Significant events in 2009

Acquisition of 25.01% of Endesa

On February 20, 2009, Enel signed an agreement for the acquisition of the 25.01% of Endesa owned directly and indirectly by Acciona.

The price of €11,107.4 million euros was determined in accordance with the criteria set out in the agreement between Enel and Acciona of March 26, 2007, the provisions of which have therefore ceased to have effect. As provided for in the agreement, the price was adjusted to take account of interest accrued up to the transaction date and dividends paid by Endesa to Acciona. The agreement, which also involved the early exercise of the put option by Acciona (the original exercise date was March 2010), was subject to a number of suspensory conditions, such as regulatory and antitrust approval and other legislative conditions, and also provided for the transfer to Acciona from Endesa of certain operational wind and hydro assets.

On June 25, 2009, Enel and Acciona, after the conditions governing the agreement of February 20, 2009 had been met, implemented the accord with the transfer to Enel Energy Europe (wholly-owned by Enel SpA) of the 25.01% of Endesa held directly and indirectly by Acciona.

Enel SpA, acting through Enel Energy Europe, paid Acciona €9,627.1 million in cash for the transfer.

The amount was determined by subtracting the Endesa dividends received by Acciona after February 20, 2009 (€1,561.5 million) from the value of the holding established on the basis of the criteria set out in the agreement of February 20, 2009 (€11,107.4 million) and adding interest accrued as from that date (about €81 million) and applied to the share of the debt taken on, directly and indirectly, by Acciona to acquire the 25.01% stake in Endesa.

Following the transaction, Enel, through Enel Energy Europe, now holds a 92.06% stake in Endesa, Spain’s largest electricity company, giving it full control.

To help finance the purchase, Enel SpA, jointly with its subsidiary Enel Finance International, contracted a loan of €8 billion agreed on April 16, 2009 (the “Credit Agreement 2009”) with a pool of 12 banks. The financing was structured as an increase in the syndicated credit line with an original amount of €35 billion (the “Credit Agreement 2007”), the terms of which included the option of increasing (up to a maximum of €8.5 billion) the C tranche (equal to €10 billion falling due in 2012) in the event of the exercise of the put option by Acciona in 2010.

The Credit Agreement 2009 comprises:

• a “facility C increase” raising the €10 billion C tranche of the Credit Agreement 2007 by a further €8 billion falling due in 2012;

• a “rollover” agreement, in the amount of €8 billion, intended to replace and renew the “facility C increase” as from 2012 with two new tranches, the first totaling €5.5 billion falling due in 2014 and the second amounting to €2.5 billion falling due in 2016.

As envisaged for the originally Credit Agreement 2007, the Credit Agreement 2009 bears a floating rate of interest that is pegged to Enel’s rating.

Incorporation of Enel Ingegneria e Innovazione

With effect from April 1, 2009, the “Engineering and Innovation” operations of Enel Produzione SpA were spun off into the new company Enel Ingegneria e Innovazione SpA.

The business line involved is essentially composed of existing legal relationships in respect of orders under way for the reconversion, refurbishing and repowering of the generation plants of Enel Produzione SpA and third parties in Italy or abroad, as well as those in respect of activities concerning research, development and experimentation of electricity generation technologies. The new company is headquartered in Rome and has share capital of €30.0 million.

Enel Ingegneria e Innovazione seeks to provide all Group companies with quality services, whether for the construction of a thermal or nuclear power plant or a research project in the countries in which Enel operates.

Capital increase

On May 6, 2009, the Board of Directors of Enel SpA voted – in execution of the authorization granted by the Extraordinary Shareholders’ Meeting of April 29, 2009, pursuant to Article 2443 of the Civil Code – to carry out a divisible capital increase of a maximum total amount, premium included, of €8,000.0 million by way of the issue of ordinary shares with a par value of €1 each bearing dividend rights as from January 1, 2009. The shares have the same characteristics of the shares already in circulation and were offered in pre-emption to parties who were shareholders of the Company as of the start date of the rights offering in proportion to the number of shares they hold.

On May 28, 2009, the Board of Directors determined the final terms and conditions for the rights offering, setting the subscription price at €2.48 per share – of which €1.48 represents the share premium – and the option ratio at 13 new shares for every 25 existing shares. The offering therefore involved the issuance of a maximum of 3,216,938,192 new shares, entailing a capital increase of €3,216,938,192, while the overall proceeds of the operation – share premium included –totaled €7,978,006,716.16.

