS LED TO INCREASED NET INCOME OF US$92 MILLION.

Net Income Attributable to Parent(US$ million)

Revenue(US$ million)

Recurring Net Income (US$ million)

992 164 (20% )

828

92 90

87 825 (6% ) 8 (10% )

‘05 ‘06 ‘05 ‘06 ‘05 ‘06

Highlights for 2006 are:

• First Gen Initial Public Offering (“IPO”)• Resolutions of both the Gas Dispute and the Siemens Dispute• 112MW Pantabangan/Masiway Hydroelectric Complex (“PMHC”) acquisition and

turnover• The extension of Santa Rita’s Income Tax Holiday (“ITH”)

3

FY 2006 EXECUTIVE SUMMARYFY 2006 EXECUTIVE SUMMARYFIRST GEN’S FIVE POWER PLANT PORTFOLIO CONTINUES TO FIRST GEN’S FIVE POWER PLANT PORTFOLIO CONTINUES TO DELIVER STRONG CASH FLOWSDELIVER STRONG CASH FLOWS

Santa Rita

San Lorenzo

PMHC^ Agusan Bauang*

Revenues 678 331 13 1 53

47

23

8

EBITDA 172 88 11 0

Net Income

92 48 6 0

Net Income to First Gen

55 29 6 0

(in US$ MM)

CONTRIBUTION TO FGEN NET INCOME

Santa Rita60%

San Lorenzo32%

PMHC7%

Others1%

^PMHC, started commercial operations only on 18 Nov 06.*Bauang is an affiliate and therefore not consolidated into First Gen.

4

FY 2006 Financial and Operating HighlightsFY 2006 Financial and Operating Highlights

Outlook for 2007Outlook for 2007

Growth PlansGrowth Plans

Q&AQ&A

5

FY 2006 MAJOR DEVELOPMENTSFY 2006 MAJOR DEVELOPMENTSTHE YEAR WAS HIGHLIGHTED BY THE COMPANY’S IPO AND THE THE YEAR WAS HIGHLIGHTED BY THE COMPANY’S IPO AND THE SUBSEQUENT RESOLUTION OF ITS LEGAL DISPUTESSUBSEQUENT RESOLUTION OF ITS LEGAL DISPUTES

Key Areas Major Developments

First Gen IPO

Successful Fundraising amidst market uncertainties• Raised $186 million (gross) from the listing of 24% of its outstanding common shares on the

Philippine Stock Exchange• 80% foreign and 20% local take-up

Legal Proceedings

Final resolution of the Siemens dispute• The tribunal ruled that Santa Rita is entitled to the US$94.2 million previously withheld• Siemens made an additional net payment to Santa Rita of $10.5 million in respect of all other

claims, counterclaims, interest and costs of the arbitration–Receivables from Siemens of US$6.7 million was reversed.–Remaining US$3.8 million booked as extraordinary income

• Used US$88.0 million to reduce outstanding debt

Resolution of the dispute with the gas sellers• Santa Rita and San Lorenzo’s US$231 million gas take-or-pay obligation reduced to US$135

million; net amount payable on a quarterly basis until 2009.• Total principal and interest payments made during the year amounted to US$77.3 million• Gas take-or-pay consumption extended until 2014.• All Gas take-or-pay obligations are a full pass-through to Meralco.

6

FY 2006 MAJOR DEVELOPMENTSFY 2006 MAJOR DEVELOPMENTSTHE YEAR WAS ALSO HIGHLIGHTED BY THE ACQUISITION AND THE YEAR WAS ALSO HIGHLIGHTED BY THE ACQUISITION AND TURNOVER OF PMHC AND THE EXTENSION OF SANTA RITA’S ITH TURNOVER OF PMHC AND THE EXTENSION OF SANTA RITA’S ITH TO MAY 2007TO MAY 2007

Key Areas Major Developments

PMHCAcquisition and Turnover

Successful turnover and operation of PMHC• First Gen successfully bid for the plant on 08 Sept 06 at US$129 million• PMHC was turned over on 18 Nov 06• Net income of $6 million in less than two months

