EDP

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RelatóRio e Contas 2009 annual report 2009 Caderno InstItuCIonal, do Governo da soCIedade e de sustentabIlIdade

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Mother earth is the source of all our energy. For her sake, we believe that the future is generating cleaner energy. For her sake, we are at the cutting edge of sustainable development. For her sake, we use the most advanced technologies. For her sake, we are so close to nature. For her sake, we are us. all we need is earth

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annual report 2009 index edp 7 10 11 12 14 18 22 MessaGe to sHareHolders vIsIon, CoMMItMents and values edp In tHe world CoMpanY HIGHlIGHts edp Corporate bodIes suMMarY oF KeY MetrICs strateGIC aGenda 90 95 107 123 128 131 136 corporate governance report stateMent oF CoMplIanCe Corporate GovernanCe struCture FunCtIonal struCture oF edp sHareHolder struCture and eXerCIse oF sHareHolder posItIons reMuneratIon tHe edp sHare and dIvIdend polICY relatIons between tHe CoMpanY and tHe MarKet business 26 28 36 orGanIzatIonal struCture busIness FraMeworK suMMarY oF aCtIvItIes 140 145 financial report FInanCIal analYsIs FInanCIal stateMents and notes contribution to sustainability 52 54 57 59 61 67 74 76 82 reCoGnItIon Corporate approaCH r&d and InnovatIon edp CoMMunICatIon eMploYees CustoMers supplIers CoMMunItY envIronMental perForManCe 242 243 244 248 258 annexes aCKnowledGeMents proposal For tHe approprIatIon oF proFIts GrI CoMplIanCe eXternal CHeCKs eXtraCt FroM tHe MInutes oF tHe General MeetInG oF sHareHolders oF edp 4

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annual report 2009 6

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edp MESSAGE TO SHAREHOLDERS In a difficult market environment… we achieved record results Yet again, 2009 confirmed in numbers the success of the options and strategy defined by eDP across its three strategic pillars – focused growth, greater efficiency and maintaining a low risk profile. the company achieved record results that we should all celebrate with enthusiasm, satisfaction and, above all, an enormous sense of pride. in terms of growth, we made a recurring net profit of over eUR 1 billion for the first time. We achieved our best ever eBitDa at eUR 3.363 billion, an increase of 7%. For the first time, over half our operating profits came from outside Portugal. spain and Brazil posted their best results ever and eDP Renováveis became the 3rd largest company in the world in its sector. in terms of efficiency, we recorded the lowest operating costs/gross profit ratio in our history at 28%, down from 38% in 2005.We are the most efficient company in our sector in the iberian Peninsula. 2009 was also the 4th consecutive year of cost reductions in nominal terms. During this same period, since 2005, eDP increased its installed capacity by around 70% to 21GW. a result that is due to the efforts and focus of our staff. We have also managed to maintain the company’s low risk profile, as shown by our ability to secure eUR 6.3 billion in financing during the year, including the sale of the tariff deficit in Portugal for approximately eUR 1.6 billion. eDP has once again made its mark, with a liquidity position today to cover our investments for the coming two years. However, the paradox of our results in spain most clearly demonstrates our capacity to predict and manage risk. in a year which saw a drop in demand (-4%) and energy prices down nearly 50% on 2008, we achieved our best results ever. this plays testament to our capacity to ensure that the different blocks which make up eDP today interact effectively to foresee the challenges ahead and overcome them successfully. two words can summarise our achievements: resilience and consistency. in a particularly challenging environment, as was the case in 2009, with several of the economies in which we operate recording negative growth, together with near-zero levels of inflation and a significant reduction in both energy demand and energy prices, these results stand as unequivocal proof of the resilience and consistency of our strategy. 7

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annual report 2009 edp We made the right choices, a reflection of the value of our staff, their confidence in knowing where they are heading and their ability to deliver. a global vision of sustainability and innovation However, the clear evidence that we have been taking the right decisions goes beyond these numbers. We recognise that our responsibility and the way we interact with all our stakeholders requires an increasingly global approach across the various areas of our business. We want to lead and continue to stand out from the competition. this is our goal. in 2009, we strengthened our leadership position in terms of sustainability management. We now rank no. 1 in europe and no. 2 in the world in our sector on the Dow Jones sustainability indices, the most demanding in the world. at the start of 2010, eDP was listed in the Gold Class in “the sustainability Yearbook 2010” published by saM, in recognition of the company’s continuous improvement in practices across the different pillars of sustainability, in line with the 10 Principles of the “Global Compact”, an international initiative promoted by the United nations and which we joined in 2004. today, we behave in a singular manner towards all those who interact with eDP. levels of customer satisfaction have remained at their highest levels ever. We have innovated the way in which we relate to suppliers and the media, through our suppliers Gathering and Media Day. these events were recognised as creating value and symbolising eDP’s new way of doing business. internally, employee satisfaction has risen to its highest levels ever since studies were first conducted. this significant improvement comes on the back of steady improvements over the last 4 years. We like to belong to eDP and this fact is reflected in the quality of the results we have achieved. With regard to our shareholders, we propose an increase of 11% in the dividend to eUR 0.155 per share, subject to approval by the General Meeting, in line with our target to double the dividend per share between 2005 (eUR 0.10) and 2012 (eUR 0.20). in 2009, eDP was in the top 5 european utilities companies in terms of share price growth, with eDP Renováveis topping the rankings. We have maintained our ambition to lead the revolution in how the energy sector will contribute to a new relationship between producer and consumer. the intelligent grid project inovgrid is currently being implemented and at the end of 2010 around 50,000 customers will have access to this new technology and the additional services it provides. eDP is one of those leading the way in introducing electrical mobility to Portugal - around 1,300 recharging points are to be installed in public places over the next two years. innovation, not just in terms of technology but also processes and behaviours is undoubtedly becoming a growing priority in the way our company operates. last but not least is our concern for the community around us. 2009 was the first year ever in which eDP generated over 50% of its energy from renewable sources, confirming our intention to reduce specific Co2 emissions by 70% by 2020, as measured against 2008 levels. this figure demonstrates that we are advancing rapidly along the path we have set ourselves. Conscious of our responsibility to society, last year we increased the eDP Foundation budget for social support activities in Portugal by 30%. in this regard, we should also highlight the support we have lent to the Kakuma refugee camp project in Kenya. this internationally recognised work has been undertaken in collaboration with the UnHCR and seeks to create opportunities for breaking the existing cycle of poverty. our intervention will make a difference. a stronger global company We are a global company. We employ staff of 16 nationalities across 11 countries, having entered the United Kingdom at the end of 2009 and italy at the start of 2010. a range of cultures, viewpoints and ideas all communicating with each other. the q

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But as has become our habit, we want to go further. in 2009 we defined a new vision – “a global energy company that leads the way in value creation, innovation and sustainability” – as well as new values and commitments. Beyond continuing to lead the way in value creation, we also want to be at the forefront of how innovation and sustainability inform the way we do business. the eDP University was officially launched. this will be an indisputable means of sharing knowledge and culture within the company. the eDP Way project, launched in 2008, continued to promote and strengthen eDP culture around the four corners of the globe. We also changed our signature to “live our energy”. it is an invitation to everyone – eDP and stakeholders – to actively participate in the challenge faced by the energy sector. these are some of the elements that will make eDP stronger in this regard. i would like to extend a word of thanks to all those with whom we work on a daily basis – our customers, our suppliers, government bodies and the regulators. i would also like to express my gratitude to the various corporate bodies who monitor eDP’s activity, in particular the General and supervisory Board, for the support and advice they have provided for the whole team throughout the year. the dual governance model has been consolidated and made a decisive contribution to the company’s credibility. Finally, a special mention to our over 12,000 employees and thousands of shareholders. to our employees, my sincerest thanks for the energy devoted by each of you to this company. to our shareholders, thank you for the confidence you have shown in this executive Board of Directors and each of its members by electing us to a new three-year term of office (2009-2011) at the annual General Meeting. looking ahead, 2010 will present yet another challenge to our ability to overcome difficulties, particularly in the current economic conditions. We will have to maintain discipline and balance in the strategy we pursue. i am counting on everyone’s participation and support to ensure we continue along the path to success, so we can all contribute to the development of eDP and the country as a whole, as well as strengthen our leadership position in the markets in which we operate. antónio Mexia Chairman of the executive board of directors lisbon, 4 March 2010 9

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annual report 2009 edp ViSiOn, COMMiTMEnTS AnD VALuES trust of shareholders, customers, suppliers and other stakeholders. excellence in the way we implement. Initiative Demonstrated through behaviour and attitude of our people. Innovation With the objective of creating value within the various areas in which we operate. sustainability aiming at improving the quality of life of current and future generations. values vision a global energy providing company, leader in creating value, innovation and sustainability. Commitment with Customer •We place ourselves in our Customers’ shoes whenever a decision has to be made. •We listen to our Customers and answer in a simple and clear manner. •We surprise our Customers by anticipating their needs. com m i m e nt s t Commitment with persons •We join ethical conduct and professional rigour to enthusiasm and initiative, emphasising team work. •We promote the development of skills and merit. •We believe that the balance between private and professional life is fundamental in order to be successful. Commitment with results •We fulfil the commitments that we embraced in the presence of our shareholders. Commitment with sustainability •We assume the social and environmental responsibilities that result from our performance thus contributing toward the development of the regions in which we are operating. •We reduce, in a sustainable manner, specific greenhouse gas emissions from the energy we produce. •We actively promote energy efficiency. •We are leaders due to our capacity of anticipating and implementing. •We demand excellence in everything that we do. 10

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EDP in THE wORLD usa employees installed Capacity (MW)* net Generation (GWh) Generation from renewables sources** 303 2,624 5,905 100% France/ belgium employees installed Capacity (MW)* net Generation (GWh) Generation from renewables sources** 21 277 426 100% poland/ romania employees installed Capacity* 30 120 spain portugal brazil 7,383 employees 6,102,495 electricity Customers 221,356 Gas Customers 10,569 installed Capacity (MW)* 26,011 net Generation (GWh) 36% Generation from renewables sources** 46,146 electricity Distribution (GWh) 6,133 Gas Distribution employees electricity Customers Gas Customers installed Capacity (MW)* net Generation (GWh) Generation from renewables sources** electricity Distribution (GWh) Gas sales 1,994 953,030 833,450 5,288 15,516 30% 9,131 18,968 2,365 employees 2,667,731 electricity Customers 1,746 installed Capacity (MW)* 6,919 net Generation (GWh) 100% Generation from renewables sources** 21,313 electricity Distribution (GWh) gás * MW eBitDa ** includes hydro, wind, biomass and waste 11

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annual report 2009 edp COMPAnY HiGHLiGHTS 06 Feb – Fitch confirms eDP’s long term credit rating to ‘a-’assigning stable outlook 10 Feb – eDP issues 1 Billion euros 5 year bond Jan Feb 15 apr – edp’s annual General shareholders Meeting Ratification of the resolutions approved at the meeting of the General and supervisory Board held on March 5, 2009; approval of the individual and consolidated financial statements for 2008; approval of the allocation of eDP’s 2008 individual accounts net profit and election of the members of the corporate bodies for the three year period 2009 2011. 09 Jun – Moody’s downgrades eDP to “a3” with stable outlook 18 Jun – eDP issues 1 Billon euros 7 year bond Jun MaY Jul Mar apr 05 Mar – eDP signed credit facility of 1,600 million euros 05 Mar – edp assigns the right to receive the extraordinary tariff adjustments in respect of 2007 and 2008 eDP serviço Universal has entered into an agreement for the assignment, by means of a true sale without recourse, to tagus sociedade de titularização de Créditos, s.a., of the rights to receive the full amount of the positive adjustments to the electricity tariffs in respect of the costs with the acquisition of electricity incurred in 2007 and estimated for 2008, accrued of the respective financial costs. With the sale of those rights, eDP shall receive around 1,200 million euros. 06 Mar – resignation of Members of the General and supervisory board on March 6, 2009, eDP informed the market and the public in general that Mr Vítor Domingos seabra Franco and Mr Vital Martins Moreira presented their resignation from the General and supervisory Board. 11 Mar – tolling agreement with Iberdrola on aguieira and raiva hydro plants in portugal for a 5 years period eDP will continue to be responsible for the operating and maintenance (o&M) of these plants and maintains the ownership of their electricity generation licences and hydro domain concessions. 12 07 MaY – publication of the royal decree law that defines the conditions for the elimination of the spanish tariff deficit issued the Royal Decree law that permits the securitization of the spanish tariff deficit borne by the companies of the electricity sector companies, supported by a state endorsement. this Royal Decree law eases securitization of the deficit amount financed by HC energía, which totals approximately 350 million euros by year 2008, net of the impacts from Royal Decree laws 3/2006 and 11/2007. 14 MaY – Gross Dividend payment of 0,14 euros per share (2008 financial year)

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07 oCt – eDP Bandeirante: aneel approves final parameters for the oct 2007/oct 2011 regulatory period 20 oCt – eDP sells stake in sonaecom of 26,979,748 shares at a price of 1.98 euros per share. 21 oCt – aneel approves a 5.46% tariff increase at eDP Bandeirante’s annual tariff readjustment process for the period from october 2009 to october 2010. auG 04 auG – standard & Poor´s affirms eDP´s “a ” rating and revised outlook from stable to negative 05 auG – aneel approves a 15.12% tariff increase at eDP escelsa´s annual tariff readjustment process for the period from august 2009 to July 2010. sep oCt 02 deC – edp renováveis closes two institutional partnership structures in the us amounting to 228 million dollars. eDP Renováveis has signed two institutional partnership structures with Ge Financial services in the amount of 228 million dollars. out of the total investment value, 111 million dollars refer to the sale of an additional stake of Vento iii equity structure and 117 million dollars are related to a partnership structure for the Blue Canyon V wind farm. 03 deC – edp assigns the right to receive the extraordinary tariff adjustments in respect of 2009 eDP serviço Universal has entered into an agreement for the assignment, by means of a true sale without recourse, to tagus – sociedade de titularização de Créditos, s.a., of the rights to receive the full amount of the positive adjustments to the electricity tariffs in respect of the costs estimated for 2009 with the implementation of energetic policies relating to over costs incurred with electricity generation under the special Regime, accrued of the respective financial costs. With the sale of those rights, eDP shall receive around 435 million euros, which corresponds to approximately 97% of the amount of the adjustments assigned. 15 deC – erse sets electricity tariffs in portugal for 2010 which set a 2.9% average increase of final electricity tariffs in Portugal mainland for 2010. 31 – deC – Conclusion of acquisition of gas assets in spain Following the obtention of the required authorizations by the spanish regulatory and competition authorities, eDP completed the acquisition from Gas natural of its low pressure natural gas distribution and supply (including last resource) activities in the regions of Cantabria and Murcia, as well as the high pressure natural gas distribution assets in the regions of the Basque Country, asturias and Cantabria deC 2010 nov 13 Jan – edp signs construction contract for venda nova III 736 Mw new hydro plant eDP awarded the construction works for the repowering of the Venda nova hydro plant, called Venda nova iii, to the consourcium MsF/somague/Mota engil/ spie Batignolles for a total amount of 131 million euros. the plant is scheduled to start operations in the first half of 2015 and the expected total capex is 349 million euros over the period. 26 Jan – edp is “gold class saM 2010. eDP has been recognized for improving their sustainability performance, evolving class silver in 2009 for gold in early 2010. this distinction is in the publication “the sustainability Yearbook 2010” saM (sustainable asset Management) that includes 15% of global companies with the best sustainability performance. 27 Jan – edp renováveis enters the Italian wind Market through the acquisition of 520 Mw to be developed eDP Renováveis s.a. acquires 85% of italian Wind srl, from Co Ver group (an industrial conglomerate from the north of italy), adding to its portfolio several wind projects in italy totalling 520 MW. the amount paid for the stake is 12 million euros. 01 sep – edp renováveis establishes a new type of institutional partnership structure for 101 Mw in the us eDP Renováveis has closed a $101.9 million institutional equity financing from JPM Capital Corporation in exchange for a economic interest in its 100.5 MW Rail splitter wind farm project installed in June 2009 in illinois. 03 sep – edp remains the only portuguese company to integrate the dow Jones sus

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annual report 2009 edp EDP CORPORATE BODiES board oF tHe General MeetInG rui eduardo Ferreira rodrigues pena, Charmain antónio bernardo de Menezes e lorena de sèves, Vice-Chairman Maria teresa Isabel pereira, Company secretary statutorY audItor KPMG & associados, sRoC, s.a., represented by Jean-éric Gaign, Certified auditor, Permanent statutory auditor Vítor Manuel da Cunha Ribeirinho, Certified auditor, Deputy statutory auditor (2001-03); Chairman of the Board of CeMaF – Centro de investigação de Mercados e activos Financeiros of isCte (1995-2003); member of the investment Committee of FinPRo-sGPs (2002-04); Chairman of the Board of Directors of sieMCa – sociedade Mediadora de Capitais (1990-97); Consultant of PMe investimentos, having been appointed as non-executive director of several of its subsidiaries (1998-2001). Co-founder and first director of the “Management Revue”, he is also author of a number of books and papers on areas such as corporate governance, financial markets and instruments, strategy and business restructuring. Member of the eDP General and supervisory Board since 15th april 2009. Carlos Jorge ramalho dos santos Ferreira He was born on 23rd February 1949. He has a degree in law by the school of law of Universidade Clássica de lisboa (1971). He was a member of the tax Reform Commission (1984-88); a Member of Parliament and Vice-Chairman of the Parliamentary Commission for Health and social security (1976); member of the Management Board of ana (1977-1987); Chairman of the Board of Fundição de oeiras (1987-89) and Chairman of the Companhia do aeroporto de Macau (1989-91). He was a director of the Champalimaud Group (1992-99) and Chairman of the Board of Mundial Confiança and of the General Meeting of Banco Pinto & sotto Mayor. Between 1999 and 2003, he served as Director of servibanca, and as Vice-Chairman and member of the Board of Directors of seguros e Pensões Gere, part of the BCP Group. He also acted as Director and Chairman of the Board of Directors of império Bonança, the insurance companies ocidental and ocidental Vida, seguro Directo, império Comércio e indústria (iCi), Companhia Portuguesa de seguros de saúde, autogere and Corretoresgest, and he was also Director of eureko B.V. He was Vice-Chairman of estoril sol and Finansol, non-executive Chairman of Willis Portugal-Corretores de seguros (2003-05) and Director of the Board of seng Heng Bank. From 2005 until 2007 he was Chairman of the Board of Caixa Geral de Depósitos. He is currently Chairman of the Board of Banco Comercial Português; member of the General and supervisory Board of Millenniumbank, in Poland, and member of the Board of Directors of Bancsabadell, in spain. Member of the eDP General and supervisory Board since 10th april 2008 and was reappointed on 15th april 2009. diogo Campos barradas de lacerda Machado He was born on 17th May 1961. He has a degree in law. He was management trainee at FiMa-leVeRiGlo (1986); a legal consultant to the tourism Fund (1986-88); an advisor to the Government of Macao’s Deputy secretary for administration and Justice (1988-90); a senior legal consultant of the tourism Fund (1990-92) and Director of interfina and several of its subsidiary companies (1992-95). From 1995 to 1999 he was a lawyer and a partner of the firm sampaio Caramelo, Fonseca santos & lacerda Machado and a member of the superior Judicial Council (1997-99). He served as legal Director for the Parque expo’98 Group and as Director of its associated companies (1999). He was secretary of state for Justice (1999-2002). He is currently a lawyer working off-counsel with the Barrocas, sarmento e neves law firm; member of the Committee for access to Government Documents (CaDa); non-executive Board Member of Bao – Banco da África ocidental (Guinea- Bissau), Moza Banco (Mozambique) and Caixa económica de Cabo Verde (Cape Verde). Member of the eDP General and supervisory Board since 30th June 2006 and was reappointed on 15th april 2009. eduardo de a

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of Banco Finantia and President of the Portugal Venture Capital initiative, an equity fund promoted by the european investment Bank. Member of the eDP General and supervisory Board since 30th June 2006 and was reappointed on 15th april 2009. Farid boukhalfa He was born on 22nd of February 1953. He has a bachelor degree in accountability (national institute of Hydrocarbons Bourmerdes), a degree in Finances (inPeD Bourmerdes) and a post-degree in auditing (alger University). He started working in sonatrach in 1975. Began his activity developing technical-economical studies on sonatrach projects defined on the company quinquennial plans. From 1992 to 1999, was head of the Coordination and syntheses department. in 1999, became sub-director of the Budget and Management Control department and in 2000 was appointed as Director of sonatrach’s Management Control Department. in 2007, became Director of the Consolidation accountability Department. since 2008, is the sonatrach Chief Financial officer. Member of the eDP General and supervisory Board representing sonatrach since 10th February 2010. Fernando Manuel barbosa Faria de oliveira He was born on 10th october 1941. He has a degree in Mechanical engineering from ist. He was secretary of state for Foreign trade (1980-83), assistant secretary of state to the Deputy Prime Minister (1995), secretary of state of Finance and treasury (1988-89), assistant secretary of state for Finance (1989-90) and Minister for trade and tourism (1990-1995) . He was a Member of the Board of Directors of siderurgia nacional (1980-83); of iPe – investimentos e Participações empresariais, sa (1983-2002); of BFe – Banco de Fomento exterior (1990); of HPP – Hospitais Privados de Portugal, sGPs, sa (2003-05); of Carlton life (2003-05); of Banco Caixa Geral, spain (Ceo from 2005-07). He is currently Chairman of the Board of Directors of the Caixa Geral de Depósitos. He was also a non-executive Member of the Board of eGF - empresa Geral de Fomento (1988), of CelBi - Celulose da Beira industrial (1987-88); of iCeP (Portuguese institute for Foreign trade) (1986-88); and of taP (1998-2006). He was Member of the advisory Board of the national administration institute and of aPaD – Portuguese Development aid agency (2000-02); Member of the executive Board of UCCla (Union of Portuguese-speaking Capital Cities) (2000-02); and Chairman of the advisory Board of elo – the Portuguese association for economic Development and Cooperation (2001-05). Member of the eDP General and supervisory Board since 10th april 2008 and was reappointed on 15th april 2009. José Manuel dos santos Fernandes He has born on 23rd september 1945. He has a degree in Mechanical engineering by the engineering school of Universidade do Porto. He is the Chairman of the Board of FReZiGest, sGPs, since 2005. FReZiGest is part of the FeRZite Group, which he founded in 1978. He was a Board Member of aFiCoR (1983-2007); General Director of MiDa (1974-1990); Director (1972-74) and Member of the Board of Metalúrgica Costa néry s.a. (1974-75); Head of Production of CeRlei (1960-1972). He is also President of PRoDUteCH (2009); Vice-president of the General Meeting of the aeP (2008); Vice-president of the General Meeting of Manufuture Portugal (2005). He was executive Vice-president (2001-04) and President of the General Meeting of CiP (2004-07). He was also CiP’s representative at the national Counsel for environment and sustainable Development (2000-02). He was Vice-president of the aiP (1984-98) and represented this association in the national Quality Counsel (1988-98) and science Counsel (1996). He was President of the Portuguese Metal industry association (1998-2004). He is the Portuguese representative at the european tools Committee (since 1998). He was a Member of the executive Board (1987-90) and Member of the General assembly of eXPonoR (1998-2009). He is Vice-president of aeP’s General Meeting (since 2008) and he coordinated an official national busines

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annual report 2009 edp and Commodities institute (iFCi) and the european Capital Markets institute (eCMi). He was awarded the title of Chevalier de l´ordre nationale de la légion d´Honneur by recommendation of the President of the French Republic. Member of the eDP General and supervisory Board since 30th June 2006 and was reappointed on 15th april 2009. Mohamed Meziane He was born on 18th april 1944. He has a degree in Chemical engineering by École Polytechnique de argel and of Petrochemical engineering by the algerian institute of oil. He started working in sonatrach in 1967. He was Director of the algiers refinery in 1973 and in 1978 he was appointed Director of the Refinery sector. in 1980 he was appointed Vice-president of sonatrach and was responsible for the refinery and lnG sectors. in 1984 he was invited to the office of the Minister of energy; in 1986 he was appointed Director of industrial security and in 1988 he was Director of international trade. Between 1991 and 1996 he was Head of the Hydrocarbons’ office. He was also General Director within the Ministry of energy (until 2003) and then he was appointed President of sonatrach. Member of the eDP General and supervisory Board representing sonatrach since 6th november 2007, and was reappointed on 22nd april 2009. on 10th February 2010, announced his resignation from eDP’s General and supervisory Board. ricardo José Minotti da Cruz Filipe He was born on 19th February 1934. He has a degree in Civil engineering by instituto superior técnico (1957). He was an assistant lecturer at ist responsible for descriptive geometry (1958-68). He is President of the specialized section for Reprivatizations (seR) within the Ministry of Finance (since 1988) and Chairman of the supervisory Board of CiMPoR (since 1992). He was a Member of the Board of Directors of eDP, responsible for strategic planning (1976-1988). During this period he has actively participated on the reorganization and consolidation of eDP, in optimizing the Generation national system, in the procurement for large electricity projects and in negotiating with the World Bank for the expansion of generation and transmission infrastructures. He was a member of the national energy Plan Commission and a representative of CPe and eDP at the executive Committee and at the General assembly of the Union for the Coordination of the Production and transport of electric Power (1971-88). He was a member of the Board of Companhia elécrtica do alentejo e algarve (1975-76). Between 1957 and 1975 he developed work on hydropower generation as part of the Zêzere Hydroelectric and CPe. Member of the eDP General and supervisory Board since 15th april 2009. rui eduardo Ferreira rodrigues pena He was born on 25th December 1939. He has a degree in law from the Universidade de lisboa. He works as a lawyer and his professional activity has focus on areas of administrative, trade, financial and business law, with a particular emphasis on the so-called regulated markets. He is a founding member and senior partner at the law firm Rui Pena, arnaut & associados. From 1973 to 2007, he was Chairman of the Board of Directors, executive Director and non-executive Director of various Portuguese and international companies. He served as Minister of national Defense from 2001 to 2002 and was a member of the General Council of the Portuguese Bar association from 1987 to 1989. He was a lecturer in administrative law at Universidade autónoma de lisboa (1983-1987) and a member of the lisbon Municipal assembly (1986). He is part of the arbitration and reconciliation body of the international Centre for settlement of investment Disputes (iCsiD). He served as President of the inter-Parliamentary Union’s Portuguese group (1980-1982) and was an assistant lecturer at the school of law at Universidade de lisboa (1977-1980), professor of administrative law at Universidade livre de lisboa from (1978-1981) and a member of the governing board at the Universidade de li

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1995). He served as assistant to the secretary of state for Foreign trade (1986-1988) and served as Vice-Chairman of the Board of Directors of Portuguese institute for Foreign trade (1988-1990). From 1990 to 1998 he was Director of Banco espírito santo de investimentos and in 1998 he was appointed Chairman of the Board of Directors of Gás de Portugal and transgás. in 2000 he joined Galp energia as Vice-Chairman of the Board of Directors and from 2001 to 2004, he was executive Chairman of Galp energia and Chairman of the Board of Directors of Petrogal, Gás de Portugal, transgás and transgás-atlântico. in 2004, he was appointed Minister of Public Works, transport and Communication for Portugal’s 16th Constitutional Government. He also served as Chairman of the Portuguese energy association (1999-2002), member of the trilateral Commission (1992-1998), Vice-Chairman of the Portuguese industrial association and Chairman of the General Board of ambelis. He was also a Government representative to the eU working group for the transeuropean network development. Chairman of the executive Board of Directors since 30th June 2006 and reappointed on 15th april 2009. ana Maria Fernandes she was born on november 1st , 1962. she graduated in economics from the Faculty of economics at oporto (1986) and received a postgraduate degree in Finance from the Faculty of economics of Universidade do Porto and an MBa from the escola de Gestão do Porto (1989). she lectured at the Faculty of economics of Universidade do Porto (1989-1991) and began her professional career in 1986 at Conselho–Gestão e investimentos, a company of Banco Português do atlântico Group, in the capital markets, investments and business restructuring field. in 1989 she began working at efisa, sociedade de investimentos, in the area of corporate finance, and was later made a director of Banco efisa. in 1992 she joined the Grupo Banco de Fomento e exterior as director in the area of investment banking and was Head Corporate Finance at BPi (1996-1998). in 1998 she joined Gás de Portugal as Director of strategic Planning and M&a and in 2000 became Director of strategy and Portfolio Management of Galp Business. she later became President of Galp Power and Director of transgás. From 2004 until 2006 she was director of the Board of Galp energia. Member of the executive Board of Directors since 30th June 2006 and reappointed on 15th april 2009. antónio Martins da Costa He was born on December 13th, 1954. He holds a degree in Civil engineering, an MBa from the University of oporto (1976) and an MBa from the escola de Gestão do Porto, and has also completed executive education studies at inseaD (Fontainebleau, França - 1995), PaDe from aese (lisbon 2000) and the aMP of the Wharton school (Philadelphia, eUa - 2003). From 1976 until 1989 he lectured at superior engineering institute of oporto. He joined hydraulic generation at eDP in 1981. From 1989 to 2003 was Gene-ral Manager of Millennium bcp Bank and executive Board Member on several companies of BCP Group. He was also Director of eureko BV (netherlands), Chairman of eureko Polska and executive Vice- Chairman of PZU (1999-2002). From 2003 to 2007, he was the Ceo and Vice-Chairman of the Board of Direc-tors of energias do Brasil. During this period he was also Vice-Chairman of Portuguese Chamber of Commerce in Brazil and Chairman of aBRaDee. in 2007, he became Chairman and Ceo of Horizon Wind energy, in the Usa, and Member of the executive Commission of eDP Renováveis since 2008. in 2009 he was appointed Chairman of the Board of Directors of eDP internacional and eDP soluções Comerciais. on the executive Board of Directors of eDP he is responsible for the management area of Distribution. He is a founding member of the Portuguese institute of Corporate Governance. Member of the executive Board of Directors since 30th June 2006 and reappointed on 15th april 2009. antónio pita de abreu He was born on March 17th, 1950. He received his degree in

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annual report 2009 edp SuMMARY OF KEY METRiCS EBITDA (EUR millions) FInanCIal IndICators eur thousands edp Group Consolidated turnover eBitDa operating profit net profit * operating Cash-flow net operating investment Financial investment/(Divestiture) net assets equity** net debt *** net debt/Gross operating profit Financial liabilities/equity Profit per share (eUR) Dividend Yield Markt capitalization electricity Generation - Iberia (excluding edp renováveis) turnover Gross operating profit operating profit net profit operating investment electricity distribution - Iberia turnover Gross operating profit operating profit net profit operating investment electricity supply - Iberia turnover Gross operating profit operating profit net profit operating investment edp renováveis turnover Gross operating profit operating profit net profit operating investment Gas - Iberia turnover Gross operating profit operating profit net profit operating investment energias do brasil turnover Gross operating profit operating profit net profit operating investment 1,680,006 550,221 419,233 240,786 258,512 1,844,908 562,277 379,558 149,684 428,926 1,854,529 586,091 456,416 253,058 209,303 1,726,298 433,907 332,111 162,641 295,138 2006 note: 100% of the displayed figures are included under operating investment (net of contributions). * net Profit tributable to eDP equity holders **Does not include Minority interests *** includes Debt, Cash and cash equivalents and short-term assets at fair value 2009 2008 2007 2006 55% 58% 64% 66% 3,155 3,363 12,198,183 3,362,948 1,969,567 1,023,845 3,921,669 3,234,740 -132,549 40,261,557 7,291,151 14,006,568 4.2 223.3% 0.28 5.0% 11,364,519 13,894,063 3,154,936 1,929,994 1,091,529 1,744,507 3,618,187 -1,362,987 35,744,969 6,366,820 13,889,511 4.4 230.7% 0.30 5.2% 9,854,369 11,010,778 2,628,275 1,560,329 907,252 2,270,151 2,700,166 -1,792,915 31,526,717 6,264,146 11,692,247 4.4 201.2% 0.25 2.8% 16,344,724 10,349,826 2,305,450 1,253,036 940,823 2,017,523 1,456,537 339,726 25,468,911 5,589,235 9,283,118 4.0 181.7% 0.26 2.9% 14,041,105 941 2,305 2,628 2006 2007 2008 2009 EBITDA EBITDA/gross Margin Net Profit * (EUR millions) 0.30 0.26 0.25 1,092 907 0.28 1,024 3,708,759 1,374,936 908,560 636,639 879,579 4,095,750 1,172,169 738,921 523,465 685,688 2,859,052 1,167,982 783,467 540,564 739,940 2,654,122 1,211,468 868,657 612,900 389,540 2006 2007 2008 2009 4,987,805 694,041 391,292 272,166 280,645 6,213,227 769,809 496,768 304,116 283,893 4,797,443 455,482 183,795 108,772 253,741 4,416,468 571,846 236,093 138,725 306,591 Net Profit Profit per share (EUR) Operating Investment (EUR millions) 1.1 1.0 1.0 1,784,816 31,590 8,726 909 8,148 1,129,950 33,855 26,414 3,728 6,246 1,181,280 58,398 37,294 2,580 3,536 865,043 -140,670 -141,624 -110,727 571 1,457 3,618 3,235 0.6 2,700 648,242 542,549 230,785 114,349 1,663,320 532,429 437,877 231,615 104,364 2,090,862 296,485 213,863 102,337 43,250 1,388,603 249,058 146,858 57,652 20,070 386,035 2006 2007 2008 2009 Operating Investment Operating Investment/GOR (x) 1,189,024 217,518 171,021 121,625 79,536 1,442,422 208,518 165,462 127,979 78,804 994,200 188,470 145,049 103,353 72,301 1,128,425 144,759 110,222 169,302 51,756 Net debt (EUR millions) 4.4 4.0 4.4 4.2 13,890 11,692 9,283 14,007 2007 2008 2009 Net Debt Net Debt/Gross Operating Profit 18

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operatInG HIGHlIGHts 2009 number of employees * electricity business (excluding Brazil) electricity generation (excluding eDP Renováveis) eDP Renováveis electricity distribution electricity supply Gas business electricity business in Brazil Generation Distribution supply support services telecomunications other * includes Corporate Bodies (87 ) Number of Employees* 2008 12,245 7,511 2,339 627 4,378 167 422 2,278 231 2,033 14 1,450 0 584 2007 13,097 7,669 2,326 532 4,647 164 411 2,980 231 2,734 15 1,562 0 475 2006 13,575 7,604 2,259 252 4,913 180 407 3,076 242 2,818 16 1,558 395 535 18,589 1,697 2,624 397 5,288 15,523 1,923 232 5,093 13,575 13,097 12,245 12,096 12,096 7,289 2,210 721 4,163 195 537 2,291 260 2,014 17 1,383 0 596 2006 2007 2008 2009 Installed Capacity (MW) 20,624 1,746 electricity Generation - Iberia (excluding edp renováveis) Installed Capacity (Mw) Portugal spain net electricity generation (Gwh)** Portugal spain ** in 2009 includes 497 GWh generated in lares testing period 13,401 9,974 3,427 36,978 24,736 12,242 12,491 9,091 3,401 35,627 22,511 13,117 11,580 9,015 2,565 40,115 25,625 14,489 11,388 8,765 2,623 42,187 28,060 14,127 13,587 1,018 28 3,462 1,044 1,124 87 3,829 9,078 9,439 9,644 10,569 electricity Generation - edp renováveis Installed Capacity (Mw) Portugal spain Rest of europe Usa Brazil net electricity generation (Gwh) Portugal spain Rest of europe Usa Brazil electricity distribution - Iberia distribution outlets Portugal spain electricity sales (Gwh) Portugal spain electricity supply - Iberia*** number of costumers Portugal spain electricity sales (Gwh) Portugal spain Gas business Gas distribution - portugal Distribution outlets Gas sales (GWh) Gas distribution - spain Distribution outlets Gas sales (GWh) Gas supply - spain number of costumers Gas sales (GWh) electricity business in brazil Installed Capacity (Mw) electricity sales (Gwh) Generation Distribution suplly number of costumers 6,893 21,313 8,586 2,667,731 5,473 24,408 7,282 2,582,636 4,704 25,029 7,188 3,207,624 3,980 23,948 6,702 3,113,177 2006 2007 Portugal 2008 Spain 2009 Brazil 1,732 1,697 1,044 1,018 45,465 46,919 46,468 46,146 5,490 595 1,861 397 2,624 14 10,907 1,275 3,275 426 5,905 26 4,400 553 1,692 232 1,923 0 7,807 1,028 2,634 238 3,907 0 2,899 424 1,265 87 1,124 0 3,777 735 2,056 119 866 0 1,180 313 839 29 0 0 1,902 483 1,419 0 0 0 48,069 1,295 1,902 48,594 48,908 1,323 3,777 1,397 7,807 2006 2007 Portugal Rest of Europe Brazil 2008 Spain USA 2009 Net generation (GWh) 54,778 1,748 10,907 6,764,329 6,119,805 644,524 55,277 46,146 9,131 6,716,520 6,088,179 628,341 56,147 46,468 9,679 6,670,452 6,053,875 616,577 56,541 46,919 9,622 6,591,077 5,987,896 603,181 55,015 45,465 9,550 29,781 28,508 26,811 26,341 7,055,525 6,102,495 953,030 62,522 43,154 19,367 6,754,151 6,087,578 666,573 65,983 46,236 19,747 6,705,615 6,051,114 654,501 63,831 44,556 19,275 6,625,113 5,984,270 640,843 59,136 42,290 16,846 2006 15,091 14,987 12,892 15,782 2007 Hydro Other 2008 Thermal 2009 Wind 221,388 6,133 963,837 18,968 833,450 21,261 200,988 5,952 690,032 20,688 628,294 24,750 179,802 2,554 665,092 20,237 415.288 18,203 163,391 2,293 Electricity distributed (GWh) 78,964 81,570 80,555 76,590 641,336 19,713 248.114 13,755 23,948 25,029 24,408 21,313 9,550 9,622 9,679 9,131 note: 100% of the displayed figures for all companies are considered, regardless of the eDP Group shareholding. ***includes last resort supply 19

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annual report 2009 edp envIronMental IndICators 2009 primary energy Consumption (tJ) total for generation Coal Fuel oil natural Gas other fuels Forest waste Fuel for vehicle fleet electricity Consumption (Mwh) Generation internal consumption administrative services Grid losses (%) environmental Certification iso 14001 environmental Certification (MW) net maximum installed capacity certified (%) Gas distribution certified (%) atmospheric emissions total emissions (kt) Co2 (1) so2 nox Particles overall specific Co2 emissions (g/kWh) specific emissions from thermal facilities (g/kWh) Co2 so2 nox Particles avoided Co2, from renewable sources (kt) Co2 intensity (gr/€) water water collected Cooling water (m3x103) waste total waste (t) total hazardous waste (t) Recoverd waste (%) biodiversity Distribution grid in protected areas (Km) substations in protected areas (nº) environmental Costs (eur thousands) 13,878 42 118,898 13,632 41 163,783 20,058 62 157,896 9,394 30 163,471 929,642 3,012 94 835,922 3,328 85 958,988 2,641 84 1,122,882 3,483 84 1,726,053 1,700,122 1,851,183 2,047,094 704.7 (2) 0.60 (2) 1.17 (2) 0.04 (2) 13,844 1,640 647 1.13 1.11 0.06 10,285 1,424 726 3.12 1.62 0.11 10,127 2,127 738 3.22 1.81 0.12 9,676 2,366 20,007 17.07 33.31 1.05 362.3(2) 19,783 33.99 33.26 1.68 387 23,422 100.75 52.26 3.69 457 24,484 106.79 59.98 4.03 485 12,633 62 100 11,424 61 100 10,343 67 100 8,680 65 n/k 2,429,843 33,256 8.3 2,244,466 31,138 8.4 1,457,748 33,411 7.2 1,687,714 24,597 7.7 242,878 132,628 6,105 89,051 10,618 4,227 249 237,259 121,423 11,292 90,180 13,411 676 277 261,157 166,152 15,117 63,503 14,669 1,443 270 282,147 183,799 17,857 57,615 21,278 1,411 187 2008 2007 2006 Avoided CO2 of EDP Group (kt) 13,844 9,676 10,127 10,285 2006 2007 2008 2009 Specific Emissions from Thermal Generation NOx, SO2 e Particles (g/kWh) 3.22 3.12 1.81 1.62 1.13 1.11 1.17 0.12 0.11 0.60 0.04 0.06 2006 SO2 2007 NOx 2008 2009 Particles Environmental Costs (EUR millions) 163,471 157,896 163,783 118,898 2006 2007 2008 2009 Environmental Costs Environmental Investments Total Costs (1) Does not include vehicle fleet. (2) Based on the net generation following the new GRi guidelines sector specific. 20

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soCIal IndICators 2009 employment employees (no.) (1) Gender ratio (%) overall satisfaction rate turnover (2) employees average age (years) absentee rate (%) Personnel costs (eUR thousands) employee benefits (eUR thousands) Gratuities (eUR thousands) (3) training (4) total hours of training average training per employee (hrs) employees trained (%) total training costs (eUR thousands) Productivity at work (eUR/h) prevention and safety osHas 18 001 (% installed capacity) on-duty accidents (no.) Fatal on-duty accidents (no.) eDP frequency rate (tf) eDP severity rate (tg) total days lost due to accidents (no.) Fatal accidents of contracted workers (no.) eDP and contracters frequency rate (tf_total) (5) 55 47 1 2.26 144 2,984 10 5.00 46 76 0 3.43 176 3,894 6 6.18 56 84 0 3.70 225 5,092 5 4.29 64 110 3 4.60 252 5,999 6 4.61 353,205 29.4 75 7,225 222 487,111 40.0 82 7,232 182 464,807 35.7 91 7,988 160 332,771 32.1 69 6,925 133 12,009 79 81 0.06 44 3.61 540,036 158,353 39,254 12,166 80 75 0.06 45 3.44 573,674 161,200 34,000 13,013 80 n/k 0.05 45 3.74 574,406 291,926 29,557 13,363 81 73 0.06 45 4.05 585,086 162,287 28,200 2008 2007 2006 Employee Satisfaction 76 72 78 68 67 70 64 63 66 Satisfaction with company 2007 Satisfaction with work area 2008 Motivation 2009 EDP Frequency and severity Rate Tg 300 250 200 150 100 50 0 2 1 0 Tf 5 4 3 (1) the number of employees does not include corporate bodies (87) for the purposes of this breakdown analysis; this figure includes the new company Gás natural (2) low turnover figures do not warrant a breakdown of employees by gender and age group (3) includes only Portugal (4) in 2006 information does not include Brazil neither Gas (5) em 2007, tf_total includes only Portugal 2006 Tg 2007 Tf 2008 2009 eConoMIC IndICators 2009 sustainability index economic Indicators direct economic value generated (eur thousands) economic value distributed(a) (eur thousands) supplier costs Personnel costs allocation to Foundations Returned to community Dividends accumulated economic value(a) (eur thousands) spending on r&d (eur thousands) Fines and penalties (eur thousands) support from public authorities (eur thousands) Billing of energy services (eUR) 11,796,328 7,797,045 768,202 698,389 14,459 531,037 507,153 3,999,283 31,035 1,165 156 12,386 13,467,780 10,088,627 735,768 734,874 12,282 195,563 454,937 3,379,153 23,690 408 653 12,658 10,751,228 7,892,770 684,187 866,333 9,569 88,348 401,385 2,858,458 13,306 484 993 5,435 10,392,596 7,419,056 741,398 747,374 10,904 259,682 365,638 2,973,540 n/k 258 186 n/k 130.4 2008 125.1 2007 117.3 2006 100.0 Accumulated economic value (EUR millions) 3,999 3,379 2,974 2,858 2006 2007 2008 2009 (a) figures from 2006,2007 and 2008 were recalculated due to an error identified 21

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annual report 2009 edp STRATEGiC AGEnDA eDP presented in lisbon on november 6, 2008 its strategic agenda for the four years 2009-2012. this agenda emphasizes first the importance of maintaining the strategic priorities from 2006 – Controlled Risk, Higher efficiency and Growth oriented – particularly in the unfavorable economic and financial context. Value Management and Creation 3. 4. Reduction of Co2 emissions through investments in generation capacity with low Co2 emission levels; solid capital structure, based on continued improvement of debt ratios; superior efficiency: 5. 6. 7. selective investment policy, favouring investments with greater return and low risk; incremental efficiency gains across all businesses and countries; Promotion of a culture of integration across all countries; · achievement of goals · Creating attractive investment opportunities · sustainability: cleaner generation - low market exposure · investment: Mix visibility and flexibility in 2009-2012 · Focus on efficiency and discipline: execution of investment options Focused Growth: 8. strengthening the strategic agenda 9. 10. Wind energy: Focus on projects with high return and implementation of current ‘pipeline’; Hydroelectric energy: Gradual increase in capacity in Portugal by implementation of current ‘pipeline’; Brazil: execution of current generation projects and thorough analysis of new opportunities. Controlled Greater steered risk efficiency Growth Moreover, it aims to the beginning of a new cycle in the existence of the company, 2009-2012, characterized by a focus on the implementation of growth opportunities developed in the 2006-2008 and which will allow to open a new cycle by 2012, marked by cash flow generation. the strategic agenda is made up of ten points, arranged into three eDP Group strategic pillars: Controlled risk: thus, the year of 2009 had a decisive role in the beginning of the new cycle in the company with the strict accomplishment of all the strategic agenda. in this particular case, deserve special relevance the following events of 2009: Controlled risk • total funding of 6,3 billion euros, from diverse sources, including the securitization of the tariff deficit in Portugal in the amount of 1.6 billion . • success in implementing the hedging strategy in the iberian energy market, enabling to cancel, during 2009, the impact of the overall decline of spreads in the wholesale market. 1. 2. Management of the regulatory agenda to keep the low risk profile that typifies eDP Group’s activity; Proactive management of exposure to the energy markets through risk hedging strategies; • Proactive regulatory management with an emphasis on the beginning of the new regulatory period for electricity distribution in Portugal and for the preparation of the spanish deficit securitization, as well as for the publication of legislation setting out the conditions for the elimination of the spanish tariff deficit and the repeal of Dl 11/2007 (mitigation of the free Co2 emission rights). 2009-2012 CYCle – FoCus on IMpleMentatIon 2012+ 2008 · 2012 2006 · 2008 Creating options to grow Focus on execution Cash-Flow generation 22

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superior efficiency • Capture of 109 million euros savings with oPeX Project, Program Office surpassing the 96 million euros goal set for the year 2009 and 175 million euros savings with the purchase negotiation process centralized across the entire Group. Culture • sale of the stake in sonae.Com (58 million euros) and offer of secondary public distribution of energias do Brasil’s common treasury stock, accounting for 9.76% of total capital (441.8 million brazilian real). • implementation of the organizational model in energias do Brasil, through the reduction of hierarchical levels, making the company more agile and efficient. Focused Growth Execution developing the conditions required for improving their mobility. • execution on-time and on-cost of hydro and wind pipeline. in the hydro, the hiring of equipment for Baixo sabor’s hydroelectric power station and the construction adjudication, in the beginning of 2010, of the future biggest hydroelectric power station in the country – Venda nova iii with 735 MW were the highlights. in the wind, stands the opening of the first wind farm in Poland and the start of construction of the first wind farm in Romania. • lean: to promote a continuous improvement culture broadly participated by everyone, by extending the implementation of lean initiatives to additional businesses and geographies, and consolidating the various lean implementations already undergoing • edpro: to effectively manage the Group’s processes • acquisition by eDP Renováveis Brasil of 532 MW of innovert’s wind pipeline and attribution to eDP Renováveis, in partnership with seaenergy, of the wind farms development in the scottish maritime coast, with an approximate capacity of 1,3GW. • acquisition of Gas natural’s assets in low-pressure distribution and supply in Cantábria and Múrcia regions and the assets in high pressure gas in Basque Country, astúrias and Cantábria for a total value of 330 million euros. through the implementation of a systematic approach centered in measuring and optimizing the performance of the key processes, and the gradual consolidation of eDP’s own modus faciendi based on the concept of Group macro-processes. • sharedp: to align concepts and gradually extend the offer of shared services to additional Business Units, in terms of geographical coverage as well as the range of services provided. • signature of a memorandum of understanding with program office edp way • opex: to continue the rationalization of eDP Group’s sonangol for the establishment of partnerships aiming investments in the electric generation in angola. cost base by launching a new wave of operational costs optimization, focused on a systematic identification and elimination of both waste and redundancies. alongside with the changes occurred during 2009 in the macroeconomic external environment, eDP prepared itself to enter a new management cycle for the 2009-2012 timeframe. this new cycle, which will keep the same 3 pillars of the former strategic agenda (Controlled Risk, superior efficiency and Focused Growth), will be clearly driven towards the consolidation of a common Group culture and the reinforcement of the execution capability of the investment options created during the former management cycle. Under a framework where the levers of execution and Culture form the two main axes, eDP set up a Program office called eDP Way intended to unify and capture communication and change management synergies within 5 transformational and cross-BU projects which will shape more profoundly the organization of the Group until the end of this new cycle: the transformations operated by these 5 projects considered in eDP Way Program office have already impacted more than 12.000 eDP employees assigned across the Business Units and geographies where the Group is presently active. • sou +edp: to foster employees activity as a source of competitive advantage for the Group, by launching initiatives aiming at increasing their engagement and 2

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annual report 2009 business 26 28 28 30 32 36 36 46 48 organizational structure business framework Macro-economic framework Energetic framework Regulatory framework summary of activities Electricity Business (excluding Brazil) Gas business in Iberia Electricity Business in Brazil 24

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annual report 2009 business organizational structure electricitY (Excluding EDP Renováveis) reneWaBles gas Portugal sPain Portugal SOURCING ORDINARY REGIME GENERATION Hidroeléctrica del cantábrico (6) 97% 15,5% EUROPE 62% eDP renováveis (6) 100% eDP gás sgPs 100% eDP Produção 100% tergen 100% o&M serviços 11% tejo energia 26% elerebro 74% PORTUGAL 100% neo TRANSPORT Hc explotación centrales 100% SPAIN 100% enernova DISTRIBUTION SPECIAL REGIME GENERATION 10% eDa 80% 100% genesa agrupación eólica 20% setgás 82% soporgen 65% energin 100% Pebble Hydro Hc cogeneración Millenium 100% 100% FRANCE 100% neo catalunya neo aragón 72% Portgás Distribuição 100% neo galia intever 100% BELGIUM SUPPLY 70% greenWind 100% eDP gás serv. universal eDP gás gPl 50% eDP Produção Bioeléctrica (2) sierra de la tercia 88% POLAND 100% neolica Polska sinova 84% ROMENIA 100% DISTIBUTION Bioastur 50% UNITED KINGDOM 85% renovatio/cernavoda 100% eDP gás.com 100% eDP Distribuição 60% eMe2-ace Hc Distribuición Hc explotación redes UNITED STATES OF AMERICA 75% Moray offshore 100% 100% 100% BRAZIL Horizon Wind energy 55% inovgriD-ace SUPPLY 55% 100% eDP serviço universal eDP renováveis Brasil (4) 100% cenaeel (4) 100% elebras Hc energía Hc cur(5) 50% 100% 100% eDP comercial 55% eDP serviços 26 ciDe Hc energía 50%

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eDP, s.a. Brazil otHer sHareHolDings sPain electricitY 100% eDP soluções comerciais eDP valor 3,5% ren 100% 65% GENERATION 21% ceM (Macau) energias do Brasil 100% sávida 100% scs 17% eegsa (guatemala) elcogás (1) 66% naturgas energia grupo (1) 100% 9% energest investco (lajeado) enerpeixe couto Magalhães Porto do Pecém enernova 100% 71% eDP-ventures Windplus 100% eDP Finance Bv 100% eDP imobiliária e Participações 3% BcP central-e geoterceira Portsines taguspark 100% ne transporte 73% 100% eDP serviner 60% 100% eDP estudos e consultoria labelec 34% 50% 40% 100% ne Distribuición 49% 40% 100% 90% tolosa gasa ne Distrib.Múrcia ne Distrib. cantábria DISTRIBUTION 100% 50% 100% eDP inovação 52% ceo 5% 100% 100% ne comercialización 100% 100% ne suministro SUPPLY 100% Bandeirante 100% escelsa energia re 100% 100% eDP internacional Hc gestión de energia (1) Hc soluciones comerciales (1) Hc servicios (1) ne suministro sur 100% enertrade 100% 100% 100% Note: Organisational chart not comprehensive. Some of the percentages shown relate to indirect shareholdings. Not considering the percentage of option contracts of sale by “written put option”. (1) Companies owned by Hidroeléctrica del Cantábrico (2) Company owned 40% by EDP, SA; 5% by EDP Gestão da Produção and 5% by EDP Imobiliária (3) Companies owned, directly or indirectly, by Naturgas Energia Group (4) Company owned 45% by Enernova (Brazil) (5) Company owned 50% by HC Energía and 50% by Naturgas Energia (6) Companies that are part of the assets of EDP - Energias de Portugal Sociedade Anónima, Sucursal en España 100% ne servicios (3) 100% nge servicios comunes (3) 100% eDP Ásia 27

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annual report 2009 business Business FraMeWork macro-economic framework There was a strong economic contraction during the course of 2009 which was characterized as one of the most adverse, on a global scale, since the Great Depression of the 1930s. The size and depth of the recessive process justified an unprecedented intervention by the monetary authorities and governments, which proved to be decisive for restoring a minimum climate of trust and for re-establishing a more normalized operation of the markets, as well as the consequent reversal of the economic activity path. The economic projections for 2010 and beyond have gradually become more promising, despite still being characterized by a high-level uncertainty. The recovery process will be different from country to country according to the intrinsic financial capacity and condition. Thus, the developing economies should take on the status of global economy boosters due to the reduced exposure to specific financial and sector problems. In the developed economies, the correction of accumulated financial imbalances in the last years has inflicted limitations to the economic growth capacity in the short run. The disinflationary period that prevailed since mid-2008 may have ended, in some respect influenced by the basic raw materials’ price increase. World Performance (Real GDP) 7.9 8.3 Stock Market Volatility & Corporate Debt Risk Premiums 120 100 80 60 40 20 0 600 500 400 300 200 100 0 Jan.09 Jan.08 Apr.08 Oct.08 Apr.09 Volatility S&P Debt Risk Premiums Corp Rating A euro (p.b.) The interest rates reached cycle minimum values. The main short-term interest rate indexations in the euro zone sustainably registered inferior values to those of the Central Bank’s reference rate (1%). In the longer term, the expectations of the normalization of the economic cycle and the uncertainties about the long-term effects on the public finances have developed a moderating effect upon the decrease potential. The risk cost, which reached extremely high values in the beginning of the year, has decreased, thus contributing to the dynamics of debt issuances in the primary market, despite, however, some risk being transmitted to the sovereign debt, especially in the most financially unbalanced countries. The main stock markets benefitted from the change in market conviction and the 2009 recessive framework was paradoxically associated to one the greatest stock market recoveries in decades. 5.1 5.2 3.4 6.3 3 2.7 1 1.7 2008 -1.1 -3.4 2006 Developed economies World 2007 2008 Advanced economies 2009 The euro zone once again registered an increase of activity in the third quarter of 2009 due to the expansion of global trade, the normalization of the production cycle, and the public policies’ support. This alteration in the activity’s direction will not, however, be enough to prevent a reduction of the GDP in the euro zone in 2009 by around 4% in real terms. 2010 is viewed to have a moderate product expansion. The financial markets registered periods of great turbulence in the beginning of the year, with a deep devaluation of the cyclical financial assets and investment strategies directed especially towards the preservation of capital. The decisive attitudes on behalf of the authorities, which included providing strong encouragement to the economic activity by reducing interest rates to meaningless values, facilitating the access to short-term liquidity, and partially taking on the counterparty risk in the private sector through the granting of endorsements and warranties, proved to be crucial for the reduction of risk aversion. The North American dollar resumed its depreciation tendency to approximately 1.50 dollars to the euro. The subsequent recovery was due to the more recurrent signs of the US economy’s recovery as opposed to the cooling of European indicators and the increase of institutional uncertainty in the euro zone. The currencies of emerging markets were valued following the commitments

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economic performance of the countries where eDp carries out business The impact of the international economic and financial crisis on the Portuguese economy’s performance was substantiated by a decrease of the GDP slightly lower than 3% in real terms; the most acute in recent years. Notwithstanding the recessive framework, the direct effects proved to be less scathing than for the most of the euro zone. The reduction in aggregate demand became evident in relation to investment and exportation due to the decrease of world trade and the reassessment of production perspectives. The more sensitive sectors to the cyclical fluctuations and external demand were penalized, especially the construction and manufacturing industries. Despite the public measures that aimed to reduce the recessive effects, employment showed a steep decline, similar to that of the product. The unemployment rate went up to nearly 10% of the active population and had very noticeable repercussions on the volume and distribution of private spending. The job market adversity surpassed the favourable and simultaneous effect that resulted from the increase in purchasing power, created by the almost 1% reduction of general prices, and from the moderation of debt services fees. Private saving rates increased and returned to the average levels that prevailed between 1996 and 2004. Portuguese Economy Performance 15 10 5 0 -5 Spanish Economy Performance 20 15 10 5 0 -5 -10 M As for 2010, the economic growth should be practically null, appearing as a more moderate version of the actions seen in 2009, with the external boosting compensating the frailty of internal demand. Brazil is confirmed to be in the beginning of a new cycle in the expansion of activity after the 2009 stagnation, revealing a less evident impact from the alteration of external conditions and a great resilience of internal demand. At the end of the year, the activity indexes practically returned to the levels which were dominant before the intensification of the world crisis, and the job market already shows signs of recovery. This performance proves to be a very favourable internal framework, with investment gaining importance. The inflation rate is in line with the objectives defined by the central bank for price stability (4.5%), in both current levels and the economic agents’ expectations.The macroeconomic instabilities are not very significant and the public finances levels are reasonable (4% for the deficit and 64% for the public debt, as a % of the GDP), the external deficit is relatively low (1.2% of the GDP) and it has a favourable demographic framework, in contrast to what has been foreseen for developed economies, allowing for an additional spur to the potential growth factors. In the scope of two important global sports events in the medium term, Brazil’s economic conditions appear favourable for a relatively quick recovery, with its growth rate close to its potential product, estimated at approximately 4-5%. M The estimated decrease of the Spanish GDP in 2009 is similar to that of the euro zone average (4%), and stems from the very severe adjustment of the investment and private consumption. Unlike most member states, which witnessed the return to positive product growth rates in the third quarter, Spain showed a much slower recovery. It registered the biggest increase in unemployment, which practically tripled to approximately 20% of the active population in a two-year period. The adjustment in the Spanish job market is not only characterized by its size but also by the growth of salaries much higher than the inflation rate. However, the very significant growth in productivity gains appeases the effects in labour costs. However, the very significant growth in productivity gains appeases the effects in labour costs. The strain on the activity has had material repercussions on the decrease of the external deficit. The latter has been reduced to almost half, to approximately 5% of the GDP. ar

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annual report 2009 business The US economic activity has revealed itself to be much heartier than expected, but there is still a high level of unpredictability. The reduction of the GDP in real terms in 2009 is expected to be 2.5%, and it should benefit from the inversion of the recessive cycle in the third quarter, sustained by private consumption, residential investment and exports, the first being boosted by public stimulus and the increase of real available income. At the same time, a significant slowdown in the employment slump was ascertained, although the unemployment rate maintained high. The investment prospects were more consolidated and showed an improvement in the confidence index from businesses, as well as a gradual normalization of the capital market. The inflationary pressures are maintained restricted, thus allowing for the conservation of an accommodative monetary policy. The main interest rate lies between 0.00% and 0.25%. The longer-term interest rates tended to go up at the end of the year, in line with a more optimistic perception of the economic conjuncture. The support measures for the liquidity of the financial system are being reassessed, in relation to their revealed avail. US Economy Performance 15 10 5 0 -5 energetic framework Still under the effects of the global financial and economic crisis, 2009 saw an unprecedented drop of worldwide energy demand, particularly in the power and gas markets. In fact, according to the International Energy Agency, this represents the deepest decline since the end of World War II. This demand drop led to a situation of overcapacity in power and gas markets, aggravated by investments made in new capacity and infrastructure which were already under construction or in advanced development stage before the crisis and therefore could not be revised in order to adjust to the evolution of demand. Energy commodity prices fell in 2009 relative to average values of 2008. However, 2008 ended with a collapse in commodity prices, which gradually recovered after the first quarter of 2009. This improvement was most visible in oil and coal prices, although it may not necessarily be associated with an actual increase in demand for these fuels due to economic recovery, but may rather reflect an anticipation by economic agents of a new scarcity situation in the near future. Brent and Coal Prices 200 160 120 80 40 0 M ar .0 Ju 6 n. 0 Se 6 p. 0 De 6 c. 0 M 6 ar .0 Ju 7 n. Se 07 p. 0 De 7 c. 07 M ar .0 Ju 8 n. 0 Se 8 p. 0 De 8 c. 0 M 8 ar .0 Ju 9 n. 0 Se 9 p. 0 De 9 c. 09 Unemployment rate (%) Real GDP (% var) Inflation rate (%) M Natural Gas Prices (Zeebrugge e HH, €/MWhth) 40 35 30 25 20 15 10 5 0 M As for natural gas, 2009 saw the decoupling between spot gas prices and oil prices, caused by the collapse in gas demand, both in Europe and in the United States. Excess volumes were directed to spot markets pressing international gas prices to a substantially lower level.The price of natural gas at Zeebrugge, the reference hub for Europe, was below 10 EUR/MWht for a large part of the year, with a slight recovery in the last quarter, but even so, much below the 2008 average of 25 EUR/MWht. 30 ar .0 Ju 6 n. 0 Se 6 p. 0 De 6 c. 06 M ar .0 Ju 7 n. Se 07 p. 0 De 7 c. 07 M ar .0 Ju 8 n. 0 Se 8 p. 0 De 8 c. 08 M ar .0 Ju 9 n. 0 Se 9 p. 0 De 9 c. 09 Zeebrugge Henry Hub ar .0 Ju 6 n. 0 Se 6 p. 0 De 6 c. 06 M ar .0 Ju 7 n. Se 07 p. 0 De 7 c. 07 M ar .0 Ju 8 n. 0 Se 8 p. 0 De 8 c. 08 M ar .0 Ju 9 n. 0 Se 9 p. 0 De 9 c. 09 Coal ($/ton) Brent ($/bbl)

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The price at Henry Hub, the reference hub for the United States, had an even more significant drop, suggesting a lower demand for LNG imports compared to Europe. Regarding the CO2 emission allowances market, the reduction in electricity demand as well in industrial production caused by the recession, caused a reduction in emissions, with a direct impact on the ETS (Emissions Trading Scheme) CO2 price, which dropped from 22.1 EUR/ton (2008 average) to 13.1 EUR/ton (2009 average). However, this price reflects not only the demand-supply balance of 2009 allowances but also the balance of the whole period until at least 2020, given the possibility of CO2 allowances banking throughout this period. As a consequence of the drop in fuel prices, wholesale power prices fell throughout Europe and the United States.Regarding Iberia, it should be noted firstly, that prices in the two countries are the lowest among European markets and secondly, that the Portuguese and Spanish price differential was very low in contrast with 2008 situation. The former is explained by higher overcapacity in Iberia when compared to other markets which, in some cases, actually face capacity shortages (e.g. UK), only delayed with the economic crises. This overcapacity situation paired with take-or-pay clauses of long-term gas contracts, affected mainly thermal power plants in both margins and volumes. The latter is explained by the growing integration of the Portuguese and Spanish markets, as a result of the implementation of MIBEL, combined with the growing similarity of the marginal generation portfolio of both countries. Electricity Price Change on European Wholesale Markets 90,9 70,0 69,2 51,0 37,6 37,0 38,9 43,0 41,6 26,1 demand but also the decommissioning of some fuel and coal-fired power stations, leaving Iberian reserve margins at comfortable levels. In Brazil, demand is expected to grow 5,4% per year. New capacity additions in the 2010-13 period will be 24 GW (45% thermal, 35% hydro, 20% renewable). In this scenario expected surpluses will be between 4 and 5 GW average, which should be enough to keep the risk of rationing below 5%, at least until 2012. Climate Change was high on the political agenda during 2009, with negotiations at the Copenhagen Conference.The Conference resulted in a non-binding accord, signed by 28 countries (including United States, European Union, China, India and Brazil), in which signatories agreed to submit their voluntary targets of emissions reduction by the 31st of January, 2010. The accord also included goals for financing to developing countries, with the aim of helping mitigate their expected emissions growth.Although Copenhagen ended without a global binding agreement, it was the first time that countries such as China, India, and even the United States, announced a commitment to specific emissions reduction goals.In the United States, a legislative package to create a “cap-and-trade” system for CO2 emissions and the establishment of a federal target for renewable energy in electricity generation is currently under discussion in the Senate, after approval by the House of Representatives. Adoption of this legislation will not only further boost renewable energy in the US, but will also increase the likelihood of reaching a global compromise in carbon emissions reduction. 2009 will also be remembered by stimulus packages to spur economic recovery across the world, with significant funding allocated to the power and gas sector. Besides ensuring a stable support and continuity to investment in the short term, particularly in renewable energy, these stimulus packages are also specifically targeting areas that could represent relevant business opportunities for the sector in the medium and long term, such as energy efficiency, electric mobility and Carbon Capture and Sequestration (CCS). 64,4 65,8 Portugal 2008 Spain 2009 Germany France UK US On generation volumes, operating hours of Iberian thermal plants dropped in 2009 due

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annual report 2009 business regulatory framework Developments in the european union energy-climate package The European Council, has adopted, last April, a new legislation package on the climate change and promoting renewable energy sources, to achieve at the Union level a 20% cut on greenhouse gases and 20% share of renewable sources in energy generation, by 2020. In particular, launched the Framework Directive (Directive 2009/28/CE) to promote renewable energy sources and the revised Emission Trading System, to encourage further reductions in emissions of greenhouse gases in areas of intensive energy by Directive 2009/29/CE, stipulating that from 2013 to 2020, heavy industries shall contribute significantly to the European goal of reducing emissions by 20% over the 1990 level. Directive 2009/31/EC established the regulatory framework to capture and geological storage of carbon dioxide in the context of mitigation of climate change. And the so-called third legislative package for the energy market, adopted on second reading unanimously by the European Parliament in June 2009, lay down common rules for generation, transmission, distribution and supply of electricity and gas (Directive 2009/72/EC and 2009/73/EC and Regulations 714/2009/CE and 715/2009/CE) as well as consumer protection, to promote and integrate the markets for electricity and gas in the European Union and establishes the Agency for Cooperation of Energy Regulators - ACER, which support and if necessary coordinate the actions of national regulators. Directive (of the parliament and of the council) on industrial emissions On 25 June 2009, before finishing the Czech Presidency, the Council reached a political agreement to adopt a common position on the recast of the IPPC Directive (Integrated pollution prevention and control) to be approved in the second reading, under Treaty of Lisbon rules, from December 2009. This new Directive will comprise six sectoral directives, including on the LCP and Waste Incineration. The most recently signed in Braga, in January 2008, formalises the Plan of Regulatory Harmonization of March 2007, reinforcing the dynamic of the integration of electrical systems of the two Iberian countries, which was ratified by the Resolution of the Assembly nº 17/2009, and also ratified in Spain. It provides, inter alia, reinforcing the coordination between System Operators (REN and REE), acceleration of the strengthening plan for the interconnection grid, implementation of a market splitting mechanism for management of the interconnection and explicit auctions to maximize the use of interconnection and competition in the Iberian context. It also aims the harmonization of the remuneration conditions of the Supplier of Last Resort and a plan for tariff convergence at the level of the rules to define the tariffs of last resort, to be additive, without prejudice to allow recovery of the earlier tariff deficit and with a phased timetable for his disappearance. This agreement also calls for the harmonization of capacity payments to ensure the required rate of investment in electricity generation, taking into account the specificities of each system, and rules on the organization and responsibilities of the IMO and the Board of Regulators, as well as a set of principles for the definition of dominant operator in the Iberian Market. The transactions in the market - daily, intraday and forward – continued to be managed by OMEL and OMIP operators, with subsequent formation of the Iberian Market Operator – IMO. Developments in the regulatory framework of the electricity sector in portugal Decree-Law n. 23/2009, completing the transposition of the Directive 2005/89/EC on the safety of electricity supply and investment in infrastructure, strengthened the planning and information on international interconnections. In the environmental field, Decree-Law n. 154/2009 introduced changes to the rules of qualification and registration of emission allowances of greenhou

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and the amount to acquire these auctions by EDP SU, as the last resort supplier (CUR), quantities that were purchased under that order. In 2009 started a new regulatory period, with the definition of a new regulatory model of regulated activities, such as electricity distribution and supply of last resort. Among the regulatory changes (Order n. 58/2009) promoted by ERSE, it must be highlighted the adaptation scheme to tariff stability as defined by Decree-Law n. 165/2008, which allowed the securitization of the tariff deficit, amounting to 1.225 million, relating to adjustments arising from differences in costs with 2007 and 2008 power purchase by EDP SU, and 447 million euros of over cost related to the PRE in 2009. According to the amended Regulations, it was implemented a set of measures of image differentiation and autonomy of the internet pages of EDP Distribuição and EDP Serviço Universal. Developments in the regulatory framework of the electricity sector in spain From 1 July were eliminated electricity final tariffs, all consumers being supplied by the liberalized market. However, consumers with BT (Low Voltage) contracted power under 10 kW shall be entitled to the tariff of last resort (TUR), administratively set to be addictive, with binomial structure (power and energy terms) including production costs, access to the transmission and distribution grids, and supply costs. The term energy is calculated based on the result of CESUR and OMIP auctions for purchases of electricity of last resort, adjusted according to the profile of its portfolio of clients, a risk factor, security of supply and power losses. Regulations designated the last resort suppliers, including the Hidrocantábrico Energía Último Recurso, SAU, with obligations to supply customers with the right to TUR, the last resort tariff. These suppliers are also required to supply energy to customers without the right to TUR but not yet with a supplier, except for reasons of lack of payment. Pursuant to Royal Decree 485/2009, business groups with obligations of last resort in the electricity and natural gas are allowed to unify their activities into one company. In May (Royal Decree-Law 6/2009) created the “bono social” for certain domestic customers with the right to TUR and contracted power less than 3 kW, provided that the supply is intended to first home, when it is applied automatically, and the consumers over 60; unemployed; belong to large families; or who receive the minimum pension, where the allocation of those benefits must be requested and proof. The “bono social” will cover the difference between the value of TUR and a reference value, called “reduced tariff”, which is the prior domestic tariff. The funding will be provided by producers and Hidroeléctrica del Cantábrico, S.A. is responsible for 3.5% of the total. Established the following maximum values for the tariff deficit: 2009, 3500 million; 2010, 3,000 million; 2011, 2,000 million, and 2012, 1,000 million. From 2013 access tariffs should be sufficient to finance the regulated activities to avoid new deficits. It was also created a Securitization Fund of Tariff Deficit, which may buy the outstanding securities up to 10,000 million and credits for the deficit of 2009, with State guarantee. Until the sale, the deficit will be financed by companies and Hidroeléctrica del Cantábrico, S.A. will bear 6.07% of the total. From 1 July 2009 was repealed the Royal Decree-Law 11/2007 which reduced the compensation of generators under increasing revenues from the sale of allowances of greenhouse gas emissions assigned for free under the 2008-2012 PNAD. In the special regime in particular, it was created a registration system for pre-allocation of compensation similar to that applicable to photovoltaic generation, a necessary condition for access to the economic system defined by Royal Decree 661/2007, to be allocated in chronological order of registration and in the face of several technical and economic re

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annual report 2009 business Comparing with other countries, electricity prices in Portugal in the 1st half of 2009, for households with annual consumption between 2500 and 5000 kWh, are 13.9% below the average of the 16 countries in the Euro area and 9.1% below the EU27 average. In Spain the electricity prices are below the average of the 16 Euro Area and the European Union of 27 in 10.0% and 4.9% respectively. Average Electricity Prices (Euro cent/KWh) 15,08 15,77 16,58** 17,52 With a strong impact in the electricity sector, on November 10th occurred the simultaneous discontinuation of three transmission lines 750 kV AC from Itaipu Hydropower Plant, with 14,000 MW of installed capacity, affecting the Brazilian system and causing a nationwide blackout. Given the damage on different costumer’s equipment, the law stipulates that companies must reimburse customers who have proven losses, and even if they do not identify a causative agent, the total cost of damages to customers should be supported by the distributors (by 40%), 30% by generators and 30% by transmission companies. In 2009 regulations also laid down the framework for the 3rd round of tariff revisions, especially for the reference company and the construction of regulatory retribution basis, central to the process of distribution tariffs. Developments in the regulatory framework of the electricity sector in the usa With regulatory impact on renewable energy was approved in February 2009 the American Recovery and Reinvestment Act (ARRA), introducing incentives for several sectors and the financial package specifically for renewable sector. In this context, it must be stressed the extension of tax credits for renewable energy production (PTC) until the end of 2012 and the creation of tax credits of 30% of eligible investment in renewable energy (ITC), with option between PTC and ITC systems for new farms. Additionally, securitizing the amounts tax credit ITC (in the form of treasury bonds North American) it’s allowed for new installations eligible until the end of 2010 with commissioning by the end 2012. In June 2009, the House of Representatives passed the American Clean Energy and Security Act (Waxman-Markey Act), establishing a system of cap and trade CO2 (reduction in emissions of 17% in 2020 compared to 2005) and requires suppliers to mandatory quota of renewable energy at federal level, system that is developed only in some states. PT ES EU27 EA16* *Source: Eurostat, 1st semester 2009. ** Household consumers in consumer band Dc [annual consumption between 2500 and 5000 kWh]. Developments in the regulatory framework of the electricity sector in brazil Despite the global financial crisis in 2009, stands out the high growth in residential and commercial markets, as well as recovery of the industrial Brazilian market, supporting the prospect of a new growth in 2010.The generation sector received a hydrological stable environment, with minimum production of thermal electricity and satisfactory levels of water reservoirs, lately unusual for several years in a row, with positive effects in the pricing of short-term market, with lower values throughout the year. The auctions for the purchase energy from the new power plants designed to meet the distributors captive markets, have struggled to ensure the presence of hydro-portfolio offer, consequence of a slow processing of environmental permits for new projects. As a result, the «A-3» auction, for projects beginning operation in three years from the year of the auction, sold small amounts of energy, so the government canceled the «A-5» auction. The auction of the Belo Monte structuring hydropower project (11,233 MW) was also postponed to 2010, due to difficulty in obtaining the Preliminary Environmental License. It stands out, though, the process of Public Hearing for adoption of trade rules and the associated bid for completion of auction wind power reserve with good reception by the companies, guaranteeing the sale of a

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Developments in the regulatory framework of the spanish gas sector Relevant regulatory changes in the natural gas sector in Spain were the permission to supply last resort for electricity and gas through the same company (see the above-mentioned Royal Decree 485/2009 of 3 April) and the change of gas Last Resort Tariff (TUR), from a maximum price regime to a fixed tariff, prohibiting the last resort suppliers to offer rebates to its customers.It was scheduled the elimination of TUR, reducing to 50,000 kWh per year the threshold of the customers entitled to TUR as of July 1, 2009. Customers from Tariff T.3 and T.4 are no longer entitled to TUR as of March 31, 2010. In 2009 was also revised the model of authorizations for gas transportation facilities (Real Decreto-Ley 6/2009) and by Resolution of July 24, 2009 of DGPEM, it was defined the procedure for allocation of interconnection capacity between Spain and France available from 2013 in Biriatou and Larrau pipelines. 35

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annual report 2009 summary of activities electricitY Business (excluDing Brazil) generation in iberia generation in iberia - portugal unit installed capacity in portugal * eDp's installed capacity * EDP's market share * Source: REN Technical data Generation portfolio (MW) 8,765 1,993 9,015 1,993 1,176 1,192 9,091 2,000 1,176 1,180 9,974 2,020 2,039 1,180 2009 13,381 9,974 74.5 190 116 93 1 3 35 23 4 5 12 2 74 67 4 3 2008 12,262 9,091 74.1 186 114 93 1 3 35 21 4 3 12 2 72 67 2 3 2007 12,147 9,015 74.2 160 114 93 1 3 35 21 4 3 12 2 46 42 1 3 2006 12,104 8,765 72.4 156 112 91 1 3 34 21 4 3 12 2 44 40 1 3 93.0 1,176 1,192 mw mw % # # # # # # # # # # # # # # # 4,404 4,654 4,735 4,735 number of generating groups* ordinary regime generation hydroelectric power plants Command Centre Generating power plants Power plants thermoelectric power plants Coal CCGT Fuel oil Gasoil special regime generation Mini-Hydroelectric power plants Biomass Cogeneration installed capacity at 31 December* ordinary regime installed capacity hydroelectric power plants thermoelectric power plants Coal CCGT Fuel oil Gasoil special regime installed capacity Hydroelectric power plants Biomass Cogeneration total capacity net generation* ordinary regime generation hydroelectric power plants thermoelectric power plants ** Coal CCGT** Fuel oil Gasoil special regime generation Mini-Hydroelectric power plants Biomass Cogeneration total generation 2006 Hydro Others 2007 Coal 2008 CCGT 2009 Ordinary Regime Generation Availability (%) 96.7 95.7 93.4 91.1 93.2 92.8 96.6 2006 2007 Hydroelectric 2008 2009 Thermoelectric mw mw mw MW MW MW MW mw MW MW MW mw 9,675 4,578 5,096 1,180 2,039 1,713 165 299 157 32 111 9,974 8,812 4,578 4,234 1,180 1,176 1,713 165 279 157 11 111 9,091 8,824 4,578 4,246 1,192 1,176 1,713 165 192 76 5 111 9,015 8,584 4,338 4,246 1,192 1,176 1,713 165 182 66 5 111 8,765 Special Regime Generation Availability (%) 95.7 93.7 96.3 94.8 90.2 95.5 94.8 90.4 94.9 91.2 89.0 82.7 2006 2007 Mini-hydro Biomass 2008 2009 gwh gwh gwh GWh GWh GWh GWh gwh GWh GWh GWh gwh 23,514 7,642 15,872 8,869 6,696 307 0 1,222 368 129 725 24,736 21,642 6,435 15,207 6,926 7,481 801 0 869 170 49 650 22,511 24,718 9,361 15,357 8,048 6,038 1,271 0 906 134 28 744 25,624 27,113 10,070 17,043 9,694 5,728 1,619 1 948 193 29 726 28,061 10,263 28,061 17,797 Cogeneration Net Generation (GWh) 25,624 16,129 22,511 15,906 24,736 16,726 ** Includes 497 GWh generated in Lares testing period 9,495 6,604 8,010 energy balance hydrological index eDp group power plants Hydroelectric output Thermal output Mini-hydroelectric output Wind power output (ENERNOVA) Biomass output Cogeneration output eDp group net generation Direct sales to industrial costumers output to grid (eDp group) Other generators with PPA Other generators with PPA Importer/(Exporter) balance Pumped hydroelectric storage consumption related to output Synchronous compensation Own consumption in generation energy Delivered to Distribution * Excludes wind power # GWh GWh GWh GWh GWh GWh gwh GWh gwh GWh GWh GWh GWh gwh GWh GWh gwh 0.77 7,642 15,872 368 1,273 129 725 26,009 26,009 7,842 11,793 4,777 -926 49,495 -1 -5 49,489 0.56 6,435 15,207 170 1,026 49 650 23,537 0 23,537 8,590 9,660 9,431 -639 50,579 0 -5 50,574 0.76 9,361 15,356 134 733 28 744 26,357 -21 26,336 8,231 8,531 7,488 -519 50,074 -9 -5 50,060 0.98 10,070 17,043 193 482 29 726 28,542 -255 28,288 8,570 7,592 5,441 -622 49,269 -17 -5 49,247 2006 2007 2008 2009 Hydroelectric generation Thermoelectric generation Energy Balance 2009 (TWh) 49.2 5.4 15.5 50.1 7.5 16.2 50.6 9.4 49.5 4.8 18.7 17.6 28.3 26.3 23.5 26.0 2006 2007 EDP Group output Importation 2008 2009 Other generators 36

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presence of eDp group in the electricity generation activity in portugal* Viana do Castelo Braga Bragança repowering venda nova iii Hydro 736 MW 2015 repowering salamonde Hydro 204 MW 2015 repowering Picote Hydro 246 MW 2011 repowering Bemposta Hydro 191 MW 2011 Fridão and alvito Hydro 463 MW 2015 Vila Real Porto Foz tua Hydro 251 MW 2014 Baixo sabor Hydro 171 MW 2013 ribeiradio Hydro 77 MW 2013 Guarda Coimbra lares CCGT 863 MW 2009 Figueira da Foz Biomass 28,8 MW 2009 Aveiro Viseu Castelo Branco Leiria constância Biomass 12,5 MW 2009 Santarém Portalegre 4.578 MW Hydro ORG installed 5.096 MW Thermic ORG installed 299 MW SRG installed Fisigen Cogeneration 24,3 MW 2010 Lisboa Setúbal Évora repowering alqueva Hydro 256 MW 2012 Beja Hydroelectric power plants Cogeneration and natural gas power plants Thermoelectric power plants Biomass power plants Faro start of operation uner construction under licensing process *Excludes wind power 2009 main events of the electricity generation activity in portugal EDP Group is present in electricity generation in Portugal through EDP Produção under Ordinary and Special Regime Generation and EDP Produção Bioeléctrica, Soporgen, Energin and Pebble Hydro under Special Regime. By the end of 2009, total installed capacity was 9.974 MW of which 4.735 MW (47%) from hydroelectric plants and 5.239 MW from thermoelectric power plants. In October 2009, the second Combined Cycle Gas Turbine power plant (CCGT) of EDP Produção entered into service. Lares power plant consits of two generator groups with a unitary capacity of 431 MW, where Group 1 started operations in October and Group 2 in November. This plant, to an annual usage of 6000 equivalent hours, allows the achievement of a total production of 5,000 GWh. Regarding the strengthening of the Hidroelectric portfolio capacity, EDP Produção is focused on the construction of the capacity repowerings of Picote, Bemposta and Alqueva with a total installed capacity of 693 MW which are planned to enter into service during the 2011-2012 period and on the development work of the General construction Contract of the Baixo Sabor Hydroelectric plant with entry into service scheduled for 2013. Mention should also be made to the work on licensing hydropower plants with a total capacity of installing 1,654 MW expected to enter into service until 2015. During 2009 EDP Produção signed an agreement with IBERDROLA for the temporary management of the production capacity of hydroelectric Aguieira and Raiva, for a period of five years. The plant management by IBERDROLA began on the 1st of April. In what concerns the certification of power plants, it is important to point out the completion of the registration in the EU Eco-Management and Audit Scheme (EMAS) of the first Production centers of EDP Produção, in which were issued by the APA the Certificates of Registration on EMAS of the thermal power station of Ribatejo and the hydro-electric plants of Alto Lindoso, Miranda and Cascata da Serra da Estrela, valid until September 2012. 37

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annual report 2009 summary of activities generation in iberia generation in iberia - spain unit installed capacity in spain * eDp's installed capacity * EDP's market share * number of generating groups* ordinary regime generation hydroelectric power plants thermoelectric power plants Coal CCGT Nuclear special regime generation hydroelectric power plants** thermoelectric power plants Biomass Cogeneration Waste installed capacity at 31 de December* ordinary regime installed capacity hydroelectric power plants thermoelectric power plants Coal CCGT Nuclear special regime installed capacity hydroelectric power plants** thermoelectric power plants Biomass Cogeneration Waste total capaticy net generation* ordinary regime generation hydroelectric power plants thermoelectric power plants Coal CCGT Nuclear special regime generation hydroelectric power plants** thermoelectric power plants Biomass Cogeneration Waste total generation energy balance hydrological index eDp group power plants Hydroelectric output Thermoelectric output Nuclear output CCGT output Mini-hydroelectric output Wind power output (ENERNOVA) Biomass output Cogeneration output Waste output eDp group net generation Other generators - ORG Other generators - SRG Importer/(Exporter) balance Pumped hydroelectric storage consumption related to output Own consumption in generation Own consumption in transmission grid Losses energy Delivered to Distribution GWh GWh GWh GWh GWh GWh GWh GWh GWh gwh GWh GWh GWh GWh gwh GWh GWh GWh gwh 877 5,865 1,113 3,491 2 3,275 6 369 519 15,113 181,116 74,020 -8,106 -3,763 258,784 -7,081 0 -3090 248,613 812 6,575 1,198 3,831 2 2,632 6 192 500 15,749 207,924 65,923 -11,040 -3,731 274,824 -8,339 0 -3,389 263,096 786 10,124 1,232 1,795 2 2,056 8 90 453 16,546 209,887 55,731 -5,750 -4,349 272,064 -8,753 0 -3,281 260,031 846 9,854 1,192 1,692 2 1,419 13 176 351 15,546 207,289 48,356 -3,280 -5,261 262,650 -8,907 0 -3,017 250,726 # 0.81 0.66 0.64 0.80 gwh gwh gwh GWh GWh GWh gwh gwh gwh GWh GWh GWh gwh 11,346 877 10,469 5,865 3,491 1,113 896 2 894 6 369 519 12,242 12,416 812 11,604 6,575 3,831 1,198 700 2 698 6 192 500 13,117 13,936 786 13,151 10,124 1,795 1,232 553 2 551 8 90 453 14,489 13,584 846 12,738 9,854 1,692 1,192 543 2 541 13 176 351 14,127 mw mw mw MW MW MW mw mw mw MW MW MW mw 3,272 426 2,846 1,460 1,229 156 155 3 152 7 63 82 3,427 3,271 426 2,845 1,460 1,229 156 130 3 127 7 38 82 3,401 2,435 426 2,009 1,460 393 156 130 3 127 7 38 82 2,565 2,492 426 2,065 1,523 387 156 131 3 128 4 42 82 2,623 mw mw % # # # # # # # # # # # # # 2009 75,096 3,427 4.6 40 20 12 8 4 3 1 20 1 19 2 11 6 2008 75,004 3,401 4.5 38 20 12 8 4 3 1 18 1 17 2 9 6 2007 71,789 2,565 3.6 39 18 12 6 4 1 1 21 1 20 2 12 6 2006 67,614 2,623 3.9 20 19 12 7 5 1 1 1 1 0 - Generation Portfolio (MW) 3,401 2,623 284 387 2,565 283 393 282 1,229 3,427 308 1,229 1,523 429 1,460 429 1,460 429 1,460 429 2006 Hydro Others 2007 Coal 2008 CCGT 2009 Ordinary Regime Generation Availability (%) 96.7 94.1 92.4 94.8 86.6 92.3 90.7 91.4 2006 CCGT 2007 2008 Coal 2009 Special Regime Generation Availability (%) 95.0 88.3 94.8 86.6 83.6 87.6 91.0 38.0 55.7 21.8 2006 2007 Cogeneration Biomass 2008 Waste 2009 Unavailable information Net Generation (GWh) 14,127 2,581 1,692 9,854 14,489 2,571 1,795 1,124 3,831 13,117 2,711 12,242 2,886 3,491 6,575 5,865 2006 Coal 2007 CCGT 2008 Others 2009 Energy Balance 2009 (TWh) 251 260 16 263 17 16 249 15 238 249 258 242 -3 -6 -11 -8 2006 2007 EDP Group output Other generators 2008 2009 38 * Excludes wind power ** Includes mini-hydro from EDP Renováveis Exportation

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presence of eDp group in the electricity generation activity in spain* Produção Espanha under construction · soto 5 CCGT 400 MW 2011 astúrias viszcaya Barcelona valladolid soria guadalajara toledo Jaén Murcia *Excludes wind power Hydroelectric power plants Cogeneration power plants Thermoelectric power plants Biomass power plants CCGT power plants Nuclear 2009 main events of the electricity generation activity in spain In Spain, EDP Group is present in electricity generation through HC Energía under Ordinary and Special Regime Generation. By the end of 2009, total installed capacity was 3.272 MW of which 426 MW (12%) from hydroelectric plants and 2.846 MW from thermoelectric power plants. The total availability of coal plants was 94,8% and the unavailability due to breakdowns, only 1,6%, which confirms the excellent operation of the equipment, particularly given the extraordinary flexible operability of these groups, due to the complementary nature of coal over gas. The availability of combined cycles was 91,4% and the unavailability due to failure was 2,5%. The combined cycle also had a very flexible operation, with frequent night stops at the weekends. Due to the various modernization works operated in the general review of the Aboño 1 nuclear power station on month, it was possible to extend the operation time of this plant even beyond its 40 years of useful life. In 2009 HC Energía incorporated 100% of Grupo Millenium into its portfolio, which entails 32 MW at four Cogeneration plants, and a significant increase in the amount of electricity generated with this technology, bringing the total to 369 GWh. With its strategy to diversify more and more the generation mix, HC Energía is building Soto 5 with an installed capacity of 400 MW, the second group of combined cycle power plant in Soto de Ribera, Asturias. The pace of construction is proceeding according to plan with the date of entry into service planned for the first quarter of 2011. With this entry the installed capacity in combined cycle in Spain will be 1,6 GW. 39

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annual report 2009 summary of activities eDp renováveis unit wind installed capacity EDP Renováveis Installed Capacity Source: Global Wind Report 2008, GWEC: Wind Onshore Installed Capacity Generation Portfolio (MW) 6,227 14 2009 157.9 6.2 2008 120.8 5.1 2007 93.9 3.6 2006 74.1 1.6 1,568 1,568 2,150 3,640 1,490 5,052 2,158 2,859 gw GW 2,894 3,355 installed capacity at 31 December* europe Portugal Spain France Belgium Poland usa brazil total capacity load factor europe Portugal Spain France Belgium Poland usa brazil net generation* europe Portugal Spain France Belgium Poland usa brazil total generation mws under construction during 2009* europe Portugal Spain France Belgium Romania Poland usa brazil total mws under construction *Excludes mini-hydro mw brutos MW Brutos MW Brutos MW Brutos MW Brutos MW Brutos mw brutos mw brutos mw brutos 3,355 680 2,278 220 57 120 2,859 14 6,227 2,894 553 2,109 185 47 0 2,158 0 5,052 2,150 424 1,639 87 0 0 1,490 0 3,640 1,568 326 1,213 29 0 0 0 0 1,568 2006 Europe Brazil 2007 USA 2008 2009 Load Factor (%) 34 30 93,4 26 26 26 26 22 32 % % % % % % % % 26.3 27.5 26.2 23.2 22.8 0.0 31.7 21.7 26.0 26.5 25.7 22.8 0.0 0.0 33.7 0.0 26.2 24.3 26.8 26.7 0.0 0.0 29.9 0.0 25.9 26.4 26.8 0.0 0.0 0.0 0.0 0.0 Brazil Europe USA 2006 2007 2008 2009 Net generation (GWh) 10,907 5,905 26 gwh GWh GWh GWh GWh GWh gwh gwh gwh 4,975 1,275 3,275 346 79 0 5,905 26 10,907 4Q09 3,900 1,028 2,634 238 0 0 3,907 0 7,807 3Q09 866 128 417 30 13 159 120 427 0 1,293 2,911 735 2,056 119 0 0 866 0 3,777 2Q09 761 133 477 18 13 0 120 501 0 1,261 1,902 483 1,419 0 0 0 0 0 1,902 1Q09 718 72 477 26 23 0 120 300 0 1,017 113 14 99 136 101 35 276 1,902 1,902 3,777 866 2,911 7,807 3,907 4,975 3,900 2006 Europe Brazil 2007 USA 2008 2009 mw MW MW MW MW MW MW mw mw mw 640 53 308 39 13 228 0 99 0 739 Entry Into Service in 2009 (MW) 650 329 322 172 104 1175 1T09 2T09 Europe Brazil 3T09 USA 4T09 2009 EDP Renováveis Share Price (€) 8 7 6 5 4 Pipeline Capacity End 2009 (Gross MW) 30,310 1,509 19,345 6,63 11,669 336 8,710 739 99 640 1,587 70 748 769 6,897 234 5,634 1,029 9,419 869 4,154 9,456 2,623 4,396 Dec.08 Jun.09 Sep.09 May.09 Oct.09 Mar.09 Dec.09 Feb.09 Jul.09 tru e çã m o r1 r2 r3 s ct pe os pi pe lin t ie t ie t ie 40 co ns Europe Brazil USA pr e to ta l

