Letter to shareholders and other stakeholders

Dear Enel shareholders and stakeholders,

With the completion of our international expansion program and the integration of the assets acquired, Enel today is a leader in its markets, with an efficient and technologically and geographically balanced mix of generation capacity, a major presence in renewables and the ability to pursue excellence through innovation.

During 2009 Enel achieved growth of 12% in its gross operating margin compared with the previous year, while Group net income rose by about 2% to €5.4 billion, the highest level ever reached in the history of the Group despite the difficult year for the world economy. At the same time, Enel boosted its financial strength with the capital increase, bond issues and the improvement of operating cash flow.

On the basis of these sound foundations, we approved a plan that develops the Group's enormous potential, with even higher earnings and greater value creation for shareholders.

The plan is based on the following strategic priorities:

• maintaining our leadership position in the markets in which we are already present;

• pursuing integration and consolidation of the assets acquired;

• pursuing operational excellence;

• developing renewables and promoting technological innovation and nuclear power.

The Company will continue to pursue financial stability through careful management of operating cash flow and initiatives to leverage certain assets in the portfolio with the aim of further reducing its debt.

Sales Division
Enel confirms its position as Italy’s leading supplier of electricity on the free market, with a share of 28% of total consumption, and the number two group in the sale of natural gas, with a share of 11% of total volumes delivered.

These results are the fruit of the great attention we pay to our customers, as underscored by the success of our commercial offers. Our customers have responded enthusiastically to our blocked-price offers and the certified renewable energy option, as well as our all-inclusive plans.

Innovation, efficiency and improved service quality are the lines of development that the Sales Division intends to continue expanding, maximizing customer value through dual energy products (electricity and gas) and establishing itself as a standard for excellence in the provision of products and services to customers.

Generation and Energy Management Division
In 2009, construction continued on the Torrevaldaliga Nord clean-coal plant at Civitavecchia: in June, commercial operation of unit 4 began following inspection of the section and verification of compliance with the Grid Code. In addition, the first parallel operation with the electricity grid was also carried out for unit 3, which had achieved its full coal load by the end of the year. By the end of 2010, units 3 and 2 will come on line for a total capacity of about 1,900 MW.

The Division also continued its commitment to cost reduction and improving the operational management of its generation facilities through projects designed to enhance operational efficiency, reliability and safety.

In 2009, the Generation and Energy Management Division produced about 72.3 TWh of electricity in Italy, about 25% of the Italian market net of imports, a decrease of 15.3% from the previous year due to a decline in demand for electricity on the grid (-7.1%) and a more substantial drop in domestic generation (-12.8%). Despite this, performance for the year was in line with that of 2008, thanks to efficiency gains and optimal use of our generation assets.

Engineering and Innovation Division
In 2009, the Division’s Plant Design and Construction unit was heavily involved in the conversion of the Torrevaldaliga Nord (Civitavecchia) plant to clean coal.

The Division’s foreign activities includes:

• on behalf of E.On, the Puente Nuevo coal plant was revamped and put into commercial operation, and construction was completed and commissioning began on the Algeciras plant (800 MW CCGT);

• on behalf of Enel, work began on designing and building the Marcinelle plant (400 MW CCGT) for Marcinelle Energie; and design was completed and construction began on the Nevinnomysskaya plant (410 MW CCGT) of OGK-5.

In the nuclear power field, a team of around 60 Enel technicians and engineers is working with the EdF team in designing and constructing the third-generation advanced EPR facility at Flamanville in France.
In Slovakia, work has begun on designing and awarding orders for the construction of units 3 and 4 of the Mochovce nuclear power plant for our subsidiary Slovenské elektrárne. Finally, activity also continued on Enel’s program for the development, in a collaborative initiative with EdF, of four new EPR nuclear reactors in Italy in the coming years. Sviluppo Nucleare Italia Srl (a 50/50 joint venture between Enel and EdF) was formed to oversee the project.
On the innovation front, a Group Technological Innovation Plan was developed, which for the very first time integrates Endesa’s R&D activities in order to ensure maximum synergies. Construction and start-up were also completed on the combined-cycle hydrogen demonstration plant in Fusina (16 MW), the first of its kind in the world. Finally, in October the “Diamante” was inaugurated at Villa Medicea in Pratolino. It is a small, new generation solar power plant that uses photovoltaic panels to generate electricity during the day and accumulates part of the energy produced in the form of hydrogen to generate electricity at night using fuel cells.
Enel continued its support for the development of alternative mobility systems for the spread of electric cars. Agreements were reached with Daimler-Mercedes and Piaggio, as well as with the cities of Roma and Pisa, for the implementation of pilot projects for intelligent recharging infrastructure and innovative services for individual customers and corporate vehicle fleets. Work also continued on the project to introduce land-based electricity systems and environmental projects for ports in order to reduce emissions produced by ships and other port activities. Agreements were reached with the ports of Civitavecchia, Venice and La Spezia.