Santa Rita ITH Extension

Extended the ITH for another year• Santa Rita saved some US$23 million in income tax payments (for seven months) as a result of the

extension• Santa Rita’s ITH to expire in May 2007 (savings of US$16.5 million this year)

7

FY 2006 MOVEMENTS IN KEY VALUE DRIVERSFY 2006 MOVEMENTS IN KEY VALUE DRIVERSTHE GAS PLANTS BOAST OF THE HIGHEST DISPATCH RATES THE GAS PLANTS BOAST OF THE HIGHEST DISPATCH RATES FOR 2006 IN THE LUZON GRIDFOR 2006 IN THE LUZON GRID

Sta. Rita998

’05 ‘06

995958Guarantee

503

’05 ‘06

498487Guarantee

77%

’05 ‘06

81%

77%

’05 ‘06

81%

Target ‘06

90%97%

Target ‘06

94%100%

90% 96%

Target ‘06

94% 99%

Target ‘06

The highest in the Luzon Grid

Value Drivers

Santa Rita

San Lorenzo

Dispatch Availability ReliabilityNDC

8

FY 2006 MOVEMENTS IN KEY VALUE DRIVERSFY 2006 MOVEMENTS IN KEY VALUE DRIVERSPMHC’S CAPACITY UTILIZATION WAS 72% SINCE TAKEOVER PMHC’S CAPACITY UTILIZATION WAS 72% SINCE TAKEOVER AND BAUANG’S DISPATCH INCREASED TO 8%AND BAUANG’S DISPATCH INCREASED TO 8%

238

’05 ‘06

215Guarantee

112

’05 ‘06

102

’05 ‘06

72%

n/a

97% 96%

Target ‘06

Target ‘06

90%97%

Target ‘06

94%100%

23896% 96%

Target ‘06

2%

’05 ‘06

8%

Value Drivers

PMHC

Bauang

NDC Dispatch Availability Reliability

9

FY 2006 GROWTH INITIATIVESFY 2006 GROWTH INITIATIVESFIRST GEN PURSUED SEVERAL OTHER GROWTH INITIATIVES IN FIRST GEN PURSUED SEVERAL OTHER GROWTH INITIATIVES IN 20062006

Growth Initiative Major Steps

PSALM Assets First Gen bid for the 360MW Magat Hydroelectric Plant. The Company’s bid price was US$420 million in contrast to AEV’s, the highest bidder, US$530 million – a 26% premium.Earlier in the year, the Company was also a bidder in the 600MW Calaca privatization. Our bid at US$176 million was about US$16 million higher than DMCI’s, one of the plant’s coal suppliers. Both bids, however, did not meet the reserve price.

Private Acquisitions First Gen formed a consortium with TEPCO and Marubeni for the purchase of Mirant’s Philippine assets. The Company, however, chose not to participate prior to the bid submission.

–First Gen was invited by the consortium to be part of the 400MW Pagbilao expansion

550MW San Gabriel Power Plant

The ability to successfully develop San Gabriel hinges on the commitment of the Gas Sellers to provide additional supply. The ball is in the Gas Seller’s court.

10

FY 2006 RESULTS OF OPERATIONSFY 2006 RESULTS OF OPERATIONSREVENUE GROWTH WAS ATTRIBUTABLE TO THE ACQUISITION OF PMHC REVENUE GROWTH WAS ATTRIBUTABLE TO THE ACQUISITION OF PMHC AND SURGING FUEL PRICES; PASSAND SURGING FUEL PRICES; PASS--THROUGH NATURE OF THE FUEL THROUGH NATURE OF THE FUEL COMPONENT RESULTED TO AN INCREASE IN OPERATING COSTS AND COMPONENT RESULTED TO AN INCREASE IN OPERATING COSTS AND EXPENSES AS WELLEXPENSES AS WELL

Revenues (US$ million)

Operating Costs & Expenses(US$ million)

992 164 (20% )

828 790148 (23% )

642

‘05 ‘06 ‘05 ‘06Increase is mainly due to:Increase is mainly due to:• Improvement in dispatch of 4%, and

higher fuel charges due to prices in the world market

• Higher O&M expenses due to higher dispatch

156

3

• Lower administrative expenses

• Lower depreciation expenses

(8)