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presence of eDp group in the operation of winD farms in the worlD 2.859 mw 99 MW usa france 220 mw 39 MW belgium 57 mw 13 MW poland 120 mw - romania brazil 14 mw 2.278 mw 308 MW 228 MW spain portugal 680 mw(1) 53 MW mw installed capacity MW under construction (1) includes 85 MW from ENEOP2 2009 main event of eDp renováveis activity EDP Group is present in the activity of wind energy generation through EDP Renováveis (EDPR). By the end of 2009 EDPR is present in 8 geographies: Portugal, Spain, France, Belgium, Poland, Romania, the United States and Brazil and during 2009 increased its capacity by 1.175 Gross MWs of which 461 MW through the European platform, 700 MW in the North American subsidiary and 14 MW in Brazil. As subsequent event, EDPR also entered the markets of UK and Italy. With this global presence EDPR reaches market share positions of 8.2% in the U.S. and 4.5% in Europe. The average load factor reached 26% in Europe and 32% in the U.S. Operational excellence and prime location of EDPR parks, allows achieving a higher premium than the market (particularly in Spain +150 percentage points). eDpr - europe (eDpr eu) EDPR EU (Neo Energia) is at the top of the list of companies that have built more wind farms during the years 2007, 2008 and 2009, with a portfolio of 9,5 GW in various stages of development and a capacity of 3,355 MW. In Portugal, the capacity increase benefits from the entry into operation of the parks built by ENEOP2, the company that won the wind generation public tender in Portugal (total of 1,2 GW). In Spain, gross installed capacity is 2.278 MW which represents an increase of 169 MW in relation to 2008. At the end of 2009, 308 MW are under construction. In 2009, installed gross capacity reached 220 MW in France and in Belgium 57 MW representing an annual increase of 35 MW and 10 MW respectively. The Margonin wind farm (120 MW), in Poland entered in operation in December 2009. In Romania, the year 2009 was marked by the beginning of construction of the first wind farm of EDPR in a country with a total capacity of 228 MW. In January 2010, EDPR EU took another important step in its strategy of expansion through the acquisition of 520 MW of projects under development in Italy. In the development of offshore, wind farms have been assigned to EDPR and SeaEnergy, through a joint venture called Moray Renewables, the exclusive rights to develop offshore wind farms in north-east Scotland, with a total capacity estimated of 1,3 GW. eDpr - north america (eDpr na) The activity in the U.S. is provided by the North American platform EDPR NA (Horizon Wind Energy). At the end of 2009 EDPR NA has 16 wind farms in operation, with a total gross capacity of 2.859 MW, representing an increase of 700 MW compared to 2008. By the end of 2009, EDPR NA holds a pipeline of 2009 19,2 GW of projects (excluding 99 MW already under construction) located in 18 states, divided into 5 regions. eDpr - brazil (eDpr sa) EDPR created in June 2008, a joint venture with EDP - Energias do Brasil/ Enernova, with the name of EDP Renewables Brazil (EDPR SA). EDPR SA has an installed capacity of 14 MW, following the conclusion of CENAEEL’s acquisition, and a pipeline of 1.5 GW of which 70 MW are expected to start construction in 2010 (Tramandaí wind farm). The main activities of EDPR SA are the exploration and development of partnerships for the construction of wind farms. The exploration is centered in the northeast, southeast and southern regions, which have a higher load factor. 41

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annual report 2009 summary of activities Distribution unit portugal energy input in the Distribution griD For the regulated market For the free market total Note: does not include VHV consumptions Energy distributed (TWh) 2009 2008 2007 2006 45,5 46,9 46,5 46,1 GWh GWh gwh 40,452 8,971 49,422 48,796 1,306 50,102 43,779 5,731 49,510 41,228 7,406 48,634 2006 Portugal 2007 Spain 2008 2009 9,6 9,6 9,7 9,1 outgoing energy from the griD Energy delivered to the distribution grid Distribution losses outgoing energy from the grid energy sales for the regulated market Very high voltage High voltage Medium voltage Special low voltage Low voltage Street lighting energy output for the liberalised market Very high voltage High voltage Medium voltage Special low voltage Low voltage ICEIT Points of Supply Employees griD structure inDicators Extension Substations Transforming stations eficiency inDicators Points of Supply/Employee Energy/Employee spain outgoing energy from the griD Energy delivered to the distribution grid Distribution losses outgoing energy from the grid electricity Distribution High voltage Medium voltage Low voltage Total Total Market Spain EDP market share ICEIT Points of Supply Employees griD structure inDicators Extension Substations Transforming stations eficiency inDicators Points of Supply/Employee Energy/Employee # GWh 1,751 24.8 1,717 26.4 1,585 24.7 1,527 24.2 2006 GWh GWh gwh gwh GWh GWh GWh GWh GWh GWh gwh GWh GWh GWh GWh GWh Min m# # 49,422 -3,277 46,146 37,626 1,330 3,723 9,128 3,163 18,740 1,542 8,520 208 2,089 4,770 413 1,040 152 6,120 3,778 50,102 -3,633 46,468 45,289 1,667 6,358 14,052 3,340 18,364 1,509 1,180 0 2 263 219 695 113 6,088 3,996 49,510 -2,591 46,919 41,546 1,527 6,265 10,290 2,491 19,523 1,449 5,373 3 11 4,098 996 264 111 6,054 4,242 48,634 -3,169 45,465 38,304 1,394 5,361 8,603 2,312 19,235 1,399 7,161 41 98 5,820 1,190 13 176 5,988 4,518 10.2 1,325 11.2 1,427 176 111 113 Installed Capacity Equivalent Interruption Time in Portugal (min) 27 31 121 2006 2007 Extraordinary events 2008 2009 Operacional Eficiency in Portugal 11.6 1,524 12.2 1,620 km # # 218,226 399 62,036 214,856 397 61,157 212,317 382 59,841 209,058 383 58,513 # GWh 1,620 12.2 1,524 11.6 1,427 11.2 1,325 10.2 2006 2007 2008 2009 Energy/Employee Points of Supply/Employee GWh GWh gwh 9,519 389 9,131 10,029 350 9,679 10,008 386 9,622 9,892 342 9,550 Installed Capacity Equivalent Interruption Time in Spain (min) 106 GWh GWh GWh GWh GWh % min m# # 5,322 1,215 2,594 9,131 247,990 3.7 55 645 368 5,762 1,284 2,633 9,679 257,412 3.8 65 628 366 5,882 1,204 2,536 9,622 238,895 4.0 59 617 389 5,874 1,215 2,461 9,550 231,428 4.1 106 603 395 24.2 59 65 55 2006 2007 2008 2009 Operational Eficiency in Spain 24.7 26.4 24.8 km # # 21,874 53 6,464 21,356 48 6,327 20,995 48 6,192 20,465 47 6,077 1,527 1,585 1,717 1,751 2007 2008 2009 Energy/Employee Points of Supply/Employee 42

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Distribuição Ibérica presence of eDp group in the activity of electricity Distribution in the iberian peninsula asturias 9.241 GWh 623.129 points 6.938 KM Grid HV 46 Substations aragón 14 GWh 2.906 points 97 KM Grid HV 2 Substations Madrid 49 GWh 6.090 points 68 KM Grid HV 1 Substation cataluña 6 GWh 18 points 5 KM Grid HV 1 Substation Portugal 46.146 GWh 6.119.805 points 218.226 KM Grid 399 Substations com. valenciana 209 GWh 12.381 points 191 KM Grid HV 3 Substations 2009 main events of the electricity Distribution activity in the iberian peninsula EDP takes part in distribution through EDP Distribuição in Portugal and HC Energía in Spain. This operation, based essentially on efficiency improvements and quality of service in the distribution grids, distributed over 55 TWh of energy in 2009. portugal In Portugal, EDP Distribuição has the concession of the National Distribution (RND) Electricity of Medium and High Voltage Grid and the Concession of all the 278 Distribution Networks in Low Voltage of all the municipalities on the mainland. It has 218.000 km of network and distributed 46.1 TWh of electricity in 2009 to a total of 6.1 million customers. The network investment in recent years, the implementation of new processes in maintenance and optimization of operating the network has had excellent results in the technical quality of service, resulting in a significant reduction, versus 2006, in the indicator “Interruption Time Equivalent of the Installed Capacity (ICEIT) to values in the order of 121 minutes (excluding extraordinary events), perfectly comparable with those found in networks of other distributors with similar structures and network consumption. The year 2009 was affected by unusual events, mainly the cyclone Klaus on 23 January and the adverse weather conditions with wind speeds exceeding 200 km/h on the 23rd of December in the western region of the country, which accounted for 5,83 and 25,17 minutes respectively. In response to the shortcomings resulting from the storm came to be involved 800 people, 360 vehicles and 50 generators. This intervention allowed the reinstatement of the power supply in the first 24 hours to 87% of consumers affected. After 48 hours the supply was restored to 98% of customers. The changes in electricity supply and demand, resulting from the attainment of the objectives of energy policy, mainly the reduction of emissions of greenhouse gases, are rising and will continue to require distribution companies to make significant changes, particularly the progressive installation of more information and automation leading to “smart grids” which will also result in clear benefit to the consumer and the producer. EDP is committed to this innovation process, emphasizing the Project InovGrid where, after the installation of equipment in various parts of the network, integrated into a pilot project, chose the city of Évora for implementing the concept of “Intelligent City”. Continued to exist a strong adherence to micro-generation, with the connection to the network of 3.485 new micro-producers with an installed capacity of 12,3 MW. Were also connected to the distribution network 84 new Special Regime Producers (PRE) with an installed capacity of 645,2 MVA. In both cases, there is a predominance of wind technology and photovoltaics. At the end of the year were connected to the grid 3.967 microproducers with 14 MW of installed capacity, and 593 with PRE 4.807 MVA of installed power. spain In Spain, HC Energía conducts the business of electricity distribution in 5 Autonomous Communities with a total of 22,000 kilometers of network and more than 9TWh distributed power, to which contributed during 2009, the acquisition of two small independent distributors of the Autonomous Region of Aragon. Aside from the Asturias HC Energía develops its electricity distribution business in the Autonomous Communities of Madrid, Valencia, Catalonia and Aragon, with a total of 21,500 new customers in these areas. Th

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annual report 2009 summary of activities supply in iberia unit last resort market in portugal number of costumers Very high voltage High voltage Medium voltage Special low voltage Low voltage Street lighting total electricity Very high voltage High voltage Medium voltage Special low voltage Low voltage Street lighting total liberalised market in portugal number of costumers EDP Comercial B2B B2C Other suppliers electricity EDP Comercial B2B B2C Other suppliers regulated/last resort market in spain number of costumers High voltage Medium voltage Low voltage total electricity High voltage Medium voltage Low voltage total liberalized market in spain number of costumers HCEnergía + NG Energía B2B B2C Other suppliers electricity HCEnergía + NG Energía B2B B2C Other suppliers # # # # # gwh GWh GWh GWh GWh 3,028,182 530,778 4,848 525,930 2,497,404 143,298 16,234 12,833 3,402 127,063 2,153,754 117,175 3,400 113,775 2,036,579 107,174 12,507 9,941 2,566 94,666 1,697,340 89,410 2,680 86,730 1,607,930 72,961 11,236 9,166 2,070 61,725 1,981,812 98,938 1,902 97,036 1,882,874 62,571 8,662 6,187 2,475 53,909 GWh GWh GWh gwh 1,559 11 1,563 3,133 5,064 133 2,043 7,240 5,629 268 2,142 8,039 5,650 462 2,072 8,184 # # # # 0 0 422,252 422,252 4 77 549,317 549,398 12 306 564,773 565,091 15 499 541,391 541,905 # # # # # gwh GWh GWh GWh GWh 277,008 259,698 7,535 252,163 17,310 8,520 5,529 4,565 963 2,992 197,752 197,151 9 197,142 601 1,180 947 271 676 233 151,613 148,319 5,105 143,214 3,294 5,372 3,010 2,751 259 2,363 26,199 22,573 4,446 18,127 3,626 7,161 4,037 4,024 13 3,124 GWh GWh GWh GWh GWh GWh gwh 1,330 3,723 9,128 3,163 18,740 1,542 37,626 1,667 6,358 14,052 3,340 18,364 1,509 45,289 1,527 6,265 10,290 2,491 19,523 1,449 41,546 1,377 5,358 8,589 2,308 19,222 1,399 38,253 # # # # # # # 26 193 17,681 28,246 5,746,352 50,299 5,842,797 53 234 22,913 32,170 5,785,797 49,260 5,890,427 55 213 20,748 25,687 5,807,784 48,308 5,902,795 20 182 19,955 25,118 5,869,451 46,971 5,961,697 2009 2008 2007 2006 Purchase of energy in Portugal (GWh) 50 40 30 20 10 0 2006 2007 2008 Wind 2009 Market* Cogeneration Hydro and other PRE *Includes purchases in auctions Electricity Supply in Portugal (TWh) 45.4 46.9 46.5 46.1 7.2 5.4 1.2 8.5 38.3 41.5 45.3 37.6 2006 Regulated 2007 Free 2008 2009 Number of supply costumers in Spain (thousands of costumers) 99 89 117 117 542 565 549 422 2006 Regulated 2007 Free 2008 2009 Electricity Supply in Spain 16.2 8.7 8.2 2006 Regulated 11.2 12.5 8.0 2007 Free 7.2 2008 3.1 2009 Market Share - Liberalised Market (%) 80.3 64.9 56.4 56.0 13.8 15.4 11.7 11.3 2006 Portugal 2007 2008 Spain 2009 44

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Comercialização Ibérica presence of eDp group in the activity of electricity supply in the iberian peninsula Portugal 6,1 Millions of Clients 5.5 TWh Free Market (65% share) 37,6 TWh Regulated Market spain 1,0 Million Clients 16,2 TWh Free Market (11% share) 3,1 TWh Regulated Market 2009 main events of the electricity supply activity in the iberian peninsula The EDP Group is engaged in supply in Portugal in the regulated market through EDP Serviço Universal, in which ensures the supply of electricity with a tariff which is set by regulation and the free market through EDP Comercial. In Spain is present in the Last Resort Market by HC Energía Last Resort and in the liberalised market through HC Energía and Energía CHC in which acts in competition with other Iberian players. portugal During 2009, the overall number of customers in the Regulated Market fell by 0.8%, as a result of the net outflow of nearly 65 thousand customers to the free market, from which 54 thousand supplied in Low Voltage (LV), 5 thousand in Special Low Voltage (SLV) and about 6 thousand in Medium Voltage (MV). In the case of Very High Voltage (VHV), over half of the customers decided to join the free market, whereas the same decision was taken by about one third of the customers supplied in High Voltage (HV). Electricity sales in the regulated market decreased by about 17% in relation to the previous year, particularly in HV and MV, with reductions of nearly 40% and 35%, respectively. These huge reductions are the combined effect of the referred migration of customers to the liberalized market, with the overall slowdown in electricity demand due to the economic crises. The relation of partnership and trust that EDP Comercial maintained with customers during 2008, when in result of the adverse pricing conditions they migrated to the Regulated Market, led in 2009 to the maintenance of a leading player position in the free market, in a competitive scenario. During the year, the EDP Comercial was allocated a 65% market share in energy demand, and had 94% of the facilities provided in the ML at the end of December. These results of EDP Comercial have been reached in a more sustained and supported way in its business units. B2B segment was the one that observed more dynamic in the reopening of the free market of electricity. The ability that EDP Comercial had to quickly make deals that create value to its customer base, complemented with an extensive display of Value Added Services, reflected in sales of 4,6 TWh and a portfolio of more than 7.535 facilities at the end of the year, including the largest consumers of electricity in the country. In the B2C segment EDP Comercial reached a portfolio of approximately 252 thousand residential customers and small businesses (95% of the liberalized market) at the end of the year, representing a sales volume of about 963 GWh, equivalent to an annualized consumption of 1,1 TWh. Concerning EDP Serviços, the year 2009 was marked by the development of new products and solutions based on three strategic points – Energy Efficiency, Multitechnic Services and Decentralized energy generation. EDP Comercial saw approved under 2009/2010 PPEC measures equivalent to 5,9 million euros, 41% of the total obtained by the EDP Group and about 30% of the total made available by ERSE. spain On 1 July 2009, when Royal Decree 485/2009 came into effect, the integral electricity tariffs were eliminated. Due to these changes, all customers are now part of the free market, whether through the independent trading company or through the Hidrocantábrico Energía Last Resort. EDP Group operates since 2005 with the new brand name HC Energía and in less than a year has managed to obtain a recognition level of 92% in its sphere of influence. This recognition was fundamental to the growth recorded in the segments where it operates. Including CHC Energía, EDP group attained approximately 531 thousand Clients which represents an increase of 353% from 2008. The

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annual report 2009 summary of activities gas business in iberia unit iberia number of costumers (thousands) Regulated Last Resort Liberalised points of supply Distribution grid length Transportation Grid Distribution Grid gas volume (millions) Distributed Supplied gas volume Distributed Supplied Regulated Last Resort Liberalised number of employees portugal number of costumers (thousands) Regulated Last Resort Liberalised points of supply Distribution grid length Transportation Grid Distribution Grid gas volume (millions) Distributed Supplied gas volume Distributed Supplied Regulated Last Resort Liberalised number of employees spain number of costumers (thousands) Regulated Last Resort Liberalised points of supply Distribution grid length Transportation Grid Distribution Grid gas volume (millions) Distributed Supplied gas volume Distributed Supplied Regulated Last Resort Liberalised number of employees # # # # # # kms Kms Kms m3 m3 m3 twh TWh TWh TWh TWh TWh # 19.0 21.3 0.0 1.2 20.1 436 20.7 26.3 1.5 n/a 24.7 311 20.2 22.7 4.5 0.0 18.2 297 19.7 20.1 6.3 0.0 13.8 292 1.6 1.8 1.8 2.1 1.7 1.6 1.7 1.2 963,837 9,065 362 8,703 690,032 5,828 309 5,519 665,092 5,469 307 5,161 641,336 5,006 250 4,756 833,450 0 214,059 619,391 628,294 0 122,000 506,294 611,893 196,605 0 415,288 590,884 342,770 0 248,114 # # # # # # kms Kms Kms m3 m3 m3 twh TWh TWh TWh TWh TWh # 6.1 3.3 2.3 0.0 1.0 101 0.0 110 0.0 112 0.0 115 6.0 2.7 2.7 2.6 2.6 2.6 2.3 2.3 2.3 0.5 0.3 0.5 0.2 0.2 0.2 0.2 0.2 221,388 3,508 0 3,508 200,988 3,220 0 3,220 179,802 2,987 0 2,987 163,391 2,642 0 2,642 221,356 221,266 0 90 200,988 200,988 0 0 179,802 179,802 0 0 163,391 163,391 0 0 # # # # # # kms Kms Kms m3 m3 m3 twh TWh TWh TWh TWh TWh # 25.1 24.6 2.3 1.2 21.1 537 26.6 28.9 4.2 n/a 24.7 421 22.7 25.3 7.1 0.0 18.2 409 21.9 22.4 8.6 0.0 13.8 407 2.1 2.1 2.3 2.1 1.9 1.6 1.9 1.2 1,185,225 12,573 362 12,211 891,020 9,048 309 8,739 844,894 8,455 307 8,148 804,727 7,648 250 7,398 1,054,806 221,266 214,059 619,481 829,282 200,988 122,000 506,294 791,695 376,407 0 415,288 754,275 506,161 0 248,114 2009 2008 2007 2006 Number of costumers (thousands) 1,055 833 754 591 792 612 829 628 163 180 201 221 2006 2007 Portugal 2008 Spain 2009 Grid Lenght (Kms) 12,573 7,648 8,455 9,048 9,065 5,006 5,469 5,828 2,642 2,987 3,220 3,508 2006 2007 Portugal 2008 Spain 2009 Gas in Portugal - Energy distributed and Points of Supply 163 180 201 6.0 221 6.1 2.3 2.6 2006 2007 2008 2009 Energy distributed (TWh) Points of supply Gas Spain - Energy distributed and Points of Supply 964 641 19.7 665 20.2 690 20.7 19.0 2006 2007 2008 2009 Energy distributed (TWh) Points of supply Gas Spain - Energy Supplied (TWh) 26.3 22.7 20.1 21.3 2.3 2.6 2.7 3.3 2006 2007 Spain 2008 2009 46 Portugal

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presence of eDp group in gas activity in the iberian peninsula Gás Ibérico Portugal 3.508 Km Distribution Grid 6,1 TWh Gas Distributed 3,3 TWh Gas Supplied 221 Millions of Clients spain 362 Km Transportation Grid 8.703 Km de Distribution Grid 19 TWh Gas Distributed 21,3 TWh Gas Supplied 833 Millions of Clients 2009 main events of the gas activity in the iberian peninsula EDP has a reference presence in the Iberian natural gas market. It is present in Portugal through Portgás (acting under the brand name of EDP Gás Distribuição), EDP Gás.Com (licensed trader to operate in the liberalized market) and a minority stake in Setgás. In Spain it is present in this market through Naturgas Energia. In December 2009, EDP Group concluded the acquisition of Gas Natural assets in the Autonomous Communities of Cantabria and Murcia. This acquisition represents a milestone for Naturgas once it has joined 3.080 Km of gas networks, 257.573 points of supply and 11 TWh of distributed gas. This operation has consolidated the company as the second largest gas distributor in the Spanish market and increase its share of supply points from 10% to 14%, achieving about 1.185.000 supply points. Important gas supply agreements have been negotiated, including agreements with Sonatrach that enables the delivery of gas to the Group 1 of Lares Thermal Power Plant until the entrance of new Medgaz international pipeline and with Shell LNG that enables the delivery of 0,22 bcm per year during the period 2010-2012. portugal In the Distribution activity, continued the concession development by ensuring the extension of the level of coverage, pointing out the supply of Vila Verde and Felgueiras, and reaching an increase of more than 20.400 points of supply (+10% compared to 2008). EDP Gas Serviço Universal, despite the customers migration with a consumption greater than 10,000 m3 for the liberalized market (57 accounts) the number of clients increased significantly to 214,441 following the growth of supply points of distributior. In the Supply actuvuty EDP Gas Comercial confirmed its position as an important player in the B2B segment, strengthening its strategic action in both the trading activity, trading 7,8 TWh of natural gas, as in supply activity, reaching 90 accounts and a market share of 9.77% spain In the Transport activity important gas pipeline projects were concluded and others entered into service, of which stands the pipeline Bergara-Irun phase III. Note also to the beginning of contacts to negotiate a stake in the future regasification unit - EL Musel In terms of the distribution activity, the continued effort to invest in expansion and densification of the network has boosted supply 16.232 points of supply surpassing 706 thousand at the end of 2009. However, adverse economic circumstances led to a decline of 8,3% of the volume conveyed over the same period. The difficult economic situation that occurred in 2009 affected in particular the supply activities, with a continuing deterioration of sales prices in the industrial sector. Given this reality, the company was particularly attentive to its energy management and made significant new trade measures, with a great focus on risk control in a complex market situation. 47

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annual report 2009 summary of activities electricity business in brazil unit generation number of generating groups Hydroelectric power stations (UHE) Small Hydroelectric power stations installed capacity at 31 December* Lajeado Peixe Angical Mascarenhas Suiça Mini-hydro total capacity net generation* Lajeado Peixe Angical Mascarenhas Suiça Mini-hídricas total generation Distribution energy Distributed Bandeirante Escelsa Enersul total Points of Supply number of costumers Regulated Bandeirante Escelsa Enersul Liberalised Bandeirante Escelsa Enersul total grid structure indicators Extension Substations Tranformation Stations supply Electricity supplied by Enertrade Enertrade Other Enertrade's costumers GWh GWh GWh # 56,120 8,586 47,534 120 54,345 7,282 47,062 64 84,566 7,188 77,378 78 72,067 6,702 65,365 52 Kms # # 82,289 122 180,272 81,579 133 168,691 147,043 221 223,322 132,862 217 214,854 # # # # # # # # # 2,667,611 1,482,355 1,185,256 0 90 73 17 0 2,667,701 2,582,572 1,438,651 1,143,921 0 105 72 33 0 2,582,677 3,206,546 1,401,302 1,095,116 710,128 110 74 21 15 3,206,656 3,113,125 1,364,577 1,058,756 689,792 112 72 24 16 3,113,237 GWh GWh GWh gwh # 13,292 8,021 0 21,313 2.668 13,554 8,652 2,202 24,408 2,583 13,268 8,488 3,273 25,029 3,207 12,763 8,060 3,126 23,948 3,114 GWh GWh GWh GWh GWh gwh 3,169 2,093 846 54 731 6,893 1,795 2,250 740 76 612 5,473 982 2,203 838 141 539 4,704 1,236 1,196 802 182 564 3,980 MW MW MW MW MW mw 903 452 181 34 163 1,732 903 452 181 32 130 1,697 250 452 181 32 130 1,044 250 452 181 30 106 1,018 # # # 39 14 25 37 14 23 32 9 23 30 9 21 2009 2008 2007 2006 Market Share (%) 13.4 9.3 6.9 7.6 15.3 8.5 5.6 1.6 1.6 5.5 1.1 1.0 2006 2007 Generation Supply 2008 Distribuition 2009 Generation Portfolio (MW) 1,697 342 1,018 317 452 250 1,044 342 452 1,732 378 452 452 250 903 903 2006 2007 Lajeado 2008 Peixe Angical 2009 Others Net Generation (GWh) 5,473 4,704 3,980 1,548 1,196 1,236 2,203 982 1,795 1,518 2,250 3,169 1,428 6,893 1,630 2,093 2006 2007 Lajeado 2008 Peixe Angical 2009 Others Distributed Electricity (TWh) 20.8 8.1 21.8 8.5 22.2 8.7 21.3 8.0 12.8 13.3 13.6 13.3 2006 2007 Bandeirante 2008 Escelsa 2009 ENBR3 (BRL) 40 33.55 Number of Clientes (millions) 2.4 1.1 2.5 1.1 2.6 1.1 2.7 1.2 30 2006 1.4 1.4 1.4 1.5 2007 Bandeirante 2008 Escelsa 2009 20 10 Jan.09 Feb.09 Mar.09 Apr.09 May.09 Jun.09 Jul.09 Aug.09 Sep.09 Oct.09 Nov.09 Dec.09 48

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presence of eDp group in brazil Porto PECÉM CEARÁ Fortaleza Pecém* Coal 720 MW 2012 repowering uHe Mascarenhas Hydro 17,5 MW 2012 Lajeado Distribution 82.289 KM Grid 21,3 TWh Energy Distributed TOCANTINS Palmas Peixe Angical PHc santa Fé Hydro 29 MW 2009 repowering uHe suiça Hydro 2,9 MW 2009 repowering PcH rio Bonito Hydro 3,8 MW 2009 Brasília (Distrito Federal) Coxim Costa Rica repowering PcH rio Bonito Hydro 1,9 MW 2010 ESPÍRITO SANTO Vitória Escelsa RIO DE JANEIRO supply 120 Clients 8,6 TWh Energy Supplied MATO GROSSO DO SUL Paraíso Campo Grande Mimoso SÃO PAULO São Paulo São João II São João I Mascarenhas Rio Bonito Suiça Jucu Viçosa S. João Alegre Fruteiras Rio de janeiro Bandeirante generation 1.732 MW Installed 6.893 GWh Generated Hydroelectric power plants in operation Hydroelectric power plants under construction Hydroelectric power plants planned Distributors Concession areas of distribution start of operation under construction * EDP Energias do Brasil holds 50 % of this power plants 2009 main events of the activity in brazil EDP Group is present in Brazil in the activities of generation, distribution and supply of electricity through EDP Energias do Brazil. generation The production activity includes the management of hydroelectric power stations (UHE) and small hydro power (PCH), with a total installed capacity of 1.732 MW in December 2009. During the year 2009 there was the repowering and modernization of three hydroelectric plants which increased the installed capacity in 35,7 MW. In the month of June began the operation Santa Fé Hidro plant in the State of Espirito Santo with an installed capacity of 29 MW. In 2009, EDP Energias do Brazil acquired through its joint venture with EDPR of Brazil, full control of the company Elebras Projectos, which has a portfolio of 533 MW, including wind farm Tramandaí, which will have 70 MW of installed capacity and whose Construction is scheduled for the first quarter of 2010. supply In Supply, Energias do Brasil is present through Enertrade which in 2009 sold 8.6 TWh to customers in the liberalized market, with a market share of 15.3%. During 2009, the free market in Brazil had a shrinkage of 9.7% in consumption for the year 2008, while auto production has fallen by 24.5% compared to the year 2008 and consumption of free consumers market fell by 3.2%. Distribution In Distribution, EDP Energias do Brazil has full control of the companies Bandeirante and Escelsa, serving about 2.668 thousands of customers and distributing 21,3 TWh in 2009. Bandeirante distributed in 2009 13.292 GWh, a decline of 1,9% compared to 2008. The electric energy distributed to final customers, totaled the amount of 8.585 GWh, which represented an increase of 1,3% over the year 2008. The company ended the year 2009 with 1.483 thousands of customers, more than 3,0% of 2008. During 2009, the distributed power to the liberalized market and dealers on Bandeirante grid totaled the amount of 4.707 GWh, representing a decrease of 7,4% when compared to 2008. Escelsa distributed in 2009 8.021 GWh, a decrease of 7,3% compared to 2008. The number of customers reached 1.185 thousand, representing an increase of 3,6% over the previous year. In the regulated market, Escelsa sold a total of 5.305 GWh, an increase of 2,6% compared to 2008. For the liberalized market, Escelsa distributed the amount of 2.716 GWh, a decrease of 22% over the previous year. Also noteworthy is the anti-fraud program “Programa de Combate às Perdas Comerciais “which carried out 174.630 inspections in the field, replaced 90.796 obsolete, damaged and electromechanical meters by electronic ones with indirect readings and performed 32.819 regularizations of immigrant customers. The level of trading losses was 6.3% in 2009. 49

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annual report 2009 contribution to sustainability 52 54 57 59 59 59 60 60 61 62 62 62 63 63 63 64 64 64 65 65 65 66 reCoGnItIon Corporate approaCH r&D anD InnoVatIon eDp CoMMunICatIon Institutional Communication The Edp Brand Edp In The Media Institutional Campaigns eMploYeeS Human Resource policies HR Governance Model profile Attract and Recruit Welcome and Induction Value and develop potential And performance Assessment Reconcile Employee Satisfaction Communication and Management of Change Labour Relations Health and Safety at Work Significant Activities in 2009 67 67 68 69 70 70 74 74 74 74 76 77 78 81 81 82 83 84 86 CuStoMerS Overview Customer Experience Service Quality Special, Social and Universal Service Customers New Services SupplIerS profile dialogue Good practices CoMMunItY Support for Economic development patronage and Sponsorship policy Volunteer Campaigns partnerships and Organisations enVIronMental perForManCe Managing Environmental Concerns Climate Change Biodiversity 50

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annual report 2009 contribution to sustainability 1. RECOGNITION Dow Jones Sustainability Index 2009/2010 For the second year running, Edp is the only portuguese company to be listed on the dow Jones World and STOXX Sustainability Indexes, ranked only two points below the world number one. eDp considered “Best in Class” by Storebrand Edp has been singled out for excellence in environmental and social performance by leading Scandinavian financial services company STOREBRANd, for the third time running. HC energía – highest quality index in its history HC Energía recorded the highest supply quality index in its history in 2009. This index is measured according to Installed Capacity Equivalent Interruption Time (TIEpI) – an indicator that measures supply quality in electricity distribution companies. eDp included in “the Sustainability yearbook 2010” Edp was included in the top 15% of companies in terms of sustainability for its third consecutive year, receiving a Gold Class ranking in 2010 from SAM (Sustainable Asset Management), which evaluates companies across 58 sectors. Edp had ranked in the Silver Class in previous years. eDp energias do Brasil Group listed on Corporate Sustainability Index The Edp Energias do Brasil Group was listed on the Bovespa Corporate Sustainability Index (ISE) for the fourth consecutive year. AF_DOW_JONES_226x315 i.indd 1 9/4/09 11:42 AM eDp considered “prime” by oekom research aG Edp obtained a B rating (B+ in environment and B in social responsibility) and was considered “Best practice” in terms of social and environmental responsibility and one of the best practices in the world in the utilities sector. accountability rating portugal 09 award Edp has been recognised by Sair da Casca and Two Tomorrows for the second year running. This internationally published rating aims to evaluate the transparency with which companies communicate and report to their stakeholders. Citizenship award from companies and organisations Edp took 1st place in the Industrial and Consumer products category in January 2010, for the implementation of its social responsibility and sustainability policies in the economic, social and environmental arenas. These awards are an AESE initiative, in partnership with pricewaterhouseCoopers. antónio Mexia – personality of the Year 2008 Award presented by the Luso-Brazilian Chamber of Commerce (CCILB) in 2009. antónio Mexia – Best leader award 2009 In the Corporate Management category, for his consistency in obtaining results, international expansion strategy and implementation of sustainability values. ana Maria Fernandes – Best portuguese Female executive Awarded by the European Women’s Management development International Network (EWMd). 52

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eDp renováveis wins Ipo of the Year Edp Renováveis, the third largest wind energy company in the world, and the third largest in Europe and Spain, won the “IpO of the Year” award upon becoming a listed company in June 2008. This operation resulted in proceeds of EUR 1.576 billion in a difficult economic climate. Investor relations & Governance awards 2009 Edp won the Special Stock Market Award at the deloitte Investor Relations & Governance Awards 2009. These awards are presented each year in recognition of best practices and professionals in investor relations. Best Companies for leaders Edp was singled out by the Hay Group for a Best Companies for Leaders award. This award recognises companies that set the market standard for talent management and leadership development. energy Business awards Edp won an Energy Business Award in the “Excellence in Energy Risk Management” category. Merit award for good practices in risk prevention Awarded to Edp distribuição – Energia, SA, by the Working Conditions Authority (ACT), for their Awareness Raising Campaign on Isolating Electrical Installations, under the theme “Connected to Life”. Gold espírito Santo Quality award (pQeS) Edp Escelsa was awarded a Gold award for Quality under the programme to Increase Systemic Competitiveness in Espírito Santo (Compete). procurement leaders awards 2009 Edp won a Special Commendation Award for Best Use of Technology for their Sinergie project – Supply Integration for Energy. Energia 2008/2009 Marketeer award Awarded to Edp by Marketeer magazine, for their overall marketing and communication strategy and positioning during 2008. eDp Bandeirante awarded transparency trophy eDp in Brazil is Model Company for Sustainability Edp Brasil was singled out by the Exame Sustainability Guide as one of the 20 best companies in the arena of corporate responsibility, for the second consecutive year. This prize was awarded by Anefac - the National Association of Finance, Administration and Accountancy Executives, for the transparency and clarity of the financial information presented in their 2008 Annual Report. IaSC 2009 – aneel Consumer Satisfaction Index Edp Bandeirante placed third in the Southwest Region for companies with over 400,000 consumers. Época Climate Change award 2009 eXaMe 500 Biggest & Best Award presented to Edp produção by EXAME magazine in the Water, Electricity and Gas category. Awarded to Edp Energias do Brasil for being a Corporate Climate policy Leader, for the second consecutive year. FeIea Grand prix 2009 The “sou edp” and ClickIdea projects received awards at this annual competition to recognise best practices in the area of corporate communication. abrinq Certification For the tenth consecutive year, Edp Escelsa obtained “Child Friendly Company” certification from Abrinq, a foundation that seeks to mobilise society on issues related to the rights of children and adolescents. Best Contact Centre Award presented to Edp in the utilities category by the portuguese Contact Centre Association (ApCC), for the second year running. HC energía receives Customer Service Centre award For the 5th year running, HC Energía won the award for Best Customer Service Centre in the energy and utilities sector. Boca livre wins “Mogi news” social award Edp Brasil’s “Boca Livre” project won the Mogi News/ Chevrolet Alto Tiête Corporate Social Responsibility Award in the internal public relations category. HC energía and naturgas most valued companies by Spanish customers Leaders in terms of overall satisfaction, loyalty and intention to recommend, according to a study conducted by the Stiga Spanish Consumer Satisfaction Institute (ISSCE). 53

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annual report 2009 contribution to sustainability 2. CORPORATE APPROACH Edp’s commitment to integrating sustainability at the highest level of management now finds expression in a new Vision based on dialogue, responsibility and innovation. While encompassing the core aspects of the business, this approach also seeks to encourage proactivity in building a future based on shared values in societies that are becoming increasingly demanding, dynamic and socially aware, an approach that ensures we do not forget the well-being and quality of life of future generations. Edp has assumed commitments in areas where the company can genuinely make a difference, based on the Sustainable development principles it published in 2004. These will be reviewed and updated during 2010 to blend into the corporate Vision and Strategy. These principles are implemented at the various levels of management, from strategic planning to application in the different business areas. ORGANIsATION Of susTAINAbIlITy GENERAl suPERvIsORy bOARD Corporate Governance and sustainability Commitee Monitors and Supervises Sustainability CORPORATE CENTRE Assists in defining codes of conduct Checks correct implementation deals with complaints of an ethical nature Ethics Committee Environment and sustainability board Assists in defining environment and sustainability strategy Approves corporate sustainability and environment policies and goals Executive board of Directors sustainability and Environment Commitee drafts and monitors Annual Sustainability plan sustainability and Environment Department Assists in defining environment and sustainability policies and goals Monitors their implementation COmPANIEs/busINEss uNITs board of Directors Approves companies sustainability and environment plans and goals Office/Coordinator in charge of the Environment Operational responsibility for execution of approved plans Functional Reporting Hierarchical Reporting 54 Note: For detailed information on the functions of each body, refer to the chapter on Corporate Governance.

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Five management guidelines have been defined in accordance with Edp’s Strategic Agenda until 2012: • Improve the integration of sustainability and These guidelines are implemented through a Sustainability and Environment Action plan that is reviewed each year, using the dow Jones Sustainability Indexes (dJSI) as a benchmark. In 2009, Edp was again recognised for its improvement in sustainability performance. For the second year running, it was listed on the dJSI World and Stoxx, ranking only 2 points below the leader in the electricity sector. Also in 2009, Edp was singled out in the worldwide “Sustainability Yearbook 2010” published by SAM (Sustainable Asset Management). This is the third consecutive time that Edp has received this distinction, improving its performance from “Silver Class” in 2009 to “Gold Class” in 2010. The company’s responsibility and determination in maintaining the highest levels of sustainability performance have been reinforced by a series of initiatives and objectives, summarised below: environmental management into the Group’s management and control systems; • Identify best practices and promote internal and external partnerships; • Build skills in environmental responsibility and risk management; • develop a corporate culture of excellence in sustainability performance; • Expand the use of instruments to gather information on expectations and assess the Group’s performance to the various stakeholders. SuStaInaBIlItY CoMMItMentS 2009 Corporate Commitments Achieve the SAM Gold Class Inventory significant environmental risks for the different activities Implement new Code of Ethics Regulations Implement the Sustainability Balance Scorecard Governance Ensure that the rules for handling, disclosing and acting upon the conflicts of interest described in the "Reference Framework for Handling Conflicts of Interest" and applicable to members of the EBd and GSB also apply to the Board Members and directors of Edp Group companies Biodiversity Conduct a pilot study to enhance ecosystem services in a hydroelectric system in portugal Follow the development of the new Edp Chair in Biodiversity Start plans for monitoring the biological quality of water downstream from hydroelectric plants in portugal develop and implement a Best practices Manual for managing transmission corridors in protected areas in portugal Harmonise biodiversity monitoring plans for new hydroelectric projects in portugal Climate change Improving the position achieved in Carbon diclosure project Measure Edp's carbon footprint in portugal Assess the Edp Group's exposure ti climate risk Strengthening Dialogue with Stakeholders Improve communication on sustainability during the planning phase of new projects promote sustainability reporting practices along the value chain Implement an LBG management system for assessing the social return on Edp projects Improve dialogue with stakeholders Human Capital Management design and launch the Corporate Leadership Schools and Edp School (for training needs shared across the Group), as part of the Edp University Reduce work accidents involving Edp staff and service providers by 10% Implement a Corporate Safety Management System environmental Management Establish mechanisms for analysing life cycle of Edp plans (pilot study: Baixo Sabor) Increase the installed capacity and number of distribution facilities with Environmental Certification according to ISO 14001:2004 Obtain EMAS registration at over 11 facilities of the Iberian peninsula r&D and Innovation Install 1,300 slow charging points and 50 fast charging points for electric cars by 2012 new 20% new Conclusion in 2011 Certification is planned for over 1,500 MW, with over 650MW from wind farms. It is planned the registration of 2,276 MW of installed capacity. 80% 70% 100% new 100% new new new In 2010, raise awareness among staff of ways to improve communication with local communities on new infrastructure projects Complete objective of the previous year a

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annual report 2009 contribution to sustainability 2.1. DIaloGue WItH StaKeHolDerS As set forth explicitly in its Sustainable development principles, the company has committed to maintaining relations based on openness, transparency and trust with its stakeholders, by: • Strengthening channels of communication; • Integrating stakeholder expectations into its decisionmaking processes; In 2009, a systematic analysis was undertaken to assess Edp’s degree of compliance with international standard AA1000 ApS (2008), taking into account the strategy, principles and processes of its involvement with its major stakeholders. An Action plan to improve the effectiveness of this involvement was drawn up based on the results obtained, to commence in 2010. As part of a continuous process, a range of environmental, social and economic issues were identified, taking into account their importance to society and relevance to the business, and are described in this annual report. detailed information on the process of identifying these issues and Edp’s major stakeholders can be found at www.edp.pt> Sustainability> Stakeholders. • Reporting objectively and credibly on its performance vis-à-vis the three pillars of sustainability. + engaged learning shared responsibility shared priority Climate Change Customer Service New Hydro projects Tariffs H&S Service Quality shared responsibility engaged learning Importance to Society Local employment public lightning Renewable Energies Financial Sustainability Life quality debts management Listed company Supplier Engagement New Technologies & Equipment Internationalization 56 Relevance to Business + © AccountAbility Strategies A Strategic Management Framework that helps align external expectation with internal priorities. Collective agreement Health and pensions plan dSM and energetic efficiency shared priority Environment Management

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3. R&D AND INNOvATION The R&d and Innovation policy followed by Edp is aligned with its strategic pillars: • photovoltaic energy demonstration projects – 1. 2. Using dye sensitized solar cells; participation in two demonstration projects in portugal: • Focused Growth – implementing projects that contribute to Edp’s sustainable growth plans; Using high concentration photovoltaics in a more centralised approach. • Greater Efficiency – seeking solutions that increase the efficiency of productive processes; • Controlled Risk – implementing projects that mitigate Edp’s exposure to risks, in particular regulatory, environmental and business risks. Edp has restated its commitment to the following areas of strategic innovation: An agreement was also signed with Estradas de portugal, with a view to taking advantage of the road infrastructure to integrate renewable energy solutions, in particular photovoltaic energy. electrical Mobility • Wattdrive project – development of a pilot project for • Renewable energies (offshore; wind and wave; solar); • Electrical Mobility; • Energy Efficiency; • New electricity distribution technologies (smart grids and micro grids); recharging electric vehicles in Lisbon, opening the first network of 6 recharging points for use by the public. • CItYeleC project – one of the most important initiatives in the field of electrical mobility in Spain, seeking sustainable solutions in the urban environment (supported by the Ministry of Science and Innovation). • living Car project – obtaining data for the Asturias region on the behaviour of electric vehicles under real driving conditions, as well as on the infra-structure required for recharging (supported by pCTI - the Science, Technology and Innovation plan). • Energy production (clean generation and CO2 capture and storage); • Added Value Markets and Services – marketing; • Information Technologies – business “webization”. In 2009, the Group’s companies were involved in a wide range of Research, development and Technological Innovation (R&d+i) projects, in partnership with technology companies, industry, universities and scientific institutions, both in portugal and internationally. In order to facilitate the financing of these projects, particular attention was focused on national and European incentive systems, with a number of successes in this regard. A detailed description of these projects will appear in a specific publication that is currently in its final stage of editing. Notwithstanding the importance of the all various projects for the businesses involved and for the Group’s overall innovation objectives, the following projects/initiatives in the strategic areas listed below are worth highlighting. See full details on www.edp.pt> Sustainability> R&d + Innovation. renewable energies Edp has also taken part in international working groups (such as Grid 4 Vehicle) and the working group organised by the portuguese government to help develop sustainable electric mobility in portugal. energy efficiency • eDIFI project – installation of a pilot system to manage energy efficiency in the Edp Valor building in Lisbon, with information available on the intranet. • project to Improve Cogeneration efficiency – development of a system to monitor the performance of cogeneration groups, integrating diagnostic and supervision functions. project completed successfully in partnership with the University of Oviedo and with support from the pCTI - Science, Technology and Innovation plan for Asturias 2006-2009. • ecofamilies project – analysis of electricity consumption • Windfloat – demonstration of deep-sea offshore wind technology, using floating platforms. This project is backed by the Innovation Support Fund (EUR 3 million). data for a group of Asturian families using fuzzy clustering techniques and statistical tools, to provide personalised recommendations on how to improve energy efficiency. project run in association with the European Centre for Soft Computing an

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annual report 2009 contribution to sustainability • Desulphurisation Gypsum project – researching the In terms of partnerships, the following are of note: potential for using this material from thermoelectric power stations as a remediation agent for contaminated soil. project run by HC Energía in cooperation with BEFESA and research institutes (University of Barcelona and two Institutes in Seville belonging to the Higher Council for Scientific Research) and subsidised by the Ministry for the Environment and Rural and Marine Affairs. • eIt energy KIC – The EU has been promoting the creation Microgeneration and electricity Grids of the Future of the EIT (European Institute of Innovation and Technology) and corresponding regional skills centres, the KIC (Knowledge and Innovation Communities), which shall be opened to tenders and operate around themed areas. Edp will join a consortium to bid for the Sustainable Energy KIC and is an associated partner of the KIC InnoEnergy Consortium. • InovGrid – project to transform the existing electricity distribution system into an intelligent system, based on telemanagement of energy and supported by an infrastructure that can respond to the needs arising from energy efficiency, telemanagement, distributed generation and microgeneration. • MIt-portugal programme – Edp is involved as an affiliate in the strategic management of the programme and may benefit from this support by hiring new talent from the doctoral students trained through the MIT-portugal programme. • reDeS 2025 project – major Spanish smart grids project • energy Competitiveness and technology Centre (pCte) – forming part of the FUTUREd platform (Spanish Technology platform for Electricity Grids of the Future). Edp leads the subproject on storing electrical energy using redox flow battery technology (supported by the Ministry of Science and Innovation). aims to develop a Collective Efficiency Strategy in the portuguese energy sector. The centre commenced activity in September 2009. The Founding Members of the pCTE are Edp, EFACEC, GALp, MARTIFER and MIT portugal. The project focuses especially on renewable energies and energy efficiency. • CenIt-DenISe project – HC Energía is participating in the preventative Maintenance working group. In 2009, laboratory tests were performed to locate partial discharges from underground cables (supported by CdTI). • offshore energy Institute – aims to develop a scientific • Micro-cogeneration project – launch of a project on skills centre in portugal to support the implementation of offshore energy projects. partners in the Institute include Edp, Efacec, Galp, Martifer, the Wave Energy Centre and the University of Aveiro. micro-cogeneration systems in houses, using gas boilers with Stirling and internal combustion engines (supported by pCTI). • Innovation utilities alliance – alliance between the major European electricity companies (RWE, Endesa, EdF, Enel, Edp), with a view to sharing different visions on R&d+i initiatives. • CteYe project – development of a telecontrol device for transformer stations, with an algorithm to detect faults in low tension grids. project run by HC Energía in cooperation with AC&A (ISASTUR Group) and the University of Oviedo, and subsidised by pCTI. • portuguese association of Business angels (apBa) – Information technologies • openspace – platform for a new concept in team founded in 2006 with the aim of stimulating investment, monitoring the development of innovative corporate projects and thus contributing to a new type of entrepreneurship in portugal. Edp renewed is participation in ApBA in 2009 as an Honorary Member, benefiting from access to the deal flow for all the projects submitted to the ApBA for appraisal. work, based on permanent sharing of information and knowledge and designed especially for geographically dispersed work teams. • Co2 • There was a focus in on consolidating relations with the platform – Edp, through HC Energía, was on the Advisory Co

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• Futured plataform – HC Energía is on the Management 4. EDP COmmuNICATION 4.1. InStItutIonal CoMMunICatIon The mission of the Edp Group’s Brand and Communication department is to plan, develop and control the Group’s communication strategy, both internally and externally, in order to maximise the value of its brands among the company’s various stakeholders. In the area of communication, the objectives for 2009 remained: to maximise the impact of the company’s activity on the media; to build the value of the Edp brand among its stakeholders; and to standardise the Edp brand across all the companies in the Group. Board of the Spanish Technology platform for Electricity Grids of the Future and is a member of the Measurement, Efficiency and Management of demand Working Group. Edp has promoted and sponsored various innovation awards, including: • eDp richard Branson Innovation award – Edp, Visão and Exame launched an innovation award with Richard Branson to promote entrepreneurship in the field of clean energy technologies. The Innovation Award is a cash prize of EUR 50,000 awarded to an innovative clean energies project that has yet to be implemented, to form a company to get it off the ground. 4.2. tHe eDp BranD The Edp brand enjoys 100% recognition in portugal and is also the most recognised portuguese brand abroad, holding a clear advantage over other brands, including those in the energy sector. The value of the Edp brand has grown by 53.6% since 2005 to reach EUR 616 million in 2008. The percentage of customers who are aware of the brand’s key values as presented through its communication has been increasing steadily over time, with particularly positive developments in areas such as innovation, dynamism and efficiency. EDP’s Values According to its Customers (%) • MIt Clean energy prize – Edp sponsored the Renewables track of the MIT Clean Energy prize, which forms part of the 100K Competition (the world’s largest university entrepreneurship competition). 50 40 20 10 trustful 41.2 41 43 In 2009, the Edp Group spent around EUR 31 million on R&d+i activities (estimated values for portugal). Research and Development 2009 (%) sustainable 40.1 36 39 0 innovative 30.2 41 45 2 9 efficient 34.3 41 47 Sep.07 May.09 Sep.09 dynamic 30.5 48 48 89 Portugal Spain Brazil 2009 was marked by greater standardisation in the architecture of an increasingly global brand (see Chapter 6.Customers). In particular, we can highlight the change of the Naturgas Energia brand in Spain; in Brazil, the parent brand 59

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annual report 2009 contribution to sustainability evolved into Edp; and in the USA, the Edp Renewables brand has replaced Horizon Wind Energy. The Edp brand was target of a minor repositioning by adopting the new signature: “Viva a nossa energia”, evoking an even closer and more interactive relationship with the consumer and a strong degree of optimism and humanism. 4.3. eDp In tHe MeDIa At Edp, disclosing information externally in a transparent and accurate manner is a daily task and concern, to ensure that the Group’s activity, values, mission and strategy are fully communicated. An analysis of portuguese media coverage of the Edp Group was again conducted in 2009. 9,238 news items were analysed as part of this study. positive and balanced news accounted for 63% of the total, with gas distribution - the increase in customers and the purchase of assets from Gas Natural in Spain – providing the main focus, along with renewable energies. July witnessed the largest number of positive news items, partly due to the disclosure of the 2009 1st half results and the investment plan. The purchase of assets from Gas Natural, the Cycling Tour of portugal and the distribution of energy-saving light bulbs around portugal also contributed to the positive coverage. A total of 35,333 news items referring to the Edp Group appeared in the entire national media during 2009. 4.4. InStItutIonal CaMpaIGnS during 2009, Edp focused its institutional campaigns on promoting the values that it believes form the basis for more sustainable operations and long-term value creation. • New dams – the objective was to inform the general public of how important hydroelectric power is to the country’s economic development. The focus on environmental protection strengthened the company’s public commitment to minimising and compensating the environmental and social impacts of this type of hydroelectric plant. AF_DOW_JONES_226x315 i.indd 1 9/4/09 11:42 AM • dow Jones 09-10 – we sought to highlight our listing on the dow Jones sustainability indices for the second year running in 2009/10, a reflection of the company’s efficient and judicious use of human and financial resources, social responsibility and environmental protection. • Gift Collection Campaign – Under the motto “Este Natal dê o que tem a mais a quem tem a menos” (This Christmas, give what you have too much of to those who have too little), the Edp group mobilised the public through a campaign to collect non-perishable goods, which were distributed by a wide range of charitable institutions. (see Chapter 8. Community) 60

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5. EmPlOyEEs HuMan reSourCeS group employment Employees (no.) (1) permanent Fixed-term contract part-time Male employees (%) directors Senior management Middle management Supervisors Qualified and highly qualified professionals Semi-qualified professionals Employees with special needs (no.) Turnover (2) (%) Employees leaving (no.) Employees' average age (years) Average age of new admissions (years) M/F ratio of new admissions Absentee rate (%) Edp minimum wage/national minimum wage pay ratio by gender (M/F) training Total hours of training Environment Sustainable development Ethics Quality Languages Health and Safety Information systems Other Employees trained (%) Average training per employee (hrs) directors Senior management Middle management Supervisors Qualified and highly qualified professionals Semi-qualified professionals labour relations Collective employment agreements (%) Trade union membership (%) Union Structures (no.) Hours lost due to strikes (no.) Staff engaged in further study (no.) professional Internships (no.) Academic internships (no.) Health and Safety OSHAS 18 001 (% installed capacity) On-duty accidents (no.) Fatal on-duty accidents (no.) Edp frequency rate (Tf) Edp severity rate (Tg) Total days lost due to accidents (no.) Occupational health rate Fatal accidents of contracted workers (no.) Contractors working hours (no.) Edp and contracters frequency rate (Tf_total) Fatal accidents involving non-workers (no.) 55 47 1 2.26 144 2,984 0.05 10 3,350,285 5.00 9 85 32 0 2.60 175 2,150 0.08 6 1,745,924 5.10 3 32 7 1 2.15 225 730 0.00 0 393,685 7.66 0 23 8 0 1.74 23 104 0.00 4 934,911 4.06 6 0 0 0 0.00 0 0 0.00 0 275,765 2.13 0 46 76 0 3.43 176 3,894 0.19 6 n/k 6.18 17 89 40 0 3.11 173 2,224 0.16 2 n/k 4.89 3 0 18 0 5.50 146 477 n/k 1 n/k 8.99 0 0 18 0 3.30 219 1,193 0.37 3 n/k 7.64 14 0 0 0 0.00 0 0 n/k 0 n/k 6.26 0 87 58 37 231 29 320 274 89 72 26 231.15 24 145 69 76 22 7 0 5 0 179 100 53 4 0 0 175 0 0 0 0 0 0 0 26 88 61 33 550 22 190 303 90 73 26 550 21 76 102 89 31 5 0 1 0 183 90 50 2 0 0 114 0 0 0 0 0 0 0 18 353,205 3,289 697 876 4,658 16,826 58,349 53,444 215,066 75 29.41 37.82 34.72 26.73 22.89 19.53 57.17 126,212 1,966 140 876 3,545 370 9,657 43,760 65,899 72 17.22 35.84 31.03 15.58 8.95 11.74 2.55 63,210 1,293 110 0 385 16,422 14,636 5,914 24,452 79 30.97 50.99 56.46 33.03 24.24 22.02 20.25 157,900 30 447 0 728 34 34,056 3,771 118,834 78 67.51 48.30 34.80 31.63 35.38 84.55 65.84 5,882 0 0 0 0 0 0 0 5,882 80 19.74 18.15 14.46 23.80 15.47 18.11 15.84 487,111 5,512 277 2,660 8,418 19,731 51,405 53,748 345,361 82 40.04 41.02 44.72 39.21 43.90 32.29 57.99 204,428 3,890 229 2,660 8,045 5,527 26,643 42,678 114,758 83 26.72 38.42 41.42 36.82 21.76 21.50 12.13 68,836 1,030 0 0 373 14,096 11,658 6,917 34,763 97 35.81 48.74 55.65 29.86 29.42 33.26 38.77 209,295 0 32 0 0 28 12,695 3,657 192,883 77 90.14 220.22 105.03 105.62 140.28 142.49 66.83 4,552 592 16 0 0 80 410 496 2,958 n/k 16.86 18.46 7.06 16.56 25.50 16.85 13.87 12,009 11,932 77 7 79 85 73 82 79 81 78 124 5.5 787 44 31 1.93 3.61 n/a 1.03 7,331 7,265 66 2 81 85 72 92 82 84 85 98 4.2 475 46 29 1.92 3.55 1.56 0.96 2,041 2,030 11 5 78 90 76 80 78 78 48 8 5.4 88 43 31 2.07 3.24 1.88 1.21 2,339 2,339 0 0 76 80 78 82 76 66 79 17 8.1 182 39 29 2.25 4.41 1.30 1.01 298 298 0 0 60 79 71 69 n/k 56 4 1 19.7 42 39 37 1.69 1.14 2.22 1.35 12,166 12,003 155 15 80 85 74 83 82 82 78 197 6.0 843 45 32.22 2.04 3.44 n/a 1.17 7,652 7,504 144 4 82 85 74 90 83 84 87 n/k 4.0 496 48 28.57 2.85 3.46 1.50 0.96 1,922 1,911 11 7 79 91 76 82 80 78 63 n/k 7.0 117 43 32.87 1.44 3.35 2.07 1.54 2,322 2,322 0 0 77 80 86 79 88 67 79 n/k 8.0 161 40 29.29 2.23 3.45 1.59 1.56 270 266 0 4 57 71 69 72 89 52 12 n/k 40.0 69 39 37.65 2.22 n/k n/k 1.37 portugal 2009 spain brazil usa group portugal 2008 spain brazil usa (1) The number of employees does not include corporate bodies (87) for the purposes of this breakdown analysis; This figure includes the new company Gás Natural (2) Low turnover figures

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annual report 2009 contribution to sustainability 5.1. HuMan reSourCe polICIeS The Edp Group has been implementing an Organisational Model that standardises the criteria used in personnel management and ensures that a common strategy is applied across all the companies in the Group. The objective is based on the universal nature of the values and strategy, where the Edp culture is the common denominator and the commitments are to: operates (96%), thereby reinforcing its important role in their development. The company’s international expansion strategy has resulted in an increase in the number of employees working outside of their home country, this figure rising from 62 to 86 in 2009. Distribution of Employees by Professional Category and Age Group Se ni 5.2. Hr GoVernanCe MoDel The three corporate HR departments in the Corporate Centre have been merged into a single body: The Human Resources department. M id 749 721 The new model has a matrix-like structure comprising eight skills centres that put the human resources value chain into practice: Communication and Management of Change; Selection and Integration; performance Management; Training Management; Management of potential; Career, Mobility and Succession Management; Remuneration and Benefits; and Information Technology to support HR Management. This model also incorporates the so-called Relationship Manager, who is responsible for coordinating the Human Resource department in the Corporate Centre with its internal customers, namely the Human Resource departments or support structures in the Group’s companies, which are structured in their own particular manner. 679 320 320 742 <30 1,735 [30-40[ Male 2,696 4,258 18 6 [50-65[ 65 [40-50[ Female Salary Ratio (M/F) by Pay Category 1.72 1.09 1.24 1.05 0.93 1.25 1.09 1.05 1.1 1.07 1.07 1.07 1.22 1.19 0.87 0.9 0.94 1.05 1.06 0.98 1 1 5.3. proFIle There was no great change from 2008 in the total number of employees, which dropped from 12,166 to 12,009. rs s s s er er or cto ag ag vis l. P ro Se f. m i-Q ua l. P ro f. dl • Attract and Recruit; • Value and develop; • Recognise with Fairness; • Reconcile; • Innovate and Manage Change; • Create Opportunities; • prevent; • Motivate. 1,137 4,868 64 373 563 1,533 409 1,429 142 661 174 656 er s rs re cto er s ag ag m an m an pe rv Su iso rs or e Qu a Di 0 f. ro .P As for gender differences, the majority of employees are male (79%), while women represent around 21% of the total workforce. Albeit small, worth noting is the slight rise of 1% in female representation compared to 2008. Edp does not discriminate between genders on pay, but rather is guided by practices that promote equal opportunities. Upon analysis of the male/female ratio, we found that pay is weighted slightly in favour of men (1.03), although in portugal (where 61% of employees work) this indicator actually favours women (0.96). There was a total volume of 352,205 hours of training in 2009, with particular focus on professionals with lower qualifications. Although there are no company procedures explicitly encouraging local recruitment, a high percentage of employees originate from the regions in which the company Di re pe r an an al rM Su Qu M io e Se n M Portugal Spain Brazil USA 62 Se m id dl i-Q ua l. P ro f. 0.56

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Employees Eligible for Retirement • To introduce students to the Edp Group’s strategy, culture and people; • To promote closer relations between Edp and the school 2,971 community, by interacting and sharing expertise. 225 85 591 156 254 80 230 89 996 219 73 A set of initiatives of a pedagogical nature has been launched in the academic arena, with the aim of attracting youth with the right profile for the Edp Group. 2009 was marked by the consolidation of partnerships with national and international associations and communities, such as the Board of European Students of Technology (BEST) and the Community of European Management Schools (CEMS). 5.4.1. proMotInG plaCeMentS anD InternSHIpS er s rs er s rs pe rv iso Su Se ni 5 years M id 10 years 5.3.1. HealtH SCHeMeS anD otHer SoCIal BeneFItS Edp Group employees are covered by illness protection schemes to complement the public health services in each country and, in their old age, by supplementary retirement pension plans and personal accident insurance policies. Most employees are also covered by specific study subsidies for employees and their children. Through the Conciliar programme, the company also offers a range of benefits to help employees achieve a healthy work-life balance (see point 8 in this chapter). 5.3.2. reJuVenatIon The Group has continued to implement its rejuvenation policy, with 545 new staff entrants, a similar number to 2008 (556), evidence of the company’s investment in a new generation of professionals and of its role as a top employer. The average age of these employees is 31. Edp has continued to pursue is Citizenship and Corporate Responsibility policy by granting placements of various types: l. P ro Se f. m i-Q ua l. P ro f. re cto ag m an m an ag or dl e Qu a Di • School and academic placements; • Work experience placements; • professional internships; • Internships offered under specific protocol agreements, including the International Association for the Exchange of Students for Technical Experience (IAESTE portugal) and the Corporate Internship programme for Young Students (pEJENE). In 2009, the Edp Group hosted a total of 594 internships, of which 320 were vocational in nature and 274 academic. Compared to last year, Edp recorded growth of over 20% in the number of placements and internships granted. 5.4. attraCt anD reCruIt 5.5. WelCoMe anD InDuCtIon The introduction and integration process for new employees was improved and consolidated during 2009. In addition to the welcome kit used in companies in the various different countries, a trilingual guide was also published on how Edp would like to welcome its employees and contribute to their adaptation process and job satisfaction. 2009 was also marked by the first Induction Meeting for New Employees, an event that brought together hundreds of professionals who had joined the company’s workforce the previous year. It provided an opportunity to visit several electricity generation and distribution facilities and all those invited were welcomed by the Chairman of the Edp Group’s Executive Board of directors (CEBd). Edp’s priority for 2009 was to reinforce its image as an attractive company to work for with universities and students in higher, vocational and technological education. Edp has invested in the growth and evolution of its business areas in the various countries in which it operates, which has involved a strong focus on staff development and acquiring new skills for the Group through its rejuvenation programme. For this reason, we created the ON TOp – Edp Recruitment program brand, an identity that hopes to attract young people with growth potential from the educational institutions that comprise our main sources of recruitment. The main objectives of this programme are: 5.6. Value anD DeVelop Staff training and personal and professional development constitute one of the Group’s strategic priorities. The Edp Group’s Training plan is aligned with the company’s Vision, Values and Strategy

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annual report 2009 contribution to sustainability • providing incentives for employees to update their professional skills; • Objectively identifying individual achievements; • Recognising and rewarding with fairness and transparency; • promoting dialogue between management and team; • Strengthening a culture of feedback and improvement; • Aligning the organisation with international best practices. The processes involved in managing potential and performance have emerged as fundamental tools in the management of people. In light of this, the potential and performance Assessment process (ppA) has been implemented gradually across the Group, seeking opportunities to catalyse value creation through the integration of skills management and performance management. ppA aims to stimulate behaviours that maximise the productivity, responsibility, participation and development of staff, assigning each employee an indispensable role in the achievement of overall targets and valuing their individual contribution. In portugal, where the majority of our employees are based, there are still two potential and performance management systems operating side by side: ppA and A2d. Both seek to: provide promote Achievement reward Results • promoting staff motivation; • Encouraging the sharing of knowledge and experience; • Building capacity and developing skills, knowledge and performance in line with the Group’s strategy. 5.6.1. YounG eMploYeeS WItH HIGH potentIon (Jep) The development programme aimed at the company’s young professionals provides an example of how the Edp Group’s development strategy is being implemented and an opportunity for putting these employees’ potential to the test. Through this initiative, employees can implement their individual development plan while at the same time participating in a range of Group-wide initiatives to share and exchange their knowledge with young employees of other nationalities who also work in the electricity sector. 2009 saw the start of a project that aims to introduce new development programmes for other age groups and functional segments deemed critical to the Group’s strategy. eDp unIVerSItY The Edp Group holds an important knowledge asset, accumulated over the years from the individual and collective experience it has acquired during the course of its activity and through its employees’ exercise of their intrinsic skills. proper management of this knowledge poses an important challenge for Edp in its quest to stand out on quality, customer service excellence and encouraging innovation and sustainability in the field in which it operates. 2009 saw the creation of a new department in the Corporate Centre called the Edp University, to develop staff knowledge and talent by launching specific Functional Schools for the different areas of its business and Generalist Schools that will work together to coordinate training, career development, knowledge management and change management in line with the Edp Group’s current and future needs. The Generation School was launched in 2009, delivering 5 programmes, 5 courses and a pilot training seminar for its upper middle, senior and top management in the 1st semester of the 2009/2010 academic year (September 2009 to February 2010). Feedback 5.8. reConCIle Edp believes that whole, fulfilled people are more creative, energetic and positive. Edp knows that successful organisations are made of such people. It was for this reason that Conciliar (“Reconcile”) was born, a programme that offers a range of solutions in the areas of health and well-being, family and education, work-life balance and citizenship. This programme will take the form of a growing number of measures aimed at raising the organization’s awareness of this issue. 5.7. potentIal anD perForManCe aSSeSSMent Conscious that the company’s success depends directly on how people are managed, Edp has been implementing a human asset management system guided by the following values: 5.9. eMploYee SatISF

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improvements introduced into the Group’s management of its human potential. i’m+edp learning Maps 5.10. CoMMunICatIon anD ManaGeMent oF CHanGe Communication and Mobilisation are strategic priorities for the three-year term 2009-2012. Through communication, we have managed to disclose information on the company and its business, organisation, strategy and internal processes and initiatives. Mobilisation makes that sharing possible, supports change management and ensures that everyone is more aligned to face the strategic road ahead: • Commitment to Edp’s values; • Sharing of information; • Guaranteeing that knowledge is passed from one generation to the next; • Innovation; • Sustained growth; • Trust in the organisation; • Motivation to do; • Be+edp. Creation of the sou+edp/soy+edp/i’m+edp and on top identities 5.11. laBour relatIonS Edp maintains a steady relationship with the structures representing its employees - Unions and Workers’ Committees - providing clarifications/information on the company’s creation, modification or termination of procedures, as well as participating in the negotiation processes to review and update the collective agreements in place. This relationship was consummated in 20 plenary meetings (with the participation of all the unions), 94 meetings with individual unions and 20 meetings with workers’ committees at various levels (coordination committee and company committees). The company also maintains regular supervision and support for workers’ organisations of a recreational, cultural and social nature, the Edp Staff Club, the Association of Blood donors and the Retirees’ Association. The rate of unionisation, calculated according to the union fees deducted from salaries, stands at 58% (72% in portugal). With the aim of strengthening, clarifying and communicating its policies, processes, projects and initiatives more effectively, two images were created to identify internal and external communication, i’m+edp and ON TOp - Recruitment program, respectively (see point 5.4.Attract and Recruit). The i’m+edp programme got off the ground in december 2009, an initiative that seeks to mobilise all employees in the Edp Group towards implementing a common culture, vision, commitments and strategy of the new strategic cycle of 2009-2012. This mobilisation started in portugal and will extend to the companies in other countries during 2010, involving around 420 “energisers”, employees in all countries who have been prepared to deliver a range of sessions throughout the corporate structure. There were no labour disputes of any kind for reasons internal to the Edp Group, fruit of the atmosphere created through dialogue and close relations with employees and their representatives. We would highlight that operational changes in the company that impact on employees are communicated to the unions, workers’ committees and workers with prior notice of never less than 30 days, depending on their complexity. 5.12. HealtH anD SaFetY at WorK Occupational health and safety is an essential element of the Edp Group’s sustainable development. The importance placed on this theme is reflected in the strategic objective of “Zero accidents, no personal injuries”. 65

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annual report 2009 contribution to sustainability In order to better manage this strategic objective, an Occupational Health and Safety Management System has been adopted, based on standard OHSAS 18001:2007 and following the directives of the International Labour Organisation as set forth in ILO-OSH 2001 and Convention no. 155 on Occupational Health and Safety. 5.12.1. eDp’S reSponSIBIlItIeS The Edp Safety policy demonstrates its commitment to managing safety in the workplace and implementing continuous improvements, in the belief that working in a safe and healthy environment is a determining factor in employee satisfaction and contributes significantly to achieving successful results. Responsibility for preventing and controlling occupational risks lies with the management of the business units and is integrated into the hierarchical chain. Responsibility for preventing and controlling occupational risks lies with the responsible management of the business units and is integrated into the hierarchical chain. Where occupational health is concerned, the in-house occupational medicine services are responsible for monitoring employees’ health, by performing medical checkups, promoting health education and checking workplace conditions and first aid supplies. The organisational structure for occupational safety management can be seen at www.edp.pt> Sustainability. 5.12.2. Corporate SaFetY ManaGeMent SYSteM Edp’s Corporate Safety Management System follows ILO recommendation ILO-OSH 2001 and the model provided by benchmark standard OHSAS 18001:2007, reinforcing the principle that occupational health and safety issues should be managed across the Edp Group companies according to common and standardised criteria. Locally, each company/organisational unit adopts the Corporate Management System directly or uses it as a reference to develop its own specific safety management system, or one that is integrated into the areas of environment and/or quality, depending on its activity. Its implementation involves an extensive occupational health and safety training and awareness raising programme delivered to employees and service providers, which involved 237,296 training hours and 4,571 people in 2009. In addition to the training mentioned above, 89 first aid training courses were delivered to 1,002 employees across the Edp Group. eMerGenCY reSponSe Edp has Internal Emergency plans (IEp) for its facilities in the various countries in which it operates. These include compulsory regular drills and in some cases these plans are being updated to comply with changes in legislation. In terms of emergency response management, 96 drills were carried out in response to accident scenarios at various industrial and administrative facilities across the Edp Group. These were designed to test the effectiveness of their internal plans, which also involved external entities such as civil protection units, the fire department and police and public safety authorities. Of these 96 drills, 31 were performed in portugal, 43 in Spain, 11 in Brazil and 11 in the USA. External Emergency plans are managed by the authorities in the countries concerned, who are responsible for their publication. SaFetY CertIFICatIonS Edp has a total installed capacity of 9,018 MW in the portuguese electricity sector, a figure that is certified in accordance with Safety Management Systems that are recognised by international standards. This figure stands at 1,658 MW in Spain and 452 MW in Brazil. In the gas sector, Naturgas is certified for occupational health and safety in all its workplaces and facilities according to standard OHSAS 18001:2007. eMploYee partICIpatIon The Occupational Health and Safety (OHS) Regulations stipulate the formation of Occupational Health and Safety Committees and Subcommittees at the companies and their larger business units. These committees and subcommittees are joint, including both company representatives and workers’ representatives for occupational

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alCoHol preVentIon anD Control polICY Edp’s Alcohol prevention and Control policy was approved in 2009, together with the regulations governing its application. This policy was discussed with workers’ representatives for occupational health and safety in the various companies and approved according to Edp’s Internal Regulations. Training and awareness raising on Alcohol and drug dependency prevention will be delivered in 2010 as part of the implementation of this policy. panDeMIC Flu: ContInGenCY plan Edp’s Contingency plan for the influenza A pandemic was activated in response to the pandemic declaration issued by national and international health organisations. The plan’s implementation involved providing further information and raising staff awareness, employing stricter cleaning and disinfection procedures in the workplace and putting in place a vaccination plan to ensure the continuity of services essential to the community and business. Edp’s Contingency plan was implemented with the participation and inclusion of service providers’ employees. Information for the public on Edp’s Contingency plan is available at www.edp.pt. SaFetY anD CItIZenSHIp As a responsible company, Edp shows constant concern for health and safety issues and works together with the community to address them, in particular those arising during the course of the normal business activities of the Group’s companies, or those that may affect the provision of essential community services. In cooperation with fire departments, vocational and secondary schools, business associations and unions, 136 information initiatives were run across the Edp Group on the precautions and procedures to follow in fire-fighting situations in electricity installations, or locations nearby, and in gas networks and installations. WorKSHop on “oCCupatIonal SaFetY ManaGeMent at eDp” With a view to improving the Group’s safety practices, a workshop was held in Lisbon on occupational safety management, under the motto “more safety, more quality of life”. Around 300 people attended, including employees of the Edp Group and service providers. Internal InCentIVeS Edp awards an Annual Award for Accident prevention and Occupational Safety to strengthen their culture of accident prevention and safety and distinguish Edp employees and service providers with good practices in this regard. The Edp Sports and physical Fitness Award, now in its fifth year, singles out employees who have distinguished themselves in amateur sports, including participation in competitions or tournaments, or other physical fitness programmes and healthy lifestyle activities. near-MISSeS For Edp, the discovery and analysis of near-miss situations comprises an essential tool in helping to achieve its objectives and targets in terms of reducing risks and personal injuries during Group company operations. In this regard, Edp has developed a specific procedure as part of its Corporate Safety Management System, implemented in accordance with OHSAS 18001:2007. 37 near-misses were reported in Edp Group companies in portugal during the course of 2009, which have resulted in the same number of correction procedures/reports to the relevant authorities. oCCupatIonal IllneSSeS In portugal in 2009, 3 cases of occupational illness were diagnosed, with only 1 resulting in incapacity. The occupational illness rate is 0.08 in portugal and 0.05 across the entire Edp Group. aCCIDent rate In 2009 There were 47 work accidents resulting in absences of one or more days in the Edp Group in 2009. The improvements recorded in accident rate indicators (see social indicators at the beginning of the chapter) reflect the action taken over the course of the year to improve safety conditions at work, in the form of training and awareness raising sessions, risk assessment and control, preventative action with service providers and stepping up the audit and inspection programme. Notwithstanding the efforts made, we regret to report the occurrence

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annual report 2009 contribution to sustainability DIStrIButIon oF eDp CuStoMerS BY tYpe oF MarKet 2009 Regulated Market Free Market total portugal 5,842,797 259,698 6,102,495 Spain 422,252 530,778 953,030 Brazil 2,667,611 120 2,667,731 total 8,932,660 790,596 9,723,256 Breakdown of customers by type of usage (%) to their own electric installations and those of third parties, as well as the accidents that may occur. The informer’s identity is treated with total and absolute confidentiality and the company commits to inspecting reported situations as a matter of urgency. Customers are also invited to provide information on cases where trees are close to electricity lines, either through an online form or a freephone number in case of emergency. Similarly to what has been implemented in Spain and in accordance with European legislation, as of June 2009 electricity bills in portugal have included monthly information on the mix of technologies used to generate the energy supplied, and the amount CO2 emissions resulting from the consumption in question. This information is also available in www.edp.pt. 1 8 41 86 Domestic Agricultural Industrial Others Commercial With a view to further developing a customer-focused culture, an internal channel called Cliente OK was launched in 2009 in portugal and Brazil. Through this channel, any employee can participate in a structured manner by answering questions or problems submitted by friends, family or relations. Over a hundred solutions have now been presented by employees in portugal. For more information see: “Summary of Activity” and “Electricity Business in Brazil”. 6.1.1. SaFetY, aCCeSS to SerVICeS proVIDeD anD CoMMunICatIon The use of electricity and gas products, by their nature, requires special care. In response to this demand, instructions are provided on the Edp website under the title “Safety Tips”, including sections on Wires and Sockets, Safety for Children, Electrical devices, and Water and Electricity. These same instructions are also provided in the Customer Care Guide. On the Edp Gás website, safety is addressed under the sections dealing with prevention, Emergencies and periodic Inspections. Similar instructions are published on the internet in Spain and Brazil. In Brazil, the Good Energy in the Community programme was aimed at customers, presenting talks on safe consumption and the risks of improper use of electricity. Edp has also created a special channel to help hearing-impaired customers in Brazil overcome communication barriers. In portugal, with a view to improving relations with a unique segment of customers, two guides in Braille have been published in partnership with the portuguese Association for the Blind and partially Sighted: a Customer Care Guide and an Energy Efficiency Guide. In Spain, leaflets on safe energy usage have been published in Basque and Catalan. The Naturgas Energia website is bilingual, allowing customers to access content in Spanish and Basque. Under the theme of safety, customers in portugal are invited to inform the company through a freephone number of situations of potential electrical danger, such as fallen lines, tree branches close to lines and open electric cabinets or street lamp circuit boxes. A line is available in Brazil for reporting illegalities, alerting people to the damage that improper connection can cause 6.2. CuStoMer eXperIenCe Edp customers are viewed in a holistic manner, in the sense that the company wants them to have a positive experience. The customer’s experience results from all their direct and indirect contacts with the company. In this light, and because Edp wants to interact positively with its customers, a whole range of opportunities has opened up to develop and implement initiatives to improve that experience. Once the goal is defined, one must evaluate whether, in fact, it delivers. From here stems the importance of devising a Customer Experience Evaluation Model. Customer experience Index (CeI) overall s

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Customer experience Index A broad-ranging survey of residential electricity customers’ experiences was conducted in portugal in 2009. This survey allowed us to determine exactly how customers felt each time they contacted the company, as well as their needs and expectations. The Customer Experience Index (CEI) provides a measure of customers’ relations with Edp and what they feel when they hear someone mention the Edp brand. It combines two major factors, with equal weighting: Image and Service. Image is evaluated using the GFK (BpI) international index, which includes a rational element (product/service), an emotional element (brand affinity) and a behavioural element (consumption/use). In 2009, the Edp brand’s BpI stood at a very positive 70 points, on a scale from 0 to 100. Service is evaluated using independent satisfaction indicators, which have also shown improvement. BAROMETER OF ATTITUdES ANd BEHAVIOURS OF dOMESTIC CONSUMERS TOWARdS ENERGY EFFICIENCY IN pORTUGAL Edp measured the Barometer of Attitudes and Behaviours of domestic Consumers towards Energy Efficiency in portugal for the third consecutive year in 2009. The Barometer’s objectives include measuring the change in behaviours and attitudes towards energy use in the home and obtaining an energy efficiency index. We are able to confirm that the Overall Energy Efficiency Index has improved, revealing that portuguese consumers are increasingly efficient in terms of home energy consumption. Index 2007: 77% Index 2008: 79.9% Satisfaction with the Service - Trend of main indicators 74 70 69 71 69 70 70 66 Index 2009: 80.7% Ideal Energy Efficiency Index 100% to Ov so era lve ll pr cap ob ac le ity m s ly al l sa Cu tis sto fa m ct e io r n at i w sfa ith cti ED on P 6.3. SerVICe QualItY 6.3.1. teCHnICal SerVICe QualItY In 2009, Installed Capacity Equivalent Interruption Time (TIEpI) was an average of 2.5 hours in the Iberian market and 12 hours in Brazil. These values correspond to an availability of 99.86%. For more information on technical service quality results, refer to the chapters “Summary of Activity” and “Electricity Business in Brazil”. 6.3.2. SupplY SerVICe QualItY Edp has continued its efforts to listen to its customers and communicate transparently using simple language. In portugal, high levels of quality were maintained in the service provided to customers by the distribution grid operator, as shown by the clear compliance with the General Standards for Supply Service Quality set forth in the Service Quality Regulations (RQS). ric ity su pp ct Ele ve r 2008 2009 With regard to natural gas in portugal, satisfaction indicators have also evolved in a positive manner: Natural Gas Satisfaction - Trend of main indicators 88 73 69 83 75 80 78 76 to Ov so era lve ll pr cap ob ac le ity m s y 2008 2009 The Edp Group consolidates figures for overall customer satisfaction with electricity and gas suppliers in the various countries in which it operates. ve ra ll sa Cu tis sto fa m ct e io r n O ve ra ll sa ti w sfa ith cti ED on P Ga ss up pl O O ve r O al ls 69

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annual report 2009 contribution to sustainability General Service Quality Indicators Customers with service reconnection within 4 hours (as a result of accidental disconnection) Requests for information in writing (within 15 days) Centralized call centre (up to 60 sec. waiting) Service in service centers (up to 20 min. waiting) Connection to LV grid (within 2 days) Line Installation (within 20 days) Providing quotes for LV line installation (within 20 days) 85 96.76 90 98.55 90 98.26 95 99.59 95 95.5 90 94.14 90 97.29 by customers and directly related to actions or omissions by Edp Group companies; entering into dialogue with customers who complain; arbitrating disputes and conflicts between customers and Edp Group companies; issuing opinions on matters relating to the activity of Edp Group companies, if requested to do so by any of their governing bodies; proposing the adoption of measures to help improve levels of service quality and customer satisfaction; establishing contacts with third parties to obtain specialist information and knowledge so recommendations can be made to the Edp Group companies on the adoption of measures to improve their customer relations. Customers submit their requests for examination via the internet and may check the status of their application at any time. At the end of 2009, 461 requests for examination had been submitted, 96% of which related to electricity complaints. Most of these requests (57%) were regarding issues related to supply and readings/billing/payment. Of the 461 requests submitted, 423 (91.8%) were replied to by the end of the year. Of these 423 requests, the Ombudsman’s opinion agreed with the applicant in 49% of cases and disagreed in 23% of cases. 75 80 85 90 95 100 Default (%) 2009 (%) 6.3.3. prIVaCY praCtICeS anD CoMplIanCe The privacy of customer data in portugal is protected through the registration of the Customer database with the National Commission for personal data protection (CNpd). In the general terms and conditions of the electricity and gas supply contract, there is a specific clause which states explicitly that “personal data (…) is processed automatically and used for the commercial and administrative management of the supply contract(s) (.) and related services. duly identified interested parties may have access to the information held on them, directly at customer services centres or by written request, and may amend this information pursuant to the personal data protection law.” For the purposes of market research and direct marketing, the customer’s authorisation is sought to record and use their personal data, as well as pass it to third parties. In Spain, the supply contract contains specific clauses on the handling of personal data pursuant to Organic Law no. 15/1999 and Royal decree no. 1720/2007, whereby the customer may refuse for their data to be used for advertising and informational campaigns on products and services. during the validity period of the contract, the customer may revoke the implicit consent provided to handle their personal data and request that it be destroyed if the contract is terminated. In Brazil, the privacy of information contained in the customer database is guaranteed by means of processes, procedures and tools in line with corporate security systems and technology. As of 2009, electricity and gas customers, in portugal, may seek assistance from the Customer Ombudsman, through a dedicated website – provedordocliente.edp.pt. The Customer Ombudsman is an external and independent entity whose mission is to “help build trust in the relations between Edp Group companies and their customers”. Its activities are guided by the principles of rigour, impartiality and fairness. The following key activities were identified in order for it to fulfil its mission: receiving and examining complaints filed 6.4. SpeCIal, SoCIal anD unIVerSal SerVICe CuStoMerS Edp has 415,028 customers to whom it supplies electricity at a social tariff, in acc

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as promoting its efficient use. Internal installation kits and energy-saving light bulbs were provided, in addition to electric meter cabinets, fuse boxes and connection lines where grid connections were non-existent. Educational talks were held in local communities to promote efficient energy use. A community customer service centre was also provided. 136,000 families in various municipalities in the concession area have benefited since 2006 from educational and guidance initiatives, and 527,000 energy-saving light bulbs have been distributed. low-Income Housing estates This programme included the substitution of electric showers in 1,680 family homes in Mogi das Cruzes municipality, in Brazil, with a solar heating alternative. There are also plans to replace all residential and communal area light bulbs as part of the project. Hospitals programme This programme covers 4 hospitals in Brazil. 2,107 lighting points, 155 air conditioning units and 111 refrigerators were replaced and improved in 2009. efficient Community There are plans to increase the energy efficiency of low-income communities in 33 neighbourhoods in Grande Vitória, in Brazil. As part of this project, training sessions were delivered on the safe and efficient use of electricity. during the sessions, 103,765 compact fluorescent light bulbs bearing the pROCEL/INMETRO performance seal were distributed to replace incandescent bulbs, 78 inefficient refrigerators were replaced with others bearing the pROCEL energy economy seal, and 9,097 residential electric meter cabinets* and 3,045 kits containing electrical materials for internal installations were handed out. “reluz” The Reluz programme was launched in Brazil in 2007, for implementation over a five-year period. Its main objective is to modernise public lighting points and thus provide greater security to communities. 69,000 lamps have already been replaced and the programme is due finish in 2012, by which time around 98,000 more lamps will have been replaced. eCo programme The ECO programme went ahead in 2009, its main objectives being to ensure that Edp continued to set the standard for energy efficiency in portugal, to mobilise portuguese consumers to take concrete action to improve energy efficiency, and to guarantee the plan’s impact and changes in behaviour through an integrated approach. The initiatives run in 2009 included: • Mass media campaigns and other awareness raising initiatives at specific events; • Activities conducted as part of the plan for promoting Consumption Efficiency (ppEC) coordinated by ERSE and including projects that started in 2008 and others approved for 2009; • Cooperating in the government campaign to distribute 1.7 million energy efficient light bulbs through schools (The National Action plan for Energy Efficiency – pNAEE); • ECO Bills – offsetting the environmental impact of Edp bills throughout their life cycle; • Refreshing and restructuring the ECO website with new activities and information on energy efficiency; • Econnosco internal programme – initiative that extends beyond portugal and aims to reduce internal consumption (electricity, water and waste). Reductions in consumption of 22% were achieved in Brazil and 13% in portugal. As part of the ECO programme, EUR 10 million were invested in initiatives to promote sustainability and energy efficiency in 2009. We should highlight the continued distribution of energy-saving CFL light bulbs in historical neighbourhoods (108,306 in 2008 and 2009), social housing estates (335,764 in 2008 and 2009), on the Cycling Tour of portugal (51,724), through a freephone number in Visão magazine (100,000) and in areas where dams are situated (59,296). Edp also participated in the Green Fest, a key event in the field of sustainable development. At the SpOT Youth Fair, Edp distributed energy-saving light bulbs and recruited young volunteers to help distribute CFLs in historical neighbourhoods and social housing estates. We should also make spec

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annual report 2009 contribution to sustainability eXpeCteD enVIronMental IMpaCt oF aCtIonS ppeC 2009-2010* ppeC 2009-10 Intangible Measures Eco-IpSS EcoFamílias II EnergyBus II TWIST (Generation 3E) tangible - residential Solar Hot Water CFL Exchanges in Social Housing Estates CFL Exchanges in Super/Hypermarkets CFL Campaign Exchange tangible - trade and Services T5 lamps in Schools CFLs eCube Refrigeration Units for Super/ Hypermarkets Astronomical Clocks eCube for Companies with refrigeration Needs tangible - agriculture and Industry eCube Refrigeration Units for the Food Industry CFLs eCube Refrigeration Units for Food processing T5 discharge Lamps total *Taking into account the equipment’s lifespan. ppeC Budget (€ thousand) 228 397 222 625 92.5 1,576 1,696 1,431 238.3 1,290 1,457 1,026.5 96 1,860 261 347 1,495 14,338.3 no. Interventions n/k n/k n/k n/k 500 800,000 850,000 700,000 45,000 800,000 10,000 1,600 198 10,800 160,000 2,000 13,485 3,393,583 total energy avoided (MWh) n/a n/a n/a n/a 18,700 173,014 183,828 151,388 47,169 179,892 190,365 114,685 9,483 1,140,502 37,338 63,992 197,418 2,507,773 total Co2 avoided (t) n/a n/a n/a n/a 6,919 64,015 68,016 56,013 17,452 66,560 70,435 42,434 3,509 421,986 13,815 23,677 73,045 927,876 The energy efficiency programmes implemented in Brazil in 2009 were certified in accordance with standard NBR ISO 9001:2008. 6.5.2. SerVICeS In order to meet the growing needs of energy services customers, the Edp Group created Edp Serviços in 2009. This company provides energy services for a whole range of customers, developing, implementing and financing projects in the areas of energy efficiency, renewable energies and decentralised generation, with or without performance guarantees. • development of a network of agents to allow a personalised service approach that meets the needs of SMEs; • Start-up of energy services supply to small businesses, 6.5.3. proDuCtS through the “edp5d negócios” brand. In 2009, 400 lighting audits were carried out. during 2009, under the electricity commercial activity of the Edp’s companies, several initiatives with potential positive impact on the Client Experience Index were implemented: • Simplicity and clarity in billing – The bill for low voltage customers was redesigned in 2009. A space was created with information on meter readings and when they should be sent. The new bill also includes a space for advertising new products/services and another for useful information. • Electronic Billing – In 2009, 538,781 Edp customers in Some of the most important projects implemented in 2009 by this company included: portugal received electronic bills (162% increase against 2008). Edp has 83,521 contracts in Spain. This figure is the result of an electronic billing campaign launched in 2009 (”one customer, one tree”) to inform customers of the main benefits of this free service, which led to the planting of 6,677 trees. • Installation of a Thermal Solar plant at the Alcochete Shooting Range; • Energy audits for the Auchan chain of supermarkets; • Increase in the voltage level at around 40 pingo doce facilities from NLV to MV; • Edp ON – Edp distributed this internal TV channel across • Innovative product for the management of energy for public lighting, consisting of a consumption management system , EWebReport@, to monitor and oversee the energy performance of the new solutions installed; their network of Edp stores, creating another channel of communication/information for all customers in different markets and businesses. The aim of this service is to promote products and services, energy efficiency, create other points of contact with Edp, disseminate information on structural themes and publicise the company’s social responsibility initiatives. 72

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• New website – Edp launched a new, more interactive and easy-to-use website. Intimacy, simplicity and clarity were the factors informing the redesign of the Edp website, improving its image, structure, language and ease of use. Through this new Edp website, customers have access to the new Edp Serviço Universal and Edp distribuição websites, the Edp website and a new addition called Our Energy, on renewable energies in general and new hydroelectric projects in particular. consumers get the chance to win a EUR 1,000 voucher to purchase energy-efficient appliances. • Wattdrive – In May, Edp opened a free network of recharging points for electrical vehicles. To mark this opening, a small event was held at which each user was given a kit containing a sticker, keys to access the recharging points, an instruction manual and a keyring. recharging points, an instruction manual and a keyring. The Edp website includes new means of disclosing information, by providing access to videos and edp On live. • “Casa Eficiente” (Efficient home) – To celebrate 29 May, • Easier access to Edp ONLINE – In 2009, the sign-up process for edpOnline was simplified to make it quicker and more convenient. Customers immediately receive an e-mail to activate the service and edpOnline now offers a range of services including current balance checks, recent bills, consumption history and meter readings. Energy day, Edp took part in the construction of an Efficient Home in partnership with National Geographic. The two-bedroom house with an area of around 100m2 was situated next to the Knowledge pavilion in parque das Nações until 5 July. • More intimacy and simplicity in written communication – As part of the response to customer complaints and queries, a review was made of the company’s written communication in order to make the language used less formal, clearer and simpler. • Insurance extended for edp5d customers – In 2009, residential, business and condominium edp5d customers saw their insurance broadened to include more benefits, including cover for the cost of lost or stolen keys. The policy also sends security technicians to provide advice on adequate anti-theft, fire and emergency medical protection. • edp5d Community – As part of its customer loyalty programme, edp5d created a new project called the edp5d Community. This project aims to help customers understand the product as an integrated offer that comes with a series of real advantages that go beyond just energy supply, and that create an emotional attachment to the edp5d brand. A number of deals have been arranged with customers in the small business segment, through which they may offer a discount or benefit to other edp5d customers on the product or service they sell. 1,000 establishments had signed up by december 2009. • HC points programme – For more details on this initiative • MYENERGY – Edp ran several initiatives to encourage launched in Spain to attract new customers to the electronic billing service, see www.hcenergia.com/puntoshc. microgeneration. As part of this effort, the company launched a campaign advertising microgeneration solutions, focusing on two electricity generation technologies: photovoltaic solar panels and micro wind turbines. With emphasis on the former, “I’m already creating my own energy” made a comeback in the media. • “Mude o seu Mundo que o Mundo muda” (Change your world to change the world) – efficiency campaign and programme on portuguese television (RTp), in which public figures provide examples of how to be more efficient and • Green Electricity – Edp has started supplying green electricity, under the Edp5d Green Tariff. There were 4,108 customers for this service in portugal in 2009, with a total of 9 GWh supplied. In Spain, the company had around 189,000 customers, 73

