2007 ANNUAL REPORT Background Information

Identity

Name: Transelec S.A. Record Entry at the Securities Registry: Number 974 Legal Domicile: Santiago, without prejudice to the agencies, subsidiaries or branch offices the corporation may establish in other places in the country or abroad. Taxpayers’ Identification Number: 76.555.400-4 Address.: Avenida Apoquindo Nº 3721, P. 6 Telephone: (56-2) 467 7000 Fax: (56-2) 650 8517 Web site: www.transelec.cl

CORPORATE PURPOSE The capital of Transelec is divided into 1,000,000 registered, The company’s sole objective is the exploitation and common, non-par value stock. Transelec Holding Rentas development of electric systems either of their own Limitada owns 999,900 shares, while Rentas Eléctricas I proprietorship or that of third parties, which are destined to Limitada owns 100 shares. the transport or transmission of electric energy. To this effect the company shall be entitled to obtain, acquire and benefit In June, 2006, the Brookfield Asset Management (BAM), the from the respective concessions and permits, and to make use Canada Pension Plan Investment Board (CPP), the British of all the rights and faculties granted to electric companies Columbia Investment Management Corp. (bcIMC) and the by the current legislation. Public Sector Pension Investment Board (PSP) acquired 100% of the Transelec’s shares from Hydro-Québec and IFC. This The social objective comprises the commercialization of Consortium’s contribution to Transelec is a unique group of the transport capacity of lines and the transformation of investors with a long term investment horizon and substations as well as the equipment associated to the latter outstanding financial strength. with the aim to allow power generating plants –both national and foreign– to transmit the electric energy they produce and, therefore, to reach their energy consumption centers. Furthermore, Transelec offers consultancy services in the fields of engineering and management of companies related 2 to their sole objective by carrying out other commercial and industrial activities aimed at making the best possible use of the infrastructure destined for the transmission of electricity. In the course of meeting its social objective, the partnership shall act either directly or through its affiliated or associated partners, both within the country and abroad.

* Historic Background of the partnership, and the legal constitution and modifications on page 50.

OWNER’S EQUITY THE COMPANY

Transelec is the biggest and most important electricity transmission company in . The Company’s power lines carry electricity from the source of energy to the cities and the big consumers of the industrial and mining areas. Its responsibility is focused on providing Chileans a continuous supply of uninterrupted energy as its system transports the electricity to light up the cities inhabited by 99% of the population.

To make this possible, the Company´s vision is focused on consolidating its leadership on the basis of a rapid growth by way of extensions, new projects and eventual acquisitions, as well as the modernisation and the continual upgrading of its installations and management processes. This vision is backed up and supported by both internal and external sustainability criteria aimed at satisfying the needs of a country that is progressively more involved with advances that run parallel with quality of life and international standards.

Transelec puts at the disposal of the regulatory authorities and the development of the country, its knowledge and the studies performed in terms of initiatives that are necessary to guarantee a transmission system that is both reliable and profitable. Transelec is firmly determined to offer the clients it has in the electric, mining and industrial sectors, the TRANSELEC’S MISSION IS TO BE Company´s vast experience and the high standards it applies to the issues of development, operation and maintenance of transm