(3)

TOTAL 148

• Higher fuel charges reflecting global prices and improvement in dispatch by 4%

160

• Addition of PMHC revenues 13

• Reduction in sales tax charge (9)

TOTAL 164

* From US$6.82/GJ for SR and US$6.90 for SL in 2005 to US$8.35/GJ in 2006

11

FY 2006 RESULTS OF OPERATIONSFY 2006 RESULTS OF OPERATIONSINCREASE IN EBITDA MAINLY DUE TO PMHC AND SAVINGS IN INCREASE IN EBITDA MAINLY DUE TO PMHC AND SAVINGS IN ADMINISTRATIVE EXPENSES. THE DECREASE IN INTEREST ADMINISTRATIVE EXPENSES. THE DECREASE IN INTEREST EXPENSES RESULTED IN IMPROVED NET INCOME.EXPENSES RESULTED IN IMPROVED NET INCOME.

EBITDA*(US$ million)

Net Income Attributable to Parent(US$ million)

261273 12(5% )

8792

5 (6% )

‘05 ‘06 ‘05 ‘06Increase is mainly due to:Increase is mainly due to:• Increase in EBITDA 12

• Decrease in interest expense - net 8

• Increase in taxes (20)

• Decrease in depreciation 3

• Others 2

TOTAL 5

• Increase in revenues

• Higher fuel and O&M expenses

• Lower administrative expenses

164

(159)

8

• Others (1)

TOTAL 12

* Includes equity in net earnings & other income (charges)

12

FY 2006 CASH FLOWSFY 2006 CASH FLOWSFURTHER INCREASES IN FREE CASH FLOW DUE TO FREED UP FURTHER INCREASES IN FREE CASH FLOW DUE TO FREED UP CASH FROM OPERATIONS AND HIGHER INTEREST INCOMECASH FROM OPERATIONS AND HIGHER INTEREST INCOME

Free Cash Flow*(US$ million)

Movements in Cash and Cash Equivalents(US$ million)

294

167229 65(28% )

‘05 ‘06Increase is mainly due to:• Increase in cash EBIT 13

• Decrease in working capital 32

• Increase in interest income 15

• Decrease in non-current assets 6

• Others (1)

TOTAL 65

* Net cash from operations – net cash used in investing activities –effects of forex on cash and cash equivalents

302

294

Dec 05 FCF IPO

52

Decrease in cash from financing activities

Dec 06

252

PMHCPurchase

459

13

FY 2006 FINANCIAL RATIOSFY 2006 FINANCIAL RATIOSIMPROVED RATIOS REFLECT FIRST GEN’S STRONG FINANCIAL IMPROVED RATIOS REFLECT FIRST GEN’S STRONG FINANCIAL POSITIONPOSITION

Key Ratios

US$446M

US$266M

‘05

‘06

8.9x

10.0x‘06Price-to-Earnings Ratio**

Net Debt

‘05

Debt-to-Total Equity Ratio* 1.6x

1.0x

‘05

‘06

US$0.109

US$0.118‘06Earnings per share

‘05

*Equity includes minority interest**FGEN price used is P47.00 (as of 31 Dec 05)

2.9x

2.7x

‘05

‘06 4.3x‘06Debt-to-EBITDA

EV-to-EBITDA 3.5x‘05

14

FY 2006 FINANCIAL CONDITIONFY 2006 FINANCIAL CONDITIONTHE DEBT LEVEL DECREASED DUE TO TIMELY AND CONTINUED THE DEBT LEVEL DECREASED DUE TO TIMELY AND CONTINUED PAYMENT OF PROJECT FINANCE DEBT DESPITE NEW PAYMENT OF PROJECT FINANCE DEBT DESPITE NEW BORROWINGS FOR THE RECENTLY ACQUIRED PMHCBORROWINGS FOR THE RECENTLY ACQUIRED PMHC

Net Debt-to-Total Equity Ratio*Consolidated Debt as of end-2006 *(US$ million)

Project Debt

1.0x

0.4x

‘05

‘06

‘05 ‘06

655

748

93

Parent company debt724

570

624

100100

’07F**

470

* Equity includes minority interest; net debt pertains to bank debts only less cash and cash equivalents.