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annual report 2009 contribution to sustainability corresponding to an annual consumption of 3,577 GWh. In portugal, Edp supplied around 13,400 GWh from renewable energy sources on the regulated and free markets (this figure was calculated according to the methodology recommended by ERSE for compliance with directive no. 2003/43/EC). In the USA, a total of 5,905 GWh of renewable energy was generated and certified through the issue of carbon credits. Edp has a positive influence on local economies, promoting the growth of local businesses. procurement from foreign suppliers represents around 2% of total procurement. 7.2. DIaloGue Edp seeks to stimulate corporate capacity and optimise suppliers’ procedures by: 7. suPPlIERs 7.1. proFIle Edp forms relationships with its suppliers based on the principles of partnership and promoting sustainable development. The company has developed active information practices with its suppliers with regard to the values in its Code of Ethics, in order to highlight the importance of integrity in business strategy. during 2009, procurement activity in the Edp Group (not including energy) totalled EUR 3.282 billion, distributed geographically as follows: Geographical Distribution of Procurement Activity (not including energy) in the EDP Group • promoting technical competence and a competitive market; • Ensuring integration and cooperation in relations; • Fostering permanent, open dialogue to enable us to • Sharing knowledge. Edp’s objective is to “Respond to challenges and establish, control and develop relations with suppliers” through Supplier Relationship Management (SRM) solutions. In this regard, a risk analysis programme for strategic suppliers is currently being implemented, which will enable the early identification of critical situations or breaks in the supply chain and guarantee the continuity of contracted supplies. This programme is based on an early-warning management model that allows Edp to obtain a wide range of information on its suppliers in a consolidated manner and monitor the “aptitude” of companies to become qualified as Edp Group suppliers. SRM solutions facilitate communication between the different partners and the sharing of methodologies, fostering closer relations between both parties. SRM also helps suppliers to get to know the company’s business and its real needs, leading to better terms of purchase and optimisation of the entire procurement process. ascertain the expectations of this important group of stakeholders; 9 23 68 4 8 43 45 Europe Spain France Portugal Others Global Europe Brazil USA Others The main categories of supply were as follows: Main Categories of Supply (%) 7.3. GooD praCtICeS Edp employs a system of researching, selecting and classifying its suppliers - the Edp Group Supplier Registration System (SRF) – which allows it to act in a clear, transparent and efficient manner and build mutually beneficial partnerships. The system is supported by a database that is shared across all the Group’s companies, with registration currently an essential prerequisite for any company wishing to become qualified, be consulted or present a tender for supply. Through this platform, suppliers can also familiarise themselves with the Edp Code of Ethics and declare their acceptance of its values and principles. 10,950 suppliers were registered with the Edp Group in 2009, 19% more than in 2008. To appear in the database, a supplier should enter the suppliers’ section of the Edp website www.edp.pt and complete a pre-registration questionnaire that asks for information on quality, environmental and safety systems and corporate social responsibility policies, among other things. 13 16 23 Global Others Supply of hydroelectric, wind, photovoltaic and other generation Construction, civil engineering and related services Other services, maintenance and inspections 48 13 21 10 56 Others Others Generation services Business and administrative services Services information technolog

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One of Edp’s objectives for 2010 is to increase the amount of information requested from suppliers, to cover their social performance as measured using the Global Reporting Initiative indicators. For their part, registered companies also enjoy a range of advantages, including: • Equal opportunities for equivalent/separate business areas; • Increased business opportunities; • Guarantee that customers have quick and reliable access to their information; • Single registration visible to several companies; • No need to present lots of documentation when applying for contracts or pre-tender qualification. In 2009, 46% of the suppliers in portugal, Spain and Brazil delivering over EUR 75,000 in goods and services were registered on the Edp Group SRF. Of these, 59% employ quality management systems that have been certified by third parties. 28% possess environmental certification and 28% occupational health and safety certification. Certified Suppliers (%) 59 Edp was one of the first two companies in the world to join the GRI Global Action Network for Transparency in the Supply Chain project, which aims to support corporate initiatives to encourage the publication of sustainability reports in line with GRI directives throughout their value chains. As such, Edp is a GRI Organisational partner and conscious of the fact that voluntary and regular reporting by an organisation on its sustainability performance is an extraordinarily powerful means of improving its performance and communicating its results. In 2009, Edp secured support from GRI and their partners for 5 of its suppliers in portugal to receive free training and consultancy support to develop the skills they need to prepare sustainability reports in line with GRI directives (www.globalreporting.org). Also as part of its activity as a GRI Organisational partner, Edp has joined the Multi-Stakeholder Supply Chain disclosure Working Group, whose objectives are to: provide recommendations to the GRI Technical Consultation Committee, with a view to improving the contents of the report in terms of performance throughout the value chain; and preparing, where required, supplementary guides to support the interpretation and application of the supply chain reporting requirements. Suppliers Meeting 2009 Given that suppliers are understood to be fundamental partners in the Edp Group’s development and growth, one of its objectives is to maintain and strengthen their contribution. In this regard, a meeting of around 90 companies was organised, including the Edp Group’s main suppliers. A detailed presentation was made on the Edp Group’s Investment plan, allowing them to anticipate and prepare for the various business opportunities that will arise over the next few years. 28 28 Major suppliers with ISO 14001* Major suppliers with OHSAS 18001* Major suppliers with ISO 9001* * Number of suppliers registered in the Corporate Registration System Supplier of the EDP. Edp has implemented a sourcing tool supported by a web environment that allows sharing of market and supplier information - Sinergie - Supply Integration for Energy. This system is in use in across all the Group’s companies, acting as a basis for all consultation and negotiation processes over EUR 75,000 in Europe and EUR 150,000 elsewhere in the world. Its main objective is to enable the sharing of information on consultation and negotiation processes across the Edp Group, independently of the business unit or the market in which it operates, employing the internet as the engine for all procurement processes on a global level. The resulting solutions and practices enable the company to significantly reduce the associated environmental costs and administrative burden. 75

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annual report 2009 contribution to sustainability To help it better respond to its partners’ expectations, Edp asked them to express their opinion on the meeting held: Suppliers’ Opinion on the Meeting Held (%) Session "increased" or "significantly increased" chances of working with EDP Appropriate level of information Session "useful" or "very useful" 0 25 50 Criteria were introduced in pre-qualification schedules/ contract specifications to force subcontracted companies to assume certain commitments, such as not using illegal labour, implementing quality guarantee systems and following environmental protection policies. As part of the training programme on “live electrical work” (TET) and safety for teams of external service providers, 2009 saw the start of a process to define the requirements and qualifications of trainers employed in the accreditation process for contractors and subcontractors. This project aims to improve and standardise the requirements of the training delivered to employees of contracted and subcontracted companies. 38 87 76 75 100 environment and Safety Regardless of the type and size of the work to be performed, using third-party suppliers necessarily involves strict controls on service quality at every stage, as part of a strategy based on the following principles: 8. COmmuNITy In 2009, the Edp Group gave great impetus to its strategy of dialogue and work with the communities in which it operates. We stepped up some existing programmes and implemented some new actions in order to create value for society. Communicating with the community assumes different expressions and approaches within the Group and is spearheaded by the different Foundations. • Integration of Environment and Safety into the pre• Compliance with Edp’s Environmental policy and Qualification System for service providers (including a questionnaire on environmental matters); Health and Safety policy, as well as with all other legal requirements incumbent upon the service provider; • Edp Foundation in portugal • Hidrocantábrico Foundation in Spain • Edp Institute in Brazil They play an important role in the consolidation of our commitment to provide the community with support in social, environmental, educative, cultural and recreational areas. The Group’s companies and its Brand and Communication department are also directly involved in creating a closer relationship with society. Edp has been a member of the London Benchmarking Group (LBG) since 2007. Since the 1990s, this working group has been developing a model for assessing the social performance of voluntary contributions by its members, the LBG Model. This enables Edp: • Application of new accident prevention and control instruments, in particular the requirement for basic safety training for all employees; • Monitoring and evaluation of environmental and safety • Conducting service provider questionnaires and performance during the execution of work, by means of scheduled audits; assessments and allocating an annual bonus to recognise those who perform exceptionally well and contribute to safety in the workplace. For further information on suppliers’ accident prevention and safety practices, see chapter 5.Employees, section 5.12.2.Corporate Safety Management System. Contractors and Subcontractors pre-qualification systems designed exclusively for subcontractors are currently being developed and implemented, especially for more critical tasks such as the construction and maintenance of HV, MV and LV electricity grids and work on live HV, MV and LV installations. The volume of subcontracting was used in 2009 as one of the assessment criteria for awarding contracts, whereby excessive subcontracting was penalised. • To demonstrate the work that it does with the community; • To engage with its various stakeholders to ascertain benefits to the company and the community; • To determine the social return of resources invested in harmony with the SROI methodology. In 2009 there were si

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ContrIButIonS(a) to tHe CoMMunItY In 2008 anD 2009 total value of contributions (€)(b) Category Nonstrategic Investment Strategic Investment Commercial initiative Not applicable nature Education Health Economic development Environment Art and culture Social welfare Emergency response Others Cash contributions Value Volunteer “Staff” (c) No. employees involved in volunteering during working hours No. volunteering hours during working hours Value of volunteer time Contributions in kind Value of contributions in kind Management costs total value of contributions (including management costs) (a) Values of 2009 are provisional: not yet validated by the Corporate Citizenship. (b) Excluding management costs. (c) At the time of this publication, values for Brazil were still not available. 2009 2008 1,625,551 12,263,973 3,088,798 71,783 2,623,431 353,650 329,332 982,160 6,489,601 2,178,595 4,093,337 15,226,586 3,246,873 7,428,572 1,751,134 1,888,646 1,276,468 312,316 518,208 4,373,713 1,180,297 19,282 2,857,649 11,606,722 248 5,817 149,762 1,673,757 n/k 1,511 5,891 495,702 163,169 17,050,104 12,589,747 Contributions by Region in 2009 (%) portugal 19 20 1 • Supporting the development of Trás-os-Montes – In order 60 to foster entrepreneurship and cultural activities in the region, Edp signed three agreements, one with Glocal to create jobs, which will also include the pilot project known as the premium Edp Sustainable Entrepreneur programme; one with the Learn to Learn Association to improve the skills of upper secondary school students and the other with the Calouste Gulbenkian Foundation and Music School of the National Conservatory to promote culture and expand the Generation Youth Orchestras model. (www.a-nossa-energia.edp.pt) Portugal Brazil Spain USA • Lares, Figueira da Foz – Edp delivered a multi-sports Provisional values: not yet validated by the Corporate Citizenship. 8.1. Support For eConoMIC DeVelopMent 8.1.1. loCal CoMMunItIeS For many years now, Edp has focused on its relationship with the community in all the geographical areas in which it operates and devotes special attention to people living in the vicinity of its facilities. 2009 witnessed the start of construction on new facilities, especially in portugal, and dialogue with communities (organisations, representatives). This dialogue is seen as part of an ongoing process of interaction and there is a highly diversified programme of initiatives involving local partners. park to the local community, one of the facilities in the parish support plan. In addition to the park, a children’s playground and repaving work around these facilities will soon be completed. • Energy Bus in Trás-os-Montes – The energy efficiency bus travelled the regions where Edp is building new hydroelectric power stations, particularly the municipalities of Miranda do douro, Mogadouro, Torre de Moncorvo, Alfandega da Fé and Macedo de Cavaleiros and received 2,945 visitors. This mobile project uses equipment for demonstrating new technologies, interactive experiences, information panels, leaflets and useful advice to encourage more efficient, environmentally-friendly behaviour. (www.eco.edp.pt) 77

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annual report 2009 contribution to sustainability • “Edp Solidária Barragens” – This programme sponsors charitable projects run by institutions in Trás-os-Montes and Alto douro, the areas of influence of the new dams. In its first edition, EUR 100,000 was distributed to the winning projects: CERCIMAC – Coorperative for the Education and Rehabilitation of Handicapped Citizens/graphic arts workshop, portuguese Red Cross – Alijó Branch / Smile – a support scheme for children and young people, Cerejais Community Centre / Mobility and Health – assistance for the elderly, picote parish Council / Youth Centre – volunteer scheme for Edp employees and suppliers. (www.a-nossa-energia.edp.pt) In addition to all these projects, there are also energy efficiency programmes not only for Edp customers but also for the community as a whole. For further information, see Chapter 6.Customers, section 6.5.1.Energy Efficiency. 8.1.2. DeVelopInG CountrIeS • Through Edp Internacional, Edp is involved in projects to • Visits to power stations – this is of special interest to the school community to complement their syllabus and in 2009 Edp received some 40,000 primary and secondary school visitors. expand and repair Angola’s electricity systems, which have a high impact on the quality of life of large sectors of the local population. We would like to highlight the following figures: In the Lobito/Benguela region, 100,000 people benefited from new electricity infrastructures, as well as 90,000 in Malange, 60,000 in Namibe, 20,000 in Caxito/ Bengo and 120,000 in Cabinda. Edp is also conducting planning studies to schedule over 20 years of investments in expanding electricity distribution grids by 50% in its main cities and towns. Communication plans and procedures for major projects (CoMpro) – definition of major project communication methods and procedures in order to involve all stakeholders in the early stages of preliminary studies. A methodological test was conducted for the new Fridão and Alvito hydroelectric plants. Main goals: to guarantee an open, transparent, trusting relationship with different stakeholders; to bring forward “public adaptation” to projects through appropriate involvement of Edp stakeholders; to train staff in communication management in order to minimise exposure to risk; to standardise a manual of guidelines for major project communication. In 2009, the phases completed were: identification of stakeholders, surveys of communities’ expectations, wishes and concerns, Landscape Outcome Assessment Methodology (LOAM) sessions and evaluations of results – whenever possible the information collected was considered in the planning of Environmental Impact Assessments (EIA). Goals for 2010: drafting and approving the training manual and planning training and in-house training courses. Brazil Edp sponsored projects for children and young people in the different states in which it operates and was considered a “child-friendly company” by Abrinq. Examples: • No-Man’s Land - Edp joined the United Nations High Commission for Refugees (UNHCR) to bring renewable energy to the Kakuma Refugee Camp in Kenya. The project was presented at the 5th Annual Meeting of the Clinton Global Initiative in New York and will generate power for more than 50,000 people, along with a technical training programme for 100 to 150 local people and the distribution solar light bulbs for domestic use. • Community Schools - Edp, in partnership with doctors of the World – portugal (NGO) and EFACEC, is sponsoring the construction of two open access centres in the Cocomela and Impaputo neighbourhoods in the Namaacha district in Maputo, as part of an Integrated HIV/AIdS and Malaria programme in Mozambique. This project will enable the generation of renewable energy for a health centre equipped with a refrigeration system for vaccines, a kindergarten and a water pump. The Mozambican Humanitarian Association (AHMO) is providing support at a local level. 8.2. patronaGe anD

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the live, dynamic models in its exhibitions help visitors to acquire a broad knowledge of the importance of biodiversity and the ecological wealth associated with nature conservation programmes. As a centre of local development, the River Aquarium has contributed to the municipality by creating new direct and indirect employment, helping to reduce regional asymmetries and stimulating the local economy. Spain • “Un Cliente, un Árbol” (One Customer, One Tree) - The • 14th physics Olympiads – this competition organised by portuguese physics Society and the Electricity Museum challenges 9th and 11th grade students from around the country to demonstrate their knowledge of physics through a series of theory and practical tests. Hidrocantábrico Foundation planted 6,677 trees in 2009 as part of this campaign, as a result of 62,323 customers subscribing to its electronic billing service (see Chapter 6.Customers). • planting of native species in public areas – An agreement • Live Science: Summer Engineering – this programme in August and September offered the public the chance to come into contact with engineering works, particularly in the arena of energy generation. Visits were made to the Alto Lindoso, Carrapatelo and Castelo do Bode plants and Ribatejo and Sines power stations. • European days of Sun: 2nd Solar Festival – this between the Hidrocantábrico Foundation and Gijón Municipal Council, with the participation of the Municipal parks and Gardens Service, in collaboration with the Fund for the protection of Wild Animals (FApAS). The HC Foundation is responsible for planting and preserving the species. The project, which includes environmental education initiatives, will be implemented in the Monte deva Nature park and is the first of several agreements to be signed with a number of municipalities. programme was developed in partnership with ApISOLAR and sought to promote knowledge of and contact with solar solutions: seeing how they work, measuring and experimenting. HealtH anD SolIDarItY Brazil Brazil • “dentistas do Bem” (pro Bono dentists) – volunteer dentists treated low-income children and adolescents up to the age of 18, free of charge. They were selected based on need by a triage performed on 5th to 8th grade pupils at state schools. The poorest children and those with serious dental problems and young people about to enter employment were given priority treatment. • Edp in Schools – The Edp Institute distributed 19,000 school kits to 62 schools in the States of São paulo, Espírito Santo, Santa Catarina, Tocanstins and Mato Grosso Sul, involving around 1,000 teachers. • “Letras de Luz” (Letters of Light) - The Brazil Institute donated 2,880 books in nine cities in the State of São paulo. • Edp Solidária – in 2009 this programme was extended • 1st class of female electricians – ten women were trained in a 32-person class on the Grid, distribution, Inspection and Metering Electrician Training programme, the first to train female technicians. Spain to Brazil, where 15 projects were selected in the areas of education (literacy, environmental education, school integration, promotion of reading and robotics), health and social support (early cancer diagnosis in children, entrepreneurism and vocational and social qualifications) in the States of São paulo, Espírito Santo, Mato Grosso do Sul and Tocantins. • 150 study grants – The Hidrocantábrico Foundation art anD Culture portugal awarded a group of 150 science students at Oviedo University a grant to complete their final course assignment or a post-graduate course. In addition to this grant, they will have a six-month, four-hour-a-day internship on a prearranged schedule. • Remade in portugal - Eco-design Exhibition – promotion of cultural and social awareness initiatives related to recycling, encouraging the design and development of products made of at least 50% recycled materials and promoting the reuse of household and industrial waste. enVIronMent portugal • Mora River Aqu

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annual report 2009 contribution to sustainability towards the integration and development of children from disadvantaged social backgrounds. • portugal Art Biennial 2010 – displays of international contemporary art in different locations to encourage the active participation of the public. Its aims to celebrate the social and cultural importance of public places and art and encourage visitors to come to the cities and regions where it is held - Lisbon, Cascais, Grândola and the Algarve. This model allows the work of portuguese artists to be displayed abroad and foreign artists to show their work in portugal. the country that work in the areas of local and social entrepreneurism, help for the elderly, reducing school dropouts, environmental education, time bank, exclusion, social promotion and integration and help for people with special needs. www.edp.pt> Sustainability> Foundations> Edp Foundation> Edp Solidária 2009. • Casa das Cores – Edp donated EUR 25,000 to this temporary shelter for children aged 3 to 12 at risk of or victims of abuse, as part of the 19th Lisbon Half Marathon. Edp gave one euro for each phone call. • Summer Mornings and the Electricity Museum – Bringing different generations together in August and September. Sunday mornings were devoted to the whole family, offering an educational and recreational introduction to the study of electricity for children and a varied music programme for adults. • país Solidário Campaign – In response to the financial crisis, the Edp Foundation and the Calouste Gulbenkian Foundation organised a campaign aimed at minimising new risks of poverty in portugal. The donations were distributed through Cáritas, the portuguese Red Cross and the Federation of Food Banks Against Hunger. Brazil • Mentally disabled athletes received special attention from Edp, which sponsored the National Sports Association for people with Mental disabilities (ANddI) and athletes in different sports by contributing to the cost of national training camps and international travel. • The Art of photography - The Little Things in Life - the Edp Institute and Edp Bandeirante chose 40 photographers from the 998 contestants who entered 3,642 photos. In addition to enabling access to and promoting art, an exhibition travelled to 28 municipalities. • Opening doors that Never Existed – this travelling play was sponsored by the Brazil Institute, in partnership with the company Abaréteatro. A truck taking culture and education to the people visited seven cities in Tocantins. Spain • Chapel of Nuestra Señora de los dolores, in Grado - artistic illumination of the exterior of the chapel as part of the restoration programme for the historical and cultural heritage of the principality of Asturias. Share your holiday spirit with a smile The Edp Group’s paper Christmas cards were replaced by an electronic version and the saving on printing and postage was converted into donations to charitable non-governmental organisations, in all the countries where the company operates. • Revillagigedo Chamber Orchestra Christmas Concerts – series of concerts in four venues in Asturias sponsored by the HC Foundation in partnership with the Revillagigedo palace International Centre for Contemporary Art in Gijón. SoCIal WellBeInG portugal Sport portugal • “partilhar um sorriso” (Sharing a Smile) – Temporary • Edp Solidária – Series of projects sponsored by the programme to give out meal tickets to Edp pensioners with a monthly income of less than EUR 450. • Lisbon, porto and Setúbal Marathons, the Cycling Tour of Spain portugal and the Lisboa Bike Tour: highly successful events that attracted thousands of participants. Edp Foundation and aimed at improving the quality of life of socially disadvantaged people and integrating people or communities at risk of social exclusion. In the 2009 edition, Edp selected 12 institutions from around • 11th Asturias Sailing Week – Held in July and sponsored by the Hidrocantábrico Foundation and Cajastur

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• San Silvestre Run – The Hidrocantabrico Foundation sponsored the races held on 31 december 2009 in Gijón and Oviedo. For each participant aged under 12 and over 60, the foundation donated one euro to charitable institutions: the Red Cross, Nuevo Futuro and Energía sin Fronteras. and actively collaborated with a number of organisations along its path to continuous improvement. A list of its current partners, with particular focus on the environment, citizenship and culture can be found on its website at www.edp.pt> Sustainability> Approach to Sustainability> participations and at www.edp.pt> Sustainability> Foundations> Edp Foundation> partnerships. 8.3. Volunteer CaMpaIGnS portugal • ”Aprender a Apreender” (Learning to Learn) – educational volunteering under the agreement with Junior Achievement portugal, which aims to nurture entrepreneurship, creativity and innovation in future generations by encouraging proactivity among schools and companies. In the previous school year, Edp had 83 volunteers working in programmes focused on families (primary school), community (primary school), economics for success (lower secondary) and companies (upper secondary). Gift Collection Campaign This Christmas, give what you have too much of to those who have too little – a campaign run by Edp employees in portugal to collect non-perishable goods. All it took to improve the quality of life of the disadvantaged was a little time, a gesture and a donation. • Collection points around the country: 40 • Edp volunteers: 110 • Non-perishable goods collected: 11 tonnes • Beneficiaries: 14 institutions reaching 300,000 people Edp had many partners that supported the campaign free of charge, without which it would not have been possible. They included Ativism, TSF, Jornal de Negócios, Jornal I, Media Edge:cia, ApS Media, MOp, Urbanos and Lógica. Brazil • Volunteering policy – through its Brazil Institute, Edp Brasil • Oral Hygiene Campaign - Edp volunteers, in partnership approved its volunteering policy to encourage and support this activity among its employees. with Colgate and dentists, visited schools in Espírito Santo, Mato Grosso do Sul, São paulo, Santa Catarina and Tocantins to tell the students about the importance of brushing their teeth properly in order to stay healthy. They were also given a kit containing a toothbrush, toothpaste and a leaflet on oral health. 8.4. partnerSHIpS anD orGanISatIonS As the largest portuguese company, Edp has always played a role in encouraging international best practices. It has joined 81

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annual report 2009 contribution to sustainability 9. ENvIRONmENTAl PERfORmANCE enVIronMental InDICatorS Group 242,878 132,628 6,105 89,051 7,996 1,483 109 4,227 1,030 249 2,429,843 33,256 8.32 12,633 62 100 2009 portugal 114,472 81,675 5,909 52,472 0 0 16 4,227 0 172 1,800,337 18,590 6.84 8,835 84 100 Spain 98,341 50,952 196 36,579 7,996 1,483 93 0 1,030 13 629,506 942 4.97 3,347 63 100 Brazil 64 n/a n/a n/a n/a n/a n/a n/a n/a 64 n/k 7,463 12.68 452 26 0 uSa n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/k 6,261 n/a 0 0 0 Group 237,259 121,423 11,292 90,180 9,673 2,496 86 676 1,156 277 2,244,466 31,138 8.39 11,424 61 100 2008 portugal 141,842 65,442 11,076 64,463 0 0 11 676 0 174 1,572,290 21,373 7.50 8,491 88 100 Spain 95,329 55,981 217 25,716 9,673 2,496 75 0 1,156 15 672,175 851 3.63 2,933 60 100 Brazil 88 n/a n/a n/a n/a n/a n/a n/a n/a 88 n/k 11,914 11.99 0 0 0 uSa n/a n/a n/a n/a n/a n/a n/a n/a n/a n/k n/k n/k n/a 0 0 0 primary energy Consumption (tJ) Coal Fuel Oil Natural Gas (1) Blast furnace gas Coke Gas diesel Oil Forest waste Iron and Steel industry gas Fuel for vehicle fleet electricity Consumption (MWh) Generation internal consumption Administrative services Grid losses (%) environmental Certification ISO 14001 Environmental Certification (MW) Net maximum installed capacity certified (%) Gas distribution certified (%) atmospheric emissions total emissions (kt) CO2 (2) SO2 NOx particles Mercury (kg) SF6 (kg) Overall specific CO2 Emissions (g/kWh) Specific emissions from thermal facilities (g/kWh) CO2 SO2 NOx particles Water collected by source( 103x m3) Ocean River or stream Reservoir Artesian well Well use of water (103x m3) Cooling water Raw water drinking water Wastewater (m3) Wastewater treated during generation discharge into sea discharge into inland and estuary water Waste sent to final disposal Total waste (t) Total hazardous waste (t) Recoverd waste (%) Main waste categories (t) Fly ash recovered Used oils pCB Metals Gypsum Biodiversity High voltage lines in protected areas (km) Medium voltage lines in protected areas (km) Substations in protected areas (no.) environmental Costs (eur thousands) Investment cost Current cost Compliance Environmental fines and penalties (EUR thousands) Environmental Complaints (no.) (1) Not including vehicle flee 20,007 17.07 33.31 1.05 142 280 362.3 (2) 704.7 (2) 11,075 8.24 21.49 0.55 100 227 411 (2) 632 (2) 8,932 8.84 11.83 0.50 42 5 594 (2) 821 (2) n/a n/a n/a n/a n/a 48 n/a n/a n/a n/a n/a n/a n/a n/a n/a 28 n/a n/a 86 n/a n/a n/a 8,931 91 99 n/a 58 0 1,525 n/a 65 3,934 12 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 19,783 33.99 33.26 1.68 145 333 387 647 1.13 1.11 0.06 1,495,630 205,097 2,078 884 33 1,700,122 6,688 253 10,110 21.68 20.15 0.83 69 234 388 552 1.18 1.10 0.05 1,001,546 188,321 2,078 884 15 1,189,836 3,898 159 9,673 12.31 13.11 0.85 76 42 613 790 1.05 1.12 0.07 494,084 16,776 0 0 0 510,287 2,790 12 2,289,439 495,242,765 11,399,485 438,206 1,287 83 334,944 169 61 722 20,648 39 610 10 52,239 30,233 22,006 132 n/k n/a n/a n/a n/a n/a 57 n/a n/a 0 0 0 0 0 0 0 18 0 n/k 80 0 0 0 7,363 98 99 0 20 0 554 0 42 3,843 20 20,206 17,215 2,991 0 n/k n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 0 0 2 0 0 0 86 29 100 0 12 0 298 0 n/a n/a n/a n/k n/k n/k 0 n/k 0.60 (2) 1.17 (2) 0.04 (2) 0.47 (2) 1.23 (2) 0.03 (2) 1,166,003 104,887 316 745 12 1,271,032 4,013 134 1,368,573 1,166,689,787 100,952,408 587,289 1,776 98 333,303 600 0 799 86,736 844 8,383 19 73,693 62,889 10,804 0 89 0.74 (2) 0.99 (2) 0.04 (2) 440,409 14,283 0 341 0 455,021 2,564 24 2,255,839 441,616,136 11,482,974 333,287 1,129 86 246,759 222 314 685 42,443 39 613 11 1,606,412 119,170 316 1,086 40 1,726,053 6,577 245 3,624,412 1,608,305,923 112,435,382 929,642 3,012 94 580,062 959 314 3,072 129,179 948 12,930 42 118,898 86,670 32,228 29 101 n/a 4,323,869 2,034,430 n/a 1,497,569,009 1,002,326,244 n/a 195,436,820 184,037,335 136 22 98 n/a 79 0 63 n/a n/a n/a n/a 835,922 3,32

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9.1. ManaGInG enVIronMental ConCernS Edp’s environment policy expresses the company’s ambition to be a role model in the environmental management of its activities, considering stakeholders in the decision-making process and promoting good practices in this area. Additional information on Edp’s environment policy and internal organisation with regard to environmental matters is available on www.edp.pt> Sustainability> Environment. The maintenance of Edp’s Corporate Environmental Management System in accordance with ISO 14001:2004 frames and reinforces Edp’s commitment to integrating environmental concerns into planning and decisionmaking at every level, in particular the evaluation, monitoring and minimisation of significant impacts that may arise from its activities. eDp enVIronMental KeY InDICatorS 2009 targets set Difference primary energy Consumption (tJ) Total for generation ISo 14 001 environmental Certification Net maximum installed capacity certified (%) Gas distribution certified (%) atmospheric emissions Overall specific CO2 emissions (g CO2/kWh) CO2 emissions intensity (g/€) Water Use of water (103xm3) Waste Total waste (103x ton) environmental Costs Current costs (million €) Investment costs (million €) Environmental investment as % of total investment 119 87 3.67 71 40 1.14 48 47 3 930 500 1,732,875 1,767,929 62 100 67 100 -5 0 242,878 225,395 1,7483 362 1,640 341 1,566 22 74 0 -35,054 0 430 Better than or as predicted Worse than predicted Above target Below target 9.1.1. atMoSpHerIC eMISSIonS desulphurisation systems, which are now fully operational at our coal-burning plants, have substantially reduced overall SO2 emissions. The reinforcement of primary NOx reduction measures was completed with the installation of the BOFA system at the Sines power Station. A catalytic denitrification system for combustion gases is currently being installed at this plant and offers efficiency of around 70% of current emission levels. The system is already under construction in Group 2 and will be installed in Groups 1, 3 and 4 in turn in 2011. Atmospheric Emissions (kt) 60.7 46.1 35.2 24.8 24.6 57.7 43.0 27.6 22.5 21.2 13.1 12.3 2006 Portugal (SO2) Portugal (NOx) 2007 Spain (SO2) Spain (NOx) 2008 Continuous improvement in environmental management is also ensured through the maintenance and extension of ISO 14001:2004 certification of environmental management systems. Today, 62% of Edp’s installed generation, all of its gas distribution and its substation maintenance activity, managed by the Coimbra Substation department for electricity distribution in portugal, are certified according to ISO 14001:2004. By the end of 2009, Edp had also registered de 19% of its installed capacity with EMAS. The company’s approach to each of its most important environmental concerns is described at www.edp.pt. Every year targets are set for a series of key environmental indicators, as shown in the table below. Significant changes are duly explained throughout the course of this chapter. Edp has a (15.5%) shareholding in the Trillo nuclear power station in Spain, but does not consolidate environmental information from this plant. Information on its performance is available at www.cnat.es. 21.5 11.8 8.8 8.2 2009 9.1.2. Water uSaGe Most of the water collected is for use in cooling circuits. Only a small amount is lost in closed circuits and it is all returned to water sources in the case of open circuits. The thermal impact of cooling water from Edp’s thermoelectric power stations is monitored through spot checks, in accordance with the specific characteristics of each plant and their environmental licences. The company uses aerial thermal imaging and regular sampling to ensure compliance with the stipulated temperature limits. The use of cooling towers in all new projects has substantially reduced this impact, as it significantly reduces the amounts of water released into water resources. 83

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annual report 2009 contribution to sustainability 9.1.3. WaSte Edp’s generation activities produce large quantities of fly ash and slag from burning coal and fuel oil at thermal power stations. Coal fly ash has a high recovery potential and has been used for several years as a by-product in the cement and concrete industry. 333,303 tonnes of fly ash from the Sines plant has been recovered for use in the cement and ready-mix concrete industries. In pursuit of our goal to close down the landfill for ash and other fuel oil waste on Sines plant land, 4,645 tonnes were sent for recovery. Gypsum is collected in desulphurisation processes and we are now studying the feasibility of selling it on the market. Other waste is also produced during operation and maintenance. The waste produced in largest quantities is concrete posts and used oils. pursuant to the Basel Convention, Edp limits cross-border movement of its waste. It only allows the export of pCBs or waste from accidents for which portugal does not have the technical capacity and necessary facilities for its disposal. Edp has a pCB disposal plan ending in 2010. Only a residual quantity will be exported from portugal and Spain this year. In Spain, Edp reported a spill of pCB-contaminated oil from a transformer leak in Carrió Substation. In portugal, it reported a number of small oil spills with a total volume of 24 m3. A transformer also ruptured due to a lightening strike and emergency procedures were implemented to recover 5 m3 of oil and 10 m3 of oil/water mixture, thus preventing any environmental damage. In this regard, Edp implements measures to prevent and minimize incidents and their impact, hiring licensed waste managers to treat contaminated soils. 9.1.4. enVIronMental eXpenSeS In 2009, Edp incurred environmental costs of around EUR 119 million to prevent, repair or minimise environmental damage. Environmental investment was EUR 87 million, accounting for 3.67% of the Edp Group’s total investment. Of particular important were the amounts spent on minimising the effects of atmospheric pollution (around EUR 68 million) and reducing impacts on biodiversity and landscape (around EUR 19 million). The sale of waste and by-products generated EUR 10 million in environmental income. For full details on our environmental financial information, please see the Financial Report, note 50. Also of note was the environmental provision of EUR 21,466,000 for decommissioning the Trillo nuclear power station, and EUR 63,956,000 for decommissioning wind farms. Environmental Costs in 2009 (%) 10 23 5 62 Portugal Spain Brazil USA 9.1.5. eleCtrIC anD MaGnetIC FIelDS Edp has monitored scientific developments in studies of the potential risks of long-term exposure to the electric and magnetic fields generated along electricity lines. Following a number publications and awareness campaigns in 2008, a new project began in 2009 to study ways of improving present levels of electromagnetic fields from standard electricity distribution facilities. Educational information on health effects resulting from prolonged exposure to electric and magnetic fields is available at www.edp.pt. 9.1.6. neW proJeCtS Edp’s growth strategy has given priority to the expansion of its renewable electricity facilities, especially wind and hydroelectric generation. The inclusion of an environmental component in the planning and design phase is common practice throughout the Group and special concern is now shown for maintaining and improving local residents’ quality of life. For more details, refer to the chapter on Community. In 2009, Edp made its full environmental impact studies available online to encourage public participation, and created a portal for monitoring its new hydroelectric plants, where visitors can view the progress of each project under way in portugal (www.a-nossa-energia.edp.pt). 9.2. ClIMate CHanGe Edp made a commitment to reduce its specific CO2 emissions by 56% by 2012, as measured against 2005 leve

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This ambitious target is in line with Edp’s sustainable development policy, which makes it one of the leading companies in this field worldwide. Its main strategic guidelines are: Co2 eMISSIonS (Kt) licenses allocated in 2009 portugal Sines Setúbal Carregado Barreiro Tunes Ribatejo Energin Soporgen Mortágua Lares total portuGal espanha Aboño Soto de Ribera Soto 4 Castejón H. Central Oviedo EITO Cogeneración Tercia Intever Sinova Biogas y Energía Sidergás Energía total SpaIn total eDp Notes: 1 - CO2 emissions in portugal do not include Rodão (1,1kt), Figueira da Foz (4,4kt), and Constância (0,5kt) power stations. 2- For comparison purposes, CO2 emissions from Mortágua represent the total amount of emissions. 3- Includes CO2 emissions from Sidergás, Aboño 1 and 2 power stations, which burn gas from iron and steel works. These are different from those presented in the financial information, note 46. real emissions in 2009 7,706.30 166.6 13.9 248.2 0.9 2,131.20 194.9 240.8 1.3 364.4 11,068.30 5,718.90 1,319.00 543.9 800.8 29.6 24.2 65.3 63.1 57.6 37.9 271.9 8,932.20 20,000.50 • To focus the expansion of the electricity generating system on renewable energy sources (RES), especially wind and hydroelectric power; • To invest in cleaner, more efficient generation technologies, e.g. CCGT; 5,833.30 1,119.00 377.2 139 4.5 1,423.10 226 239.3 1.2 381.5 9,744.10 5,362.20 1,640.60 328.3 627.4 27.7 20.3 52.9 29.8 52.9 28.4 271.9 8,442.40 18,186.50 • To promote energy efficiency through both technology and behaviour. In 2009, the renewable component of Edp’s generation assets, in terms of installed capacity, was 60.7% (slightly higher than in 2008) and electricity generated from RES represented 50.5% of the total (42% in 2008). With this generation structure, Edp’s overall emission factor has gone down to 0.362 tCO2 /MWh (0.400 in 2008), continuing the downward trend of recent years and on course for its 2012 and 2020 targets. Specific CO2 Emission Reduction Targets 0.60 0.49 tCO2/MWh 0.46 0.40 0.36 0.27 0.12 -56% -70% 2005 2006 2007 2008 2009 2010 2011 2012 (…) 2020 In Brazil, we strengthened our portfolio of CdM (Clean development Mechanism) projects through the acquisition of the Água doce and Horizonte wind farms, the plans for which had already been approved (see table below). In addition to these, the plans for the Santa Fé mini-hydroelectric plant are being prepared and a package of other mini-hydroelectric plants consisting of turbines 1, 2 and 3 at Mascarenhas, Suíça and Rio Bonito is in the approval stage. annual reductions Validity (tCo2e/year) 50,466 2015 (renewable) 30,310 2018 32,344 2015 (renewable) 13,704 2013 (renewable) 6,227 2011 (renewable) total reductions (tCo2e) 353,262 303,095 226,408 95,928 43,587 In portugal, 2009 was not as dry as 2008 – with a hydrological index of 0.77 (0.56 in 2008) - which allowed hydroelectric energy to make a larger contribution to the overall mix. Even so, it was necessary to make intensive use of thermoelectric power to meet the needs of the national generation system. This affected CO2 management in the EU Emissions Trading Scheme (ETS) and Edp exceeded its allocated credits by around 1.8 Mt. It was therefore necessary to offset this excess by the using credits in our portfolio, which is managed centrally by UNGE, and purchasing allowances on the market. project type Mascarenhas Mini-hydro paraíso S. João Água doce Horizonte Mini-hydro Mini-hydro Wind Wind In 2009, 32,588 VERs (Verified Emission Reductions) from these CdMs were sold on the European market. Overall primary energy consumption, including fleet, was approximately 243,000 TJ in 2009, up slightly (2.4%) compared to 2008 due to the increased use of coal and biomass plants in the Iberian peninsula. 85

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annual report 2009 contribution to sustainability Primary Energy Consumption (TJ) 310,473 282,147 261,157 environmental concerns, which include, where applicable, impacts on surrounding ecosystems. 242,878 237,259 2005 2006 2007 2008 2009 We also evaluated the effectiveness of ecological flows at certain hydroelectric plants in portugal and Spain and surveyed the situation downstream of the other plants in portugal for reference purposes. This will allow the effectiveness of any future ecological flows to be assessed. FISH ELEVATOR AT pROAZA HYdROELECTRIC pLANT In 2009 the efficiency of coal and combined cycle power stations, defined as the ratio of net energy produced to primary energy, was 37.3% and 53.9% respectively. Our strategy of investing strongly in renewables in all the countries in which Edp operates continues to have a substantial impact on the CO2 emissions avoided from conventional thermoelectric power stations. This figure rose 35% between 2008 and 2009. Emissions Avoided (kt CO2) 13,844 39 9,676 825 1,542 10,127 1,543 1,961 10,285 23 2,174 1,595 1,991 7,309 6,623 4,503 2008 Spain 5,923 3,527 2,153 2,202 HC Energía began building work on an elevator to minimise the impacts of the proaza hydroelectric plant on fish communities. It is designed to: • Allow the passage of different species, including salmon, shad, trout, eels and possibly sturgeon, although addition measures may have to be considered for this species; • Ensure correct operation during all the phases of migration (all year round); • Respect the physical integrity of migrating fish. With regard to wind generation, particular emphasis was placed on the monitoring of new wind farms. In 2009, monitoring studies were under way at 66% of these, corresponding to a total of 218 studies. In terms of distribution, the impact on birdlife is the most important environmental concern and management of vegetation in transmission corridors has recently warranted special attention. So far, approximately 126 km of electricity grid lines have been protected against the effects of collision and electrocution of birdlife in portugal, and corrections are planned for around 247km of lines until 2010. Most of this work has been carried out under an existing agreement between Edp, the Institute for Nature Conservation and Biodiversity and two non-governmental organisations: The portuguese Society for the Study of Birds and Quercus, which together have been identifying the areas of highest risk to birds. This work is recognised by the energy sector regulator. In terms of corridor management, portugal currently has two different programmes that will significantly improve processes: 2006 2007 Portugal 2009 Brazil USA Rest of Europe In terms of the strategic aspect of demand - efficient final energy use - Edp stepped up its ECO programme in 2009. These activities and other initiatives in 2009 are described in the chapter Customers. 9.3. BIoDIVerSItY eDp ManaGeMent In proteCteD areaS In 2009 Distribution Grids (km) HV MV Overhead Underground Overhead* Underground portugal 834 11 7,640 743 19 3,426 792 17 Spain 39 0.5 587 26 11 260 n/k 11 Brazil 64 0.1 3,924 10.3 12 0 0 n/k uSa n/a n/a n/a n/a n/a n/a 0 0 no. of substations Generation activity (ha) Area flooded by reservoirs(*) Area assigned to wind generation Wind farms in sensitive areas (%) *Not including Alqueva and pedrógão • A project approved by ERSE to draft a manual of good practices in the management of transmission corridors for high and medium-voltage lines, with particular focus on environmental protection areas and developing their potential as ecological corridors. Edp published its biodiversity policy in 2007. In 2009 a brochure was produced to provide more detail on the work carried out in this area, which is of strategic importance to the Group due to recognition of the significant environmental impacts of its new projects. The brochure will be published in 2010, the International Year of Biodiversity. In terms o

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ANNUAL REPORT 2009 corporate governance report 90 STATEMENT OF COMPLIANCE Statutory framework in respect of independence and incompatibilities 94 Statements regarding the independence and incompatibilities 94 CORPORATE GOVERNANCE STRUCTURE 95 Corporate Governance Model 96 Organic Corporate Structure 97 Corporate Bodies 106 Business operations between the Company and the members of the corporate management and supervision bodies with qualifying holdings and companies in a group or control relationship with EDP FUNCTIONAL STRUCTURE OF EDP 107 The Group Organisational Model 108 Corporate Centre 111 Specific EDP Committee (Functional Structures) 117 Customer Ombudsman 117 Branch in Spain 118 Risk Control and Management System SHAREHOLDER STRUCTURE AND EXERCISE OF SHAREHOLDER POSITIONS 123 Capital structure 124 Shareholder Structure 124 Qualifying Holdings 126 Holders of Special Rights 126 Restrictions to Share Transferability 126 Shareholder Agreements 126 General Meeting of Shareholders and Participation in the General Meeting 126 Votes and Exercising of Voting Rights 127 Postal Voting/Electronic Voting 127 Quorum and Decisions 127 Minutes and Information on Decisions 128 Measures on Control and Changes in Control of the Company 128 REMUNERATION 128 Remuneration of CORPORATE bodies 128 Remuneration of the Board of the General Meeting 128 Remuneration of the Members of the Executive Board of Directors 129 Remuneration of the Members of General and Supervisory Board 130 Remuneration of Managerial Staff 130 Agreements Regarding Termination of Management or Employment Contracts 130 Stock Option/Stock Purchase Options Plans 130 Remuneration of the Auditor THE EDP SHARE AND DIVIDEND POLICY 131 EDP in the Capital Markets 132 Factors influencing change in EDP share price 135 Dividend Distribution policy RELATIONS bETwEEN THE COMPANY AND THE MARkET 136 General Information Duties 136 EDP Investor Relations Department 137 Company Information on the EDP Website 95 131 107 136 123 88

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ANNUAL REPORT 2009 corporate governance 1. STATEMENT OF COMPLIANCE EDP – Energias de Portugal, S.A. (“EDP”) is a company that issues shares listed on the NYSE Euronext Lisbon market (denominated Eurolist by Euronext Lisbon). Accordingly, the corporate governance recommendations contained in the “Corporate Governance Code” approved by the CMVM in September 2007 apply to the company. The full text of the code is available on the CMVM website at “www.cmvm.pt”. Ever since the company was listed in the former Lisbon Stock Exchange, the organisation and functioning of the EDP corporate governance model have been guided towards achieving the highest standards of corporate governance and business conduct and ethics referenced on the best national and international practices in corporate governance. In this context, EDP declares that it adopts in full the CMVM recommendations on corporate governance for listed companies in the aforementioned “Corporate Governance Code”, approved in September 2007 and in force during the year 2009, with the exception of Recommendation 1.6.2 of said code, which is not adopted for the reasons given below. The following table lists the CMVM recommendations in the Corporate Governance Code and indicates whether they were fully adopted or not by EDP, as well as the section of this report that contains more detailed information on the adoption of each specific recommendation. STATEMENT OF COMPLIANCE Recommendation I. GENERAL MEETING OF SHAREHOLDERS I.1 bOARD OF THE GENERAL MEETING I.1.1 The Chairman of the Board of the General Meeting shall have the necessary human and logistical resources at his/her disposal, taking the company’s economic situation into account. I.1.2 The remuneration of the Chairman of the Board of the General Meeting shall be disclosed in the annual corporate governance report. I.2 PARTICIPATION IN THE GENERAL MEETING I.2.1 The period for depositing or blocking shares prior to participating in a General Meeting imposed by the Articles of Association shall not exceed five working days. I.2.2. If a General Meeting is suspended, the company shall not oblige shareholders to block shares for the whole period until the session is resumed. The ordinary period required for the first session shall suffice. I.3 VOTING RIGHTS AND VOTING I.3.1 Companies shall not impose any restrictions on postal votes. I.3.2 The time limit set for receipt of postal votes prior to meetings shall not exceed three working days. I.3.3 Companies’ Articles of Association shall indicate that one share is entitled to one vote. I.4 QUORUM AND DECISIONS I.4.1 Companies shall not establish a constitutive or deliberative quorum greater than that laid down by law. I.5 MINUTES AND INFORMATION ON DECISIONS I.5.1 The minutes of General Meetings shall be made available to shareholders on the company’s website within five days, even if they are not inside information, as required by law, and a history of attendance lists, agendas and decisions made shall be maintained on the site covering the meetings of at least the three previous years. This recommendation has been adopted in general terms but is not considered applicable with respect to the maintenance of historic records of attendance lists at the General Meeting, given the personal nature of the information involved. Adopted 4.10. Adopted Adopted Article 14 of the Articles of Association Article 14 of the Articles of Association 4.9. 4.9. Adopted Article 14 of the Articles of Association 4.7. Adoption status Observations Description in the Report Adopted 2.3.1 Adopted 5.2. Adopted 4.7. Adopted Article 14 of the Articles of Association 4.8. Adopted 4.11. 90

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STATEMENT OF COMPLIANCE Recommendation I.6 COMPANY CONTROL MEASURES No measures designed to prevent successful takeover bids have been adopted. As far as other measures concerning company control, in particular the restriction of the number of votes exercisable by each shareholder holding category A shares, in accordance with article 14.3 of the Articles of Association, it is considered that these measures, even if not adopted with an aim to prevent successful takeover bids, considering their origins, the characteristic of the shareholder structure of the company and the general interests they aim to protect, respect the interests of the company and its shareholders. The alteration of any provision in the company’s Articles of Association requires the approval of the General Meeting of Shareholders. No provision has been established in the Articles of Association exclusively devoted to the assessment of the maintenance or alteration of the rule limiting the voting rights that can be exercised by each shareholder holding category A shares. Considering the representativeness of the shareholders at the General Meeting at which the Article of Association in force was approved (participation or representation of 60,7% of the capital and an approval rate of 95% of the votes cast), the characteristic of the shareholder structure of the company and even if the matter under consideration is decided upon exclusively by the shareholders, one is of the opinion that the interests of the latter are adequately respected. Adoption status Observations Description in the Report I.6.1 Measures adopted to prevent successful takeover bids shall respect the interests of the company and its shareholders. Adopted 4.12. I.6.2. Companies’ Articles of Association which, while respecting the principle set forth in the previous paragraph, limit the number of votes that can be held or exercised by a single shareholder, individually or jointly with other shareholders, shall also set forth that, at least every five years, the maintenance or not of this provision shall be put to the vote by the General Meeting – without the need for a quorum greater than the legal quorum – and that all the votes cast shall count in this decision without the limitation. Not adopted 4.12. I.6.3 Defensive measures shall not be taken if they have the effect of automatically causing serious erosion of the company’s assets in the event of transfer of control or a change in the membership of the Board of Directors, thereby affecting the free transferability of shares and the free appreciation by shareholders of the performance of the members of the Board of Directors. II. MANAGEMENT AND SUPERVISORY bODIES II.1 General Matters II.1.1 Structure and Duties II.1.1.1 The Board of Directors shall, in its governance report, assess the model adopted, identify any constraints on its functioning and recommend appropriate measures to overcome them II.1.1.2 Companies shall set up in-house control systems for the effective detection of risks associated with their activity in order to safeguard their assets and ensure the transparency of their corporate governance. II.1.1.3 Management and supervisory bodies shall have their own regulations which shall be posted on the company’s website. II.1.2 INCOMPATIbILITIES AND INDEPENDENCE II.1.2.1 The Board of Directors shall include a number of non-executive members guaranteeing an effective capacity to oversee, supervise and evaluate the work of the executive members. II.1.2.2 The non-executive directors shall include a suitable number of independent directors, taking into account the company’s size and shareholder structure. The number shall be no less than one quarter of the total number of directors. II.1.3 ELIGIbILITY AND APPOINTMENT II.1.3.1 Depending on the applicable model, the Chairman of the Supervisory Board, Committee on Financial Matters/Audit Committee or Financial Committee shall be independent and have the appropriate competences to perform

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ANNUAL REPORT 2009 corporate governance STATEMENT OF COMPLIANCE Recommendation II.1.5 REMUNERATION II.1.5.1 The remuneration of the members of the Board of Directors shall be structured in such a way as to ensure that it aligns their interests with those of the company. In this context: i) the remuneration of executive directors should include a performance-based component and therefore take into consideration the performance assessments regularly carried out by the competent body or committee; ii) the variable component shall be consistent with the maximisation of the long-term performance of the company and depend on the sustainability of the performance variables adopted; iii) when this is not stipulated directly by law, the remuneration of non-executive board members shall be made up exclusively of a fixed amount. II.1.5.2 The Remuneration Committee and the Board of Directors shall submit to the Annual General Meeting a statement on the remuneration policy for the managing and supervisory bodies and other managers as set forth in Article 248-B.3 of the Securities Code. In this context, the criteria and main parameters for assessing performance in order to determine the variable component, be it in the form of shares, share options, annual bonuses or other components, shall be explained to the shareholders. II.1.5.3 At least one representative from the Remuneration Committee shall attend the Annual General Meetings. II.1.5.4 A proposal on the approval of share distribution and/or share option plan or plans based on variations in share price to members of the managing and supervisory bodies and other company officers, as set forth in Article 248B.3 of the Securities Code, shall be submitted to the general meeting. These proposals should contain all the information necessary for a proper appraisal of the plans and should be accompanied by their regulations, or if these have yet to be drafted, by the general conditions that shall govern them. Likewise, the main features of the pension system for members of the managing and supervisory boards and other company officers, as set forth in Article 248-B.3 of the Securities Code, should be approved by the general meeting. II.1.5.5 The remuneration of the individual members of the managing and supervisory bodies shall be disclosed annually, indicating, where applicable, the different components received as fixed and variable remuneration and remuneration received from other group companies or companies controlled by shareholders with qualifying holdings. II.2. bOARD OF DIRECTORS II.2.1 Within the limits of the law for each managing and supervisory board and unless the company is very small, the Board of Directors shall delegate the dayto-day running of the company. The powers delegated shall be indicated in the annual corporate governance report. II.2.2 The Board of Directors shall ensure that the company acts in accordance with its objectives and shall not delegate its powers with respect to: i) defining the company’s general strategy and policies; ii) defining the group’s business structure; iii) decisions that are considered strategic due to the amounts or risks involved or their special characteristics. II.2.3 If the chairman of the Board of Directors has executive duties, the board shall find efficient mechanisms for coordinating the work of the non-executive members so as to ensure that they can make independent, informed decisions and shall explain these mechanisms to the shareholders in the corporate governance report. II.2.4 The company’s annual report shall include a description of the work done by the non-executive directors and mention any constraints encountered. Adoption status Observations Description in the Report Adopted 5.3. Adopted 5.1 to 5.5 Adopted 2.3.5. and 2.3.8. Not applicable Adopted 5.3. and 5.4. Not applicable This recommendation does not apply, given the corporate governance model adopted by EDP. Not applicable This recommendation does not apply, given th

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STATEMENT OF COMPLIANCE Recommendation II.3 CEO, EXECUTIVE COMMITTEE AND EXECUTIVE bOARD OF DIRECTORS II.3.1 When asked to do so by other members of the corporate bodies, executive directors shall provide all information in a timely fashion and appropriate form. II.3.2 The chairman of the Executive Committee shall send the invitations to and minutes of its meetings to the chairman of the Board of Directors and, as applicable, the chairman of the Supervisory Board or Committee on Financial Matters/Audit Committee. II.3.3 The chairman of the Executive Board of Directors shall send the invitations to and minutes of its meetings to the chairman of the General and Supervisory Board and chairman of the Financial Committee. II.4. GENERAL AND SUPERVISORY bOARD, FINANCIAL COMMITTEE, COMMITTEE ON FINANCIAL MATTERS/AUDIT COMMITTEE AND SUPERVISORY bOARD II.4.1 In addition to its supervisory duties, the General and Supervisory Board shall advise, monitor and continuously assess the management of the company by the Executive Board of Directors. The matters on which the General and Supervisory Board shall give opinions include: i) defining the company’s general strategy and policies; ii) the business structure of the group; and iii) decisions that are considered strategic due to the amounts or risk involved or their special characteristics. II.4.2 The annual reports on the activities of the General and Supervisory Board, Financial Committee, Committee on Financial Matters/Audit Committee and Supervisory Board shall be published on the company’s website along with the financial statements. II.4.3 The annual reports on the activities of the General and Supervisory Board, Financial Committee, Committee on Financial Matters/Audit Committee and Supervisory Board shall include a description of their supervisory activities and reference any constraints encountered. II.4.4 The Financial Committee, Committee on Financial Matters/Audit Committee and Supervisory Board, depending on the applicable model, shall represent the company in all dealings with the external auditors. They may also make suggestions as to the providers of these services and their remuneration, ensuring that the right conditions exist in the company for the services to be performed and acting as the company’s interlocutor and first recipient of their reports. II.4.5 The Financial Committee, Committee on Financial Matters/Audit Committee and Supervisory Board, depending on the applicable model, shall evaluate the external auditors every year and should just cause be given move that the General Meeting dismiss them. II.5. SPECIALISED COMMITTEES II.5.1 Unless the company is very small, the Board of Directors and the General and Supervisory Board, depending on the model adopted, shall set up any committees necessary for: i) performing a competent and independent assessment of the executive directors’ performance and evaluating their own overall performance and that of other committees; ii) reflecting on the adopted system of governance, checking its effectiveness and proposing, to thecompetent bodies, measures aimed at improving it. II.5.2 The members of the Remuneration Committee or equivalent shall be independent from the members of the Board of Directors. II.5.3 All committees must keep minutes of their meetings. III. DISCLOSURE AND AUDITS III.1 GENERAL DISCLOSURE ObLIGATIONS III.1.2 Companies shall ensure permanent contact with the market, respect the principle of equality of shareholders and prevent imbalance in access to information by investors. In order to achieve this, the company shall have an investor relations office. III.1.3 The following information on the company’s website must be published in English: a) the company name, status as public limited company, registered office and all other information mentioned in Article 171 of the Companies Code; b) the Articles of Association; c) the names of the members of the corporate bodies and market liaison officer; d) the Investo

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ANNUAL REPORT 2009 corporate governance 1.1. STATUTORY FRAMEwORk IN RESPECT OF INDEPENDENCE AND INCOMPATIbILITIES The Articles of Association of EDP, which are available for consultation on its Website (www.edp.pt), contain rules on independence and incompatibilities for office in any body of the Company. The independence criteria provided for in Article 414 5) of the Companies Code are in line with those stipulated in the Articles of Association, determining that the independence corresponds to the absence of direct or indirect relations with the company or any of its management bodies or with persons or groups with specific interests in the company that could affect their impartiality in analysis and decision making and hold or act on behalf of holders of qualifying of 2% or more of the share capital or have been re-elected for more than two terms, either continuous or interspersed. The assessment of the independence of members of corporate bodies should be promoted by each corporate body for its members, complying with applicable laws and regulations at all times and must be expressly justified when it diverges from criteria resulting from non mandatory recommendations which EDP should take into account. In matters of incompatibility and as a way of safeguarding the interests of the company and its shareholders, it was established by the Articles of Association that the holding of office in any of the EDP corporate bodies is not compatible with: a stake of at least 10% (ten per cent) or more of the voting rights corresponding to a shareholding in that company. • A person that indirectly carries out a business activity in competition with EDP is the one that, directly or indirectly, holds a share, or of at least 10% (ten per cent) in the capital or voting rights of a company that carries out some of the same business activities as EDP or an EDP subsidiary. Incompatibility for office in any body of EDP is not applicable to EDP competing legal persons in which EDP holds 50% (fifty per cent) or more of the respective share capital or voting rights, nor to natural persons that hold office of any kind or designation or are nominated, even if only de facto, in such competing legal persons when the appointment to the corporate office in the competing legal person or the contract with the competing legal person were made on the basis of an indication by EDP or an EDP subsidiary. Incompatibility as defined above also does not apply to the holding of offices such as member of the General and Supervisory Board, where permitted by law, through prior authorisation approved by a two-thirds majority of votes issued in the General Meeting at which the appointment is confirmed. The competition relationship must be expressly referred to and identified in precise terms in the appointment proposal and the decision on authorisation may be made subject to conditions, namely the holding of a shareholding in EDP representing no more than 10% (ten per cent) of its share capital. • The quality of natural or legal person associated with a legal person that is a competitor of EDP; • Holding any office or performing any tasks of any kind or designation – namely through appointment to a corporate office, a work contract or a service contract – in a legal person competing with EDP or in a legal person associated with an EDP competing company; 1.2. STATEMENTS REGARDING THE INDEPENDENCE AND INCOMPATIbILITIES In line with the independence criteria provided for in Article 9 of the company’s Articles of Association, the members of the Executive Board of Directors declared upon taking office that they fully comply with the independence criteria, given that they have no direct or indirect relations with the company or any of its management bodies or with persons or groups with specific interests in the company that could affect their impartiality in analysis and decision making and also do not hold a stake in EDP representing 2% (two per cent) or more of its sha

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in which the member specifically declares: (i); (ii) the absence of any incompatibility situation under the law or EDP’S Articles of Association with the exercise of the office: (ii) the fulfillment of the independence requirements set out in the Internal Regulation, if elected as a General and Supervisory Board independent member; and iii) the duty to inform the Chairman of the General and Supervisory Board or, in case of the Chairman, the Board itself directly, of the subsequent occurrence of any circumstance that may constitute a situation of incompatibility or loss of independence status. 2. CORPORATE GOVERNANCE STRUCTURE 2.1. CORPORATE GOVERNANCE MODEL EDP has adopted, since 2006, a dual corporate governance model comprising an administration body responsible for the company management, the Executive Board of Directors, and a supervisory body, the General and Supervisory Board. The EDP corporate governance model is aimed at ensuring separation of functions and specialisation of supervision with the due transparency and rigour. The EDP management and supervision structure is made up of three bodies: • The members of the General and Supervisory Board must confirm annually in writing the absence of incompatibility and compliance with the requirements of independence, if applicable. • The Executive Board of Directors; • The General and Supervisory Board; and • The Statutory Auditor. This model is also aimed at aligning the interests of EDP and its shareholders. Accordingly, the EDP General Meeting of Shareholders appoints and dismisses the members of the Executive Board of Directors and the General and Supervisory Board as well as the Statutory Auditor, the latter upon proposal by the General and Supervisory Board (or by the Committee on Financial Matters/Audit Committee on its behalf). The General Meeting also appoints the members of the Environment and Sustainability Board and the Remuneration Committee, responsible for fixing the remuneration of members of the corporate bodies (with the exception of the members of the Executive Board of Directors). Separation of the functions of management and supervision is ensured by the existence of a Executive Board of Directors, which is responsible for the management of the business, and by the General and Supervisory Board, which is the maximum corporate authority in matters of supervision. The choice of this management and supervision model was made in the context of the amendments to the Companies Code introduced by Decree-Law no. 76-A/2006 of 29 March. The model came into force on the same date as the new EDP Articles of Association, i.e. 30 June 2006, according with the deliberation approved on the Annual General Shareholders Meeting of 30 March 2006. For a better understanding of how EDP works in terms of corporate governance, the company maintains its Articles of Association updated in both Portuguese and English for its shareholders on its website (www.edp.pt), as well as the internal regulations for the Executive Board of Directors, the General and Supervisory Board and their respective committees. In accordance with the EDP Articles of Association, the General Meeting appoints and dismisses the members of the Executive Board of Directors and of the General and Supervisory Board, as well as the Statutory Auditor. The General and Supervisory Board may propose to the General Meeting the dismissal of any member of the Executive Board of Directors and of the Statutory Auditor. In relation to the assessment of the corporate governance model and in accordance with its powers in this matter, the • Also annually, the General and Supervisory Board conducts a general assessment on the fulfillment of the incompatibilities and independence requirements by its members. In accordance with this procedure the members of General and Supervisory Board declared, in accordance with the independence criteria provided for in Article 414 5) of the Companies Code and Article 9 of the Articles of As

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ANNUAL REPORT 2009 corporate governance General and Supervisory Board registered its conclusions in its Annual Report, which can be summarised as follows: • The governance model adopted by the shareholders strengthen the demand and functional accountability standards within the EDP universe and better safeguard theinterests of all shareholders and other stakeholders; proves to be adequate to the organisation of the EDP business, especially as it ensures a fair balance between the necessary flexibility and amplitude of the management powers and the effectiveness of the general supervision of the company and specific supervision in truly sensitive areas; • The commitment and the institutional articulation between the General and Supervisory Board and the Executive Board of Directors further promote higher quality levels in governance practices, allowing for optimisation of the virtues of the governance model, namely: • The institutional and functional relationship between the General and Supervisory Board and the Executive Board of Directors was very positive and of considerable effectiveness in the choice of the matters dealt with; it also proved to be very efficient in terms of how the matters were looked at and dealt with; • The continuous monitoring of the Group’s activities by the General and Supervisory Board, the constant close scrutiny of the decision making processes and, in some cases, the effective involvement in said processes, significantly • At the level of the mechanisms for access to information by the General and Supervisory Board; • In terms of consolidating the functions of the General and Supervisory Board in relation to the subsidiaries; • At the level of the provision of the human and technical resources appropriate to the tasks of the General and Supervisory Board. For more information on this topic please see section 1 of the Annual Report of the General and Supervisory Board. 2.2. ORGANIC CORPORATE STRUCTURE GENERAL MEETING Company Secretary Remuneration commitee of the GM STATUTORY AUDITOR GENERAL AND SUPERVISORY bOARD EXECUTIVE bOARD OF DIRECTORS Finantial Matters Commitee Audit Commitee Remuneration Commitee Corporate Goivernance and Sustainability Environmental and Sustainability board Corporate bodies1 96 Corporate entities Other statutory bodies 1 Corporate entities are also corporate bodies, pursuant to Article 8/4 of EDP’s Articles of Association

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2.3. CORPORATE bODIES The current members of the corporate bodies were elected at the annual General Meeting held on the 15 April 2009, for a term of 3 years (triennial 2009/2011). 2.3.1. GENERAL MEETING OF SHAREHOLDERS The General Meeting of Shareholders is the body that represents the shareholders. It has the following functions: • Assessing the annual reports of the Executive Board of Directors, discussing and voting on the balance sheet, accounts and opinion of the Statutory Auditor and the opinions of the General and Supervisory Board and Committee on Financial Matters/Audit Committee and voting on proposals for the allocation of profits; The Chairman of the Board of the General Meeting has the internal human and logistic resources that are appropriate for his/her needs, namely the support of the General Secretary and Legal Department, the Investors Relations Office and the Brand and Communication Department, as well as external support from a specialised entity hired by EDP for the collection, processing and counting of votes. The logistic and administrative resources for holding the General Meeting are provided by the company, with the respective organisation being supervised by the Chairman of the Board of the General Meeting. 2.3.2. GENERAL AND SUPERVISORY bOARD The EDP General and Supervisory Board is the body that oversees the company’s management activity and guarantees permanent monitoring and supervision of the administration of the company, cooperating with the Executive Board of Directors and all other corporate bodies in the pursuit of the corporate interests in accordance with the Companies Code and the Articles of Association, being elected by the shareholders in the General Meeting. The General and Supervisory Board is made up of 17 members, the majority of whom are independent, who meet the requirements in terms of education and competence provided for in the Articles of Association and legislation applicable to EDP. The work of the General and Supervisory Board is governed by an internal regulation, available on the EDP website (www.edp.pt). The professional qualifications of the members of the General and Supervisory Board can be consulted in the Corporate Bodies chapter herein. The competencies of the General and Supervisory Board are to: • Electing and dismissing the members of the board of the General Meeting, the Executive Board of Directors and the General and Supervisory Board as well as their respective chairmen and vice-chairmen and, if applicable, the Statutory Auditor, under proposal of the General and Supervisory Board or, by delegation, of the Committee on Financial Matters/Audit Committee, and also the members of the Environment and Sustainability Board; • Deciding on amendments to the Articles of Association, including capital increases; • Appointing a Remuneration Committee responsible for establishing the remuneration of the members of the corporate bodies; the majority of the committee members should be independent; • Assessing the annual company report produced by the General and Supervisory Board; • Dealing with any other matters brought before it; • Exercising any other powers that may be conferred to it by law. bOARD OF THE GENERAL MEETING Pursuant to Article 12 of the EDP Articles of Association, the Board of the General Meeting is made up of a Chairman and a Vice-chairman re-elected by the General Meeting on 15 April 2009 and the company’s General Secretary appointed by the Executive Board of Directors. The current members of the board of the General Meeting are as follows: board of the General Meeting Chairman Vice-Chairman Company Secretary Rui Eduardo Ferreira Rodrigues Pena António Bernardo de Menezes e Lorena de Sèves Maria Teresa Isabel Pereira • Permanently monitor the management of the company and the subsidiaries, providing advice and assistance to the Executive Board of Directors, namely with respect to strategy, meeting targets and objectives and complying the applicable

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ANNUAL REPORT 2009 corporate governance • Monitor the definition of the necessary or appropriate criteria and responsibilities for the internal structures and bodies of the company or group and their impact, in addition to drawing up succession plans • Provide, in accordance with the law, for the replacement of members of the Executive Board of Directors in the event of absence or temporary impediment; power of particular importance. Although it does not have management powers, in accordance with Article 442. 1) of the Companies Code, the company’s Articles of Association establish that the approval of the company’s strategic plan and the following operations carried out by the company or by subsidiaries are subject to favourable prior opinion from the General and Supervisory Board: • Issue, on its own initiative or upon request by the Chairman of the Executive Board of Directors, an opinion on the annual vote of confidence in the company management as referred to in Article 455 of the Companies Code; * * * * * * * Acquisitions and sales of assets, rights or shareholdings of significant economic value; Contracting financing operations of significant value; The opening and closure of establishments, or important parts thereof, and important extensions or limitations of the company activity; Other transactions or operations of significant economic or strategic value; The commencement or termination of strategic partnerships or other forms of lasting cooperation; Plans for divisions, mergers or transformations; Amendments to the Articles of Association, including changes of registered office and capital increases when these are of the initiative of the Executive Board of Directors. • Monitor and assess matters pertaining to corporate governance, sustainability, internal codes of ethics and conduct and compliance with these codes, systems for appraising and solving conflicts of interest, including those associated with the company’s relations with its shareholders, and issue opinions on these matters; • Procure the resources, financial or otherwise, which it reasonably considers necessary for its work and request the Executive Board of Directors to adopt the measures or corrections it deems appropriate, being authorised to contract the necessary resources to obtain independent advice, if required; • Receive regular information from the Executive Board of Directors on significant commercial relations between the company or subsidiaries and shareholders with a qualified shareholding and related persons; The Chairman of the General and Supervisory Board has competencies of its own, and is responsible for: • Appoint the Remuneration Committee and Committee on Financial Matters/Audit Committee; • Convening and chairing meetings of the General and Supervisory Board; • Represent the company in its relations with the directors; • Oversee the work of the Executive Board of Directors; • Supervise observance of the law and the Articles of Association; • Representing the General and Supervisory Board institutionally; • Coordinating the work of the General and Supervisory Board and supervising the correct functioning of its committees; • Select and replace the company’s external auditor, giving the Executive Board of Directors instructions for the engagement or dismissal of the same; • Provide timely availability to members of the General and Supervisory Board of the information necessary for the complete fulfilment of their duties; • Monitor, when and how it deems appropriate, the regularity of bookkeeping, accounts and supporting documents, as well as the status of any assets or securities held by the company; • Requesting and receiving information from the Executive Board of Directors on the activities of the company and subsidiaries; • Oversee the drawing up and disclosure of financial information; • Promote the necessary arrangements for proper monitoring of social activity by the General and Supervisory Board; • Convene the General Meeti

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of the Executive Board of Directors and participate in the discussion of matters to be submitted to the General and Supervisory Board, whenever they deem convenient and without the right to vote. Members of the Committee on Financial Matters/Audit Committee have the obligation to attend Executive Board of Directors meetings assessing the accounts for a financial year. Ordinary meetings of the General and Supervisory Board are held at least once every quarter and extraordinary meetings take place whenever convened by the Chairman, either on its own initiative or at the request of any member, of the Executive Board of Directors or of its respective Chairman. In 2009, the General and Supervisory Board met 7 times. The General and Supervisory Board draws up an annual report on its activity and functioning, including any constraints it may have encountered in the carrying out of its duties. The report is available on the EDP website (www.edp.pt) together with the management report and accounts. Supported in the work developed by the Corporate Governance and Sustainability Committee, the General and Supervisory Board carries out, each year: Until April 15, 2009, the composition of the General and Supervisory Board was as follows: General and Supervisory board Chairman Vice-Chairman António de Almeida Alberto João Coraceiro de Castro António Francisco Barroso de Sousa Gomes Carlos Jorge Ramalho Santos Ferreira Diogo Campos Barradas de Lacerda Machado Eduardo de Almeida Catroga Fernando Manuel Barbosa Faria de Oliveira José Brandão de Brito (as representative of Cajastur Inversiones, S.A.) José Maria Espírito Santo Silva Ricciardi Khalifa Adbulla Khamis Al Romaithi Manuel Fernando de Macedo Alves Monteiro Mohamed Meziane (as representative of Sonatrach) Rui Eduardo Ferreira Rodrigues Pena Vasco Maria Guimarães José de Mello Vítor Domingos Seabra Franco Independent Independent Independent Independent Independent Independent Independent On 4 and 6 March 2009, Victor Domingos Seabra Franco and Vital Moreira Martins resigned, respectively, to the office of members of the General and Supervisory Board. As a consequence, the offices held by them in the committees that they belonged to were also terminated. Following the General Meeting held on 15 April 2009, the company Cajastur Inversiones, SA and Societe Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialization des Hydrocarbures (“Sonatrach”) appointed, respectively, José Maria Brandão de Brito and Mohamed Meziane, as their representatives in the General and Supervisory Board. After the General Meeting on 15 April in which members of the corporate bodies for the term corresponding to the three-year period 2009/2011 were elected, the General and Supervisory Board has the following composition: General and Supervisory board Chairman António de Almeida Independent Independent Independent Independent Independent António Sarmento Gomes Mota Carlos Jorge Ramalho Santos Ferreira Diogo Campos Barradas de Lacerda Machado Eduardo de Almeida Catroga Fernando Manuel Barbosa Faria de Oliveira José Manuel dos Santos Fernandes José Maria Brandão de Brito (as representative of Cajastur Inversiones, S.A.) José Maria Espírito Santo Silva Ricciardi Khalifa Adbulla Khamis Al Romaithi Manuel Fernando de Macedo Alves Monteiro Mohamed Meziane (as representative of Sonatrach) Ricardo José Minotti da Cruz Filipe Rui Eduardo Ferreira Rodrigues Pena Vasco Maria Guimarães José de Mello Vítor Fernando da Conceição Gonçalves Independent Independent Independent Independent Vice-Chairman Alberto João Coraceiro de Castro • The self-assessment of its activity and performance, as well as that of the Committees, the conclusions of the evaluation to be included in the General and Supervisory Board Annual Report. • The independent assessment of the activity and performance of the Executive Board of Directors, the conclusions of the assessment process to be included in the General and

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ANNUAL REPORT 2009 corporate governance For more information regarding changes to the composition of the General and Supervisory Board please see section 2.1. of its Annual Report. 2.3.3. EXECUTIVE bOARD OF DIRECTORS The Executive Board of Directors is the body responsible for the management of the company’s business activities and for representing the Company, in accordance with the Companies Code and EDP Articles of Association. Its members are elected by the shareholders at the General Meeting. The Executive Board of Directors is made up of 7 members, who were re-elected at the General Meeting of 15 April 2009 for the term corresponding to the three year period 2009/2011. The professional qualifications of the members of the Executive Board of Directors can be consulted in the Corporate Bodies section. The Executive Board of Directors habitually meets once a week, though it is obliged to meet only once every two months. The Executive Board of Directors requires the presence of a majority of its members at a meeting in order to deliberate. Each member may not represent more than one other member at a meeting. All directors have equal voting rights and the Chairman has the casting vote. The work of the Executive Board of Directors is governed by an internal regulation, available on the EDP website (www.edp.pt). The powers of the Executive Board of Directors, in accordance with the Articles of Association, include: • Establishing the technical and administrative organisation • Establishing proxies with such powers as it may deem fit, including the power to delegate; of EDP and the rules of its internal operation, particularly in relation to personnel and their remuneration; • Appointing the general secretary and his/her alternate; • Contracting and dismissing the External Auditor upon instruction of the General and Supervisory Board; • Exercising any other powers invested in it by law or by the General Meeting; and • Establishing its regulation setting out rules applicable to its internal functioning. Moreover, proposals for amendments to the Articles of Association in matters of capital increases that are submitted by the Executive Board of Directors are subject, pursuant to Article 17.2 g) of the Articles of Association, to a prior opinion of the General and Supervisory Board. The Chairman of the Executive Board of Directors has competencies of its own, and is responsible for: • Representing the Executive Board of Directors; • Coordinating the work of the Executive Board of Directors and convening and presiding over its meetings; • Ensuring the correct execution of the decisions of the Executive Board of Directors. The Chairman of the Executive Board of Directors has the right to attend meetings of the General and Supervisory Board whenever he/she deems appropriate, except when the meetings deal with decisions on the supervision of the work of the Executive Board of Directors and, in general, in any situations which involve a conflict of interests. The Chairman of the Executive Board of Directors forwards to the support office of the General and Supervisory Board invitations to meetings and the respective minutes and, whenever requested, timely provides the information requested from him/her in the appropriate form, such information being accessible to all members of the General and Supervisory Board. The performance of the Executive Board of Directors is assessed continuously and independently by the General and Supervisory Board. The Executive Board of Directors met 48 times in 2009. The Executive Board of Directors is organised in accordance with the following management areas and corporate areas: • Establishing the objectives and management policies of EDP and the EDP Group; • Drawing up the annual business and financial plans; • Managing corporate business and undertaking all actions and operations associated with the corporate object that do not fall within the remit of other corporate bodies; • Representing the compan

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ExECUTIVE BOARd OF dIRECTORS António Luís Guerra Nunes Mexia CORPORATE THEMES •GeneralSecretariatandLegaloffice •OfficeoftheChairmanoftheExecutiveBoard of Directors •AuditDepartment •BrandandCommunicationDepartment •BusinessAnalysisDepartment •RiskManagementDepartment •HumanResourcesDepartment •OfficeoftheEthicsOmbudsman •UniversityofEDP Jorge Manuel Pragana da Cruz Morais CORPORATE AREAS Corporate Marketing Department Customer Relations Department Information Systems Department Sustainability and Environment Department João Manuel Manso Neto Ana Maria Machado Fernandes António Manuel Barreto Pita de Abreu António Fernando Melo Martins da Costa Organisational Development Nuno Maria Pestana de Almeida Alves Energy Planning Regulation and Competition Coordination Office for Labor Relations Human Resources Department Consolidation, Accounting Control and Taxation Management Planning and Control Financial Management Investor Relations MANAGEMENT AREAS Supply - Portugal Inovation Iberian Generation and Trading Distribution - Spain Supply - Spain Gas Renewables Brazil Distributiion - Portugal Business Solutions International EDP Valor Holdings/Investments 101

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ANNUAL REPORT 2009 corporate governance The offices held by members of the Executive Board of Directors in other Group companies are as follows: Offices Held by Members of The Executive board of Directors António Mexia Balwerk – Consultadoria Económica e Participações, S.U, Lda. EDP - Energias de Portugal Sociedade Anónima, Sucursal en España EDP – Estudos e Consultoria, S.A. EDP – Gestão da Produção de Energia, S.A. EDP – Soluções Comerciais, S.A. EDP Ásia – Investimentos e Consultoria Lda. EDP Comercial – Comercialização de Energia, S.A. EDP Energias do Brasil, S.A. EDP Energia Ibérica S.A. EDP Finance BV EDP Gás II, SGPS, S.A. (ex NQF Gás, SGPS,S.A.) EDP Gás III, SGPS, S.A. (ex NQF – Energia, SGPS, S.A.) EDP Gás, SGPS, S.A. EDP Gás.Com – Comércio de Gás Natural, S.A. EDP Imobiliária e Participações, S.A. EDP Internacional, S.A. EDP Investimentos, SGPS, S.A. (ex NQF – PTE, SGPS, S.A.) EDP Renováveis Brasil, S.A. EDP Renováveis, S.A. EDP Serviner – Serviços de Energia, S.A. EDP Valor – Gestão Integrada de Serviços, S.A. Electricidade de Portugal Finance Company Ireland Lt. Empresa Hidroeléctrica do Guadiana, SA ENEOP – Eólicas de Portugal, S.A. Energia RE, S.A. Hidroeléctrica del Cantábrico, S.A. Horizon Wind Energy, LLC Naturgás Energía, S.A. Nuevas Energias de Occidente, S.L. Sãvida – Medicina Apoiada, S.A. SCS – Serviços Complementares de Saúde, S.A. CBD - Chairman of the Board of Directors M - Manager CEBD - Chairman of the Executive Board of Directors VCBD - Vice-Chairman of the Board of Directors DC - Director-Chairman of the Board (Executive Board) Ana Maria Fernandes A R CBO VCBD CBO A A CBO A A PCA A – Administrador R – Representative D - Director António Martins da Costa R CBO A CBO PCA - António Pita de Abreu VCBD + DC R VP A A A - João Manso Neto A R CBO CBO CBO A CBO A CBO VP/CD VP VP/CD VP - Jorge Cruz Morais CBO CBO R A CBO CBO A A A A - Nuno Almeida Alves A R CBO A CBO D CBO A A CBO CBO A A PCA PCA CBO R CBO - VP/CD – Vice-President and Counselor-Delegate PR - Permanent Representative 102

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2.3.4. STATUTORY AUDITOR The Statutory Auditor is the corporate body responsible for examining the financial statements. It is elected by the General Meeting of Shareholders for three year period terms. In accordance with the Companies Code and the Articles of Association, the Statutory Auditor is in particular responsible for verifying: • The regularity of the company’s books, accounting records and the respective supporting documents; As regards the term 2009/2011, the Remuneration Committee - General Meeting decided in February 2010 to approve the remuneration policy applicable to the corporate bodies of EDP, with the exception of the Executive Board of Directors, setting their remuneration. In the annual General Meeting of 2010, in accordance with Law 28/2009 of 19 June, the Chairman of the Remuneration Committee - General Meeting intends to submit the remuneration policy of the corporate bodies, with the exception of the Executive Board of Directors, for the current three-year period term. 2.3.6. ENVIRONMENT AND SUSTAINAbILITY bOARD The Environment and Sustainability Board was elected by the General Meeting of 15 April 2009 for a term period of three years. This Board was set up as a corporate body in 1991 under a different name. Its name was changed to Environment and Sustainability Board at the Annual General Meeting of Shareholders of 30 March 2006. The Environment and Sustainability Board has powers to advise the Executive Board of Directors in environment and sustainability-related matters. In particular, it provides advice and support in defining the company’s environmental and sustainability strategy and in drawing up opinions and recommendations on the environmental impact of projects planned by the EDP Group. The Environment and Sustainability Board is currently made up of persons with acknowledged competence in the field of environmental protection. Until April 15, 2009, the Environment and Sustainability Board was composed by the following members: Environmental and Sustainability board Graça Martinho João Ferreira do Amaral Madalena Presumido Miguel St. Aubyn • When, and in the form it deems fitting, the cash and all • The exactness of the account rendering documents; assets or securities belonging to the company or received by it as a guarantee, deposit or for any other purpose; • Whether or not the accounting policies and valuation criteria adopted by the company lead to a correct evaluation of the assets and profits. The Statutory Auditor and its alternate were re-elected by the General Meeting of 15 April 2009 and are as follows: Statutory Auditor Permanent Alternate KPMG & Associados, SROC, S.A. represented by Jean-éric Gaign, ROC Vítor Manuel da Cunha Ribeirinho, ROC 2.3.5. REMUNERATION COMMITTEE - GENERAL MEETING The remuneration of members of the corporate bodies, with the exception of the members of the Executive Board of Directors, is fixed by the Remuneration Committee elected by the General Meeting. In accordance with Article 11-2d) of the Articles of Association, the members of the Remuneration Committee – General Meeting should be independent. Until April 15, 2009, the Remuneration Committee – General Meeting was composed of the following members: Remuneration Committee - General Meeting Chairman José Manuel Archer Galvão Teles Parpública – Participações Públicas, (SGPS), SA The current composition of the Environment and Sustainability Board elected by the General Meeting of 15 April 2009 is as follows: Environmental and Sustainability board Chairman João Martins Ferreira do Amaral Miguel Pedro Brito St. Aubyn Maria Madalena Monteiro Garcia Presumido Maria da Graça Madeira Martinho José de Sousa Cunhal Sendim The current members of the Remuneration Committee – General Meeting elected by the General Meeting of 15 April 2009 are as follows: Remuneration Committee - General Meeting Chairman José Manuel Archer Galvão Teles Carlos Alberto Veiga Anjos Parpública – Participações Públicas, (SGPS), SA 2.3

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ANNUAL REPORT 2009 corporate governance Company Secretary Secretary Alternate Maria Teresa Isabel Pereira Maria Virgínia Bastos dos Santos At April 15, 2009, the Committee on Financial Matters/Audit Committee was composed of the following members: Financial Matters Committee/Audit Committee Chairman Vítor Fernando da Conceição Gonçalves António Francisco Barroso de Sousa Gomes Manuel Fernando de Macedo Alves Monteiro The current Company Secretary and alternate are: Company Secretary Secretary Alternate Maria Teresa Isabel Pereira Ana Rita Pontífice Ferreira de Almeida Côrte-Real 2.3.8. SPECIALISED COMMITTEES OF THE GENERAL AND SUPERVISORY bOARD Without prejudice to the maintenance of its responsibility for the carrying out of its competencies as a corporate body, the internal regulation of the General and Supervisory Board sets out the possibility of establishing permanent and temporary specialised committees composed of some of its members, whenever it considers necessary, in which the board can delegate the exercise of certain specific functions. Both the permanent and temporary committees have as main mission to make a specific and permanent monitoring of the matters entrusted to them to ensure processes of decision-making informed by the General and Supervisory Board or the information about certain subjects. The committees´ activities are coordinated by the Chairman of the General and Supervisory Board, who ensures an adequate coordination of such activities with that of the Board, through their respective Chairmen, who shall keep him informed, namely by disclosing to him the convening of their meetings and their respective minutes. The current specialised committees of the General and Supervisory Board were set up at the meeting of 7 May 2009. The General and Supervisory Board considers that its specialised committees are relevant to the regular functioning of the company as they allow the delegation of the carrying out of certain activities, including the monitoring of the company financial information, the reflection on the governance system it has adopted, the assessment of the performance of the company directors as well as that of the company’s overall performance. The work of the committees is governed by an internal regulations, available on the EDP website (www.edp.pt). COMMITTEE ON FINANCIAL MATTERS/AUDIT COMMITTEE Composition, powers and functioning The Committee on Financial Matters/Audit Committee is made up of three independent members with the appropriate qualifications and experience, including at least one member with a higher education degree in the area of the committee’s functions and with specific knowledge of auditing and accounting, as confirmed by the curriculum vitae of the Chairman, which can be consulted in the chapter on corporate bodies. 104 Currently, and since May 7, 2009, the Committee on Financial Matters/Audit Committee comprise the following members elected at the General Meeting of 15 April 2009 for the current three year term of office 2009/2011: Financial Matters Committee/Audit Committee Chairman Vítor Fernando da Conceição Gonçalves António Sarmento Gomes Mota Manuel Fernando de Macedo Alves Monteiro In accordance with the EDP Articles of Association and by means of a delegation from the General and Supervisory Board, the Committee on Financial Matters/Audit Committee has the following responsibilities: • To issue an opinion on the annual report and accounts • To oversee, on a permanent basis, the work of the statutory auditor and the external auditor and, with regard to the former, to issue an opinion on its respective election or appointment, removal from office, conditions of independence and other relations with the company; • To oversee, on a permanent basis, and evaluate internal procedures for accounting and auditing, as well as the efficacy of the risk management system, the internal control system and the internal auditing system, including the way in which complaints and q

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The General and Supervisory Board carries out an annual assessment of the compliance with the above mentioned requirements. The composition, competence and functioning of the Committee on Financial Matters/Audit Committee are in line with the European Commission Recommendation of 15 February 2005.In 2009, the Committee on Financial Matters/Audit Committee met 15 times. Minutes of all meetings were drawn up. whistle-blowing Policy The EDP Group has always carried out its activity by consistently implementing measures to ensure the good governance of its companies, including the prevention of incorrect practices, particularly in the areas of accounting and finance. EDP provides the Group workers with a channel enabling them to report directly and confidentially to the Committee on Financial Matters/Audit Committee of the General and Supervisory Board any practice presumed illicit or any alleged accounting and/or financial irregularity in their company, in compliance with the provisions of CMVM Regulation no. 1/2007. With the creation of this channel for reporting irregular accounting and financial practices, EDP aims at: consultation a statement on the remuneration policy for the members of the Executive Board of Directors which it has adopted, at least in years during which such policy is implemented or altered. Taking into account the publication of Law 28/2009 of 19 June, the work of the Remuneration Committee shall abide by the applicable legal rules. The work of the Remuneration Committee is governed by is governed by an internal regulation approved by the General and Supervisory Board. In 2009, the committee met 5 times. Minutes of all meetings were drawn up. The Remuneration Committee is made up of members of the General and Supervisory Board with the appropriate qualifications and experience, the majority of whom are independent. Remuneration Committee of the GSb Chairman Alberto João Coraceiro de Castro Eduardo de Almeida Catroga Vasco Maria Guimarães José de Mello • Guaranteeing conditions that allow workers to freely report any concerns they may have in these areas to the Committee on Financial Matters/Audit Committee; The members of the Remuneration Committee, which belonged to this committee during the term of the General and Supervisory Board ended December 31, 2008, attended the General Meeting on 15 April 2009. The Chairman of the Committee submitted at the General Meeting a statement on the remuneration policy adopted by the Committee during this period. As regards the term 2009/2011, the Remuneration Committee decided on 21 September 2009 to approve the remuneration policy applicable to the Executive Board of Directors, setting their fixed remuneration. In the annual General Meeting of 2010, in accordance with Law 28/2009 of 19 June, the Chairman of this Committee intends to submit for approval a statement on the remuneration policy of the members of the Executive Board of Directors, for the current three-year period term. CORPORATE GOVERNANCE AND SUSTAINAbILITY COMMITTEE The Corporate Governance and Sustainability Committee is a specialised committee of the General and Supervisory Board. Its purpose is to monitor and supervise, on a permanent basis, all matters related with the following: • Facilitating the early detection of irregular situations which, The Committee on Financial Matters/Audit Committee can be contacted by e-mail, fax and regular mail, and access to the information received in this context is restricted. All complaints or reports to the Committee on Financial Matters/Audit Committee are treated with the strictest confidentiality. The identity of the whistle-blower is kept secret, provided that this does not hinder investigation of the complaint. if practised, might cause serious damage to the EDP Group, its workers, customers and shareholders. In accordance with its established regulations, EDP guarantees that no employee will be the target of any retaliatory or disciplinary action as a result

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ANNUAL REPORT 2009 corporate governance In the scope of its responsibilities, the Corporate Governance and Sustainability Committee supports the activity of the General and Supervisory Board in the continuous assessment of the management, as well as well as of the performance of the General and Supervisory Board itself. Based on the work of the Corporate Governance and Sustainability Committee, the General and Supervisory Board annually carries out the above mentioned assessments, which are the object of a report. The conclusions of these assessments are included in the annual report of the General and Supervisory Board and presented to the shareholders in the annual General Meeting. Another two very important activities carried out by the Corporate Governance and Sustainability Committee are the monitoring: 2.4. bUSINESS OPERATIONS bETwEEN THE COMPANY AND THE MEMbERS OF THE CORPORATE MANAGEMENT AND SUPERVISION bODIES wITH QUALIFYING HOLDINGS AND COMPANIES IN A GROUP OR CONTROL RELATIONSHIP wITH EDP In the current exercise of its activity, EDP performs business transactions and operations in normal market conditions for similar operations with a range of entities, in particular financial institutions. These include holders of qualifying holdings in the EDP capital and EDP group companies and subsidiaries which are not considered relevant due to their very nature or the fact that they are not significant in economic terms. Moreover, in accordance with article 246, paragraph 3, point c) of the Securities Code, it is noted that during the year 2009, EDP did not enter into the relevant transactions between related parties that have materially affected its financial position or performance. In the context of the qualitative improvement of the governance practices, it should be noted that the General and Supervisory Board has approved, on 29 October 2008, the “Reference Framework for the Treatment of Conflicts of Interests”, which is available for consultation on the EDP website (www.edp.pt). This set of rules on the prevention, identification and resolution of potential important conflicts of interest has a wider scope of application than that resulting from CMVM Regulation no. 1/2007. The Corporate Governance and Sustainability Committee is responsible for supervising enforcement of the aforementioned rules and reports on its activity to the General and Supervisory Board. With reference to 2009, the Corporate Governance and Sustainability Committee concluded that, with respect to the cases it analysed and on the basis of the information provided by the Executive Board of Directors, there was no evidence that potential conflicts of interests in the business operations had been resolved in a way that was contrary to the interests of the company. For further information on this matter, please see section 3.5.1 of the Annual Report of the General and Supervisory Board. • Of the corporate governance practices adopted by the Company; • Of the human resources and succession plans management. The Corporate Governance and Sustainability Committee is made up of members of the General and Supervisory Board with the appropriate qualifications and experience. The functioning of the Corporate Governance and Sustainability Committee is governed by an internal regulation approved by the General and Supervisory Board. In 2009, the Committee met 4 times. Minutes of all meetings were drawn up. Until April 15, 2009 the committee had the following composition: Corporate Governance and Sustainability Committee Chairman António de Almeida Alberto João Coraceiro de Castro Diogo Campos Barradas de Lacerda Machado José Maria Espírito Santo Silva Ricciardi Manuel Fernando de Macedo Alves Monteiro The committee currently consists of the following members: Corporate Governance and Sustainability Committee Chairman António de Almeida Alberto João Coraceiro de Castro António Sarmento Gomes Mota Diogo Campos Barradas de Lacerda Machado José Maria Brandão de Brit