The Ministry for the Economy and Finance, as a shareholder of the Company, notified Enel of its intention to participate , directly or indirectly, in the capital increase, subject to a final evaluation to be conducted in light of the definitive terms of the offering. On March 25, 2009, the Company shareholder Cassa Depositi e Prestiti SpA announced the unanimous decision of its board of directors to exercise both the rights granted directly to it and the rights granted to the Ministry (subject to the transfer of the Ministry’s rights to Cassa Depositi e Prestiti).

On May 28, 2009, Mediobanca, JP Morgan and Banca IMI as Joint Global Coordinators and Joint Bookrunners, Bank of America – Merrill Lynch, Credit Suisse, Goldman Sachs, Morgan Stanley, Unicredit as Co-Bookrunners, 13 banks as Senior Co-Lead Managers and 13 banks as Co-Lead Managers signed an underwriting agreement with Enel SpA under whose provisions they undertook to subscribe the capital increase in respect of unexercised rights (if any), for a total amount of up to €5.5 billion – that is, the entire portion of the capital increase which is not expected to be subscribed, net of the direct and indirect portion pertaining to the Ministry. Enel was assisted by Lazard as financial advisor for the transaction.

As part of the underwriting agreement, consistent with market practice, Enel agreed to a lock-up clause continuing until the 180th day after the closing of the offering. In particular, Enel agreed not to issue or offer shares directly or via the issuance of convertible securities, warrants or other financial instruments that grant the right to acquire, exchange for, or be converted into shares Enel. Consistent with market practice, the lock-up commitment shall not apply, inter alia: (i) to the issuance or subscription of the shares involved in the capital increase, or (ii) to the issuance of Enel shares or to the granting of option rights to Group executives and employees under any existing stock option plans.

During the offer period, which started on June 1 and ended on June 19, 2009, a total of 6,160,693,425 rights were exercised. As a result, 3,203,560,581 newly issued Enel ordinary shares were subscribed altogether, equal to 99.58% of the shares offered, for aggregate proceeds of €7,944,830,240.88.

At the end of the offer period, total unexercised rights amounted to 25,726,175, granting the right to subscribe 13,377,611 newly issued Enel ordinary shares, for a total value of €33,176,475.28. The unexercised rights were offered on the Stock Exchange, pursuant to Article 2441, paragraph 3, of the Italian Civil Code, through Mediobanca and purchased in their entirety at the session of June 26, 2009, at the price of €0.51 per share for a total of €13,120,349.25 (the 13,377,611 shares were issued on July 3, 2009).

Upon the conclusion of the capital increase, on July 9, 2009, the 3,216,938,192 newly issued and fully subscribed ordinary shares, equal to 34.21% of share capital, were entered in the Company Register. The total value of the shares came to €7,978.0 million gross of fees and other costs. Consequently, the underwriting pool coordinated and directed by Banca IMI, JP Morgan and Mediobanca in their capacities as Joint Global Coordinators and Joint Bookrunners did not have to subscribe any of the shares.

Enel’s new share capital therefore amounts to €9,403,357,795, represented by an equal number of ordinary shares with a par value of €1 each.

Cassa Depositi e Prestiti SpA, following through on its announcement of March 25, 2009, exercised both the rights granted directly to it and the rights granted to the Ministry for the Economy and Finance (following the transfer of the Ministry’s rights to Cassa Depositi e Prestiti). Specifically, it subscribed 1,005,095,936 newly issued Enel ordinary shares – equal to about 31.24% of the offered shares and about 10.69% of the new share capital of the Company – for a total of €2,492,637,921.28. Therefore, following the subscription of the Enel capital increase and the settlement of the transaction, Cassa Depositi e Prestiti now holds about 17.4% of Enel’s share capital, while the Ministry retains a direct shareholding equal to about 13.9%.

Sale of Enel.si to Enel Green Power

In implementation of the sale instrument signed on December 23, 2008, with effect from January 1, 2009, Enel SpA sold 100% of Enel.si to Enel Green Power for €9.2 million, equal to the carrying amount of the investment.

Sale of Sfera to Enel Servizi

On May 21, 2009, in implementation of the resolution of the Board of Directors of Enel SpA of April 21, 2009, the 100% holding in Sfera was sold to Enel Servizi for €10.4 million, equal to the carrying amount of the investment. The sale was part of the broader “Shared Services” reorganization project, which involves the centralization of certain service and staff functions, approved by the Board in October 2004, in a single corporate vehicle (Enel Servizi Srl), creating shared operational structures to maximize efficiency and improve process quality.

Bond issues

As part of the plan to refinance and extend the average maturity of the Enel Group’s debt, on July 30, 2009, the Board of Directors approved the issue of one or more bonds, to be placed with institutional investors and/or with the general public, up to a maximum value of €10 billion by June 30, 2010.

