Entering in Mexico’s electricity generation
business with 2,000 MW
October 23, 2015
Strategic
compliance
Sector
overview
Project
description
Final
remarks
Page 2
Page 4
Page 14
Page 18
1
Compliance with Mota-Engil strategy
Mexico is a
core region
Long-term
growth
Construction
synergies
Resilient cashflow
Low upfront
requirements
Diversification
Principles aligned with the Company’s strategy
2
Strategic
compliance
Sector
overview
Project
description
Final
remarks
Page 2
Page 4
Page. 14
Page 18
3
Electric sector highly correlated with GDP
Mexico’s GDP and electric sector evolution
20%
15%
10%
5%
0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
-5%
-10%
GDP
Source: Mexico’s Secretaria de Energía.
Electric sector
4
83% of the capacity owned by the Government
Installed capacity in 2014
7%
7%
11%
48%
65 GW
Conventional
49 GW
27%
26%
Combined cycle
Thermal
74%
Coal
Turbogas
Other
6%
8%
Renewables
17 GW
12%
Conventional
Renewables
73%
Hydro
Source: Mexico’s Secretaria de Energía.
Wind
Nuclear
Other
5
Electricity prices with a CAGR of 7% since 2000
Installed capacity (GW)
Electricity prices (MXN cent/kWh current prices)
65 GW
350
300
37 GW
250
200
158
150
100
50
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Residential
Commercial
Services
Industrial-mid size
Industrial-large size
Average
2010
2011
2012
2013
2014
Agriculture
Average electricity prices rising, despite increase in capacity and subsidies usually
granted to the agriculture and residential segments
Source: Mexico’s Secretaria de Energía.
6
An opportunity for private players
Electric sector challenges

Positive GDP growth outlook and electricity
demand, mainly fuelled by the manufacturing
sector

Mexico’s oil production declining

Low installed electricity generation capacity


Private investment opportunities

Stable and well defined new energy legal
framework, effective from August 2014

Energy demand will continue to grow at an
estimated rate above 3.5%/year in the next ten
years1

New projects already planned expected to add 34
GW of new generation capacity until 20241

Required expansion of transmission and
distribution infrastructure both in the pipelines
and the electricity network

Diversification of generation mix towards hydro
and combined cycle gas turbines (CCGT) and
other renewables, technologies with lower fuel
cost and emissions
Capacity congestion, limiting electricity
transmission and interconnection activities
High relative electricity tariffs for both high
consumption residential and industrial segments,
with impact in the country’s competitiveness
1Source:
Mexico’s Secretaria de Energía.
7
GDP expected to grow 3% on average until 2020
Expected electricity demand1
Expected GDP growth2
CAGR
2014-2029E 3.6%
5.0%
3.4%
4.6%
4.5%
3.2%
4.0%
3.0%
3.5%
3.5%
2.8%
2.6%
3.0%
2.8%
2.4%
2.5%
2.2%
2.0%
2.0%
2015
2016
2017
2018
2019
2020
High case
1Source:
Mexico’s Secretaria de Energía.
2Source:
IMF, October 2015.
2021
2022
Base case
2023
2024
2025
2026
2027
2028
2029
2014
2015
2016
2017
2018
2019
2020
Low case
8
60 GW of additional capacity requirements until 2029
Generation mix of incremental capacity
0.5%
1.2%
1.5%
0.5%
Conventional
27 GW
60 GW
96.4%
Combined cycle
Thermal
46%
Turbogas
Other
17%
Renewables
33 GW
54%
Coal
23%
11%
37%
12%
Conventional



Renewables
Increased weight of combined cycle and renewables, which are more
efficient and have lower fuel costs and emissions
Existing prospects already account for a 34 GW increase
Investments will be mainly promoted by the private sector, with 68% of
the total
Source: Mexico’s Secretaria de Energía.
Hydro
Wind
Nuclear
Other
Cogeneration
9
Generation with the bulk of expected investment
Expected investment by activity
12%
10%
77%
Generation
Transmission
Distribution
US$ 127 Bn1 expected to be invested in the period 2015 to 2029, of which US$98 Bn
in the generation activity
1
US$/MXN=16.6.
Source: Mexico’s Secretaria de Energía.
10
A transparent and stable legal framework
New Electric Industry Law main goals

Development of the electric sector on a sustainable basis, guaranteeing continued, efficient and secure
operations

Improvement of Mexico’s competitiveness

Compliance with public service, clean energy and decreased emissions obligations

Opening of the electricity sector to private companies
Main reforms

Unbundling of the electricity generation, transmission, distribution and marketing activities

Liberalisation of the electricity generation and commercialisation activities, with private investment now allowed

Transmission and distribution will continue under Government ownership with regulated tariffs, but private
companies can participate in the construction, operation and maintenance of the facilities

Creation of a liberalised wholesale electricity market open to competition, being the participants generators,
marketing companies and large consumers (“qualified consumers”)