Infrastructure and Networks Division
The Infrastructure and Networks Division achieved excellent results again in 2009, with among the best technical and commercial performance in Europe.
The level of service quality in terms of the average duration and number of interruptions per customer improved further, making it once again among the best in Europe with the total length of service interruptions falling to 48 minutes and an average of 5 interruptions.
Enel’s automated system for remote contract management and metering handled over 20 million contract transactions and more than 210 million remote readings in 2009, further increasing operational efficiency and facilitating the execution of an increasing number of operations. In July 2009, Enel and Endesa announced the start of the Cervantes project to install 13 million advanced Enel meters in Spain with an open communications protocol. 2009 also marked the creation of the European Electricity Grid Initiative, a project involving many of Europe’s major electricity distribution and transmission companies, coordinated by Enel, to develop a plan for launching smart grid pilot programs. The initiative was approved by the EU and is included among those European technological research plans designed to reach the 20-20-20 targets.
Enel has not only demonstrated excellence in network innovation, but also in managing commercial and technical processes. With the Zenith project, Enel continues to involve all the Division’s employees and processes in the pursuit of improvement. As a result, the Division has been able to maintain operating costs at a level of absolute excellence and to improve service quality.
The public lighting business line improved on the positive results of the previous year and, thanks to the Archilede project, the company consolidated its leadership in the new LED (Light Emitting Diode) street lighting systems sector by selling and installing over 40,000 low-consumption systems in Italy in 2009.

Iberia and Latin America Division
2009 was a year of important results for the Iberia and Latin America Division. Endesa posted results that were an improvement even over its excellent performance in 2008, despite the difficult conditions associated with the global recession.
On the Spanish market, the improvement in results was due in particular to the performance in the free market, thanks to Endesa’s strong position in electricity sales (entirely liberalized starting from July 1, 2009) and optimal energy management. Endesa’s results in Latin America were especially outstanding. It posted a record gross operating margin, up 7% over the previous year. Excluding the impact of exchange rate changes, the increase would have been 10%.
These results were mainly due to performance in generation operations, where there was an increase in volumes (+3.4%), lower variable costs, good water availability in Chile and Peru and fossil fuel cost optimization.
Last year was also important in terms of synergies. Savings amounted to €494 million, 13% above expectations. Work continued on identifying additional synergies for the future, amounting to an additional €240 million by 2012. Added to those already identified, Enel expects to achieve over €1 billion in synergies for 2012.

International Division
A selective investment policy, coupled with initiatives to improve operational management and develop assets, led to excellent performance on the part of the Group’s foreign companies in 2009, despite an increasingly competitive and difficult market environment springing from the economic crisis that began in the autumn of 2008, which has also affected the electricity market.
In 2009, Slovenské elektrárne, the largest generation company in Slovakia with 5,345 MW of total net capacity and a market share of about 81%, posted a gross operating margin of €826 million, up 24% on 2008. This was mainly the result of the excellent performance of its nuclear plants and cost optimization as a result of the Zenith project. Work continues on the construction, begun in 2008, of two units (3 and 4) of the Mochovce nuclear power plant, which will add 820 MW of new installed nuclear capacity starting from 2013.
In France, collaboration continues with EdF on the development of third-generation nuclear power plants and the parallel expansion of a platform for the sale of electricity. In 2009, Enel France entered into the fifth of six contracts for anticipated capacity in units of 200 MW each, linked to the construction of the first EPR plant in Flamanville. This made it possible for the company to sell 5.5 TWh of electricity in France in 2009.
In Russia in 2009, following the acquisition of OGK-5, Enel focused on integrating and boosting the efficiency of structures, systems and processes, thereby laying the groundwork for excellent operational performance. Cost cutting and improvement in plant availability were the primary factors in the Group’s success. Enel continued to invest in the two new 410 MW CCGT power plants in Nevinnomiskaya and Sredneuralskaya to strengthen its presence in the Caucasus and the Urals. These plants should be up and running in early 2011.
In Romania, thanks to the acquisition of Muntenia Sud, the electricity and sales company in the Bucharest area, Enel has doubled the scale of its operations. The integration of this new company is part of a broader integration, optimization and consolidation project to exploit the synergies with other recently-acquired Romanian companies, as well as to improve operational management and leverage its assets more effectively. Investments are also being made to develop the electricity grid, reduce commercial losses and increase service quality in Bulgaria. Within the framework of initiatives to enhance sustainability and environmental compatibility, in February 2009 the modernization of the Enel Maritza East 3 plant was completed with the entry into operation of the fourth and final unit. It thus became the only lignite-fired plant in the Balkan area that fully complies with Europe’s most recent and stringent environmental requirements.
Finally, construction continued on the Marcinelle CCGT plant in Belgium, which should enter service in 2011.

