Fernando RayónPlanning DirectorIstanbul, march 16, 2009

R+D+iin AGBAR Water & Environment

1. Agbar water

2. Innovation in the water sector

3. Agbar Innovation model

4. Conclusions

Index

AGBAR GROUP: Key Figures

AGBAR GROUP has more than 150 companies & approximately 13.700 employees, and gives service to more than 22 million people in 7 countries (*)

2006 2007

2.579 M€1.427 M€1.088 M€

64 M€

2.861 M€1.563 M€1.233 M€

65 M€

(*) New contracts of China and Algeria not included

Exploitation consolidated incomeWater + Corporate holding HealthOthers

InvestmentWater + Corporate holdingHealthOthers

641 M€590 M€50 M€

1 M€

346 M€290 M€55 M€1 M€

2008

3.108 M€1.771 M€1.337 M€

-

570 M€516 M€54 M€

-

AGBAR Water & Environment: Presence in Spain

AGBAR Water & Environment : International presence

1.200+ municipalities served22+ million inhabitants

Spain

Chile

United Kingdom

Colombia

Cuba

Mexico

Argelia

China

MEXICOSaltillo711,000 hab.

COLOMBIACartagena944,000 hab.

CHILESantiago5,941,000 hab.

CUBALa Habana, Varadero1,272,000 hab.

UNITED KINGDOMBristol1,092,000 hab.

SPAIN12,718,000 hab.

ARGELIAOran1,630,000 hab.

CHINA

Responsibility levels:• Infrastructure ownership• Concessions• Public/Private ownership• Management Contracts

Different needs

Scope of management:Integral cycle vs. specific contracts

DifferentLegal Frameworks

AGBAR Water & Environment: Flexibility & adaptability

Different solutions

Agbar is the leader private operator in the urban water cycle management in Spain & one of the leading groups in the world.

Water Disposal

Waterregeneration & reuse

WastewaterTreatment

DrainageDrinking Water

Transport & storage

Drinking WaterTreatment

Raw watercollection

Water Resourcesmanagement

Drinking Water Distribution

AGBAR Water & Environment: Activities

A good moment to innovate

A Sector in transition

WaterDemand

management

Water newparadigm

New & strongerrequirements from

users

Climatechange

Efficiency (resourcemanagement &

service provision)Price – costrelationship

INN

OVA

TION

THE INNOVATION IN THE WATER SECTOR:A good moment to innovate

The technological changes can help improve

the services for millions of people.

World Water Council

Ricardo Fornesa, Honour President of Agbar Group

The water technology revolution

is still to come

THE INNOVATION IN THE WATER SECTOR:Innovation & social responsability

There are only two kinds of competitiveadvantage: low price or differentiation.

Only the companies with an strategy oncompetitive advantage will be able tosurvive.

THE INNOVATION IN THE WATER SECTOR:Competitive advantage

PublicAdministration

Operators:

No competition

Otheroperators

Price

Competitive strategy:

THE INNOVATION IN THE WATER SECTOR: Competitive strategy

Differentiation - Service

TechnologyQuality

CreativityInnovation

Presentations by private operators in the AEAS 2007 Conference

Veolia

Aguas deValencia

113

11

1

AqualiaAigües deCastellbisbal

NOTE: Public sector (Aigües Ter Llobregat, Cassa, Emasesa, Emasa, Emacsa, Canal Isabel II, etc.): 13 lectures.

AGBAR INNOVATION MODEL:Presentations

Contributing

Co-operating

Results sharing

AGBAR INNOVATION MODEL: Global technology network

National & local water Public AdministrationResearch centresSupport platforms & Funding programs

PublicAdministration

Sound knowledgeOrientation to the productive sectorObjetives & deadlines

University

AGBAR INNOVATION MODEL: Public Administration-University-Company integration:

an engine for innovation

From responsibility to actionOperational visionA platform to export

R+D+i AGBAR

Partnership withcompanies

Anual budget: 8 M€

Partnership withUniversities

Professorships (2) Agreements (7) Grants (18)….

PartnershipAdministration

CENIT program: SOSTAQUA (25M€, 16 companies, 12 Public

Researchentities (OPI)

Partnership withTechnology

networks

I

AGBAR INNOVATION MODEL:CETaqua

Portfolio of projects for 2008-2010 worth over M9 € in direct supervision and managed more than M22 € in total investment together with other partners.

Annual budget in 2008 of M5 €

A team of 50 people working full time and over 100 experts made available by the operating companies of the Agbar group.

AGBAR INNOVATION MODEL:CETaqua: Key Figures

Alternative resources

Impact of global change

Eficient management of infraestructures

Environment and health

Water & energy

Management of the demand for water

R+i Alliance

CDTI

CDTI

LIFE (CE)

7PM (CE)

FUN

DIN

G P

RO

GR

AM

E

ACC1Ó (CIDEM)

Water vector Waste vector Health & Env vector

Watervector

OTHER PROJECTS OWN FUNDING

L1 L2 L3 L4 L5 L6

Vector ResiduosVector Energía

2008 (k€)

TOTAL (K€)

324.48

1 267.13

446.99

1 997.35

344.23

418.75

895.50

2 253.24

366.45

1 965.70

317.53

1 074.29

<100K€ 100-500K€ 500-1 000K€ >1 000K€

RASA CSACAHUCA HYDROGEN COPSA

WR0805AM0801AM0702

ORGANOLEPTICODOUR-WWTP

Activity6d

IMPRINTS

PROFUREDQUALITAX

MODPLANT

Activity6 a/b/c

OPTIMECA

WR0801WR0802

SW0801SW0802EN0804

WATERCHANGE

EN0803EN0802SL0801SL0802

BIOCELL

WR0807OD0801SL0804HE0802HE0607

WD0803WD0806WD0801WD0807

MARN VIECO

CETaqua: Lines of research in detailSummary table

• R+i Alliance is a company established in Paris (France).

• Company members: - Suez Environment- Lyonnaise des Eaux- United Water- Northumbrian Water- Agbar

• Mission: select, finance & coordinate the execution of investigation & innovation projects ofcommon interests for the company members.

• Objetive: Join efforts (resources) & share common objectives in R+D+i in the scope of water. Increase the economies of scale & the synergies.

• Initial priority lines:Line 1:Asset management Line 6: Sludge managementLine 2:Control of odours Line 7: Water & healthLine 3: Energy efficiency Line 8: Demand managementLine 4: Metering Line 9: Water resources managementLine 5: Stormwater management

R&DAlliance

NWL UW

Agbar LDEF

SE

R&DAlliance

NWL UW

Agbar LDEF

SE

AGBAR INNOVATION MODEL:R+I Alliance

Conclusions:

• To improve efficiency and meet emerging requirements, the water sector is in need of innovation

• As a world class water management Group, Agbar has the responsibility to innovate

• Agbar makes innovation to be its best competitive advantage

• Distributed innovation model in AGBAR is based on partnership (Administration, Universities, Companies) and internationalisation.

Fernando RayónPlanning DirectorIstanbul, march 16, 2009

R+D+iin AGBAR Water & Environment