• As of Dec. 06, First Gen has paid a total of US$359m of project financed debt at the Santa Rita & San Lorenzo.

• First Gen took took on new debt of US$77.4 million for PMHC

*Current and Long-term portion**Assuming no acquisitions and no PMHC refinancing

15

FY 2006 Financial and Operating HighlightsFY 2006 Financial and Operating Highlights

Outlook for 2007Outlook for 2007

Growth PlansGrowth Plans

Q&AQ&A

16

OPERATIONSOPERATIONSPMHC WILL DELIVER A FULL YEAR OF OPERATIONS IN 2007 AND PMHC WILL DELIVER A FULL YEAR OF OPERATIONS IN 2007 AND IS OPTIMISTIC THAT IT WILL GET AN ITH IS OPTIMISTIC THAT IT WILL GET AN ITH

Full Year of PMHC

Dependable Capacity

Pantabangan – 100MW, Masiway – 12MW

Location Nueva Ecija Province (~180km. north of Metro Manila)

Land area Pantabangan – 8.4 ha.Masiway – 3.1 ha.

Age Pantabangan - 29 yearsMasiway – 25 years

With Contract? Generally bid out as a merchant plant with some ~60MW of TSCs attached

Reservoir 3 billion cubic meters

Original Equipment Manufacturer

Pantabangan – MitsubishiMasiway – Toshiba12MW Masiway

(Nueva Ecija)

100MW Pantabangan(Nueva Ecija)

17

OPERATIONSOPERATIONSPMHC BOASTS OF VARIOUS OPERATING CAPABILITIES THAT PMHC BOASTS OF VARIOUS OPERATING CAPABILITIES THAT WILL ALLOW IT TO MAXIMIZE INCOMEWILL ALLOW IT TO MAXIMIZE INCOME

PMHC Competitive Edge

Reservoir size vs. Inflows At 3 billion cubic meters, the Pantabangan reservoir can adequately store annual water inflows (1.8-2.0 billion cubic meters) providing better control over water release, which minimizes spillage

Flexible Operations Can start up in 10 minutes and reach full load in 1 minute; is able to provide the whole range of ancillary services and can readily disengage from the grid when power prices are low and re-engage when power rates are high. Low minimum stable load of 5MW per unit.

Low variable cost Minimal water fees make PMHC one of the lowest variable cost plants in the system today

Low sedimentation Projected useful life of the reservoir is 110 years (up to 2084)

Operating History 100% reliability and >95% availability in recent years

GIVEN THE SIZE OF PMHC’S RESERVOIR AND ITS FLEXIBLE OPERATING PARAMETERS, THERE ARE OPPORTUNITIES FOR EXPANSION

18

OPERATIONSOPERATIONSWHILE PANTABANGAN CAN OPTIMIZE TO RUN AT PEAK, THE WHILE PANTABANGAN CAN OPTIMIZE TO RUN AT PEAK, THE SMALLER MASIWAY WILL NEED TO SERVE CONSTANT SMALLER MASIWAY WILL NEED TO SERVE CONSTANT IRRIGATION NEEDSIRRIGATION NEEDS

PMHC Competitive Edge

Casecnan HEPRun-of-River fromCasecnan River

150MW

Pantabangan HEP2x50MW

Masiway HEP1x12MW

PantabanganReservoir Dam26km Tunnel

Max. Operating Level = 221masl

Min. Operating Level = 170masl

Max. Operating Level = 129masl

Min. Operating Level = 126.5 masl

Storage capacity: 3BCM

Masiway Reservoir

Storage capacity: 6MCM

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Can program generation during peak hours

19

FINANCEFINANCEPMHC IS LOOKING AT PREPAYING ITS US$77.4 MILLION DEBT TO PMHC IS LOOKING AT PREPAYING ITS US$77.4 MILLION DEBT TO PSALM WHICH WILL LESSEN THE PLANT’S INTEREST EXPENSE PSALM WHICH WILL LESSEN THE PLANT’S INTEREST EXPENSE IN THE PROCESSIN THE PROCESS