Renewable Energy Division
The Division ended the year with an installed capacity of 4,808 MW divided between wind, solar, geothermal, hydroelectric and biomass, and over 500 plants operating throughout the world. Output in 2009 came to 18.9 TWh, meeting the demand of some 7,100,000 households, avoiding the emission of over 14 million metric tons of CO₂ a year.
In Italy, with a total installed capacity of about 2,637 MW and 11.7 TWh of energy produced, Enel Green Power is the leader in geothermal, hydroelectric and solar technologies, and in the coming years it intends to greatly increase total installed capacity. This objective will be achieved by consolidating its leadership position in the mini-hydro and geothermal sectors, and by strengthening its presence in solar and wind power in particular. In the solar technology area, in 2009 Enel Green Power, Sharp and STMicroelectronics signed an important agreement for the manufacture of thin-film photovoltaic panels. The facility will be built in Catania and will have an initial manufacturing capacity of 160 MW, to increase to 480 MW in subsequent years. Enel Green Power and Sharp signed an additional accord for the joint development of photovoltaic plants in the Mediterranean area with a total installed capacity of about 500 MW by 2016.
Elsewhere in the rest of Europe, Enel Green Power has a presence in Spain, Greece, France, Romania and Bulgaria, with 716 MW of installed capacity and major projects under development.
In the United States and Canada, the company is present in 20 US states and two Canadian provinces. In this region, Enel Green Power is one of the few companies to have a diversified portfolio in the four areas of wind, geothermal, hydroelectric and biomass technologies, with an installed capacity of 788 MW and output in 2009 of 2.4 TWh.
With a strong focus on technological innovation, in North America Enel Green Power is completing two new geothermal plants using binary technology in Churchill County (Nevada).
Also in the United States, the Group entered into two major strategic agreements, one with Geronimo Wind Energy, a Minnesota-based wind plant company, to develop a 4,000 MW wind pipeline in the upper Midwest, and one with Padoma Wind Power, which is specialized in wind power development in California, for 4,000 MW of potential projects.
In Central and South America, Enel Green Power is present with the development and operation of 32 plants in Mexico, Costa Rica, Guatemala, Nicaragua, Panama, El Salvador, Chile and Brazil. With a variety of technologies ranging from hydroelectric to wind and geothermal, Enel operates in the region with 667 MW of renewables capacity and 3.5 TWh of electricity generated in 2009.
Other important wind projects under development include those making up the 2,000 MW pipeline in Brazil and Mexico and the 850 MW pipeline in Chile. In Panama Enel Green Power runs a 300 MW hydroelectric power plant, the second most-important civil work in that country after the Panama Canal.
In the coming years Enel Green Power plans to dramatically expand installed capacity and generation from renewables by leveraging Enel’s long-time expertise and excellence in this field.
In the early months of 2010, as part of the rationalization of Endesa assets and operations within the Enel Group, it was decided to create a leading operator in the Iberian renewables market under the control of Enel Green Power. The new company, which will help lend new impetus to the management and development of renewables in the Iberian peninsula, will incorporate all of the Enel Group's renewables assets in that area.

Outlook
The size of the Group and the strength of its strategies have enabled Enel to maintain its performance levels despite the adverse macroeconomic environment and represent a solid foundation on which to pursue the Group's objectives and an opportunity to reap the benefits of any acceleration in the economic recovery.
On these bases, Enel will continue its programs to establish its leadership in the areas in which it is present, benefiting from the optimal diversification of its generation plants both by type of generation technology and by geographical area and a competitive cost structure.
The Group will also continue to invest in research and development in the renewables field, pursuing technological excellence without neglecting environmental issues. The programs for the return of nuclear power to Italy will also move ahead, in line with developments in the legislative framework.
Additional benefits in terms of cost containment and improved cash flow are expected from the operating excellence programs under way and from the synergies to be achieved from even closer integration with Endesa.
The contribution of these programs and all other efforts being made will enable achievement of the targets announced for 2010. In particular, planned extraordinary corporate transactions to optimize the portfolio and the generation of operating cash flow will make it possible to reduce the debt, with a consequent improvement in the financial structure of the Group.
In this regard, the Renewable Energy Division is undergoing a reorganization, the benefits of which will also be leveraged with the sale of a minority stake in Enel Green Power.

The Chief Executive Officer

Fulvio Conti