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EDP SHARES HELD bY COMPANY OFFICERS EDP - Energias de Portugal, S.A. Movements in 2009 General and Supervisory board António de Almeida1 Alberto João Coraceiro de Castro António Sarmento Gomes Mota Cajastur Inversiones, S.A. José Maria Brandão de Brito (as representative of Cajastur Inversiones, S.A.) Carlos Jorge Ramalho dos Santos Ferreira Diogo Campos Barradas de Lacerda Machado Eduardo de Almeida Catroga Fernando Manuel Barbosa Faria de Oliveira José dos Santos Fernandes José Maria Espírito Santo Silva Ricciardi2 Khalifa Adbulla Khamis Al Romaithi Manuel Fernando de Macedo Alves Monteiro Ricardo José Minotti da Cruz Filipe Rui Eduardo Ferreira Rodrigues Pena Sonatrach Mohammed Meziane (as representative of Sonatrach) Vasco Maria Guimarães José de Mello Vítor Fernando da Conceição Gonçalves Executive board of Directors António Luís Guerra Nunes Mexia Ana Maria Machado Fernandes António Fernando Melo Martins da Costa3 António Manuel Barreto Pita de Abreu4 João Manuel Manso Neto Jorge Manuel Pragana da Cruz Morais5 Nuno Maria Pestana de Almeida Alves 1 The shares of EDP Renováveis, S.A. were purchased in 2008; 2 The shares of EDP Renováveis, S.A. are held by his wife, Teresa Maria Belo de Morais Calheiros e Meneses Ricciardi and were purchase in 2008; 3 The shares of EDP Renováveis, S.A. includes 150 shares held by his wife, Anna Starzenska Martins da Costa; 4 The shares of EDP - Energias de Portugal, S.A. includes 475 shares held by his wife, Gilda Maria Pitta de Abreu; 5 The shares of EDP Renováveis, S.A. includes 380 shares held by his wife, Ana Maria Ferreira de Oliveira Barrêto. EDP Renováveis, S.A. N.º Shares 31-12-2008 Avg. Purch./ Sales price (euros) 7.70 6.82 8.00 7.79 7.72 7.68 7.60 7.80 7.76 N.º Shares 31-12-2009 EDP - Energias do brasil S.A. N.º Shares 31-12-2009 Avg. Purch./ Sales price (euros) 2.614 N.º Shares 31-12-2009 10,000 0 4,578 0 183,257,513 0 40,000 260 1,375 0 0 0 0 0 6,622 1,445 81,713,076 0 0 3,465 1,000 0 13,299 34,549 1,268 12,497 50,000 0 4,578 183,257,513 0 40,000 260 1,375 0 0 0 0 1,445 81,713,076 0 0 3,465 1,000 0 13,299 34,549 1,268 12,497 40,000 1,200 1,580 0 0 0 0 0 0 600 2,320 0 2,750 500 380 0 0 680 4,200 1,510 1,480 1,810 0 1,990 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 11 1 0 0 1 3. FUNCTIONAL STRUCTURE OF EdP 3.1. THE GROUP ORGANISATIONAL MODEL It is the responsibility of the Executive Board of Directors to define the organisational model of the Group and how tasks are distributed amongst the various business units, the Group’s shared services company – EDP Valor – and the central structure. The latter consists of a Corporate Centre that plays an instrumental role of support to the Executive Board of Directors in defining and controlling implementation of the strategies, policies and goals for the respective business areas. The Corporate Centre is organised in departments and business units, allowing for greater optimisation and efficiency of the organisational structure. The Executive Board of Directors is also supported by specialised committees, allowing for more effective and efficient monitoring and better support of the company management. Corporate Centre ExECUTIVE BOARd OF dIRECTORS CUSTOMER OMBUdSMAN Business Units Branch in Spain Functional structures 107

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ANNUAL REPORT 2009 corporate governance 3.2. CORPORATE CENTRE The current organisation of the central support structure for decision-making processes is as follows: CorporateCentre•Businessunits DEPARTMENTS SUPPORT TO GOVERNANCE AREA General Secretariat and Legal office Office of the Chairman of the Executive Board of Directors and Institutional Relations Audit Department Office of the Ethics Ombudsman STRATEGIC AREA Energy Planning Department Business Analysis Department Risk Management Department University of EDP FINANCIAL AREA Investor Relations Consolidation, Accounting Control and Taxation Department Management Planning and Control Department Financial Management Department MARkETING AND COMMUNICATION AREA Corporate Marketing Department Brand and Communication Department Costumer Relations Department SYSTEMS AND ORGANISATIONAL AREA Information Systems Department Organisational Development Department HUMAN RESOURCES AREA HR Department Coordination Office for Labor Relations SUSTAINAbILITY AND REGULATION AREA Regulation and Competition Department Sustainability and Environmental Department COORDINATION AREA FOR STAkEHOLDERS RELATIONS Office of the Chairman of the Executive Board of Directors and Institutional Relations Corporate Marketing Department Brand and Communication Department Sustainability and Environmental Department Costumer Relations Department bUSINESS UNITS Energy Management Business Unit Carlos Alves Pereira Maria Joana Simões António Neves de Carvalho Paulo Campos Costa Maria João Martins Eugénio Purificação Carvalho José Salas Orta Rui Ferin Cunha Maria Inês Lima Paulo Campos Costa Paula Pinto da Fonseca Miguel Henriques Viana Miguel Ribeiro Ferreira Nuno Miguel Chung Paula Cristina Guerra Pedro Neves Ferreira Pedro Pires João José Allen Lima Nuno Manuel Brito Maria Teresa Pereira Duarte Castro Bello Azucena Viñuela Hernández Carlos Alberto Loureiro The functions and responsibilities of the current Departments are as follows: The General Secretariat and Legal Office supports the Executive Board of Directors in administrative and logistical matters, thus ensuring the smooth functioning of the Corporate Centre, and provides legal assistance to the Group with the aim of guaranteeing observance of the applicable legislation. It also provides administrative support to the meetings of the Executive Board of Directors, including dissemination of the decisions reached. The Office of the Chairman of the Executive board of Directors and Institutional Relations supports the Chairman of the Executive Board of Directors in all matters determined by the latter, guarantees representation of the Group at the institutional level and participates, on behalf of the Chairman, in internal projects and initiatives. It also coordinates the management of the agenda and the support work for the office and represents the Chairman at events and meetings whenever necessary. The main function of the Audit Department (DAI) is the systematic and independent assessment of the Group activities with the aim of ensuring effectiveness of the management systems and processes and the internal control system. The DAI’s main responsibilities are to establish and manage the systematic planning of the internal audits at the Group level in the areas of finance, information, operations and management and to monitor the definition and implementation of corrective measures and improvements resulting from audits performed. It is also responsible for monitoring the implementation and maintenance of the Internal Control System, providing methodological support and guaranteeing its consistency and internal coherence, as well as reporting on its performance. 108

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In accordance with the EDP Code of Ethics, the Office of the Ethics Ombudsman (GPE) is responsible for receiving, retaining and processing reports and complaints received by EDP on alleged infractions of the provisions of the code in matters of compliance with laws and ethics, conduct in the workplace, human rights, equal opportunities, integrity, relations with customers and suppliers, the environment and sustainability. The GPE must accompany each of the infraction proceedings it initiates to its conclusion, making contact with the reporter of the complaint wherever necessary and appropriate. The Energy Planning Department (DPE) supports the Executive Board of Directors in processes for altering the Group’s energy portfolio, contributing to an integrated vision of the portfolio and to the planning of its development in the various regions in which the Group operates. The DPE thus constitutes an organisational platform that links the Group’s various electricity and gas business areas, helping to form the required integrated vision of the market and operation of the EDP Group. The mission of the business Analysis Department (DAN) is to contribute to defining and developing the Group business strategy by promoting and carrying out the analysis, study and realisation of new business opportunities and optimising the EDP business portfolio. Its main areas of work are the assessment of projects, identification of business opportunities, the analysis and execution of merger operations, the purchase and sale of assets and strategic alliance options, as well as providing analyses and studies for the Group’s strategic planning processes. The mission of the Risk Management Department (DGR) is to support the Executive Board of Directors in modelling and monitoring identification of the Group’s risks with a view to risk minimisation and control. The use of the Integrated Risk Management System provides comparative advantages to EDP by enabling the risk factor to be included in the Group’s strategic and operational decisions. There are always uncertainties associated with the business opportunities that are constantly presented to a group the size of EDP and the fact that these can be quantified by determining the corresponding risks is a decisive contribution towards correct decision-making. The University EDP’s mission is to develop knowledge and talent of the EDP Group employees, reinforcing the corporate culture as a competitive advantage of the Group for the excellence in customer service, enhancing innovation and sustainability in the environment where it is located. Investor Relations Department (DRI) (see section 7.2) The Consolidation, Accounting Control and Taxation Department (DCF) is structured into three areas of operation: (i) the area of consolidation, the main task of which is consolidation of the Group accounts and accounting reports; (ii) the area of corporate accounting standardisation (national, international and environmental); and (iii) the area of taxation. Its mission is to render the Group’s accounts and define, implement, monitor and coordinate the rules, guidelines, policies and procedures for all the Group companies in Portugal, Spain, Brazil and other countries in matters of accounting, internal control, taxation, consolidation and reporting on a local and international basis (IFRS-IAS) in a standardised and consistent way. The main tasks of the Management Planning and Control Department (DCG) are to support the Executive Board of Directors in the Group’s corporate planning and to challenge the business units in their performance, guaranteeing their alignment with the Group’s strategic objectives. It is responsible for coordinating the EDP Group’s business plan and budget and for the corporate management control process. The mission of the Financial Management Department (DFN) is to optimise the consolidated financial operations of the Group and control the financial liabilities in accordance with the approved

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ANNUAL REPORT 2009 corporate governance proposing the Group´s information systems’ architecture for an adequate support to its businesses. The Organisational Development Department (DDO) is responsible for defining and implementing an organisational structure in permanent alignment with the Group strategy, supported by adequate business process management practices, and for coordinating transformation projects that aim to guarantee performance excellence for the Corporate Centre and the businesses. The mission of the Human Resources Department (DRH) is to support the Executive Board of Directors in defining and implementing a Human Resources strategy that promotes the personal and professional development of all employees, responds to the strategic and operational needs of the Business Units and contributes to the corporate values of the EDP Group, by supporting a series of Centres of Competence to put the Human Resources value chain into practice, as follows: Change Communication and Management; Management of Potential; Career Management, Mobility and Succession; Training Management; Performance Management; Selection and Integration; Remuneration and Benefits; and Information and Technology to support HR Management. The Coordination Office for Labour Relations (GCRL) negotiates (or monitors negotiation when outside Portugal) of the Collective Employment Agreements, manages relations with the Ministry of Labour and Social Solidarity and the official entities dependent on it, Works Council, Trade Unions, Workers’ Association, Pensioners’ Association and other similar institutions for workers, former workers and pensioners. The office’s main responsibilities are: i) to draw up and propose the instruments of collective regulation for the Group and carry out the respective negotiation in Portugal; ii) to guarantee complete understanding of the labour-related legislation in all the countries in which the Group operates and ensure compliance with said legislation; iii) to propose and implement strategies for relations with the social partners; iv) to monitor the management of the EDP Pension Fund in the HR perspective, in particular the actuarial responsibilities; and v) to develop the EDP Flex Plan and monitor management thereof. The main responsibilities of the Sustainability and Environment Department (DSA) are to support the Executive Board of Directors in defining the sustainability and environmental policy and objectives and to cooperate with the businesses with a view to boosting complementarities and synergies in these areas and, in particular, to contribute to the operationalisation of the policies and initiatives in the area of the Group’s environmental management. The Stakeholder Relations Coordination Area is an organisational area which coordinates relations with the EDP Group’s main stakeholders in a structured and coherent manner, mainly employees, customers, the media, NGOs, the government, local authorities, the European Community, opinion formers and others. This area ensure a constant coordination of dialogue with all the stakeholders involved, as well as with the EDP Group’s network of Foundations; The Energy Management business Unit (UNGE) is responsible for negotiating the physical and forward purchases of fuel and contracting maritime transport in the name of, and on behalf of, the relevant EDP companies. It is also responsible for carrying out spot and forward purchases and sales in the electricity market of a physical and financial nature, namely energy derivatives and foreign exchange operations. It also decides on operational and supply programmes of the EDP Group electricity generating plants where the energy management is under its responsibility, with the aim of optimising the portfolio and supplying energy to the clients of the EDP Group’s sellers. Additionally, it is responsible for managing operations relating to the EDP Group’s CO2 emission licences and green certificates. 3.2.1. ACTIVITY OF THE ETH

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3.3. SPECIFIC EDP COMMITTEE (FUNCTIONAL STRUCTURES) With a view to achieving more effective and efficient support of the management of the company, the following specific committees were set up: ETHICS COMMITTEE EDP has always carried out its business activities within a framework of ethical values that are explicit or implicit in its business agenda, in its professional relations and obligations to the shareholders, in the Vision, Commitments and Culture and in the Principles of Sustainable Development defined by the Executive Board of Directors. Following the approval of the EDP Group Code of Ethics, a specialised committee was set up to work together with the General and Supervisory Board’s Corporate Governance and Sustainability Committee with the aim of: Innovation Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors Chairman of The Board of Directors of EDP Distribuição Chairman of The Board of Directors of EDP Inovação Member of the Board of EDP Inovação (5 Members) Member of the Board of EDP Gás Member of the Board of EDP Produção Member of the Board of EDP Energias do Brasil Member of the Board of Foundation EDP Member of the Management Team EDP Renováveis Business Analysis Department Human Resources Department Brand and Communication Department Corporate Marketing Department Energy Planning Department Information Systems Department Officer of HC Energía Representative of EDP – Energias do Brasil • Supporting the definition of EDP Group policy regarding the code of conduct, the adoption of good practices and compliance with the highest standards of ethics; The Innovation Committee held one meeting in 2009, which was chaired by a member of the Executive Board of Directors responsible for the financial area as a representative of the Chairman of the Executive Board of Directors. DISCLOSURE OF INFORMATION CONTROL AND PROCEDURES COMMITTEE The Disclosure of Information Control and Procedures Committee (CDI) has three main functions: • Establishing guidelines for regulating the matters for which it is responsible; and, • Ensuring the proper regulation of ethical matters within the Group companies. Ethics Committee Chairman of the Executive Board of Directors Chairman of the Board of Directors of EDP Distribuição Member of the Board of EDP Produção Human Resources Department Sustainability and Environmental Department • To identify and analyse the information that should regularly be made public by the company; • To assist in the review of the information periodically • To make quarterly assessments of the control and disclosure of information mechanisms of EDP. disclosed by EDP in the context of preparing reports and other communications to the market; In 2009 this committee met three times, all such meetings being chaired by the Chairman of the Executive Board of Directors. INNOVATION COMMITTEE The Innovation Committee has the following missions: • To define strategic areas for innovation within the EDP • To identify the projects to be carried out in the field of Group, to be submitted to the approval of the Executive Board of Directors; This committee is the organisational structure responsible for monitoring and assessing the control mechanisms and procedures for the disclosure of information. It is an integral part of the EDP Group’s Information Certification Project, which also includes a project work group, led by the Internal Auditing Department working in close cooperation with the Executive Board of Directors, and teams from the business areas responsible for the control procedures in their respective areas of activity. The committee meets on a quarterly basis. Disclosure of Information and Procedures Committee Member of the Executive Board of Directors (CFO) Audit Department Consolidation, Accounting Control and Taxation Department Management Planning and Control Department Brand and Communication Department Investor Relations Department General Secretariat and Legal office

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ANNUAL REPORT 2009 corporate governance RISk COMMITTEE The Risk Committee has the following responsibilities: Accident Prevention and Safety Committee Member of Executive Board of Directors Member of the Board of EDP Valor (Responsible for Accident Prevention and Safety Department) Member of the Board of EDP Distribuição (RH) Member of the Board of EDP Produção (RH) Member of the Board of EDP Valor (RH) Responsible Office Safety and Health EDP Valor Responsible of Occupational Medicine (Office Safety and Health EDP Valor) Representative of HC Energía Representative of EDP – Energias do Brasil Representative of EDP Renováveis • To monitor significant risks and the EDP Group’s risk profile; • To approve the periodical reporting model proposed by the business units or the Risk Management Department, as well as other mechanisms for reporting and monitoring EDP risks; • To approve or define recommendations on the Group’s significant risks and on extraordinary situations in terms of risk, for analysis by the Executive Board of Directors; During 2009, the committee held one meeting, chaired by the member of the Executive Board of Directors member responsible for the financial area. ENERGY PLANNING COMMITTEE The main tasks of the Energy Planning Committee are: • To approve or define recommendations on risk policies, procedures and limits for the EDP Group to be analysed and approved by the Executive Board of Directors. Risk Committe Chairman of the Executive Board of Directors Member of Executive Board of Directors (6 Members) Member of the Board of EDP Gás Member of the Board of EDP Inovação Financial Management Department Risk Management Department Management Planning and Control Department Energy Planning Department Director of Energy Management Business Unit Representative of EDP - Energias do Brasil Representative of EDP Renováveis • To plan and project the structural development of the market on a 5-year horizon; • To define a baseline scenario for the purpose ofthe Business Plan; • To identify the generation portfolio to adopt on a 5-year horizon; • To provide an integrated vision of the Group’s portfolio of • To identify gas and CO2 needs for the next 5 years; • To analyse priorities for action in new technologies/ quantities, covering generation, gas and the retail market; Non-standing members participate in this committee´s meetings when invited to do so depending on the respective items on the agenda. It also meets whenever an unexpected risk situation requires it. In 2009, this committee met three times, with the presence of members of the Executive Board of Directors at all meetings. ACCIDENT PREVENTION AND SAFETY COMMITTEE The Accident Prevention and Safety Committee has the following main responsibilities: innovation, in liaison with the Innovation Committee; and, • To identify attractive business opportunities throughout Energy Planning Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors (Generation, Gas, HC Energía) Member of Executive Board of Directors (Renewables) Member of the Executive Board of Directors (Supply) Member of Executive Board of Directors (Brazil) Member of the Board of EDP Comercial Member of the Board of EDP Gás Member of the Board of EDP Produção Director Corp. HC Energía Director Energy Planning Department - Energias do Brasil Representative of EDP Renováveis (2 members) Business Analysis Department Management Planning and Control Department Investor Relations Department Energy Planning Department Risk Management Department Regulation and Competition Department Responsible for the Energy Management Business Unit the value chain and in the different geographical locations. • To support the Executive Board of Directors in drawing up proposals for defining the EDP Group’s strategic objectives with regard to accident prevention and safety at work, appraising the degree of application and effectiveness thereof and reporting on progress; • To provide a critical

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part of the budget or entail changes to it, according to the amounts and profitability involved. Investments Committee Member of Executive Board of Directors (CFO) Business Analysis Department Management Planning and Control Department Energy Planning Department Member of the Board of EDP Distribuição Member of the Board of EDP Gás Member of the Board of EDP Internacional Representative of EDP Produção Director of HC Energía Member of the Board of EDP - Energias do Brasil Member of the Management Team EDP Renováveis • Approving the benchmarks for the Key Performance Indicators (management by objectives) for Macrostructure workers, high-potential managerial staff and performers with potential, as well as the corresponding annual performance calculation; • Regularly fostering development and comparative analysis (benchmarks) at the national and international levels with a view to defining adequate (fixed and variable) remuneration levels and fringe benefits for all Macrostructure workers, high-potential managerial staff and performers with potential, in particular the Macrostructure “payment package”, and align the strategy for compensation for all workers; and, In 2009 the committee met 18 times, with the Executive Board of Directors member responsible for the financial area attending all meetings. CAREERS, MObILITY AND TRAINING COMMITTEE The Careers, Mobility and Training Committee has the following main areas of responsibility: • Reporting on the remuneration policies to all stakeholders. Remuneration Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors (6 Members) Human Resources Department • Approving measures designed to further evolution and/or mobility of the workforce, in particular with reference to Macrostructure workers, high-potential managerial staff and performers with potential; This committee met once in 2009. All members of the Executive Board of Directors attended the meeting. INFORMATION TECHNOLOGY COMMITTEE The Information Technologies Committee is responsible for the following: • Guaranteeing the implementation of Succession Plans for key positions in the EDP Group; • Developing guidelines for the strategic planning of information systems; • Monitoring the development of careers in the Macrostructure workforce, high-potential managerial staff and performers with potential and analysing expectations and possible hindrances; and, • Approving the annual plan and budget for information systems (application and infrastructure projects), to be submitted to the Executive Board of Directors for approval; • Approving the EDP Group’s Training Plan and monitoring its implementation. Careers, Mobility and Training Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors (6 Members) Member of the Board of EDP Comercial (HR) Member of the Board of EDP Distribuição (HR) Member of the Board of EDP Produção (HR) Member of the Board of EDP Soluções Comerciais Member of the Board of EDP Valor (HR) Human Resources Department Representative of HC Energía Representative of EDP – Energias do Brasil Representative of EDP Renováveis • Allocating funds and resources for large-scale initiatives; • Defining priorities with respect to strategic projects; • Projecting budget allocations for unplanned projects; and, • Resolving issues such as the distribution of limited Information Technology Committee Member of Executive Board of Directors (Information Systems) Member of the Board of EDP Distribuição (Information Systems) Member of the Board of EDP Produção (Information Systems) Member of the Board of EDP Soluções Comerciais (Information Systems) Member of the Board of EDP Valor (Information Systems) General Manager of EDP (Information Systems) Organisational Development Department Corporate Marketing Department Information Systems Department Officer of EDP Gás (Information Systems) Representative of HC Energía Representative of EDP – Energias do Brasil Repres

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ANNUAL REPORT 2009 corporate governance REGULATION COMMITTEE The main responsibilities of the Regulation Committee are: • Monitoring the activities of the sustainability and Environmental and Sustainability Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors (Sustainability) Chairman of The Board of Directors of EDP Inovação Member of the Board of EDP Comercial Member of the Board of EDP Distribuição (Sust. and Env.) Member of the Board of EDP Gás Member of the Board of EDP Produção (Sust. and Env.) Member of the Board of EDP Soluções Comerciais (Sust. and Env.) Member of the Board of EDP Valor (Sust. and Env.) Member of the Board of EDP Energias do Brasil Member of the Board of Foundation EDP Risk Management Department Brand and Communication Department Investor Relations Department Human Resources Department Sustainability and Environment Department Officer of HC Energía (Environmental) Representative of EDP – Energias do Brasil Representative of EDP Renováveis environmental management structures of the Group companies. • Monitoring the development of European Commission’s energy strategy and policy and the implementation of new European internal market and competition directives for the electricity and natural gas sectors and to study their impact on the Iberian Market; • Monitoring alterations in terms of policies, legislation, regulations and organisation to the energy sectors in Portugal and Spain (namely in the scope of the Iberian Market), anticipating the structural implications thereof for the sectors in terms of energy prices and tariffs, company profitability and possible needs or obligations for alterations at the organisational level, namely through identification and monitoring of the most relevant regulatory risks; • Supporting the Executive Board of Directors in drawing up proposals defining the positions to be defended by the EDP Group in the context of the Iberian and European Markets in terms of regulation and competition; • Fostering the exchange of experiences on regulatory practices in Europe and the Iberian peninsula as well as those applicable in Brazil; Given the specific responsibilities of this committee, the Chairman of the Executive Board of Directors monitors its work and attends its meetings whenever he/she deems fitting. The committee meets at least once every quarter. The Committee of Sustainability and Environment held a meeting in 2009 and was attended by the Chairman of the Executive Board of Directors and the administrator with responsibility for the area of sustainability. However, in 2009, most of the affairs of the Committee of Sustainability and Environment have been addressed in meetings of the Steering Committee, which was formed to follow up specific projects in the areas of sustainability and the environment. This Committee met 5 times in 2009, with the presence of the Chairman of the Executive Board of Directors and the Administrator with responsibility for the area of sustainability. PROCUREMENT COMMITTEE • Monitoring the trends in prices and the implications of the tariff policies and decisions (per se and on a comparative basis) in the regulated activities. Regulation Committee Member of Executive Board of Directors (Regulation) Member of Executive Board of Directors (Distribution) Member of Executive Board of Directors (Costumer Relations) Member of the Board of EDP Gás Regulation and Competition Department Officer HC Energía EDP Gas Officer of HC Energía (Regulation) Officer of Naturgas (Regulation) Officer of EDP - Energias do Brasil (Regulation) Representative of Naturgás (Regulation) Representative of EDP Renováveis This committee met 8 times in 2009, in the presence of members of the Executive Board of Directors and with the member of the Executive Board of Directors responsible for regulation attending the meetings. ENVIRONMENT AND SUSTAINAbILITY COMMITTEE The Environment and Sustainability Committee has the following responsibil

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Procurement Committee Member of Executive Board of Directors (CFO) Member of the Board of EDP Valor (Procurement) Member of the Board of EDP – Energias do Brasil (Procurement) Member of the Management Team EDP Renováveis (Procurement) Officer of EDP Valor (Procurement Plataform) Representative of EDP Gás (Procurement) • Exchange of information on the development of the business in each geographical area, including the respective regulatory environments; • Dissemination of best practices, particularly in the context of operation of power generation infrastructures, with a view to identifying and harnessing synergies; In 2009, this committee held 5 meetings which were chaired by the director responsible for the financial area. PRICES AND VOLUMES COMMITTEE The main purpose of the Prices and Volumes Committee is to guarantee that the Group has access to the best information and perspective on market evolution at any given moment. Accordingly, the committee is responsible for: • Joint decision-making with a view to defining objectives (with a focus on developing power generation infrastructures); and, • Broadening the scope of the committee to cover other regions, whenever necessary. Generation Committee Member of Executive Board of Directors (Generation) Member of the Board of EDP Produção (3 Members) Adviser of the Board of EDP Produção Representative of Energias do Brasil Energy Planning Department Officer of EDP Produção (Planning and Control) Officer of EDP Produção (Business Development) Officer of EDP Produção (Hydro Generation) Officer of EDP Produção (Thermal Generation) Officer of EDP Produção (Projects and Investments) Officer of EDP Produção (Quality and Process) Officer of EDP Produção (Integrated Management of Environmental Matters) Officer of EDP Produção (Cogeneration and Biomass) Officer of HC Energía - Environmental Officer of HC Energía - Studies and Comminication Officer of HC Energía - Generation Officer of HC Energía - Projects Officer of Energy Management Business Unit Representative of EDP Produção (Planning and Control) • Sharing relevant and up-to-date market information; • Deciding on what should be considered relevant information on the evolution of key variables to be made available to the Group; • Defining the forward curve that represents Group estimates in terms of market evolution; • Providing an up-to-date database containing historical data and estimates for key market variables; • Guaranteeing harmonisation amongst business areas with regard to shared information; and, • Establishing itself as a forum for ongoing discussion and for sharing and aligning market perspectives and information. Prices and Volumes Committee Member of Executive Board of Directors (Energy Planning and Gas) Member of Executive Board of Directors (Renewable) Member of Executive Board of Directors (Costumer Relations) Member of the Board of EDP Comercial Member of the Board of EDP Gás (2 Members) Member of the Board of EDP Produção (2 Members) General Manager of HC Energía Risk Management Department Management Planning and Control Department Energy Planning Department Regulation and Competition Department Officer of HC Energía (Planning) Officer of UNGE Officer of EDP Produção (Planning and Control) Representative of Naturgás Representative of EDP Renováveis This committee met twice in 2009, with the member of the Executive Board of Directors responsible for generation attending the meetings. DISTRIbUTION COMMITTEE The main responsibility of the Distribution Committee is to guarantee the Iberia-wide coordination of distribution and coordinate and standardise the activities of EDP Distribuição, HC Energía (Distribution) and EDP Brasil, with special reference to: • Drawing up joint proposals for strategic objectives for the EDP Group’s distribution activity, assessing their degree of implementation and effectiveness and reporting on progress; EIn 2009, this committee held 4 meetings which were chaired by the member of the Exec

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ANNUAL REPORT 2009 corporate governance its responsibility and monitoring and studying the effects of alterations in terms of policies, legislation, regulation and organisation on the energy sectors; Commercial Committee Member of Executive Board of Directors (Supply) Member of Executive Board of Directors (Generation) Member of the Board of EDP Comercial (2 Members) Member of the Board of EDP Gás Member of the Board of EDP Soluções Comerciais General Manager of HC General Manager of Naturgas Member of the Board of EDP – Energias do Brasil Brand and Communication Department Corporate Marketing Department Officer of HC Energía - Costumer Relations Officer of HC Energía - Marketing Officer of Naturgas (Costumer Relations) • Disclosing and sharing information on the evolution of the distribution business in each region, as well as on best practices, with a view to identifying projects of mutual interest, improving the efficiency and effectiveness of operations, and identifying synergies; Sharing information on the management of high-impact events; • Analysing, and issue opinions on, the criteria used to evaluate investment projects and planning models; • Ensuring coordination with regard to standardising projects and heavily used equipment and analysing new technological options and identifying priorities for action in the area of new technologies/innovation. estabelecer orientações para a regulamentação das matérias da sua responsabilidade e acompanhar e estudar os impactos decorrentes das alterações ao nível de políticas, legislativo, regulamentar e organizativo dos sectores energéticos; PENSION PLAN AND FUND COMMITTEE The main responsibilities of the Pension Plan and Fund Committee are to define the strategy for the Pension Plan and Fund and guarantee its alignment with the EDP Group strategy. It is responsible for strategic decisions on: • The pension plan; • Risk assessment for the pension plan; and, • The pension fund’s management structure. Pension Plan and Fund Committee Chairman of the Executive Board of Directors Member of Executive Board of Directors (CFO) Member of the Board of EDP Valor (Labor Relations) Consolidation, Accounting Control and Taxation Department Risk Management Department Representative of Financial Management Department Distribution Committee Member of Executive Board of Directors (Distribution) Chairman of the Board of Directors of EDP Distribuição Member of the Board of EDP Distribuição (2 Members) Member of the Board of EDP Energias do Brasil Officer of HC Energía - Distribution This committee met three times in 2009. This meeting was chaired by the member of the Executive Board of Directors responsible for distribution. COMMERCIAL COMMITTEE The Commercial Committee’s main responsibility is to coordinate the commercial area Iberia-wide and to ensure coordination and standardisation of the activities of EDP Comercial and HC Energía (Marketing and Supply), in particular: This committee met 3 times in 2009, with the member of the Executive Board of Directors responsible for the financial area attending the meetings. COMMITTEE ON INFORMATION SECURITY The Committee on Information Security has the following responsibilities: • Exchange of information on the evolution of the business in each region, including the respective regulatory environments; • Provide an opinion on the Strategic Plan for Information Security, EDP; • Dissemination of best practices in the supply of energy services, with a view to identifying and harnessing synergies; and, • Discuss the more relevant security initiatives, with a • Joint decision making in relation to business with an impact at the Iberian level, in particular with regard to setting objectives, implementing the marketing plan and defining conditions for energy purchase. view to their inclusion in the annual Information Security Information of the EDP Group; • Give advice on policy Information Security, of the EDP Group and its evolution; • Evaluate and approve except

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• Monitor the implementation of the Program for Information Security Information EDP and KPI performance. Information Security Committee Member of Executive Board of Directors (Information Systems) Audit Department Financial Management Department Risk Management Department Management Planning and Control Department Human Resources Department General Secretariat and Legal office Information Systems Department Officer of Energy Management Business Unit Responsable of Government IT DSI Responsable of Information Security DSI Responsible for Security and Risk of companies In the scope of the performance of his duties, the Customer Ombudsman has the use of an independent organic structure called the Office of the Customer Ombudsman, as well as an annual budget allocation. 3.5. bRANCH IN SPAIN The mission of EDP - Energias de Portugal, Sociedade Anónima, Sucursal en España is to manage and coordinate the energy interests of the EDP Group companies in Spain with a view to guaranteeing maximum synergies and the creation of value in the operations and activities in Spain. It also serves as an organisational platform for managing the Iberia-wide integration of support services. All majority shareholdings in EDP Renováveis S.A. and HC Energía (Hidroeléctrica del Cantábrico S.A.), as well as the indirect shareholding in NG Energia (Naturgas Energia Grupo S.A.) by virtue of the majority control of the latter, have been directly allocated to the subsidiary’s assets. The branch has offices in Madrid and Oviedo. The branch is represented by means of Permanent Representatives that are members of the EDP Executive Board of Directors appointed for that purpose. The administration, coordination, management and representation of EDP Sucursal de España is made up of the Executive Committee, the Management Committee and the Coordination Committees. The Executive Committee is made up of five Permanent Representatives of EDP, a Group Controller for activities in Spain and by the first line managers in charge of the business units in Spain. It fundamentally serves as the coordination body for the activities of the permanent representatives. The Management Committee is chaired by the Group Controller and is also made up of the natural extension of the management departments at the EDP Corporate Centre, namely the Business Analysis, Legal, Audit, Spanish Taxation, Financial Management, Shared Services and Information Systems departments. The committee carries out, in a homogeneously grouped way the tasks of these departments in Spain. Finally, the Coordination Committees for Generation, Supply and Gas are chaired by members of the members of the EDP Executive Board of Directors responsible for the respective management areas with a view to harnessing synergies with Spain and eliminating inefficiencies and redundancies. 3.4. CUSTOMER OMbUDSMAN The Customer Ombudsman is an independent entity created in 2009. It aims to support the EDP Group’s customer care policy, and has the following remit: • To receive and examine complaints filed by customers • To enter into dialogue with complaining customers; and directly related to actions or omissions by EDP Group companies; • To arbitrate disputes and conflicts between customers and EDP Group companies; • To issue opinions on matters relating to the activity of EDP Group companies, if requested to do so by any of their corporate bodies; • To propose the adoption of measures to help improve levels of service quality and customer satisfaction; • To establish contacts with third parties to obtain specialist information and knowledge so recommendations can be made to the EDP Group companies on the adoption of measures to improve their customer relations. The Customer Ombudsman holds office for a period of 3 years, and this term is renewable once only, for an equal period. EDP Energias de Portugal, Sucursal en España, Sociedad Anonima ADMINISTRATION, COORDINATION, MANAGEMENT AND REPRESENTATION STRUCTURE Executive Commi

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ANNUAL REPORT 2009 corporate governance 3.6. RISk CONTROL AND MANAGEMENT SYSTEM 3.6.1. INTERNAL CONTROL OVER FINANCIAL REPORTING (ICOFR) In line with the EDP Group’s decision to strengthen and develop its internal control systems in 2009, using the ICOFR model (Internal Control Over Financial Reporting), it implemented all the activities required to extend this system to its business units in new countries and to the organisation overall, as well as transferring responsibility for maintaining and consolidating the information to the business units. In this regard, EDP surveyed and documented all the cross-sectoral processes and controls identified at EDP Renováveis in all its structures, and updated the processes and controls surveyed in previous cycles. In the businesses where ICOFR had been implemented in previous years (Portugal, Spain and Brazil), EDP ordered the review and maintenance of existing processes and controls, and any of these affected by significant organisational, structural and/or legislative changes were redesigned. The new processes and controls resulting from use of ICOFR, and from the opportunities for improvement identified in the first review cycle (in 2008), were also documented and implemented with the assistance of an international consulting firm. The following initiatives were also put into place: 3.6.2. RISk MANAGEMENT STRUCTURE 3.6.2.1. RISk MANAGEMENT MANDATE AND STRUCTURE The year 2009 was marked by the financial and economic global crisis. Therefore, the European utilities, although in a lesser extent than the industry in general, felt that impact. In fact, the general reduction in consumption led to situations of incomplete recovery of fixed costs, attenuated by low overall cost of fuel, as well as other operating costs and financial burdens. However, the diversity of business lines of the Group continued to provide a low level of risk, primarily due to: (i) the high relative weight of regulated businesses, (ii) growth in low-risk activities, including wind power, and even (iii) the application of appropriate hedging policies fit to promote the mitigation of the financial risks of fuel and price and volume of electricity purchased or placed in the market. The organization and process of risk management practice in the Group have been receiving the highest rating under the Dow Jones Sustainability Index, a benchmark that pleases and encourages us to continue developing integrated methodologies of R2R - Return to Risk, trying to include them in the normal management of the Business Units and at Corporate Center. This process is based on the following: • Identification and prioritization of risks. The Risk Portal, an • Approval and publication of the Internal Control Over system in Portugal; Financial Reporting Manual for application in all countries; • Implementation of the internal control computer support • Training of managers in the following areas: * * * Use of the computer system; Theoretical and practical concepts; and Training consolidation through an e-learning course. instrument developed internally for the consistent collection of information on each relevant risk is used at the EDP Group level. It provides qualitative and, as far as possible, quantitative assessment of the overall impact of a risk, the probability of occurrence and the control level, as well as drawing up priority matrixes for action and control. This tool allows answering the following questions: What are the key risks by business unit? Who is responsible for the management of a certain risk? • Risk strategy. The aim of the risk strategy, for each of the priority risks, is to identify the key measure that can be used to avoid or mitigate it, decide on the transfer of the risk to another entity (insurance, hedging) and define the desired risk-return profile. It answers the questions: What are the risks that EDP profits in managing and which ones should be transferred to other entities? Is the ability to take risk al

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• Governance and control. This component of the process of risk management is based on the Corporate Entrepreneurial Risk Management Policy defined by the Executive Board and on the structure established for this purpose. This tool allows answering the following questions: Are there management and risk control processes? Are they effective? consolidated results, due to the expectations of decrease in the growth in consumption and resulting excess in power generation capacity, and taking in consideration factors of economic and financial risk – inflation, interest rates, exchange rates and fuel prices. • Network Electricity Distribution: review of regulatory The Executive Board of Directors decides on the level of exposure to risk assumed by the EDP Group in its various operations and, notwithstanding the delegation of tasks and responsibilities, defines the overall risk limits and ensures that risk management policies and procedures are followed. This is based on the definition of the Group’s appetite for risk, resulting on one hand from its long established business structure and, on the other hand, from criteria agreed upon by the Executive Board of Directors and the General and Supervisory Board. In fact and in practice, the appetite for risk focuses on how the Group: risk and Portugal - Spain benchmarking in this area considering the diversity of densities of consumption and the impacts resulting from the stagnation of consumption growth and inflation; • Energias do Brasil: Analysis of risk with a view to integrated risk assessment, with emphasis on those related to hydro - development of investment in electricity generation and regulatory issues for distribution, as well as for the assessment of alternative hedging strategies between the positions of Trading and Production; • Is positioned in relation of its debt rating; • Aims to grow (with a focus on a policy of organic investment and acquisitions in core assets/disposals of non-core assets); • Risk analysis of EDP Renováveis, trying to establish an • Implement a dividends payment policy (and a policy of possible acquisition of treasury stock). In the organizational structure of the corporate center, the DGR is part of the strategic departments. So, in addition to monitoring activities and methodologies, it develops its own studies and actively participate in a perspective of a business intelligence unit, performing the assessment of important and current subjects of R2R - Return to Risk for the Group. In relation to the activity undertaken in 2009, it should be noted the following: integrated assessment and developing of eventual natural hedgings, given the positions in dollars of Horizon (and composition of selling in the electricity markets or by PPA’s arrangements) and dependence on market prices for electricity in Europe for the wind generation with price dependent on that sale price (indirectly related with the price of brent and currency exchange €/USD); • Analysis of structural and cyclical factors of risk, which aims to support the definition of limits for guiding business units, as well as criteria for evaluating alternative hedging (including non-hedging) by comparison: eventual sacrifice of revenue - reductions in economic cost of risk; • Trends in the Iberian electricity market pricing (MIBEL), • Crisis and impacts on EDP: preview, in the beginning of separating the natural volatility (daily, weekly and seasonal volatility of consumption and volatility of renewable energy production) from the structural volatility (eventual excess of installed production capacity, price volatility of fuel and the year, the effect of economic and financial crisis in the EXECUTIVE BOARD OF DIRECTORS RISK COMMITTEE RISK OFFICE DIRECTOR EDP Produção EDP Distribuição EDP Comercial EDP Soluções Comerciais HC Energía Naturgas Energia Energias do Brasil EDP Renováveis Corporate Oversight Corporate Supervisor Local Oversight Local Supervisor Hierarchical Reporting Functional Reporti

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ANNUAL REPORT 2009 corporate governance CO2), in order to evaluate the quality of estimated average prices and annual spreads; 3.6.2.2. FACTORES DE RISCO The main risk factors identified by the EDP Group are structured as follows: • Hydro and Risk Premium, with weighting for the chance to secure alternative revenue for production of small water obtained from the EDP in the market, not subject to the Costs of Maintenance of Contractual Equilibrium in the face of this situation self-insurance; • Debt structure, analyzing the contribution of debt to the volatility of earnings before tax of EDP and its optimal structure, given the present maturity of the debt, fixed interest rate - floating rate, currency, and comparison with similar companies, but also the evaluation of criteria of return - risk for those conditions; RISK FACTORS BUSINESS RISKS Investment associated risks Regulatory risks Environmental risks MARKET RISKS Energy management Energy volume and price risk Financial risk OPERATIONAL RISKS Insurable risks IT risks Risk with processes and people Legal and litigation risk CREdIT RISKS Supply Counterparty • Establishment of methodologies for better managing the credit risk - clients, through collaboration with HC Energía in preparation of the evaluation methodology and history of behavioral targeting customers for incorporation into the Project Smile (business management) and also through temporary secondment of a DGR senior staff member to Naturgas with the task of implementing a foresight process on the behavior of credit in diverse economic sectors and for new customers, but also in setting risk premiums and the possible need to provide collateral or guarantee; The Business Risk is the most important component, followed by the Market, Operational Risk and Credit Risk. This is a typical situation for the utilities in the sector. As mentioned above, the effects of international financial crisis led, in general, the devaluation of business because of the systemic risk of the market. However, it is important to register that the EDP’s share value has increased more favorably compared to the DJ Euro Stoxx Utilities index, during the year. EDP Group has confirmed its low risk profile, given its lower exposure to structural market risk. However, this advantage will tend to reduce in the future, due to the replacement in the short/medium term, of power plants at end of life and protected by the mechanisms of CMEC’s, by plants in the liberalized electricity market and also due to the largest natural exposure to foreign exchange risk arising from the growth of business in areas outside the euro. A top-down assessment of EDP’s RaR - Return at Risk in a weekly basis (95% probability of not being exceeded) and also of its assets (here by the ratio Equity/Assets times the RaR of Equity) compared with that of Iberian competitors, confirms that the Group has a business portfolio with a smaller risk profile, even during the general increase in the critical year 2008. R@R Weekly 95% - Equity (%) 20 15 10 5 0 2006 EDP Peer 1 2007 Peer 2 2008 Peer 3 2009 • Analysis of aggregate risk top down and bottom-up simplified methodology compared to competitors, which continued to show a reduced level of risk for the EDP business, which has allowed EDP to use a greater financial leverage, to identical levels of rating; • Analysis of aggregate risk bottom up to the Business Plan 2009 - 2012, which shows the maintenance of a low risk profile of the Group; • Contribution to the Focus Group Enterprise Risk Management of Eurelectric either through active participation in development issues, or the constant changes to the subject regulatory risk in the sector. On this subject, advocated the need to stabilize the European regulatory landscape and take measures to support the sector, environmental challenges and the need for stability to achieve the high investments associated with the decarbonization of electricity and the intelligent management of distrib

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R@R Weekly 95% - Assets (%) 15 3.6.2.3. RISk MANAGEMENT THROUGHOUT THE VALUE CHAIN – MIbEL In addition to the management of risks that transversally affect all business units, management of the aforementioned risk factors within the EDP Group is carried out on the basis of the value chain of the individual activities as follows: Electricity Production and Energy Management: Electricity price risk: Revenues from production can be influenced by changes in the price of electricity in wholesale markets. The Group has limited exposure to power plants acting on the free market (except in Spain, Ribatejo and Lares CCGT power plants and small hydro in Portugal) because the majority are subject to the adjustment mechanism of CMEC’s - The Cost for the Maintenance of Contractual Equilibrium (plants that had contracts - Power Purchase Agreements - with REN and now act in the market from July 1, 2007). To mention the exposure to market (price of OMEL) of wind production from EDP Renováveis in Spain (and also in the United States). Furthermore, the Group actively seeks to protect the commercial spread, acting in an integrated manner within the Energy Management and Marketing. In MIBEL the UNGE has a mandate to act on the wholesale market; both for optimization of the supply to the spot market of OMEL like to take advantage of the futures market, OMIP, OTC and arbitration in Spain-France interconnection. The risk of market price higher in Portugal than in Spain, as a result of market splitting, after exhaustion of interconnection capacity, and the corresponding need in Portugal for using more expensive power plants, is not relevant to the Group, given that its marketing in the free Portuguese market is not dependent on imports from Spain. The UNGE simulates the behaviour of the system and uses the Iberian MUR - Unified Risk Model (model risk analysis of UNGE to Iberia) program for the periodic calculation of MaR - Margin at Risk. Fuel price and CO2 Risk: This risk is also more present for the power plants in the free market. The UNGE has been entrusted with management of this risk, serving on the purchase of coal and fuel oil and in the operational management of procurement of gas for electricity generation and trading scheme for CO2, but also in establishing solutions for the hedging of fuel prices and the dollar exchange (the latter in coordination with the Financial Department). As far as supplies of gas are concerned, EDP Gás is responsible for negotiating new contracts, but also the management of positions resulting from momentary excess/deficiency between the Group companies and the market or with other players. The MUR is also used in the risk assessment, making use of its capacity for assessing trends in the prices of fuels and CO2. Operational risk for power plants and wind farms: Conventional power plants and wind farms have breakdowns and incidents, which can entail a loss of revenue due to outage or downtime. This risk is mitigated by the application of conduction and maintenance methods and safety procedures of the highest standard. Furthermore, the most important insurable risks are associated with generation, which is covered by insurance, managed by EDP Valor’s Insurable Risk Management Office. 121 10 5 0 2006 EDP Source: EDP Peer 1 2007 Peer 2 2008 Peer 3 2009 Moreover, and as the following graphs show, the Group’s financial leverage - debt/assets - got a slight reduction and the structural net debt to EBITDA ratio remained at the same level and is expected to reach a value of less than 4 in 2012. The stay in the range of rating A assigned by S&P, level continues to be a goal. It represents a good compromise between the spread in this class on the cost of debt and the benefit from the tax deductibility of financial expenses, within the parameters of expected debt leverage. Net Debt / EBITDA (x) 6 4 2 0 2006 EDP Source: EDP Peer 1 2007 Peer 2 2008 Peer 3 2009 Net Debt / Assets (x) 0.6 0.4 0.2 0.0 2006 EDP Source: EDP Peer 1 2

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ANNUAL REPORT 2009 corporate governance Environmental risk: Power generation resources are more exposed to this risk due to the use of natural resources and also due to the emissions and waste that thermal power generation produces. The EDP observes a very strict Environmental Policy that seeks to fully comply with the parameters for the licensing of its facilities and introduce additional measures that will minimize possible responsibilities in this area. Also worth noting that an environmental liability insurance has been contracted trying to respond to new demands in this field. Credit risk: In an organized market this is not a significant risk. In OTC market and fuel purchase operations, the UNGE minimizes this risk by applying exposure limits in agreement with the limits approved in line with the counterparty rating (defined by an external agency, or internally, if there is not such external information). Note that the international crisis led to a revision of criteria, since some of the counterparties are linked to international groups with acknowledges difficulties. However, there have been no defaults. Market supply: Price risk for electricity: This risk is assumed by the UNGE once defined the volumes of sales to final customers from EDP Commercial and HC Energía, except in situations in which market price - indexed contracts are possible. Volume risk: Either because of weather and economic situation, or as a result of migration of customers between the free and the public service regulated tariff, the amount of energy to sell to final customers has always a degree of uncertainty. In principle, this risk is assumed by supply, as it has to make excess or shortage adjustments with the UNGE at the market price. However, the current transition phase the MIBEL is experiencing, which can lead to significant fluctuation in the share of free market consumption depending on the attractiveness of the public tariffs, calls for dynamic management of this risk through integrated and regular intervention by the Prices and Volumes Committee set up for that purpose. Commercial quality operational risk: In the free market, the criteria for commercial service quality are the entire responsibility of the Group, which has placed great emphasis on the good management of this risk. Credit risk: This supply-related risk is managed primarily by the contractual criteria that are applied and, secondly, by EDP Soluções Comerciais, the unit entrusted with performing the metering – billing – payment collection cycle (in Spain, HC Energía and Naturgas). Supply of Last Resort: As defined in European legislation, consumers who opt for regulated tariffs are customers of the so-called Supplier of Last Resort. In Spain this infrastructure has, since the 1st of July, to cover a range of domestic consumers, taking a step in the extinction of the regulated tariffs for final consumption. Regulatory risk: The exercise of this activity is low risk, but the deviations in the estimates made by the Regulator - ERSE for acquisition costs of energy, thus creating a deficit or excess amount, raises concern about the fair remuneration of such volatility and about the consistency of a hybrid system with systematic arbitration between the regulated tariff of public service and free market. It is hoped that the gradual disappearance of the regulated tariffs for electricity sales to provide, a knowledge of the mechanisms of competitive balance and a longer follow-up to the reality of the evolution of international prices of raw materials necessary for the production of electricity. Supply quality operational risk: Whatever the criteria for supply quality of regulated service business (average response time in providing customer services, the percentage of readings of meters of low voltage, etc.), the Group has placed great emphasis on the management of this risk, also to manage the risk of erosion of the brand once the impacts consequences are not negligible. Credit ris

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Risk management in other regions and activities Although market conditions and regulatory may differ, the principles and methods listed above apply to gas transport, distribution and supply business units and to Energias do Brasil and EDP Renováveis. As far as gas is concerned, the strategic partnership with Sonatrach, which is now becoming perceptible with the start into operation of the plants in partnership, introduces a significant contribution to profitable growth with controlled risk, in this sphere of activity, since it provides a significant increase in levels of flexibility and hedging. The strong growth of the EDP Renováveis, but also the geographic diversity of its investments, clearly confirm the change in power production profile of the Group and compensates, in times of international crisis, a lower growth in other areas due to weakness in consumption growth. It also indicates a strong participation on the U.S.A, which market has a huge potential for growth and reduced country risk, confirming the Group as one of the major players in renewable energy and therefore low risk exposure relating to emissions of reenhouse gases. Transversal risk management Investment risk: The investment assessment and decisionmaking process has established uniform criteria for defining the discount rates to be used in evaluating the expected cash flows and for the modeling of scenarios (which incorporate different sensitivities, such as, price risk, energy volume risk, and regulatory risk). These criteria help to mark out limits in the Group’s appetite for risk, with the capital cost of each business unit/region reviewed on a regular basis. The Investment Committees at the business units and corporate level allow the effective implementation of these mechanisms in the assessment phase and for the monitoring of the execution of the investment, monitoring operational risks in these phases and their potential impact on the expected value. Financial risk: The Group’s financial risks are mainly managed by the Financial Department, which is responsible for the Group’s cash management at Iberian level, the debt portfolio and the risk of interest rate and foreign exchange instruments through financial markets. In Brazil, Energias do Brasil follows, under coordination, similar principles Liquidity risk received particular attention, given the international crisis experienced. The strong credit profile of EDP, in this difficult environment, was reconfirmed and it was made the bond issues necessary for the usual debt roll over and to finance growth of the Group for a total of two billion euros and one billion dollars. On the other hand, was successfully negotiated a credit line of one thousand and six hundred million euros (revolving credit facility) and also the transfer of rights to tariff adjustments in Portugal for the years 2007, 2008 and 2009, through two transactions, which provided about sixteen hundred million. Consequently, the liquidity risk is mitigated due to the policy of debt management and recruitment of new funding and even the availability of credit lines contracted (firm deals) and not used. Given the financial management policies followed by the Group, one continues to be observed a low level of market risk and a diversified counterparty risk involving financial institutions with adequate ratings. Liabilities resulting from the EDP Group Defined Benefit Pensions Fund and health care benefits in Portugal are fully covered by the Pension Fund assets and specific provisions included in the EDP balance sheet. The calculation of these liabilities is conducted annually by an independent Actuary, using assumptions set out in IAS-IFRS, taking into account various aspects including, inter alia, the Fund’s performance, demographics, economic variables and the applicable requirements. Operational risk: Included in this group are the potential losses resulting from incidents caused by failures or inadequate procedures, staff, equipment o

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ANNUAL REPORT 2009 corporate governance In accordance with the Articles of Association, votes corresponding to Category A shares that are cast by one and the same shareholder on its own behalf or in representation of another shareholder and exceed 5% of the total number of votes corresponding to the share capital shall not be counted. Category B shares are those to be reprivatised. Their only privilege is that their holders, or those representing them, are not subject to the voting restriction laid down in Article 14.3 of the Articles of Association, in relation to these shares. In addition, shareholders who acquire a holding of 5% or more of the voting rights, or of the share capital, must communicate this fact to the Executive Board of Directors within a period of five work days from the date on which said holding becomes effective. They may not exercise voting rights if they have not communicated this fact. Breakdown of Shareholder Struture by Investor Type (%) 10 10 80 4.2. SHAREHOLDER STRUCTURE The breakdown of the EDP shareholder structure by region and investor type in 31 December 2009 was as follows: EDP Shareholder Structure (%) 3,4 Institucional Private Persons Pension Funds 4.3. QUALIFYING HOLDINGS Pursuant to Article 8.1b of CMVM Regulation no. 5/2008, the following information on qualifying holdings held by shareholders in the EDP share capital in 2009 and the allocation of voting rights in accordance with Article 20.1 of the Securities Code is hereby provided: 5,0 5,7 4,8 9,5 3,0 34,6 0.9 3,8 4,1 2,9 2,2 20,1 BCP Group BES Blackrock CajAstur CGD Sonatrach J. de Mello Pictet Iberdrola Senfora Parpública Treasury Stock Remaining Shareholders Geographic Breakdown of Shareholder Structure (%) 7 12 6 50 12 12 Portugal United States Spain United Kingdom Europe Rest of Mundo 124

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Shareholder PARPÚbLICA - Participações Públicas, (SGPS), S.A. Privatised shares - Category A Non-privatised shares - Category B Capitalpor – Participações Portuguesas, SGPS, S.A. PARPÚBLICA - Participações Públicas, SGPS, S.A. Total IbERDROLA - Participações, SGPS, SA IBERDROLA - Participações, SGPS, SA Total GROUP CAIXA GERAL DE DEPÓSITOS Privatised shares - Category A Caixa Geral de Depósitos Pension Fund of CGD Companhia de Seguros Fidelidade Mundial, S.A. Império Bonança - Companhia de Seguros, S.A. Via Directa - Companhia de Seguros, S.A. Multicare - Seguros de Saúde, S.A. Parcaixa, SGPS, S.A. Non-privatised shares - Category B Parcaixa, SGPS, S.A. Total Nº of Shares 29,009,161 704,141,551 408,797,735 295,343,816 733,150,712 % Capital 0.79% 19.26% 11.18% 8.08% 20.05% % Vote 0.80% 19.44% 11.29% 8.15% 20.24% The company Capitalpor – Participações Portuguesas, SGPS, S.A. Is fully owned by PARPÚBLICA - Participações Públicas, SGPS, S.A. 347,371,083 347,371,083 190.919.887 186.443.384 1.323.006 2.804.885 179.439 13.490 10.683 145.000 16.173.184 16.173.184 207.093.071 9.50% 9.50% 5.22% 5.10% 0.04% 0.08% 0.00% 0.00% 0.00% 0.00% 0.44% 0.44% 5.66% 5.00% 5.00% 5.00% 0.45% 0.45% 5.45% CGD holds 100% of share capital and voting rights of Caixa Seguros, SGPS, S.A. which, in turn, holds: i) 100% of the share capital and voting rights of Companhia de Seguros Fidelidade-Mundial, S.A. which, in turn, holds 100% of the share capital and voting rights of Via Directa - Companhia de Seguros, S.A.; ii) 70% of the share capital and voting rights of Império Bonança, SGPS, SA, which, in turn, holds 100% of the share capital and voting rights of Império Bonança - Companhia de Seguros, S.A.; iii) 100% of the share capital and voting rights of Multicare - Seguros de Saúde, S.A. CAJA DE AHORROS DE ASTURIAS (CajAstur) Cantabrica de Inversiones de Cartera, S.L. Caja de Ahorros de Asturias (CajAstur) Total The company Cantabrica de Inversiones de Cartera, S.L. is fully onwed by Caja de Ahorros de Asturias (CajAstur) 128,409,447 54,848,066 183,257,513 3.51% 1.50% 5.01% 5.00% - JOSÉ DE MELLO - SOC. GESTORA DE PARTICIPAÇÕES SOCIAIS, S.A. José de Mello Energia, SGPS, S.A. Management and supervisory bodies Total 176,283,526 17,443 176,300,969 4.82% 4.82% 4.87% 0.00% 4.87% The company José de Mello Energia, SGPS,S.A. Is fully owned by José de Mello Participações II, SGPS, S.A., which capital in fully owned by José de Mello - Sociedade Gestora de Participações Sociais, S.A. INTERNATIONAL PETROLEUM INVESTMENT COMPANY (IPIC) Senfora SARL Total The company Senfora SARL, Luxembourg, is fully owned by IPIC, a company wholly owned by the Abu Dhabi Government. 148,431,999 148,431,999 4.06% 4.06% 4.10% 4.10% blackRock, Inc. BlackRock Institutional Trust Company, N.A. BlackRock Asset Management Limited/Blackrock Advisors UK Ltd. BlackRock Investment Management (LUX) BlackRock Fund Advisors BlackRock Asset Management Japan Limited BlackRock Investment Management (UK) Limited BlackRock Fund Managers Ltd. BlackRock Investment Management, LLC BlackRock Japan Co. Ltd. BlackRock (Netherlands) B.V. BlackRock Asset Management Canada Limited Total All the companies mentioned above are controlled by BlackRock, Inc. 57,204,205 36,180,065 16,300,000 10,272,330 9,005,713 2,681,060 2,389,360 2,158,147 1,494,978 1,439,485 759,019 139,884,362 1.56% 0.99% 0.45% 0.28% 0.25% 0.07% 0.07% 0.06% 0.04% 0.04% 0.02% 3.83% 1.58% 1.00% 0.45% 0.28% 0.25% 0.07% 0.07% 0.06% 0.04% 0.04% 0.02% 3.86% Group Millennium bCP + PENSION FUND Corporate Bodies Foundation Millennium BCP Banco Comercial Português, S.A. Pension Fund of Group Millennium BCP Pension Fund of Millennium CD Total The management company of the pension fund of Group Millennium BCP exercises independently their voting rights. 28,380 350,000 337,551 122,289,594 47,000 123,052,525 0.01% 0.01% 3.34% 0.00% 3.36% 0.00% 0.01% 0.01% 3.38% 0.00% 3.40% bANCO ESPÍRITO SANTO, S.A. Company’s in a group relationship with BES or exercising control ov

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ANNUAL REPORT 2009 corporate governance 4.4. HOLDERS OF SPECIAL RIGHTS Pursuant to Article 4.3 and 4.4 of EDP´s Articles of Association, Category B shares are the shares to be reprivatised. Holders of these shares or their representatives are not subject to the voting restrictions stipulated for Category A shares, i.e. the fact that votes corresponding to Category A shares cast by a shareholder on its own behalf or in representation of another shareholder that exceed 5% (five per cent) of the total votes corresponding to the share capital shall not be counted (in keeping with Article 20.1 of the Securities Code). The shares in reprivatisation are Category B shares as long as they are held by public entities. Their transfer to non-public entities determines their respective conversion to Category A shares. This conversion does not require the approval of the respective holders or a decision by any EDP corporate body. 4.7. GENERAL MEETING OF SHAREHOLDERS AND PARTICIPATION IN THE GENERAL MEETING Meetings of the General Meeting of Shareholders must be convened at least 30 (thirty) days in advance of the respective date with specific reference to the items on the agenda. Only shareholders with voting rights may attend the meetings, as well as other persons whose presence is considered justified by the Chairman of the Board of the General Meeting. In accordance with Article 11.10 of the EDP Articles of Association, EDP shareholders can only attend the General Meeting of Shareholders if they have held shares for at least five working days before the date of the respective meeting and maintain that quality until the date of the meeting. Proof of ownership of shares is provided by forwarding to the Chairman of the Board of the General Meeting, at least five working days prior to the date of the respective General Meeting, a declaration issued and authenticated by the financial intermediary entrusted with the account registration of the shares. The declaration of the aforementioned financial intermediary must state that the shares in question were registered in the respective account at least five working days in advance of the date of the respective General Meeting and that the blockage of the shares in the account until the date of the General Meeting has been effected. In the event of suspension of a General Meeting, EDP adopts Recommendation 1.2.2 of the Corporate Governance Code. Accordingly, for clarification purposes, express reference to application of the aforementioned recommendation shall be made on the notice for the General Meeting. Shareholders may be represented by persons with full legal capacity. This must be communicated to the Chairman of the Board of the General Meeting by 5.00 p.m. on the second last day prior to the date of the General Meeting at the latest. 4.5. RESTRICTIONS TO SHARE TRANSFERAbILITY As laid down in the Articles of Association (Article 5.3), Category B shares can only be held by public entities as long as they are not the object of privatisation. There are no restrictions on the transferability of Category A shares. 4.6. SHAREHOLDER AGREEMENTS In accordance with Article 7 of the EDP Articles of Association, full information of shareholders agreements relating to the company must be forwarded to the Executive Board of Directors and the General and Supervisory Board by the shareholders that sign them within 30 (thirty) days after the date on which they were entered into. On the basis of the information provided to the Company by shareholders, the Executive Board of Directors has knowledge of one single shareholders agreement, which was entered into on 11 April 2007 by Parpública - Participações Públicas (SGPS), S.A. (“Parpública”), Caixa Geral de Depósitos, S.A. (“CGD”) and Société Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures (“Sonatrach”). Under the aforementioned Shareholders Agreement, which was the object of public disclosur

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the Board – all information that the latter requests on matters relating to them and related with Article 20.1 of the Securities Code. Failure to comply with this duty shall result in prevention of the exercise of voting rights for the shares held by the defaulting shareholder. In the event that the same limitation of the counting of votes affects more than several shareholders, the restriction shall apply in proportion to the number of ordinary shares held by each such shareholders. Article 15.1 of the EDP Articles of Association sets out that shareholders who, under the aforementioned Article 20.1 of the Securities Code or a legal provision that amends or replaces it, become holders of, or have allocated to them, a share equal to or higher than 5% (five per cent) of the voting rights or the share capital, must inform the Executive Board of Directors of that fact within a period of five working days following the date on which said ownership is effective They cannot exercise the respective voting rights if they have not made this communication. EDP has adopted measures aimed at encouraging the exercise of voting rights by the shareholders, namely though the elimination of financial obstacles that may affect the exercise of voting rights. These measures include: to be defined by the Chairman of the Board of the General Meeting in the notice for the respective General Meeting. 4.10. QUORUM AND DECISIONS Decisions of the General Meeting shall be reached by a majority of votes cast, unless there is legal or statutory provision requiring a qualified majority. The EDP Articles of Association do not define any constitutive quorum for the General Meeting (adopting the rule in the Companies Code). On what concerns the deliberative quorum, the rule adopted in the EDP Articles of Association is that the General Meeting can reach decisions at the first or second convening of the meeting, irrespective of the number of shareholders attending or represented, including decisions on the amendments to the Articles of Association, mergers, demergers or transformation of the company (this means that, with respect to the aforementioned matters, the quorum is lower than that provided for in the law, i.e. the need for shareholders holding at least the shares corresponding to one third of the share capital to be present or to be represented). In all other cases, the deliberative quorum laid down in the law, namely in Article. 383.2 of the Companies Code, applies. • General dissemination of the notice of the General Meeting, with express reference to the means available for voting, namely through regular publications and the forwarding of mailings to the shareholders; 4.11. MINUTES AND INFORMATION ON DECISIONS EDP provides extracts from the minutes of its General Meetings, in Portuguese and English, as well as the respective notices, agenda, motions submitted and forms of participation for consultation on its website (www.edp.pt) within 5 (five) days after a meeting. EDP considers that the information that is materially relevant for investors does not include the whole content of the minutes of meetings. Full provision of the minutes would, indeed, be susceptible to be used for purposes that are not related to the interests of the company, its shareholders, investors and the market in general. Accordingly, EDP publishes on its website an extract of the minutes of General Meetings containing all relevant information relating to the constitution of the General Meeting and decisions taken, including motions submitted and any voting declarations made. The website provides information to the EDP shareholders on the following: i) the requirements for participation in the General Meeting; ii) exercising postal voting rights; and iii) the information available at the company head office. Additionally, EDP clarifies its shareholders on the forms of participation in the General Meeting through provision of draft versions of the letter of representation, voting

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ANNUAL REPORT 2009 corporate governance The historic records do not include the attendance lists at the General Meetings, given the personal nature of the data involved. 4.12. MEASURES ON CONTROL AND CHANGES IN CONTROL OF THE COMPANY EDP has not adopted any measures to prevent takeover bids that would put the interests of the company and its shareholders at risk. Although the EDP Articles of Association establish a restriction on the exercise of voting rights for Category A shares, according to which the votes for Category A shares cast by one shareholder (pursuant to the terms of allocation of voting rights established in Article 20.1 of the Securities Code) that exceed 5% of the total votes corresponding to the share capital shall not be counted, this restriction is not a measure adopted with a view to preventing the success of takeover bids. Indeed, the fact that the restriction of voting rights is incapable of preventing a successful takeover bid is a result of the current EDP capital structure and the relative weight of the Category A shares in that capital, as well as of the requirement of a deliberative quorum of two-thirds of the votes cast established in the EDP Articles of Association for amendments to the by-laws being in accordance with the provisions of Article 182-A.2 of the Securities Code. Defensive measures with the aim, or that have the consequence, of causing grave erosion of the EDP assets in the case of transition of control of the company or a change in the composition of the Executive Board of Directors, thus impairing the free transferability of the shares and free appraisal by the shareholders of the performance of the members of the Executive Board of Directors, have also not been adopted. To the knowledge of the Executive Board of Directors, EDP is not party to important agreements that enter into force, are altered or terminated in the event of a change in control of the company following a takeover bid (with the exception of the normal practice in matters of debt issue). Nor is it party to agreements with holders of office on the management body or directors, in the understanding of Article 248-B.3 of the Securities Code, that provide for compensations in the event of dismissal, dismissal without just cause or the termination of work contracts following a successful takeover bid. Statutory Auditor, the Remuneration Committee of the General Meeting takes into consideration their fixed nature as well as the mandatory rules on determination of the remuneration, in particular the provisions of Article 440(2) of the Companies Code, which defines the criteria for payment of the General and Supervisory Board; Article 374-A of the Companies Code on the remuneration of members of the Board of the General Meeting, and Article. 60 of Decree-Law no. 224/2008 of 20 November on the remuneration of the Statutory Auditor. The total gross amounts paid to members of the EDP corporate bodies in 2009 were 19,266,254.61 euros. 5.2. REMUNERATION OF THE bOARD OF THE GENERAL MEETING The Chairman of the Board of the General Meeting receives no remuneration in that capacity, given that the Chairman is a member of the General and Supervisory Board and is remunerated for that office. The Vice-Chairman of the Board of the General Meeting is paid by means of attendance fees. The attendance fee of EUR 1,000.00 for his presence at the General Meeting held on 15 April 2009 was paid in 2009. 5.3. REMUNERATION OF THE MEMbERS OF THE EXECUTIVE bOARD OF DIRECTORS The remuneration policy for the members of the Executive Board is defined by the Remuneration Committee appointed by the General and Supervisory Board. The committee has defined the payment to be made to the members of the Executive Board of Directors to 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 con

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• Multi-annual Variable Remuneration – likewise, for each of the Executive Board of Directors members this component can be between 0% and 100% of the annual gross remuneration, depending on the annual accumulated assessment of the performance of the directors in achieving the economic sustainability of the EDP Group. The award of this multi-annual remuneration, although calculated on an annual basis, only takes effect if, at the end of the term of office, at least 90% of the set strategic objectives have been achieved; these will be assessed on the basis of the performance and comparison with defined strategic benchmarks. More precisely, this payment component is fixed on the basis of the following factors: relative performance of the EDP Group’s EBITDA vs. Eurostoxx Utilities and PSI-20 in the term of office; the EDP Group’s capacity for creation of value in the term of office; relative performance of the Group’s stock market capitalisation vs. Eurostoxx Utilities and PSI-20 in the term of office; performance of the sustainability index applied to the EDP Group (DJSI method); EDP Group’s image in the national and international markets; capacity for change and adaptation to new market demands; and compliance with strategic goals set for the EDP Group. The time frame taken into consideration for determining the value of the multi-annual variable remuneration component (3 years), the use of medium-term strategy oriented qualitative criteria in the company development, the existence of caps for the variable remuneration and the relative weight of that component in the overall payment are decisive elements in fostering performance in the company management that is not concentrated on short-term objectives alone, but includes the medium and long-term interests of the company and the shareholders in its performance. In compliance with Law 28/2009 of 19 June, the Remuneration Committee shall submit to the next General Meeting a statement on the remuneration policy for the term of office corresponding to the three-year period 2009/2011. As regards the remuneration of members of the Executive Board of Directors for the office term corresponding to the three-year period 2009/2011, the Remuneration Committee of the General and Supervisory Board decided on September 21, 2009, to maintain the same level of fixed remuneration that was in force the previous year. The table below shows the gross remuneration amounts paid to each of the members of the Executive Board of Directors during the year 2009. Variable Annual 600,000.00 246,857.13 159,691.47 258,651.08 451,200.00 389,760.00 360,960.00 451,200.00 436,800.00 480,000.00 Multi-annual 2006 600,000.00 480,000.00 428,307.67 384,000.00 480,000.00 480,000.00 480,000.00 Multi-annual 2007 600,000.00 480,000.00 428,307.67 384,000.00 480,000.00 480,000.00 480,000.00 Multi-annual 2008 600,000.00 480,000.00 428,307.67 384,000.00 480,000.00 480,000.00 480,000.00 Euros António Luís Guerra Nunes Mexia (Chairman) Ana Maria Machado Fernandes António Fernando Melo Martins da Costa António Manuel Barreto Pita de Abreu João Manuel Manso Neto Jorge Manuel Pragana da Cruz Morais Nuno Maria Pestana de Almeida Alves Fixed 703,448.20 315,901.43 553,846.02 546,206.78 562,758.56 562,758.56 527,999.92 Remuneration paid by other companies majority held by EDP Note: Payments to the Chairman and members of the Executive Board include those relating to employee pension savings schemes. The amount of variable payments were based on the tax treatment of the country in which the Administrator had residence for tax The pension savings scheme for the members of the Executive Board of Directors serves as a complement to the retirement pension and corresponds to 10% of the annual remuneration. Company directors do not receive any significant remuneration in the form of non-monetary benefits. Euros António de Almeida (Chairman) Alberto João Coraceiro de Castro António Sarmento Gomes Mota Caja de Ahorros de Asturias (CajAstur)

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ANNUAL REPORT 2009 corporate governance During the year 2009, former members of the General and Supervisory Board received payment of remuneration as follows: Euros António Francisco Barroso de Sousa Gomes Vital Martins Moreira Vítor Domingos Seabra Franco Fixed 18,777.79 9,905.91 11,532.27 dismissal without just cause or the termination of work contracts following a successful takeover of the company. 5.7. STOCk OPTION/STOCk PURCHASE OPTIONS PLANS The only stock options stock purchase options plan currently in force is as follows. 5.7.1. APPLICAbLE TO THE MANAGEMENT bODY IN THE 2003/2005 PERIOD For the variable remuneration for the Chairman of the Board of Directors, the Chairman of the Executive Committee and the members of the Executive Committee in the three-year period of 2003 to 2005 the Remuneration Committee in office during that period provided for the stock option plans in accordance with the qualitative and quantitative assessment for each business year. In accordance with the plans, each stock purchase option can be exercised up to a maximum of 1/3 on each of the anniversaries from the date of allocation of the option plan onwards. Options not exercised become null and void at the end of eight years from the date of allocation. In 2009 a total of 105,088 options were exercised, as shown in the following table, which also details the total number of stock options allocated in the 2003 - 2005 period. Date of Commencement 30-Apr-05 30-Jun-06 02-May-07 Date of expiry 29-Apr-12 29-Jun-13 01-May-14 Nº of Options Exercised In 2009 0 0 105,088 Total 722,206 641,666 778,038 5.5. REMUNERATION OF MANAGERIAL STAFF The remuneration of the other company managers, as defined in Article 248-B of the Securities Code, with the exception of the members of the corporate bodies, follows the scheme applicable to the workforce in general. This remuneration is made up of a fixed monthly amount plus a possible annual bonus based on corporate and individual performance, in accordance with previously defined criteria, namely the achievement of set profitability targets, absenteeism and equity. 5.6. AGREEMENTS REGARDING TERMINATION OF MANAGEMENT OR EMPLOYMENT CONTRACTS There are no agreements between the company and holders of office on the governing or supervisory bodies or workers that provide for compensation in the event of resignation or dismissal of the former or the resignation of a worker, Date of option 30-Apr-04 30-Jun-05 02-May-06 Nº of benef. 6 6 6 N.º of Options 760,482 932.328 1,461,497 Option Price 2.29 2.21 2.21 5.8. REMUNERATION OF THE AUDITOR KPMG has been entrusted with the independent external auditing of all EDP Group companies in Portugal, Spain, Brazil, the USA and other countries in which the Group presently operates. In 2009 the recognised specialised costs for fees to KPMG for auditing services and statutory auditing, guarantee and reliability services, taxation consultancy and other services beyond legal revision of the accounts for Portugal, Spain, Brazil, the USA and other countries were as follows: Type of Services Audit and Statutory Audit of Accounts Assurance and Reliability Services Sub - Total Tax Consultancy Service Other Services unrelated to Statutory Auditing Sub - Total Total Portugal 2,445,6001 866,168 3,311,768 635,980 73,467 709,447 4,021,215 Spain 1,601,575 178,660 1,780,235 337,091 946,595 1,283,686 3,063,921 brazil 981,510 220,969 1,202,479 29,777 29,777 1,232,256 United States of America 694,403 202,178 896,581 665,765 665,765 1,562,346 Other Countries 363,249 13,900 377,149 6,000 6,000 383,149 Total 6,086,337 1,481,875 7,568,212 1,644,836 1,049,839 2,694,675 10,262,887 1 Includes the remuneration of the Statutory Auditors of EDP amounting 180,000 euros. Note: On 17 September 2009, by joint decision of the President of the General and Supervisory Board and the Committee on financial matters, was granted a special permit to the Executive Board of Directors to hire to KPMG assurance and reliability

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The auditing services and statutory auditing are services required in order to issue opinions on the individual and consolidated financial statements of the parent company and its subsidiaries in Portugal and abroad. These amounts do not include services provided to associated companies or jointly controlled entities. Given the scope of the services provided by auditing companies, EDP has adopted measures specifically aimed at safeguarding the independence of the statutory auditor. Indeed, on 29 January 2009, the General and Supervisory Board approved a regulation concerning the procurement of “non-audit” services to the Statutory Auditor and to the independent external auditor of the EDP Group. This regulation establishes the permitted scope of “non-audit” services to be eventually provided by an independent external auditor, from which are excluded, in particular, accounting services, development of financial information systems, evaluation as well as legal services, management of human resources and actuarial matters. These services may not be provided by the statutory auditor or by the independent external auditor. Moreover, the regulation provides that the provision of “non-audit” services by the statutory auditor or by an independent external auditor to the EDP Group is subject to prior joint approval by the Chairman of the General and Supervisory Board and the Committee on Financial Matters/Audit Committee. However, the cost may not exceed 30% of contracted fees for the respective services of statutory audit and external audit, except in exceptional circumstances and upon joint prior approval of the Chairman of General Supervisory Board and the Committee on Financial Matters/Audit Committee. Finally, EDP created a mechanism for quarterly reporting to the Committee on Financial Matters/Audit Committee for services contracted by companies of the EDP to the statutory auditor and to the independent external auditor. 6. THE EdP SHARE ANd dIVIdENd POLICY 6.1. EDP IN THE CAPITAL MARkETS The shares representing the EDP share capital were initially admitted to trading in the official stock exchange NYSE Euronext Lisbon (which, at the time, operated under the name Lisbon Stock Exchange) on 16 June 1997. Since then, by means of subsequent reprivatisation phases, more company shares have been admitted to trading in the NYSE Euronext Lisbon market: Phases of EDP’s Admission to Trading Admission phase 1st Privatisation phase/IPO 2nd Privatisation phase 3rd Privatisation phase 4th Privatisation phase 5th Privatisation phase/Capital increase 6th Privatisation phase 7th Reprivatisation Phase Date 16/Jun/97 26/May/98 28/Jun/98 23/Oct/00 07/Dec/04 27/Dec/05 13/Dec/07 EDP has 2,936,222,980 ordinary shares, with a face value of EUR 1.00 and representing 80.30% of the share capital, admitted to trading in the NYSE Euronext Lisbon market. The free float in 2009 was 60 per cent. EDP - Energias de Portugal S.A. Shares NYSE Euronext Lisbon Reuters RIC Bloomberg ISIN Shares EDP.LS EDP PL PTEDPOAM0009 The EDP shares are also the underlying assets for futures contracts and warrants negotiated in the Lisbon market. The following EDP bond loans are also listed on stock markets to trading: Amount Outstanding2 500,000,000 747,352,000 500,000,000 1,000,000,0004 1,000,000,000 500,000,000 500,000,000 1,000,000,000 200,000,0003 1,000,000,0004 1,000,000,0004 300,000,000 325,000,0003 Date Issue/ISIN 11ª Issue EMTN1 XS0256997932 2ª Issue EMTN1 XS0126990778 12ª Issue EMTN1 XS0256996538 1ª Issue 144A/REGS US26835PAA84 15ª Issue XS0413462721 9ª Issue EMTN1 XS0221295628 13ª Issue EMTN1 XS0256997007 16ª Issue XS0435879605 6ª Issue EMTN1 XS0152784715 2ª Issue 144A/REGS US26835PAB67 3ª Issue 144A/REGS XS0454935395 10ª Issue EMTN1 XS0223447227 14ª Issue EMTN1 XS0397015537 1 EMTN - Euro Medium Term Notes 3 Amount in GBP 2 Outstanding - Amount owed as at 31 Dec 2009 4 Amount in USD Issue 12-06-2006 28-03-2001 12-06-2006 11-02-2007 18-02-2009 22-06-2005 12-06-2006 06-25

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ANNUAL REPORT 2009 corporate governance In 2009, EDP was the company with the greatest stock market capitalisation and presented a relative weight in the PSI-20, the NYSE Euronext Lisbon reference index, accounting for 12.5% of said index. EDP is one of the seven Portuguese companies represented in the Euronext 100 index, with a relative weight of 0.702%. EDP shares are also a reference in several European indices, such as the Dow Jones Eurostoxx Utilities, which is based on the stock market performance of the leading and most representative European utilities companies. EDP is also the only Portuguese company in this sustainability index of the Dow Jones (Dow Jones Sustainability Index), which succeeded in 2009 for the second consecutive year. In 2008, EDP shares increase 15% of their value, dropping from EUR 2.695 to EUR 3.108. This increase in value together with the gross dividend of EUR 0.14 per share (paid on 14 May 2009) resulted in a total positive gross return of 20.5% in the reference period. This performance was above the returns provided by the leading benchmark indices, in particular the Dow Jones Europe STOXX Utilities index, which had a positive performance of a mere 1% in the same period, and bellow the PSI-20 index, which rose 33% in value in 2009. The market value of the EDP Group, based on its stock market capitalisation (no. of shares issued x price per share), amounted in 2009 to EUR 11.365 billion, the equivalent of 16.5% of the total capitalisation of the shares that make up the PSI-20 index, which amounted to EUR 68.877 billion. The EDP share was one of the most traded shares in the NYSE Euronext Lisbon market in 2009. In this official stock market, approximately 1.722 billion EDP shares were traded, which corresponds to a daily average of 6.7 million shares at an average price of EUR 2.855 and to approximately 59% of the total number of EDP shares admitted to trading. In terms of trading volume, EDP shares accounted for 2.9% (EUR 4.970 billion) of the overall volume of shares traded in the Lisbon regulated market (a total of EUR 172.304 billion). The following graphs present the daily and intradaily variation for the EDP shares in the NYSE Euronext Lisbon market, allowing for the conclusion that, despite the volatile behaviour of the markets in 2009, EDP shares proved to be less volatile. Histogram – Daily Variation 52 Weeks (Jan09-Dec09) Nº Days 60 50 0.01 0.02 -0.02 Histogram – Intradaily Variation 52 Weeks (Jan09-Dec09) Nº Days 0.03 0.04 50 40 0.02 0.05 0.06 0.07 0.08 30 20 10 0.01 0.09 0.10 0.12 0.13 0.15 0.14 0.16 0 Source: Bloomberg 6.2. FACTORS INFLUENCING CHANGE IN EDP SHARE PRICE The stock markets showed a strong recovery in 2009, despite having hit their lowest levels for a decade in March. Of the world’s main indices, in the US the Dow Jones rose 18.8%, while in Europe the DJ Stoxx went up 28%, the FTSE 100 in the UK grew 22% and Germany’s DAX increased by 23.9%. The benchmark index for the Portuguese stock market, the PSI-20, rose 33.5% over the period. The Brazilian stock market recorded one of the world’s best performances in 2009, with the Bovespa Index growing 82.6%. As for the economic sub-sectors that make up the European DJ Stoxx 600, the largest rises in 2009 came from the most cyclical sectors, which had recorded sharp falls in 2008: basic materials (+101% in 2009), banking (+47% in 2009) and chemicals (+44% in 2009). The utilities sector, of which EDP forms a part, put in the worst performance of all the sub-sectors on the DJ Stoxx 600 in 2009, with the European utilities index, the SX6P, growing by only 1% over the period, while sectors such as telecoms (+11.3%) and insurance (12.9%) also performed at below the overall average. It was against this backdrop that EDP’s listed shares posted a 15.3% increase in value in 2009. Taking into account the payment of dividends of EUR 0.14 per share on 14 May 2009, this resulted in a total profitability of 20.5% for the shareholder over the

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The behavior of the markets during 2009 can be divided into two phases. The first three months of the year continued to be marked by persistent instability and lack of confidence in the global financial system, and by its knock-on effects on the real economy during the 2nd half of 2008 due to restricted liquidity in the credit markets, a drop in demand for goods and services and a slowdown in world economic growth. During this period, economic performance was also affected by a strong contraction in consumer financing and investment, together with a rise in unemployment. However, following the introduction of strong measures by the central banks of the world’s major economies, reducing key interest rates and injecting liquidity into the global financial system, market interest rates fell rapidly and liquidity gradually returned to the credit markets. This occurred first in the short-term markets, before spreading gradually to the medium and long-term markets. In addition, the governments of the world’s major economies introduced stimulus packages for their national economies at the start of 2009. These included investment and consumption incentives, as well as social support mechanisms for the unemployed and assistance for companies facing difficulties. As a result of these measures, economic indicators for the 2nd and 3rd quarters showed signs of improvement and the continuation of ample liquidity was reflected in a more favorable climate in the financial markets, with significant increases in the value of most assets (shares and credit). The year ended with activity picking up significantly against a backdrop of inflation and low interest rates, a good combination for the stock market. In its initial stage, the financial crisis induced a sharp reduction in liquidity and increased spreads in the global credit markets, creating a scenario whereby credit risk analyses conducted by the independent rating agencies took on even further importance. In February, Fitch maintained EDP‘s long-term rating at ’A-’, describing its Outlook as stable. In June, Moody’s lowered EDP’s rating to ‘A3’ with a stable Outlook and in August, Standard & Poor’s confirmed EDP’s rating at ‘A-‘ and revised its Outlook from stable to negative. In terms of financing policy, 2009 was marked by EDP’s decision to extend the period for covering its financing needs on the credit markets, from 12 months to 24 months, so as to reduce the risk associated with instability in the global credit markets. On 9 February 2009, EDP issued 5-year bonds to the value of EUR 1 billion. On 5 March 2009, EDP signed a 3-year revolving credit facility in a value of EUR 1.6 billion, with a view to bolstering the Group’s liquidity. On the same day, EDP securitised the right to receive the tariff adjustments for the extra costs resulting from electricity generation in Portugal in 2007 and 2008, to the sum of EUR 1.2 billion. On 18 June, EDP issued 7-year bonds to the value of EUR 1 billion. In September, EDP once again issued debt securities, to the sum of USD 1 billion, to cover investments in the United States and secure enough liquidity to cover the next two years. In December, EDP securitised the right to receive all the positive adjustments from the costs of energy policy measures resulting in estimated extra costs for special regime energy generation in 2009, which generated proceeds of around EUR 435 million. In terms of consolidation of the Iberian utilities sector, in February Acciona and Enel reached an agreement to exchange Acciona’s holding in Endesa for Endesa’s renewable assets. In another deal, Gas Natural completed its acquisition of Union Fenosa in September. The regulatory decision accompanying this acquisition forced Gas Natural to sell a number of its assets. In July, EDP announced the expansion of its gas business in Spain with the agreement to take over low-pressure natural gas distribution and supply companies in the regions of Cantabria and Murcia, and high-p

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ANNUAL REPORT 2009 corporate governance Main Events Affecting the EDP Share Price in 2009 3.30 3.20 3.10 3.0 2.90 2.80 2.70 2.60 2.50 5 2.40 4 2.30 Jan.09 Feb.09 Mar.09 Apr.09 May.09 Jun.09 Jul.09 Aug.09 Sep.09 Oct.09 Nov.09 Dec.09 1 2 3 7 10 6 14 15 8 9 13 16 26 19 18 20 21 24 22 23 25 17 12 11 # 1 2 3 4 4 4 5 6 7 8 8 8 9 10 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Date 4/Feb 6/Feb 10/Feb 5/Mar 5/Mar 5/Mar 6/Mar 11/Mar 15/Apr 7/May 7/May 7/May 9/Jun 18/Jun 18/Jun 30/Jul 4/Aug 5/Aug 1/Sep 3/Sep 23/Sep 7/Oct 19/Oct 20/Oct 21/Oct 29/Oct 25/Nov 2/Dec 3/Dec 15/Dec 31/Dec Description EDP signed a EUR 145 million loan with European Investment Bank Fitch confirms EDP’s long term credit rating to ‘A-’assigning stable outlook EDP issues EUR 1 Billion 5 year bond EDP assigns the right to receive the extraordinary tariff adjustments in respect of 2007 and 2008 EDP signed credit facility of EUR 1,600 million Disclosure to the market of the financial results for 2008 Resignation of Members of the General and Supervisory Board Tolling agreement with iberdrola on Aguieira and Raiva hydro plants in Portugal EDP’s Annual General Shareholders Meeting Disclosure of the financial results for the 1st quarter 2009 Publication of the Royal Decree Law that defines the conditions for the elimination of the Spanish tariff deficit Payment of gross dividend of € 0.14 per share for the business year 2008 (net dividend of € 0.112) Moody’s downgrades EDP to “A3” with stable outlook EDP issues EUR 1 Billon 7 year bond Energias do Brasil completes the sale of telecom company ESC90 Disclosure of financial results for 1st half year 2009 Standard & Poor´s affirms EDP´s "A-" rating and revised outlook from stable to negative ANEEL approves a 15.12% tariff increase at EDP Escelsa´s annual tariff readjustment process EDP Renováveis establishes a new type of institutional partnership structure for 101 MW in the US EDP remains the only Portuguese company to integrate the Dow Jones Sustainability world and Stoxx Index in 2009 EDP to issue U.S.$ 1,000 million of Notes EDP Bandeirante: ANEEL approves final parameters for the Oct-2007/Oct-2011 regulatory period Secondary public distribution of common treasury shares by Energias do Brasil EDP sells stake in Sonaecom ANEEL approves a 5.46% tariff increase at Edp Bandeirante’s annual tariff readjustment process Disclosure of the financial results for the 3rd quarter 2009 Conclusion of the secondary public distribution of common treasury shares by Energias do Brasil EDP Renováveis closes two institutional partnership structures in the US amounting to U.S.$ 228 million EDP assigns the right to receive the extraordinary tariff adjustments in respect of 2009 ERSE sets electricity tariffs in Portugal for 2010 Conclusion of acquisition of gas assets in Spain Share Price 2.80 2.80 2.72 2.35 2.35 2.35 2.44 2.57 2.77 2.86 2.86 2.86 2.83 2.70 2.70 2.79 2.84 2.83 2.98 2.97 3.09 3.18 3.11 3.10 3.11 3.02 3.11 3.10 3.07 3.09 3.14 134

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Capital Market Indicators EDP Shares on Euronext Lisbon (euros) Opening price Closing price Peak price Minimum price Variation in share price and reference indices EDP Shares (1) PS120 Dow Jones Eurostoxx Utilities Euronext 100 Liquidity of EDP shares on the markets Volume on Euronext Lisbon (EUR million) Mean daily volume (EUR million) Number of shares traded (million) (2) Total number of shares issued (million) Privatised shares at the end of the year (million) % of capital already privatised Number of own shares held (treasury stock) as at 31 Dec (million) Annual rotation of capital (privatised shares) EDP Market Value (EUR million) Market appreciation at the end of the financial year Total shareholder profitability Annual variation in share price (1) Gross dividend distributed per share in the year Total shareholder profitability Dividends Dividend per share 2009 2.695 3.108 3.218 2.43 15.3% 33.5% 1.0% 25.5% 4,969.7 19.4 1,722.3 3,656.5 2,936.2 80% 34.2 58.7% 11,364.5 0.41 0.140 20.5% 0.155 5.0% 2008 4.470 2.695 4.760 2.062 (39.7%) (51.3%) (38.1%) (45.2%) 9,710.1 37.9 2,761.1 3,656.5 2,936.2 80% 35.7 94.0% 9,854.4 (1.78) 0.125 -36.9% 0.14 5.2% 2007 3.84 4.47 5.00 3.79 16% 16% 18% 3% 21,256.5 83.4 5,079.7 3,656.5 3,096.2 85% 15.5 164.1% 16,344.7 0.63 0.110 19% 0.125 2.8% 2006 2.60 3.84 3.86 2.58 48% 30% 36% 19% 12,812.5 50.2 4,080.9 3,656.5 3,096.2 85% 7.1 131.8% 14,041.1 1.24 0.100 52% 0.11 2.9% 2005 2.22 2.60 2.68 2.04 17% 13% 26% 23% 5,639.4 21.9 2,505.2 3,656.5 3,096.2 85% 17.3 85.0% 9,507.0 0.37 0.092 21% 0.10 3.8% Dividend yield 6.3. DIVIDEND DISTRIbUTION POLICY Since the EDP shares were initially admitted to trading in the Lisbon Stock Exchange (now NYSE Euronext Lisbon), EDP has made careful and judicious annual distribution of dividends Year 19971 19981 19991 20002 20012 20022 20032 20042 20052 20062 20072 20082 based on principles o prudence and creation of value for its shareholders. In accordance with these principles, the dividends distributed by EDP since 1997 are as follows: Gross Dividend € 0.648 € 0.698 € 0.698 € 0.140 € 0.113 € 0.090 € 0.090 € 0.092 € 0.100 € 0.110 € 0.125 € 0.140 Approval Date 4/17/98 5/11/99 5/12/00 5/10/01 5/10/02 5/22/03 3/31/04 3/31/05 3/30/06 4/12/07 4/10/08 4/15/09 Payment Date 5/18/98 5/28/99 5/31/00 5/31/01 6/6/02 6/18/03 4/30/04 4/29/05 4/28/06 5/4/07 5/8/08 5/14/09 Net Dividend Resident € 0.534 € 0.620 € 0.611 € 0.119 € 0.099 € 0.079 € 0.083 € 0.085 € 0.090 € 0.099 € 0.100 € 0.112 Non-Resident € 0.534 € 0.620 € 0.611 € 0.119 € 0.093 € 0.074 € 0.079 € 0.081 € 0.090 € 0.099 € 0.100 € 0.112 1 Values converted fromEscudos to Euros rounded to the third decimal place. The gross value per share referenced in the legal tender at the time oy payment of the dividend was PTE 129$87 in 1997 and PTE 140.00 in 1998 and 1999. 2 After a stock split in which each share was substituted by five shares each with a nominal value equal to one-fifth of the pre-stock split value. 135