Refinancing PMHC

FIRST GEN HYDRO POWER CORPORATION

US$77.4 million

US$77.4 million

Terms of PSALM Financing

Currency: USDRate: 12% 2007 Interest Expense: US$9.1 million (~P437.9 million)

20

POWER AUGMENTATION FOR SANTA RITA AND SAN LORENZOPOWER AUGMENTATION FOR SANTA RITA AND SAN LORENZOFIRST GEN WILL ENJOY THE FULL EFFECTS OF INCREASE IN FIRST GEN WILL ENJOY THE FULL EFFECTS OF INCREASE IN 48MW VIA INLET AIR COOLING TECHNOLOGY IN 200748MW VIA INLET AIR COOLING TECHNOLOGY IN 2007

Improvements to Existing Power Generation Facilities

Total Capacity Additions 32.6MW for Santa Rita15.8MW for San Lorenzo48.4MW in total

Nature of improvement Water is evaporated or sprayed into the inlet air duct of the gas turbine to cool the inlet air and increase the gas turbine mass flow, thereby increasing the unit output. The impact on Net Heat Rate is negligible.

Implementation Date Santa Rita full implementation 23 Jan 07San Lorenzo full implementation 14 Nov 06

Estimated Cost US$3.0 million for both Santa Rita and San Lorenzo.

Financing Internally generated funds

Estimated Impact to FGEN’snet income

~US$3.1 million

21

POWER AUGMENTATION FOR SANTA RITA AND SAN LORENZOPOWER AUGMENTATION FOR SANTA RITA AND SAN LORENZOFIRST GEN IS IN THE PROCESS OF INSTALLING THE COMPRESSOR FIRST GEN IS IN THE PROCESS OF INSTALLING THE COMPRESSOR BLADE UPGRADES IN LINE WITH ITS MAJOR OVERHAUL PROGRAM THIS BLADE UPGRADES IN LINE WITH ITS MAJOR OVERHAUL PROGRAM THIS YEAR, WHICH IS EXPECTED TO BOOST NDC BY ANOTHER 27MWYEAR, WHICH IS EXPECTED TO BOOST NDC BY ANOTHER 27MW

Improvements to Existing Power Generation Facilities

Total Capacity Additions

At least 18MW for Santa Rita At least 9MW for San Lorenzo27MW in total

Nature of improvement

Widely-used, proven technology to increase the generating capacity of Santa Rita and San Lorenzo. The new compressor blades will increase the air mass flow thus improving the efficiency of the compressor, resulting in an increased gas turbine power output.

Estimated Installation Date

Santa Rita - Feb to July 07San Lorenzo – Oct to Nov 07

Estimated Cost US$10.0 million for both Santa Rita and San Lorenzo.

Financing Internally generated funds

22

OTHERSOTHERSSANTA RITA RECENTLY PREPAID DEBT OF US$84 MILLION. SAN SANTA RITA RECENTLY PREPAID DEBT OF US$84 MILLION. SAN LORENZO RECEIVED INSURANCE CLAIMS OF US$4.7 MILLION.LORENZO RECEIVED INSURANCE CLAIMS OF US$4.7 MILLION.

Debt Prepayment Insurance Claims

Project San Lorenzo

Insurance Claims US$4.8 million

When Feb 2007

Project Santa Rita

Prepayment Amount

Principal - US$84.4 millionInterest – US$1.8 millionBreakfunding costs – US$1.4 million

When Feb 2007

Interest Expense Savings(2007)

US$6.0 million

Ave. Interest Expense Savings

US$1.7 million

23

ACQUISITIONSACQUISITIONSFIRST GEN WILL CONTINUE TO BE ACTIVE IN THE EXPLORATION FIRST GEN WILL CONTINUE TO BE ACTIVE IN THE EXPLORATION OF GROWTH OPPORTUNITIES THROUGH THE PSALM OF GROWTH OPPORTUNITIES THROUGH THE PSALM PRIVATIZATION / PRIVATE ACQUISITIONSPRIVATIZATION / PRIVATE ACQUISITIONS

Expected Privatization for 2007Expected Privatization for 2007

600MW Calaca(Batangas)

Coal

600MW Masinloc(Zambales)

Geothermal

192.5MW Palinpinon(Negros Oriental )