Enel SpA, acting through its subsidiary Enel Finance International in implementation of that resolution, launched:

• on September 10, 2009, a multi-tranche bond targeted at institutional investors on the international market. The bond is denominated in euros and pounds sterling with an aggregate value of over €6.5 billion. The bond was issued under the Global Medium-Term Notes program, which was renewed on September 3, 2009.

The transaction, run by a syndicate of banks consisting of BNP Paribas and Deutsche Bank (as global coordinators and joint bookrunners) and Barclays Capital, BBVA, Calyon, Royal Bank of Scotland, Banco Santander and Société Générale (as joint bookrunners), consists of the following four tranches (all guaranteed by Enel SpA and listed on the Irish Stock Exchange):

• €1,500 million fixed-rate 4.00% bond due 2016;

• €2,500 million fixed-rate 5.00% bond due 2022;

• £850 million fixed-rate 5.625% bond due 2024;

• £1,400 million fixed-rate 5.75% bond due 2040.

• on September 30, 2009, a multi-tranche bond on the US and international markets targeted at institutional investors for a total of $4,500 million, equal to an aggregate of about €3,073 million. The bonds were issued under the Global Medium-Term Notes program.

The transaction, run by a syndicate of banks consisting of Citigroup Global Markets Inc. and J.P. Morgan Securities (as global coordinators and joint bookrunners) and of Bank of America Securities, Barclays Capital, Credit Suisse Securities (USA), Deutsche Bank Securities and Morgan Stanley & Co. (as joint bookrunners), consists of the following three tranches (all guaranteed by Enel SpA):

• $1,250 million fixed-rate 3.875% bond due 2014;

• $1,750 million fixed-rate 5.125% bond due 2019;

• $1,500 million fixed-rate 6.0% bond due 2039;

On November 4, 2009, the Board, noting the success of the up to €10 billion issue with institutional investors, approved the issue by December 31, 2010 of one or more bonds to be placed primarily with retail investors, with residual placement with institutional investors, for a maximum of €4 billion.

Incorporation of Sviluppo Nucleare Italia

On July 31, 2009, the company Sviluppo Nucleare Italia Srl, with headquarters in Rome, was established in a joint venture between Enel SpA and EDF International SA.

Enel and EDF hold 50% each of the joint venture, whose mission is to carry out feasibility studies for the construction in Italy of at least 4 nuclear power plants using the advanced third generation EPR technology, as envisaged in the Memorandum of Understanding signed between the two companies on February 24, 2009.

Once the studies are completed and the necessary investment decisions taken, plans call for the establishment of a company to build, own and operated each EPR facility.

In conjunction with the incorporation of Sviluppo Nucleare Italia Srl, the two parties also defined their reciprocal commitments and the corporate governance rules of the joint venture.

Interim dividend for 2009

On October 1, 2009, the Board of Directors of Enel SpA approved an interim dividend of €0.10 per share. The interim dividend was to be paid as from November 26, 2009, with an ex-dividend date of November 23, 2009.

Specification of purchase price of Electrica Muntenia Sud (EMS)

On December 23, 2009, in line with the provisions of the agreement of June 11, 2007 (the “Privatization Agreement”) between Enel SpA and Electrica SA, which is wholly owned by AVAS, Romania’s privatization agency, Enel and Electrica determined the adjustment to the purchase price for Electrica Muntenia Sud - EMS (now Enel Distributie Muntenia SA and Enel Energie Muntenia SA) in the total amount of €38.1 million (€32.4 million for Enel Distributie Muntenia SA and €5.7 million for Enel Energie Muntenia SA). The advance paid by Enel in 2007 (€39.5 million) for the acquisition was used for the price adjustment.

Reorganization of Romanian investments

At the end of December, in implementation of the project to reorganize the Group’s equity investments in Romania, Enel SpA transferred (at their carrying amounts) its direct holdings in Enel Romania, Enel Distributie Muntenia SA and Enel Energie Muntenia SA to Enel Investment Holding BV (EIH).

With the transfer of the stakes in Enel Distributie Muntenia SA and Enel Energie Muntenia SA, Enel SpA transferred to EIH all the rights and obligations associated with those investments under the Privatization Agreement, including, therefore, the commitment in respect of the three-year put option granted by Enel to Electrica entitling the latter to sell a minimum of 13.6% of its remaining holding in EMS, as well as all other shares not sold to EMS employees as part of the mechanism giving them the right to subscribe up to 10% of the company’s share capital on the occasion of the privatization. Consequently, the shares subject to the option could vary from a minimum of about 13.6% to a maximum of 23.6% (if no employee should take up the right to subscribe the shares). The option can be exercised in one or more tranches between July 1 and December 31 of each year from 2009 to 2012, in accordance with the terms and conditions of the agreement.