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ANNUAL REPORT 2009 corporate governance With regard to 2008, the EDP Executive Board of Directors submitted to the approval of the General Meeting of Shareholders held on 15 April 2009 a proposal for the appropriation of EUR 551.0 million in net profits (POC), of which EUR 511.9 million was earmarked for distribution to shareholders in the form of dividends. The proposal was unanimously approved by the General Meeting, with a gross dividend of EUR 0.14 per share being paid out on 14 May 2009. In keeping with the legal provisions in force, the EDP Articles of Association require that profits for a business year be allocated to: objective of increasing the annual gross dividend per share by 1.5 euro cents in 2009 over the value paid out for the previous year was reconfirmed. 7. RELATIONS BETwEEN THE COMPANY ANd THE MARKET 7.1. GENERAL INFORMATION DUTIES Access to information on the company activities for investors and potential investors is one of the pillars of EDP policies and operations. Indeed, correct understanding of the strategy and financial, accounting and assets situation and the significant events in the life of the company, is only possible through promotion of transparency and easy access to quality information. In this context, EDP created, in 1997, a support department Investor Relations Department - with a view to guaranteeing appropriate relations between the company and the shareholders. The department guarantees permanent contact with the market, respecting the principle of shareholder equality and preventing imbalances in access to information by investors. EDP thus aims to guarantee, in a permanent and transparent manner, a close relationship with all market agents, providing investors with information that can help them in making decisions on investments (or divestments) in an informed, clear and concrete fashion. • Covering losses from previous years; • Constituting or increasing legal reserves or other reserves determined by law: • Constituting or increasing other reserves established by the General Meeting; • Distributing dividends to shareholders; • Awarding bonuses to company directors and employees as part of a profit-sharing scheme, in accordance with criteria defined by the General Meeting; and • Making a donation to EDP Foundation to be used to sponsor worthy initiatives in accordance with a programme to be submitted to the General and Supervisory Board as part of the EDP Group corporate citizenship and sustainable development policy; the donation is to be the equivalent of up to 0.1% of the consolidated business volume. 7.2. EDP INVESTOR RELATIONS DEPARTMENT The primary function of the Investor Relations Department is to act as a liaison link between the EDP Executive Board of Directors and investors and the financial markets in general. As part of its normal activities, it is responsible for all information provided by the EDP, including privileged information and other market communications as well as the publication of regular financial statements. In carrying out its duties, the department is in constant contact with investors and financial analysts, providing all the information these request, while observing the applicable legal and regulatory provisions. The company representative for relations with the market is the Executive Board of Directors member, Mr. Nuno Alves. The EDP Investor Relations Department is coordinated by Mr. Miguel Viana and is located in the company’s head offices at: In accordance with the accounting principles generally accepted in Portugal, profits to be distributed in the form of dividends are those calculated after deduction of losses brought forward from previous years and a provision of 5% to increase the legal reserves until this amounts to one fifth of the share capital, taking into consideration all other applicable legal and statutory limitations. “Dividend Payout” EDP has followed a sustained policy of dividend distribution that seeks to reconcile, on the on

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Channels Elements required by law or regulation3 Notice of meeting Board of Directors' proposals Amendment of the Articles of Association Other proposals 2009 Annual Report4 Management and supervisory positions held in other Group companies by company officers Additional information provided by EDP Ballots for voting by proxy Ballots for voting by mail Ballots for voting by e-mail Clarification of any issues EDP Articles of Association and Regulations Results of voting on proposals 1 At the EDP head office. In Person www.edp.pt E-mail Investors Relations Phone Line5 by mail2 www.cmvm.pt Media • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 2 Additionally, at EDP’s initiative: Information from the Chairman of the Board of Directors relating to participation in the General Meetings of 2006, 2007, 2008 and 2009, press release from the Chairman of the Executive Board of Directors divulging information on the economic and financial activity and indicators at the end of each business year and press releases whenever important developments in the life of the company take place. 3 Companies Code (Article 289) and CMVM Regulation no. 7/2001, as CMVM Regulations nos. 10/2005 and 3/2006. 4 Annual report, individual and consolidated accounts, statutory auditing and opinion of the Statutory Auditor. 5 Investor Relations phone line: +351 21 001 28 34 7.3. COMPANY INFORMATION ON THE EDP wEbSITE In addition to the Investor Relations Department and in compliance with CMVM regulations, the EDP website (www.edp.pt) also provides all information on legal or corporate governance matters, updates on company activities and a complete set of financial and operational information with a view to facilitating access to and consultation of information by shareholders, financial analysts and other interested parties. The information made available through this channel in Portuguese and English includes data on the company, financial statements and accounts, privileged information, the Articles of Association and internal regulations of corporate bodies, the Group’s shareholder structure, documentation for preparing General Meetings, historical development in EDP share prices, a calendar of company events, the names of members of the corporate bodies and the representative for market relations, contact information for the Investor Relations Department, as well as other information on the Group of potential interest. The EDP website enables all interested parties to consult, or request, the financial statements and accounts for any accounting year since 1999. 137

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annual report 2009 financial report 140 145 Financial analysis Financial statements and notes 138

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annual report 2009 financial analysis I. EDP GROUP’S BUSINESS EVOLUTION In 2009, the EDP Group’s net profit reached EUR 1,024 million, compared with EUR 1,092 million in 2008. Net profit retreated 6%, to EUR 1,024 million, impacted by lower capital gains. 2009 capital gains, which amount to EUR 60 million, include: (1) a EUR 29 million gain booked following the sale of EDP’s remaining 8% stake in Sonaecom; (2) a EUR 19 million gain arising from the sale of Energias do Brasil’s stake in ESC 90; (3) a EUR 13 million dilution gain resulting from the entry of Sonatrach (with a 25% stake) into the capital of Soto 4 CCGT, during the 1st quarter of 2009. In 2008, capital gains, which amounted to EUR 482 million, were mainly impacted by a EUR 405 million gain stemming from the dilution of EDP’s equity stake in EDP Renováveis as a result of the Initial Public Offering. income statement – edp Group eur milllion Gross profit Supplies and services Personnel costs Costs with social benefits Concession fees Other operating costs (net) operating costs eBitda Provisions Net Depreciation and amortisation eBit Capital gains/(losses) Financial Results Results from associated companies pre-tax profit Income taxes Discontinued Activities Net Profit for the period net profit attribut. to edp shareholders Minority interests 2009 5,105 768 540 158 249 27 1,742 3,363 75 1,318 1,970 60 (487) 25 1,568 400 1,168 1,024 144 2008 4,897 736 574 161 236 35 1,742 3,155 32 1,193 1,930 482 (943) 35 1,504 284 (8) 1,212 1,092 120 % 4% 4% -6% -2% 5% -23% 0% 7% 133% 11% 2% -88% 48% -27% 4% 41% -4% -6% 20% eBitda – edp Group eur milllion Generation Iberia LT Contracted Generation Liberalised Generation Supply Iberia Distribution Iberia Gas Iberia Wind Brazil Other and Adjustments consolidated 2009 1,375 0 543 32 694 218 543 550 -48 3,363 2008 1,172 0 323 34 770 209 438 562 -30 3,155 % 17% 68% -7% -10% 4% 24% -2% -62% 7% eBitda from the generation business in the iberian peninsula increased 17% in the period (+EUR 203 million) to EUR 1,375 million in 2009. In 2009, EBITDA from long term contracted generation decreased 2%, to EUR 832 million, in line with gross profit evolution. Gross profit retreated 2%, to EUR 1,029 million, reflecting a lower contribution from power plants under CMEC (Costs for the Maintenance of the Equilibrium System), not fully compensated by the favorable evolution of gross profit from special regime power plants. Gross profit from power plants under CMEC decreased 4%, to EUR 946 million, mainly reflecting: (1) costs from deviations between fuel procurement costs and the international indexes accepted under the CMEC, amounting to EUR 34 million (which compares to EUR 20 million in 2008); (2) lower contribution from inflation (- EUR 25 million) due to a lower average annual inflation rate (-1%) in 2009 compared with 2.6% in 2008; and (3) lower availability from some of our hydro plants, namely Frades and Cabril, which were penalised by major works (concluded in late 2009). Nevertheless, it is worth to highlight the positive impacts on gross profit from power plants under CMEC: (1) additional contracted gross profit resulting from the new Sines coal plant’s Desox facilities (EUR 23 million), which involved a total investment of EUR 196 million (last 50% commissioned in June 2008) and (2) higher than contracted availability and efficiency ratios in thermal plants (EUR 7 million). Special regime’s gross profit rose 18% in 2009 to EUR 84 million fuelled by mini-hydros, that benefited from the full consolidation of Pebble Hydro, from June 2008 onwards, and from the increase of 117% in hydro production, that benefited from exceptional weather conditions in 4Q09. Gross profit from thermal plants in 2009 dropped 7% penalised by volumes 7% lower in Spain and by average unit gross profit 26% YoY lower in Portugal (as the decrease in tariffs overstated the decrease in costs). EBITDA from liberalized generation activity rose 68% in 2009, to EUR 543 million,

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(3) lower generation costs supported by lower gas prices and the forward contracting strategy applied in 2008. In 2009, the gross profit of our merchant electricity generation fleet was also supported by an increase in the volume sold in markets of complementary services, which have been gaining relevancein a scenario of increasing weight of wind in the system. In 2009, output from our liberalised generation plants dropped 11%, reflecting the lower opportunity cost of buying electricity in the pool. CCGT output declined 14% in 2009, in line with Iberian average. In spite of the extremely rainy and windy weather conditions in 4Q09 and of the additional capacity brought on stream (863 MW in Lares 1 and 2), load factors in Portugal remained higher than in Spain ( 52% versus Spain’s average of 40% in 2009). Coal output dropped 11% in 2009, penalised in 4Q09 on weaker thermal demand and a tough comparison basis (since coal was clearly cheaper than gas in 4Q08). Even so, load factor at our coal plants remained above the Spanish average in 2009 (46% versus 34% in 2009), supported by its superior efficiency and the use of blast furnace gases at Aboño plant. Hydro output rose 16% YoY in 2009, as favorable weather conditions in 1Q09 and 4Q09 more than compensated very dry quarters in 2Q09 and 3Q09. In turn, nuclear output retreated 7% as a result of Trillo’s 7-week outage for maintenance works in 1Q09 (ending on April 3th). EBitda from the supply business in the iberian peninsula decreased 7% in the period to EUR 31.6 million in 2009, due to an 18% increase in operating costs related to the increased activity. In 2009, in the supply business in Portugal, volumes supplied by EDP surged 484%, to 5.5TWh, showing a steady increase on a quarterly base. As a result of growth opportunities introduced by 2009/2010 tariffs defined by ERSE, free market expanded significantly (reaching 43% of total consumption in December 2009 versus 2.7% in December 2008), competition intensified and EDP’s share in volume supplied in the free market declined to 65%. By segment, residential and SMEs unveiled a good performance, both in terms of volumes per client and number of clients (+32% YoY), but the industrial segment was the main growth driver, with a strong recovery in both clients and volumes. Average selling price in Portuguese electricity retail retreated 3.1% as the higher weight of industrial consumption and lower margins stemming from current market conditions start taking its toll. The performance from supply business in Spain was marked by the end of the option to choose last resource supplier for all industrial and residential clients (excluding low-voltage consumers whose contracted power is less than or equal to 10KW) as from July 2009. In 2009, electricity volumes supplied to our liberalised clients in Spain rose 30% reflecting a sharp expansion in the client base (+350%), prompted by the switching of residential clients, with lower per capita consumption, and by the agreement reached with CIDE (association of small electricity distribution companies) in July 2009. Average selling price was flat, at EUR 62/MWh, reflecting the significant contribution from contracts closed in late 2008 (when electricity forward prices were at higher levels), on the one hand, and lower prices implicit in contracts recently closed, on the other hand. eBitda from iberian distribution business decreased 10% (- EUR 76 million) when compared with the same period of 2008, to EUR 694 million. EBITDA of the distribution activity decreased 14% to EUR 590 million, on the back of: (1) human resources restructuring costs of EUR 13 million in 2009, compared with EUR 38 million in 2008, (2) the recognition, in 2008, of the 2007 tariff deficit totaling EUR 86 million and (3) the recovery, through 2008 electricity tariffs, of EUR 108 million relative to previous years tariff deviations. Note that in 2008, following regulatory changes, tariff deviations are now recognized in the g

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annual report 2009 financial analysis Gas Natural in 31st December 2009, which consumption (approximately 1.1 TWh/year) will be accounted from 1st January 2010 onwards. In Portugal, EDP initiated operations in the industrial segment in April, with 983 GWh supplied till the end of 2009. eBitda from wind power generation activity increased by 24% (+EUR 105 million) to EUR 543 million reflecting: (1) a 25% YoY increase of its installed capacity to 5,491 MW (2) a 40% increase on wind power output and (3) a decline in spot energy prices in Spain and USA. Installed capacity of EDP Renováveis increased by 1,091 MW in 2009 representing a 25% YoY increase. As a consequence, EDP Renováveis currently manages a portfolio of 5,491 MW of capacity (or 6,227 MW of gross capacity). From 2009 EDP Renováveis total additions of 1,091 MW, as referred above, 700 MW were installed in USA, 169 MW in Spain, 42 MW in Portugal, 10 MW in Belgium and 35 MW in France and 120 MW in Poland. In Brazil 14 new MW were added through acquisition in March 2009. Additionally in Portugal, the consortium Eólicas de Portugal (consolidated by equity method) installed 85 MW. In Europe, wind output increased 28% YoY on the back of a 15% YoY increase of installed capacity and average load factor flat YoY at 26%.In USA, electricity output went up 51% YoY following a 36% YoY increase of installed capacity while load factors fell by 2% YoY to 32%. Average selling price in USA fell 2% YoY in 2009. Average price of our long-term selling contracts (PPAs) rose 8% YoY in 2009, reflecting higher prices from the last contacts added during 2008 and 2009 to our PPAs portfolio. Note that in 2009, our wind power output sold through PPAs amounted to 4,798 GWh (81% of our output in USA). Average selling price for wind power sold in merchant markets fell 51% YoY in 2009, reflecting the deterioration of electricity prices in US, namely the lower power demand from the industrial segment and lower gas prices. Average wind tariffs in Spain fell 17% YoY in 2009 reflecting the 44% YoY decline in the achieved pool price and forward sales at higher prices which had a positive impact of cEUR 6.0/MWh on average selling price in Spain or EUR 19 million at gross profit level. Note that 21% of EDP Renováveis wind power output in Spain in 2009 (697 GWh) were protected by the cap & floor system, 61% of output (1,991 GWh) were sold forward while just 18% of output (587 GWh) were exposed to pool price performance. energias do Brasil’s eBitda in 2009 decreased 2% YoY (- EUR 12 million) following to EUR 550,2 million impacted by the 5% depreciation in 2009 of average Real/Euro exchange rate, (- EUR 27 million impact on EBITDA 2009). In local currency EBITDA increased 3% YoY to BRL 1,531 million. Note that 2009 YoY comparison is impacted by some non recurrent issues from which we highlight: (1) conclusion of asset swap with Rede Group in September 2008. The distribution company Enersul was excluded from consolidation perimeter while Lajeado hydro plant (73% owned against 27.65% before) started to be fully consolidated. From September 1st 2008 onwards, Investco consolidation method changed from proportional to full consolidation and Enersul was fully 142 excluded from consolidation) (2) BRL 77 million gains in 2008 generation and supply activities. EBITDA of the distribution activity of Energias do Brasil decreased 9% in the period (in local currency) reflecting the exclusion of Enersul from the consolidation perimeter since September 2008. Excluding Enersul’s contribution in 2008, EBITDA in 2009 increased 11% due to the positive impact of the annual tariff readjustments (Escelsa since August 2009 and Bandeirante since October 2009) and to the increase of 2% in the volume sold to final clients. EBITDA in our electricity generation activities in Brazil rose 27% in 2009 due to the asset swap explained above, what implied an increase of 25% of the volumes sold in 2009 (+1.574 GWh). The installed of Energias do B

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Expansion capex decreased EUR 282 million reflecting the mixed impact from lower capex in wind operations (-EUR 400 million partially stemming from EUR 156 million cash grants received in US) and higher capex in new conventional generation capacity in Iberia (+EUR 227 million driven by the payment of hydro concession rights higher than 2008). In 2009, EDP installed 1,996 MW of new capacity, the bulk of which in wind (1,077 MW, of which 700 MW in US and 376 MW in Europe) and CCGTs in Iberia (863 MW in Portugal). Maintenance capex retreated EUR 101 million supported by (i) lower environmental investments (-EUR 59 million) in Portugal (PPA coal plant Sines) and Spain (coal plants Aboño and Soto 3) and (ii) exclusion of Enersul from the consolidation perimeter, as from September 2008. In wind power, capex adjusted for cash grants received totaled EUR 1,690 million in 2009: 60% in Europe, 40% in US, reflecting the completion of 1,077 MW and the construction of 686 MW: 308 MW in Spain, 280 MW in Europe (Romania, France and Belgium); 99 MW in USA. In the Iberian liberalized activities, capex increased by EUR 187 million in 2009, to EUR 704 million, fuelled by investments in new hydro capacity in Portugal (EUR 406 million): (1) EUR 232 million payment of Fridão (238 MW) and Alvito (225 MW) hydro power plants concession rights (due to start-up in Dec-15); (2) construction works in 4 hydro power plants (repowerings at Picote II, Bemposta II and Alqueva II, totaling 693 MW; new dam of Baixo Sabor with 171 MW) proceeded, absorbing EUR 157 million in 2009; (3) launch of construction works at Ribeiradio (77 MW) and Venda Nova III (736 MW). In CCGTs, capex totaled EUR 246 million in 2009: (1) EUR 80 million in Lares 1 and 2 (863 MW), which started operations in October/November 2009; (2) EUR 165m in Soto 5 (424 MW), raising the cumulated capex incurred to EUR 234 million (83% of total). Capex at our electricity and gas regulated networks in Iberia was flat in 2009 at EUR 367 million. Capex in the electricity distribution activity in Portugal represented 67% of total capex in this area. In Brazil, capex totaled EUR 259m in 2009: i) EUR 131 million was spent in new generation capacity, with the construction of Pecém PPA coal plant (720 MW, 50% owned by Energias do Brasil) due to start-up in December 2011, and the conclusion of 36 MW of new mini-hydro capacity with PPA (Santa Fé, Rio Bonito and Suíça) and ii) EUR 110 million invested in the electricity distribution grid (maintenance). In 2009, the Group’s (nominal) consolidated debt totaled EUR 16,127 million. When compared to December 2008, the Group’s debt was nearly EUR 1,466 million higher, mostly due to the payment of dividends and early funding of future needs, through the issuance of bonds. On the other hand, EDP Group’s consolidated net debt at the end of 2009 stood at EUR 14,007 million, having increased 1% from year-end 2008. The EUR 2,2734 million difference between gross and net debt, was mainly due to cash and cash equivalents held by EDP SA and EDP Finance BV (EUR 1,249 million), by the Group’s Brazilian subsidiaries (EUR 441 million) and by EDP Renováveis (EUR 481 million). eur milllion debt - short term Bonds Bank loans Other loans Commercial paper debt - long term Bonds Bank loans Other loans nominal debt interest accrued Fair value hedge adjustments consolidated debt dez 2009 2,549 581 318 10 1,640 13,578 8,150 5,332 96 16,127 246 -92 16,281 dez 2008 3,669 1,085 1,204 8 1,372 10,992 5,989 4,923 80 14,661 142 -117 14,686 11% change -31% -46% -74% 25% 19% 24% 36% 8% 20% 10% In terms of maturity, EDP Group’s consolidated debt breaks down into 16% in short-term debt and borrowings and 84% in medium- and long-term debt and borrowings. In relation to short-term financing and treasury management, EDP SA continues to favor the use of Euro Commercial Paper, an instrument that provides access to a large investor base at very competitive pricing, ensuring the necessary flexibility for ef

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annual report 2009 financial analysis In 2009, EDP Serviço Universal, sold without recourse, to Tagus – Sociedade de Titularização de Créditos, S.A. (“Tagus”), the rights to receive the full amount of the positive adjustments to the electricity tariffs, accrued of the respective financial costs, in respect of the costs with the acquisition of electricity incurred in 2007 and estimated for 2008 (transaction concluded in March), as well as, in respect of the costs estimated for 2009 with the implementation of energetic policies relating to over costs incurred with electricity generation under the Special Regime (transaction concluded in December). The net proceeds to EDP Serviço Universal amounted to approximately EUR 1,639 million, of which, EUR 1.204 refer to the years of 2007 and 2008 and EUR 435 million refer to 2009. In March 2009, EDP SA and EDP Finance BV signed a three year revolving credit facility in the amount of EUR 1,600 million. This new facility replaces the existing EUR 1,300 million revolving credit facility signed in 2004 that was due to mature in July 2009, keeping the same purpose: backup credit facility. The credit line is currently undrawn. The facility was self-arranged as a Club Deal and involved 19 domestic and international banks. Maintaining a financial management policy, by the end of June 2009 EDP SA had access to EUR 1,953 million of available credit lines and EUR 650 million of commercial paper with underwriting commitment, of which EUR 350 million were fully available. It is the Group’s policy to maintain its liquidity sources with several banks. By the end of 2009, the average cost of debt of the EDP Group was 4.0% per year and approximately 50% of its debt and borrowings had a fixed rate. GloBal scale s&p edp s.a. e edp Finance B.V. Hc energía energias do Brasil Bandeirante escelsa brAA-/Posit BB-/brA+/Stab 16/6/08 16/6/08 A-/Neg/A-2 last update 4/8/09 deBt By currency In terms of currencies, the USD financing contracted to fund the purchase and capex of Horizon justifies the Group’s exposure to USD (20%). Euro continues to be the main funding currency of the EDP Group. 20% 8% 72% Euro BRL USD In June 2009, Moody’s downgraded the senior unsecured ratings of EDP S.A. and EDP Finance B.V. to “A3”/”Prime-2” with stable outlook from “A2”/”Prime-1” with negative outlook. On the other hand, S&P, reaffirmed, in August, its ‘A-/A-2’ long and short-term corporate credit ratings on EDP SA and EDP Finance BV, having, however, revised its outlook from stable to negative, reflecting increasing uncertainty about EDP’s ability to deliver and maintain credit metrics in line with the ratings in the intermediate term. moody’s A3/Stab/P2 Baa1/Stab/P2 Ba1/Aa2.br/Stab Baa3/Aa1.br/Stab Baa3/Aa1.br/Stab last update 9/6/09 9/6/09 4/3/09 4/3/09 4/3/09 Fitch A-/Stab/F2 A-/Stab/F2 last update 6/2/09 6/2/09 144

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financial statements EDP - Energias de Portugal Consolidated Income Statement for the years ended 31 December 2009 and 2008 2009 Notes Continuing operations (Thousand Euros) 2008 Continuing operations (Thousand Euros) Discontinued operations (Thousand Euros) Total (Thousand Euros) Turnover Cost of consumed electricity Cost of consumed gas Changes in inventories and cost of raw materials and consumables used 6 6 6 6 12,198,183 -5,340,458 -641,183 -1,111,229 5,105,313 13,671,204 -6,558,250 -823,200 -1,544,024 4,745,730 222,859 -69,023 -2,381 151,455 13,894,063 -6,627,273 -823,200 -1,546,405 4,897,185 Other operating income / (expenses) Other operating income Supplies and services Personnel costs Employee benefits Other operating expenses 7 8 9 9 10 224,790 -768,202 -540,036 -158,353 -500,564 -1,742,365 3,362,948 226,242 -707,783 -557,676 -159,400 -454,918 -1,653,535 3,092,195 -27,994 -1,277,459 110,712 1,897,454 481,732 1,175,092 -2,112,605 34,687 1,476,360 -274 266 -274,266 2,431 -27,985 -15,998 -1,800 -45,362 -88,714 62,741 -4,077 -29,009 2,885 32,540 11,005 -16,194 27,351 -9 325 -9,325 228,673 -735,768 -573,674 -161,200 -500,280 -1,742,249 3,154,936 -32,071 -1,306,468 113,597 1,929,994 481,732 1,186,097 -2,128,799 34,687 1,503,711 -283 591 -283,591 Provisions Depreciation and amortisation expense Compensation of amortisation and depreciation 11 12 12 -74,685 -1,429,711 111,015 1,969,567 Gains / (losses) on the sale of financial assets Other financial income Other financial expenses Share of profit in associates Profit before income tax Income tax expense Profit after income tax and before gains / (losses) on sale of discontinued operations Gains / (losses) on sale of discontinued operations Net profit for the year Attributable to: Equity holders of EDP Minority interests Net profit for the year Earnings per share (Basic and Diluted) - Euros 13 14 14 59,703 1,036,374 -1,523,083 25,151 1,567,712 15 -399 -399,765 765 1,167,947 45 1,167,947 1,202,094 1,202,094 18,026 -8,448 9,578 1,220,120 -8,448 1,211,672 32 1,023,845 144,102 1,167,947 1,089,232 112,862 1,202,094 0.30 2,297 7,281 9,578 0.00 1,091,529 120,143 1,211,672 0.30 29 0.28 LISBON, 4 MARCH 2010 THE ACCOUNTANT N.º 17713 MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS The following notes form an integral part of these financial statements The following notes form an integral part of these financial statements 145

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annual report 2009 financial statements EDP - Energias de Portugal Consolidated Balance Sheet as at 31 December 2009 and 2008 Notes 2009 (Thousand Euros) 2008 (Thousand Euros) Assets Property, plant and equipment Intangible assets Goodwill Investments in associates Available for sale investments Deferred tax assets Trade receivables Debtors and other assets Total Non-Current Assets Inventories Trade receivables Debtors and other assets Tax receivable Financial assets at fair value through profit or loss Cash and cash equivalents Assets classified as held for sale Total Current Assets Total Assets 23 24 25 26 27 28 39 16 17 18 20 21 22 24 25 24,093,738 2,806,714 3,159,832 175,272 443,117 661,335 114,821 1,942,970 33,397,799 273,376 1,893,313 1,865,016 557,641 84,852 2,189,560 6,863,758 40,261,557 21,249,965 2,648,792 3,104,979 172,754 350,887 539,878 112,044 2,637,703 30,817,002 276,800 1,646,613 1,632,172 544,740 83,227 713,587 30,828 4,927,967 35,744,969 Equity Share capital Treasury stock Share premium Reserves and retained earnings Consolidated net profit attributable to equity holders of EDP Total Equity attributable to equity holders of EDP Minority interests Total Equity 32 29 30 29 31 3,656,538 -119,784 501,992 2,228,560 1,023,845 7,291,151 2,687,537 9,978,688 3,656,538 -126,532 501,992 1,243,293 1,091,529 6,366,820 2,200,605 8,567,425 Liabilities Financial debt Employee benefits Provisions Hydrological correction account Deferred tax liabilities Trade and other payables Total Non-Current Liabilities Financial debt Trade and other payables Tax payable Liabilities classified as held for sale Total Current Liabilities Total Liabilities Total Equity and Liabilities 34 37 38 39 34 35 36 33 22 37 13,486,499 1,879,704 342,755 112,631 758,893 4,674,269 21,254,751 2,794,481 5,305,631 928,006 9,028,118 30,282,869 40,261,557 10,874,311 1,833,887 323,719 237,822 675,737 4,862,651 18,808,127 3,812,014 4,153,100 388,462 15,841 8,369,417 27,177,544 35,744,969 LISBON, 4 MARCH 2010 THE ACCOUNTANT N.º 17713 MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS The following notes form an integral part of these financial statements 146 The following notes form an integral part of these financial statements

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EDP - Energias de Portugal Consolidated Statement of Comprehensive Income for the years ended 31 December 2009 and 2008 (Thousand Euros) 2009 Equity holders of EDP Net profit for the year Minority Interests 144,102 242,145 -6,666 2,192 405 -1,245 403 237,234 381,336 2008 Equity holders of EDP 1,091,529 -235,599 -56,667 17,112 -88,324 13,504 -136,790 4,156 -482,608 608,921 Minority Interests 120,143 -210,935 -2,447 996 1,779 -3,677 1,250 -213,034 -92,891 1,023,845 259,877 135,097 -38,780 144,929 -14,864 -85,239 1,341 402,361 1,426,206 Exchange differences arising on consolidation Fair value reserve (cash flow hedge) Tax effect from the fair value reserve (cash flow hedge) Fair value reserve (available for sale investments) Tax effect from the fair value reserve (available for sale investments) Actuarial gains / (losses) Tax effect from the actuarial gains / (losses) Other comprehensive income for the year, net of income tax Total comprehensive income for the year The following notes form an integral part of these condensed financial statements The following notes form an integral part of these financial statements 147

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annual report 2009 financial statements EDP - Energias de Portugal Consolidated Statement of Changes in Equity for the years ended 31 December 2009 and 2008 (Thousand Euros) Equity attributable to equity holders of EDP 6,264,146 Total Equity Balance as at 31 December 2007 Comprehensive income: Net profit for the year Changes in the fair value reserve (cash flow hedge) net of taxes Changes in the fair value reserve (available for sale investments) net of taxes Actuarial gains / (losses) net of taxes Exchange differences arising on consolidation Total comprehensive income for the year Transfer to legal reserve Dividends paid Dividends attributable to minority interests Purchase and sale of treasury stock Share-based payments Minority interests resulting from EDP Renováveis IPO Purchase of treasury stock - Energias do Brasil Assets swap - Energias do Brasil Minority interests resulting from PPA Changes in minority interests resulting from acquisitions and equity increases Other reserves arising on consolidation Balance as at 31 December 2008 Comprehensive income: Net profit for the year Changes in the fair value reserve (cash flow hedge) net of taxes Changes in the fair value reserve (available for sale investments) net of taxes Actuarial gains / (losses) net of taxes Exchange differences arising on consolidation Total comprehensive income for the year Transfer to legal reserve Dividends paid Dividends attributable to minority interests Purchase and sale of treasury stock Share-based payments Sale of treasury stock - Energias do Brasil Changes in minority interests resulting from acquisitions / sales and equity increases Other reserves arising on consolidation Balance as at 31 December 2009 7,278,758 Share capital 3,656,538 Share premium 501,992 Legal reserve 418,730 Reserves and retained earnings 1,487,156 Fair value reserve (Cash flow hedge) 5,032 Fair value reserve (AFS investments) 118,858 Exchange differences 141,581 Treasury stock -65,741 Minority interests 1,014,612 1,211,672 -41,006 -73,041 -135,061 -446,534 516,030 -454,937 -42,633 -71,094 1,801 1,128,248 -190,383 402,025 9,436 -10,491 665 8,567,425 1,167,947 91,843 130,470 -84,740 502,022 1,807,542 -507,153 -74,691 2,845 2,062 166,621 15,338 -1,301 9,978,688 3,656,538 3,656,538 501,992 501,992 25,108 443,838 27,549 471,387 1,091,529 -132,634 958,895 -25,108 -454,937 -8,971 469 18,369 -386 1,975,487 1,023,845 -83,898 939,947 -27,549 -507,153 -1,941 100 371 2,379,262 -39,555 -39,555 -34,523 96,317 96,317 61,794 -74,820 -74,820 44,038 130,065 130,065 174,103 -235,599 -235,599 -94,018 259,877 259,877 165,859 -62,123 1,332 -126,532 4,786 1,962 -119,784 1,091,529 -39,555 -74,820 -132,634 -235,599 608,921 -454,937 -71,094 1,801 18,369 -386 6,366,820 1,023,845 96,317 130,065 -83,898 259,877 1,426,206 -507,153 2,845 2,062 371 7,291,151 120,143 -1,451 1,779 -2,427 -210,935 -92,891 -42,633 1,128,248 -190,383 383,656 9,436 -10,491 1,051 2,200,605 144,102 -4,474 405 -842 242,145 381,336 -74,691 166,621 15,338 -1,672 2,687,537 The following notes form an integral part of these financial statements 148 The following notes form an integral part of these financial statements

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EDP - Energias de Portugal Consolidated and Non-Consolidated Cash Flow Statements for the years ended 31 December 2009 and 2008 (Thousand Euros) Group Dec 2009 Operating activities Cash receipts from customers Proceeds from tariff adjustments securitization Cash paid to suppliers Cash paid to personnel Concession rents paid Other receipts / (payments) relating to operating activities Net cash from operations Income tax received / (paid) Net cash from operating activities Discontinued operations Continuing operations 11,478,194 1,639,142 -7,924,642 -680,885 -255,684 -213,925 4,042,200 -120,531 3,921,669 3,921,669 Dec 2008 12,136,628 177,111 -9,298,076 -848,195 -221,974 -45,278 1,900,216 -155,709 1,744,507 68,898 1,675,609 Company Dec 2009 1,729,310 -1,695,918 -54,904 -34,890 -56,402 6,237 -50,165 Dec 2008 2,269,327 -2,212,431 -36,942 -115,716 -95,762 15,982 -79,780 Investing activities Cash receipts relating to: Financial assets EDP Renováveis IPO Property, plant and equipment and intangible assets Investment grants Interest and similar income Dividends Cash payments relating to: Financial assets Changes in cash resulting from perimeter variations Property, plant and equipment and intangible assets 319,022 2,836 161,879 87,563 48,766 620,066 -451,571 10,447 -3,417,533 -3,858,657 249,252 1,538,958 30,116 92,560 117,582 34,971 2,063,439 -425,223 -4,243 -4,367,284 -4,796,750 -2,733,311 -49,094 -2,684,217 4,435 798 323,519 645,078 973,830 -121,042 -16,327 -137,369 836,461 153,995 1,849 5 389,522 418,135 963,506 -124,903 -33,926 -158,829 804,677 Net cash from investing activities Discontinued operations Continuing operations Financing activities Receipts / (payments) relating to loans and related interest Interest and similar costs Cash grants Share capital and share premium increases Receipts / (payments) relating to derivative financial instruments Dividends paid Treasury stock sold / (purchased) Receipts from wind activity institutional partnerships - USA Net cash from financing activities Discontinued operations Continuing operations Changes in cash and cash equivalents Effect of exchange rate fluctuations on cash held Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (*) Discontinued operations Cash and cash equivalents from continuing operations at the end of the year (*) See details of "Cash and cash equivalents" in note 28 to the Financial Statements. -3,238,591 -3,238,591 1,188,937 -528,581 155,946 9,057 54,710 -507,153 2,107 333,528 708,551 708,551 1,391,629 84,344 713,587 2,189,560 2,189,560 1,710,414 -712,902 101,936 -454,937 -72,623 319,985 891,873 12,263 879,610 -96,931 -54,193 864,711 713,587 32,067 681,520 650,249 -420,671 193,898 -507,153 4,169 -79,508 -79,508 706,788 1,689 182,879 891,356 891,356 389,037 -510,466 -19,725 -454,937 -65,536 -661,627 -661,627 63,270 119,609 182,879 182,879 The following notes form an integral part of these financial statements The following notes form an integral part of these financial statements 149

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annual report 2009 financial statements EDP - Energias de Portugal, S.A. Company Income Statement for the years ended 31 December 2009 and 2008 Notes 2009 (Thousand Euros) 2008 (Thousand Euros) Turnover Cost of consumed electricity Changes in inventories and cost of raw materials and consumables used 6 6 6 1,755,564 -1,192,863 -360,684 202,017 2,322,526 -1,830,374 -400,351 91,801 Other operating income / (expenses) Other operating income Supplies and services Personnel costs Employee benefits Other operating expenses 7 8 9 9 10 8,453 -99,170 -16,262 -197 -17,610 -124,786 77,231 20,764 -107,347 -10,003 -177 -11,447 -108,210 -16,409 -1,519 -5,805 -23,733 15,164 2,282,728 -1,796,055 478,104 72,874 550,978 Provisions Depreciation and amortisation expense 11 12 -187 -6,935 70,109 Gains / (losses) on the sale of financial assets Other financial income Other financial expenses Profit before income tax Income tax expense Net profit for the year 13 14 14 -10 2,162,520 -1,574,110 658,509 15 -28,488 630,021 LISBON 4 MARCH 2010 LISBON, THE ACCOUNTANT N.º 17713 MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS The following notes form an integral part of these financial statements 150 The following notes form an integral part of these financial statements

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EDP - Energias de Portugal, S.A. Company Balance Sheet as at 31 December 2009 and 2008 Notes 2009 (Thousand Euros) 2008 (Thousand Euros) Assets Property, plant and equipment Intangible assets Investments in subsidiaries Investments in associates Available for sale investments Deferred tax assets Debtors and other assets Total Non-Current Assets Inventories Trade receivables Debtors and other assets Tax receivable Financial assets at fair value through profit or loss Cash and cash equivalents Total Current Assets Total Assets Equity Share capital Treasury stock Share premium Reserves and retained earnings Net profit for the year Total Equity 29 30 29 31 3,656,538 -113,689 501,992 1,868,007 630,021 6,542,869 3,656,538 -120,437 501,992 1,681,607 550,978 6,270,678 23 24 25 26 27 28 16 17 19 20 21 22 25 123,562 33 9,535,843 45,398 238,401 4,537,916 14,481,153 11,351 97,432 1,727,737 44,545 891,356 2,772,421 17,253,574 107,038 41 9,506,408 49,773 134,159 60,716 5,911,157 15,769,292 27,744 18,390 2,830,973 95,437 232 182,879 3,155,655 18,924,947 Liabilities Financial debt Provisions Hydrological correction account Deferred tax liabilities Trade and other payables Total Non-Current Liabilities Financial debt Trade and other payables Tax payable Total Current Liabilities Total Liabilities Total Equity and Liabilities 34 37 38 34 36 33 22 37 1,962,393 18,637 112,631 80,489 2,824,741 4,998,891 4,194,840 1,032,380 484,594 5,711,814 10,710,705 17,253,574 2,859,631 79,014 237,822 2,401,840 5,578,307 5,360,236 1,704,896 10,830 7,075,962 12,654,269 18,924,947 LISBON, 4 MARCH 2010 THE ACCOUNTANT N.º 17713 MANAGEMENT THE EXECUTIVE BOARD OF DIRECTORS The following notes form an integral part of these financial statements The following notes form an integral part of these financial statements 151

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annual report 2009 financial statements EDP - Energias de Portugal, S.A. Company Statement of Changes in Equity for the years ended 31 December 2009 and 2008 (Thousand Euros) Reserves and retained earnings 1,711,896 Fair value reserve (Cash flow hedge) -9,721 Fair value reserve (AFS investments) 49,361 Total Equity Balance as at 31 December 2007 Comprehensive income: Net profit for the year Changes in the fair value reserve (cash flow hedge) net of taxes Changes in the fair value reserve (available for sale investments) net of taxes Total comprehensive income for the year Transfer to legal reserve Dividends paid Purchase and sale of treasury stock Share-based payments Balance as at 31 December 2008 Comprehensive income: Net profit for the year Changes in the fair value reserve (cash flow hedge net of taxes Changes in the fair value reserve (available for sale investments) net of taxes Total comprehensive income for the year Transfer to legal reserve Dividends paid Purchase and sale of treasury stock Share-based payments Balance as at 31 December 2009 6,263,055 Share capital 3,656,538 Share premium 501,992 Legal reserve 418,730 Treasury stock -65,741 550,978 951 -26,171 525,758 -454,937 -64,999 1,801 6,270,678 3,656,538 501,992 25,108 443,838 550,978 550,978 -25,108 -454,937 -8,971 469 1,774,327 951 951 -8,770 -26,171 -26,171 23,190 -56,028 1,332 -120,437 630,021 49,874 94,542 774,437 -507,153 2,845 2,062 6,542,869 3,656,538 501,992 27,549 471,387 630,021 630,021 -27,549 -507,153 -1,941 100 1,867,805 49,874 49,874 41,104 94,542 94,542 117,732 4,786 1,962 -113,689 The following notes form an integral part of these financial statements 152 The following notes form an integral part of these financial statements

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notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 1. Economic activity of EDP Group The Group’s parent company, EDP – Energias de Portugal, S.A. (EDP, S.A.), was incorporated in 1976 as a result of the nationalisation and merger of the major Portuguese companies in the electricity sector operating in mainland Portugal. EDP S.A.'s head office is located in Lisbon at Praça Marquês de Pombal, 12, 6th floor. During 1994, as established by Decree-laws 7/91 and 131/94, the EDP Group (EDP Group or Group) was set up following the split up of EDP, S.A., which led to a number of directly or indirectly wholly owned subsidiaries of EDP, S.A. The Group’s businesses are currently focused on the generation, distribution and supply of electricity and distribution and supply of gas. Although complementary, the Group also operates in related areas such as engineering, laboratory tests, vocational training and property management. The EDP Group operates essentially in the Iberian (Portugal and Spain) and American (Brazil and the United States of America) energy sectors. Activity in the energy sector in Portugal Electricity The National Electricity System (SEN) basis of organization, operations and activities are established by the Decree-Law 29/2006 of 15 February, which transposes the principles of the Directive n.º 2003/54/CE, and the Decree-Law 172/2006 of 23 August with the wording of DL 264-2007, of 24 July. The National Electricity System (SEN) includes the activities of generation and supply of electricity under free competition conditions, subject to licensing, and the activities of transmission and distribution provided through the award of public service concessions. Transmission, distribution and supply of last resort activities are subject to regulation from Entidade Reguladora dos Serviços Energéticos – ERSE (Energy Sector Regulator), which is responsible for the preparation, issuance and enforcement of regulations and for establishing the tariffs and prices related to network usage – access tariffs – and electricity supply for clients in the regulated market - electricity tariffs charged by the Supplier of Last Resort. Electricity transmission is ensured by the National Transportation Network (RNT) and is carried out under public service concessions, exclusively by REN – Rede Eléctrica Nacional, S.A., for a period of 50 years. Generation The generation of electricity covers the generation under ordinary and special regimes. Under the ordinary regime, where EDP Group is represented by EDP Gestão da Produção, S.A., electricity is generated and sold under free market conditions, in organised markets or through bilateral agreements, being subject only to licensing. The special regime (PRE) allows producers to deliver electricity to the network, through bilateral agreements with the Supplier of Last Resort (CUR), being remunerated based on the principle of the costs avoided to the system, plus an environmental reward representing the benefits of using renewable energy resources. The PRE is subject to specific legislation, namely to promote the use of endogenous renewable resources, cogeneration or micro generation. The EDP Group is present in this segment through its subsidiaries EDP Gestão da Produção, S.A. and Enernova – Novas Energias, S.A., among others. In January 2005, following the publication of Decree-Law 240/2004 of 27 December, the EDP Group signed the early termination of contracts for the Power Purchase Agreements (PPAs) related to the binding electricity production plants of the EDP Group. This Decree-Law established the creation of a compensation mechanism to maintain the contractual balance (CMEC) attributed to the bounded producers, which includes a significant portion of the EDP Group's generation activity in Portugal. According to this legislation, the effects of the termination agreements were suspended until the launch of the Iberian Electricity Market (MIB

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Gas In the distribution and commercialization activity for natural gas, EDP Group develops its activity in Portugal through its subsidiaries Portgás, S.A. EDP Group is present in the commercialization of natural gas, under the regulated market (EDP Gás Serviço Universal) and free market (EDP Gás.com). EDP Gás.com, with a trading license in the free market since 2008, began operating in early 2009. Additionally, the Group develops the supply business of propane gas, through EDP Gás GPL S.A. On 15 June 2009, the tariffs set by ERSE were published for the years 2009-2010. The income allowed to Portgás S.A. include the initial revaluation of its assets (with reference to 31.12.2007), approved by the Finance Ministry. Activity in the energy sector in Spain Electricity In Spain, Hidroeléctrica del Cantábrico (Hidrocantábrico) is the parent company of an industrial group that operates in the electricity and gas sectors. In the electricity sector, Hidrocantábrico generates, transports, distributes and supplies electricity. Production is based essentially on traditional coal thermal power plants and, on a smaller scale, on hydroelectric and nuclear power plants. Electric Sector Regulation On 27 November 1997 the Electric Sector's Law 54/1997 was approved, which (i) implements the principles included in the Protocol signed on 11 December 1996 between the Ministry of Industry and Energy and the major electric power companies regarding greater liberalization and competition in the electricity sector and (ii) incorporates into Spanish law the provisions contained in Directive 96/92/EC on common rules for the internal electricity market. Additionally, on 6 July 2007 the Law 17/2007 of 4 July went into force, amending the Law 54/1997, to adapt it to the Directive 2003/54/EC of the European Council and Parliament of 26 June 2003 on common rules for the internal market of electricity. The referred Law 54/1997, as amended, provides the following basic principles: Generation Since 1 January 1998 electricity generation operates in a free market competition basis, which covers the purchase and sale of energy and other services related to the distribution of electricity. The market structure for electricity generation has been widened by Law 17/2007 of 4 July, in order to include the forwards market and the intraday market, as well as technical issues, complementary services, deviations management and unorganised markets. The organisation and regulation of the market for electric power generation is defined by Royal Decree 2019/1997 of 26 December. Electric energy is paid at the system's marginal price plus a component for the adjustment services necessary to ensure an adequate supply. Additionally, the Order ITC/2794/2007 of September 27, which revised the tariffs of electricity from 1 October 2007, replaced the concept of "power availability" of remuneration of electricity generation by the concept of "capacity payments" stated in Article 16 of the Law 54/1997 (amended by Law 17/2007), which sets a retribution of the availability service for the procurement of capacity in the medium term - and the incentive to invest in long-term capacity. The installation of new generation units is liberalised, subject to obtaining the necessary permits. Producers have the right to use primary energy sources in its generation units as deemed most appropriate, appropriate with the restrictions applicable to the environment. environment Transportation Red Eléctrica de España, S.A. performs the activities of Transmission Manager and System Operator, being responsible for its technical management, to ensure the continuity of supply and efficient management of the generation and transmission system. The responsibility for the economic management of the system is guaranteed by the Compañía Operadora del Mercado Español de Electricidad, S.A.

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Social Benefit The Royal Decree 6/2009 of 30 April, created the Social Benefit for some consumers who benefit from the tariff of last resort (TUR) and that meet certain social characteristics of consumption and purchasing power given by the Ministry of Industry, Tourism and Trade. The benefit will cover the difference between the value of TUR and the benchmark value and will be financed by the production companies. Gas Naturgás, a subsidiary of Hidrocantábrico which operates in the natural gas distribution and supply, owns all the EDP Group's gas assets in Spain. The distribution of natural gas in Spain is a regulated activity. Law 34/1998, approved on 7 October 1998, amended by Law 12/2007 of 2 July 2007, transposed to Spanish legislation the provisions of Directive 2003/55/EC of the European Parliament and Council of 26 June 2003 related with common rules for the natural gas internal market . The aforementioned legislation identifies the following operators in the context of the supply of natural gas by pipeline: § Transmission companies, owners of facilities for regasification of liquefied natural gas, transport or storage of natural gas; § Distribution companies, owners of distribution facilities, whose function is to distribute natural gas by pipeline, as well as build, maintain and operate such facilities in order to bring natural gas to the consumption points; § Suppliers, companies that hold access to the facilities owned by third parties, purchase natural gas for sale to consumers or other suppliers for the purpose of international exchanges; § Final consumers, who purchase natural gas for own consumption and direct consumers in the market, who have direct access to third party facilities. The Royal Decree 6/2000 of 23 June, also creates the figure of Technical Manager of the System, which is responsible for the technical management of the gas basic network and secondary transmission network, attributed to ENAGÁS, S.A. The system of provisioning and based on tariffs for natural gas distribution companies expired on 1 July 2008. Since then, new last resort rates have been set, that can benefit the consumers who are covered by the regulation (from July 2009 are those consuming less than 50,000 kWh / year), and that will be implemented by the suppliers, in accordance with Article 82 of Law 34/1998 that have an obligation to take delivery of last resort. Naturgás Comercializadora Energía, SAU. is one of the trading companies designated by the Ministry. For the supplier of last resort, the Royal Decree 485/2009 makes it possible for groups of companies that have, the obligation to provide last-resort electricity and gas, aggregate in a single company with both obligations (HC Energia Supplier of Last Resort currently comprises the delivery obligations of last resort for gas and electricity). Activity in the energy sector in Brazil Electricity In Brazil, the EDP Group generates, distributes and supplies electric energy through its subsidiary EDP Energias do Brasil, S.A. (EDP Energias do Brasil). In August 2008, 2008 Energias do Brasil made an exchange with "Grupo Grupo REDE REDE" of the entire interest held in Enersul (a distributor of electricity in the State of Mato Grosso do Sul) by the corporate shares held by Rede Energia in Rede Lajeado Energia S.A. ("Rede Lajeado") and Investco S.A. (" Investco "), as well as corporate shareholdings held by Rede Power in Rede Lajeado and Tocantins Energia S.A. This transaction enabled EDP Energias do Brasil to consolidate its position in the electricity generation sector in the State of Tocantins in northern Brazil. The Brazilian electricity sector has undergone major structural and institutional changes in recent years, having migrated from a monopoly run by the State to a market model, involving private capital. This market model includes the existence of two distinct systems, the regulated system and the liberalised system (or not regulated). Regulated System The Regulated Contrac

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Transmission The Brazilian transmission system, with a capacity above 230 kV, is divided into transmission and sub-transmission networks, depending on the disaggregation level of the consumers market. The primary network is responsible for the transmission of electricity to large consumers and the supply of energy to any consumer of high dimension. The secondary network is basically an extension of the primary network with the objective of delivering electricity to small consumers and providing energy to large industrial customers. Distribution The service concession arrangements for electricity distribution are allocated by tender and establish rules regarding price, regularity, continuity, safety, timeliness and quality of services and supplies provided to consumers and users. These arrangements also define penalties for possible irregularities. In most states, mainly in the North and Northeast, the concession area corresponds to the state boundaries. However, mainly in São Paulo and Rio Grande do Sul, the concessions for distribution may cover smaller areas than the state itself. In same cases, the concession area is extended beyond the geographical limits of the state where the distribution company is located. The distribution activity operates in a regulated environment, with tariffs determined in the context of incentive regulation ("price cap") with a remuneration basis in the assets used in the distribution energy service (BRR). The tariff also includes a part to cover the operating costs established from a standard company, the Reference Company (with costs that would be charged by an efficient operator and which acted in the concession region). The regulatory EBITDA has two parts, which (i) regulatory depreciation of BRR assets and (ii) return on capital prudently invested multiplied by the regulatory WACC, ie by the rate of weighted average cost of capital of sector companies. Finally, the tariffs also consider the costs of acquiring energy, hiring the use of transmission and sector-based as costs to be included in the tariff. The tariff portion that includes the regulatory remuneration, the depreciation charge and the value of the reference Company is called portion B. The costs of buying energy, hiring of basic network and charges, set up the portion A of the tariffs as set out in the concession contracts for distribution companies. Tariffs are updated annually based on changes occurred in portion A costs and in the correction of portion B costs, by the index of variation of IGPM, discounting productivity gains (factor X). The index adjustment is calculated to pass the variations in costs not manageable in Parcel A and Parcel B corrected. Periodically (on average every 4 years) there is a tariff revision, which results in a global review of costs, in the definition of a new BRR and a new Reference Company, with the capture of the productivity gains in the period between reviews. Supply The electricity suppliers that do not own electric assets, are authorised to act exclusively in the free market, selling or buying energy in quantity, conditions and prices freely negotiated. The commercialization of energy with a distributor is only possible through participation in the "Auction Set by the distributors", with the negotiation of contracts, for a maximum of two years, and commencement of energy delivery within a period not exceeding two years. Public Domain Assets In Brazil, fixed assets used in the distribution and the supply activities are binded to these services and can not be removed, sold, transferred or used as mortgage without the prior and express consent of the regulator (ANEEL). Activity in the Renewable energies sector In December 2007 the EDP Group incorporated EDP Renováveis, S.L. in Spain so as to concentrate the Group's subsidiaries in the renewable energies sector. On 4 Jul

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On 15th December the Spanish Government released the list of wind facilities included in the administrative register. Out of the 6.389 MW of wind capacity assigned by the Spanish Government, EDP Renováveis obtained 840 gross MW corresponding to 31 wind farms which represent 13% of the total allocated capacity. Regulatory framework for the activities in Portugal The Portuguese legal provisions applicable to the generation of electrical power based on renewable resources are currently established by Decree-Law No. 189/88 dated 27 May 1998, as amended by Decree-Law No. 168/99 dated 18 May 1999, Decree-Law No. 312/2001 dated 10 December 2001 and Decree-Law No. 339-C/2001 dated 29 December 2001. Also relevant is Decree-Law No. 33-A/2005, dated 16 February 2005, which establishes the current amounts used in the remuneration formula applicable to energy produced by means of renewable resources and the deadlines for the application of such remuneration formula. The main feature of the legal framework for renewable energy power generation in Portugal is that the national network operator or the regional distribution operator must purchase all electricity produced by renewable producers who hold an operating license. The construction and operation of a wind farm depends on the allocation of a network connection point issued by the State Energy Department "Direcção Geral de Geologia e Energia-DGGE”. The issue of the point of connection occurs upon the request of the promoters during limited periods of time set by the DGGE or by means of a public tender procedure. Award of connection points by direct negotiation is exceptional. Decree-Law No. 225/2007 dated 31 May, establishes a set of regulations associated to renewable energies, foreseen in the National Strategy for Energy, and has reviewed the formula used in estimating the remuneration of electricity supply generated by renewable power stations and delivered to the network of the National Electric System, as well as the procedures for the attribution of the available power in the same network and the deadlines to obtain licenses for the establishment of renewable power stations. Since 1 July, 2007, the Iberian electricity financial market ("MIBEL") has been fully operational, with daily transactions from both Portugal and Spain, including a forwards market that has operated since July 2006. Regulatory framework for the activities in the United States of America Federal, state and local energy laws and regulations regulate the development, ownership, business organization and operation of electric generating facilities and the sale of electricity in the United States. All project companies within the Group in the United States operate as exempt wholesale generators (“EWGs”) or qualifying facilities (“QFs”) under federal law or are dually certified. In addition, most of the project companies in the United States are regulated by the Federal Energy Regulatory Commission (“FERC”) and have market-based rates on file with FERC. The federal government regulates the wholesale electric energy sale and transmission business in interstate commerce through the Federal Energy Regulatory Commission (“FERC”), which draws its jurisdiction from the Federal Power Act (the “FPA”), and from other federal legislation such as the Public Utility Regulatory Policies Act of 1978 (“PURPA 1978”), the Energy Policy Act of 1992 (“EPACT 1992”) and the Energy Policy Act of 2005 (“EPACT 2005”). EWGs are owners or operators of electric generation (including producers of renewable energy, such as wind projects) that are engaged exclusively in the business of owning and/or operating generating facilities and selling electric energy at wholesale rates. An EWG cannot make retail sales of electric energy and may only own or operate the limited interconnection facilities necessary to connect its generating facility to the network. In certain states, approval of the construction of new electricity generating facilities, inc

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 In accordance with IFRS 3 – Business Combinations, adjustments to the provisional fair values that result from purchase price allocations to assets, liabilities and contingent liabilities, with impact on the amount of goodwill determined and registered in previous periods, originate a restatement of the comparative financial information, reflecting these adjustments on the income statement and balance sheet, with effect from the date of the acquisition. The preparation of financial statements in conformity with IFRS requires the Executive Board of Directors to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The issues involving a higher degree of judgment or complexity, or where assumptions and estimates are considered to be significant, are presented in note 3 (Critical accounting estimates and judgments in preparing the financial statements). b) Basis of consolidation The accompanying consolidated financial statements reflect the assets, liabilities and results of EDP, S.A. and its subsidiaries (Group or EDP Group) and the equity and results of its associates attributable to the Group. Subsidiaries Investments in subsidiaries where the EDP Group has control are fully consolidated from the date the Group assumes control over their financial and operating activities until the moment that control ceases to exist. Control is presumed to exist when the Group owns more than half of the voting rights. Control also exists when the Group has the power, directly or indirectly, to manage the financial and operating policies of the entity to obtain benefits from its activities, even if the percentage of shareholding is less than 50%. When the accumulated losses of a subsidiary attributable to minority interests exceed the minority interests in its equity, the excess is attributed to the Group and charged to the income statement as incurred. Profits subsequently reported by the subsidiary are recognised as profits of the Group until the losses attributable to the minority interests previously recognised by the Group have been recovered. Associates Investments in associates are accounted for by the equity method from the date the Group acquires significant influence to the date it ceases. Associates are entities over which the Group has significant influence, but not control, over its financial and operating policies. Generally, when the Group holds more than 20% of the voting rights of the investee it is presumed to have significant influence. If the Group holds, directly or indirectly, less than 20% of the voting rights of the investee, it is presumed not to have significant influence, unless such influence can be clearly demonstrated. The existence of significant influence by the Group is usually evidenced by one or more of the following: - Representation on the Executive Board of Directors or equivalent governing body of the investee; - Participation in policy-making processes, including participation in decisions about dividends and other distributions; - Existence of material transactions between the Group and the investee; - Interchange of managerial personnel; - Provision of essential technical information. The consolidated financial statements include the Group's attributable share of total reserves and profits or losses of associates, accounted for under the equity method. When the Group’s share of losses exceeds its interest in a

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When an interest in a subsidiary is disposed of, without a loss in control, the difference between the sale price and the book value of the net assets held by the Group, plus the carrying value of goodwill in that subsidiary, is recognised in the income statement of the period as a gain or loss resulting from the disposal. The dilution effect occurs when the percentage of interest in a subsidiary decreases without any sale of interest in that subsidiary, for example, if the Group does not participate proportionally in the share capital increase of that subsidiary. The Group recognises in the income statement of the period the gains and losses related to a dilution of interest in a subsidiary resulting from share capital increases or sale of an investment. Investments in foreign operations The financial statements of the foreign subsidiaries and associates of the Group are prepared using their functional currency, defined as the currency of the primary economic environment in which they operate. In the consolidation process, the assets and liabilities of foreign subsidiaries are translated into Euros at the official exchange rate at the balance sheet date. Regarding the investments in foreign operations that are consolidated using the full consolidation method, proportionate or equity method, the exchange differences between the amount of equity expressed in Euros at the beginning of the year and the amount translated at the official exchange rates at the end of the year, on a consolidated basis, are booked against reserves. Foreign currency goodwill arising on the acquisition of these investments is remeasured at the official exchange rate at the balance sheet date directly against reserves. The income and expenses of foreign subsidiaries are translated into Euros at the approximate exchange rates at the dates of the transactions. Exchange differences from the translation into Euros of the net profit for the period, arising from the differences between the rates used in the income statement and those prevailing at the balance sheet date are recognised in reserves. On disposal of a foreign subsidiary, the related exchange differences previously recognised in reserves, are accounted for in the income statement. Balances and transactions eliminated on consolidation Inter-company balances and transactions, including any unrealised gains and losses on transactions between Group companies, are eliminated in preparing the consolidated financial statements. Unrealised gains and losses arising on transactions with associates and jointly controlled entities are eliminated to the extend of the Group's interest in those entities. c) Foreign currency transactions Foreign currency transactions are translated at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currency are translated into Euros at the exchange rates at the balance sheet date. These exchange differences arising on translation are recognised in the income statement. Foreign currency non-monetary assets and liabilities accounted for at historical cost are translated using the exchange rates at the dates of the transactions. Foreign currency non-monetary assets and liabilities stated at fair value are translated into Euros at the exchange rates at the dates the fair value was determined. d) Derivative financial instruments and hedge accounting Derivative financial instruments are recognised on the trade date at fair value. value Subsequently, Subsequently the fair value of derivative financial instruments is remeasured on a regular basis, being the gains or losses on remeasurement recognised directly in the income statement, except for derivatives designated as cash flow hedging instruments. Recognition, in the income statement, of the resulting gains and losses on remeasurement of hedging derivatives depends on the nature of the risk being hedged and of the hedge model used. The fair value of derivative financial instru

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The accumulated foreign exchange gains and losses regarding the net investment and the related hedging recognised in equity are transferred to the income statement when the foreign entity is sold, as part of gain or loss resulting from the disposal. Effectiveness For an hedge relationship to be classified as such, in accordance with IAS 39, its effectiveness must be demonstrated. Therefore, the Group performs prospective tests at the inception date of the hedge and in each balance sheet date, to demonstrate the effectiveness at each balance sheet date, showing that any adjustments to the fair value of the hedged item attributable to the risk being hedged are offset by adjustments to the fair value of the hedging instrument. Any ineffectiveness is recognised in the income statement in the moment that occurs. e) Other financial assets The Group classifies its other financial assets at acquisition date, considering the underlying intention, in the following categories: Financial assets at fair value through profit or loss This category includes: (i) financial assets held for trading, acquired for the purpose of being traded in the short term, and (ii) financial assets designated at fair value through profit or loss at inception (fair value option). Available-for-sale investments Available-for-sale investments are non-derivative financial assets which: (i) the Group intends to hold for an undetermined period of time, or (ii) are designated as available for sale on initial recognition. Initial recognition, measurement and derecognition Purchases and sales of: (i) financial assets at fair value through profit or loss, and (ii) available-for-sale investments, are recognised on the trade date, which is the date on which the Group commits to purchase or sell the assets. Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, in which the transaction costs are recognised directly in the income statement. Financial assets are derecognised when (i) the contractual rights to receive their cash flows have expired, (ii) the Group has transferred substantially all risks and rewards of ownership or (iii) although retaining some, but not substantially all the risks and rewards of ownership, the Group has transferred control over the assets. Subsequent measurement After initial recognition, financial assets at fair value through profit or loss are subsequently carried at fair value, being the gains or losses arising from changes in their fair value recorded in the income statement. Available-for-sale investments are also subsequently carried at fair value, however, gains and losses arising from changes in their fair value are recognised in fair value reserves until the financial assets are derecognised or impaired, being the cumulative gains or losses previously recognised in fair value reserves recognised in the income statement. Foreign exchange differences relating to these assets are also recognised in fair value reserves, and in the income statement if arising from debt instruments Interest, instruments. Interest calculated using the effective interest rate method, method as well as dividends received are recognised in the income statement. statement The fair value of listed investments in active markets is based on current bid price. The Group determines the fair value of unlisted securities through (i) valuation methodologies, such as the price of similar recent arm’s length transactions and discounted cash flow techniques, and (ii) valuation assumptions based on market information. Financial assets whose fair value cannot be reliably measured are stated at cost, being any impairment loss booked against the income statement. Reclassifications between categories The Group does not transfer financial instruments into or out to

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Distributions related to equity instruments are deducted from equity, as dividends, when declared. Preference shares issued by the Group are considered as an equity instrument when the Group has no contractual obligation to redeem the shares and dividends are paid at the discretion of the Group. Preference shares issued by subsidiaries, classified as equity instruments and held by third parties, are included under minority interests. h) Property, plant and equipment Items of Property, plant and equipment are stated at acquisition cost less accumulated depreciation and impairment losses. On transition to IFRS, 1 January 2004, the Group decided to consider as deemed cost the revalued amount of property, plant and equipment in accordance with the Group's previous accounting policy, which was comparable in general terms to depreciated cost determined in accordance with IFRS. Subsequent costs are recognised as property, plant and equipment only when it is probable that future economic benefits associated with the item will flow to the Group. Repair and maintenance costs are charged to the income statement as incurred. The Group carries out impairment tests whenever events or circumstances may indicate that the book value of an asset exceeds its recoverable amount, being any impairment recognised in the income statement. The recoverable amount is the higher of net selling price and value in use, the latter being calculated by the present value of the estimated future cash flows obtained from continued use of the asset and its sale at the end of its useful life. Land is not depreciated. Depreciation of the other assets is calculated on a straight-line basis over their estimated useful lives, as follows: Number of years Buildings and other constructions Plant and machinery: Hydroelectric generation Thermoelectric generation Renewable generation Electricity distribution Other plant and machinery Transport equipment Office equipment and tools Other property, plant and equipment 8 to 50 32 to 65 25 to 40 20 10 to 40 5 to 10 4 to 25 4 to 10 10 to 25 Borrowing costs and other directly attributable costs Borrowing costs that are directly attributable to the acquisition or construction of assets are capitalised as part of the cost of the assets. A qualifying asset is an asset that needs a substantial period of time to be ready for its intended use or sale. The amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on those assets. The capitalisation rate corresponds to the weighted average of the borrowing costs applicable to the outstanding borrowings during the period. The capitalisation of borrowing costs begins when expenditures for the assets are being incurred, borrowing costs have been incurred and activities necessary to prepare all or part of the assets for their intended use or sale are in progress. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use or sale are completed. Other expenses directly attributable to the acquisition and construction of the assets, such as cost of consumed materials and personnel costs, are also capitalised as part of the cost of the assets. Government grants Government grants are initially booked as deferred revenue, under non current liabilities only when there is reasonable certainty that it will be received and that the Group will fulfil the grant term conditions. Grants that compensate the Group for incurred expenses are booked in income statement on a systematic basis, on the same period in which the expenses are incurred. Grants that compensate the Group for the acquisition of assets are recognised in income statement over the related assets useful life. Property, plant and equipment relating to EDP Distribuição's concessions and investment grants Under the terms of Decree-Law 344-B/82, low-tension electricity distribution concession does not involve the sale

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Concession rights on distribution of electricity and gas The concession rights on distribution of electricity in Brazil related to the investments in Bandeirante and Escelsa and the concession rights related to the distribution of gas, namely from Portgás and Setgás, are recorded as intangible assets and depreciated on a straight-line basis over the concession period, not exceeding 30 years. Concession rights to use the public hydric domain Concession rights to use the public hydric domain are booked as intangible assets and depreciated on a straight-line basis over the concession period, which currently does not exceed 45 years. EDP Group records as concession rights the financial compensations for the use of public domain assets, whenever this compensations are paid by the Group subsidiaries. Industrial property and other rights Industrial property and other rights are depreciated on a straight-line basis over the estimated useful life of the assets, which does not exceed 6 years. j) Leases The Group classifies its lease transactions as finance leases or operating leases based on the substance of the transaction rather than its legal form. A lease is classified as a finance lease if it transfers to the lessee substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. Operating leases Lease payments under operating lease contracts are recognised as an expense in the period to which they relate. Finance leases Finance leases are recognised by the lessee, at the inception of the lease, as assets and liabilities at the fair value of the leased assets which is equivalent to the present value of the future lease payments. Lease payments include the interest charges and the amortisation of the outstanding principal. The interest charges are recognised as costs over the lease period in order to produce a constant periodic rate of interest on the remaining balance of the liability. Lessors record assets held under finance leases as leased capital, at the net amount invested in the lease. Lease payments include the financial income and the amortisation of the outstanding principal. Financial results recognised reflect a constant periodic rate of return on the outstanding net balance of the lessor. Determining whether an Arrangement contains a Lease Following the issuance by International Financial Reporting Interpretations Committee (IFRIC) of IFRIC 4 - Determining whether an arrangement contains a lease, applicable from 1 January 2006, arrangements including transactions that, although do not take the form of a lease, convey the right to use an asset in return for a payment are recognised as leases, payment, leases provided that, that in substance, substance they comply with the requirements defined in the interpretation. interpretation k) Investment property The Group classifies as investment property, property held for capital appreciation and/or for rental purposes. Investment property is recognised initially at acquisition or production cost, including directly attributable transaction costs, and is subsequently measured at cost less accumulated depreciation and any impairment losses. Subsequent expenditures on investment property are only added to the cost of the asset when it is probable that additional future economic benefits will rise. l) Inventories Inventories are measured at the lower of acquisition cost and net realisable value. The cost of inventories includes purchases, conversion and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated selling costs. The cost of inventories is measured by using the weighted average method. CO2 licenses held by the Group for trade purposes are booked for as

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The Group’s pension plans are defined benefit plans, since the criteria used to determine the amount of the pension to be received by employees on retirement is usually dependent on one or more factors such as age, years of service and salary level. In compliance with IFRS 1, the Group decided, on the transition date as at 1 January 2004, to recognise the full amount of the deferred actuarial losses at that date against reserves. The Group’s pension liability for each plan is calculated annually at the balance sheet date, by independent experts individually for each plan, using the projected unit credit method. The discount rate used in the calculation is determined based on market interest rates of high quality corporate bonds denominated in the currency in which the benefits will be paid and that have similar maturity to the related pension liability. Actuarial gains and losses resulting from (i) differences between financial and actuarial assumptions used and actual amounts and (ii) changes in the actuarial assumptions, are recognised against equity, in accordance with the alternative method defined by IAS 19. The increase in past service costs arising from early retirements (retirements before the normal retirement age) is recognised in the income statement when incurred. The Group recognises as cost in the income statement the total net amount of (i) current service cost, (ii) interest cost, (iii) estimated return of the fund assets and (iv) the effect of early retirements. The assets of the plan comply with the recognition criteria established by IFRIC 14 - IAS 19 and the minimum funding requirements established by law or by contract. Defined contribution plans In Portugal, Spain and Brazil, the companies EDP Estudos e Consultoria, HC Energia, NEO and Bandeirante have defined contribution social benefit plans that complement those granted by the Social Welfare System, under which they pay an annual contribution to the plans, calculated in accordance with the rules established in each plan. Other benefits Medical benefits and other plans In Portugal and in Brazil (Escelsa) some EDP Group companies provide medical benefits during retirement and early retirement, through complementary benefits to those provided by the Social Welfare System. The medical benefits plans are classified as defined benefit plans, the liability being covered by provisions booked in the Group’s balance sheet. Measurement and recognition of the medical benefits liabilities are similar to those of the defined benefit plans pension liabilities, explained above. Variable remuneration paid to employees In accordance with the by-laws of some Group companies, the shareholders approve in the Annual General Meeting a variable remuneration to be paid to the management and employees (bonus), following a proposal made by the Executive Board of Directors. The variable remuneration is charged to the income statement in the year to which it relates. o) Provisions Provisions are recognised when: (i) the Group has a present legal or constructive obligation, obligation (ii) it is probable that settlement will be required in the future and (iii) a reliable estimate of the obligation can be made. Provisions for dismantling and decommissioning in electric power plants The Group accounts for provisions for dismantling and decommissioning of assets when there is a legal or contractual obligation at the end of assets’ useful life. Therefore, such provisions have been booked in the electric power plants to cover the cost of restoring the location and land to their original condition. The provisions are calculated at the present amount of expected future liability and are accounted for as part of the cost of the related property, plant and equipment being depreciated on a straight-line basis over the useful life of those assets. Decommissioning and dismantling provisions are remeasured on an annual basis based on the best estimate of the settlement amount. The unwinding of

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Current tax is the tax expected to be paid on the taxable income for the period, using tax rates enacted at the balance sheet date and any adjustment to tax payable in respect of previous years. Deferred taxes are calculated in accordance with the balance sheet liability method, considering temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, using the tax rates enacted or substantively enacted at the balance sheet date for each jurisdiction and that is expected to be applied when the temporary difference is reversed. Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. Deferred tax assets are recognised to the extent it is probable that future taxable profits will be available to absorb deductible temporary differences for taxation purposes. The Group compensates, as established in IAS 12, paragraph 74, the deferred tax assets and liabilities if, and only if: (i) the entity has a legally enforceable right to offset current tax assets against current tax liabilities; and (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. s) Earnings per share Basic earnings per share are calculated by dividing consolidated and the company net profit attributable to the equity holders of EDP, S.A. by the weighted average number of ordinary shares outstanding during the period, excluding the average number of shares held by the Group and by EDP, S.A., respectively. For the diluted earnings per share calculation, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potential ordinary shares, such as convertible debt and stock options granted to employees. The dilution effect corresponds to a decrease in earnings per share resulting from the assumption that the convertible instruments are converted or the options granted are exercised. t) Share based payments The stock options remuneration program enables the Group's employees to acquire EDP, S.A. shares. The exercise price of the options is calculated based on the listed price of the shares at the grant date. The fair value of the options granted, determined at the grant date, is recognised in the income statement against equity during the vesting period, based on their market value calculated at the grant date. If the option is exercised, the Group acquires shares in the market to grant them to employees. u) Non-current assets held for sale and discontinued operations Non-current assets or groups of non-current assets held for sale (groups of assets and related liabilities that include at least one non-current asset) are classified as held for sale when their carrying amounts will be recovered mainly through sale, the assets or groups of assets are available for immediate sale and the sale is highly probable. b bl The Group also classifies as non-current assets held for sale, non-current assets or groups of assets acquired exclusively for its subsequent resale, that are available for immediate sale and the sale is highly probable. Immediately before classification as held for sale, the measureme

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Amortisation of subsidies is made in the year when the subsidy is granted. When the emissions of the year exceed the CO2 licenses attributed for free, a provision is booked to cover for the costs of acquiring the necessary additional licenses at the balance sheet date. The licenses held by the Group for trading purposes are booked under inventories at acquisition cost, subsequently adjusted to the respective fair value, calculated on the basis of the Powernext market quote in the last working day of each month. Gains and losses resulting from these adjustments are recognised in the income statement of the period. z) Cash Flow Statement The Cash Flow Statement is presented under the direct method, by which gross cash flows from operating, financing and investing activities are disclosed. The Group classifies cash flows related to interest and dividends received and paid as investing and financing activities, respectively. 3. Critical accounting estimates and judgements in preparing the financial statements IFRS require the use of judgement and the making of estimates in the decision process about certain accounting treatments, with impact in total assets, liabilities, equity, costs and income. The actual effects may differ from these estimates and judgements, namely in relation to the effect of actual costs and income. The main accounting estimates and judgements used in applying the accounting policies are discussed in this note in order to improve the understanding of how their application affects the Group’s reported results and disclosures. A broader description of the accounting policies employed by the Group is disclosed in note 2 to this Consolidated Financial Statements. Considering that in many cases there are alternatives to the accounting treatment adopted by EDP, the Group’s reported results could differ if a different treatment was chosen. The Executive Board of Directors believes that the choices made are appropriate and that the financial statements present fairly, in all material respects, the Group’s financial position and results. The alternative outcomes discussed below are presented solely to assist the reader in understanding the financial statements and are not intended to suggest that other alternatives or estimates would be more appropriate. Impairment of available-for-sale investments The Group determines that available-for-sale investments are impaired when there has been a significant or prolonged decline in their fair value. Determination of a significant or prolonged decline requires judgement. In making this judgement, the Group assesses, among other factors, the normal share price volatility, assuming as significant a decline of more than 20% in listed shares. In addition, valuations are generally obtained through market prices or valuation models that require assumptions or judgement in making estimates of fair value. Alternative methodologies and the use of different assumptions and estimates could result in different impairment losses being recognised with a consequent impact in the Group’s income statement. Fair value of financial instruments Fair values are based on listed market prices, if available, otherwise fair value is determined either by the price of similar recent transactions under market conditions or by pricing models based on net present value of estimated future cash flows techniques considering market conditions, time value, yield curves and volatility factors. Th methodologies th d l i may require i the th use of f assumptions ti or judgements j d t in i estimating ti ti fair f i values. l These Consequently, the use of different methodologies or different assumptions or judgements in applying a particular model, could have produced different financial results from those reported. Contractual Stability Compensation (CMEC) Following a Portuguese Government decision to extinguish the Power Purchase Agreement (PPA), EDP and REN agreed to the early termination of the PPAs, with ef

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Tariff adjustments Tariff adjustments represent the difference between costs and income of the National Electricity System (SEN), estimated at the beginning of each period for purposes of calculating the tariff, and the actual costs and income of the Electricity System established at the end of each period. The tariff adjustments assets or liabilities are recovered or returned through electricity tariffs for customers in subsequent periods. Considering the current legislation which establishes an unconditional right of the regulated operators to recover or return the tariff adjustments, the EDP Group booked in the caption Electricity sales of the period, the effects of the recognition of the tariff adjustment, against Other debtors / Other Creditors. Under the current legislation, regulated companies can also sell to a third party, in whole or in part, the right to receive the tariff adjustments through the electricity tariffs. Tariff deficit In Portugal, the Decree-Law 237-B/2006, of 19 December 2006, recognised in unconditional right of the operators of the binding sector to recover the tariff deficit of 2006 and 2007, regardless of the form of its future payment or in situations of insolvency and cease of operations. The Decree-Law also allows the transfer of the tariff deficit collecting right to a third party. In 2008, the EDP Group sold unconditionally the tariff deficit booked in 2007. In 2009, the tariff deficits regarding 2008 and the remaining part of 2007 were transferred, as well as the non-regular tariff adjustment regarding the estimated overcost of the special regime production for 2009. In Spain, Royal Decree 1634/2006, published in December 2006, established the electricity tariff for the period starting on 1 January 2007. This Royal Decree established the method of recovering the 2006 deficit, and that as from 1 July 2007 tariffs for the sale of electric energy by distribution companies will be modified quarterly by Royal Decree. Order ITC/2794/2007 of 27 September, which revises electricity tariffs as from 1 October 2007 was issued in compliance with Royal Decree 1634/2006. As at 29 December 2007, Order ITC/3860/2007 of 28 December, revised the electricity tariffs, from 1 January 2008. Spanish Royal Decree Law 6/2009, published on 7 May 2009 establishes, among other matters: (i) the possibility to securitize the Spanish tariff deficit supported by the electric sector companies through a State guarantee; (ii) the calendar for the elimination of the tariff deficit, such that on 1 January 2013, access tariffs will be enough to cover regulated activities’ costs, without the creation of an ex-ante tariff deficit and, in order to ease this gradual elimination, the Royal Decree Law also provides for the passage of some costs currently included in the electricity tariff to the Spanish State Budget; (iii) the revocation, as from 1 July 2009, of Royal Decree Law 11/2007, which established the obligation to return the additional revenues obtained from the incorporation of CO2 costs in markets prices, and which was to be in force until 2012; (iv) the creation of a social subsidy, which translates to a lower tariff for low income consumers and (v) the charge to electric companies of the costs with the management and treatment of radioactive waste from nuclear power plants and fuels consumed. EDP Group believes, based on the legislation issued, that the requirements for the recognition of tariff deficits as receivables against the income statement are accomplished. Impairment of long term assets and Goodwill Impairment tests are performed, whenever there is a trigger that the recoverable amount of property, plant, equipment and intangible assets is less than the corresponding net book value of assets. On an annual basis the Group reviews the assumptions used to assess the existence of impairment

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4. Financial-risk management policies Financial risk management The EDP Group’s business is exposed to a variety of financial risks, including the effect of changes in market prices, foreign exchange and interest rates. The Group’s exposure to financial risks arises essentially from its debt portfolio, resulting in interest and exchange rate exposures. The unpredictability of the financial markets is analysed on an on-going basis in accordance with the Group’s risk management policy. Derivative financial instruments are used to minimise potential adverse effects, resulting from interest rate and/or foreign exchange rate risks on EDP Group's financial performance. The management of financial risks of EDP, S.A., EDP Finance, B.V. and other EDP Group entities is undertaken centrally by the Financial Department of EDP S.A., in accordance with policies approved by the Executive Board of Directors. The Financial Department identifies, evaluates and submits to the Board for approval, hedging mechanisms appropriate to each exposure. The Executive Board of Directors is responsible for the definition of general risk management principles and the establishment of exposure limits. All transactions undertaken using derivative financial instruments require prior approval by the Executive Board of Directors, which defines the parameters of each transaction and approves the formal documents describing their objectives. As for the subsidiaries in Brazil, the Local Risk Management Department is responsible for the management of market risks arising from fluctuation in interest and exchange rates. This management is performed according to the principles/policies set by the EDP Group for this geographical area. Exchange-rate risk management EDP, S.A. Financial Department is responsible for managing exchange rate risk exposure resulting from foreign currency loans/borrowings, seeking to mitigate the impact of exchange rate fluctuations on the financial costs of the EDP Group companies and, consequently, on the consolidated results, through exchange rate derivative financial instruments and/or other hedging structures. EDP Group is exposed to the exchange rate risk in US Dollars (USD), British Pounds (GBP), Japanese Yen (JPY) and Brazilian Reais (BRL). Currently, the exposure to EUR/USD exchange rate risk results essentially from the acquisition of Horizon in July 2007 and from the investments in the wind parks performed in the USA since then. In order to finance this acquisition and its investment plan, EDP contracted USD loans as well as foreign exchange derivative financial instruments that convert the issued debt into USD, with the objective of mitigating the exchange rate risk related to the net assets of Horizon. The exchange and interest rate risks on the GBP and JPY bonds issued by EDP Finance B.V. under the Medium Term Notes Program for the Issuance of Debt Instruments have been hedged as from their issuing date. The EDP Group’s remaining debt, except for the debt contracted by the Brazilian subsidiaries, is denominated in Euros. The Brazilian subsidiaries exposed to the USD/BRL exchange rate risk as a result of their USD debt, use derivative financial instruments to hedge this risk. Additionally, investments in the Brazilian subsidiaries, whose net assets expressed in BRL are exposed to exchange rate risks, are monitored through analysis of the evolution of the BRL/EUR exchange rate. Given the long term nature defined for the investments in the Brazilian subsidiaries, the Group has decided not to use financial instruments to hedge the exchange rate risk on the investment in these subsidiaries. The policy implemented by the EDP Group consists of undertaking derivative financial instruments to hedge exchange rate risk with characteristics similar to those of the hedged asset or liability. The operations are revalued and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that ga

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Sensitivity analysis - Interest rates (excluding the Brazilian operations) Interest rate risk management relating to the Group’s operations, excluding Brazil, is performed centrally by the EDP Group’s Financial Department, which contracts derivative financial instruments (swaps and collars) to mitigate this risk. Based on the debt portfolio contracted by the Group, except for Brazil and the related derivative financial instruments used to hedge the related interest rate risk, a 100 basis points change in the reference interest rates at 31 December 2009 and 2008 would lead to the following increases / (decreases) in equity and results of the EDP Group: Dec 2009 Results Euro'000 100 bp increase Cash flow effect: Hedged debt Unhedged debt Fair value effect Cash flow hedging derivatives Trading derivatives (accounting perspective) 100 bp decrease 100 bp increase Equity Euro'000 100 bp decrease -17,277 -64,135 17,277 64,135 - - -15,142 -96,554 12,191 93,603 Dec 2008 18,997 18,997 -20,956 -20,956 Results Euro'000 100 bp increase Cash flow effect: Hedged debt Unhedged debt Fair value effect Cash flow hedging derivatives Trading derivatives (accounting perspective) 100 bp decrease 100 bp increase Equity Euro'000 100 bp decrease -24,777 -71,532 24,777 71,532 - - -1,778 -98,087 1,938 98,247 20,502 20,502 -22,461 -22,461 This analysis assumes that all other variables, namely exchange rates, remain unchanged. Counterparty credit risk management The EDP Group’s policy in terms of counterparty risk on financial transactions is managed through an analysis of the technical capacity, competitiveness, credit rating p p y avoiding g significant g p g credit rating g notation and exposure to each counterparty, concentrations of credit risk. Counterparties in derivative financial instruments to high credit institutions and therefore the risk of counterparty default is not considered to be significant. Guarantees and other collaterals are not required on these transactions. The EDP Group has documented its financial operations in accordance with international standards. Therefore, generally, derivative financial instruments are contracted under ISDA Master Agreements, facilitating the transfer of the instruments in the market. Regarding the third-party debt generated by the Group’s day-to-day business, the credit risk arise essentially from the legal obligation of providing continuous lowtension electricity supplies even when there are payment delays. This risk is considered to be mitigated by the large number of customers and by their diversity in terms of sectors of activity, as well as by the large volume of residential customers. Liquidity risk management The EDP Group undertakes management of liquidity risk through the engagement and maintenance of credit lines and financing facilities with a firm underwriting commitment with national and international financial institutions allowing immediate access to funds. These lines are used to complement and backup national and international commercial paper programmes, allowing the EDP Group’s short-term financing sources to be diversified (see note 34). Energy market risk management In its operations in the non-regulated Iberian electricity market, EDP Group purchases fuel to generate electric energy and sells the electric energy generated by its plants in the organised market (OMEL and OMIP) as well as to third parties. The Group is exposed to energy market risks namely in its operations in the non-regulated market. Some electricity generating plants despite operating in the market, are subject to the CMEC legislation, and the changes in the operating margins are determined essentially by the difference between the prices in the market and the reference indexes defined in the contracts. As a result of its energy management operations, EDP Group has a portfolio of operations

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The principal price and volume risk indicator used is the margin at risk (P@R), which estimates the impact of the variation of the different risk factors (price of electricity and hydrological) on the following year’s margin, P@R corresponding to the difference between an expected margin and a pessimistic scenario with a probability to occur of 5% (confidence interval of 95%) considering a time frame of 1 year. Both the volumes which are certain and those, which although uncertain, are expected, namely production of the plants and the corresponding consumption of fuel. P@R Distribution by risk factor Dec 2009 Dec 2008 Euro'000 Euro'000 Risk factor: Negociation Fuel CO2 Electricity Hydrological Diversification effect Total 4,000 32,000 33,000 44,000 17,000 -93,000 37,000 4,000 106,000 5,000 32,000 17,000 -133,000 31,000 Regarding credit risk, the quantification of exposure considers the amount and type of transaction (eg. swap or forward), the rating of the counterparty risk that depends on the probability of default and the expected value of credit to recover, which varies depending on the guarantees received or the existence of "netting" agreements. As at 31 December 2009 and 2008, the EDP Group's exposure to credit risk rating is as follows: 2009 Credit risk rating (S&P): AAA to AAA+ to ABBB+ to BBBBB+ to BNo rating assigned Total Brazil – Interest rate and exchange rate risk management The main tool used to monitor and control market risk in the Brazilian subsidiaries is Value at Risk (VaR). VaR is the maximum expected loss on the operations portfolio over a specific period of time, resulting from an adverse movement in the market that has a specific confidence interval. The VaR model used is based on a confidence interval of 95% and assumes a 10 day time frame for settlement of positions, based essentially on historical data. Considering market data for the last 2 years and observation of the relationship between the different prices and markets, the model generates a series of scenarios for changes in market prices. The VaR methodology used in Brazil considers a series of stress tests with the objective of monitoring the financial impact of the different market scenarios. The summary of VaR on the operations of the Brazilian subsidiaries at 31 December 2009 and 2008 is as follows: VaR 2009 Euro'000 Exchange rate risk Interest rate risk Covariation Total 5. Consolidation perimeter During 2009, several changes occurred in EDP Group consolidation perimeter as described bellow: Companies acquired: ● Nuevas Energías de Occidente, S.L. acquired 100% of the share capital of Mardelle, SARL and Vallée du Moulin, SARL and 49% of the share capital of Quinze Mines, SARL; ● Neo Catalunya, S.L. acquired 100% of the share capital of Parc Eólic Coll de la Garganta, S.L., Bon Vent de L'Ebre, S.L. and Serra Voltorera, S.L.; ● EDP Energias do Brasil acquired 100% of the share capital of CENAEEL through its subsidiaries EDP Renováveis Brasil (55%) and Enernova Brasil, S.A. (45%); ● Nuevas Energias de Occidente, S.L. acquired 100% of the share capital of Elektrownia Wiatrowa Kresy I, S.P. through its subsidiary Neolica Polska S.P. Z.o.o.; ● EDP Energias do Brasil acquired 100% of the share capital of Elebrás Projetos, Ltda through its subsidiary EDP Renováveis Brasil, S.A.; ● EDP, S.A. acquired 52% of the share capital of CEO - Companhia Energia Oceânica, S.A. through its subsidiary EDP Inovação, S.A.; ● Neo Catalunya, S.L. and Desarollos Catalanes, subsidiaries of Nuevas Energías de Occidente, S.L. acquired 60.63% of the share capital of Aprofitament D'Energies Renovables de la Terra Alta, S.A.; ● Nuevas Energías de Occidente, S.L. acquired 38.96% of the share capital of Aprofitament D'Energies Renovables de L'Ebre, S.A. through its subsidiary Aprofitament D'Energies Renovables de la Terra Alta, S.A.; ● Naturgás Energía acquired from Gas Natural 90.41% of the share capital of Gas Natural Cantabria SDG, S.A., 99.98% of Gas Natural Murcia SDG,

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 EDP - Energias de Portugal, S.A. Notas às Demonstrações Financeiras Consolidadas e Individuais para os exercícios findos em 31 de Dezembro de 2009 e 2008 Considerando a legislação actualmente em vigor que estabelece a incondicionalidade por parte dos operadores regulados à recuperação ou devolução dos desvios tarifários, o Grupo EDP registou nos resultados do exercício na rubrica de Vendas de electricidade, os efeitos decorrentes do reconhecimento do desvio tarifário, por contrapartida das rubricas Outros devedores/Outros credores. No âmbito da legislação em vigor as empresas reguladas podem ainda ceder a terceiros, no todo ou em parte, o direito a receber através das tarifas de energia eléctrica, os desvios tarifários. Défice tarifário Em Portugal, o Decreto-Lei 237-B/2006, de 19 de Dezembro de 2006, veio reconhecer o direito incondicional à recuperação do défice tarifário relativo aos exercícios de 2006 e 2007, por parte dos operadores regulados, independentemente da forma da sua liquidação futura, mantendo-se este direito em caso de insolvência ou cessação de actividade. Adicionalmente, este Decreto-Lei consagrou a transmissibilidade a terceiros do direito ao recebimento do défice tarifário. No exercício de 2008 o Grupo EDP procedeu à transmissão de forma plena e não condicionada do défice tarifário registado em 2007. No exercicio de 2009 foram transmitidos os défices tarifários de 2008 e parte remanescente de 2007, assim como do ajustamento tarifário não regular relativo ao sobrecusto estimado da produção em regime especial para o ano 2009. Em Espanha, em Dezembro de 2006, foi publicado o Decreto Real 1634/2006, que estabelece a tarifa de electricidade para o período com início em 1 de Janeiro de 2007. Este Decreto Real definiu a forma de recuperação do défice de 2006, estabelecendo adicionalmente que, com carácter trimestral e a partir de 1 de Julho de 2007, o Governo, mediante Decreto Real, efectuará modificações às tarifas de venda de energia eléctrica a aplicar pelas empresas distribuidoras. A Ordem ITC/2794/2007, de 27 de Setembro, que revê as tarifas eléctricas a partir de 1 de Outubro de 2007 veio cumprir com o establecido no Decreto Real 1634/2006. Em 29 de Dezembro de 2007 foi publicada a Ordem ITC/3860/2007, de 28 de Dezembro, a qual reviu as tarifas eléctricas a partir de 1 de Janeiro de 2008. Foi publicado em 7 de Maio de 2009 o Real Decreto Ley 6/2009 que estabelece entre outras matérias, (i) a possibilidade de se proceder à securitização do défice tarifário espanhol suportado pelas empresas do sector eléctrico, recorrendo a aval do Estado; (ii) o calendário de eliminação do défice tarifário para que em 1 de Janeiro de 2013 as tarifas de acesso sejam suficientes para cobrir os custos das actividades reguladas, sem criação de défice tarifário ex-ante e, de forma a que esta eliminação seja gradual, os custos actualmente integrados na tarifa eléctrica passem a ser suportados pelo Orçamento de Estado Espanhol; (iii) a revogação, a partir de 1 de Julho de 2009, do Real Decreto Ley 11/2007, que estabelecia a obrigação de devolução dos proveitos adicionais gerados pela repercussão dos custos do CO2 nos preços de mercado, cuja vigência se estendia até 2012; (iv) a criação de um subsídio social que constitui numa tarifa reduzida para os consumidores de baixo rendimento e (v) a assunção pelas empresas eléctricas dos custos de gestão e tratamento de resíduos radioactivos das centrais nucleares e dos combustíveis gastos. Com base na legislação referida a EDP considera que se encontram reunidas as condições de reconhecimento dos défices tarifários como valores a receber, registados por contrapartida dos resultados do exercício. Imparidade dos activos de longo prazo e Goodwill Os activos fixos tangíveis e intangíveis são revistos para efeitos de imparidade sempre que existam factos ou circunstânci

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Other changes: ● Reduction of the interests in Central Termica Ciclo Combinado Soto 4 from 100% to 75% through dilution, following a share capital increase not fully subscribed by Electrica Ribera del Ebro, S.A. (see note 13); ● EDP Gestão da Produção, S.A. acquired the remaining 40% of the share capital of O&M Serviços - Operação e Manutenção Industrial, S.A.; ● Genesa I S.L. acquired the remaining 10% of the share capital of Hidroeléctrica Fuentermosa, S.L.; ● Desarrollos Eólicos Promoción S.A.U. acquired 3.33% of share capital of Desarrollos Eólicos de Galicia, S.A.; ● Neolica Polska acquired 3.14% of share capital of Relax Wind Park I SP z.o.o.; ● Sinae Inversiones Eólicas S.A. acquired 18% of share capital of Parque Eólico del Voltoya, S.A.; ● EDP – Energias do Brasil, S.A. sold treasury stock corresponding to 9.76% of its own share capital (see note 13); ● Naturgás Participaciones S.A.U. sold its 50% interests of Millenium Energy S.L. to Hidrocantábrico Cogeneracions, S.L. The companies included in the consolidation perimeter of EDP Group as at 31 December 2009 and 2008 are listed in note 52. 6. Turnover Turnover analysed by sector is as follows: Group Dec 2009 Euro'000 Revenue by business sector: Electricity Gas Steam and ashes Other 10,934,141 944,482 10,371 114,610 12,003,604 Services rendered by business sector: Associated with electricity sales Gas Power availability agreement Advisory and management services Other Dec 2008 Euro'000 12,369,499 1,226,852 10,182 126,282 13,732,815 Company Dec 2009 Dec 2008 Euro'000 Euro'000 1,532,557 129,196 1,661,753 2,263,447 2,263,447 87,899 37,011 2,445 7,274 59,950 194,579 12,198,183 35,393 51,850 2,730 5,797 65,478 161,248 13,894,063 33,847 59,774 190 93,811 1,755,564 9,097 49,935 47 59,079 2,322,526 Total turnover: Electricity Gas Steam and ashes Power availability agreement Advisory and management services Other 11,022,040 981,493 10,371 2,445 7 274 7,274 174,560 12,198,183 12,404,892 1,278,702 10,182 2,730 5 797 5,797 191,760 13,894,063 1,566,404 59 774 59,774 129,386 1,755,564 2,272,544 49 935 49,935 47 2,322,526 In 2009, on a consolidated basis, the caption Electricity in Portugal includes a net cost of 361,080 thousand Euros (income in December 2008: 1,063,367 thousand Euros) regarding the tariff adjustments of the year, as described under accounting policies - note 2 x). Additionally, the caption Electricity includes on a consolidated basis 535,543 thousand Euros (31 December 2008: 300,422 thousand Euros) related to the Contractual Stability Compensation (CMEC) as a result of the Power Purchase Agreements (PPA) termination. This amount includes 140,052 thousand Euros (138,716 thousand Euros as at 31 December 2008) related to the initial CMEC for the period and 395,491 thousand Euros (161,706 thousand Euros as at 31 December 2008) resulting from the revisable mechanism, as established by the current legislation in Portugal. Turnover by geographical market, for the Group , is analysed as follows: Dec 2009 Portugal Spain and other European countries 2,247,272 855,106 657 27,178 3,130,213 Brazil U.S.A. Group Electricity Gas Steam and ashes Power availability agreement Advisory and management services Other 6,923,086 126,387 10,371 2,445 6,617 112,122 7,181,028 1,655,415 26,879 1,682,294 Dec 2008 196,267 8,381 204,648 11,022,040 981,493 10,371 2,445 7,274 174,560 12,198,183 Portugal Spain and other European countries 1,779,387 1,159,960 91,629 3,030,976 Brazil U.S.A. Group Electricity Gas Steam and ashes Power availability agreement Advisory and management services Other 8,673,117 118,742 10,182 2,730 5,797 75,798 8,886,366 1,820,575 24,333 1,844,908 131,813 131,813 12,404,892 1,278,702 10,182 2,730 5,797 191,760 13,894,063 171 The breakdown of Revenue by segment is presented in the Segmental reporting (see note 51). 51)

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Cost of consumed electricity and Changes in inventories and cost of raw materials and consumables used are analysed as follows: Group Company Dec 2009 Dec 2008 Euro'000 Euro'000 1,192,863 3,411 214,521 142,752 360,684 1,553,547 1,830,374 405,434 -5,083 400,351 2,230,725 Dec 2009 Euro'000 Cost of consumed electricity Cost of consumed gas Changes in inventories and cost of raw materials and consumables used Fuel, steam and ashes Gas Cost of consumables used CO2 licenses Consumptions Government grants Other Own work capitalised 5,340,458 641,183 454,965 495,745 134,529 338,399 -233,429 124,224 -203,204 1,111,229 7,092,870 Dec 2008 Euro'000 6,627,273 823,200 572,611 850,264 538,141 354,310 -294,683 158,717 -632,955 1,546,405 8,996,878 On a company basis Cost of consumed electricity, includes costs of 699,737 thousand Euros (31 December 2008: 928,201 thousand Euros) with the purchase of energy under the agreement for management, purchase and resale of energy signed between EDP, S.A. and EDP Gestão da Produção de Energia, S.A. 7. Other operating income Other operating income are analysed as follows: Group Dec 2009 Euro'000 Supplementary income Operating Government grants Gains on fixed assets Reversal of impairment losses: - Doubtful debtors - Debtors and other assets Own work capitalised Excess amount over customers contributions Insurance premiums - Energia RE Income arising from institutional partnerships - Horizon CO2 Licenses (RDL 06/2006) - HC Energia Group Amortisation of the power purchase agreements fair value - Horizon Turbine availability bonus - Horizon Other operating income 25,181 882 3,297 20,700 831 4,198 8,201 11,302 82 671 82,671 17,654 12,692 37,181 224,790 Dec 2008 Euro'000 23,392 1,404 19,538 17,323 656 6,980 9,179 9,267 61 238 61,238 13,024 18,272 2,390 46,010 228,673 Company Dec 2009 Dec 2008 Euro'000 Euro'000 325 781 7,347 8,453 1,174 1,596 20 328 17,646 20,764 Income arising from institutional partnerships - Horizon relates to revenue recognition arising from production and investment tax credits (PTC/ITC) and tax depreciations regarding Vento I, II, III, IV and V projects, in wind farms in U.S.A. The caption CO2 Licenses (Royal Decree-Law 06/2006) - HC Group in 2008 includes the income recognised resulting from the interpretation made by the Spanish regulatory authorities under the application of Royal Decree-Law 06/2006 to the HC Energia activity. The power purchase agreements between Horizon and its customers were valued based on market assumptions, at the acquisition date, using discounted cash flow models. At that date, these agreements were valued at approximately 190,400 thousand USD and recorded as a non-current liability (note 37). This liability is depreciated over the period of the agreements against other operating income. As at 31 December 2009, the amortisation for the year amounts to 17,654 thousand Euros (31 December 2008: 18,272 thousand Euros). Turbine availability bonus - Horizon refers to compensation received and predicted in the contracts with turbines suppliers responsible for supply and maintenance of eolic turbines when the measured average availability of turbines in activity is less than 93% in the first six months and/or less than 97% in any of the subsequent periods of six months during the warranty period. 172

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8. Supplies and services Supplies and services are analysed as follows: Group Dec 2009 Euro'000 Subcontracts Supplies and services: Water, electricity and fuel Tools and office material Rents and leases Communication Insurance Transportation, travelling and representation Commission and fees Maintenance and repairs Advertising Surveillance and security Specialised works: - Commercial activity - IT services - Legal fees - Advisory fees - Other services Provided personal Other supplies and services 3,753 11,386 6,597 92,759 40,156 34,174 25,031 4,205 241,202 27,403 10,304 92,275 41,013 18,420 25,001 63,397 31,126 768,202 9. Personnel costs and employee benefits expense Personnel costs are analysed as follows: Group Dec 2009 Euro'000 Board of Directors remuneration Employee's remuneration Social charges on remuneration Indemnities Performance bonus Share-based remuneration plan Other costs Own work capitalised 12,298 441,098 112,501 8,632 74,725 2,062 21,142 -132,422 540,036 Dec 2008 Euro'000 16,127 452,111 111,286 6,462 77,973 1,801 24,703 -116,789 573,674 Company Dec 2009 Dec 2008 Euro'000 Euro'000 5,281 405 227 9,102 1,247 16,262 5,656 273 216 3,285 573 10,003 Dec 2008 Euro'000 6,894 13,538 6,330 91,583 38,619 29,060 24,430 4,479 217,684 24,501 10,472 88,525 40,587 13,817 42,759 48,037 34,453 735,768 Company Dec 2009 Dec 2008 Euro'000 Euro'000 928 273 9,804 1,584 845 1,393 105 2,739 6,640 456 1,913 2,330 4,354 25,998 34,175 5,633 99,170 852 270 8,715 1,436 1,105 1,909 670 4,500 10,291 515 1,170 1,231 16,065 23,820 28,279 6,519 107,347 The breakdown by management positions and category of professional permanent staff as at 31 December 2009 and 2008 is as follows: Group Dec 2009 Dec 2008 Company Dec 2009 Dec 2008 Board members and senior officers Senior management High management Middle management Intermediate management Highly-skilled and skilled workers Semi-skilled workers Temporary workers 87 436 2,050 803 830 5,976 1,837 77 12,096 79 431 1,945 756 836 6,145 1,898 155 12,245 29 1 30 24 1 25 Employee benefits are analysed as follows: Group Dec 2009 Euro'000 Pension plans costs Medical plans costs and other benefits Cost of rationalising human resources Other 73,751 43,801 39,872 929 158,353 Dec 2008 Euro'000 62,246 48,791 49,203 960 161,200 Company Dec 2009 Dec 2008 Euro'000 Euro'000 75 122 197 177 177 Pension plans costs include 62,274 thousand Euros (41,771 thousand Euros in 2008) related to defined benefit plans (see note 35) and 11,477 thousand Euros (20,475 thousand Euros in 2008) related to defined contribution plans. Medical plans costs and other employee benefits include 49,955 thousand Euros related to the charge of the year net of the corresponding charge-off. The cost of rationalising human resources results from the project for restructuring the hierarchy structure of EDP Brasil, which modified the structure from 5 to 3 hierarchy levels with a total cost of 5,379 thousand Euros. This plan covered 46 employees. This caption also includes 34,493 thousand Euros related to 133 new early retirement agreements of EDP Gestão da Produção de Energia, S.A. and EDP Distribuição, S.A. In 2008, the cost of rationalising human resources results from the implementation of PAE Plan (Plan to Adjust the Workforce in Portugal), through which 198 employees opted for early retirement. 173

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 10. Other operating expenses Other operating expenses are analysed as follows: Group Dec 2009 Euro'000 Concession rents paid to local authorities Rents from power generation units Direct taxes Indirect taxes Impairment losses on doubtful debts Impairment losses on debtors and other assets Losses on fixed assets Regulation costs Return of CO2 licenses (Royal Decree - Law 11/07) Donations Other operating costs 240,517 8,113 13,132 57,376 71,327 7,369 8,934 5,037 15,502 16,770 56,487 500,564 Dec 2008 Euro'000 228,261 7,430 9,384 53,868 70,438 3,636 4,929 4,707 62,137 17,484 38,006 500,280 Company Dec 2009 Dec 2008 Euro'000 Euro'000 271 460 11 415 6,876 9,577 17,610 341 972 35 356 140 4,028 5,575 11,447 The caption Concession rents paid to local authorities corresponds to the rents paid by EDP Distribuição to the local authorities under the terms of the distribution concession contracts in low tension electricity. Return of CO2 licenses (Royal Decree - Law 11/07) reflects the amount of the licenses that the Group expects to return to the Spanish Government as a result of the publication of Royal Decree - Law 11/07, which establishes that the cost relating to CO2 licenses granted free of charge by the Spanish Government will be deducted from the sector’s tariff deficit in 2009. Impairment losses on doubtful debts and debtors and other assets are analysed in notes 24 and 25, respectively. 11. Provisions Provisions are analysed as follows: Group Dec 2009 Euro'000 Charge for the year Write-back for the year 92,322 -17,637 74,685 Dec 2008 Euro'000 71,185 -39,114 32,071 Company Dec 2009 Dec 2008 Euro'000 Euro'000 187 187 3,927 -2,408 1,519 The net movement of provisions (74,685 thousand Euros) includes the charge for the year related to onerous contracts with clients (approximately 33,212 thousand Euros) E ) in i Portugal P t l and d Spain, S i th the charge h f the for th year related l t d to t legal l l actions ti i in B Brazil il and d Portugal P t l (12,720 (12 720 th thousand d Euros E and d 4,762 4 762 thousand th d Euros, E respectively) ti l ) and d the charge for the year concerning legal risks in Spain of 10,027 thousand Euros. 12. Depreciation and amortisation expense Depreciation and amortisation expense are analysed as follows: Group Dec 2009 Euro'000 Property, plant and equipment: Property, plant and equipment under concession DL 344-B/82 Buildings and other constructions Plant and machinery: Hydroelectricity generation Thermoelectric generation Renewable generation Electricity distribution Gas distribution Other plant and machinery Transport equipment Office equipment and tools Impairment loss Other 255 17,054 140,167 275,957 305,996 441,542 40,227 1,782 10,191 52,341 416 3,023 1,288,951 Intangible assets: Industrial property and other rights Concession rights Accelerated amortisation/impairment Dec 2008 Euro'000 424 16,458 134,030 249,257 201,282 459,819 35,958 1,914 9,595 42,856 2,658 2,450 1,156,701 Company Dec 2009 Dec 2008 Euro'000 Euro'000 469 8 15 687 4,335 1,413 6,927 509 8 15 626 3,211 1,421 5,790 15,753 80,788 44,219 140,760 1,429,711 21,510 78,336 49,921 149,767 1,306,468 8 8 6,935 15 15 5,805 Compensation of amortisation and depreciation: Partially-funded property, plant and equipment -111,015 1,318,696 -113,597 1,192,871 6,935 5,805 174 In December 2008, Accelerated amortisation/impairment included the concession rights of Enersul in Brazil, of 49,921 thousand Euros. This accelerated amortisation/impairment represents the loss of the Enersul assets value (impairment) resulting from the regulatory changes occurred in 2008. In 2009, this caption includes 44,219 thousand Euros related to the accelerated amortisation of the concession rights of EDP Energias do Brasil, under the treasury stock sale performed by this company (see note 13).