100MW Binga(Benguet)

75MW Ambuklao(Benguet)

Hydro

246MW Angat(Bulacan)

200MW Manila(Manila)

Decommissioned

24

FY 2006 Financial and Operating HighlightsFY 2006 Financial and Operating Highlights

Outlook for 2007Outlook for 2007

Growth PlansGrowth Plans

Q&AQ&A

25

HYDROHYDROAFTER JUST WINNING PMHC,AFTER JUST WINNING PMHC, A CAPACITY UPGRADE AND A CAPACITY UPGRADE AND EXPANSION OF 109MW IS ALREADY IN THE WORKSEXPANSION OF 109MW IS ALREADY IN THE WORKS

Hydropower Expansion

Capacity Upgrade Pantabangan - 30MWMasiway – 1MWTotal – 31MW

Target Delivery Date

Pantabangan Unit 1 – Dec 2008Pantabangan Unit 2 – Dec 2009Masiway – Dec 2008

Technology Pantabangan: Full rehabilitation of existing electromechanical components to extend the plant’s life by 25 years and to enhance its reliability. Masiway: Modernization of overall control system and its integration with PMHC’s control system, testing and calibration of all recording and indicating instruments, and some turbine adjustments to increase output

Cost US$25 million

Capacity Expansion

Pantabangan - 65MWMasiway – 13MWTotal – 78MW

Target Delivery Date

June 2010

Technology Pantabangan: Exploring the feasibility of one additional Francis turbine

Masiway: Exploring the feasibility of one additional Kaplan turbine

Cost US$600,000/MW

26

MINIMINI--HYDROHYDROFIRST GEN IS IN THE PROCESS OF CONDUCTING STUDIES FOR FIRST GEN IS IN THE PROCESS OF CONDUCTING STUDIES FOR POSSIBLE HYDRO PLANTS IN THE ISLAND OF PANAY AND IN POSSIBLE HYDRO PLANTS IN THE ISLAND OF PANAY AND IN MINDANAOMINDANAO

Hydro Greenfield Development

Dependable Capacity

Up to 170 MW(12 projects)

Location Island of Panay, Misamis Oriental, Bukidnon, and Agusan del Norte

Technology Run-of-river mini-hydro

Potential Customers

Various A+/A electric cooperatives and nearby distribution utilities

Estimated Start of Commercial Operations

2011 / 2012

27

COALCOALTOGETHER WITH DMCI, FIRST GEN IS DEVELOPING A 100MW TOGETHER WITH DMCI, FIRST GEN IS DEVELOPING A 100MW CIRCULATING FLUIDIZED BED (“CFB”) COAL PLANT IN PANAYCIRCULATING FLUIDIZED BED (“CFB”) COAL PLANT IN PANAY

Entrance to Coal

Dependable Capacity

100MW (2 x 50MW)

Location Concepcion, Iloilo

Technology CFB is viewed as “clean coal technology” in terms of air emissions

Dispatch Baseload

Customers West grid (Antique), South grid (Iloilo City) and the North grid (Capiz and Aklan)

Fuel possibly, Semirara Coal

Iloilo City

Site

Semirara

28

NATURAL GASNATURAL GASFIRST GEN IS CONSIDERING BUILDING THEFIRST GEN IS CONSIDERING BUILDING THE 550MW SAN GABRIEL 550MW SAN GABRIEL PROJECT IN PHASES OF 275MW EACH PROJECT IN PHASES OF 275MW EACH

Natural Gas Expansion

Green Bay Boundary

FGHC PropertiesFGHC Corp. PropertiesFGPC Properties

Legend:

Proposed San Gabriel

site

Dependable Capacity

550MW

Location Santa Rita, Batangas

Technology Combined cycle

Dispatch Baseload

Cost US$400 million

Fuel Malampaya gas and/or LNG

29

FY 2006 Financial and Operating HighlightsFY 2006 Financial and Operating Highlights

Outlook for 2007Outlook for 2007

Growth PlansGrowth Plans

Q&AQ&A

30

END OF PRESENTATIONEND OF PRESENTATION

visit us at visit us at www.firstgen.com.phwww.firstgen.com.ph