Power generators can sell the electricity in the wholesale market or under PPAs (Power Purchase Agreements)

Large electricity consumers are free to chose the supplier and the terms and conditions of the supply

Mechanism to encourage clean energy sources
11
A transparent and stable legal framework
Before new Electric Industry Law
Generation
CFE’s1 Power
Plants
Independent
Producers
Small scale
production
After new Electric Industry Law
Self-supply &
cogeneration
National Electrical
System
Consumers
1Comisión
2Eligible
Commercial
Private
Short Term
Contracts
Long Term
Contracts
Spot
Auctions
Wholesale
Public Service
Suppliers
CFE1
Residential
Industrial
Federal de Electricidad, Government owned.
consumers: consumption above 3 MW, being reduced to 1 MW by 2017.
Qualified Service
Suppliers
Services
Qualified
consumers2
Last Resort
Supplier
Basic Service
Suppliers
Regulated
consumers
12
Strategic
compliance
Sector
overview
Project
description
Final
remarks
Page 2
Page 4
Page 14
Page 18
13
Mota-Engil well placed to succeed
Established in Mexico since 2008 with a successful performance
Within the top 5 construction players in the country
Local company stance with solid local partnerships
Strong competencies in infrastructures construction
Strengthening the Human Resources and competencies to successfully
manage and maximize returns in the business
Proven track record in entering in new and/or changing businesses
14
Inroads in the electricity generation activity
SME1
Mota-Engil México
51%
Generadora Fénix
49%
Activity: build, explore, operate and mantain during a period of 30 years
Hydro plants
Plant
Capacity
(MW)
State
Necaxa
114
Puebla
Tepexic
45
Puebla
Patla
45
Puebla
Tezcapa
5
Puebla
Lerma
74



Michoacán


1Sindicato
Mini-hydro plants
Five plants with a total
installed capacity of 288
MW
Average load factors over
the last years ranged from
40-45%
Option to increase capacity
to 400 MW
Energy to be sold in the
spot market from January
2016 onwards, with priority
in the merit order
2014 average price of 1.58
MXN/kWh
Mexicano de Electricistas, Mexico’s main electricity Union.
Plant
Capacity (MW)
State
Alameda
5.6
Morelos
Juando
6.6
Hidalgo
Cañada
1.1
Hidalgo
Tlilan
0.7
México
Fernández
Leal
1.3
México
Villada
1.3
México
Temascaltepec
2.4
México
S. Simón
2.1
México
Zepayautla
0.8
México
Zictepec
0.5
México

Ten plants with a total
installed capacity of 20 MW
with option to increase by
50%

To be rehabilitated and to
upgrade capacity with an
expected required
investment of less than
US$10 Mn

Energy to be sold to the spot
market
15
Inroads in the electricity generation activity
SME1
Mota-Engil México
51%
Generadora Fénix
49%
Activity: build, explore, operate and mantain during a period of 30 years
CCGT plant
Plant
Capacity (MW)
State
CTE JLL
-
Puebla
 Located in Mexico’s highest electricity demand growth area
 Thermal plant, currently deactivated, with a revamping option to a combined cycle gas turbine (CCGT)
with a planned capacity up to 1,700 MW
 Availability of existing land and facilities, including transmission, transport and pipeline to develop the
plant
 Project already obtained the required technical and environment licenses
 Investment is an option, not an obligation
 Energy to be sold under a PPA contract
16
Strategic
compliance
Sector
overview
Project
description
Final
remarks
Page 2
Page 4
Page 14
Page 18
17
Final remarks
 Mota-Engil México to become an important player in Mexico’s liberalised electricity market
with a total potential generation capacity of up to 2,000 MW (11% of Portugal’s installed
capacity)
 Existing plants already in operation with c.300 MW and option to add 1,700 MW through a
CCGT (when PPA signed)
 Proven track record in entering in new and/or changing businesses
 Strong presence in Mexico, a core country in the Company’s portfolio
 Platform for future analysis of other opportunities if and when available
 Business to be fully consolidated with main impacts from 2016 onwards
18
Disclaimer
This presentation used sources deemed credible and reliable but is not guaranteed as to
accuracy or completeness. It also contains forward looking information that expresses
management’s best assessments but might prove inaccurate. The information contained in
this presentation is subject to many factors and uncertainties and therefore subject to
change without notice. The company declines any responsibility to update, revise or correct
any of the information hereby contained. This presentation does not constitute an offer or
invitation to purchase securities of Mota-Engil nor any of its subsidiaries.
19
João Vermelho
Director, Head of Investor Relations
Email: [email protected]
Maria Anunciação Borrega
Investor Relations Officer
Email: [email protected]
[email protected]
Rua de Mário Dionísio, 2
2796-957 Linda-A-Velha Portugal
Tel. +351-21-415-8671