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The partially-funded property, plant and equipment by third parties is depreciated on the same basis and at the same rates as the Group’s remaining assets, being the corresponding cost compensated through the amortisation of the amounts received (registered under Trade and other payables) on the same basis and at the same rates as the corresponding partially-funded assets. In accordance with IFRS 3 - Business combinations, the adjustments resulting from the purchase price allocation performed during 2009 for the goodwill booked in 2008 for EDP Brasil subgroup and for Ródão Power resulted in the restatement of the comparative financial information for the depreciation and amortisation expense regarding property, plant and equipment and intangible assets of 1,429 thousand Euros and -551 thousand Euros, respectively. 13. Gains/ (losses) on the sale of financial assets Gains / (losses) on the sale of financial assets for the Group are analysed as follows: Dec 2009 Disposal % Available for sale investments: Banco Comercial Português, S.A. REN - Rede Eléctrica Nacional, S.A. Valor Sul, S.A Sonaecom, S.A. Held for sale assets: Edinfor - Sistemas Informáticos, S.A. ESC90 - Telecomunicações, Lda. Investments in subsidiaries and associates: Ambitec Laboratorio Medioambiental, S.A. Central Térmica Ciclo Combinado Soto 4 EDP Renováveis, S.A. Ibersol E. Solar Ibérica, S.A. Marquesado del Solar, S.A. Portugen - Energia, S.A. Proenercam Turbogás Produtora Energética, S.A. Cogeneration La Espina, S.L Treasury stock EDP Brasil Other 0.60% 7.96% Value Euro'000 5,355 28,920 Disposal % 0.01% 1.5% 15.6% Dec 2008 Value Euro'000 274 16,969 1,322 - 48.51% 19,141 40.0% - 4,819 - 100.00% 25.00% 50.00% 50.00% 50.00% 7.03% - -150 12,899 268 60 367 -6,979 -178 59,703 22.5% 50.0% 26.7% 40.0% - 405,375 2,378 -1,424 50,822 1,197 481,732 Gains / (losses) on the sale of financial assets for the Company are analysed as follows: Dec 2009 p Disposal % Value Euro'000 -10 p Disposal % 1.5% Dec 2008 Value Euro'000 15,100 - Available for sale investments: REN - Rede Eléctrica Nacional, S.A. Pirites Alentejanas, S.A. * Held for sale assets: Edinfor - Sistema Informáticos, S.A. - -10 40.0% 64 15,164 * 322 shares sold in total. In 2009, EDP sold 28,167,603 shares of BCP, for 22,706 thousand Euros, which were booked by 17,351 thousand Euros, net of impairment losses, generating a gain on a consolidated basis of 5,355 thousand Euros. In 2009, EDP sold 29,150,000 shares of Sonaecom, S.A., for 57,866 thousand Euros, which were booked by 28,946 thousand Euros, net of impairment losses, generating a gain on a consolidated basis of 28,920 thousand Euros. On 30 June 2009,bthed Group concluded the sale off its shareholding in ESC d f 90 Telecomunicações b l f Ltda. (“ESC 90”), representing d 48.51% of the respective share capital, to Net Serviços de Comunicação S.A. as agreed on the Sale and Purchase Private Agreement signed in August 2008 (see note 39). This operation generated a accounting gain of 19,141 thousand Euros. In January 2009, the share capital of Central Térmica Ciclo Combinado Soto 4 ("CTCC Group 4") was increased and subscribed by EDP through its subsidiary Electrica de la Ribera del Ebro, S.A. (the sole previous shareholder) and also by a new shareholder, Sonatrach, which paid a share premium of approximately 16,204 thousand Euros. Following the share capital increase, Sonatrach holds 25% of CTCC Group 4 share capital, while EDP reduced its shareholding (by dilution) from 100% to 75%. EDP benefited from the capital increase of CTCC Soto 4 as a result of the share premium paid by the minority shareholders. This operation generated, for EDP Group, a gain of 12,899 thousand Euros booked against the income statement of the period, according to the accounting policy described in paragraph 2 b). In November 2009 it was concluded a secondary public offer distribution of ordinary shares which consists in own shares of EDP - Energias do Brasil, S.A. The offer was composed

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The gain from the referred dilution effect that resulted from this operation was determined by comparing the contribution of EDP Renováveis to EDP Group before and after the IPO. The Group has prepared consolidated financial statements of EDP Renováveis with reference to 31 May 2008, date of the last consolidation before the IPO. The equity amounts of EDP Renováveis before and after the IPO are analysed as follows: Share capital increase Euro'000 980,122 552,035 1,532,157 Equity (with reference to 31 May 2008) Share capital Share premium (net of operation costs) Reserves and retained earnings Net profit Total equity Pre IPO Euro'000 3,381,419 67,109 40,453 3,488,981 Post IPO Euro'000 4,361,541 552,035 67,109 40,453 5,021,138 The gain of 405,375 thousand Euros corresponds to the difference between the equity held Pre IPO (held in 100% by EDP Group) and the equity held Post IPO (held in 77,53% by EDP Group), as presented in the following table: Gain calculation Euro'000 (B - A) Pre IPO Euro'000 (A) EDP Renováveis contribution % of consolidation 3,488,981 100.00% 3,488,981 Other consolidation adjustments Consolidated gain Post IPO Euro'000 (B) 5,021,138 77.53% 3,892,888 403,907 1,468 405,375 On 6 May 2008, EDP Gestão da Produção, S.A. sold to International Power Portugal Holdings SGPS, S.A. its interests of 40% and 26.7% in the share capital of Turbogás Produtora Energética, S.A. (Turbogás) and Portugen - Energia, S.A. (Portugen), respectively. This transaction has been concluded with a price of 140,000 thousand Euros, generating a gain on a consolidated basis of 50,822 thousand Euros in Turbogás and a loss of 1,424 thousand Euros in Portugen. On 31 March 2008, EDP, S.A. sold 1.5% of REN - Rede Eléctrica Nacional, S.A. share capital to the Pension Fund of EDP. Under the terms of this operation, 8,010,000 shares have been traded for 3.5 Euros per share (market price at this date), representing a cash inflow of 28,035 thousand Euros. This operation generated a gain in the individual and consolidated financial statements of 15,100 thousand Euros and 16,969 thousand Euros, respectively. On 7 March 2008, EDP, S.A. signed a contract to sell 40% of the share capital and credits over Edinfor for 54,964 thousand Euros, generating a gain on a consolidated basis of 4,819 thousand Euros. 14. Other financial income and expenses Other financial income and expenses are analysed as follows: Group Dec 2009 Euro'000 Other financial income Interest income from investments Derivative financial instruments: Interest Fair value Other interest income Income from equity investments Foreign exchange gains CMEC Interest Income - Tariff adjustment and tariff deficit Reversal of impairment losses of equity investments Other financial income 70,139 182,941 445,646 46,089 24,954 80,449 91,693 76,627 17,836 1,036,374 Group Dec 2009 Euro'000 Other financial expenses Interest expense from financial debt Capitalised interest expense from financial debt Derivative financial instruments: Interest Fair value Other interest expense Impairment of available for sale financial assets Banking services Foreign exchange losses CMEC Impairment of financial investments and equity investments Impairment of goodwill - Enersul Unwinding Interest Expenses - Tariff adjustment Cost of the securitization of the tariff deficit Other financial expenses 666,280 -150,387 127,562 498,564 12,076 29,289 10,881 73,321 25,696 113,059 17,241 35,718 63,783 1,523,083 Financial income / (expenses) -486,709 Dec 2008 Euro'000 756,867 -94,625 129,821 407,082 13,721 289,378 11,351 423,265 31,942 153 17,371 97,483 846 1,063 43,081 2,128,799 -942,702 Dec 2008 Euro'000 54,259 131,714 460,869 63,403 6,680 361,205 89,861 4,299 13,807 1,186,097 Company Dec 2009 Dec 2008 Euro'000 Euro'000 353,022 200,944 671,023 608,697 268,825 57,190 2,819 2,162,520 377,995 114,220 674,063 792,

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The caption Other financial Income - CMEC totalling 91,693 thousand Euros includes 21,599 thousand Euros related to interest of the initial CMEC included in the annuity for 2009, 60,820 thousand Euros related to the financial effect considered in the calculation of the initial CMEC, and 9,274 thousand Euros relating to the financial component of revisable mechanism of CMEC for 2009. Other financial expenses - CMEC includes 25,696 thousand Euros related to the cost on the updating of the initial CMEC, booked against Deferred Income (see note 37). Capitalised interest expense from financial debt includes the interest capitalised in assets under construction according to the accounting policy described in paragraph 2 h). The interest rates considered for the referred capitalisation are in accordance with market rates. In 2009, Impairment of available for sale financial assets, on a consolidated basis, totalling 29,289 thousand Euros, refers essentially to the recognition in the income statement of impairment losses in the investment held in BCP (29,274 thousand Euros) as a result of the depreciation on the market share price of this investment occurred in the first quarter of 2009. In the last quarter of 2009, the EDP Group sold part of the shares held in BCP, as referred in note 13. As at 31 December 2009, the remaining shares of BCP valued by 28,036 thousand Euros, being this valuation booked against fair value reserves (see note 21) according to the Group accounting policies. In 2008 this caption include the recognition in the income statement of 200,139 thousand Euros, 66,958 thousand Euros, 20,536 thousand Euros and 1,745 thousand Euros related with impairment losses booked in the investments held in BCP, Sonaecom, Ampla Energia e Serviços and Energia RE respectively, as a result of the devaluation verified in the financial markets. Impairment of financial investments and equity investments, on a company basis, in 2009, include a provision booked against financial expenses as a result of losses on its subsidiaries EDP Imobiliária e Participações, S.A. and EDP Investimentos of 41,891 thousand Euros and 659 thousand Euros, respectively. Additionally, the provision recorded in 2008 to cover negative equity of 57,190 thousand Euros was reversed against financial income (see note 36). EDP Group has booked in 2008 under Impairment of goodwill - Enersul, on a consolidated basis, an impairment loss of 17,371 thousand Euros (see note 18). The Unwinding expenses refer essentially to, (i) the financial actualization of the dismantling provision for wind farms of 3,134 thousand Euros (2,157 thousand Euros in 2008), (ii) the financial actualization related to the put option of Genesa and Desa of 8,620 thousand Euros (12,134 thousand Euros in 2008), (iii) the financial actualization related to the put option of Naturgás of 16,100 thousand Euros (15,170 thousand Euros in 2008), (iv) the implied financial return in institutional partnership in US wind farms which amounted to 54,147 thousand Euros (43,631 thousand Euros in 2008) and (v) the financial expenses related to the discount of the debt associated to the concessions of Alqueva, Investco and Enerpeixe of 11,518 thousand Euros (10,621 thousand Euros in 2008), 2,444 thousand Euros (1,811 thousand Euros in 2008) and 3,075 thousand Euros (11,959 thousand Euros in 2008), respectively. Income from equity investments is analysed as follows: Group Dec 2009 Euro'000 Group companies Associated companies DECA - Distribuición Elétrica Centroamericana, S.A. Other companies Ampla Energia e Serviços, S.A. Ampla Investimentos e Serviços, S.A. EDA - Electricidade dos Açores, Açores S S.A. A Banco Comercial Português, S.A. Tejo Energia, S.A. REN - Rede Eléctrica Nacional, S.A. Other Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 590,621 780,705 - - 3,965 8,424 2,119 8,908 315 2,579 7,556 3,084 393 24,954 490 2,472 3,046 672 6,680 2,119 8,908 3,084 608,697 3,046 792,175 15. Income tax In

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The reconciliation between the nominal and the effective income tax rate for the Group as at 31 December 2009, is analysed as follows: Dec 2009 Tax basis Euro '000 1,567,712 -57,294 50,355 53,894 -206,800 115,823 -26,004 -29,540 4,506 35,894 1,508,546 Rate % Nominal rate and income tax Charges / reversals of non deductible provisions and amortisations for tax purposes Tax losses and tax credits Tax exempt dividends Tax benefits Fair value of financial instruments and financial investments Difference between tax and accounting gains/losses Financial investments in associates and subsidiaries Autonomous taxation and tax benefits Other adjustments and changes in estimates Effective tax rate and total income tax 26.5% -1.0% 0.8% 0.9% -3.5% 2.0% -0.4% -0.5% 0.1% 0.6% 25.5% Tax Euro '000 415,444 -15,183 13,344 14,282 -54,802 30,693 -6,891 -7,828 1,194 9,512 399,765 The reconciliation between the nominal and the effective income tax rate for the Group as at 31 December 2008, is analysed as follows: Dec 2008 Tax basis Euro '000 1,503,711 -52,053 75,272 -16,045 -104,404 234,974 -562,140 -33,079 12,958 10,962 1,070,156 Rate % Nominal rate and income tax Charges / reversals of non deductible provisions and amortisations for tax purposes Tax losses and tax credits Tax exempt dividends Tax benefits Fair value of financial instruments and financial investments Difference between tax and accounting gains/losses Financial investments in associates and subsidiaries Autonomous taxation and tax benefits Other adjustments and changes in estimates Effective tax rate and total income tax 26.5% -0.9% 1.3% -0.3% -1.8% 4.1% -9.9% -0.6% 0.2% 0.2% 18.9% Tax Euro '000 398,483 -13,794 19,947 -4,252 -27,667 62,268 -148,967 -8,766 3,434 2,905 283,591 The reconciliation between the nominal and the effective income tax rate for the Company as at 31 December 2009, is analysed as follows: Dec 2009 Tax basis Euro '000 658,509 1,475 -49,770 4,438 -14,642 -2,966 -552,336 -8,479 71,272 107,501 Rate % Nominal rate and income tax Charges / reversals of non deductible provisions and amortisations for tax purposes Tax losses and tax credits Unrecognised deferred tax assets related to temporary differences Fair value of financial instruments and financial investments Difference between tax and accounting gains/losses Tax exempt dividends Autonomous taxation and tax benefits Other adjustments and changes in estimates Effective tax rate and total income tax 26.5% 0.1% -2.0% 0.2% -0.6% -0.1% -22.2% -0.4% 2.8% 4.3% Tax Euro '000 174,505 391 -13,189 1,176 -3,880 -786 -146,369 -2,247 18,887 28,488 The reconciliation between the nominal and the effective income tax rate for the Company as at 31 December 2008, is analysed as follows: Dec 2008 Tax basis Euro '000 478,104 10,577 -180,685 30,015 124,993 -21,966 -760,496 -145 44,603 -275,000 Rate % Nominal rate and income tax Charges / reversals of non deductible provisions and amortisations for tax purposes Tax losses and tax credits Unrecognised deferred tax assets related to temporary differences Fair value of financial instruments and financial investments Difference between tax and accounting gains/losses Tax exempt dividends Autonomous taxation and tax benefits Other adjustments and changes in estimates Effective tax rate and total income tax The effective tax rate for the EDP Group and EDP, SA is analysed as follows: Group Dec 2009 Euro'000 Profit before tax Income tax Effective tax rate 1,567,712 -399,765 25.5% 26.5% 0.6% -10.0% 1.7% 6.9% -1.2% -42.2% 0.0% 2.5% -15.2% Tax Euro '000 126,698 2,803 -47,882 7,954 33,123 -5,821 -201,531 -38 11,820 -72,874 Dec 2008 Euro'000 1,503,711 -283,591 18.9% Company Dec 2009 Dec 2008 Euro'000 Euro'000 658,509 -28,488 4.3% 478,104 72,874 -15.2% 178 The change in the effective income tax rate for the Group in 6.6 pp in relation to 31 December 2008 results essential

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16. Property, plant and equipment This caption is analysed as follows: Group Dec 2009 Euro'000 Cost: Property, plant and equipment held under the DL 344-B/82 regime Land and natural resources Buildings and other constructions Plant and machinery: Hydroelectric generation Thermoelectric generation Renewable generation Electricity distribution Gas distribution Other plant and machinery Transport equipment Office equipment and tools Other Assets under construction 223,420 194,069 702,163 7,976,110 7,161,919 7,346,192 15,328,487 1,556,125 38,296 88,356 600,807 120,080 3,567,638 44,903,662 Accumulated depreciation and impairment losses: Depreciation charge for the year Accumulated depreciation in previous years Impairment losses for the year Impairment losses in previous years 223,420 166,902 602,694 7,761,810 6,554,723 5,223,555 14,192,494 1,137,670 38,696 78,078 521,145 92,456 3,762,861 40,356,504 46,502 25,252 254 148 3,788 98,114 14,246 36,056 224,360 46,502 25,648 254 148 3,262 85,001 14,246 26,834 201,895 Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 -1,288,535 -19,506,509 -416 -14,464 -20,809,924 -1,154,043 -17,937,842 -2,658 -11,996 -19,106,539 21,249,965 -6,927 -93,871 -100,798 123,562 -5,790 -89,067 -94,857 107,038 Carrying amount 24,093,738 As referred under accounting policies - note 2 a) above, in accordance with IFRS 3, in the twelve months period subsequent to a business combination, the acquirer may adjust the fair value of identifiable assets, liabilities or contingent liabilities, recording these adjustments with effect from the acquisition date. The final allocation of the fair value attributable to the assets, liabilities and contingent liabilities concluded in 2009, regarding the acquisition of Investco, Neo Catalunya, Instalaciones Electricas Rio Isabena and Septentrional de Gás of HC Group and Polish companies Cernavoda and Renovatio in 2008, determined the allocation of 30,990 thousand euros (29,822 thousand Euros net of accumulated depreciation) 21,199 thousand Euros, 5,559 thousand Euros and 67,823 thousand Euros, respectively, with reference to 31 December 2008. Property, plant and equipment held under Decree-law 344-B/82 regime are those assets allocated to low tension electricity distribution transferred from the local authorities ("Municipalities") th iti ("M i i liti ") under d th the concession i regime. i Th These assets, t although lth h operated t db by the th Group, G continue ti t to b be th the property t of f th the l local l authorities th iti and d are analysed as follows: Group Dec 2009 Euro'000 Property, plant and equipment held under the DL 344-B/82 regime Accumulated depreciation Net amount 223,420 -222,881 539 Dec 2008 Euro'000 223,420 -222,626 794 Part of these assets may be transferred to EDP Group through settlement, by offset of accounts, of outstanding debts of the respective Municipalities, which have not yet been regularised (see note 24). The movements in Property, plant and equipment, for the Group, for the year ended 31 December 2009 are analysed as follows: Perimeter Variations/ Regularisations Euro'000 Balance at 1 January Euro'000 Cost: Property, plant and equipment held under the DL 344-B/82 regime Land and natural resources Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other Assets under construction 223,420 166,902 602,694 34,908,948 78,078 521,145 92,456 3,762,861 40,356,504 Acquisitions Euro'000 Disposals/ Write-offs Euro'000 Transfers Euro'000 Exchange Differences Euro'000 Balance at 31 December Euro'000 1,926 2,855 248,694 13,856 20,411 888 3,093,840 3,382,470 -115 -2,058 -40,992 -11,825 -146 -19,991 -12,296 -87,423 2,619 11,565 2,858,308 2,321 48,424 1,880 -2,925,117 - 21,069 87,802 662,797 5,840 4,777 -29 87,944 870,200 1,668 -695 769,374 86 6,196 44,876 -439,594 381,911 223,420 194,069 702,163 39,407,129 88,356 600,807 120,080 3,567,638 44,903,662 179

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Balance at 1 January Euro'000 Accumulated depreciation and impairment losses: Property, plant and equipment held under the DL 344-B/82 regime Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other 222,626 218,872 18,169,865 54,743 387,109 53,324 19,106,539 Charge for the year Euro'000 Impairment losses for the year Euro'000 Disposals/ Write-offs Euro'000 Exchange Differences Euro'000 Perimeter Variations/ Regularisations Euro'000 Balance at 31 December Euro'000 255 17,054 1,205,671 10,191 52,341 3,023 1,288,535 416 416 -1,565 -26,690 -11,062 -94 -7,305 -46,716 23,704 304,372 4,964 4,845 -29 337,856 1,302 104,788 238 -3,197 20,163 123,294 222,881 259,367 19,758,422 59,074 441,004 69,176 20,809,924 Acquisitions include the investment in wind farms by the subgroups NEO, in Europe, and Horizon, in the United States during 2009. Additionally, the Hidrocantábrico subgroup carried out investments related to the construction of the new CCGT Soto 5, as well as in new gas and electricity networks. In Portugal subgroup, in the energy distribution activity, investments were made in the electricity distribution network. In the Portuguese generation activity, the Group is carrying out hydroelectric investments on the construction of the new Baixo Sabor power station and on the power enhancement projects of Picote and Bemposta. Transfers from assets under construction into operation in 2009, refer mainly to wind farms of EDP Renováveis that became operational and to the conclusion of the construction of CCGT Lares by the Portuguese Generation subgroup. The Perimeter Variations/Regularisations include, among others, the effect of the 2009 acquisitions, by the NEO Group, namely Mardelle, Quinze Mines, Vallé du Moulin, Renovatio Power and Aprofitament D'Energies Renovables de la Terra Alta, by the Naturgás subgroup, such as Gas Natural Cantabria, Gas Natural Murcia, GEM Suministro Gas, GEM Suministro Sur and GEM Suministro Servicios Comunes. This caption also includes 35,756 thousand Euros related with the effect of the Purchase Price Allocation for the companies acquired in 2009 namely, Elektrownia Wiatrowa Kresy, Bon Vent de L'Ebre, CENAEEL and Elebrás, subsidiaries of the EDP Renováveis Group. The movement in Exchange differences for the period is essentially due to the appreciation of the Brazilian Real (BRL) against the Euro and the depreciation of the American Dollar (USD) against the Euro for the year ended 31 December 2009. The movements in Property, plant and equipment , for the Group , for 2008 are analysed as follows: Perimeter Variations/ Regularisations Euro'000 Balance at 1 January Euro'000 Cost: Property, plant and equipment held Property under the DL 344-B/82 regime Land and natural resources Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other Assets under construction Acquisitions Euro'000 Disposals/ Write-offs Euro'000 Transfers Euro'000 Exchange Differences Euro'000 Balance at 31 December Euro'000 223,420 132,009 785,132 31,718,545 87,960 492,160 157,633 3,811,302 37,408,161 17,134 32,278 153,815 6,710 13,198 1,268 3,431,184 3,655,587 -5,716 -12,316 -60,601 -10,211 -2,755 -688 -24,327 -116,614 Impairment losses for the year Euro'000 1,121 -227,228 3,895,190 5,585 23,336 -9,591 -3,694,559 -6,146 -18,959 -87,249 -681,879 -6,320 -4,995 38 -26,190 -825,554 41,313 112,077 -116,122 -5,646 201 -56,204 265,451 241,070 Perimeter Variations/ Regularisations Euro'000 223,420 166,902 602,694 34,908,948 78,078 521,145 92,456 3,762,861 40,356,504 Balance at 1 January Euro'000 Accumulated depreciation and impairment losses: Property, plant and equipment held under the DL 344-B/82 regime Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other Charge for the ye

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Dec 2009 Principal Euro'000 Less than one year Between one and five years More than five years 2,325 3,059 279 5,663 Interest Euro'000 97 93 8 198 Future lease payments Euro'000 2,422 3,152 287 5,861 Principal Euro'000 2,265 2,778 5,043 Dec 2008 Interest Euro'000 218 170 388 Future lease payments Euro'000 2,483 2,948 5,431 During 2009, the costs incurred with these assets amounted to 607 thousand Euros (31 December 2008: 571 thousand Euros) and are booked in the income statement under Maintenance and repairs. The movements in Property, plant and equipment, for the Company, for the year 2009 are analysed as follows: Disposals/ Write-offs Euro'000 -1,222 -832 -2,054 Impairment losses for the year Euro'000 Balance at 31 December Euro'000 46,502 25,252 402 3,788 98,114 14,246 36,056 224,360 Balance at 1 January Euro'000 Cost: Land and natural resources Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other Assets under construction 46,502 25,648 402 3,262 85,001 14,246 26,834 201,895 Acquisitions Euro'000 1,358 5,991 16,276 23,625 Transfers Euro'000 7,054 -7,054 - Regularisations Euro'000 826 68 894 Balance at 1 January Euro'000 Accumulated depreciation and impairment losses: Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other 17,647 99 1,469 68,354 7,288 94,857 Charge for the year Euro'000 Disposals/ Write-offs Euro'000 Regularisations Euro'000 Balance at 31 December Euro'000 469 23 687 4,335 1,413 6,927 - -1,207 -673 -1,880 826 68 894 17,735 122 1,483 72,757 8,701 100,798 The movements in Property, Plant and Equipment, for the Company , and for the year 2008 are analysed as follows: Balance at 1 January Euro'000 Cost: Land and natural resources Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other Assets under construction 46,727 25,665 402 3,224 75,969 14,246 6,084 172,317 Balance at 1 January Euro'000 Accumulated depreciation: Buildings and other constructions Plant and machinery Transport equipment Office equipment and tools Other 17,155 76 1,626 65,143 5,867 89,867 509 23 626 3,211 1,421 5,790 -1,500 -809 -2,309 1,483 26 1,509 17,647 99 1,469 68,354 7,288 94,857 Acquisitions Euro'000 22 1,489 1,147 5,621 24,161 32,440 Charge for the year Euro'000 Disposals/ Write-offs Euro'000 -247 -1,506 -1,109 -2,862 Disposals/ Write-offs Euro'000 Transfers Euro'000 3,411 -3,411 Regularisations Euro'000 Balance at 31 December Euro'000 46,502 25,648 402 3,262 85,001 14,246 26,834 201,895 Balance at 31 December Euro'000 Transfers Euro'000 Regularisations Euro'000 As at 31 December 2009 and for the Company, the Property, plant and equipment financed by leasing contracts amounts to 3,177 thousand Euros (2,561 thousand Euros at 31 December 2008), with accumulated depreciation of 1,055 thousand Euros (1,003 thousand Euros at 31 December 2008) and the respective future lease payments amount to 1,751 thousand Euros (1,445 thousand Euros at 31 December 2008). Property, plant and equipment financed by leasing contracts is detailed as follows: Dec 2009 Principal Euro'000 Less than one year Between one and five years More than five years 674 949 75 1,698 Interest Euro'000 26 25 2 53 Future lease payments Euro'000 700 974 77 1,751 Principal Euro'000 525 808 1,333 Dec 2008 Interest Euro'000 59 53 112 Future lease payments Euro'000 584 861 1,445 181 During g 2009, , the costs incurred related to these assets amount to 130 thousand Euros (81 ( thousand Euros at 31 December 2008) ) and are booked under Maintenance and repairs in the income statement.

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 17. Intangible assets This caption is analysed as follows: Group Dec 2009 Euro'000 Cost: Industrial property, other rights and other intangibles Concession rights CO2 licenses Intangible assets in progress 189,570 2,601,430 287,989 312,671 3,391,660 Accumulated amortisation and impairment losses: Amortisation of concession rights during the year Amortisation of industrial property and other intangibles during the year Accumulated amortisation in previous years Dec 2008 Euro'000 145,427 2,473,135 385,096 75,880 3,079,538 Company Dec 2009 Dec 2008 Euro'000 Euro'000 100 100 100 100 -125,007 -15,753 -444,186 -584,946 -128,257 -21,510 -280,979 -430,746 2,648,792 -8 -59 -67 33 -15 -44 -59 41 Carrying amount 2,806,714 The concession rights over the electric energy distribution networks in Brazil, namely Bandeirante (State of São Paulo) and Escelsa (State of Espírito Santo) are amortised on a straight-line basis over the period of the concession until 2025 and 2030, respectively. The concession rights in Portugal relate to the natural gas distribution network, being amortised on a straight-line basis over the period of the concession, until 2048, as well as the concession of the public hydric domain for hydroelectric generation. The concession rights over electricity production in Brazil, namely for EDP Lajeado, Lajeado Energia, Tocatins and Investco, are amortised on a straight line basis over the period of the concession, until 2032. The movements in Intangible assets during 2009, for the Group , are analysed as follows: Perimeter variations/ Regularisations Euro'000 Balance at 1 January Euro'000 Cost: Industrial property, other rights and other intangibles Concession rights Concession rights - Brazil Concession rights - Gas U rights i ht Alqueva/Pedrogão Al /P d ã Use Extension of the public hydric domain Concession rights - mini-hydrics Other concession rights CO2 licenses Intangible assets in progress 145,427 1,082,498 152,232 377 460 377,460 759,000 91,118 10,827 385,096 75,880 3,079,538 Acquisitions Euro'000 Disposals/ Write-offs Euro'000 Transfers Euro'000 Exchange differences Euro'000 Balance at 31 December Euro'000 302 43 43,612 612 243,091 280,372 567,377 -6,855 -366,115 -372,970 Accelerated depreciation/ Impairment Euro'000 49,014 25,917 -49,014 25,917 27,694 109,079 2,737 139,510 -26,012 -883 -13,878 -9,635 9 635 2,696 -47,712 Perimeter variations/ Regularisations Euro'000 189,570 1,190,694 138,354 411 411,437 437 759,000 91,118 10,827 287,989 312,671 3,391,660 Balance at 1 January Euro'000 Accumulated amortisation and impairment losses: Industrial property and other rights Concession rights 64,953 365,793 430,746 Charge for the Year Euro'000 Disposals/ Write-offs Euro'000 Exchange differences Euro'000 Balance at 31 December Euro'000 15,753 80,788 96,541 44,219 44,219 -7,049 -7,049 14,809 11,053 25,862 263 -5,636 -5,373 88,729 496,217 584,946 In accordance with IFRS 3 - Business combinations, the adjustments resulting from the conclusion of the purchase price allocation performed during 2009 for the goodwill of Ródão Power, Investco and Rede Lajeado resulted in a restatement of the comparative financial information which implied a decrease of 12,252 thousand Euros and an increase of 10,827 thousand Euros regarding Concession rights - Brazil and Other concession rights, respectively. The caption Accumulated amortisation and impairment losses - Concession rights was also restated with a decrease of 401 thousand Euros. Accelerated depreciation / Impairment include the impairment booked through the dilution effect which resulted from the liquidation of EDP Energias do Brasil treasury stock of 44,219 thousand Euros, in accordance with Accounting policy – note 2 b). Acquisitions of intangible assets in progress include 232,100 thousand Euros related to the concession for the use of the public hydric d

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The movements in Intangible assets during 2008, for the Group, are analysed as follows: Perimeter variations/ Regularisations Euro'000 Balance at 1 January Euro'000 Cost: Industrial property, other rights and other intangibles Concession rights Concession rights - Brazil Concession rights - Gas Use rights Alqueva/Pedrogão Extension of the public hydric domain Concession rights - mini-hydrics Other Concession rights CO2 licenses Intangible assets in progress Acquisitions Euro'000 Disposals/ write-offs Euro'000 Transfers Euro'000 Exchange differences Euro'000 Balance at 31 December Euro'000 141,644 996,992 152,232 393,136 759,000 86,855 40,249 2,570,108 798 17,095 385,748 89,881 493,522 Accelerated depreciation/ Impairment Euro'000 -289 -87,507 -1,523 -89,319 35,034 -46,498 -28,055 -39,519 -25,706 -96,120 -5,656 -127,482 -6,054 228,124 -32,771 91,118 10,827 -19,016 272,228 Perimeter variations/ Regularisations Euro'000 145,427 1,082,498 152,232 377,460 759,000 91,118 10,827 385,096 75,880 3,079,538 Balance at 1 January Euro'000 Accumulated amortisation and impairment losses: Industrial property and other rights Concession rights Charge for the year Euro'000 Disposals/ Write-offs Euro'000 Transfers Euro'000 Exchange differences Euro'000 Balance at 31 December Euro'000 68,104 328,863 396,967 21,510 78,336 99,846 49,921 49,921 -103 -103 -22,858 -22,858 -14,079 -8,292 -22,371 -10,479 -60,177 -70,656 64,953 365,793 430,746 Disposals/write-offs of CO2 licenses includes 86,855 thousand Euros which correspond to CO2 licenses consumed in 2007 and delivered to the regulatory authorities in 2008. Acquisitions for this caption relate to licenses granted free of charge by regulatory authorities and licenses acquired to cover consumption needs of 341,202 thousand Euros and 44,546 thousand Euros, respectively (see note 46). Acquisitions of intangible assets in progress includes 55,597 thousand Euros related to the concession for the use of the public hydric domain for the generation of hydroelectric energy and for the conception, construction, operation and maintenance in the Tua river, for a period of 75 years starting from the operation of the hydroelectric power plant of Foz Tua. Tua Perimeter variations/Regularisations related to Concession rights - Brazil include the concession rights acquired by the Group through the asset swap operation, in Rede Lajeado, Tocatins and Investco of 312,832 thousand Euros (see note 18) and the effect of the write-off of the concession rights of Enersul, resulting from this same operation, of 80,194 thousand Euros. Transfers include 23,640 thousand Euros, net of depreciation, as a result of the assets of the company ESC 90, being considered as Assets held for sale as at 31 December 2008. In the caption Use rights Alqueva/Pedrogão, acquisitions of 17,095 thousand Euros relate to the power enhancement performed during 2008. The movement in Perimeter variations/Regularisations of 32,771 thousand Euros relates to the update of the discount rate used in the calculation of the use rights to 6.97% (31 December 2007: 5.37%). Concession rights - mini-hydrics, the movement in Perimeter variations/Regularisations of 91,118 thousand Euros relates to concession rights booked by the Group following the acquisition of the Pebble Hydro Group. Extension of the public hydric domain includes 759,000 thousand Euros paid by the EDP Group for the extension of the public hydric domain concessions. Accelerated depreciation/Impairment includes the impairment booked for the concession rights of Enersul, of 49,921 thousand Euros as a result of regulatory changes occurred during the year 2008. Perimeter variations/Regularisations includes 80,194 thousand Euros related to the write-off of the accumulated depreciation of Enersul and 18,135 thousand Euros related with the booking of accumulated depreciation of the concession rights in Investco acquired through the assets swap operation. The movements in Intangible assets in 2009, for the

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The movement in Intangible assets in 2008, for the Company, is analysed as follows: Balance at 1 January Euro'000 Cost Industrial property, other rights and other intangibles 100 100 Balance at 1 January Euro'000 Accumulated amortisation: Industrial property and other rights 44 44 18. Goodwill Goodwill for the Group, resulting from the difference between the acquisition value and the corresponding share of the fair value of the assets acquired, at the acquisition date, is analysed as follows: Group Dec 2009 Euro'000 Electric business: Hidrocantábrico Group Neo Energia Group Horizon Group Brazil Group EDP Renováveis Brazil Group Other (Portugal Group) Gas Distribution business: Naturgás Group 969,050 765,275 550,868 56,762 1,501 35,312 2,378,768 781,064 3,159,832 The movements in Goodwill during the year ended 31 December 2009, are analysed as follows: Balance at 1 January Euro'000 Electric business: Hidrocantábrico Group Neo Energia Group Horizon Group Brazil Group EDP Renováveis Brazil Group Other (Portugal Group) Exchange differences Euro'000 Balance at 31 December Euro'000 Dec 2008 Euro'000 954,196 735,229 569,777 57,288 34,137 2,350,627 754,352 3,104,979 15 15 59 59 Charge for the year Euro'000 100 100 Balance at 31 December Euro'000 Balance at 31 December Euro'000 Acquisitions Euro'000 Disposals Euro'000 Transfers Euro'000 Regularisations Euro'000 Disposals Euro'000 Transfers Euro'000 Regularisations Euro'000 Increases Euro'000 Decreases Euro'000 Impairment Euro'000 Regularisations Euro'000 954,196 735,229 569,777 57,288 34,137 2,350,627 14,854 37,809 1,225 1,175 55,063 -8,013 -8,013 -4,328 -4,328 250 -18,909 3,802 276 -14,581 - 969,050 765,275 550,868 56,762 1,501 35,312 2,378,768 Gas Distribution business Naturgás Group 754,352 3,104,979 57,911 112,974 -31,199 -39,212 -4,328 -14,581 - 781,064 3,159,832 The movements in Goodwill during the year ended 31 December 2008, are analysed as follows: Balance at 1 January Euro'000 Electric business HC Energia Group Neo Energia Group Horizon Group Brazil Group Others (Portugal Group) Exchange differences Euro'000 Balance at 31 December Euro'000 Increases Euro'000 Decreases Euro'000 Impairment Euro'000 Regularisations Euro'000 1,002,660 660,912 539,353 64,511 523 2,267,959 97,476 16,620 33,614 147,710 -48,240 -23,352 -71,592 -17,371 -17,371 30,424 -3,581 26,843 -224 193 -2,891 -2,922 954,196 735,229 569,777 57,288 34,137 2,350,627 Gas Distribution business: Naturgás Group 736,824 3,004,783 17,501 165,211 -71,592 -17,371 26,843 27 -2,895 754,352 3,104,979 HC Energia Group During 2009, the goodwill from Hidrocantabrico Group increased by 14,854 thousand Euros (31 December 2008: decrease of 48,240 thousand Euros) as a result of the revaluation of the liability relating to the anticipated acquisition of minority interests from Cajastur, through the written put option held by this entity over 3% of HC Energia share capital, under the utilisation of the Parent Company Model, as described under accounting policies - note 2 b). Additionally the goodwill amount as at 31 December 2008 was reduced by 6,081 thousand Euros as a result of allocation of the acquisition cost of Solanar Distribuición and IERI Distribuición to assets, liabilities and contingent liabilities, during 2008, in accordance with IFRS 3 and as shown at the end of this note. 184

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Neo Energia Group The goodwill held in Neo Energia Group, with reference to 31 December 2009 and 2008, is presented as follows: Neo Energia Group Dec 2008 Dec 2009 Euro'000 Euro'000 Genesa subgroup Ceasa subgroup Neo Polska subgroup Neo Galia subgroup Romania subgroup Neo Catalunya subgroup Enernova subgroup Other 477,522 117,513 26,410 83,160 10,931 4,689 41,876 3,174 765,275 441,356 146,469 25,424 57,428 14,803 4,187 42,299 3,263 735,229 Genesa subgroup The increase in Genesa subgroup goodwill results essentially from the revaluation effect of the liability regarding the anticipated acquisition of minority interests to Caja Madrid due to the existence of a written put option detained by this entity over Genesa and Neo Desa, which amounts to 36,139 thousand Euros (31 December 2008: decrease of 18,109 thousand Euros). Ceasa subgroup The decrease in Ceasa subgroup goodwill during 2009 results from the decrease of the acquisition price of Parc eolic Coll de Moro, S.L. (1,555 thousand Euros), Parc eolic Torre Madrina, S.L. (1,555 thousand Euros) and Parc eolic de Vilalba des Arcs, S.L. (392 thousand Euros) and from the societary restructuring process that originated the transfer of French subsidiaries from Ceasa subgroup to Neo Galia subgroup (25,454 thousand Euros). Neo Polska subgroup The increase in Neo Polska subgroup goodwill during 2009 results from the acquisition of Elektrownia Wiatrowa Kresy I, S.P. (736 thousand Euros) and from the effect of the exchange rate EUR/PLN (250 thousand Euros). Neo Galia subgroup The increase in Neo Galia subgroup goodwill during 2009 results from the acquisition of entities totalling 113 thousand Euros and from the societary restructuring process that originated the transfer of French subsidiaries from Ceasa subgroup to Neo Galia subgroup of 25,619 thousand Euros. Romania subgroup The variation in Romania subgroup goodwill during 2009 results from the increase in the acquisition costs of Renovatio Power, Power SRL by 216 thousand Euros and from the decrease of the payable success fees, amounting to 4,088 thousand Euros, as pre-established contractual assumptions were not fulfilled. Additionally, following the conclusion of the Purchase Price Allocation regarding Renovatio Power and Cernavoda Power, goodwill as at 31 December 2008 was restated, decreasing 49,658 thousand Euros (see detailed information at the end of the note). Neo Catalunya subgroup The variation in Neo Catalunya subgroup goodwill during 2009 results from the acquisition of 100% of the share capital of Bon Vent de L'Ebre, S.L. (502 thousand Euros). Additionally, following the conclusion of the Purchase Price Allocation of Bon Vent de Corbera, S.L. (9,615 thousand Euros) and Bon Vent de Vilalba, S.L. (7,397 thousand Euros), goodwill as at 31 December 2008 was restated, which resulted in a decrease of 17,012 thousand Euros (see detailed information at the end of the note). Enernova subgroup The decrease in goodwill of Enernova subgroup (423 thousand Euros) results from the reduction of the contingent price of its subsidiary Bolores. Horizon Group Goodwill arising from the acquisition of the Horizon Group was determinated in USD with reference to the acquisition date (775,251 thousand USD), corresponding to 550,868 thousand Euros as at 31 December 2009 (31 December 2008: 569,777 thousand Euros), including transaction costs of 12,723 thousand Euros. The decrease in this caption is related with the effect of exchange differences EUR/USD, which amounts to 18,909 thousand Euros (31 December 2008: increase 30,424 thousand Euros). Brazil Group The decrease in Brazil Group goodwill results from the impairment of 4,328 thousand Euros resulting from the liquidation of EDP Energias do Brasil treasury stock and from the recognition of exchange differences of 3,802 thousand Euros ensuing the appreciation of the Brazilian Real against the Euro. Additionally, following the conclusion of the Purchase Price Allocation for Investco, Lajeado and

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Naturgás Group The variation in Naturgás subgroup goodwill includes a decrease of 30,924 thousand Euros (31 December 2008: increase of 14,668 thousand Euros) as a result of the revaluation of the liability relating to the anticipated acquisition of minority interests held by Ente Vasco Energia, under the terms of the Parent Company Model, as described under accounting policies - note 2 b), through a written put option over 30.4% of Naturgás subgroup. Goodwill, as at 31 December 2008, was reduced in 3,239 thousand Euros as a result of the final Purchase Price Allocation of Septentrional Gas, to the assets and liabilities acquired, according to IFRS 3. Additionally, Gas Natural Cantabria, S.A., Gas Natural Murcia Servicios Comunes, S.L., GEM Suministro, S.L. and GEM Suministro Sur, S.L. were acquired, generating an increase of 57,911 thousand Euros in goodwill. In 2009, the book value of assets, liabilities and contingent liabilities recognised at the acquisition date of the entities above mentioned of Gas Natural is as follows: Book Value Property, plant and equipment Other assets Total Assets Minority interests Deferred tax liabilities Current liabilities Total liabilities and minority interests Net assets acquired Acquisition cost Goodwill Reclassifications related with Purchase Price Allocation (PPA): During 2009, EDP Group restated the final allocation of the acquisition cost of the assets, liabilities and contingent liabilities acquired (PPA) from Investco, Lajeado Energia and Tocantins, Neo Catalunya and Ródão Power acquired in 2008. According to IFRS 3, the fair value of the assets, liabilities and contingent liabilities may be adjusted with effect as at the acquisition date during 1 year from the acquisition date. Consequently, the Group restated the balance sheet captions as at 31 December 2008: 177,664 41,657 219,321 3,831 5,554 163,645 173,030 46,291 104,202 57,911 31 Dec 2008 Before PPA Property, plant and equipment Intangible assets Goodwill 21,125,562 2,649,816 3,192,484 26,967,862 Reserves and retained earnings Net income attributable to equity holders of the parent Minority interests 1,241,316 1,091,866 2,181,729 4,514,911 Deferred tax liabilities Other creditors 655,947 655,947 PPA reclassifications 124,403 -1,024 -87,505 35,874 1,977 -337 18,876 20,516 19,790 -4,432 15,358 31 Dec 2008 After PPA 21,249,965 2,648,792 3,104,979 27,003,736 1,243,293 1,091,529 2,200,605 4,535,427 675,737 -4,432 671,305 Goodwill impairment tests The recoverable amount of the goodwill of subsidiaries is assessed annually, independently of the existence of any indicators of impairment. Impairment losses are recognised in the income statement. The recoverable amount is determined based on the value in use of the assets, calculated using valuation methodologies supported by discounted cash flow techniques, considering market conditions, the time value of money and the business risks. 186

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Therefore, for the purposes of these tests, the EDP Group has defined a set of assumptions to determine the recoverable amount of the main investments of the Group, being the main assumptions analysed as follows: Used assumptions 31-Dec-09 Cash Generating Unit EDP Brasil Group Activity Recoverable amount (basis of calculation) Value in use Equity Value (DCF) Cash flows basis of calculation Production and consumption volume and estimated tariffs Residual value at the end of the concession Production and consumption volume and estimated tariffs Installed capacity and tariff evolution prospects in the different markets Cash flows period Growth rate for cash flows Generation: Tariff evolution Distribution: 4.2% 4.5% Discount rate used (after tax) Generation Distribution Supply Untill the end of the concession WACC Generation: 9.61% WACC Distribution: 9.61% WACC Supply: 9.61% HC Energia Group Generation Distribution Supply Value in use Equity Value (DCF) Useful life of equipments Estimation of tariffs evolution and price sale at market WACC Generation: 6.40% WACC Distribution: 5.60% WACC Supply: 6.40% WACC Naturgás: 5.60% WACC (PT): 5.83% WACC (SP): 6.06% WACC (Fr): 5.83% WACC (Belg): 6.06% WACC (Pol): 7.41% WACC (Rom): 7.33% WACC (USA): 5.90% - 6.80% Neo Energia Group Wind Generation Value in use Equity Value (DCF) Useful life of equipments (20 years) Estimation of tariffs evolution and price sale at market Horizon Group Wind Generation Value in use Equity Value (DCF) Installed capacity and tariff evolution prospects/power purchase agreements Useful life of equipments (20 years) Estimation of tariffs evolution and price sale at market Used assumptions 31-Dec-08 Cash Generating Unit Brazil Group Activity Recoverable amount (basis of calculation) Value in use Equity Value (DCF) Cash flows basis of calculation Production and consumption volume and estimated tariffs Cash flows period Growth rate for cash flows Generation: Tariff evolution Distribution: 6.59% Perpetuity Discount rate used (ater tax) Generation Distribution Supply Generation: Untill the end of concession Distribution: Perpetuity Useful life of equipments WACC Generation: 11.71%-17.81% WACC Distribution: 12.51%-18.66% HC Energia Group Generation Distribution Supply Value in use Equity Value (DCF) Production and consumption volume and estimated tariffs Installed capacity and dt tariff iff evolution l ti prospects in the different markets Installed capacity and tariff evolution prospects/power purchase agreements Estimation of tariffs evolution and price sale at market WACC Generation: 7.5% WACC Distribution: 6.80% WACC Supply: 7.5% WACC Naturgás: 7.02% WACC (PT): 7.66% WACC (SP): (SP) 6.96% 6 96% WACC (Fr): 6.66% WACC (Pol): 8.53% WACC (USA): 8.00% Neo Energia Group Wind Generation Value in use E Equity it V Value l (DCF) Useful life of equipments i t (20 years) Estimation of tariffs evolution l ti Horizon Group Wind Generation Value in use Equity Value (DCF) Useful life of equipments (20 years) Estimation of tariffs evolution and price sale at market 19. Investments in subsidiaries (Company basis) This caption is analysed as follows: Company Dec 2009 Dec 2008 Euro'000 Euro'000 Historical acquisition cost Effect of equity method (transition to IFRS) Equity investments in subsidiaries Impairment losses on equity investments in subsidiaries 10,812,363 -1,165,796 9,646,567 -110,724 9,535,843 10,740,378 -1,165,796 9,574,582 -68,174 9,506,408 On the date of transition to IFRS, EDP, S.A. ceased to apply the equity method of accounting to its investments in its unconsolidated financial statements, having considered this method in the determination of the deemed cost at transition date. 187

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Investments in subsidiaries are analysed as follows: Company Dec 2009 Dec 2008 Net amount Net amount Euro'000 Euro'000 Investments in subsidiaries: EDP Distribuição de Energia, S.A. EDP Comercial, S.A. EDP Gestão de Produção de Energia, S.A. EDP Gás, SGPS, S.A. (ex-EDP-Participações, SGPS, S.A.) Energia RE EDP Produção Bioeléctrica, S.A. EDP Valor - Gestão Integrada de Serviços, S.A. Edalpro - Imobiliária, Lda. Labelec - Est. Desenv. Activ. Laboratoriais, S.A. EDP Energias do Brasil, S.A. Hidroeléctrica del Cantábrico, S.A. EDP Finance B.V. Sãvida, S.A. EDP Investimentos, S.G.P.S., S.A. EDP Imobiliária e Participações, S.A. Balwerk, S.A. EDP Renováveis S.A. EDP Inovação, S.A. Other 1,686,145 188,463 2,156,054 47,796 2,005 6,595 4,550 3,465 432,238 1,981,798 2,001 4,452 46,592 28,109 1,686 2,939,889 2,098 1,907 9,535,843 1,686,145 188,463 2,156,054 47,795 2,005 6,595 4,550 748 3,465 432,238 1,981,798 2,001 2,552 47,251 1,686 2,939,889 1,206 1,967 9,506,408 The increase in Investments in subsidiaries (29,435 thousand Euros) results mainly from the granting of supplementary capital contributions to the subsidiaries EDP Imobiliária e Participações, S.A., EDP Inovação, S.A. and Sãvida (70,000 thousand Euros, 892 thousand Euros and 1,900 thousand Euros, respectively), from the liquidation of EDALPRO - Imobiliária, Lda (748 thousand Euros) and from the charge for the year of the impairment on investments in EDP Imobiliária e Participações, S.A. (41,891 thousand Euros) and in EDP Investimentos, S.G.P.S., S.A. (659 thousand Euros). 20. Investments in associates This caption is analysed as follows: Group Dec 2009 Euro'000 Associated companies: Investments in associates Adjustments in investments in associates Net book value 175,409 -137 175,272 Dec 2008 Euro'000 172,891 -137 172,754 Company Dec 2009 Dec 2008 Euro'000 Euro'000 45,535 -137 45,398 49,910 -137 49,773 As of 31 December 2009, for the Group, Investments in associates include goodwill of 36,767 thousand Euros (31 December 2008: 21,132 thousand Euros). Investments in associates , for the Group , are analysed as follows: Group Dec 2009 Cost Impairment Euro'000 Euro'000 Associated companies: CEM - Companhia de Electricidade de Macau, S.A. DECA - Distribucion Eléctrica Centroamerica, S.A. Setgás-Soc.de Prod.e Distrib.de Gás, S.A. D. E. de Canárias, S.A. Parque Eólico Altos del Voltoya, S.A. Portsines - Terminal de Multipurpose de Sines, S.A. ENEOP - Eólicas de Portugal, S.A. Parque Eólico Sierra del Madero, S.A. Veinco Energia Limpia SL Parque Eólico de Belmonte, S.A. Hidroastur, S.A. Aprofitament D'Energies Renovables de L'Ebre, S.A. Carriço Cogeração, S.A. Other Dec 2008 Cost Impairment Euro'000 Euro'000 57 132 34 797 23 909 11 235 8 995 7 489 6 907 5 485 4 792 3 073 1 937 1 365 1 102 7 191 175,409 - 137 -137 59,152 51,695 9,256 10,735 3,481 6,308 6,486 5,454 4,837 3,243 2,113 1,763 8,368 172,891 -137 -137 EDP Group acquired 14.71% of the share capital of Aprofitament D'Energies Renovables de lÉbre, S.A. through the acquisition of Aprofitament D'Energies Renovable de la Terra Alta, S.A. and an additional 11.09% of the share capital of Parque Eólico del Voltoya through its subsidiary Sinae Inversiones Eólicas, S.A. 188

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The movement in Investments in associates , for the Group , is analysed as follows: Group Dec 2009 Euro'000 Balance as at 1 January Acquisitions / Perimeter entries Disposals Share of profit of associates Dividends received Exchange differences Transfers / Regularisations Balance as at 31 December Investments in associates , for the Company , are analysed as follows: Company Dec 2008 Dec 2009 Cost Impairment Cost Impairment Euro'000 Euro'000 Euro'000 Euro'000 Associated companies DECA - Distribuición Eléctrica Centroamerica, S.A. Other 172,891 7,248 25,151 -20,254 -7,264 -2,363 175,409 Dec 2008 Euro'000 252,099 6,536 -77,009 34,687 -31,937 6,704 -18,189 172,891 45,398 137 45,535 -137 -137 49,773 137 49,910 -137 -137 During 2009, the reimbursement of the supplementary capital contributions granted to DECA took place in the total amount of 4,375 thousand Euros. During 2009, there were no movements in the impairment of Investments in associates. 21. Available for sale investments This caption is analysed as follows: Group Dec 2009 Euro'000 Ampla Energia e Serviços, S.A. Ampla Investimentos e Serviços, S.A. Banco Comercial Português, S.A. Denerge EDA - Eléctrica dos Açores, S.A. REN - Rede Eléctrica Nacional, S.A. Sociedade Eólica de Andalucia, S.A. Sonaecom, S.A. Tagusparque, S.A. Tejo Energia, S.A. Other 163,644 15,038 104,118 15,563 8,213 55,883 11,766 2,062 25,636 41,194 443,117 Dec 2008 Euro'000 68,939 9,073 122,707 6,006 52,332 10,854 28,946 1,097 18,200 32,733 350,887 Company Dec 2009 Dec 2008 Euro'000 Euro'000 163,644 15,038 55,883 3,836 238,401 68,939 9,073 52,332 3,815 134,159 As at 31 December 2009, investments held in REN - Rede Eléctrica Nacional, S.A. and Ampla Energia e Serviços, S.A. increased by 3,551 thousand Euros and 94,705 thousand Euros, respectively, as a consequence of the positive evolution in the listed market price of these shares. This increase in fair value was booked against fair value reserves (see note 31). During 2009, EDP sold in the Stock Exchange 29,150,000 shares of Sonaecom, S.A. for 57,866 thousand Euros, which were booked at acquisition cost net of impairment for 28,946 thousand Euros. This operation generated a gain on a consolidated basis of 28,920 thousand Euros (see note 13). Additionally EDP sold 28,167,603 shares of BCP which were booked at acquisition cost net of impairment for 17,351 thousand Euros. This operation generated a gain on a consolidated basis of 5,355 thousand Euros (see note 13). In 2009, the movements in Available for sale investments are analysed as follows: Dec 2009 Balance at 1 January Euro'000 Ampla Energia e Serviços, S.A. Ampla Investimentos e Serviços, S.A. Banco Comercial Português, S.A. Denerge EDA - Electricidade dos Açores, S.A. REN - Rede Eléctrica Nacional, S.A. Sociedade Eólica de Andalucia, S.A. Sonaecom, S.A. Tagusparque, S.A. Tejo Energia, S.A. Other 68,939 9,073 122,707 6,006 52,332 10,854 28,946 1,097 18,200 32,733 350,887 Change in fair value reserve Euro'000 94,705 5,965 28,036 370 2,207 3,551 703 965 7,436 991 144,929 Transfers/ Minority Interests Euro'000 15,193 209 -3,016 12,386 Balance at 31 December Euro'000 163,644 15,038 104,118 15,563 8,213 55,883 11,766 2,062 25,636 41,194 443,117 Acquisitions Euro'000 17,869 17,869 Disposals Euro'000 -17,351 -28,946 -7,368 -53,665 Impairment Euro'000 -29,274 -15 -29,289 189 Transfers / minority interests includes the transfer of 3.16% of the investment in Denerge - Desenvolvimento Energético, S.A. of 14,995 thousand Euros previously included under Assets held for sale.

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 In 2008, the movements in Available for sale investments are analysed as follows: Dec 2008 Balance at 1 January Euro'000 Ampla Energia e Serviços, S.A. Ampla Investimentos e Serviços, S.A. Banco Comercial Português, S.A. EDA - Electricidade dos Açores, S.A. REN - Rede Eléctrica Nacional, S.A. Sociedade Eólica de Andalucia, S.A. Sonaecom, S.A. Tagusparque, S.A. Tejo Energia, S.A. ValorSul, S.A. Other 93,907 5,575 340,699 5,100 95,586 3,107 95,904 1,097 19,998 3,878 40,409 705,260 Change in fair value reserve Euro'000 -4,432 3,498 -59,851 906 -32,188 5,968 -1,798 -427 -88,324 Minority Interests Euro'000 1,779 1,779 Balance at 31 December Euro'000 68,939 9,073 122,707 6,006 52,332 10,854 28,946 1,097 18,200 32,733 350,887 Acquisitions Euro'000 42,587 2,301 44,888 Disposals Euro'000 -589 -11,066 -3,878 -7,805 -23,338 Impairment Euro'000 -20,536 -200,139 -66,958 -1,745 -289,378 Available for sale investments are booked at fair value being the changes from the date of acquisition recorded against fair value reserves (see note 31). The fair value reserves as at 31 December 2009 and 2008 are analysed as follows: Dec 2009 Euro'000 Ampla Energia e Serviços, S.A. Ampla Investimentos e Serviços, S.A. Banco Comercial Português, S.A. Denerge EDA - Electricidade dos Açores, S.A. REN - Rede Eléctrica Nacional, S.A. Sociedade Eólica de Andalucia, S.A. Tagusparque Tejo Energia, S.A. Other 94,705 9,463 28,036 370 1,322 30,063 6,671 965 19,281 1,017 191,893 22. Deferred tax assets and liabilities EDP Group records the tax effect resulting from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis, which are analysed as follows: y Deferred tax assets Dec 2009 Euro'000 Tax credits Provisions Financial instruments Tangible and intangible fixed assets Reinvested gains Financial and available for sale investments Tariff adjustments and tariff deficit Reversal of regulatory assets and liabilities Allocation of fair value to assets and liabilities acquired Accounting revaluations Deferred income relating to CMEC Other temporary differences Assets/liabilities compensation of deferred taxes 110,310 506,148 77,900 251,212 25,059 303,349 18,196 30,944 48,260 39,773 -749,816 661,335 Dec 2008 Euro'000 252,222 575,936 133,439 286,504 39,284 79,519 39,100 13,785 10,530 19,924 -910,365 539,878 Deferred tax liabilities Dec 2009 Euro'000 69,043 10,807 8,083 70,030 168,501 690,212 211,508 222,871 57,654 -749,816 758,893 Dec 2008 Euro'000 121,618 20,949 8,281 63,783 362,227 20,460 616,381 213,708 130,045 28,650 -910,365 675,737 Net deferred tax Dec 2009 Euro'000 110,310 506,148 8,857 240,405 -8,083 -44,971 134,848 18,196 -659,268 -163,248 -222,871 -17,881 -97,558 Dec 2008 Euro'000 252,222 575,936 11,821 265,555 -8,281 -24,499 -282,708 18,640 -602,596 -203,178 -130,045 -8,726 -135,859 Dec 2008 Euro'000 3,498 -885 26,512 5,968 11,845 26 46,964 As referred under accounting policies - note 2 r), the compensation between deferred tax assets and liabilities is performed at each subsidiary, and therefore the consolidated financial statements reflect in its assets the total of the deferred tax of subsidiaries that have deferred tax assets and in its liabilities the total of the deferred tax of subsidiaries that have deferred tax liabilities. On a company basis, EDP, S.A. records the tax effect resulting from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis, which are analysed as follows: Deferred tax assets Dec 2009 Euro'000 Tax credits Provisions Financial instruments Financial and available for sale investments Accounting revaluations Other temporary differences 6,327 33,123 441 9,043 4,193 53,127 Dec 2008 Euro'000 114,710 15,493 62,147 3,229 8,653 4,199 208,431 Deferred tax liabilities Dec 2009 Euro'000 47,736 68,870 12,023 4,987

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The deferred tax movement, for the Group and for the Company, in 2009 and 2008 is analysed as follows: Deferred taxes Group Dec 2009 Euro '000 Balance at 1 January Charges to the profit and loss account Charges against reserves Exchange differences and other variations Balance at 31 December -135,859 131,272 -48,740 -44,231 -97,558 Dec 2008 Euro '000 54,786 -88,028 37,018 -139,635 -135,859 Deferred taxes Company Dec 2009 Euro '000 60,716 -54,519 -26,632 -60,054 -80,489 Dec 2008 Euro '000 -53,253 109,267 4,549 153 60,716 As referred under accounting policies - note 2 a), in accordance with IFRS 3, in the period of 12 months following a business combination, the acquiring company may adjust the fair value of assets, liabilities or contingent liabilities, being those adjustments performed with effect from the date of acquisition. The allocation of the fair value of assets, liabilities and contingent liabilities concluded in 2009, regarding the acquisition of Investco, Lajeado and Tocantis, Neo Catalunya and Romenia sub-group, that occurred in 2008, implied an allocation of 19,790 thousand Euros to deferred tax liabilities, as at 31 December 2008 (see note 18). Group Dec 2009 Euro'000 Current tax Changes in fair value of derivative financial instruments Gains/losses on the sale of treasury stock -968 -366 -1,334 Deferred tax Financial instruments and fair value Actuarial gains and losses Changes in fair value of financial assets held for sale -35,620 1,744 -14,864 -48,740 -50,074 The Group tax losses and tax credits carried forward are analysed as follows: Group Dec 2009 Euro'000 Expiry date: 2009 2010 2011 2012 2013 2014 2015 2016 to 2029 Without expiry date Without expiry date but limited to 30% of taxable income of each year 93 348 525 2,132 8,543 32,415 831,430 149,304 491,942 1,516,732 23. Inventories This caption is analysed as follows: Group Dec 2009 Euro'000 Merchandise Advances on account of purchases Finished and intermediate products Sub-products, waste, residues and scrap Raw and subsidiary materials and consumables: Coal Fuel Nuclear fuel Other consumables CO2 licenses Other 24,937 4,650 10,384 13,159 94,780 41,041 13,594 11,351 59,480 273,376 Dec 2008 Euro'000 40,470 4,061 12,075 10,506 64,443 41,153 12,845 27,744 63,503 276,800 Company Dec 2009 Dec 2008 Euro'000 Euro'000 11,351 11,351 27,744 27,744 Dec 2008 Euro'000 691 874 259 899 2,633 539,080 7,462 476,403 474,113 1,502,414 Dec 2008 Euro'000 831 831 18,108 5,406 13,504 37,018 37,849 Company Dec 2009 Dec 2008 Euro'000 Euro'000 -968 -366 -1,334 -17,014 -9,618 -26,632 -27,966 831 831 4,549 4,549 5,380 CO2 licenses correspond to the amount of available for sale licenses as at 31 December 2009, valued at market price on the same date against the income statement (see note 46). 191

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 24. Trade receivables Trade receivables are analysed as follows: Group Dec 2009 Euro'000 Short-term trade receivables - Current: Corporate sector and individuals : Portugal Spain Brazil U.S.A. Other Public Sector: Portugal State and official entities Local government Brazil State and official entities Local government Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 772,701 669,427 332,441 27,434 12,429 733,412 616,452 207,563 21,130 4,239 97,432 - 18,106 - 16,674 33,769 19,886 31,316 - 284 8,306 20,132 1,893,313 1,472 11,143 1,646,613 222,008 -222,008 1,646,613 97,432 9,941 -9,941 97,432 18,390 9,941 -9,941 18,390 Doubtful debts Impairment losses 230,851 -230,851 1,893,313 Group Dec 2009 Euro'000 Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 Medium and long-term trade receivables - Non-Current: Corporate sector and individuals : Brazil Public Sector: Portugal - Local government 38,386 142,521 180,907 33,610 147,140 180,750 -68,706 112,044 1,758,657 97,432 18,390 Impairment losses -66,086 114,821 2,008,134 The movement in Impairment losses , in 2009, for the Group is analysed as follows: Reversal of Impairment losses Euro'000 -14,275 -740 -470 Perimeter Variations / Regularisations Euro'000 -20,156 -24,216 2,107 6 Balance at 1 January Euro'000 Corporate sector and individuals : Portugal Brazil Spain Other Public sector : Portugal Brazil 127,587 50,263 17,271 - Exchange differences Euro'000 13,467 - Charge for the year Euro'000 35,214 28,858 6,941 - Charge-off Euro'000 -856 -14,693 -48 - Balance at 31 December Euro'000 127,514 52,939 25,801 6 94,969 624 290,714 182 13,649 314 71,327 -5,215 -20,700 -197 -15,794 -42,259 90,068 609 296,937 The movement in Impairment losses , in 2008, for the Group is analysed as follows: Reversal of Impairment losses Euro'000 -10,619 -6,489 -215 Perimeter Variations / Regularisations Euro'000 -19,267 -14,353 -187 Balance at 1 January Euro'000 Corporate sector and individuals : Portugal Brazil Spain Public sector : Portugal Brazil 157,473 88,106 11,937 Exchange differences Euro'000 -16,740 - Charge for the year Euro'000 33,276 8,252 Charge-off Euro'000 -33,537 -2,516 Balance at 31 December Euro'000 127,587 50,263 17,271 63,948 321,464 -16,740 28,286 624 70,438 -17,323 -140 -36,193 2,875 -30,932 94,969 624 290,714 192

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The movement in Impairment losses , in 2009, for the Company is analysed as follows: Reversal of Impairment losses Euro'000 - Balance at 1 January Euro'000 Corporate sector and individuals 9,941 9,941 The movement in Impairment losses , in 2008, for the Company is analysed as follows: Charge for the year Euro'000 Charge-off Euro'000 - Balance at 31 December Euro'000 9,941 9,941 Balance at 1 January Euro'000 Corporate sector and individuals 9,941 9,941 25. Debtors and other assets Debtors and other assets are analysed as follows: Charge for the year Euro'000 35 35 Reversal of Impairment losses Euro'000 -20 -20 Charge-off Euro'000 -15 -15 Balance at 31 December Euro'000 9,941 9,941 Group Dec 2009 Euro'000 Short term debtors - Current: Loans to subsidiaries Dividends Loans to related companies Other debtors: - Advances to pensioners on account of the Social Security - Amounts owed to staff - Amounts receivable from the Telecommunications business - Amounts receivable from Spanish tariff expenses - Amounts receivable from Portuguese tariff adjustments - Receivables from the State and concessors - Advances to RTP - broadcasting charge - Receivables relating to other goods and services - Derivative financial instruments - Subsidiaries companies - Amounts receivable relating to gas sales operations - Amounts receivable relating to insurance and reinsurance operations - Amounts receivable relating to the renewable operations - Expenditure on concessions - Insurance - Other deferred costs - Rents receivable of Energin lease - Amounts receivable relating to CMEC - Amounts to be invoiced to REN - Tied deposits (Horizon) Accrued income relating to energy sales and purchase activity in the market Sundry debtors and other operations 142,976 13,717 3,520 55,640 117,915 559,724 13,040 32,125 66,831 230,195 1,402 5,067 11,272 14,284 10,130 6,879 24,976 363,350 90,505 27,425 148,234 1,939,207 Impairment losses on short-term debtors - Current -74,191 1,865,016 Group Dec 2009 Euro'000 Medium and long term debtors - Non Current: Loans to subsidiaries Loans to related companies Other debtors: - Amounts receivable from Portuguese tariff adjustments - Amounts receivable from Spanish tariff expenses - Expenditure on concessors - Guarantees and linked deposits - Amounts receivable relating to CMEC - Derivative financial instruments - O&M contract valuation - Mapple Ridge I (Horizon) Sundry debtors and other operations Dec 2008 Euro'000 Dec 2008 Euro'000 8,054 1,889 3,475 55,640 281,155 10,444 33,749 29,140 71,932 216,670 18,056 11,043 24,948 4,789 6,808 15,852 26,790 367,790 29,098 43,016 218,582 220,733 1,699,653 -67,481 1,632,172 Company Dec 2009 Dec 2008 Euro'000 Euro'000 811,279 7,492 84,651 216,534 524,888 6,269 38,191 39,341 1,728,645 -908 1,727,737 22,957 369,153 6,373 3 3 20,585 154,383 329,278 1,624,117 5,198 883 218,582 80,355 2,831,870 -897 2,830,973 Company Dec 2009 Dec 2008 Euro'000 Euro'000 25,672 76,127 536,205 16,199 126,601 1,026,181 46,116 7,405 85,303 1,945,809 37,384 1,435,033 134,201 8,222 104,308 785,204 44,197 7,941 83,995 2,640,485 -2,782 2,637,703 4,269,875 4,480,386 18,874 1,385 37,271 4,537,916 4,537,916 6,265,653 5,784,331 15,087 7,405 104,334 5,911,157 5,911,157 8,742,130 Impairment losses on medium and long term debtors - Non current -2,839 1,942,970 3,807,986 193

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Tied deposits (Horizon) - Current includes 86,807 thousand Euros (39,736 thousand Euros in 2008) related to the financing agreement for wind farms, which establishes that the amount of these deposits should be sufficient to cover all costs which are expected to incur in the construction. The amounts receivable from Spanish tariff expenses current and non-current correspond to the accumulated amount receivable from the Spanish Government of the Spanish electricity system tariff deficit as at 31 December 2009, according to the applicable legal framework (see note 3). The amounts receivable relating to CMEC totalize 1,389,531 thousand Euros, which include 1,026,181 thousand Euros as medium and long term debts and 363,350 thousand Euros as short term debts. The amount receivable relating to the initial CMEC of 763,302 thousand Euros as medium and long term debts and 41,055 thousand Euros as short term debts, corresponds to the initial CMEC granted to EDP Produção (833,467 thousand Euros) deducted from the receivable annuity for 2007, 2008 and 2009. The remaining 262,879 thousand Euros in the medium and long term and 322,295 thousand Euros in the short term correspond to the operational revenues related to the revisibility calculation in 2007, 2008 and 2009. The Derivative financial instruments portfolio, whose amounts have been booked as Debtors and other current and non current assets by 230,195 thousand Euros and 46,116 thousand Euros respectively, include the trading and hedge portfolios as at 31 December 2009 (see note 40). The amounts receivable from Portuguese current and non-current tariff adjustments by 559,724 thousand Euros and 76,127 thousand Euros respectively (31 December 2008: 10,444 thousand Euros and 1,435,033 thousand Euros in current and non-current respectively), relate to the tariff adjustment (see note 3) from the Portuguese electric system (SEP) in 2009 and 2008 of regulated companies in Portugal. The movement for the period in Amounts receivable from Portuguese tariff adjustments (Current and Non current) is analysed as follows: Current Euro'000 Balance as at 1 January 2008 Tariff adjustment of 2007 Tariff adjustment for the period Balance as at 31 December 2008 Receipts through the electric energy tariff Securitisation of the non regular tariff adjustments of 2007 and 2008 Tariff adjustment of 2008 Tariff adjustment for the period Interest expense Transfer from non current to current Balance as at 31 December 2009 10 444 10,444 -11,015 571 559,724 559,724 Non Current Euro'000 173,896 1,261,137 1,435,033 -1 672 845 49,435 748,172 76,056 -559,724 76,127 On 5 March 2009 and 3 December 2009, EDP - Serviço Universal, S.A. entered into an agreement for the assignment, by means of a true sale without recourse, to Tagus - Sociedade de Titularização de Créditos, S.A. ("Tagus"), of the rights to receive the full amount of the positive adjustments to the electricity tariffs, as endorsed by Decree-Law n.º 165/2008 of 21 August. In the first operation, EDP - Serviço Universal, (tariff deficit) h f l S.A. granted d the h rights h to receive the h non regular l tariff ff adjustments d ( ff d f ) related l d to 2007 and d 2008 of f 1,225,376 thousand Euros. With the sale of those rights, EDP Group has received 1,204,422 thousand Euros, generating a loss of 22,969 thousand Euros including financial expenses incurred (see note 14). In the second operation, was granted the right to receive the non regular tariff adjustments (tariff deficit) related to the estimated over cost concerning to generation in special regime related to 2009 of 447,469 thousand Euros. The transaction totalised 434,720 thousand Euros, net of expenses, and generated a loss of 12,749 thousand Euros (see note 14). The movements in Impairment losses on short-term debtors - Current in 2009, for the Group, are analysed as follows:

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The movements in Impairment losses on short-term debtors - Current in 2008, for the Company , are analysed as follows: Reversal of impairment losses Euro'000 -328 -328 Balance at 1 January Euro'000 Other debtors 869 869 Charge for the year Euro'000 356 356 Transfers Euro'000 - Charge off Euro'000 - Balance at 31 December Euro'000 897 897 The movements in Impairment losses on Medium and long term debtors - Non current Balance at 1 January Euro'000 Other debtors 2,782 2,782 The movements in Impairment losses on Medium and long term debtors - Non current Balance at 1 January Euro'000 Other debtors 2,737 2,737 26. Tax receivable Tax receivable is analysed as follows: in 2009, for the Group, are as follows: Balance at 31 December Euro'000 2,839 2,839 Charge for the year Euro'000 72 72 Transfers Euro'000 -15 -15 Charge off Euro'000 in 2008, for the Group, are as follows: Balance at 31 December Euro'000 2,782 2,782 Charge for the year Euro'000 - Transfers Euro'000 45 45 Charge off Euro'000 Group Dec 2009 Euro'000 State and other public entities: - Income tax - Value added tax (VAT) - Turnover tax (Brazil) - Social tax (Brazil) - Other taxes 144,016 334,110 72,786 288 6 441 6,441 557,641 27. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are analysed as follows: Group Dec 2009 Euro'000 Fixed income securities: Listed funds Bonds and other listed fixed income securities Variable income securities: Listed funds Shares 33,012 47,749 80,761 4,091 4,091 84,852 28. Cash and cash equivalents Cash and cash equivalents are analysed as follows: Group Dec 2009 Euro'000 Cash: - Cash in hand Bank deposits: - Current deposits - Term deposits - Other deposits 124 333,102 613,506 505 947,113 Other short term investments: - Banks - Euros - Banks - Other currencies 915,156 327,167 1,242,323 Cash and cash equivalents 2,189,560 Dec 2008 Euro'000 93 457,741 49,133 506,874 122,720 83,900 206,620 713,587 Dec 2008 Euro'000 32,369 47,221 79,590 3,405 232 3,637 83,227 Dec 2008 Euro'000 111,459 347,997 17,899 21,643 45 742 45,742 544,740 Company Dec 2009 Dec 2008 Euro'000 Euro'000 14,077 30,468 44,545 33,901 54,220 7 316 7,316 95,437 Company Dec 2009 Dec 2008 Euro'000 Euro'000 232 232 232 Company Dec 2009 Dec 2008 Euro'000 Euro'000 13,856 13,856 877,500 877,500 891,356 113,379 113,379 69,500 69,500 182,879 195 The caption Other short term investments includes very short term investments promptly convertible into cash.

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 29. Share capital and share premium EDP, S.A. is a company incorporated by shares in which the Portuguese State and other public entities have minority interests. The Company was incorporated as a State-owned company and started its privatisation process in 1997. The second and third phases of the privatisation process were carried out in 1998, the fourth phase in 2000, the fifth phase consisting of a capital increase in 2004 and a sixth phase in 2005. In December 2007 the State issued bonds convertible into shares of EDP, S.A. under the seventh phase of the privatisation process. The Portuguese State now holds directly and indirectly approximately 25.71% of the share capital of EDP, S.A. The share capital amounts to 3,656,537,715 Euros and is represented by 3,656,537,715 fully paid up ordinary shares of 1 Euro each. Of this amount, 2,936,222,980 are class A shares and 720,314,735 are class B shares. The class B shares are held by Portuguese public entities. Share capital and Share premium are analysed as follows: Group and Company Share capital Share premium Euro'000 Euro'000 Balance as at 31 December 2008 Movements during the year Balance as at 31 December 2009 The earnings per share (EPS) attributable to the equity holders of EDP are as follows: Group Dec 2009 Net profit attributable to the equity holders of EDP (in Euros) Net profit from continuing operations attributable to the equity holders of EDP (in Euros) Weighted average number of ordinary shares outstanding Weighted average number of diluted ordinary shares outstanding Basic earnings per share attributable to equity holders of EDP (in Euros) Diluted earnings per share attributable to equity holders of EDP (in Euros) Basic earnings per share from continuing operations (in Euros) Diluted earnings per share from continuing operations (in Euros) 1,023,844,684 Dec 2008 1,091,528,829 Company Dec 2009 630,020,903 Dec 2008 550,977,634 3,656,538 3,656,538 501,992 501,992 1,023,844,684 3,621,419,392 3,622,458,061 0.28 0.28 0.28 0.28 1,089,231,457 3,629,295,527 3,630,582,881 0.30 0.30 0.30 0.30 3,622,932,392 3,623,971,061 3,630,440,152 3,631,727,506 EDP Group calculates basic and diluted earnings per share attributable to equity holders of EDP using the weighted average number of ordinary shares outstanding during the year, net of changes in treasury stock during the year. The average number of shares was determined as follows: Group Dec 2009 Ordinary shares issued at the beginning of the year Effect of shares issued during the year Average number of realised shares Effect of treasury stock Average number of shares during the year Effect of stock options Diluted average number of shares during the year 30. Treasury stock This caption is analysed as follows: Group Dec 2009 Book value of EDP, S.A. treasury stock (thousand Euros) Number of shares Market value per share (in Euros) Market value of EDP, S.A.'s treasury stock (thousand Euros) 119,784 34,212,975 3.108 106,334 Dec 2008 126,532 35,703,591 2.695 96,221 Company Dec 2009 113,689 32,699,975 3.108 101,632 Dec 2008 120,437 34,190,591 2.695 92,144 3,656,537,715 3,656,537,715 -35,118,323 3,621,419,392 1,038,669 3,622,458,061 Dec 2008 3,656,537,715 3,656,537,715 -27,242,188 3,629,295,527 1,287,354 3,630,582,881 Company Dec 2009 3,656,537,715 3,656,537,715 -33,605,323 3,622,932,392 1,038,669 3,623,971,061 Dec 2008 3,656,537,715 3,656,537,715 -26,097,563 3,630,440,152 1,287,354 3,631,727,506 196

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Operations performed from 1 January 2009 to 31 December 2009: Volume acquired (number of shares) Volume sold (number of shares) Final position (number of shares) Highest market price (in Euros) Lowest market price (in Euros) Average market price (in Euros) EDP, S.A. 1,409,481 -2,900,097 32,699,975 3.21 2.21 2.86 Energia RE 1,513,000 - The treasury stock held by EDP, S.A., is within the limits established by the Company's articles of association and by the 'Código das Sociedades Comerciais' (Companies Commercial Code). The treasury stock is stated at acquisition cost. 31. Reserves and retained earnings This caption is analysed as follows: Group Dec 2009 Euro'000 Legal reserve Fair value reserve (cash flow hedge) Tax effect of fair value reserve (cash flow hedge) Fair value reserve (available-for-sale investments) Tax effect of fair value reserve (available-for-sale investments) Exchange differences arising on consolidation Treasury stock reserve (EDP, S.A.) Other reserves and retained earnings 471,387 80,444 -18,650 191,893 -17,790 165,859 113,689 1,241,728 2,228,560 Dec 2008 Euro'000 443,838 -54,653 20,130 46,964 -2,926 -94,018 120,437 763,521 1,243,293 Company Dec 2009 Dec 2008 Euro'000 Euro'000 471,387 56,561 -15,457 129,809 -12,077 113,689 1,124,095 1,868,007 443,838 -11,295 2,525 25,649 -2,459 120,437 1,102,912 1,681,607 Legal reserve In accordance with Article 295 of "Código das Sociedades Comerciais" (Companies Commercial Code) and EDP, S.A.'s articles of association, the legal reserve must be increased by a minimum of 5% of the annual profit until it reaches 20% of the company’s share capital. This reserve can only be used to cover losses or to increase share capital. Fair value reserve (cash flow hedge) This reserve includes the effective portion of the cumulative net change in the fair value of the cash flow hedging instruments. Fair value reserve (available-for-sale (available for sale investments) This reserve includes the accumulated net change in the fair value of available-for-sale investments as at the balance sheet, net of impairment losses. The changes in this consolidated caption for the year are as follows: Group Increases Euro'000 Balance as at 31 December 2007 Changes in fair value Transfer of impairment to profit or loss Transfer to the income statement relating to assets sold Balance as at 31 December 2008 Changes in fair value Transfer of impairment to profit or loss Transfer to the income statement relating to assets sold Balance as at 31 December 2009 329,161 10,373 -16,969 322,565 179,756 -34,275 468,046 Decreases Euro'000 -193,873 -371,106 289,378 -275,601 -29,841 29,289 -276,153 Decreases in fair value changes during the year ended 31 December 2009 include 29,274 thousand Euros related to impairment losses recognised regarding the investment in BCP, transferred to the income statement during the first quarter of 2009. Increases in fair value changes during the year ended 31 December 2009 are analysed as follows: Dec 2009 Euro'000 Sonaecom, S.A. Ampla Energia e Serviços, S.A. Banco Comercial Português, S.A. REN - Rede Eléctrica Nacional, S.A. Tejo Energia, S.A. Ampla Investimentos e Serviços, S.A. Other 28,920 94,705 33,391 3,551 7,436 5,965 5,788 179,756 Transfer to the income statement relating to assets sold includes the gains of 28,920 thousand Euros and 5,355 thousand Euros, related to the sale at the Stock Exchange of Sonaecom and BCP shares, respectively (see note 13). 197

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Exchange difference on consolidation Exchange difference on consolidation includes the amounts resulting from changes in the value of shareholder's equity of subsidiary and associated companies resulting from changes in exchange rates. The exchange rates used in the preparation of the financial statements are as follows: Exchange rates at Dec 2009 Closing Average rates exchange-rate USD BRL MOP GTQ PLN RON 1.441 2.511 11.506 12.003 4.105 4.236 1.390 2.783 11.088 11.332 4.362 4.245 Exchange rates at Dec 2008 Closing Average rates exchange-rate 1.392 3.244 11.109 10.779 4.154 4.023 1.477 2.652 11.841 11.153 3.486 3.762 Currency Dollar Brazilian Real Macao Pataca Quetzal Zloty Lei Dividends The dividend proposed, prior to approval of the accounts and not yet recognised as a distribution, amounts to 566,763 thousand Euros for the year ended 31 December 2009 and corresponds to 0.155 Euros per share. Proposal for the appropriation of statutory net profits of EDP, S.A. with reference to 2008 and 2007 - Donations to Fundação EDP In accordance with article 30, n.º 1 f) of EDP - Energias de Portugal, S.A. Articles, the General Assembly of Shareholders approved on 15 April 2009 and 10 April 2008, the proposals for the appropriation of statutory net profits of EDP, S.A. with reference to 2008 and 2007, attributing for 2009 and 2008 annual donations to Fundação EDP of 6,000,000 Euros and 3,428,144 Euros, respectively. The referred donations for IFRS accounting purposes were recognised as Donations in Other operating expenses (see note 10) in 2009 and 2008, respectively. 32. Minority interests This caption is analysed as follows: Group Dec 2009 Euro'000 Minority interests in income statement Minority interests in reserves 144,102 2,543,435 2,687,537 Minority interests , by company, are made up as follows: Group Dec 2009 Euro'000 EDP Renováveis Group Energias do Brasil Group Hidrocantábrico Group Other minority interests 1,281,672 1,346,792 35,534 23,539 2,687,537 Dec 2008 Euro'000 1,253,875 895,114 29,191 22,425 2,200,605 Dec 2008 Euro'000 120,143 2,080,462 2,200,605 During 2009, EDP Group generated profit of 144,102 thousand Euros attributable to minority interests (31 December 2008: 120,143 thousand Euros). The movement in minority interests of EDP Renováveis Group is mainly related to profits attributable to minority interests of 24,688 thousand Euros, to variations resulting from share capital increases attributable to minority interests totalling 7,597 thousand Euros and to a decrease of 3,491 thousand Euros related to dividends paid. The movement booked in minority interests of Energias do Brasil Group includes 116,338 thousand Euros of profits attributable to minority interests, 242,052 thousand Euros from the positive exchange difference and a decrease related to the dividends paid of 67,814 thousand Euros. In November 2009, the secondary public offer of 15,500,000 treasury stock of EDP - Energias do Brasil, S.A. was concluded, and, as a result, the Group recognised minority interests of 166,621 thousand Euros. Additionally, during 2009 the effect of changes in fair value reserve and actuarial losses resulted in a decrease of minority interests of 3,825 thousand Euros. The movement in minority interests of the Hidrocantábrico Group mainly includes 612 thousand Euros of profits attributable to minority interests, an increase of 3,833 thousand Euros related to the subscription of 25% of the share capital of Central Térmica de Ciclo Combinado Grupo 4 by Sonatrach, an increase of 3,814 thousand Euros related to a share capital increase of Naturgás Energia Distribución Cantabria, S.A. and a decrease of 2,185 thousand Euros related to dividends paid. The caption Other minority interests includes 22,287 thousand Euros related to the Gas subgroup subsidiaries in Portugal (31 December 2008: 20,001 thousand Euros).

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33. Hydrological account The movements in the Hydrological account are analysed as follows: Group and Company Dec 2009 Dec 2008 Euro'000 Euro'000 Balance at the beginning of the year Amounts received / (paid) during the year Financial charges Balance at the end of the year 237,822 -135,069 9,878 112,631 227,686 10,136 237,822 The hydrological account was established by Decree-law 338/91 and consists of a legal mechanism for compensating the variable costs of generating electricity. The hydrological account was set up in 1994 when the actual EDP Group was owned by the State, through a charge against the income statement. In 2000, through a spinoff of EDP, REN was set up, and new regulations were issued (through Decree-law 98/2000) which reinforced and maintained the requirement to keep the hydrological account in EDP’s balance sheet. As explained above, REN was part of the EDP Group until 2000. Thus, the entries in the hydrological correction account were made within the EDP Group. Since the split of REN in June 2000, EDP, S.A. (the Group parent company) has paid to or received cash from REN, which is booked against the hydrological correction account in the balance sheet and the related financial charges are booked in the income statement. REN uses the amounts received or paid to compensate the operators in the liberalised market, in accordance with the objectives of the hydrological correction account as explained above. Therefore, REN is effectively a pass-through entity for the purposes of the hydrological correction account. In 2004, Decree-law 240/2004 was issued which establishes that, in respect to the free electricity market, the government must publish specific regulations applicable to the hydrological correction account. Based on these regulations and due to the government announcement mentioned above, the EDP Group’s Executive Board of Directors expects with a high probability that the recorded liability, including the balance relating to pre-1994 activity, will be payable to a third party to be nominated by the regulator. 34. Financial debt This caption is analysed as follows: Group Dec 2009 Euro'000 Short term debt and borrowings - Current Bank loans: - EDP, S.A. - EDP Finance B.V. - EDP Energias do Brasil Group - HC Energia Group - Renewables Group - Generation - Portugal - Portgás Non convertible bond loans: - EDP, S.A. - EDP Finance B.V. - EDP Energias do Brasil Group Commercial paper: - EDP, S.A. - EDP Energias do Brasil Group - HC Energia Group Other loans: - EDP Energias do Brasil Group - Renewables Group - Generation - Portugal 51,277 119,661 1,488 103 039 103,039 8,991 33,999 318,455 499,861 81,077 580,938 1,218,500 91,586 329,322 1,639,408 5,402 4,096 701 10,199 Accrued interest 245,481 2,794,481 92,568 730,000 256,639 8,517 75 950 75,950 7,390 32,977 1,204,041 1,000,000 22,455 62,784 1,085,239 939,300 433,082 1,372,382 3,669 3,277 1,208 8,154 142,198 3,812,014 51,277 51,277 4,107,500 4,107,500 36,063 4,194,840 92,568 92,568 1,000,000 1,000,000 4,227,700 4,227,700 39,968 5,360,236 Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 199

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Group Dec 2009 Euro'000 Medium and long term debts and borrowings - Non current Bank loans: - EDP, S.A. - EDP Finance B.V. - EDP Energias do Brasil Group - HC Energia Group - Renewable Group - Generation - Portugal - Portgás Non convertible bond loans: - EDP, S.A. - EDP Finance B.V. - EDP Energias do Brasil Group Other loans: - Preference shares of Investco - EDP Energias do Brasil Group - Renewable Group - Generation - Portugal 759,024 3,206,321 707,426 4,991 402,599 185,046 66,862 5,332,269 1,174,742 6,795,215 180,639 8,150,596 22,494 37,349 29,530 6,151 95,524 13,578,389 Other liabilities: - Fair value of the issued debt hedged risk -91,890 13,486,499 16,280,980 1,672,201 2,175,000 364,425 7,076 451,062 174,911 78,449 4,923,124 1,189,594 4,596,332 202,651 5,988,577 13,993 31,382 27,834 6,728 79,937 10,991,638 -117,327 10,874,311 14,686,325 Dec 2008 Euro'000 Company Dec 2009 Dec 2008 Euro'000 Euro'000 759,024 759,024 1,174,742 1,174,742 1,933,766 28,627 1,962,393 6,157,233 1,672,201 1,672,201 1,189,594 1,189,594 2,861,795 -2,164 2,859,631 8,219,867 EDP Group, at EDP, S.A. level, has short-term credit facilities of 390,410 thousand Euros, indexed to Euribor for the agreed period of use with spread conditions agreed in advance, of which 375,410 thousand Euros have a firm underwriting commitment, being available 352,639 thousand Euros as at 31 December 2009, as well as Commercial Paper programs of 650,000 thousand Euros with guaranteed placement, being 350,000 thousand Euros still available as at 31 December 2009. EDP, S.A. has a medium term Revolving Credit Facility (RCF) of 1,600,000 thousand Euros, with a firm underwriting commitment, totally available. For liquidity management needs in USD, EDP, S.A. has a RCF of 1,500,000 thousand USD with a firm underwriting commitment, which as at 31 December 2009 is totally drawn. The Group has project finance loans with the usual guarantees for such loans, namely pledged or promissory pledges over shares, bank accounts and assets relating to the projects. As at 31 December 2009 and 2008 these loans amounted to 716,429 thousand Euros and 742,190 thousand Euros, respectively (amounts already included in the Group’s consolidated debt). The nominal value of Bond loans issued and outstanding , as at 31 December 2009, is analysed as follows: Date issued Interest rate Type of hedge Conditions/ Redemption Group Euro'000 Company Euro'000 Issuer Issued by EDP S.A. EDP, S.A. EDP, S.A. (ii) Mar-03 May-08 Euribor 6 months + 0.5% Variable rate (iv) n.a. n.a. Mar-13 May-18 150,000 300,000 450,000 150,000 300,000 450,000 747,352 747,352 Issued under the Euro Medium Term Notes program EDP, S.A. Mar-01 EDP Finance B.V. Aug-02 EDP Finance B.V. Dec-02 EDP Finance B.V. Jun-05 EDP Finance B.V. (i) Jun-05 EDP Finance B.V. Jun-06 EDP Finance B.V. Jun-06 EDP Finance B.V. Jun-06 EDP Finance B.V. Nov-07 EDP Finance B.V. Nov-07 EDP Finance B.V. Nov-08 EDP Finance B.V. Nov-08 EDP Finance B.V. (iii) Feb-09 EDP Finance B.V. (i) Jun-09 EDP Finance B.V. Jun-09 EDP Finance B.V. Sep-09 Fixed rate EUR 5.875% Fixed rate GBP 6.625% Fixed rate EUR (iv) Fixed rate EUR 3.75% Fixed rate EUR 4.125% Euribor 3 months + 0.15% Fixed rate EUR 4.25% Fixed rate EUR 4.625% Fixed rate USD 5.375 % Fixed rate USD 6.00 % Fixed rate GBP 8.625% Zero coupon (iv) Fixed rate EUR 5.5% Fixed rate JPY (iv) Fixed rate EUR 4.75% Fixed rate USD 4.90 % Fair Value Fair Value n.a. n.a. n.a. n.a. n.a. n.a. Net Investment Net Investment Fair Value n.a. Fair Value Net Investment n.a. Net Investment Mar-11 Aug-17 Dec-22 Jun-15 Jun-20 Jun-10 Jun-12 Jun-16 Nov-12 Feb-18 Jan-24 Nov-23 Feb-14 Jun-19 Sep-16 Oct-19 747,352 320,000 93,357 500,000 300,000 500,000 500,000 500,000 694,155 694,155 410,314 160,000 1,000,000 75,098 1,000,000 694,155 8,188,586 Issued by the EDP Energias do Brasil Group in the Brazilian domestic market Investco

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Debt and borrowings by maturity, are analysed as follows: Group Dec 2009 Euro'000 Bank loans and overdrafts: Up to 1 year From 1 to 5 years More than 5 years Bond loans: Up to 1 year From 1 to 5 years More than 5 years 324,586 4,012,942 1,319,327 5,656,855 820,699 3,232,718 4,825,988 8,879,405 Commercial paper: Up to 1 year Other loans: Up to 1 year From 1 to 5 years More than 5 years 1,638,513 10,683 42,921 52,603 106,207 16,280,980 The fair value of EDP Group’s debt is analysed as follows: Dec 2009 Carrying Market amount value Euro'000 Euro'000 Short term debt and borrowings - Current Medium/Long term debt and borrowings - Non current 2,794,481 13,486,499 16,280,980 2,547,504 14,110,568 16,658,072 Dec 2008 Carrying Market amount value Euro'000 Euro'000 3,812,014 10,874,311 14,686,325 3,824,018 10,676,963 14,500,981 Dec 2008 Euro'000 1,305,729 2,834,286 2,088,838 6,228,853 1,124,905 2,792,859 3,078,391 6,996,155 1,372,382 8,998 26,936 53,001 88,935 14,686,325 Company Dec 2009 Dec 2008 Euro'000 Euro'000 52,513 131,155 627,869 811,537 34,726 891,685 311,684 1,238,095 4,107,601 6,157,233 94,890 104,934 1,567,267 1,767,091 1,037,543 887,430 300,000 2,224,973 4,227,803 8,219,867 In accordance with Accounting policies - note 2 f), the financial liabilities risks hedged by derivative financial instruments that comply with hedge accounting requirements as in IAS 39, are stated at fair value. However, the remaining financial liabilities are booked at amortised cost. As at 31 December 2009, scheduled repayments of Group's debt and borrowings including interest accrued are as follows: Following F ll i years Euro'000 2010 Euro'000 Medium/long term debt and borrowings Short term debt and borrowings 2011 Euro'000 2012 Euro'000 2013 Euro'000 2014 Euro'000 Total Euro'000 2,794,481 2,794,481 1,203,700 1,203,700 1,448,579 1,448,579 2,412,879 2,412,879 2,223,423 2,223,423 6,197,918 6,197,918 13,486,499 2,794,481 16,280,980 Future payments of capital in debt and interests and guarantees are detailed in note 41. Future debt and borrowings payments and interest for type of loan and currency are analysed as follows: Following years Euro'000 2010 Euro'000 Bank loans: Euro Brazilian Real US Dollar 2011 Euro'000 2012 Euro'000 2013 Euro'000 2014 Euro'000 Total Euro'000 204,386 120,200 324,586 246,807 108,566 355,373 756,760 81,089 837,849 4,213 5,398 867 10,478 1,203,700 101,812 114,889 216,701 494,976 33,183 694,155 1,222,314 3,292 5,329 943 9,564 1,448,579 2,124,184 101,223 2,225,407 144,975 33,183 178,158 2,994 5,292 1,028 9,314 2,412,879 85,169 89,059 1,041,233 1,215,461 961,275 33,122 994,397 7,975 4,721 869 13,565 2,223,423 1,017,933 301,394 1,319,327 3,365,089 1,460,899 4,825,988 13,501 39,102 52,603 6,197,918 3,780,291 835,331 1,041,233 5,656,855 6,462,695 261,656 2,155,054 8,879,405 1,546,927 91,586 1,638,513 36,142 65,244 4,821 106,207 16,280,980 Bond loans: Euro Brazilian Real US Dollar 739,620 81,079 820,699 Commercial paper: Euro Brazilian Real 1,546,927 91,586 1,638,513 Other loans: Euro Brazilian Real US Dollar 4,167 5,402 1,114 10,683 2,794,481 201

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 35. Employee benefits Employee benefits are analysed as follows: Group Dec 2009 Euro'000 Provisions for social liabilities and benefits Provisions for medical liabilities and other benefits 1,109,347 770,357 1,879,704 Dec 2008 Euro'000 1,082,905 750,982 1,833,887 Company Dec 2009 Dec 2008 Euro'000 Euro'000 - Provisions for social liabilities and benefits as at 31 December 2009 include 1,095,981 thousand Euros relating to retirement pension defined benefit plans (31 December 2008: 1,067,553 thousand Euros) and 13,366 thousand Euros (31 December 2008: 15,352 thousand Euros) relating to the estimated cost of services rendered by third parties under the human resources rationalisation program. The movement in Provisions for social liabilities and benefits is analysed as follows: Group Dec 2009 Euro'000 Balance at the beginning of the period Charge for the year Pre-retirements (curtailments) Actuarial (gains)/losses Charge-off Perimeter variation - Enersul Transfers, reclassifications and exchange differences Balance at the end of the period The movement in Provisions for Medical and other benefits is analysed as follows: Group Dec 2009 Euro'000 Balance at the beginning of the period Charge for the period Pre-retirements (curtailments) Actuarial (gains)/losses Charge-off Transfers, reclassifications and exchange differences Balance at the end of the period 750,982 49,955 1,736 2,479 -42,905 8,110 770,357 Dec 2008 Euro'000 779,784 48,791 3,086 -43,842 -33,318 -3,519 750,982 Company Dec 2009 Dec 2008 Euro'000 Euro'000 1,082,905 62,274 32,757 84,005 -150,267 -2,327 1,109,347 Dec 2008 Euro'000 935,593 47,196 46,117 185,791 -146,310 15,573 -1,055 1,082,905 Company Dec 2009 Dec 2008 Euro'000 Euro'000 - As mentioned under Accounting policies - note 2 n), the EDP Group opted, upon transition to IFRS, to charge to reserves, the total amount of the deferred actuarial losses existing at that date, for the several employee benefit plans. The impact on reserves at 31 December 2004 amounted to 1,162,000 thousand Euros. In the following years, in compliance with the accounting policy adopted, the actuarial gains and losses of these plans were recorded directly in reserves, having been recognised in 2009 and 2008, losses of 86,484 thousand Euros and of 140,467 thousand Euros, respectively. Employee benefit plans Some EDP Group companies grant post-retirement benefits to employees, under defined benefit and defined contribution plans, namely pension plans that ensure retirement complements to age, disability and surviving pensions, as well as retirement pensions. In some cases healthcare is provided during retirement and early retirement, through mechanisms complementary to those provided by the National Health Service. The following is a summary of the nature of the plans and the companies covered, as well as financial and economic data of the plans: I. Defined benefit pension plans The EDP Group companies in Portugal resulting from the spin-off of EDP in 1994 have a social benefits plan funded by a closed Pension Fund, complemented by a specific provision. The EDP Pension Fund is managed by Pensõesgere being the management of the assets subcontracted to external asset management entities. This Pension Fund covers the liability for retirement pension complements (age, disability and survivor pension) as well as the liability for early retirement. The responsibilities with early retirement are not covered by the fund’s assets, being adequately provisioned through a specific provision. Bandeirante in Brazil has two defined benefit plans managed by the CESP Foundation, a closed supplementary welfare entity with its own assets, segregated from those of its Sponsors (Bandeirante and other Brazilian electricity companies) and with no common contributions or funding between these funds: - BD Plan in force up to 31 March 1998, a

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As at 31 December 2009 and 2008 the number of participants covered by the pension plans was as follows: Portugal 2009 Number of participants Retirees and pensioners Active workers 18,309 6,608 Spain 2009 1,515 1,263 2,778 Brazil 2009 1,610 1,951 3,561 Portugal 2008 18,446 6,838 25,284 Spain 2008 1,600 1,294 2,894 Brazil 2008 1,559 2,165 3,724 24,917 The following financial and actuarial assumptions were used to calculate the liability of the EDP Group pension plans and similar obligations: Dec 2009 Portugal Assumptions Expected return of plan assets Discount rate Salary increase rate Pension increase rate Social Security salary appreciation Inflation rate Mortality table Spain Bandeirante 6.34% 5.20% 3.70% 2.70% 1.90% 2.00% Age > 60 -TV 88/90; Age <= 60 years -TV99/01 50% EKV 80 (a) not applicable 5% / 4,5% 2.75% (CPI+0.5%); In 2011 - 3% (CPI+0.75%) not applicable not applicable 2.25% PERM/F-2000P 11.49% 11.20% 5.55% 4.50% not applicable 4.50% RP-2000 Disabled Brazil Escelsa 11.49% 11.20% 5.55% 4.50% not applicable 4.50% RP-2000 Disabled Energest 11.49% 11.20% 5.55% 4.50% not applicable 4.50% RP-2000 Disabled Disability table Expected % of eligible employees accepting early retirement not applicable not applicable Wyatt 85 Class 1 Wyatt 85 Class 1 Wyatt 85 Class 1 not applicable Dec 2008 not applicable not applicable Portugal Assumptions Expected return of plan assets Discount rate Salary increase rate Pension increase rate Social Security salary appreciation Inflation rate Mortality table Disability table Expected % of eligible employees accepting early retirement Spain Bandeirante Brazil Escelsa Enersul 6.34% 5.75% 3.70% 2.90% 2.10% 2.20% TV 88/90 50% EKV 80 (a) not applicable 5.40% 1.90% not applicable not applicable 2.50% PERM/F-2000P not applicable not applicable 11.25% 10.75% 11.25% 11.25% 5.55% 5.55% 4.50% 4.50% not applicable not applicable 4.50% 4.50% AT 2000/RPAT 2000/RPRP-2000 2000 2000 Geracional Geracional Geracional Wyatt 85 Class 1 Wyatt 85 Class 1 Wyatt 85 Class 1 not applicable not applicable not applicable 11.00% 11.25% 5.55% 4.50% not applicable 4.50% (a) 40% of the eligible population (employees entitled to early retirement, as stated in the Collective Labour Agreement: 36 years of service with at least 60 years of age or 40 years of service at any age). The liability for retirement pensions and related coverage for the Group, as at 31 December 2009 and 2008 is analysed as follows: Dec 2009 Portugal Euro'000 Provision for Pension Plans Liability at the end of the year Fair value of plan assets at the end of the year Asset ceiling Provision at the end of the year 1,984,765 -1,011,986 972,779 Spain Euro'000 91,679 91,679 Dec 2008 Portugal Euro'000 Provision for Pension Plans Liability at the end of the year Fair value of plan assets at the end of the year Asset ceiling Provision at the end of the year 1,930,534 -991,453 939,081 Spain Euro'000 93,990 93,990 Brazil Euro'000 168,461 -154,820 20,841 34,482 Group Euro'000 2,192,985 -1,146,273 20,841 1,067,553 Brazil Euro'000 225,863 -221,776 27,436 31,523 Group Euro'000 2,302,307 -1,233,762 27,436 1,095,981 The caption Asset ceiling refers to the unrecognised assets in the respective accounting periods. The evolution of the present value of the plan liability and fair value of the plan assets of the related Funds is analysed as follows: 2009 Euro'000 Provision for Pension Plans Liability at the end of the year Fair value of plan assets at the end of the year Asset ceiling Provision at the end of the year 2,302,307 -1,233,762 27,436 1,095,981 2008 Euro'000 2,192,985 -1,146,273 20,841 1,067,553 2007 Euro'000 2,217,351 -1,389,997 827,354 2006 Euro'000 2,247,023 -1,316,748 930,275 2005 Euro'000 2,231,598 -1,207,121 1,024,477 203

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The experience adjustments (effects of the differences between the previous actuarial assumptions and what has really occurred) for the Portugal Pension Funds are analysed as follows: 2009 Euro'000 Experience adjustments for the Plan liabilities Experience adjustments for the Plan assets -9,112 13,676 2008 Euro'000 -33,781 -136,929 2007 Euro'000 7,315 -12,027 2006 Euro'000 -9,987 12,538 2005 Euro'000 41,241 25,853 The experience adjustments (effects of the differences between the previous actuarial assumptions and what has really occurred) for the Brazil Pension Funds are analysed as follows: 2009 Euro'000 2008 Euro'000 2007 Euro'000 2006 Euro'000 2005 Euro'000 Experience adjustments for the Plan liabilities Experience adjustments for the Plan assets 2,701 5,160 4,693 -18,938 4,907 16,401 -8,654 7,694 -27,060 6,926 The past service liability of the pension plans for the Group, as at 31 December 2009 and 2008 is as follows: Dec 2009 Portugal Euro'000 Evolution of the liability Liability at the beginning of the year Current service cost Interest cost Benefits paid Curtailments / Settlements Actuarial losses and gains Currency fluctuation Other Liability at the end of the year 1,930,534 11,716 105,103 -187,949 32,757 101,453 -8,849 1,984,765 Spain Euro'000 93,990 493 4,883 -7,984 2,559 -2,262 91,679 Dec 2008 Portugal Euro'000 Evolution of the liability Liability at the beginning of the year Current service cost Interest cost B Benefits fit paid id Curtailments / Settlements Actuarial losses and gains Currency fluctuation Perimeter variation - Enersul Other Liability at the end of the year 1,987,010 12,544 100,401 -179,954 179 954 46,117 -42,779 7,195 1,930,534 Spain Euro'000 90,952 933 4,178 -6,997 6 997 3,425 1,499 93,990 Brazil Euro'000 230,341 488 21,200 -11,261 11 261 -5,660 -41,519 -25,905 777 168,461 Group Euro'000 2,308,303 13,965 125,779 -198,212 198 212 46,117 -45,014 -41,519 -25,905 9,471 2,192,985 Brazil Euro'000 168,461 491 21,550 -12,297 -2,438 49,955 141 225,863 Group Euro'000 2,192,985 12,700 131,536 -208,230 32,757 101,574 49,955 -10,970 2,302,307 The components of consolidated net cost of the plans recognised in the year were as follows: Dec 2009 Portugal Euro'000 Cost for the year Current service cost Interest cost Expected return on plan assets Curtailments / Settlements Plan participants contributions Net cost for the year Spain Euro'000 Brazil Euro'000 Group Euro'000 11,716 105,103 -61,085 32,757 88,491 493 4,883 5,376 Dec 2008 491 21,550 -19,940 -937 1,164 12,700 131,536 -81,025 32,757 -937 95,031 Portugal Euro'000 Cost for the year Current service cost Interest cost Expected return on plan assets Curtailments / Settlements Plan participants contributions Other Net cost for the year Spain Euro'000 Brazil Euro'000 Group Euro'000 12,544 100,401 -70,712 46,117 88,350 933 4,178 5,111 488 21,200 -21,836 -1,012 698 -462 13,965 125,779 -92,548 46,117 -1,012 698 92,999 204

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The evolution of the consolidated assets of the Pension Funds is analysed as follows: Dec 2009 Portugal Euro'000 Pension funds Fair value of plan assets at the beginning of the year Group contribution Plan participants contributions Benefits paid Actual return on plan assets Actuarial gains/(losses) Currency fluctuation Assets value at the end of the year Spain Euro'000 Brazil Euro'000 Group Euro'000 991,453 -54,228 61,085 13,676 1,011,986 - 154,820 6,086 805 -11,806 19,940 4,567 47,364 221,776 1,146,273 6,086 805 -66,034 81,025 18,243 47,364 1,233,762 The actuarial gains/losses in Brazil include the amount of 674 thousand Euros (1,876 thousand BRL) related to actuarial gains and losses of asset ceiling not recognised in reserves (2008: 1,482 thousand Euros). Dec 2008 Portugal Euro'000 Pension funds Fair value of plan assets at the beginning of the year Group contribution Plan participants contributions Benefits paid Actual return on plan assets Actuarial gains/(losses) Currency fluctuation Perimeter variation - Enersul Assets value at the end of the year Spain Euro'000 Brazil Euro'000 Group Euro'000 1,178,536 3,571 -53,725 70,712 -207,641 991,453 - 256,686 7,574 986 -11,261 21,836 -23,164 -38,387 -59,450 154,820 1,435,222 11,145 986 -64,986 92,548 -230,805 -38,387 -59,450 1,146,273 As at 31 December 2009 and 2008, the assets of the pension fund in Portugal are analysed as follows: Fund assets by nature Shares Property Euro'000 Euro'000 230,227 199,282 165,460 178,462 Cash Euro'000 31 December 2009 31 December 2008 26,818 - Bonds Euro'000 541,817 553,231 Other Euro'000 47,664 60,478 Total Euro'000 1,011,986 991,453 Cash % 31 December 2009 31 December 2008 2.65% - Bonds % 53.54% 55.80% Fund assets by nature Shares Property % % 22.75% 20.10% 16.35% 18.00% Other % 4.71% 6.10% Total % 100.00% 100.00% Properties included in the fund, that are being used by the Group amount to 124,722 thousand Euros at 31 December 2009 (133,847 thousand Euros at 31 December 2008). Bonds include the amount of 2,277 thousand Euros relating to bonds issued by EDP Finance B.V. Shares include securities issued by Group companies that are analysed as follows: 2009 Euro'000 Shares: EDP Renováveis EDP S.A. 2,815 2,815 Pension fund assets in Brazil as at 31 December 2009 and 2008 are analysed as follows: Fund assets by nature Shares Property Euro'000 Euro'000 32,362 33,235 1,071 1,855 2008 Euro'000 4,347 4,347 Cash Euro'000 31 December 2009 31 December 2008 325 Bonds Euro'000 182,637 - Other Euro'000 5,706 119,405 Total Euro'000 221,776 154,820 Cash % 31 December 2009 31 December 2008 0.21% Bonds % 82.35% - Fund assets by nature Shares Property % % 14.59% 21.47% 0.48% 1.20% Other % 2.58% 77.12% Total % 100.00% 100.00% As at 31 December 2008, Other represents, essentially, financial applications indexed to CDI (Interbank Deposits Certificate). To determine the amount of provisions for pension funds, it has been deducted from the assets funds the value of the asset ceiling of 27,436 thousand Euros, converted at closing rate of BRL (68,901 thousand BRL). As at 31 December 2008 the value of the asset ceiling was 20,841 thousand Euros. 205

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Assumptions regarding the discount rate and expected return rate of the assets The discount rates used for the EDP Group pension plan were selected based on an analysis of the rates of return available at the date for the bonds considered the most appropriate. Bonds with maturities and ratings considered appropriate were selected considering the amount and the periods the benefits are expected to be paid. The expected return rate of assets for 2010 and subsequent years, in accordance with expectations in January 2010, was determined based on the investment objectives by class of assets and the best estimate of long term return for each class, as follows: 2009 Portugal Weight Expected annual return rate 4.40% 9.20% 9.50% 6.70% 6.50% 2.50% 6.30% Expected return rate for 2010 and subsequent years Expected annual Weight return rate 52.50% 14.00% 10.00% 3.00% 18.50% 2.00% 100.00% 4.40% 7.90% 8.00% 5.80% 6.90% 8.40% 6.00% Bonds European shares Global shares Hedge Funds Property Other Total 48.50% 18.00% 10.00% 4.50% 18.50% 0.50% 100.00% The real return rate of assets in 2009 was 7.47% (2008: - 11.81%). 2009 Brazil Weight Expected annual return rate 11.20% 13.29% 11.20% 10.77% 11.49% Expected return rate for 2010 and subsequent years Expected annual Weight return rate 81.00% 14.10% 4.9% 100.00% 10.75% 13.25% 10.75% 11.00% Bonds European shares Global shares Hedge Funds Property Other Total 82.35% 14.59% 0.48% 2.58% 100.00% As at 31 December 2009 the amount of future benefits expected to be paid, relating to the activity in Portugal, Spain and Brazil, is analysed as follows: p future benefits to be p paid Expected Portugal 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pensions 190,936 185,484 180,360 173,758 167,475 159,127 151,366 145,926 138,596 134,148 Medical plans 20,363 20,792 21,216 21,697 22,205 22,775 23,398 24,155 24,964 25,823 Other benefits 15,814 16,045 16,383 16,724 17,130 17,768 18,235 19,065 19,621 20,154 Total 227,113 222,321 217,959 212,179 206,810 199,670 192,999 189,146 183,181 180,125 In 2009, were not made contributions to the pension Funds (3,571 thousand Euros in December 2008 were fully paid in cash). In 2009, the pensions paid by the Funds in Portugal totalled 54,228 thousand Euros (53,725 thousand Euros in December 2008). Expected future benefits to be paid Other Benefits Spain 2010 8,658 2011 10,381 2012 11,668 2013 12,093 2014 11,566 2015 7,165 2016 5,312 2017 3,035 2018 2,000 2019 2,000 In 2009, the pensions paid by the Funds in Spain totalled 7,984 thousand Euros (6,997 thousand Euros in December 2008). The amount of 91,679 thousand Euros relating to HC Energia Group, included in Provisions for social welfare and benefits, includes 37,801 thousand Euros relating to provisions for revision of the collective labour agreement of the Hidrocantábrico Group ("Convénio Colectivo"), signed in December 2007. This agreement regulates, among other matters, the pre-retirement regime for the years 2008 until 2012. The provision includes 53,878 thousand Euros related to responsibilities with preretirement before 31 December 2007. 206

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Expected future benefits to be paid Brazil 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pensions 8 6,781 7,761 8,796 9,872 10,907 12,193 13,546 15,355 18,253 Medical Plans 2 2 2 3 3 3 3 3 3 3 Other Benefits 1 1 1 Total 10 6,783 7,763 8,799 9,875 10,910 12,197 13,549 15,359 18,257 The contributions made to the pension Funds in 2009 amounted to 6,086 thousand Euros (7,574 thousand Euros in 2008) and were fully paid in cash. The pensions paid by the Funds in 2009 totalled 11,806 thousand Euros (11,261 thousand Euros in 2008). II. Defined contribution pension plan NEO and Hidrocantábrico in Spain, Bandeirante in Brazil and EDP Estudos e Consultoria in Portugal have defined contribution plans for their employees that complement those granted by the Social Welfare Systems, under which they pay annual contributions to these plans, calculated in accordance with the rules established in each case. III. Liability for Medical Care and Other Benefits Plans - Defined Benefit Type The Group companies in Portugal resulting from the spin-off of EDP in 1994 have a Medical Care Plan which is fully covered by a provision. Escelsa and Energest in Brazil also have Medical and other benefits plans for retired employees which are also fully covered by provisions. The actuarial assumptions used to calculate the liability for Medical Care Plans are as follows: Dec 2009 Portugal Assumptions Discount rate Annual increase rate of medical service costs Estimated administrative expenses per beneficiary per year (Euros) Mortality table Disability table Expected % of subscription of early retirement by employees eligible 5.20% 4.00% 150 Age > 60 -TV 88/90; Age <= 60 years -TV99/01 50% EKV 80 a) Brazil 11.20% 9,5% (b) not applicable RP-2000 Geracional Wyatt 85 Class 1 not applicable Portugal 5.75% 4.00% 233 TV 88/90 50% EKV 80 a) Dec 2008 Brazil 11.25% 10% (b) not applicable RP-2000 Geracional Wyatt 85 Class 1 not applicable (a) 40% of the eligible population (employees entitled to early retirement, as stated in the Collective Labour Agreement: 36 years of service with at least 60 years of age or 40 years of service at any age). (b) 9.5% in the first year, decreasing to 5.5% in 8 years. The number of participants covered by the Medical and other benefits plans as at 31 December 2009 and 2008 is as follows: Portugal 2009 Number of participants Retirees and pensioners Current employees 18,300 6,608 24,908 The evolution of the present value of the liability for Medical and other benefits for the Group is as follows: 2009 Euro'000 Provision for medical care Liability at the end of the year Provision at the end of the year 2008 Euro'000 2007 Euro'000 2006 Euro'000 2005 Euro'000 Brazil 2009 856 656 1,512 Portugal 2008 18,446 6,838 25,284 Brazil 2008 834 1,098 1,932 770,357 770,357 750,982 750,982 779,784 779,784 760,460 760,460 743,462 743,462 The experience adjustments (effects of the differences between the previous actuarial assumptions and what has really occurred) for the Portugal Medical Care Plans are analysed as follows: 2009 Euro'000 Experience adjustments for the Medical Plan liabilities 57,164 57,164 2008 Euro'000 -4,160 -4,160 2007 Euro'000 -69,385 -69,385 2006 Euro'000 -9,693 -9,693 2005 Euro'000 61,049 61,049 The experience adjustments (effects of the differences between the previous actuarial assumptions and what has really occurred) for the Brazil Medical Care Plans is analysed as follows: 2009 Euro'000 Experience adjustments for the Medical Plan liabilities -9,771 -9,771 2008 Euro'000 2,717 2,717 2007 Euro'000 1,542 1,542 2006 Euro'000 -2,853 -2,853 2005 Euro'000 5,606 5,606 207

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The change of the consolidated past service liability for medical and other benefits for the Group is as follows: Dec 2009 Brazil Euro'000 16,048 166 2,026 -3,871 8,817 5,449 28,635 28,635 Dec 2008 Brazil Euro'000 25,496 256 2,319 -1,922 -3,323 -4,058 -2,720 16,048 16,048 Portugal Euro'000 Evolution of the liability Liability at the beginning of the year Current service cost Current interest cost Benefits paid Curtailments / Settlements Actuarial gains and losses Currency fluctuation Other Liability at end of the year Provision at end of the year 734,934 6,622 41,141 -39,034 1,736 -6,338 2,661 741,722 741,722 Group Euro'000 750,982 6,788 43,167 -42,905 1,736 2,479 5,449 2,661 770,357 770,357 Portugal Euro'000 754,288 7,223 38,993 -31,396 3,086 -40,519 3,259 734,934 734,934 Group Euro'000 779,784 7,479 41,312 -33,318 3,086 -43,842 -4,058 539 750,982 750,982 The Medical Plan liability is recognised in the Group’s accounts through provisions that fully cover the liability. The components of the net consolidated cost with this plan recognised during the year are as follows: Dec 2009 Brazil Euro'000 166 2,026 2,192 Dec 2008 Brazil Euro'000 256 2,319 2,575 Portugal Euro'000 Cost for the year Current service cost Interest cost Curtailment Net cost for the year 6,622 41,141 1,736 49,499 Group Euro'000 6,788 43,167 1,736 51,691 Portugal Euro'000 7,223 38,993 3,086 49,302 Group Euro'000 7,479 41,312 3,086 51,877 The sensitivity analysis for the Medical Care Plan in Portugal is analysed as follows: Euro'000 Sensitivity assumption - medical care inflation -1% +1% 696,959 796,138 Central Assumptions Liabilities at the end of the year 2010 cost for the year Current service cost Interest cost 741,722 6 965 6,965 37,629 44,594 6 221 6,221 35,302 41,523 7 933 7,933 40,459 48,392 Medical Care Plan and Other Benefits in Brazil includes liabilities of 23,555 thousand Euros relating to medical care, which sensitivity analysis is as follows: Euro'000 Sensitivity assumption - medical care inflation -1% +1% 21,768 25,593 Central Assumptions Liabilities at the end of the year 2010 cost for the year Current service cost Interest cost 23,555 2,528 2,528 2,328 2,328 2,757 2,757 36. Provisions for liabilities and charges Provisions for liabilities and charges are analysed as follows: Group Dec 2009 Euro'000 Provision for legal and labour matters and other contingencies Provision for customer guarantees under current operations Provision for other liabilities and charges 94,520 28,561 219,674 342,755 The changes in the Provisions for legal and labour matters and other contingencies are analysed as follows: Group Dec 2009 Euro'000 Balance at the beginning of the year Changes in the consolidation perimeter Charge for the year Reversals Charge-off for the year Other and exchange differences Balance at the end of the year 116,528 26,502 -10,354 -65,551 27,395 94,520 Dec 2008 Euro'000 152,428 -30,869 14,566 -2,561 -2,195 -14,841 116,528 Company Dec 2008 Dec 2008 Euro'000 Euro'000 Dec 2008 Euro'000 116,528 14,993 192,198 323,719 Company Dec 2009 Dec 2008 Euro'000 Euro'000 18,637 18,637 79,014 79,014 208

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On 27 October 2009 and 5 January 2010, the EDP Group received two tax assessments regarding 2005 and 2006 taxable income for the EDP tax Group, which included an adjustment of 591 million Euros regarding its subsidiary, EDP Internacional SGPS, related with the tax treatment considered by the EDP Group in relation to a capital loss generated with the liquidation of a subsidiary, which main assets consists in investments in operating subsidiaries in Brazil, namely Escelsa and Enersul. As at 31 December 2009, the amount of this Tax contingency totals 176 million Euros. Considering the analysis made and the technical advice received, and a favourable binding opinion obtained from the tax authorities in relation to the nature of the transaction occurred in the year of the assessment, the EDP Group considers as remote the risk associated with this matter. Under this analysis, the capital loss is tax deductible for income tax purposes, as established in article 75, no. 2 of the Corporate Income Tax Code ("Código do IRC") based on the wording of the law at the date of the transaction. Consequently, EDP Group is currently executing all available legal means to defend its interest and those of its shareholders, based on the conviction that reason is on its side, both from a legal and tax perspective. The Group intends to, at a final instance, call upon a judicial proceeding, if necessary. Provision for legal and labour matters and other contingencies of 94,520 thousand Euros, includes provisions for litigation in progress and other labour contingencies of 78,693 thousand Euros. The opening balance as at 31 December 2009 relating to tax litigation includes 9,564 thousand Euros relating to taxes to be returned to the State by the subsidiary Naturgás Distribucion for specific deductions made in the Basque Country under Norma Foral 7/1996 of 4 July, which establishes that 45% of the amounts invested in new fixed assets by residents in the Basque Country could be considered as tax deductible. The subsidiary applied the referred deductions, however, following a process brought by the European Community Authorities a court decision was issued under which the entities making such deductions should return them to the State. The company awaits for the final court decision. The provisions for legal litigations in process against subsidiaries of the EDP Group amounting to 78,693 thousand Euros (2008: 54,304 thousand Euros), relates essentially to: i) Requests for the refund of tariff increases paid by industrial consumers of the Brazilian subsidiaries Bandeirante and Escelsa of 15,607 thousand Euros (2008: 15,998 thousand Euros). The requests result from application of Orders DNAEE 38 of 27 February 1986 and 45 of 4 March 1986 - Plano Cruzado effective from March to November 1986; ii) The Municipal Council of Póvoa do Varzim has brought up a legal action of 5,703 thousand Euros to be refunded by EDP of amounts of the FEF (Fundo de Equilíbrio Financeiro – Financial Stability Fund). The action has been contested by EDP which has made a re-conventional request of 11,200 thousand Euros; iii) There is a litigation with the Municipal Council of Seixal relating to differences regarding occupation rates of the public thoroughfare for the years 2004 and 2005 of 3,172 thousand Euros each year, in a total amount of 6,344 thousand Euros; iv) The remaining legal litigations correspond mainly to indemnities for fires, interruption of electricity supply, electrocution, as well as for other damages caused. The movement in Provision for customer guarantees under current operations is analysed as follows: Group Dec 2009 Dec 2008 Euro'000 Euro'000 14,993 8,093 -1,810 30,992 20,279 -1,289 -17,457 -9,968 33 -312 28,561 14,993 Company Dec 2009 Dec 2008 Euro'000 Euro'000 - Balance at the beginning of the year Changes in the consolidation perimeter Charge for the year Reversals Charge-off for the year Other and exchange differences Balance at the end of the year - Provisi

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 37. Trade and other payables Trade and other payables are analysed as follows: Group Dec 2009 Euro'000 Trade and other payables - Current: Suppliers Property, plant and equipment suppliers Advances from customers Other payables: - Employees - Supply of other goods and services - Concession rents - Amount payable to the regulatory entity in Brazil - Amount to be invested in research and development - Brazil - Portuguese public debt securities (treasury bonds) to liquidate - Amounts payable for electricity transactions in MIBEL Payables - related companies Payables from the Regulated Activity Energetic efficiency program - Brazil Holiday pay, bonus and other charges Derivative financial instruments Government grants and co-participation in investment in fixed assets Accrued costs - Energy management business Accrued costs - Energy purchase (PRE) Accrued income - supply energy Accrued costs relating to CMEC Revisable mechanism Accrued costs relating to the fix network utilization tariff CO2 emission licenses Accrued costs - Subcontracts (Horizon) Deferred income - CMEC OMIP futures (own use) Amounts payable for tariff adjustments - Portugal Amounts payable for tariff adjustments - Spain Tariff adjustment payable Supplementary capital contributions payable to EDP Imobiliária Creditors - Group companies Put options over minority interests liabilities Other creditors and sundry operations 803,457 901,417 29,500 56,949 193,914 15,822 11,988 16,449 30,481 40,159 21,056 96,606 88,745 135,446 17,132 143,280 20,395 72,140 341,446 22,841 92,446 9,620 1,056,236 65,231 14,317 710,113 298,445 5,305,631 Dec 2008 Euro'000 956,745 649,475 29,905 64,286 147,229 11,857 11,591 13,734 48,206 119,714 13,837 27,127 10,757 90,382 178,473 105,418 107,885 97,128 39,251 84,155 6,212 496,425 68,821 131,136 300,073 78,584 264,694 4,153,100 Company Dec 2009 Dec 2008 Euro'000 Euro'000 110,501 7,217 43 6,901 9,777 587 132,349 102,176 9,620 621,941 31,268 1,032,380 125,068 522 43 3,496 138,847 119,714 113,830 652 239,948 107,885 13,154 48,206 768,931 24,600 1,704,896 The caption Group companies on a Company basis includes 558,061 thousand Euros (2008: 768,931 thousand Euros) relating to debt financing obtained by EDP S.A., Sucursal in Spain through Finance BV and 37,690 thousand Euros, 21,554 thousand Euros and 4,636 thousand Euros, relating to debt financing obtained near EDP Renováveis, Nuevas Energias del Ocidente e Naturgás Energia Grupo, S.A., respectively (see note 43). In the caption Put options over minority interests liabilities – current, as referred in accounting policy 2 b), the Group accounts for its put options regarding interests held by minority interests in group subsidiaries, at the acquisition date or in a subsequent date as an anticipated acquisition of those minority interests, booking a financial liability by the present value of the best estimate of the amount payable, regardless the exercise probability of the options. As at 31 December 2009 the liabilities with options over minority interests include a put option of Caja Madrid to NEO regarding 20% of its interests in Genesa of 303,722 thousand Euros (31 December 2008: 258,841 thousand Euros) and a put option from Ente Vasco de la Energia to HC Energia of 30.4% of its interests in Naturgás of 406,391 thousand Euros (31 December 2008: 426,839 thousand Euros). In 2008 these liabilities were booked as non-current. The caption CO2 emission licenses includes 158,281 thousand Euros of licenses granted in Portugal, to return to the "Instituto do Ambiente" and 183,165 thousand Euros related to the HC Energia Group in Spain, regarding the CO2 consumptions made during the year. Group Dec 2009 Euro'000 Trade and other payables - Non-Current State participation in Multipurpose hydroelectric power stations Deposits received from customers and other debtors Payables to ass

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In the caption Put options over minority interests liabilities medium / long term, as referred under Accounting policies - note 2 b) the Group books the put options related to interests held by minority interests in EDP Group subsidiaries, at the acquisition date or in a subsequent date, as an anticipated acquisition of those minority interests, booking a financial liability for the present value of the best estimate of the payable amount, regardless of the probability of the options being exercised. As at 31 December 2009 the responsibilities with options over minority interests include the put option of Cajastur over EDP for 3.13% of HC Energia share capital of 100,812 thousand Euros (31 December 2008: 85,961 thousand Euros). At the moment of the Horizon acquisition, the contracts signed between this subsidiary and its customers, determined under the terms of the Purchase Price Allocation, were valued through discounted cash flows models and market assumptions at 190,400 thousand USD, being booked as a non current liability under Energy sales contract - Horizon, which is depreciated over the useful life of the contracts under Other operational income (see note 7). The subsidiary Horizon books the receipts from equity investors associated to wind farms projects as non current liabilities under Liability to institutional investors in corporate partnership in wind farms in USA. This liability is reduced by the amount of tax benefits provided and payments made to the equity investors during the period. The amount of tax benefits provided is booked as a non current deferred income, recognised over the useful life of 20 years of the related projects (see note 7). Additionally this liability is increased by the estimated interest calculated based on the liability amount and the expected return rate of the equity investors (see note 14). Amounts payable for concessions refers to the amounts payable, in the medium/long term, related to the concession rights of the operation of the hydric domain of Alqueva and Pedrógão transferred by EDIA of 154,301 thousand Euros as at 31 December 2009 (31 December 2008: 165,089 thousand Euros) and to the financial compensation for the use of the public domain related to concession agreements of Investco, S.A. and Enerpeixe, S.A. in Brazil of 81,602 thousand Euros as at 31 December 2009 (31 December 2008: 63.855 thousand Euros). The derivative financial instruments portfolio, booked as other Creditors and liabilities current and non current of 88,745 thousand Euros and 178,628 thousand Euros, respectively, includes the trading and hedge portfolios (see note 40). Success fees payable related to companies acquisitions refers to the contingent price to be paid for the acquisition of Relax Wind Group, Renovatio Group, Greenwind, Elektrownia Wiatrowa Kresy and Elebrás. The caption Payables - Group companies (EDP Finance B.V.) non current on a company basis, of 2,809,277 thousand Euros, corresponds to the financing obtained through EDP Finance B.V. and granted to EDP - Energias de Portugal - Sociedade Anónima, Sucursal en España, following Horizon's acquisition and for the financing of the investment plan of EDP Renováveis Group. Amounts payable for tariff adjustments - Portugal current and non-current of 1,056,236 thousand Euros and 88,479 thousand Euros, respectively (2008: 300,073 thousand Euros in current), relates to tariff adjustments (see note 3) of the Portuguese Electric System in 2008 and 2009 for the regulated companies in Portugal. The movement for the period in Amounts payable for tariff adjustments - Portugal (Current and Non-Current) is analysed as follows: Current Euro'000 Balance as at 1 January 2008 Tariff adjustment of 2007 Tariff adjustment of the period Balance as at 31 December 2008 P Payment t through th h the th electricity l t i it tariff t iff Tariff adjustment of 2008 Tariff adjustment of the period Interest expense Transfer from Non-Current to Current Balance as at 31 December 2

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The EDP Group decided to maintain its interest of 3.16% in Denerge - Desenvolvimento Energético S.A., having reclassified this investment to the caption Available for sale investment (see note 21). This interest resulted from the asset swap operations occurred in 2008 with Rede Group. On 30 June 2009, EDP Brasil concluded the sale of its shareholding in ESC 90 Telecomunicações Ltda. (“ESC 90”), representing 48.51% of the respective share capital, to Net Serviços de Comunicação S.A. as agreed on the Sale and Purchase Private Agreement signed in August 2008. This operation was subject to the approval from the regulatory entity Agência Nacional de Telecomunicações– ANATEL, which has been granted without any reserves on 8 June 2009. This operation generated a gain on a consolidated basis of 19,141 thousand Euros (see note 13). 40. Derivative financial instruments In accordance with IAS 39, the Group classifies derivative financial instruments as fair value hedges of a recognised asset or liability (Fair value hedge), as cash flow hedges of recognised liabilities and highly probable future transactions (Cash flow hedge) and net investment hedge. In 2009 the fair value and the maturity of the derivative financial instruments are analysed as follows: Fair value Assets Euro'000 Net Investment hedges Cross currency rate swaps Liabilities Euro'000 Up 1 year Euro'000 From 1 to 5 years Euro'000 Notional Over 5 Years Euro'000 Total Euro'000 663 663 -94 -94 - - 75,098 75,098 75,098 75,098 Fair value hedges Interest rate swaps Cross currency rate swaps 82,347 34,388 116,735 -143,821 -143,821 - 1,000,000 1,000,000 730,313 730,313 1,000,000 730,313 1,730,313 Cash flow hedges Raw-materials swaps Interest rate swaps Foreign exchange forwards Negotiation Raw-materials swaps Interest rate swaps Cross currency rate swaps Foreign exchange forwards Raw-materials forwards Options purchased and sold OMIP f futures t 85,261 96 1,805 87,162 30,317 29,495 2,672 8,755 512 71,751 276,311 -465 -23,721 -23,236 -47,422 -1,634 -23,240 -8,603 -27,191 -10,989 -1,157 -3,222 3 222 -76,036 -267,373 566,141 35,355 319,364 920,860 1,009,027 9,082 480,337 82,926 487 487,695 695 2,069,067 2,989,927 56,018 215,156 442,444 713,618 8,372 27,003 132,959 34 34,374 374 202,708 1,916,326 216,988 216,988 837,532 837,532 1,859,931 622,159 467,499 761,808 1,851,466 1,017,399 846,614 27,003 613,296 82,926 522 522,069 069 3,109,307 6,766,184 In 2008 the fair value and the maturity of the derivative financial instruments are analysed as follows: Fair value Assets Euro'000 Fair value hedges Interest rate swaps Cross currency rate swaps 81,619 2,764 84,383 Cash flow hedges Raw-materials swaps Cross currency rate swaps Foreign exchange forwards Negotiation Raw-materials swaps Interest rate swaps Cross currency rate swaps Foreign exchange forwards Options purchased and sold Liabilities Euro'000 -115,979 -115,979 Up 1 year Euro'000 1,000,000 43,586 1,043,586 From 1 to 5 years Euro'000 750,000 43,113 793,113 Notional Over 5 Years Euro'000 265,600 265,600 Total Euro'000 1,750,000 352,299 2,102,299 5,154 102 365 5,621 84,569 26,665 59,629 170,863 260,867 -483 -17,294 -2,264 -20,041 -57,039 -20,881 -61,175 -26,808 -2,515 -168,418 -304,438 12,865 29,310 99,408 141,583 591,387 22,455 2,104,298 1,506,609 4,224,749 5,409,918 182,557 182,557 98,700 54,761 153,461 1,129,131 212,407 212,407 600,000 410,313 2,051 1,012,364 1,490,371 12,865 424,274 99,408 536,547 591,387 622,455 410,313 2,202,998 1,563,421 5,390,574 8,029,420 The fair value of the derivative financial instruments is booked in Debtors and other assets (see note 25) and Creditors and other liabilities (see note 37), according to its nature. The valuation of cash flow hedges is based on external entities. These entities use market information and generally accepted future cash flow discount techniques. Derivat

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The changes in the fair value of hedging instruments and risks are analysed as follows: 2009 Changes in fair value Instrument Risk Euro'000 Euro'000 -2,286 26,547 -3,242 -29,177 79,498 71,340 The changes in the fair value reserve relating to cash flow hedges in 2009 and 2008 were as follows: Group Dec 2009 Euro'000 Balance at the beginning of the year Fair value changes Transfers to results Balance at the end of the year -54,653 47,079 88,018 80,444 Dec 2008 Euro'000 2,014 -58,175 1,508 -54,653 2,286 -26,547 -24,261 2008 Changes in fair value Instrument Risk Euro'000 Euro'000 18,539 -52,141 -22,836 4,434 -39,773 -91,777 -18,539 52,141 33,602 Type of hedge Hedging instrument Interest rate swap Cross currency rate swaps Interest rate swap Foreign exchange forwards Raw-materials swaps Hedged risk Interest rate Interest and exchange rate Interest rate Exchange rate Raw-materials price - Fair value - Fair value - Cash flow hedge - Cash flow hedge - Cash flow hedge The gains and losses on the financial instruments portfolio booked in the income statement in 2009 and 2008 are as follows: Group 31 Dec 2008 31 Dec 2009 Euro'000 Euro'000 Derivatives held for trading Fair value hedges - Derivatives - Hedged liabilities Cash flow hedges - Transfer to results - Ineffectiveness 34,123 24,261 -24,261 -88,018 977 -52,918 55,295 -33,602 33,602 -1,508 53,787 Company 31 Dec 2009 31 Dec 2008 Euro'000 Euro'000 -10,474 -2,852 2,852 -42,505 977 -52,002 147,089 18,539 -18,539 -1,485 145,604 The effective interest rates of the derivative financial instruments relating to financing operations at 31 December 2009 are as follows: Group Notional Interest rate contracts Interest rate swaps Interest rate swaps Currency interest rate CIRS (currency interest rate swaps) CIRS (currency interest rate swaps) CIRS (currency interest rate swaps) Exchange rate contracts Currency forwards 2,314,113 246,614 Currency EUR USD EDP Pays [ 5.01% - 0.19% ] [ 5.82% - 2.09% ] EDP Receives [ 5.88% - 0.71% ] 0.43% 730,313 27,004 75,098 EUR / GBP USD / BRL USD / JPY [ 4.74% - 2.51% ] [ 10.25% - 9.44% ] 6.84% [ 8.63% - 6.63% ] 4.86% 3.11% 226,989 BRL / USD The currency forward contracts BRL / USD correspond to the exchange hedge of the loan from Porto do Pecém Geração de Energia S.A. The interest rate is fixed through interest rate swaps in USD. The effective interest rates of the derivative financial instruments relating to financing operations at 31 December 2008 were as follows: Group Notional Interest rate contracts Interest rate swaps Currency interest rate CIRS (currency interest rate swaps) CIRS (currency interest rate swaps) 2,796,729 Currency EUR EDP Pays [ 5.95% 3.0% ] EDP Receives [ 6.40% 3.04% ] 730,313 32,299 GBP / EUR USD / BRL 8.67% [16.35% - 13.47% ] 8.63% [ 4.38% - 4.0% ] Nominal value Euro'000 Interest rate contracts Options purchased on interest rates (CAP purchases) Options sold on interest rates (CAP sale) Options sold on interest rates (FLOOR sale) 534,810 500,000 528,611 Group [ 5.75% [ 5.30% [ 4.27% 4.00%] 5.20%] 3.00%] 213

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 EDP - Energias de Portugal, S.A. Notas às Demonstrações Financeiras Consolidadas e Individuais para os exercícios findos em 31 de Dezembro de 2009 e 2008 41. Commitments Financial and real guarantees granted by the EDP Group, not included in the balance sheet as at 31 December 2009 and 2008, are analysed as follows: Os pagamentos futuros do capital em dívida e juros corridos por tipo de empréstimo e por moeda de denominação são analisados como segue: Group Anos Company Type Dec 2009 Dec 2008 Dec 2009 Dec 2008 2010 2011 2012 2013 2014 seguintes Total Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Empréstimos bancários: Euro Real Brasileiro Dólar Americano Guarantees of a financial nature EDP, S.A. 204.386 Hidrocantábrico Group 120.200 Brazil Group EDP Renováveis Group 396,175 2.124.184 36,858 101.223 46,587 9,465 3,720 2.225.407 492,805 144.975 33.183 829,891 324,839 102,732 178.158 1,613,885 25,191 2,896,538 407,256 85.169 65,027 89.059 40,569 1.041.233 9,574 3,729 1.215.461 526,155 961.275 33.122 1,042,960 301,454 66,333 994.397 1,309,010 9,110 2,728,867 396,175 1.017.933 301.394 -1.319.327 396,175 3.365.089 829,891 1.460.899 4.825.988 407,256 3.780.291 835.331 1.041.233 5.656.855 407,256 6.462.695 261.656 1,042,960 2.155.054 8.879.405 - 246.807 108.566 355.373 756.760 81.089 837.849 - 101.812 114.889 216.701 494.976 33.183 694.155 1.222.314 - Other 324.586 Empréstimos obrigacionistas: Euro 739.620 nature Guarantees of an operating Real Brasileiro 81.079 EDP, S.A. Dólar Americano Hidrocantábrico Group Papel comercial: Euro Real Brasileiro Brazil Group 820.699 EDP Renováveis Group Other (Portugal) 1.546.927 91.586 829,891 1.546.927 91.586 1,042,960 1.638.513 1.638.513 3,389,343 3,255,022 1,226,066 1,450,216 Total Outros empréstimos: Real guarantees 12,504 6,313 Euro 4.167 4.213 3.292 2.994 7.975 13.501 36.142 Real Brasileiro 5.402 5.398 5.329 5.292 4.721 39.102 65.244 The financial guarantees contracted include, at 31 December 2009 and 867 31 December 2008, 452,063 thousand Dólar Americano 1.114 943 1.028 Euros and 466,916 869 thousand Euros, -respectively, relating 4.821 to loans obtained by Group companies and already included in the consolidated debt. These include guarantees of 359,249 thousand Euros at December 2009 for 10.683 9.564 9.314 13.565 52.603 106.207 loans obtained by Brazilian companies to finance the construction of 10.478 hydro electrical plants, which have counter-guarantees of 132,851 thousand Euros received by EDP from partners in these projects. 2.794.481 1.203.700 1.448.579 2.412.879 2.223.423 6.197.918 16.280.980 EDP and its subsidiaries are required to provide bank or corporate guarantees of an operating nature for the current generation and distribution activities. The total 35. Benefícios aos empregados operating guarantees outstanding include, at 31 December 2009 and 2008, 439,030 thousand Euros and 454,651 thousand Euros, respectively, of guarantees provided market operators toaos enable EDP and its to participate ésubsidiaries analisada como segue: in the energy markets. A to rubrica de Beneficios empregados The Group also has project finance loans with usual guarantees for these loans, namely pledged assets or promissory pledges over shares, bank accounts and assets Individual Grupo relating to the projects. At 31 December 2009 and 2008 these loans amounted to 716,429 thousand Euros Euros, respectively, and are included Dez 2009and 742,190 Dez thousand 2008 Dez 2009 Dez 2008 in the Group’s consolidated debt. Euro'000 Euro'000 Euro'000 Euro'000 The commitments relating to short and medium/long financial debt, finance lease commitments and other long term commitments (included in the balance sheet) Provisões para responsabilidades e benefíciosterm sociais 1.109.347 1.082.905 and other liabilities relating to purchases an

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Other long term commitments relate essentially to reorganisation plans established in prior years, as well as to Group’s liabilities relating to pension and Medical plans and other benefits, classified as provisions in the consolidated balance sheet (note 35 – Employee benefits). As at 31 December 2009, the EDP Group has the following liabilities/rights arising from call and put options on investments: - Put option of Cajastur over EDP for 3.13% of the share capital of HC Energia, this option can be exercised until 31 December 2025; - Put option of Ente Vasco de la Energia over HC Energia for 30.4% of Naturgás, exercised until 30 July 2010, for the higher of the following amounts: ● Initial price discounted to the put option exercise date, considering the dividends distributed up to date; of the b● ) Fair value l d asset, determined by investment banks; - Put option of Caja Madrid over NEO for 20% of its investment in Genesa. The option can be exercised between January 2010 and January 2011, being the price of exercising the option determined by an investment bank valuation process; - EDP holds a put option over Mercado Electrónico and Mercado Electrónico has a call option over EDP of 34% of the investment in Central E, S.A. The price of the options will be determined based on the last 12 months invoicing and the exercise period of the options starts in June 2010 and ends in June 2015; d b its d subsidiary NEO, a call option f over Cajastur for f b l share capital f d - EDP holds, through “Quinze Mines” (51% of total share capital). Cajastur has an equivalent put option over EDP. This option can be exercised between 1 January 2012 and 1 January 2013, being the price of exercising the option determined by an investment bank valuation process; d b its d subsidiary NEO, a call option f over Cajastur for the f companies b "Sauvageon", l f d share capital (51% of total share capital). - EDP holds, through "Le Mee" and "Petit Peece" Cajastur has an equivalent put option over EDP. This option can be exercised between 1 January 2014 and 31 December 2014, being the price of exercising the option determined by an investment bank valuation process; - EDP holds, through its subsidiary NEO, a call option over Copcisa for 49% of Corbera and Vilalba share capital; - EDP holds, through its subsidiary Veinco Energia Limpia, S.L. a call option over Jorge, S.L. for 8.5% of the share capital of Apineli – Aplicaciones Industriales de Energias Limpias, S.L. This option can be exercised until 18 April 2014; - The EDP Group, through its subsidiary EDP - Energias do Brasil, acquired an interest of 3.16% in Denerge following the asset swap transaction occurred in August 2008 with Rede Group. The acquisition contract for this investment includes an option clause, valid for 2 years, to swap Denerge shares for a subscription of Rede Group shares in a potential Initial Public Offering, or an equivalent shareholding in preferred shares of Rede Energia, S.A. at a price of 5.68 BRL per share; 42. Share based payments EDP implemented a stock option program applicable to senior management and directors, under the terms approved by the General Meeting, in order to promote value enhancement. EDP Group has the following three stock option plans: i) Plan for the members of the Board of Directors approved in 1999, in which options can be granted for up to 2,450,000 ordinary shares, ii) Plan for the Members of the Board of Directors and Management of the Group subsidiaries, in which options can be granted for up to 16,250,000 ordinary shares, iii) Plan for the President of the Board of Directors, Chief Executive Officer and Executive Members for the 2003/2005 period in which the options granted can be exercised up to 1/3 in each of the following three years following the grant date. Options not exercised expire eight years after being granted. The exercise price of the options is calculated based on the market price of the company’s shares at the grant date. The opti

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The number of shares of EDP S.A. held by company officers in 2009 and 2008 are as follows: 2009 Nr. of shares General and Supervisory Board Alberto João Coraceiro de Castro António Francisco Barroso de Sousa Gomes * Carlos Jorge Ramalho dos Santos Ferreira Diogo Campos Barradas de Lacerda Machado Eduardo Almeida Catroga Ricardo José Minotti da Cruz Filipe Rui Eduardo Rodrigues Pena Vital Martins Moreira * Vitor Fernando da Conceição Gonçalves 4,578 40,000 260 1,375 6,622 1,445 3,465 57,745 Executive Board of Directors António Luís Guerra Nunes Mexia António Fernando Melo Martins da Costa António Manuel Barreto Pita de Abreu João Manuel Manso Neto Jorge Manuel Pragana da Cruz Morais Nuno Maria Pestana de Almeida Alves 1,000 13,299 34,549 1,268 12,497 50,000 112,613 * No longer members of the General and Supervisory Board on 31 December 2009. Remuneration of company officers In accordance with the Company's by-laws, the remuneration of company officers is set by a Remuneration Committee appointed by the Shareholders’ General Meeting, except for the fixed and variable remuneration of the members of the Executive Board of Directors, which is set by a Remuneration Committee appointed by the General and Supervisory Board. The remuneration cost of the members of the Executive Board of Directors (EBD) and the members of the General and Supervisory Board (GSC) for 2009 was as follows: EBD Euro'000 President Members 1,303 6,305 7,608 GSC Euro'000 639 842 1,481 2008 Nr. of shares 4,578 4,135 40,000 260 1,375 1,445 27,082 3,465 82,340 1,000 13,299 34,549 1,268 12,497 40,000 102,613 The remuneration of the members of the Executive Board of Directors includes a variable component of 3,170 thousand Euros in accordance with the remuneration policy defined by the Remuneration Committee of the General and Supervisory Board. Board Business operations between the Company and the members of the Executive Board of Directors and General and Supervisory Board with qualifying holdings and companies in the group or control relationship with EDP In the normal course of its activity, EDP performs business transactions and operations based on normal market conditions for similar operations with several entities, particularly financial institutions, including holders of qualifying holdings in EDP Share capital and other group companies and subsidiaries, which are not considered relevant due to their nature or to the fact that they are insignificant in economic terms. Balances and transactions with subsidiaries and associates As at 31 December 2009, the credits over subsidiaries and associates, at Company level and eliminated in the consolidated financial statements are analysed as follows: Intra-Group Financial Mov. Euro'000 Companies Balwerk EDP Produção Bioeléctrica EDP Produção EDP Brasil EDP Distribuição EDP Comercial EDP Finance EDP Gás.Com EDP Imobiliária e Participações EDP Inovação EDP Soluções Comerciais EDP Renováveis EDP Serviço Universal EDP Gás EDP Valor Electrica Ribera del Ebro Energin Enernova HDC Gestão de Energia Hidroeléctrica del Cantábrico EDP Internacional Labelec EDP Investimentos Soporgen Other 17,741 2,459 3,960 115,409 4,349 3,893 35,944 1,007 184,762 Loans Granted Euro'000 265,000 13,045 3,693,962 628,125 15,183 206,622 2,545 47,452 303,139 55,616 1,047 17,000 5,248,736 Other Receivables Euro'000 1,604 94 213,626 14,947 120,967 50,365 1,190 3,902 505 269 22,828 17,016 254,574 1,115 13,837 8,443 1,135 1,177 32,082 336 2,138 976 877 5,910 769,913 Total Euro'000 284,345 13,139 3,910,047 14,947 753,052 165,774 16,373 3,902 211,476 6,707 22,828 17,016 254,574 84,511 13,837 8,443 1,135 1,177 303,139 87,698 2,390 2,138 17,976 877 5,910 6,203,411 216

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As at 31 December 2008, the credits over subsidiaries and associates, at Company level and eliminated in the consolidated financial statements are analysed as follows: Intra-Group Financial Mov. Euro'000 Companies Balwerk EDP Brasil EDP Comercial EDP Distribuição EDP Finance EDP Gás EDP Imobiliária e Participações EDP Inovação EDP Internacional EDP Powerline EDP Produção EDP Produção Bioeléctrica EDP Renováveis EDP Serviço Universal EDP Serviner EDP Soluções Comerciais EDP Valor Electrica Ribera del Ebro Enernova Hidroeléctrica del Cantábrico Labelec NEO EDP Investimentos OPTEP Sãvida Other Loans Granted Euro'000 Other Receivables Euro'000 Total Euro'000 5,454 1,030,212 19,207 5,045 4,201 7,911 675 1,072,705 280,000 1,406,215 13,150 343,591 813 661 3,171,324 21,370 862,817 3,250 1,750 1,500 17,000 6,123,441 1,580 7,504 6,283 43,034 655,931 1,060 4,079 383 103 97 111,463 470 74,646 92,721 147 19,085 5,019 10,659 1,276 79,491 522 2,434 3 571 234 5,136 1,123,931 287,034 7,504 6,283 2,479,461 655,931 33,417 352,715 1,196 764 4,298 3,290,698 21,840 937,463 92,721 147 22,335 6,769 10,659 1,276 80,166 2,022 2,434 17,003 571 234 5,136 8,320,077 As at 31 December 2009, the debits from subsidiaries and associates, at Company level and eliminated in the consolidated financial statements are analysed as follows: Intra-Group Financial Mov. Mov Euro'000 Companies EDP Produção EDP Distribuição EDP Comercial EDP Estudos e Consultoria EDP Finance EDP Imobiliária e Participações EDP Inovação EDP Soluções Comerciais EDP Renováveis EDP Serviner EDP Valor Electrica Ribera del Ebro Energin Hidrocantábrico Energia Hidroeléctrica do Guadiana (Alqueva) Hidroeléctrica del Cantábrico Labelec Naturgás NEO NQF Gás III SGPS EDP Investimentos Sãvida Soporgen Other 3 284 38 123 1 304 31 308 4 604 3 707 62 147 1 919 12 163 158,559 Loans Obtained Euro'000 3 337 359 37 690 4 636 21 554 3,401,239 Other Payables Euro'000 102 718 16 041 6 354 6 562 36 740 6 402 4 599 24 792 28 933 2 446 1 219 1 143 16 545 286 11 377 381 2 1 507 704 244,775 Total Euro'000 102,718 16,041 6,354 9,846 3,374,099 6,402 4,599 38,123 37,690 1,328 32,100 28,933 2,446 1,219 1,143 21,149 3,993 4,636 32,931 62,528 1,919 12,165 1,507 704 3,804,573 217

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 As at 31 December 2008, the debits from subsidiaries and associates, at Company level and eliminated in the consolidated financial statements are analysed as follows: Intra-Group Financial Mov. Euro'000 Companies Edalpro EDP Comercial EDP Distribuição EDP Estudos e Consultoria EDP Finance EDP Gás.Com EDP Imobiliária e Participações EDP Inovação EDP Produção EDP Renováveis EDP Serviner EDP Soluções Comerciais EDP Valor Electrica Ribera del Ebro Hidrocantábrico Energia Hidroeléctrica del Cantábrico EDP Internacional Labelec NEO EDPGás II SGPS (NQF Energia) EDP Investimentos Sãvida Soporgen Other 197 1,497 1,416 1,238 1,443 1,497 29,492 462 3,680 62,147 1,949 6,775 111,793 Loans Obtained Euro'000 Other Payables Euro'000 2,076 42,868 4,639 3,131,528 2,258 48,346 3,871 275,332 24,352 55 4,404 7,078 848 2,166 937 1,001 6,684 4 353 1,542 4,719 3,565,061 Total Euro'000 197 3,573 42,868 6,055 3,131,528 2,258 48,346 5,109 275,332 24,352 1,498 5,901 36,570 848 2,166 937 462 4,681 6,684 62,151 1,949 7,128 1,542 4,719 3,676,854 Expenses related to intra-Group transactions as at 31 December 2009, at Company level , eliminated on consolidation are as follows: Interest on Intra-Group Financial Mov. Eur'000 Companies EDP Produção EDP Distribuição EDP Estudos e Consultoria EDP Finance EDP Gas Com EDP Imobiliária e Participações EDP Inovação EDP Soluções Comerciais EDP Renováveis EDP Valor Electrica Ribera del Ebro Hidrocantábrico Energia Hidroeléctrica do Guadiana (Alqueva) Hidroeléctrica del Cantábrico Naturgás NEO Outras 52 1,398 22 19 781 217 109 2,598 Interest on Loans Obtained Eur'000 168,347 257 850 131 169,585 Other Costs Eur'000 924 086 8,642 20,098 99,216 1,700 922 3,447 180 77,813 5,405 44,890 13,806 7,130 47,934 24,857 1,446 1,281,572 Total Eur'000 924,138 10,040 20,120 267,563 1,700 922 3,466 961 78,070 5,622 44,890 13,806 7,130 47,934 850 24,857 1,686 1,453,755 Expenses related to intra-Group transactions for the year ended 31 December 2008, at Company level , eliminated on consolidation are as follows: Interest on Intra-Group Financial Mov. Eur'000 Companies Balwerk EDP Comercial EDP Distribuição EDP Estudos e Consultoria EDP Finance EDP Gás .Com EDP Inovação EDP Produção EDP Renováveis EDP Serviço Universal EDP Valor Eléctrica Ribera del Ebro Enernova Hidroeléctrica del Cantábrico Hidrocantábrico Energia S.A.U. Labelec NEO Sãvida Other 145 77 754 126 707 1,540 952 340 79 233 384 5,337 Interest on Loans Obtained Eur'000 Other Costs Eur'000 94 22,364 8,690 16,116 157,872 339 3,280 1,205,319 28,317 477 5,881 9,427 41,827 30,463 533 7,226 30 7,582 1,545,837 Total Eur'000 239 22,364 8,690 16,193 157,872 1,093 3,406 1,206,026 28,317 2,017 6,833 9,427 340 41,827 30,463 612 7,226 263 7,966 1,551,174 218

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Income related to intra-Group transactions as at 31 December 2009, at Company level , eliminated on consolidation are as follows: Interest on Intra-Group Financial Mov. Euro'000 Companies 2007 Vento I LLC Balwerk EDP Produção Bioeléctrica EDP Produção EDP Distribuição EDP Comercial EDP Finance EDP Imobiliária e Participações EDP Ásia - Investimento e Consultadoria EDP Soluções Comerciais EDP Renováveis EDP Serviço Universal EDP Gás EDP Valor Electrica Ribera del Ebro Hidrocantábrico Distribuição Eléctrica S.A.U. Hidroeléctrica do Guadiana (Alqueva) Hidroeléctrica del Cantábrico EDP Investimentos Sãvida Other 54 1,863 6,097 682 161 1,106 284 75 10,322 Interest on Loans Granted Euro'000 9,646 466 194,523 70,299 113 11,657 34,311 1,712 17 797 577 324,118 Other Income Euro'000 743 144 1 128,129 39,554 253,211 91,265 489 712 29,757 13,827 16,049 1,786 9,298 16,602 1,000 1,577 66,031 721 4,632 675,528 Total Euro'000 743 9,844 467 324,515 115,950 253,893 91,378 12,307 712 30,863 48,138 16,049 3,782 9,298 16,602 1,000 1,577 66,048 797 721 5,284 1,009,968 Income related to intra-Group transactions for the year ended 31 December 2008, at Company level , eliminated on consolidation are as follows: Interest on Intra-Group Financial Mov. Euro'000 Companies Balwerk EDP Comercial EDP Distribuição EDP Finance EDP Imobiliária b l á e Participações EDP Produção EDP Gás EDP Renováveis EDP Serviço Universal EDP Soluções Comerciais EDP Valor EDP Powerline Enernova Eléctrica Ribera del Ebro Hidroeléctrica del Cantábrico Hidrocantábrico Energia S.A.U. Horizon Wind Energy, LLC NEO Other 16 1,102 17,112 257 8,087 851 3,432 979 49 207 7 45 32,144 Interest on Loans Granted Euro'000 14,304 92,893 4,278 20,882 151,690 744 12,958 1,258 3,200 37,819 948 340,974 Other Income Euro'000 4,382 36,721 61,175 349 117,108 707 108,596 58,134 32,778 9,190 118 15,202 50,589 2,359 2 546 14,661 512,617 Total Euro'000 14,320 5,484 146,726 65,453 21,488 276,885 2,302 121,554 61,566 33,757 9,239 207 1,383 15,202 50,589 2,359 3,202 38,365 15,654 885,735 Assets and Liabilities with related companies at 31 December 2009, for the Group and eliminated in the consolidated financial statements are analysed as follows: Net Value Euro'000 121,241 37,198 158,439 Assets Euro'000 Associates Jointly controlled entities 123,327 49,261 172,588 Liabilities Euro'000 2,086 12,063 14,149 Assets and Liabilities with related companies at 31 December 2008, for the Group and eliminated in the consolidated financial statements are analysed as follows: Net Value Euro'000 26,489 23,283 49,772 Associates Jointly controlled entities Assets Euro'000 28,394 25,786 54,180 Liabilities Euro'000 1,905 2,503 4,408 219

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Transactions with related companies at 31 December 2009, for the Group and eliminated in the consolidated financial statements are analysed as follows: Operating Income Euro'000 Associates Jointly controlled entities 8,762 29,251 38,013 Financial Income Euro'000 2,641 852 3,493 Operating Expenses Euro'000 -1,871 -20,002 -21,873 Financial Expenses Euro'000 -14 -546 -560 Transactions with related companies at 31 December 2008, for the Group and eliminated in the consolidated financial statements are analysed as follows: Operating Income Euro'000 Associates Jointly controlled entities 11,064 1,641 12,705 44. Fair value of financial assets and liabilities Fair value of financial instruments is based, whenever available, on listed market prices. Otherwise, fair value is determined through internal models, which are based on cash flow discounting techniques and option valuation models or through quotations supplied by third parties. These models are developed considering the market variables which affect the financial instruments, namely yield curves, exchange rates and volatility factors. Market data is obtained from stock exchange and suppliers of financial data (Bloomberg and Reuters). As at 31 December 2009 and 2008, the following table presents the interest rate curves of the major currencies to which the Group is exposed used for cash flow discount: 31 December 2009 Currency EUR USD 0.70% 0.25% 0.99% 0.43% 1.25% 0.98% 1.89% 1.42% 2.25% 2.06% 2.56% 2.58% 2.80% 2.98% 3.03% 3.29% 3 22% 3.22% 3 54% 3.54% 3.36% 3.70% 3.49% 3.85% 3.58% 3.97% 31 December 2008 Currency EUR USD 2.89% 1.43% 2.97% 1.75% 3.05% 2.00% 2.68% 1.48% 2.96% 1.75% 3.12% 1.95% 3.25% 2.13% 3.37% 2.25% 3 48% 3.48% 2 31% 2.31% 3.56% 2.44% 3.67% 2.50% 3.74% 2.56% Financial Income Euro'000 1,270 965 2,235 Operating Expenses Euro'000 -1,133 -10,005 -11,138 Financial Expenses Euro'000 -18 -3,827 -3,845 BRL 8.74% 9.22% 10.50% 11.86% 12.43% 12.65% 12.79% 12.90% 13 10% 13.10% 13.30% 13.31% 13.31% 3 months 6 months 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years BRL 13.02% 12.68% 12.16% 12.19% 12.29% 12.55% 12.56% 12.65% 12 71% 12.71% 12.73% 12.73% 12.73% Fair value of assets and liabilities as at 31 December 2009 and 31 December 2008 is analysed as follows: Group Dec 2009 Carrying amount Financial assets Available for sale investments Trade receivables Derivative financial instruments Financial assets at fair value through profit or loss Cash and cash equivalents (assets) Fair value Difference Carrying amount Group Dec 2008 Fair value Difference 443,117 2,008,134 276,311 84,852 2,189,560 5,001,974 443,117 2,008,134 276,311 84,852 2,189,560 5,001,974 - 350,887 1,758,657 260,867 83,227 713,587 3,167,225 350,887 1,758,657 260,867 83,227 713,587 3,167,225 - Financial liabilities Loans Trade payables Derivative financial instruments 16,280,980 1,704,874 267,373 18,253,227 16,658,072 1,704,874 267,373 18,630,319 377,092 377,092 14,686,325 1,606,220 304,438 16,596,983 14,500,981 1,606,220 304,438 16,411,639 -185,344 -185,344 Considering that the EDP Group’s structure of financial assets and liabilities booked at amortised cost has essentially a short term nature, the effect of changes in the fair value has not been considered. Fair value of EDP Group’s loans was determined considering current market interest rates. The remaining financial assets and liabilities are already stated at fair value. The market value of the medium/long term loans is calculated based on the discounted cash flows at market interest rates at the date of the balance sheet, increased by the best estimate, at the same date, of market conditions applicable to the Group's debt, based on its average term. Regarding short term debt, the market value does not differ substantially from the book value. 220

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According to IFRS 7, EDP Group established the way it obtains the fair value of its financial assets and liabilities. The levels used are defined as follows: ● Level 1 – Fair value based on the available listed price (not adjusted) in the identified markets for assets and liabilities; ● Level 2 – Fair value based in market inputs not included in Level 1, but observable in the market for the asset or liability, either directly or indirectly; ● Level 3 – Fair value of the assets and liabilities calculated with inputs that are not based on observable market information. 31 December 2009 Level 2 31 December 2008 Level 2 Level 1 Financial assets Available for sale investments Derivative financial instruments Financial assets at fair value through profit or loss Level 3 Level 1 Level 3 323,645 84,852 408,497 47,570 276,311 323,881 71,902 71,902 272,924 83,227 356,151 22,379 260,867 283,246 55,584 55,584 Financial liabilities Derivative financial instruments - 267,373 267,373 - - 304,438 304,438 - As at 31 December 2009 and 2008, the movement in assets and liabilities included in Level 3 is analysed as follows: Financial assets available for sale Dec 2009 Balance at beginning of year Change in fair value reserve Disposals Transfers and other changes Balance at year end 45. Discontinued operations On 11 September 2008, the assets swap between EDP Energias do Brasil and Rede Group (Rede Energia S.A. and Rede Power do Brasil S.A.) was concluded. This operation consisted in a swap of 100% interest in Enersul, previously held by EDP Energias do Brasil, by the shareholding control of Investco, after the purchase of the majority interests held in the share capital of the companies Lajeado Energia, S.A. and Tocatins. The EDP Group results as at 31 December 2008 include the effect of the Enersul operations, which have been identified in the column "Discontinued operations" in the Consolidated Income Statement for comparative purposes. 46. CO2 licenses The movements in the portfolio of CO2 licenses are analysed as follows: Group Dec 2009 CO 2 (Ton) CO2 licenses as at 1 January Licenses canceled (granted in PNALE I) Licenses granted free of charge Licenses purchased Licenses transferred (from own consumption to trading) Licenses to be returned (consumed) Excess/(Lack) of licenses 1,373,457 15,713,069 6,390,760 -3,105,000 20,372,286 19,956,601 415,685 Group Dec 2008 CO 2 (Ton) 820,169 -820,169 15,335,505 5,352,160 -2,446,000 18,241,665 16,868,208 1,373,457 55,584 17,277 -1,168 209 71,902 Dec 2008 55,792 8,574 -10,561 1,779 55,584 Licenses equivalent to total emissions during the year are returned to the regulatory entity of each country by the end of the fourth month of the subsequent year (see notes 17 and 23). The movements in the portfolio of CO2 licenses held for trading and classified as inventories are analysed as follows: Group Dec 2009 CO 2 (Ton) CO2 licenses held for trading on 1 January Licenses cancelled (granted in PNALE I) Licenses acquired in the market Emission licenses transferred to the trading portfolio Licenses sold 1,830,009 5,860,583 3,105,000 -9,840,853 954,739 CO2 licenses for trading (in tons) - EUA CO2 licenses for trading (in tons) - CER 601,000 353,739 954,739 Fair Value at 31 December - EUA (in Euros) Fair Value at 31 December - CER (in Euros) CO2 Licenses for trading (in thousand Euros) 12.33 11.14 11,351 Group Dec 2008 CO 2 (Ton) 148,908 -148,908 7,983,009 2,446,000 -8,599,000 1,830,009 1,630,853 199,156 1,830,009 15.36 13.53 27,744 Purchases and sales of licenses are booked based on the listed price on the transaction date. Emission licenses transferred to the trading portfolios are classified as Inventories (see note 23), in accordance with Accounting policy - note 2 I). Fair value corresponds to the spot price (closing price) at the end of December in each year. 221

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 47. Subsequent events EDP adjudicates construction of new hydroelectric Venda Nova III On 13 January 2010, EDP adjudicated the construction works to increase the power of the hydroelectric plant in Venda Nova, designated as Venda Nova IIII, to the consortium MSF/Somague/Mota-Engil/Spie Batignolles, for 131 million Euros. The beginning of the work in the new plant, located in Vieira do Minho, is expected to start in January 2010, being almost exclusively underground works. The plant is expected to start to produce in the first semester of 2015. At this date, the total estimated investment amounts to 349 million Euros. EDP Renováveis enters the Italian wind market through the acquisition of 520 MW in developing stage On 27 January 2010, EDP Renováveis acquired 85% of Italian Wind Srl, from Co-Ver Group (industrial cluster in North Italy), adding to its portfolio several wind projects in Italy totalling 520 MW. These projects are in different stages of maturity and in prime locations: i) 4 wind projects totalling 108 MW classified as Tier 2; ii) 98 MW of projects classified as Tier 3; and iii) 314 MW classified as Prospects. EDP Renováveis awarded 1.3 GW of wind offshore capacity in the UK EDP Renováveis UK and SeaEnergy PLC formed in 2009 a company denominated Moray Offshore Renewable Limited (“MORL”, company owned 75% by EDP Renováveis Group), to develop wind farms offshore in the Moray estuary, in Scotland. In January 2010, EDP Renováveis announced that UK Crown Estate awarded to MORL, the right to develop wind farms in this region, with the capacity of 1,3 GW. After obtaining the required administrative authorizations, MORL will be able to start the construction and operation of the wind offshore projects, which should occur between 2015 and 2020. 48. Recent accounting standards and interpretations issued The new standards and interpretation that have been issued and are already effective and that the Group has applied on its consolidated financial statements can be analysed as follows: IAS 1 (Amended) – Presentation of Financial Statements The International Accounting Standards Board (IASB) issued in September 2007, the amended IAS 1 - Presentation of Financial Statements, with effective date of mandatory application of 1 January 2009, being allowed its early adoption. The changes regarding the current text of IAS 1 are as follows: - The presentation of the financial position statement (balance sheet) is required for current and comparative period. According to amended IAS 1, the financial position statement should also be presented for the beginning of the comparative period, when an entity restates the comparatives following a change in an accounting policy, an error adjustment or a reclassification of an item in the financial statements. In theses cases, three statements of the financial position would be presented, compared to the two already required. - Following the changes required by this standard, standard the users of the financial statements will be able to distinguish, distinguish in an easier way, way the variations in the equity of the Group on transactions with shareholders, as shareholders (ex. dividends, transactions with treasury stocks) and transactions with third parties, that are summarised in the comprehensive income statement. Given the nature of these changes (disclosures), no significant impact resulted from this amendment. IAS 23 (Amended) – Borrowing costs The International Accounting Standards Board (IASB) issued in March 2007, the amended IAS 23 - Borrowing costs, with effective date of mandatory application of 1 January 2009, being allowed its early adoption. This standard defines that borrowing costs, directly attributable to acquisition cost, construction or production of an asset (eligible asset) are included in its cost. Therefore, the option to recognise these cos

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This amendment to IFRS 7 requires the disclosure of additional information related to fair value measurement, namely that these amounts should be presented in three hierarquical levels defined in the standard and related to liquidity risk. Given the nature of these changes (disclosures) the impact in the Group financial statements was exclusively related to presentation. IFRS 8 – Operating Segments The International Accounting Standards Board (IASB) issued on 30 November 2006, the IFRS 8 - Operating Segments, approved by the European Commission on 21 November 2007. This standard is mandatory and applicable for periods beginning on or after 1 January 2009. IFRS 8 - Operating Segments defines the presentation of information about an entity’s operating segments and also about services and products, geographical areas where the entity operates and its major clients. This standard specifies how an entity should disclose its information in the annual financial statements and, consequently will amend IAS 34 - Interim Financial Reporting, regarding the information to be disclosed in the interim financial reporting. Each entity should also to provide a description of the segmental information disclosed, namely profit or loss and of segment assets, as well as a brief description of how the segmental information is produced. Given the nature of these changes, the impact was exclusively related to presentation. IFRIC 13 – Customer Loyalty Programmes The International Financial Reporting Interpretations Committee (IFRIC) issued in July 2007 the IFRIC 13 - Customer Loyalty Programmes with effective date of mandatory application on 1 July 2008, being allowed its early adoption. This interpretation is applicable to customer loyalty programmes and addresses how companies grant their customers loyalty award credits (often called points) when buying goods or services, allowing them to exchange these credits, in the future, by goods or services free of charge or with a discount. No significant impact in the Group resulted from the adoption of this interpretation. IFRIC 15 - Agreements for the Construction of Real Estate The IFRIC 15 - Agreements for the Construction of Real Estate is effective from 1 January 2009. This interpretation includes guidance that allows determining if a contract for the construction of real estate is within the scope of IAS 18 - Revenue or IAS 11 Construction Contracts. It is expected that IAS 18 will be applied to a larger number of transactions. No significant impact in the Group resulted from the adoption of this interpretation. IFRIC 16 – Hedges of a Net Investment in a Foreign Operation The International Financial Reporting Interpretations Committee (IFRIC), issued in July 2008 the IFRIC 16 – Hedges of a Net Investment in a Foreign Operation, with mandatory application for years started after 1 October 2008, although allowing for an early adoption. This interpretation intends to clarify that: ● ● ● The hedge of a net investment in a foreign operation can only be applied to exchange differences resulting from the foreign subsidiaries' financial statements conversion from its functional currency to the parent company's functional currency and only for an amount equal or smaller to the subsidiary's net assets; The hedge instrument can be contracted by any of the Group's entities, except by the entity that is being hedged; and At the moment of the hedged subsidiary's sale, the accumulated gain or loss related to the effective hedge component is reclassified to profit and loss. This interpretation allows an entity that uses the step by step consolidation method to choose an accounting policy that allows determining the accumulated foreign exchange conversion adjustment that is reclassified to profit and loss when the subsidiary is sold, as it would do if applying the direct consolidation method. This interpretation has a prospective application. No significant impact in the Group resulted from the adoption of this inter

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 ● Changes to IAS 27 - Consolidated and Separate Financial Statements, applicable from 1 January 2009. The change to this standard determines that in the cases when an investment in a subsidiary is accounted at fair value in the individual accounts, according with IAS 39 - Financial Instruments: Recognition and Measurement and qualifies for classification as a non-current asset held for sale according with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, the investment should continue to be measured as defined in IAS 39. No significant impact in the Group resulted from the adoption of this change. ● Changes to IAS 28 - Investments in Associates, applicable from 1 January 2009. The changes to IAS 28 - Investments in Associates had the objective of clarifying (i) that an investment in an associate should be treated as a single asset for impairment testing purposes under the scope of IAS 36 - Impairment of assets, (ii) that any impairment loss to be recognised should not be allocated to specific assets namely to goodwill and (iii) that the impairment reversals are accounted as an adjustment to the carrying amount of the associate as long as and to the extent that the recoverable amount of the investment increases. No significant impact in the Group resulted from the adoption of this change. ● Changes to the IAS 39 - Financial Instruments: Recognition and Measurement, applicable from 1 January 2009. These changes include mainly (i) the clarification that it is possible to perform transfers from and to the category of fair value through profit and loss regarding derivatives, whenever these start or end an hedge relationship in cash-flows hedge models or net investment in an associate or subsidiary, (ii) the change to the definition of financial instruments at fair value through profit and loss in what relates to the trading portfolio, determining that in the case of financial instrument portfolios jointly managed and for which there is evidence of a recent and real model of short-term profit taking, these should be classified as trading on initial recognition; (iii) the change to the documentation requirements and the effectiveness tests of the hedge relationship for the operational segments defined under the scope of IFRS 8 - Operating Segments; and (iv) the clarification that the measurement of a financial liability at amortised cost, after the interruption of the respective fair value hedge relationship, should be performed based on the new effective rate calculated at the interruption date. No significant impact in the Group resulted from the adoption of this change. ● Change to IAS 40 - Investment Properties, applicable from 1 January 2009. Following this change, the properties under construction or development for subsequent use as investment properties are included under the scope of IAS 40 (before they were included under the scope of IAS 16 Property, Plant and Equipment). These properties under construction can be accounted at fair value except if they cannot be reliably measured in which case they should be accounted at acquisition cost. No significant impact in the Group resulted from the adoption of this change. Standards, amendments and interpretations issued but not yet effective for the Group IAS 39 (Amended) - Financial Instruments: Recognition and measurement – Eligible hedged items The International Accounting Standards Board (IASB) issued an amendment to IAS 39 - Financial Instruments: Recognition and measurement – Eligible hedged items, which is of mandatory application from 1 July 2009. This change clarifies the application of the existing principles that determine what risks or which cash-flows are eligible for inclusion on a hedged operation. The Group is evaluating the impact of adopting this standard in its financial statements. IFRS 1 (Amended) - First time a

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- Equity instruments issued by third parties are recognised at fair value with subsequent changes recognised in the profit and loss. However an entity could irrevocably elect equity instruments at initial recognition for which fair value changes and the realised gain or loss are recognised in fair value reserves. Gains and losses recognised in fair value reserves can not be recycled to profit and loss. This is a discretionary decision, and does not imply that all the equity instruments should be treated on this basis. The dividends received are recognised as income for the year. The Group is evaluating the impact of adopting this standard. IFRIC 12 – Service Concession Arrangements The International Financial Reporting Interpretations Committee (IFRIC) issued in July 2007 IFRIC 12 – Service Concession Arrangement. The EU endorsement of this interpretation was on 25 March 2009, which is mandatory for annual periods beginning on or after 29 March 2009. The IFRIC 12 applies to public-to-private service concession arrangements. Therefore IFRIC 12 shall be applied to EDP Group consolidated financial statements, from 1 January 2010, including the comparative amounts disclosed for 2009. The IFRIC 12 applies to public-to-private service concession arrangements and establishes the accounting framework to the activity made by infrastructure operators under service concession arrangements, whose objective is to render a public service. This interpretation is applicable when the grantor maintains the control of the services rendered by the operator, in what concerns its nature and type, maintains the control over the prices and controls any significant residual interest in the infrastructure comprised by the arrangement. The Group EDP is evaluating the impact in its subsidiaries in Portugal and in other locations of adopting this interpretation. Following this assessment, the main activities which fall under the scope of IFRIC 12 are analysed as follows: Portugal In the distribution activity in Portugal, the concessions with the municipalities for the low-tension electricity, the State concession for the distribution of high and medium tension (EDP Distribuição), as well as the State concession for the distribution of low and medium pressure gas (EDP Gás) were identified. In the production of electricity were also identified exploration licenses of mini-hydric in EDP Produção and in Pebble Hydro Group, where the IFRIC 12 is applicable, and that will be reclassified under the application of this standard. Brazil It was identified that the distribution activity rendered under concessions falls under IFRIC 12, namely the concessions of Bandeirante and Escelsa. According to the preliminary analysis made, the Group does not expect a significant impact resulting from the adoption of this interpretation in the other locations of EDP Group. The Group is evaluating the impact of adopting this interpretation, which could affect the classification of certain assets currently recognised as property, plant and equipment, to intangible assets and / or financial assets. IFRIC 17 – Distributions of Non-cash Assets to Owners The International Financial Reporting Interpretations Committee (IFRIC) issued in November 2008, IFRIC 17 – Distributions of Non-cash Assets to Owners, with effective application date to years started after 1 July 2009, early adopting being allowed. This interpretation intends to clarify the accounting treatment of non-cash assets distribution to owners. It establishes that non-cash assets distributions must be accounted at fair value and the difference to the distributed assets carrying amount recognised in profit and loss in the period of the distribution. The Group does not expect any significant impact from the adoption of this interpretation in the financial statements. IFRIC 18 – Transfers of Assets from Customers The International Financial Reporting Interpretations Committee (IFRIC) issued in November 2008, IFRIC 18 – Transfer

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The Spanish branch of EDP has offices in Madrid and Oviedo. From a formal and legal point of view, the representation of the Spanish branch of EDP before third parties is ensured through the permanent representatives, which are members of the Executive Board of Directors of EDP, mandated for that purpose. The structure of direction, coordination, management and representation of the Spanish branch of EDP is composed of an Executive Committee, a Management Committee and a Coordination Committee. The Executive Committee of EDP is composed of five permanent representatives, a Corporate General Director (Group Controller for the activities in Spain) and by first line directors of the business units in Spain, which constitute the main direction and coordination body of the Branch, being responsible for the coordination of the activities of the permanent representatives and of the Management Committee. The Management Committee is chaired by the Corporate General Director and is composed by the natural extension of the Departments of the Corporate Centre of EDP, namely the Department of M&A ("Direcção de Análise de Negócios"), Department of Legal Affairs ("Direcção de Assessoria Jurídica"), Department of Internal Audit ("Direcção de Auditoria"), Department of Spanish Tax Matters ("Direcção de Fiscalidade Espanhola"), Department of Financial Management ("Direcção de Gestão Financeira"), Department of Shared Services ("Direcção de Serviços Partilhados") and IT Department ("Direcção de Sistemas de Informação") ensuring in a homogeneous way the functions of these departments transversally to the Spanish territory. Lastly, the Generation, Distribution, Trading and Gas Coordination Committees are composed and chaired by the respective Directors from the Board of Executive Directors of EDP in order to ensure synergies with Spain and eliminate inefficiencies and redundancies. The balance sheet of the Branch as at 31 December 2009 and 2008 is analysed as follows: EDP Branch Dec 2009 Dec 2008 Euro'000 Euro'000 Investments in subsidiaries EDP Renováveis S.A. Hidroeléctrica del Cantábrico S.A. Other Deferred tax assets Other debtors Total Non-Current Assets 2,939,889 1,981,798 60 1,478 4,923,225 2,939,889 1,981,798 60 52,404 928,506 5,902,657 Trade receivables Debtors and other assets Tax receivable Financial assets at fair value through profit or loss Cash and cash equivalents Total Current Assets Total Assets 16,157 376,013 10,442 10,885 413,497 5,336,722 Dec 2009 Euro'000 2,022 154,589 7,406 113,379 277,396 6,180,053 Dec 2008 Euro'000 1,925,440 3,419,314 3,419,314 760,825 74,324 150 835,299 4,254,613 6,180,053 Equity Financial debt Total Non-Current Liabilities Financial debt Trade and other payables Tax payable Total Current Liabilities Total Liabilities Total Equity and Liabilities 50. Environmental matters 1,852,407 2,809,277 2,809,277 22,771 651,760 507 675,038 3,484,315 5,336,722 Expenses of an environmental nature are those identified and incurred to avoid, reduce or repair damage of an environmental nature resulting from the company's normal activity. Expenses of an environmental nature are recorded as expenses for the year, except if they qualify for capitalization under the terms of IAS 16. Investments of an environmental nature recorded as Property, plant and equipment assets during the years 2009 and 2008 are analysed as follows: Group Dec 2009 Euro'000 Air and climate protection Biodiversity and landscape protection Waste management Research and development in the environmental area Soil, subterranean and superficial water protection Residual water management Noise and radiation reduction Other environmental management and protection activities 59,062 16,150 1,485 1,104 1,403 27 7,439 86,670 Dec 2008 Euro'000 93,052 20,555 8,876 1,197 1,596 112 607 5,518 131,513 226 Investments recognised in Air and clim

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During the year, the Group recognised expenses that are analysed as follows: Group Dec 2009 Euro'000 Air and climate protection Soil, subterranean and superficial water protection Waste management Biodiversity and landscape protection Residual water management Research and development in the environmental area Noise and radiation reduction Other environmental management and protection activities Other expenses 9,582 3,635 3,477 2,765 1,577 106 296 10,747 43 32,228 Dec 2008 Euro'000 15,196 2,894 6,731 1,394 2,420 2,521 1,113 32,269 Under the current and future social/economical trends and the practices followed by the EDP Group in matters of sustainability and environment, the group accounts for provisions to cover the costs with the restoring and decontamination of land where the electric power plants are located, of 12,154 thousand Euros and 5,831 thousand Euros as at 31 December 2009, to the electric power plants located in Portugal and Spain, respectively. According to the accounting policy referred in note 2 o), these provisions are calculated at the present amount of the expected future liability and are accounted for as part of the cost of the related asset (increase in property, plant and equipment) and are depreciated on a straight line basis over the expected average useful life of the assets. Regarding the liabilities to dismantle and restore the land where the wind farms are located to its original condition, as at 31 December 2009, the provisions amount to 63,956 thousand Euros. Additionally, the provision to dismantle the Trillo nuclear power plant amounts to 21,466 thousand Euros (see note 36). During the year 2009, EDP Group incurred in fines and other penalties for breaching environmental regulations of 29 thousand Euros. Environmental income recognised in 2009 relates to the sale of environmental subproducts of 5,510 thousand Euros, the sale of environmental waste of 4,967 thousand Euros and public environmental protection incentives of 1,043 thousand Euros. 51. Segmental reporting A business segment is a distinguishable component of the Group, that is engaged in providing a product or an individual service or a group of related products or services that is subject to risks and returns that are different from those of other business segments. A geographical segment is a distinguishable component of the Group, that is engaged in providing a product or an individual service or a group of related products or services within a particular economic environment which is subject to risks and returns that are different from those of components operating in other economic environments. The Group develops a set of activities in the energy sector in Portugal and abroad, with special emphasis in generation, distribution and supply of electricity and distribution and supply of gas. p internal reporting p g system y p p g g yg g p y and responsibility p y area for each member of the Board of The Group produces reports with business segments organised by geography Directors. Based on these reports, the Board of Directors assumes the function of Chief Operating Decision Maker ("CODM"), evaluating the performance of the various segments and deciding on resource allocations to each identified segment. The Group manages its activities based on several business segments, which involve essentially the following products/services: Electricity, Gas and Other Operations. The segments defined by the Group are the following: • Iberian Generation • Iberian Distribution • Iberian Supply • EDP Renováveis • EDP - Energias do Brasil • Iberian Gas • Other Operations The EDP Group makes a separate analysis of the electricity generation business through renewable power sources, which is achieved in a specific segment (EDP Renováveis). Taking into consideration the specificity of the Brazilian market, the Group also makes a separate analysis of the electricity generation, distribution and supply businesses in Brazil (EDP Energias do Brasil). The

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The Iberian Supply segment corresponds to the activity of unregulated electricity supply in Portugal and Spain. The regulated supply activity is included in the iberian distribution activity. This segment includes, namely, the following companies: • EDP Comercial - Comercialização de Energia, S.A. • Hidrocantábrico Energia, S.A.U. The EDP Renováveis segment corresponds to the power generation activity through renewable energy resources and includes all the companies of NEO Energia and Horizon Wind Energy subgroups. This segment also includes the holding company EDP Renováveis, S.A., and all the adjustments between the companies composing this segment, including consolidation adjustments. The EDP Energias do Brasil segment includes the activities of electricity generation, distribution and supply in Brazil, and is composed by the Holding EDP Energias do Brasil and all its subsidiaries, with the exception of EDP Renováveis Brasil which is included in the EDP Renováveis segment. As in the EDP Renováveis segment, this segment includes all the adjustments for the companies composing this segment, including consolidation adjustments. The Gas segment includes the gas distribution and supply activities in Portugal and Spain. This segment includes, namely, the following companies: • EDP Gás, SGPS • Portgás - Soc. de Produção e Distribuição de Gás, S.A. • EDP Gás Serviço Universal, S.A. • Gas de Euskadi Transporte de Gas, S.A.U. • Naturgás Comercializadora, S.A. • Naturgás Energia Distribución, S.A.U. • Naturgás Energia Group, S.A. • Septentrional de Gas, S.A. The Other operations segment includes the centralised management of financial investments and the remaining activities not included in the businesses segments, namely the centralised management of human resources, logistic platforms and shared service centers. The column "Adjustments" includes the elimination of dividends paid to EDP Energias de Portugal by the companies included in the segments, as well as, the adjustments related to the elimination of financial investments in the EDP Group subsidiaries and the remaining consolidation adjustments and intra-segments eliminations. Segment Definition The amounts reported in each business segment result from the aggregation of the subsidiaries and business units defined in each segment perimeter and the elimination of transactions between companies of the same segment. The balance sheet captions of each subsidiary and business unit are determined based on the amounts booked directly in the companies that compose the segment, including the elimination of balances between companies of the same segment, and excluding the allocation in the segments of the adjustments between segments. The income statement captions for each business segment are based in the amounts booked directly in the companies financial statements and related business units, adjusted by the elimination of transactions between companies of the same segment. For comparability purposes the information as at 31 December 2008 has been restated to reflect the changes which occurred in 2009. 2009 53. Explanation added for translation These financial statements are a translation of financial statements originally issued in Portuguese in accordance with International Financial Reporting Standards as adopted by the European Union. In the event of discrepancies, the Portuguese language version prevails. 228

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52. Companies in the Consolidation perimeter The subsidiary companies consolidated under the full consolidation method as at 31 December 2009 are as follows: Subsidiaries Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company Portugal Group Parent Company and Related Activities: EDP - Energias de Portugal, S.A. Balwerk - Consultadoria Económica e Participações, Sociedade Unipessoal, Lda. EDP Estudos e Consultoria, S.A. EDP Gás - S.G.P.S., S.A. EDP Imobiliária e Participações, S.A. EDP Inovação, S.A. EDP Investments and Services, S.L. EDP Valor - Gestão Integrada de Serviços, S.A. EDP Internacional S.A. Labelec - Estudos, Desenvolvimento e Actividades Laboratoriais, S.A. Pebble Hydro - Consultoria, Invest. e Serv., Lda. Sãvida - Medicina Apoiada, S.A. SCS - Serviços Complementares de Saúde, S.A. EDP Ventures, S.G.P.S., S.A. CEO-Comp Energia Oceânica,S.A. Electricity - Portugal: Electricity Generation: EDP - Gestão da Produção de Energia, S.A. Energin, S.A. O&M Serviços - Operação e Manutenção Industrial, S.A. Soporgen, S.A. Tergen - Operação e Manutenção de Centrais Termoeléctricas, S.A. Greenvouga - Soc. Gestora do Aproveitamento Hidroeléctrico de Ribeiradio-Ermida,S.A. Hidroeléctrica de Fagilde, Lda. Hidroeléctrica Janeiro de Baixo, LDA Minihídrica do Palhal, Lda. Hidroeléctrica de Penacova, Lda. Hidroeléctrica de Pinhel, Lda. Hidroeléctrica do Rabaçal Ponte, Lda. FISIGEN - Empresa de Cogeração, S.A. Empresa Hidroeléctrica do Guadiana, SA Renewable Energies: Eneraltius-Produção de Energia Electrica, S.A. Enernova - Novas Energias, S.A. Eólica da Alagoa, S.A. Eólica da Serra das Alturas, S.A. Eólica de Montenegrelo, Lda Malhadizes, S.A Windplus, S.A. Electricity Distribution: EDP Distribuição de Energia, S.A. Electricity Supply: EDP Serviço Universal, S.A. EDP Comercial - Comercialização de Energia, S.A. EDP Serviner - Serviços de Energia, S.A. EDP Serviços - Sistemas para a Qualidade e Eficiência Energética, SA Gas Supply and Distribution: EDP GÁS.Com - Comércio de Gás Natural, S.A. ENAGÁS - S.G.P.S., S.A. EDP Investimentos, S.G.P.S, S.A. EDP Gás III S.G.P.S, S.A. EDP Gás II S.G.P.S, S.A. PORTGÁS - Soc. de Produção e Distribuição de Gás, S.A. EDP Gás GPL - Comércio de Gás de Petróleo Liquefeito,S.A. EDP Gás Serviço Universal, S.A. Related Activities: EDP Soluções Comerciais, S.A. Other Activities: FCTE - Forum do Comércio, Transacções Electrónicas e Serviços Empresariais On-Line, S.A. Oni Multimédia - Serviços Interactivos, S.A. OPTEP SGPS, S.A. Lisbon Lisbon Lisbon 500,000 EUR 50,000 EUR 5,500,000 EUR 11 1,968 49,596 512 64,660 27,912 -501 -62,692 21,684 25 1 37,522 14 1,796 27,823 80.00% 100.00% 100.00% Lisbon 50,000 EUR 99,661 102,490 -2,830 171,012 3,278 100.00% 100.00% Lisbon Lisbon Lisbon Lisbon Lisbon Oporto Oporto Oporto 50,000 EUR 299,400 EUR 5,489,000 EUR 5,500,000 EUR 5,000,000 EUR 7,909,150 EUR 549,998 EUR 1,049,996 EUR 42,740 14,164 63,265 62,831 53,029 351,461 5,735 25,392 34,785 13,501 17,981 33,684 18,488 284,800 3,340 21,843 7,955 662 45,284 29,147 34,541 66,661 2,395 3,549 158,536 385 1,515 4 812 52,322 3,651 99,235 7,507 30 506 -1,142 -44 6,285 984 -3,479 100.00% 60.00% 100.00% 100.00% 100.00% 71.97% 71.97% 71.97% 100.00% Lisbon Lisbon Lisbon Massama 10,100,000 EUR 20,814,695 EUR 50,000 EUR 50,000 EUR 2,260,061 205,486 2,687 940 2,227,087 182,122 2,269 600 32,974 23,363 418 340 4,562,377 498,330 4,942 756 16,532 7,391 -44 -28 100.00% 100.00% 100.00% 55.00% 100.00% 100.00% Lisbon 1,024,500,000 EUR 5,426,830 4,875,689 551,141 1,948,913 211,960 100.00% 100.00% Oporto Oporto Arcos Valdevez Boticas Vila Pouca de Aguiar Oporto Lisbon 1,505,000 EUR 7,500,000 EUR 50,000 EUR 50,000 EUR 50,000 EUR 50,000 EUR 50,000 EUR 39,528 784,488 12,821 15,581 26,343 27,782 325 33,462 698,373 10,259 13,688 22,761 27,437 153 6,065 86,115 2,563 1,893 3,582 345 172 9,083 115,984 3,18

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Subsidiaries Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company Spain Electricity - Spain: Renewable Energies: Cía. Eléctrica de Energías Renovables Alternativas, SAU Compañía Eólica Campo de Borja, S.A. Corporación Empresarial de Renovables Alternativas, SLU Desarrollos Eólicos Promocion, S.A. Desarrollo Eólico Almarchal, SAU Desarrollo Eólico Buenavista, SAU Desarrollo Eólico de Corme, S.A. Desarrollo Eólico de Lugo, SAU Desarrollo Eólico de Tarifa, SAU Desarrollo Eólico Dumbria, SAU Desarrollo Eólico Rebosera, S.A. Desarrollo Eólico Santa Quiteria, S.L. Desarrollos Catalanes Del Viento,S.L Desarrollos Eolicos de Galicia, S.A. Desarrollos Eolicos, S.A. Eólica Dulcinea, S.L. Eólica Alfoz, SL Eneroliva S.A. Eólica Arlanzón, S.A. Eolica Campollano S.A. Eólica Don Quijote, S.L. Energia Eólica La Manchuela, SLU Genesa I S.L. Guadalteba Hidrocantábrico Congeneracion S.L. Hidroeléctrica del Rumblar, S.L. Hidroeléctrica Fuentermosa, S.L. Hidroeléctrica Gormaz S.A. Iberia Aprovechamientos Eólicos, SAU Industrias Medioambientales Río Carrión, S.A. Investigación y Desarrollo de Energías Renovables, S.L. Lajanda Lanavica Molino de Caragüeyes,S.L NEO Catalunya SL NEO Energia Aragon SL Neomai Inversiones SICAV, SA Parque Eólico Belchite S.L. Parque Eólico la Sotonera, S.L. Parque Eólico Los Cantales, SLU Parque Eólico Montes de Castejón, S.L. Parque Eólico Plana de Artajona, SLU Parques de Generación Eólica, S.L Parques Eólicos del Cantábrico S.A. Renovables Castilla la Mancha, S.A. Eólica Sierrra de Avila, SL Siesa Renovables Canarias, S.L. Sinae Inversiones Eólicas S.A. Sotromal, S.A. Tratamientos Medioambientales del Norte, S.A. Valle del Ebro Ingenieria y Consultoria, S.L. Veinco Energia Limpia SLU Parc Eòlic de Coll de Moro, S.L. Fontesilva Parc Eolic Molinars SL Muxia I e II Naturneo Energía, S.L. Eolica de Radona SL Parc Eòlic de Torre Madrina, S.L. Bon Vent de Corbera, SL Bon Vent de Vilalba, SL Parc Eòlic de Vilalba dels Arcs, S.L. Aprofitament D'Energies Renovables de la Terra Alta, S.A. Agrupación Eólica Francia SL Coll de la Garganta Eólica Curiscao Pumar, S.A. Desarrollos Eólicos de Teruel, S.L. Sierra de la Peña, S.A. Bon Vent de L'Ebre, S.L. Serra Voltorera Eólica Garcimuñoz, SL Electricity Distribution: Electra de Llobregat Energía, S.L. Solanar Distribución Electrica, S.L. Gas Supply and Distribution: Gas de Euskadi Transporte de Gas, S.A.U. Naturgas Comercializadora, S.A. Naturgás Energia Distribución, S.A.U. Naturgás Energia Grupo, S.A. Naturgas Participaciones, S.A.U. Naturgas Energía Comercializadoras Ultimo Recurso,S.A. Naturgas Energía Servicios, S.A. Naturgas Energía Suministro Sur, S.L. Naturgas Energía Suministro, S.L. Naturgas Energía Servicios Comunes, S.A. Naturgas Energía Distribución Cantabria, S.A. Naturgas Energía Distribución Murcia, S.A. HC Energía Ultimo Recurso, S.A. Electricity Supply: EDP Energia Ibérica, S.A. Hidrocantabrico Energia, S.A.U. Other Activities: Cerámica Técnica de Illescas Cogeneración S.A. Iniciativas Tecnológicas de Valorizacón Energética de Residuos S.A. Renovamed, S.A. Sinova Medoambiental, SA Tecman, S.L. Tratamientos Ambientales Sierra de La Tercia, S.A. Oviedo Oviedo Oviedo Oviedo Bilbao Oviedo 62,247 EUR 2,996,022 EUR 60,200 EUR 2,687,364 EUR 250,000 EUR 3,731,202 EUR 1,418 9,749 550 16,433 4,931 14,737 1,938 9,719 1,321 13,623 1,416 5,331 -520 30 -770 2,810 3,515 9,406 1,195 15,514 925 14,217 5,306 16,317 65 1,707 67 1,385 321 2,496 90.00% 100.00% 75.00% 84.00% 95.97% 88.00% Madrid Oviedo 60,200 EUR 44,502,000 EUR 17 1,127,192 13,376 1,066,713 -13,359 60,479 36 1,540,261 9 29,097 100.00% 100.00% Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Bilbao Santander Murcia Oviedo 12,880,20

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Subsidiaries Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company Brazil Parent Company and Related Activities: Energest, S.A. Escelsapar Santa-Fé Energia, S.A. Elebras Projetos, Ltda Evrecy Participações Ltda Electricity - Brazil: Electricity Generation: CESA - Castelo Energética, S.A. Costa Rica Energética, Lda. Enercouto, S.A. Enerpeixe, S.A. Pantanal Ipueiras Energia S.A. Lajeado Energia S.A. Investco, S.A. Renewable Energies: EDP Renovaveis Brasil, SA Enernova, SA (Brasil) Central Nacional de Energia Eólica, S.A. Terra Verde Bioenergia Participações S.A. Electricity Distribution: Bandeirante Energia, S.A. Escelsa - Espírito Santo Centrais Eléctricas, S.A. Electricity Supply: Enertrade - Comercializadora de Energia, S.A. Sao Paulo 26,284,758 BRL 67,576 47,387 20,188 290,165 9,972 64.91% Sao Paulo Espirito Santo 254,628,684 BRL 376,021,630 BRL 1,031,902 918,995 699,870 592,054 332,031 326,941 798,077 524,563 114,156 63,242 64.91% 64.91% Sao Paulo Sao Paulo Sao Paulo Sao Paulo 49,458,545 BRL 1,000 BRL 22,035,000 BRL 100 BRL 27,428 10,285 18,781 665 8,018 12,522 9,898 1,274 19,410 -2,237 8,883 -609 567 -540 2,640 -205 -2,031 634 -609 71.85% 64.91% 71.85% 59.72% Sao Paulo Mato Grosso Sul Sao Paulo Sao Paulo Sao Paulo Sao Paulo Sao Paulo Sao Paulo 23,458,269 BRL 14,318,185 BRL 1,000 BRL 882,627,748 BRL 23,390,369 BRL 14,721,836 BRL 756,867,541 BRL 961,793,701 BRL 81,755 9,459 1,977 831,923 32,389 3 736,883 750,856 54,976 1,132 2,164 390,903 9,489 2 126,632 254,456 26,780 8,327 -187 441,020 22,900 610,251 496,400 16,412 6,053 121,482 14,910 106,823 78,072 6,351 5,013 -21 48,360 10,770 -2 40,556 36,684 64.91% 33.11% 64.91% 38.95% 64.91% 64.91% 36.26% 26.47% Sao Paulo Espirito Santo Espirito Santo Sao Paulo Sao Paulo 120,480,870 BRL 2,800,000 BRL 86,371,000 BRL 1,326,013 BRL 21,462,267 BRL 196,146 2,115 63,147 174 10,119 73,436 3,064 27,974 4 496 122,711 -948 35,173 170 9,623 58,979 1 7,079 1,691 31,489 -175 1,103 -6 1,462 64.91% 64.91% 64.91% 71.85% 64.91% - France Electricity - France: Renewable Energies: C.E. Canet-Pont de Salars, S.A.S. C.E. Gueltas Noyal-Pontivy, S.A.S. C.E. Patay, SAS C.E. Segur, SAS Plouvien Breiz, S.A.S. C.E. NEO Truc L'homme, SAS Parc Eolien D'Ardennes Parc Eolien du Clos Bataille, SAS Eolienne des Bocages, SARL Eolienne de Callengeville, SAS Parc Eolien des Longs Champs, SARL Eolienne D'Etalondes, SARL Parc Eolien de La Hetroye, SAS Parc Eolien de Mancheville, SARL Neo Galia , SAS Parc Eolien des Bocages, SARL Parc Eolien de Roman, SARL C.E. Saint Barnabe, SAS Eolienne de Saugueuse, SARL Parc Eolien de Varimpre, SAS Parc Eolien des Vatines, SAS Le Mee, S.A. R.L. Sauvageons, S.A.R.L. Petite Piece, S.A.R.L. Mardelle, SARL Quinze Mines, SARL Vallée du Moulin, SARL Paris Paris Paris Paris Carhaix Paris Elbeuf Elbeuf Elbeuf Elbeuf Elbeuf Elbeuf Elbeuf Elbeuf Paris Elbeuf Elbeuf Paris Elbeuf Elbeuf Elbeuf Toulouse Toulouse Toulouse Toulouse Toulouse Toulouse 125,000 EUR 2,261,000 EUR 1,640,000 EUR 1,615,000 EUR 40,000 EUR 37,500 EUR 1,000 EUR 37,001 EUR 1,000 EUR 37,004 EUR 1,000 EUR 1,000 EUR 37,004 EUR 1,000 EUR 48,526,642 EUR 1,000 EUR 1,000 EUR 1,600,000 EUR 1,000 EUR 37,003 EUR 37,004 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000 EUR 1,000 EUR 16,367 9,422 16,625 15,750 12,880 35 25 12,516 8 29 79 19 19 7 260,687 27 139 15,607 10 15,201 14,737 7,111 9,834 1,042 5,294 11,225 9,593 16,803 5,778 13,980 13,944 14,453 7 147 13,655 35 12 148 46 10 46 218,223 188 240 13,883 37 16,754 16,419 7,153 9,866 1,116 5,298 11,242 9,609 -435 3,645 2,645 1,805 -1,573 29 -122 -1,139 -27 17 -68 -27 9 -39 42,464 -161 -101 1,724 -26 -1,553 -1,682 -42 -32 -75 -3 -17 -16 2,062 1,540 2,835 2,398 1,483 1 1,810 1 9 1 1 15,046 1 1 2,362 2,429 2,062 151 324 14 256 218 -7 344 447 238 -382 -3 -1 286 -1 3 -3 -2 -5 -4 -4,587 -1 -7 144 -2 527 196 -9 -13 -72 -1 -15 -13 77.53% 77.53% 7

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 Subsidiaries Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company United States of America Electricity - United States of America: Renewable Energies: Marble River, LLC Martinsdale Wind Farm LLC Mesquite Wind, LLC Old Trail Wind Farm, LLC OPQ Property LLC Post Oak Wind, LLC Signal Hill Wind Power Project LLC Telocaset Wind Power Partners, LLC Tumbleweed Wind Power Project LLC Stinson Mills Wind Farm, LLC Wind Turbine Prometheus, LP Lost Lakes Wind Farm, LLC Quilt Block Wind Farm, LLC Cloud County Wind Farm Whitestone Wind Purchasing, LLC Blue Canyon Windpower V, LLC Pioneer Prairie Wind Farm I, LLC Sagebrush Power Partners, LLC Rail Splitter Blackstone Wind Farm, LLC Meadow Lake Wind Farm, LLC Wheatfield Wind Power Project, LLC 2007 Vento II 2008 Vento III Horizon Wind Ventures IC, LLC Meadow Lake Wind Farm IV LLC Meadow Lake Windfarm III LLC 2009 Vento IV, LLC 2009 Vento V, LLC 2009 Vento VI, LLC Horizon Wind Ventures II LLC Horizon Wind Ventures III, LLC Horizon Wind Ventures VI, LLC Black Prairie Wind Farm LLC Blackstone Wind Farm II LLC Meadow Lake Wind Farm II LLC Saddleback Wind Power Project LLC Horizon Wind, Freeport Windpower I LLC Juniper Wind Power Partners, LLC Lexington Chenoa Wind Farm LLC Machias Wind Farm LLC New Trail Wind Farm LLC North Slope Wind Farm LLC Number Nine Wind Farm LLC Pacific Southwest Wind Farm LLC Pioneer Prairie Wind Farm II LLC Rim Rock Power Partners LLC Sardinia Windpower LLC Turtle Creek Wind Farm LLC Western Trail Wind Project I LLC Whistling Wind WI Energy Center, LLC Simpson Ridge Wind Farm LLC Coos Curry Wind Power Project LLC Horizon Wind Energy Midwest IX LLC Horizon Wind Energy Northwest I LLC Peterson Power Partners LLC Pioneer Prairie Interconnection LLC The Nook Wind Power Project LLC Tug Hill Windpower LLC Whiskey Ridge Power Partners LLC Wilson Creek Power Partners LLC WTP Management Company LLC BC2 Maple Ridge Holdings LLC Cloud West Wind Project, LLC Five-Spot, LLC Alabama Ledge Wind Farm LLC Antelope Ridge Wind Power Project LLC Arkwright Summit Wind Farm LLC Ashford Wind Farm LLC Athena-Weston Wind Power Project LLC Blackstone Wind Farm III LLC Blackstone Wind Farm IV LLC Blackstone Wind Farm V LLC Blue Canyon Windpower III LLC Blue Canyon Windpower IV LLC Blue Canyon Windpower VI LLC Broadlands Wind Farm II LLC Broadlands Wind Farm III LLC Broadlands Wind Farm LLC Chateaugay River Wind Farm LLC Cropsey Ridge Wind Farm LLC Crossing Trails Wind, Power Project LLC Dairy Hills Wind Farm LLC Diamond Power Partners LLC Ford Wind Farm LLC Freeport Windpower I, LP Gulf Coast Windpower Management Company, LLC Homestead Wind Farm LLC Horizon Wind Energy Northwest VII LLC Horizon Wind Energy Northwest X LLC Horizon Wind Energy Northwest XI LLC Horizon Wind Energy Panhandle I LLC Horizon Wind Energy Southwest I LLC Horizon Wind Energy Southwest II LLC Horizon Wind Energy Southwest III LLC Horizon Wind Energy Southwest IV LLC Horizon Wind Energy Valley I LLC Horizon Wind MREC Iowa Partners LLC Horizon Wind Chocolate Bayou I LLC Lexington Chenoa Wind Farm II LLC Lexington Chenoa Wind Farm III LLC East Klickitat Wind Power Project LLC Horizon Wind Energy Northwest IV LLC Blue Canyon Wind Power VII LLC Horizon Wyoming Transmission LLC New York Colorado Texas Illinois Illinois Texas Colorado Oregon Colorado Colorado California Minnesota Minnesota Kansas Texas Oklahoma Iowa Washington Illinois Illinois Indiana Oregon Texas Texas Texas Indiana Indiana Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Texas Te

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Subsidiaries Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company United States of America Electricity - United States of America: Renewable Energies: AZ Solar LLC Black Prairie Wind Farm II LLC Black Prairie Wind Farm III LLC Paulding Wind Farm LLC Paulding Wind Farm II LLC Paulding Wind Farm III LLC Simpson Ridge Wind Farm II LLC Simpson Ridge Wind Farm III LLC Simpson Ridge Wind Farm IV LLC Simpson Ridge Wind Farm V LLC Athena-Weston Wind Power Project II, LLC Meadow Lake Wind Farm V, LLC Arizona Illinois Illinois Ohio Ohio Ohio Wyoming Wyoming Wyoming Wyoming Oregon Indiana - USD - USD - USD - USD - USD - USD - USD - USD - USD - USD - USD - USD 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% 77.53% - Other Countries Related Activities: EDP Finance BV EDP Finance Company Ltd. EDP ASIA - Investimento e Consultadoria , Limitada EDP - Ásia Soluções Energéticas Limitada Energia RE - Sociedade Cativa de Resseguro Electricity - Other Countries: Renewable Energies: Greenwind, S.A. Tarcan, BV Cernavoda Power SRL Renovatio Power SRL Louvain-la-Neuve Amsterdam Bucharest Bucharest 24,924,000 EUR 20,000 EUR 200 LEI 200 LEI 87,902 20,294 55,901 53,610 63,059 15,643 56,704 54,520 24,843 4,650 -803 -910 8,190 6,542 4,000 3,035 1,166 5,283 -281 -518 54.27% 77.53% 65.90% 65.90% Amsterdam Dublin Macao Macao Luxembourg 2,000,000 EUR 1,000,001 EUR 200,000 MOP 1,500,000 MOP 2,000,000 EUR 11,203,207 674 58,602 130 50,301 11,197,528 352 147 33,737 5,679 322 58,456 130 16,564 390,872 13,973 13,603 1,126 -82 13,048 2,464 100.00% 100.00% 100.00% 60.00% 100.00% 100.00% 100.00% 100.00% 100.00% The EDP Group holds, through EDP Renováveis a number of subsidiaries legally constituted, without share capital, and that at the year end do not have any assets, liabilities, or any operational activity. When applicable, the interest held by EDP Group include the effect of the acquisition of minority interests by means of written put options as described under the accounting policy 2 b). The main financial data of the companies included in the consolidation under the proportional method as at 31 December 2009 are as follows: Jointly controled entities Head Office Share Capital / Currency Noncurrent Assets 31-Dec-09 Euro'000 Current Assets 31-Dec-09 Euro'000 Noncurrent Liabilities 31-Dec-09 Euro'000 Current Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Total Costs 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company Bioastur, AIE Cogneracion y Matenimiento AIE Compañía Eólica Aragonesa, S.A. Desarrollos Energeticos Canarios, S.A. EDP Produção Bioeléctrica, S.A. Evolución 2000, S.L. Infrastructuras Gasistas de Navarra, S.L. Murciasol 1 Sola Térmica, S.L. Tébar Eólica, S.A. EME2 - Engenharia, Manutenção e Serviços, ACE Ródão Power - Energia e Biomassa do Ródão, S.A. Porto do Pecém Geração de Energia S.A. Flat Rock Windpower II LLC Flat Rock Windpower LLC CIDE HC Energía, S.A. InovGrid, A.C.E. Gijon Oviedo Zaragoza Las Palmas Lisbon Albacete Pamplona Almería Cuenca Lisbon Vila Velha de Rodão Ceara Portland Portland Madrid Lisbon 60,101 1,208,010 6,701,165 15,025 50,000 117,994 1,003,006 3,340 4,720,400 50,000 507,594,744 207,447,187 525,479,601 500,000 - EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR EUR BRL USD USD EUR EUR 23 50 105,014 -8 68,776 22,690 571 84 15,436 8,219 183,315 -7,899 -19,659 -166 - 997 2,463 9,088 4 3,379 5,694 1,822 16 4,992 1,082 376 81,966 849 3,694 37,002 266 44,313 69,887 23,366 194 14,981 2 242,064 387 1,049 - 572 1,106 13,357 9 6,559 3,895 735 100 2,845 1,082 9,359 36,049 43 66 36,722 266 447 1,407 56,433 -13 -4,291 1,124 1,464 2,601 -766 -12,832 -7,479 -17,081 114 - 1,652 3,647 14,805 10,192 5,273 544 4,054 645 6,572 24,828 2,743 11,353 52,664 362 -1,376 -3,050 -11,946 -10,402 -3,955 -234 -3,449 -645

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 The associated companies included in the consolidation under the equity method as at 31 December 2009 are as follows: Associated companies Head Office Share capital / Currency Assets 31-Dec-09 Euro'000 Liabilities 31-Dec-09 Euro'000 Equity 31-Dec-09 Euro'000 Total Income 31-Dec-09 Euro'000 Net Profit/(Loss) 31-Dec-09 Euro'000 % Group % Company Biomasas del Pirineo, S.A. Carriço Cogeração, S.A. CEM, S.A. Central E - Informação e Comércio Electrónico, S.A. Cultivos Energéticos de Castilla, S.A. D.E. de Canárias, S.A. DECA - Distribuicion Eléctrica Centroamericana Dos (II), S.A. Ederg-Produção Hidroeléctrica, Lda. ENEOP - Éolicas de Portugal, SA Geoterceira - S. Geo. Terceira, S.A. Hidroastur, S.A. Inkolan, A.I.E. Inverasturias - Fondo Capital Riesgo Kosorkuntza, A.I.E. Parque Eólico Altos del Voltoya, S.A. Parque Eólico de Belmonte, S.A. Parque Eólico Sierra del Madero, S.A. Portsines - Terminal Multipurpose de Sines, S.A. SETGAS - Sociedade de Produção e Distribuição de Gás, S.A. Sodecoan, S.L. Solar Siglo XXI, S.A. Tolosa Gasa, S.A. Aprofitament D'Energies Renovables de L'Ebre, S.A. Huesca Vila Rei Macao Lisbon Burgos Gran Canaria Guatemala Lisbon Lisbon Azores Oviedo Bilbao Aviles Bilbao Madrid Asturias Soria Sines Charneca da Caparica Seville Ciudad Real Tolosa Barcelona 454,896 EUR 50,000 EUR 580,000,000 MOP 227,275 EUR 300,000 EUR 4,291,140 EUR 1,141,092,000 GTQ 1,000,000 EUR 5,000,000 EUR 1,000,000 EUR 4,808,000 EUR 60,101 EUR 3,005,000 EUR 1,502,500 EUR 6,444,956 EUR 120,400 EUR 7,194,021 EUR 10,000,000 EUR 9,000,000 EUR 6,010 EUR 80,000 EUR 1,021,700 EUR 3,869,020 EUR 238 17,308 429,127 879 252 11,435 476,890 951 440,141 27,598 7,749 247 5,582 9,158 39,395 4,506 13,059 21,180 126,578 3 62 2,617 24,547 14,158 199,585 315 807 275,631 404,900 26,605 133 5,692 28,398 2,201 90,499 364 21,044 238 3,149 229,543 564 252 10,628 201,259 951 35,241 992 7,749 114 5,582 3,466 10,997 4,506 13,059 18,979 36,078 3 62 2,253 3,503 23,763 388,150 971 4,108 450,449 12,462 2,002 372 229 10,180 7,343 15,759 26,197 1,369 - 2,113 46,918 -14 1,115 24,794 -19 2,151 -1 33 1,031 1,066 576 3,843 1,708 8,079 655 -366 23.26% 35.00% 21.19% 34.00% 23.26% 34.69% 21.00% 25.00% 15.20% 49.90% 19.38% 41.13% 20.00% 23.99% 37.99% 23.18% 32.56% 39.60% 19.83% 38.76% 19.38% 38.39% 14.71% 21.00% - The associated companies included in the consolidation under the equity method as at 31 December 2008 are as follows: Associated companies Head Office Share capital / Currency Assets 31-Dec-08 Euro'000 Liabilities 31-Dec-08 Euro'000 Equity 31-Dec-08 Euro'000 Total Income 31-Dec-08 Euro'000 Net Profit/(Loss) 31-Dec-08 Euro'000 % Group % Company Biomasas del Pirineo, S.A. Carriço Cogeração, S.A. CEM, S.A. Central E - Informação e Comércio Electrónico, S.A. Cultivos Energéticos de Castilla, S.A. D.E. de Canárias, S.A. DECA - Distribuicion Eléctrica Centroamericana Dos (II), S.A. EDEL - Empresa Editorial Electrotécnica, Lda. Ederg-Produção Hidroeléctrica, Lda. ENEOP - Éolicas de Portugal, SA Geoterceira - S. Geo. Terceira, S.A. Hidroastur, S.A. Inkolan, A.I.E. Inverasturias - Fondo Capital Riesgo Kosorkuntza, A.I.E. Parque Eólico Altos del Voltoya, S.A. Parque Eólico de Belmonte, S.A. Parque Eólico Sierra del Madero, S.A. Portsines - Terminal Multipurpose de Sines, S.A. SETGAS - Sociedade de Produção e Distribuição de Gás, S.A. Sodecoan, S.L. Solar Siglo XXI, S.A. Tolosa Gasa, S.A. Huesca Vila Rei Macao Lisbon Burgos Gran Canaria Guatemala Portugal Lisbon Lisbon Azores Oviedo Bilbao Aviles Bilbao Madrid Asturias Soria Sines Charneca da Caparica Seville Ciudad Real Tolosa 454,896 EUR 50,000 EUR 580,000,000 MOP 227,275 EUR 300,000 EUR 4,291,140 EUR 1,731,677,586 GTQ 1,798 EUR 1,000,000 EUR 5,000,000 EUR 1,000,000 EUR 4,808,000 EUR 60,101 EUR 5,384,132 EUR 1,503 EUR 6,444,956 EUR 120,400 EUR 7,194,021 EUR 10,000,000 EUR 9,000,000 EUR 6,010 EUR 80,000

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Biomasas del Pirineo, S.A. Carriço Cogeração, S.A. CEM, S.A. Central E - Informação e Comércio Electrónico, S.A. Cultivos Energéticos de Castilla, S.A. D.E. de Canárias, S.A. DECA - Distribuicion Eléctrica Centroamericana Dos (II), S.A. Ederg-Produção Hidroeléctrica, Lda. ENEOP - Éolicas de Portugal, SA Geoterceira - S. Geo. Terceira, S.A. Hidroastur, S.A. Inkolan, A.I.E. Inverasturias - Fondo Capital Riesgo Kosorkuntza, A.I.E. Parque Eólico Altos del Voltoya, S.A. Parque Eólico de Belmonte, S.A. Parque Eólico Sierra del Madero, S.A. Portsines - Terminal Multipurpose de Sines, S.A. SETGAS - Sociedade de Produção e Distribuição de Gás, S.A. Sodecoan, S.L. Solar Siglo XXI, S.A. Tolosa Gasa, S.A. Aprofitament D'Energies Renovables de L'Ebre, S.A. Huesca Vila Rei Macao Lisbon Burgos Gran Canaria Guatemala Lisbon Lisbon Azores Oviedo Bilbao Aviles Bilbao Madrid Asturias Soria Sines Charneca da Caparica Seville Ciudad Real Tolosa Barcelona 454.896 EUR 50.000 EUR 580.000.000 MOP 227.275 EUR 300.000 EUR 4.291.140 EUR 1.141.092.000 GTQ 1.000.000 EUR 5.000.000 EUR 1.000.000 EUR 4.808.000 EUR 60.101 EUR 3.005.000 EUR 1.502.500 EUR 6.444.956 EUR 120.400 EUR 7.194.021 EUR 10.000.000 EUR 9.000.000 EUR 6.010 EUR 80.000 EUR 1.021.700 EUR 3.869.020 EUR 238 17.308 429.127 879 252 11.435 476.890 951 440.141 27.598 7.749 247 5.582 9.158 39.395 4.506 13.059 21.180 126.578 3 62 2.617 24.547 14.158 199.585 315 807 275.631 404.900 26.605 133 5.692 28.398 2.201 90.499 364 21.044 238 3.149 229.543 564 252 10.628 201.259 951 35.241 992 7.749 114 5.582 3.466 10.997 4.506 13.059 18.979 36.078 3 62 2.253 3.503 23.763 388.150 971 4.108 450.449 12.462 2.002 372 229 10.180 7.343 15.759 26.197 1.369 - 2.113 46.918 -14 1.115 24.794 -19 2.151 -1 33 1.031 1.066 576 3.843 1.708 8.079 655 -366 23,26% 35,00% 21,19% 34,00% 23,26% 34,69% 21,00% 25,00% 15,20% 49,90% 19,38% 41,13% 20,00% 23,99% 37,99% 23,18% 32,56% 39,60% 19,83% 38,76% 19,38% 38,39% 14,71% 21,00% - The associated companies included in the consolidation under the equity method as at 31 December 2008 are as follows: Associated companies Head Office Share capital / Currency Assets 31-Dec-08 Euro'000 Liabilities 31-Dec-08 Euro'000 Equity 31-Dec-08 Euro'000 Total Income 31-Dec-08 Euro'000 Net Profit/(Loss) 31-Dec-08 Euro'000 % Group % Company Biomasas del Pirineo, S.A. Carriço Cogeração, S.A. CEM, S.A. Central E - Informação e Comércio Electrónico, S.A. Cultivos Energéticos de Castilla, S.A. D.E. de Canárias, S.A. DECA - Distribuicion Eléctrica Centroamericana Dos (II), S.A. EDEL - Empresa Editorial Electrotécnica, Lda. Ederg-Produção Hidroeléctrica, Lda. ENEOP - Éolicas de Portugal, SA Geoterceira - S. Geo. Terceira, S.A. Hidroastur, S.A. Inkolan, A.I.E. Inverasturias - Fondo Capital Riesgo Kosorkuntza, A.I.E. Parque Eólico Altos del Voltoya, S.A. Parque Eólico de Belmonte, S.A. Parque Eólico Sierra del Madero, S.A. Portsines - Terminal Multipurpose de Sines, S.A. SETGAS - Sociedade de Produção e Distribuição de Gás, S.A. Sodecoan, S.L. Solar Siglo XXI, S.A. Tolosa Gasa, S.A. Huesca Vila Rei Macao Lisbon Burgos Gran Canaria Guatemala Portugal Lisbon Lisbon Azores Oviedo Bilbao Aviles Bilbao Madrid Asturias Soria Sines Charneca da Caparica Seville Ciudad Real Tolosa 454.896 EUR 50.000 EUR 580.000.000 MOP 227.275 EUR 300.000 EUR 4.291.140 EUR 1.731.677.586 GTQ 1.798 EUR 1.000.000 EUR 5.000.000 EUR 1.000.000 EUR 4.808.000 EUR 60.101 EUR 5.384.132 EUR 1.503 EUR 6.444.956 EUR 120.400 EUR 7.194.021 EUR 10.000.000 EUR 9.000.000 EUR 6.010 EUR 80.000 EUR 1.021.700 EUR 432 22.380 420.814 1.094 62 10.431 596.939 19 970 107.446 16.973 9.188 247 5.265 9.775 44.101 38.542 27 23.060 120.815 69 2.574 194 17.343 183.169 543 -190 919 350.773 93 74.357 15.980 739 194 49 6.137 32.196 33.467 -12.959 3.366 92.810 3 7 375 238 5.037 237.645 551 252 9.512 246.166 -74 970 33.089 993 8.449 53 5.216 3.638 11.905 5.075 12.986 19.694 28.005 -3 62 2.199 25.037 373.640 1.272 4.784 619.452 1.331 931 11.706 12.320 6.756 13.573 16.749 23.820

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annual report 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 edp Group activity by Business segment - iFrs Information by Business Segment – 31 December 2009 (Amounts in thousand Euros) EDP Group EDP Activity Group by Activity Business by Segment Business Segment IFRS Information by Business Information Segment by Business – 31 December Segment – 2009 31 December 2009 (Amounts in thousand (Amounts Euros) in thousand Euros) Electricity Electricity EDP Renováveis EDP Renováveis Adjustments Total Iberian Distribution Iberian Generation Iberian Generation Iberian Distribution * Iberian Distribution * Iberian Supply Portugal Spain Portugal Adjustments Spain * Iberian Supply ain Adjustments Total Ajustamentos Portugal Total Spain Portugal Ajustamentos Spain Ajustamentos Total Total Portugal Spain Portugal Total Spain Europe Total U.S.A. Europe Other U.S.A. Operations Other Operations Adjustments Ge T 24,046 Turnover Turnover 2,331,504 175,212 External customers External customers 1,940,347 48,834 Inter segmental costumers Inter segmental costumers 391,157 38,577 Cost of consumed electricity Cost of consumed electricity -404,369 Cost of consumed gas Cost of consumed gas Change in inventories and cost of raw materials and Change in inventories and cost of raw materials and used consumables used consumables -675,146 564 1,429,637 2,331,504 1,352,278 1,940,347 77,359 391,157 -473,575 -404,369 --484,737 -675,146 1,251,989 471,325 1,429,637 -52,382 1,352,278 -36,305 77,359 -16,077 -473,575 943 --484,737 33,600 471,325 -17,839 3,708,759 -52,382 3,256,320 -36,305 452,439 -16,077 -877,001 943 --1,126,283 33,600 -17,839 1,705,475 4,763,759 3,708,759 4,632,156 3,256,320 131,603 452,439 -3,380,624 -877,001 --1,126,283 -12,104 1,705,475 1,371,031 224,046 4,763,759 4,632,156 175,212 48,834 131,603 -3,380,624 -38,577 --12,104 564 1,371,031 186,033 224,046 175,212 48,834 -38,577 - 564 186,033 - 4,987,805 4,807,368 180,437 -3,419,201 --11,540 1,557,064 - 4,987,805 495,546 4,807,368 487,479 180,437 8,067 -3,419,201 -450,839 - -11,540 -6,062 1,557,064 38,645 1,289,270 495,546 1,159,214 487,479 130,056 8,067 -1,231,440 -450,839 -5,602 -14,491 -6,062 38,645 37,737 1,784,816 1,289,270 1,646,693 1,159,214 138,123 130,056 -1,682,279 -1,231,440 -5,602 -5,602 -20,553 -14,491 37,737 76,382 441,437 1,784,816 141,977 1,646,693 299,460 138,123 -1,682,279 -246 -5,602 -4,804 -20,553 76,382 436,387 204,649 441,437 204,649 141,977 299,460 -1,198 -246 --4,804 436,387 203,451 204,649 1,771 204,6492,286 - -515 -1,198 -78 203,451 1,693 - 1,771 385 2,286 -515 385 -78 - - 91 1,693 476 648,242 385 348,912299,330 385 -1,522--4,713 91 476 642,007 1,251,989 86,033 Other operating income / operating (expenses) Other income / (expenses) Other operating income 18,244 Other operating income 12,567 Supplies and services -96,230 Supplies and services 63,652 Personnel costs -72,603 Personnel costs -18,491 Employee benefits Employee benefits -41,659 -2,921 Other operating expenses -18,563 Other operating expenses -9,353 3,932 18,244 -62,810 -96,230 -31,762 -72,603 -1,643 -41,659 -31,353 -18,563 -123,636 -210,811 347,689 1,041,178 -20,299 -5,859 -128,659 -316,818 -416 450 5,225 199,181 723,310 13,251 54,945 523,980 22,328 465 -82,393 -475,608 -24,811 -153,329 258 735 182,759 619,553 -29,455 -118,781 153,304 500,772 3,932 2,140 -62,810 1,030 -31,762 -1,643 738 -31,353 3,908 -123,636 -13,931 347,689 -20,299 -128,659 -450 -13,931 199,181 13,251 -70,845 54,945 22,328 73,234 -82,393 -24,811 258 -11,542 182,759 -4,241 -29,455 153,304 -15,783 22,176-156,900 2,140 -103,335 1,030 -43,302-49,178 738 -330,539 3,908 1,374,936 -13,931 -26,158-445,477-4165,675908,560 -13,931 13,251508,080 -70,845 22,793-484,767 73,234 -178,140993790,770 -11,542 -152,477 -4,241 638,293 -15,783 51,434 22,176 -289,154 -156,900 -164,262 -103,335 -94,351 -43,302 -284,840 -49,178 -781,173 -330,539 589,858 1,374,936 -8,558 -26,158 -346,776 -445,477 -416 8

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ment - IFRS er 2009 Gas EDP Energias do Brasil Total Generation Total Distribution Supply Other Operations Adjustments Total Portugal Spain Iberian Activity Adjustments Total Other Operations Adjustments ts EDP Portuga Group 12,198,183 11,944,358 253,825 -5,340,458 -641,183 -1,111,229 5,105,313 385 385 91 476 648,242 348,912 299,330 -1,522 -4,713 642,007 351,201 4,987,805 1,242,560 289,136 1,693 -204,584 1,680,006 193,933 4,807,368 1,240,350 244,736 987 1,680,006 706 -204,584 157,268 2,210 44,400 180,437 -52,222 -744,496 -269,686 204,584 -861,820 -3,419,201 -37 298,942 -1,167 -7 -1,211 -11,540 255,681 126,687 128,994 -203,374 52,307 1,030,595 994,883 35,712 -143,180 -619,242 -5,249 262,924 -97,252 -97,252 97,583 331 1,189,024 1,121,570 67,454 -143,180 -725,033 -5,249 315,562 168,955 -932,241 1,101,196 -112 168,843 -1,969,424 15,730 -1,985,154 1,644,545 89,452 58,432 -176,995 495, 487 8 -450, -6, 496,897 19,443 1,693 816,975 1,557,064 38, -1,243 926 -160 -477 -1 -241 1 -241 125,231 -148,304 -41,914 -633 -33,838 -99,458 542,549 183 -314,350 2,403 230,785 268 18,744 16,973 -79,097 -29,054 3,922 162,541 -44,754 117,787 206 -20,603 -12,069 -1,093 -5,715 -39,274 259,668 -595 -50,128 -3 208,942 13,784 7,564 -45,447 -42,469 142,374 -19,440 122,934 10,355 4 388 10,953 64,001 -94,865 -1,750 -13,233 -130,451 -352,806 -1,926 -5,679 -73,520 -53,846 -182,753 -13,346 -160 -1,903 -16,502 -97,272 -46,883 -2,145 -2,491 -57,234 -294,193 -198,585 -5,977 -22,918 -266,754 -863,023 298,312 13,466 -21,225 550,221 694,041 2,040 -13,164 -4,758 -117 -4,871 -20,870 31,437 -848 -12,376 1,251 19,464 2,084 957 -3,869 -5,337 2,668 15,967 -5,010 10,957 3,398 -43,880 -23,192 -513 -13,753 -77,940 184,984 -188 -37,577 3,241 150,460 143 1,489 4,932 -768 -258 262 156,260 -36,780 119,480 -86 1,469 -617 766 1,097 1,097 -766 -332 -84 -85 -85 5,352 -55,575 -27,950 -630 -19,241 -98,044 217,518 -1,036 -49,953 4,492 171,021 143 2,807 5,889 -4,969 -5,595 2,846 172,142 -41,790 130,352 69,545 -136,020 -101,312 -9,475 -29,045 -206,307 -37,464 -1,702 -11,781 55 -50,892 34,793 1,003,832 658,646 -474,334 -736,606 17,307 452,746 -21,715 431,031 -113,111 264,576 1,528 9,845 3,714 166,552 -10,443 -98,715 -109,158 -34,427 -908,218 -473,292 313,187 473,512 166 -738,230 21,773 -716,457 224,790 -768,202 -540,036 -158,353 -500,564 -1,742,365 3,362,948 -74,685 -1,429,295 -416 111,015 1,969,567 59,703 660,577 375,797 -852,506 -670,577 25,151 1,567,712 -399,765 1,167,947 2 -16, -4 -6, -25, 13, -3,890 -242 -8,057 -12,784 -13,942 -68,907 -77 -4,663 -123,775 -381,575 5,574 5,571 92,768 231,089 19,901 29,573 -20,627 -41,532 218,404 -58,326 13,147 -33,945 419,233 391,292 45,673 45,673 2 34,748 51 168,094 -167,082 485 973 17,967 -2,318 53,759 90,606 -714 -15,420 2,325 -79,883 -42,200 -64 -10,729 -94,794 -91,572 -83 -83 13,393 171,640 -167,158 378,653 348,613 -4,395 -3,568 -85,729 -75,291 -1 -1 10, 5,784 8,627 6,069 15,515 - - 6,932 9 8,067 -2, 8,865 273,322 160,078 8,998 168,072 -167,158 292,924 7 8,865 - 114,349 3,438 117,787 74,893 48,041 122,934 160,078 - 8,998 163,975 -167,158 240,786 272,166 4,097 52,138 1,156 8,892 2,065 10,957 112,818 6,662 119,480 -85 -85 121,625 8,727 130,352 439,816 -8,785 431,031 -802,445 85,988 -716,457 1,023,845 144,102 1,167,947 7 8,865 273,322 160,078 8,998 168,072 -167,158 292,924 7 5,874 2,723 -1 3,852 8,635,011 1,335,696 47,609 1,105,356 1,929,064 332,290 8,862 231,220 5,013,132 968,702 303 9,087 2,907,156 402 111,601 -891 509,072 235,556 65,670 10,951 -11,078 8,735 621,890 58,738 192,014 -80,926 1,022,936 1,476,238 321,795 77,150 23,909 79,642 805,049 710,403 1,319 326,707 -2,564 1,126,844 787,553 25,228 403,785 163,485 368,030 997,335 4,749,421 145,809 480,010 -906,028 -3,771,208 24,093,738 5,966,546 175,272 6,863,758 4, 208 61,123 3,572 5,327,555 1,245,510 1,415,212 288,772 932,522 658,973 20,188 1,404,703 -1,057,758 2,441,318 674,150 37,707 98,856 -72,677 1,026,808 2,659,130 229,182 139,277 1,451,426 614,092 -2,564 1,680,608 750,805 5,623,848 4,628,497 -10

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AnnuAl REPoRt 2009 notes to the financial statements consolidated income statement for the years ended 31 December 2009 and 2008 EDP Group Activity by Business Segment - IFRS Information by Business Segment – 31 December 2008 (Amounts in thousand Euros) 238

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AnnuAl rePort 2009 annexes 242 243 244 248 258 Acknowledgements ProPosAl for the APProPriAtion of Profits gri comPliAnce externAl checks extrAct from the minutes of the generAl meeting of shAreholders of edP 240

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AnnuAl rePort 2009 annexes ACKNOWLEDGEMENTS The Executive Board of Directors expresses its gratitude to all those who have contributed to the activity of EDP during 2009. First of all, we thank the shareholders for the interest and confidence they placed in the current Executive Board of Directors and to each of its members, designated on the Annual Shareholders Meeting for the new mandate, corresponding to the three-year period 2009-2011. A word of gratitude is also due to the members of the Company Bodies, responsible for the auditing and supervision of the Group, for the work undertaken and for the support provided during 2009 and, in particular, to the General and Supervisory Board for the guidance provided to activity of the Executive Board of Directors . 2009 came to contribute, once again, for the consolidation of the existing governance model of EDP, which has been serving as an example in the overseeing of the management activity and as a guarantee for the interests of the Group’s stakeholders. As a result of the support granted to the Group activities during last year, the Board also wishes to thank the members of the governmental bodies of the countries in which EDP has institutional presence and who have assisted EDP in its activities for the benefit of the economic and social development of their respective nations. Similar to previous years, it is also important to refer to, the ongoing cooperation between EDP and the energy sector regulators. A particular emphasis should be given to the Regulatory Body for Energy Services (ERSE) and the DirectorateGeneral for Energy and Geology (DGEG) in Portugal, as well as to other regulators in the countries where the activity of the EDP Group is most visible, such as CNE in Spain, ANEEL in Brazil and FERC and NERC in the USA. The Executive Board of Directors also extends its gratitude to other entities that have related with EDP during 2009, namely: • The National Association of Portuguese Municipalities and Town Councils; • Environmental and social non-governmental organisations. A particular acknowledgment is also to be given to the clients of the EDP Group companies, to which we reinforce the commitment towards Excellency in the provision of services and fulfilment of their needs. The provision of a service driven by quality and excellence is assumed by us as a constant priority. The Board’s gratitude is also extended to the various media bodies that followed closely the company during 2009. The coverage made with respect to the various EDP Group events inspires us to continue the requirement of accuracy and professionalism of all those who cooperate with the Company. Finally, a special word of thanks to all the staff of EDP, whose contribution, commitment, competence and dynamic were crucial elements to the results attained by the Company. the executive Board of directors António Luís Guerra Nunes Mexia (Chairman) Ana Maria Machado Fernandes António Fernando Melo Martins da Costa António Manuel Barreto Pita de Abreu • CMVM, Euronext Lisbon, Interbolsa, CNMV, CVM and BOVESPA; João Manuel Manso Neto • EDP Group companies’ external auditors; • Financial and bonds institutions and ratings agencies; • Scientific, academic and technical institutions; • The Portuguese association of Electricity Sector Companies – ELECPOR; Nuno Maria Pestana de Almeida Alves Jorge Manuel Pragana da Cruz Morais • Asociación Española de la Industria Eléctrica – UNESA; • The European Wind Energy Association – EWEA and the American Wind Energy Association – AWEA; 242

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PROPOSAL FOR THE APPROPRIATION OF PROFITS Under the terms of the Article 30 of the Company Constitution, the Executive Board of Directors proposes that the Net Profit is appropriated as follows: AProPriAtion of Profit (euros) company net Profits Legal Reserve Dividends Donations to Fundação EDP Retained Earnings net Profit The dividend proposed is EUR 0.155 per share. 2009 31.501.045,15 € 566.763.345,83 € 6.000.000,00 € 25.756.511,99 € 630.020.902.97 € 243

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AnnuAl rePort 2009 annexes 1. GRI COMPLIANCE The contents of EDP’s Report and Accounts were developed considering “Global Reporting Initiative” guidelines. The following table shows GRI Indicators according to the Electric Utility Sector Supplement and includes commitments for future disclosure of a few specific indicators according to this new supplement, where it has not been possible to publish in this first year of this Supplement. In www.edp.pt > Sustainability > Reports it can be consulted a completed table. The table bellow also identifies the available information that responds to the Global Compact 10 Principles, reinforcing the EDP’s commitment with this initiative. edP gri tABle edP gri tABle source of information 1. strAtegY And AnAlYsis Pages 7-9, 22-23, 122-124 2. orgAniZAtionAl Profile Pages 11, 18-19, 26-27, 52 -53, 90, 252, Last page: Contacts www.edp.pt> Sustainability> Publications and Reports EU1 EU2 EU3 EU4 EU5 Pages 11, 19; www.a-nossa-energia.edp.pt > centros produtores Pages 11, 19 Page 68 Pages 42, 48 Portugal: www.edpdistribuicao.pt; Espanha: www.hcenergia.com> About Us> Distribution> Facilities Page 86; www.edp.pt> Sustainability> Publications and Reports> Sustainability Reports: Carbon Disclosure Project global compact source of information enVironmentAl PerformAnce MANAGEMENT APPROACH materials www.edp.pt> Sustainability> Environment> Performance water www.edp.pt> Sustainability> Environment> Performance Biodiversity www.edp.pt> Sustainability> Environment> Biodiversity emissions, effluents and waste www.edp.pt> Sustainability> Environment> Performance MATERIALS EN1 EN2 EN3 EN4 EN5 EN6 EN7 WATER EN8 EN9 EN10 EN11 EN12 EN13 EN14 EN15 EN16 EN17 EN18 EN19 EN20 EN21 EN22 EN23 EN24 EN25 Page 83 n/k 0% Page 87 Pages 84-85, 87; www.edp.pt> Sustainability> Environment> Biodiversity (1) (1) n/k Page 83 Page 83 Pages 72, 83 ,87 (2) Page 83 Pages 84-85 www.edp.pt> Sustainability> Environment> Performance Page 83 Page 85 Page 85 n/k www.eco.edp.pt; www.edp.pt> Sustainability> Environment> Impact Assessment n/a(4) Page 83 www.edp.pt> Sustainability> Environment> Impact Assessment Pages 83-85, 233-234 Pages 83, 85 non existant Page 83 Page 83 Page 83 Page 85 Page 72; www.eco.edp.pt global compact 3. rePort PArAmeter report Profile Page 252, Last page: Contacts; www.edp.pt> Sustainability> Publications and Reports report scape and Boundary Page 252; www.edp.pt> Sustainability> Publications and Reports gri index Page 252; www.edp.pt> Sustainability> Publications and Reports check Page 252; www.edp.pt> Sustainability> Publications and Reports 4. goVernAnce governance Pages 10, 54-55, 95-97, 103, 114, 129-131; www.edp.pt> Corporate Governance; www.edp.pt> Corporate Governance> By-Laws and Internal Regulations (Conflicts of Interests Framework Rules - Decision of 16th October 2008); www.edp.pt> About EDP> Our Commitments; www.edp.pt> Sustainability> Stakeholders> Employees commitments to external initiatives Page 119-120; www.edp.pt > Sustainability> Approach to Sustainability> Participations stakeholder engagement Page 56; www.edp.pt> Sustainability> Stakeholders; (stakeholders engagement) 5. mAnAgement APProAch economic PerformAnce MANAGEMENT APPROACH EU6 EU7 EU8 EU9 EC1 EC2 EC3 EC4 EC5 EC6 EC7 Page 31 Pages 72, 87 Pages 57-58 Page 85 Page 21 Pages 32, 86, 173 Pages 166-167 Page 21 Page 61 Page 74 Page 62 Page 78; www.edp.pt> Sustainability> Society and Culture> Local Communities Page 77 Page 31 Page 87 Page 83 7; 8 ENERGY 7; 8 BIODIVERSITY 7; 8 EMISSIONS, EFFLUENTS AND WASTE 8 PERFORMANCE PRODUCTS AND SERVICES EN26 EN27 EN28 7 MARKET PRESENCE COMPLIANCE 8 TRANSPORT EN29 7 INDIRECT ECONOMIC IMPACTS EC8 EC9 EU10 EU11 EU12 ENVIRONMENTAL INVESTMENTS EN30 7; 8; 9 244

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edP gri tABle edP gri tABle source of information sociAl PerformAnce MANAGEMENT APPROACH EU14 EU15 EU16 Page 64 Page 63 Page 61 n/k; EDP has an ongoing characterization of their suppliers, who hopes to graduate in 2010 and begin its public release in 2011; Pages 61, 75 Page 61, Average duration of the presence of employees in the company is 18 years (note 3) n/k Page 61 Page 66 Page 61; See comment on LA1 Page 65 Page 66 Page 61 Page 66; www.edp.pt> Sustainability> Occupational Health and Safety> Plano de Constingência n/k Page 61 Pages 61, 64 Page 64: 100% Pages 61-62 Page 61 global compact source of information SOCIETY MANAGEMENT APPROACH EU19 EU20 EU21 Page 79; www.edp.pt> Approach to Sustainability> Organisation www.edp.pt> Sustainability> Environment> Biodiversity> Minimising the Impact on Biodiversity> Environmental impact management in Peixe Anglical Hydroelectric Power Plant Page 66 Pages 78, 84 (EMAS); www.edp.pt> Sustainability> Aproach to sustainability> Organization; www.edp.pt > Sustainability> Environment> Impact Assessment 0 Page 252; www.edp.pt> Sustainability> Publications and Reports Page 61 Page 110-111 www.edp.pt> Sustainability> Stakeholders (Governmental Institutions); www.edp.pt> Sustainability> Approach to Sustainability> Participations www.edp.pt> Corporate Governance> Code of Ethics (Clause 4.1.2) n/k (5) global compact EMPLOYMENT LA1 LA2 LA3 EU17 EU18 COMMUNITY SO1 EU22 6 CORRUPTION SO2 SO3 1;3 SO4 LABOR/MANAGEMENT RELATIONS LA4 LA5 LA6 LA7 LA8 LA9 LA10 LA11 LA12 LA13 LA14 10 PUBLIC POLITIC SO5 SO6 OCCUPATIONAL HEALTH AND SAFETY 1 ANTICOMPETITIVE BEHAVIOUR SO7 SO8 6 10 COMPLIANCE PRODUCT RESPONSIBILITY PRODUCT ACCESS APPROACH EU23 2; 6 EU24 Page 71; www.edpdistribuicao.pt> a rede> AGRIS Page 68 www.edp.pt> Sustentabilidade> Prevenção e Segurança> Segurança e Cidadania; www.edp.pt> Sustentabilidade> Ambiente> Desempenho> Campos Eléctricos e Magnéticos 0 Page 61 Page 68 n/k Pages 68-69 non existant non existant n/k (5) 100% 7% (6) www.edpdistribuicao.pt> Qualidade> Documentação> Relatórios de Qualidade de Serviço (6) Page 42 Page 38 TRAINING AND EDUCATION DIVERSITY AND EQUAL OPPORTUNITY CUSTOMER HEALTH AND SAFETY PR1 PR2 HUMAN RIGHTS INVESTMENT AND PROCUREMENT PRACTICES HR1 HR2 HR3 HR4 100%, referred to in general terms of purchase of the EDP. Page 75 20% (6) Page 61 Pages 110-111 Page 65; www.edp.pt> Corporate Governance> Code of Ethics; www.edp.pt> Corporate Governance> Code of Ethics (Clause 2.2.2; 3.1.1); Explicit in the collective labor agreements. www.edp.pt> Corporate Governance> Code of Ethics (Clause 3.1.2) www.edp.pt> Corporate Governance> Code of Ethics (Clause 3.1.2) n/k 0 Core indicators Aditional indicators Core Sector indicators (1) ) More information is available on a specific publication on Biodiversity to be made available during the first half of 2010 (2) The only source of emission of substances responsible for the depletion of the ozone layer identified by the company comes from air conditioning systems older, existing in administrative buildings. The company has an ongoing plan to replace these systems, which already are a minority at Group level. 1 EU25 PR3 PRODUCT AND SERVICE LABELING PR4 PR5 PR6 PR7 PR8 PR9 EU26 EU27 1 1; 2 EU28 EU29 EU30 NON-DISCRIMINATION 1; 6 FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING HR5 1; 3 MARKETING COMMUNICATIONS AND CUSTOMER PRIVACY CHILD, FORCED AND COMPULSORY LABOR HR6 HR7 1; 4; 5 COMPLIANCE AND PRODUCT ACCESS SECURITY PRACTICES HR8 HR9 INDIGENOUS RIGHTS (3) Information consolidated by the EDP, but not available over the Notebook. Will be included in 2010. (4) The product sold by the company (Energie electricity and gas) is not packed. (5) The monetary value of fines for the EDP has no materiality, therefore is not justified by what the different categories su breakdown (6) Regulated market in Portugal, representing 60% of Group customers. 245

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AnnuAl rePort 2009 annexes gri comPliAnce Our reporting score was A+, as confirmed by KPMG and the Global Reporting Initiative. REPORT APPLICATION LEVEL 2002 IN ACCORDANCE C C+ B B+ A A+ MANDATORY REPORT EXTERNALLY ASSURED REPORT EXTERNALLY ASSURED OPTIONAL Third Party Checked GRI Checked contents And orgAniZAtion This year, EDP publishes only one report separated in 5 different sections: EDP; Business; Contribution to Sustainability; Report on Corporate Governance; and Financial Information, with its performance reported between 1 of January and 31 of December 2009, including, as well, the most relevant facts occurred during the first quarter of 2010. In addition to this annual report, • Proportional control – consolidating only the percentage it owns in the company, such as * 50%: EDP Produção Bioeléctrica, COGENERACION Y MATENIMIENTO AIE-2, PROENERCAM, S.L.-2, BIOASTUR AIE-2, TEBAR EOLICA, S.A and Compañia Eólica Aragonesa, all at 50% and EVOLUCIÓN 2000 S.L.; 40%: Desarollos Energeticos Canarios S.A.; Evolución 2000, S.L.; Horta Nedioambiente S.A.; Ibersol E. Solar Ibérica, S.A.; Murciasol-1 Solar Térmica, S.L.; TEBAR EÓLICA, S.A. * • EDP reports quarterly to the market and key sustainability and made available on-line; • Keeps on-line qualitative and quantitative information, both operational and environmental, some of it detailed at a facility level: Thermal Facilities 2009. • Annual and Sustainable reports from EDP companies from Spain and Brazil are also published and may complement information about the sustainability performance of those companies. It has been included in this year’s report information from the new two companies aquired by EDP: Gás Natural (number of employes, kilometers of grid, number of customers) and CIDE, (number of customers). 1.3. glossArY For a better understanding of the report, our online glossary includes definitions of the quantitative indicators given at www.edp.pt/pt/Pages/Glossario.aspx. Detailed information about contents and organization of EDP’s Annual Report is available in www.edp.pt > Sustainability > Reports. corPorAte consolidAtion criteriA The operational and sustainability consolidation criteria use the account consolidation methods, which are: • Full consolidation – reporting the performance of 100% owned companies or whose management control is held by EDP. 246 REPORT EXTERNALLY ASSURED Self Declared

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AnnuAl rePort 2009 annexes - extract from the minutes of the general meeting of shareholders of edp 258 -------------------------------------- Extract of Minute no. 1/2010 of the EDP’s General Shareholders’ Meeting ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------On the sixteenth of April of two thousand and ten, at fifteen hours, the General Shareholders’ Meeting of EDP – Energias de Portugal, S.A., a listed company (hereinafter referred to as “EDP” or “Company”), with head office at Praça Marquês de Pombal, 12, in Lisbon, with the share capital of € 3 656 537 715, with the sole number with the tax authorities and with the Commercial Registry Office of Lisbon 500 697 256, met at Auditório I of Centro de Reuniões of FIL, at Rua do Bojador, Parque das Nações, in Lisbon. The meeting took place outside of the Company’s head office since it did not allow the meeting to occur in satisfactory conditions, considering, as EDP is a listed company, the high level of shareholders participating. ------------------------------------------------------------------------------------------------------------------------------------------ The Chairman of the General Shareholders’ Meeting, Mr. Rui Eduardo Ferreira Rodrigues Pena, started the meeting by explaining the participation procedures in the present General Shareholders’ Meeting and the respective functioning and, afterwards, assisted by the Vice-Chairman of the General Shareholders’ Meeting, Mr. António Bernardo de Menezes e Lorena de Sèves, and by the Company Secretary, Ms. Maria Teresa Isabel Pereira, verified the regularity of the notice to convene the meeting through the mandatory publications made at the Ministry of Justice’s, CMVM’s, NYSE Euronext Lisbon’s and EDP’s websites (apart from the publication made in the Euronext‘s Official Listing Bulletin of 15th of March of 2010). ---------------------------------------------------------------------------------------------------------------------------------The Chairman of the General Shareholders’ Meeting and the Company Secretary also verified that the participants list was duly organized and that there were representation letters for the shareholders that were legal persons or that were not physically present. ------------------The Chairman of the General Shareholders’ Meeting and the Company Secretary then verified the percentage of the share capital present or represented at the General Shareholder’s Meeting – which, adding the correspondence votes, represented 58,4158% of the share capital and 55,6497% of the voting rights –, based upon the shares’ registry and blocking statements issued by the financial intermediaries responsible for the individual registry of shares for each shareholder. The Chairman of the General Shareholders’ Meeting stated that the required meeting quorum and resolution quorum for this General Shareholder’s Meeting were met. ----------------------------------------------------------The Chairman of the General Shareholders’ Meeting also stated that, according to article 14, no. 3 of EDP’s By-laws, votes from a shareholder owning category A shares issued on its own account or on behalf of another shareholder would not be cast in the event that they exceeded 5% of the total votes, as well as, since such restriction does not apply to category B shares, the shareholders Parpública – Participações Públicas, SGPS, S.A. and Capitalpor – Participações Portuguesas, SGPS, S.A., could vote with more than 5% of the voting rights attached to the share capital. -------------------------------------------------------------------------------------------------------------------------------------------------------The Chairman of the General Shareholders’ Meeting and the Company Secretary also verified that the remaining General Shareholders’ Meeting’s prior formalities w

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--- Initiating Item Three of the agenda, the Chairman of the General Shareholders’ Meeting read the respective content “General appraisal of the management and supervision of the company, in accordance with article 455 of the Portuguese Companies Code”. Afterwards, the Chairman of the General Shareholders’ Meeting ask the Company Secretary to read the proposal presented by the shareholders Parpública – Participações Públicas, (SGPS), S. A., Caixa Geral de Depósitos, S.A., Caja de Ahorros de Asturias, Banco Comercial Português, S.A., Banco Espírito Santo, S.A., José de Mello Energia, SGPS, S.A., Senfora, SARL and Sociéte Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures (“Sonatrach”), with the following content: ----------------------------------------------“Pursuant to article 455 of the Portuguese Companies Code, -----------------------------------------------------------------------------------------------The Shareholders propose: ---------------------------------------------------------------------------------------------------------------------------------------1. – A vote of confidence and praise to the Executive Board of Directors and to each of its members for the performance of their offices during 2009 financial year. ------------------------------------------------------------------------------------------------------------------------------------------------2. – A vote of confidence and praise to the General and Supervisory Board and to each of its members for the performance of their offices during 2009 financial year. -3. – A vote of confidence and praise to the Statutory Auditor for the performance of his office during 2009 financial year”. -----------------------After reading the proposal, the Chairman of the Shareholders Meeting granted permission for the Chairman of the General and Supervisory Board to speak, who presented the following speech: -------------------------------------------------------------------------------------------------------“Dear Shareholders, ------------------------------------------------------------------------------------------------------------------------------------------------Pursuant to GSB Opinion that was distributed to all concerning a vote of confidence in EBD, I waive the respective reading, remembering only its conclusion:--------------------------------------------------------------------------------------------------------------------------------------------------------«In accordance to the analysis performed and the conclusions made on the 4th March 2010 referred meeting, the General and Supervisory Board, by unanimity, resolved to approve the present opinion concerning the evaluation of Executive Board of Directors activity and performance during 2009 financial year and to communicate to the Shareholders its favourable position to a vote of confidence and praise to the Executive Board and Directors, to its Chairman, Mr. António Mexia, and to each of its Members». ----------------------------------------------------------------(…) Since none of the persons attending the meeting asked to speak, the Chairman of General Shareholders’ Meeting submitted to vote the proposal regarding Item Three of the agenda, which was approved by the majority of the votes cast (with 99,8452% of votes in favour). -----The Chairman of the General Shareholders’ Meeting read the content of Item Four of the agenda - “Granting authorization to the Executive Board of Directors for the acquisition and sale of own shares by EDP and its subsidiaries” and questioned shareholders to waive the reading of the proposal presented by the Executive Board of Directors since the same is extensive and known by all. Since shareholders waived the reading of the proposal, the Chairman of the General Shareholders’ Meeting granted permission to the Executive Board of Directors for the presentation of such proposal. ----------------------------------

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AnnuAl rePort 2009 annexes - extract from the minutes of the general meeting of shareholders of edp 260 international expression of its current activity, it was considered, for comparison purposes, published remunerations of chairmen of listed companies that integrate Eurostoxx Utilities and PSI-20, in order to standardize the exercise of the management model adopted (one tier or dual). ----------------------------------------------------------------------------------------------------------------------------------------------------------• As a result of the referred analysis, and for the reasons detailed below, it was considered adequate to maintain the value of € 600 000 already practiced on the former three year period for the Chairman of the Executive Board of Directors, as well as the maintenance, in 80% of the relation between the salary of the other members of the Executive Board of Directors and their Chairman. As per the data available, such value would put that remuneration component substantially below the average of the analyzed universe. -----------------------------• On the other hand, the execution of the second purpose demands not only a variable component that integrates the global remuneration, but also that the same is attributed subject to the verification of a set of requirements. ------------------------------------------------------------• Considering the best international practices – as companies’ policies or guidelines issued by international institutions such as European Commission or supervisory entities – the remuneration variable component must: 1) be relevant, meaning, have an expressive relevance in the remuneration; 2) result from a set of indicators that reflect the shareholders perspective over the company performance and 3) depend, on a significant part, from the multiannual performance. ------------------------------------------------------------------------------------------------• As mentioned before, these criteria were already observed on the 2006-2008 three year period, materialized on a remuneration structure where the variable part may duplicate the fixed part and where the variable multiannual component, which reflects the appraisal for all term of office, has the same relevance as the fixed component. Therefore: ---------------------------------------------------------------------------* Annual Variable Remuneration - the respective value might vary between 0 and 100% of the annual gross fixed remuneration, as the effective performance would be 90% below of the established on the business plan (in case no payment was conferred) or overcame it, in 10% (in case it would be conferred a 100% payment). -------------------------------------------------------------------------------------------* Multiannual Variable Remuneration – the respective value would be established between 0 and 100% of the term of office gross fixed remuneration, in result of the accumulated annual appraisal of the directors performance in the materialization of EDP’ Group economical sustainability. The attribution of this multiannual remuneration, though annually calculated, would only become effective if, at the end of the term of office, at least 90% of the strategic established purposes were reached; the referred purposes would be evaluated in result of the performance and of the comparison of the reference strategic universes. ----------------------------------------• Beyond the demand resulting from the referred quantitative limits, we should note that the targets proposed by the Executive Board of Directors are approved by the General and Supervisory Board – corporate body that, although integrating independent members is also represented by EDP’ referenced shareholders. ------------------------------------------------------------------------------------------------------------• A compared analysis of EDP’s remuneration policy against the one practiced by the most significant referenced companies (main PSI-

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speak. Mr. Alberto João Coraceiro de Castro, after presenting its compliments to the shareholders, referred that its explanation would be focused on the “strength lines” of the remuneration policy of Executive Board of Directors members but, before doing it, referred that it shall be remembered here that EDP has assumed a leadership position on corporate governance best practices, which is proved not only by the fact that, in 2007, the Remuneration Committee of the General and Supervisory Board has submitted to the vote of shareholders the remuneration policy of Executive Board of Directors members, though there was no legal disposition that obliged such procedure, but also by the fact that the individualized remuneration of the Chairman of the General and Supervisory Board and of the Executive Board of Directors was published when there was no legal requirement that demanded such publication. ---------------------------------------------------------------------------------(…) Subsequently, the Chairman of the General Shareholders’ Meeting submitted to vote Item Six of the agenda and the proposal was approved by the majority of the votes cast (with 50,3045% of votes in favour). ---------------------------------------------------------------------------------------Afterwards, representative of Parpública – Participações Públicas (SGPS), S.A. and Capitalpor – Participações Portuguesas, SGPS, S.A., Mr. Rui Pinto Duarte, asked permission to speak to inform that the entities that he is representing voted against the proposal presented and require that the following statement, which was read by the Chairman of the General Shareholders’ Meeting, shall be reported on the present minutes: --------------------------------------------------------------------------------------------------------------------------------------------------------------«Within the scope of the understanding adopted by PARPÚBLICA (SGPS) S.A. and by CAPITALPOR, SGPS, S.A., regarding the guidelines contained on Dispatch no. 11420/2009, from the Treasury and Finance Secretary of State, published on Diário da República, 2nd series, dated 11th May 2009 and on Dispatch no. 5696-A/2010 from the Finance Ministry of State, published on Diário da República, 2nd series, dated 29th March 2010, as well as on the provision inserted in 2010 State Budget concerning the same subject, already approved but not yet promulgated, the companies above referred stated that they have voted against the statement regarding “Remuneration Policy of Executive Board of Directors members for the term of office 2009-2011” presented by the Remuneration Committee of the General and Supervisory Board within item 6. of the agenda».------------------------------------------------------------------------------------------------------------------------------------------------------------ The Chairman of the General Shareholders’ Meeting read then the content of Item Seven of the agenda - “Resolve on the remaining members of corporate bodies remuneration policy presented by the Remuneration Committee elected by the General Shareholders’ Meeting” and, as in the previous proposals, questioned shareholders to waive the reading of the statement with the following content: ----------------“Statement of the Remuneration Committee of EDP – Energias de Portugal, S.A. on the Remuneration Policy for the Corporate Bodies ---------A. Responsibility ----------------------------------------------------------------------------------------------------------------------------------------------------1. Pursuant to Article 11, paragraph 2, item d), of the Articles of Association of EDP – Energias de Portugal, S.A., the General Shareholders Meeting is responsible for the appointment of a Remuneration Committee with the responsibility to determine the remuneration of the members of the corporate bodies, with the exception of the Directors’ remuneration (Executive Board of Directors), which, under Article 27 of the aforement

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AnnuAl rePort 2009 annexes - extract from the minutes of the general meeting of shareholders of edp 262 (iii) The recommendations of the European Union and, mainly, the supporting principles of Order no. 363/09, of 30 April, of the Secretary of State for Treasury and Finance. ----------------------------------------------------------------------------------------------------------------------------------(iv) The general guideline – under the current severe circumstances of financial and economic global crisis – to promote moderation of remunerations in order to meet with the demands for a greater social justice within the general framework of the country, as well as within the various payment systems of the Company. ---------------------------------------------------------------------------------------------------------------9. Specifically regarding EDP, the Commission had a particular concern to hear the Portuguese reference shareholders of the Company and took especially into account the following aspects: -----------------------------------------------------------------------------------------------------------(i) EDP’s economic and financial conditions and the economic and social situation of the country.----------------------------------------------------(ii) The remuneration systems in force in similar companies comprised in the PSI 20 index and the top position of EDP in said index. ---------(iii) The effective way of exercising duties carried out by the members of the corporate bodies.-------------------------------------------------------10. In addition, the Commission’s understanding was that the introduction of radical changes, that in some particular cases would have been necessary, taking into account the new corporate governance model, were not advisable to be implemented as a whole in the current term of office. --------------------------------------------------------------------------------------------------------------------------------------------------------------11. The State, acting through Parpública, proposed that the remuneration of the Chairman of the GSB was reduced by 10% and that the remuneration of the remaining members was reduced by 5%. Furthermore, it proposed that no new remunerations should be introduced, notably that of the Vice-Chairman of the GSB. C. Decisions----------------------------------------------------------------------------------------------------------------------------------------------------------After being established the criteria governing the remuneration policy of the Company and weighted the several factors concerned, the Commission decided, in general, on the following: ----------------------------------------------------------------------------------------------------------(i) To set the remunerations of the members of the GSC, including its Chairman’s remuneration, in amounts lower than those allocated to the members of the EBD, particularly regarding the non allocation of a variable component of remuneration, and -----------------------------------(ii) Given the guidelines established by the Portuguese Government for companies in which the State holds a shareholding, the Commission considered – taking into account the difficulties experienced by the country as a result of a widespread economic, financial and social crisis – to promote remuneration adjustments in order to improve containment. In any case, it should always be taken into account the merits of the members of each corporate body, in order not to put at risk the cohesion, stability and development of the company. --------------------------(iii) The Commission decided not to make any adjustments to the remunerations of the members of the Audit Committee, keeping unchanged the amount of remuneration applicable in the previous term of office, due to having been registered a progressive increase of work and responsibility of the members of this Committee. ------------------------------------------------------

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Nevertheless, these shareholders recognized the effort that was taken by this Remuneration Committee, namely by its chairman in the demand of a more fair and coherent solution with the proposed objectives. Even though, the fact that it was not possible to converge integrally concerning the referred guidelines, has determined the vote that was expressed». ------------------------------------------------------------------------ Regarding Item Eight of the agenda, the Chairman of the General Shareholders’ Meeting read the respective content – “Resolve on the election of a General and Supervisory Board member” – and ask the Company Secretary to read the proposal presented by the shareholders Senfora, SARL and Parpública – Participações Públicas (SGPS) S.A. with the following content: --------------------------------------------------------“Considering that Mr. Khalifa Abdulla Khamis Al Romaithi presented its resignation as member of the General and Supervisory Board, the shareholders Senfora SARL and Parpública – Participações Públicas (SGPS), S.A. resolve to propose the election of Senfora, SARL, company incorporated under Abu Dhabi laws, which holds a participation in EDP correspondent to 4,06% of its share and outstanding capital, as member of the General and Supervisory Board, with effects on the current 2009-2011 term of office.” On the information note regarding Senfora, SARL, disclosed to the shareholders within the legal deadline, it is mentioned the identification elements of the referred company, namely the reference that its registered office is in Luxemburg.---------------------------------------------------------------------------------------------Since none of the presented members asked to speak about this item, the Chairman of the General Shareholders’ Meeting submitted to vote Item Eight of the agenda, being the proposal approved by the majority of the votes cast (with 94,2684% of votes in favour). ----------------------- Concluded the discussion and resolution in relation to all of the items in the agenda, the Chairman of the General Shareholders’ Meeting expressed its gratitude to all presents for the collaboration demonstrated which was decisive for the good performance of this General Shareholders’ Meeting. ----------------------------------------------------------------------------------------------------------------------------------------------- There being no further business, the meeting was closed at nineteen hours and forty minutes, in relation to which the present minute was drawn up and will be signed by the Chairman of the General Shareholders’ Meeting and by the Company Secretary. ---------------------------Lisbon, April 20th, 2010 The Company Secretary Maria Teresa Isabel Pereira 263

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AnnuAl rePort 2009 contacts useful informAtion heAd office edP – energias de Portugal Praça Marquês de Pombal, 12 1250-162 Lisboa Portugal Tel.: +351 21 001 25 00 Fax: +351 21 001 14 03 Online contact details: www.edp.pt> about edp> contacts inVestors dri – investor relations department Praça Marquês de Pombal, 12 1250-162 Lisboa Portugal Tel.: +351 21 001 28 34 Fax: +351 21 001 28 99 Online contact details: www.edp.pt> Investors clients edP lines Costumer Service 808 505 505 Meter Reading 808 507 507 Emergency Service 800 506 506 EDP confort 800 501 501 Online contact details: www.edp.pt> about edp> contacts dre – costumer relations department Praça Marquês de Pombal, 13 1252-162 Lisboa Portugal Fax: +351 21 002 15 20 suPPliers Rua Camilo Castelo Branco, 46, 4º 1050-045 Lisboa Portugal Tel.: +351 21 00 55 50 Online contact details: www.edp.pt> Suppliers mediA dmc – Brand and communication department Praça Marquês de Pombal, 12 1250-162 Lisboa Portugal Tel.: +351 21 001 26 80 Fax: +351 21 001 29 10 Online contact details: www.edp.pt> about edp> contacts communitY nog channel: www.edp.pt> Sustentabilidade> Sociedade e Cultura> ONG E-mail: Gabinete.ambiente@edp.pt fundação edP Av. De Brasília, Central Tejo 1300-598 Lisboa Portugal Tel.: +351 21 002 81 01 Fax: +351 21 002 81 04 www.fundacao.edp.pt E-mail: fundacaoedp@edp.pt eco – energy eficciency www.eco.edp.pt E-mail: eficienciaenergetica@edp.pt ppec@edp.pt Human Resources Tel.: 351 21 001 25 89 Fax: 351 21 001 29 11 sugestions www.edp.pt> a edp> Contactos> Sugestões & Reclamações 264

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AnnuAl rePort 2009 earth is all we need

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PuBlicAtion EDP - Energias de Portugal, S.A. Brand and Communication Office Praça de Marquês de Pombal, 12 1250-162 Lisboa design happy brands Printing Dilazo - Artes Gráficas, Lda Print run 550 units legAl dePosit April 2010

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AnnuAl rePort 2009 Printed on paper made with ECF – Elementary Chlorine Free – cellulose with ISO 9001, Environmental Management ISO 14001 and forestry FSC certification. Paper from forests subjected to a sustained scientific reforestation process. www.edp.pt