Board of Directors Confirms Tractebel's Strategy.

NEW YORK--(BUSINESS WIRE)--March 18, 1999--

Jean-Pierre Hansen, the New Chief Executive Officer, Sets Out the

Basis for Growth and for Collaboration With the Controlling

Shareholder

The following resolutions were made at a meeting of the board of directors of Tractebel held on Thursday, 18 March:

1. Appointments

The Board of Directors appointed Mr. Jean-Pierre Hansen to serve out the term of office of Mr. Jean-Jacques Massart, who resigned as a Director on 18 March 1999. Mr. Hansen's appointment will be put to the next general meeting of shareholders on 25 May 1999 for ratification. The Board will also propose to the meeting the re-election of Mr. Massart as a Director.

Following Baron Bodson's resignation as Chairman of the General Management Committee and Managing Director, the Board of Directors appointed Mr. Jean-Pierre Hansen Chairman of the General Management Committee following the Strategy Committee's recommendation, and appointed him Managing Director.

Baron Bodson will continue to sit on Tractebel's Board of Directors as an independent director.

Jean-Pierre Hansen remarked: "Philippe's ambitions for the Tractebel Group generated a spirit of dynamism and created a new sense of enterprise which led to its extraordinary success. He can be proud of what he achieved during the 10 or so years in which he headed up Tractebel's General Management Committee. My colleagues and I are very grateful for the legacy he has left us. We are firmly resolved to continue the strategy he initiated, keeping Tractebel on the path to profitability and growth."

2. Strategy

The Board of Directors confirmed the recommendations made by the Strategy Committee on 27 January:

i The Board of Directors noted with satisfaction the decision by

Societe Generale de Belgique and Suez Lyonnaise des Eaux to make

Tractebel the single focus for their international ambitions in

the energy sector. It will thus become the sole engine for

expansion for all the Suez Lyonnaise des Eaux group's energy

activities.

ii The main thrust of Tractebel's strategy as an energy and services

group was confirmed:

-- service-related activities to have an international dimension;

-- the Group to become one of the world leaders in the energy

sector.

iii A new factor to be considered is the opening-up of the European

gas and electricity markets in the wake of deregulation and the

abolition of national borders as boundaries for the management of

electricity and gas systems. The newly created competition is

prompting Electrabel and Distrigaz to break out of their national

markets and seek fresh opportunities for development in Europe

and the neighboring regions. Should they fail to do so, they may

well find themselves retreating to their "traditional" markets.

The General Management Committee has therefore been charged with drawing up and presenting to the Strategy Committee and the board of directors an ambitious industrial development plan for the entire Tractebel Group. The plan will take on board these three factors, paying special attention to the complementary nature of the gas and electricity sectors, which ranks among the Group's prime assets; and also taking account of any structural changes or adaptations which it believes necessary to equip the company with the best tools for ensuring its successful development.

The representatives of Tractebel's General Management indicated that they approved of the terms and framework of this undertaking, subject to greater clarification of certain details.

It was agreed that this was a sound basis on which to continue Tractebel's efforts to build up a global presence in the energy sector within the Suez Lyonnaise des Eaux Group.

Mr. Jean-Pierre Hansen emphasised the following points in relation to EGI's international activities and business strategy in the energy sector:

-- The will to continue the Group's development is clear and is

reiterated.

-- As is the case today, this expansion will be guided by the

concern for efficiency rather than by looking for 

prospective takeovers of a certain size or for reasons of

prestige.

-- The principle of flexibility, which has enabled EGI to react

rapidly and thereby guaranteed its success, will be

maintained. As is the case in any organization experiencing

rapid growth, both the momentum of the development and the

soundness of operational management must be regularly

reaffirmed.

-- Tractebel's strategy will remain to take advantage of

opportunities in the market, analysing each project on its

own merits.

-- Even so, in various parts of the world, the electricity and

gas markets are developing into "systems," where the choice

of investments, new contractual options vis-a-vis customers

and the versatile use of know-how can be applied to products

as well as sectors: electricity generation, transmission of

electricity and gas, distribution and supply. This is the

case in Europe where the Group is already a significant

systems player, in the United States and, finally, in Latin

America, especially in the "southern cone" countries where

the Group already occupies major bridgehead positions.

The Tractebel Group intends to be a player in these new systems, and it has both the strengths and the will required to succeed.

Mr. Hansen also reasserted the international vocation and development of Groupe Fabricom "whose results speak for themselves" and of Engineering, whose leading expertise may "make the difference."

The Board of Directors concurred with the analysis and direction given on these points by the Chairman of the General Management Committee.

1. Relations with the Suez Lyonnaise des Eaux group and Societe

Generale de Belgique.

Mr. Jean-Pierre Hansen said that he had requested information on the precise form of collaboration with these shareholders.

This can be summarized in six principles to which the representatives of the controlling shareholder indicated their agreement, confirming that they are entirely consistent with their own views:

i. The general strategy for the Tractebel Group's expansion, as

presented and approved by its various bodies, is confirmed.

ii. The energy sectors in which the Tractebel Group received a

mandate to fulfill the international and global ambitions of the

Suez Lyonnaise des Eaux group are as follows:

-- electricity generation, transmission, distribution, trading

and supply;

-- gas transmission, distribution and supply;

-- heat and, within the context of the development of energy

markets, the management and maintenance of technical

installations and facility management.

iii. The Suez Lyonnaise des Eaux group is organized along business

activity lines. In particular the projects entrusted to the

people responsible for the various parts of the world where the

Suez Lyonnaise des Eaux Group is active are not hierarchically 

arranged. These regional delegate posts will be open to the

members of the Tractebel Group.

iv. Tractebel will continue to have at its disposal all means

necessary to fulfill this mandate, particularly in terms of the

operational resources it requires to achieve its objectives.

v. Where Tractebel and the other Suez Lyonnaise des Eaux business

units have common interests in a project, decisions relating to 

these will be taken "at arm's length." In the case of projects in

the water and energy sectors, each sector will determine its own

investment policy but will give each other complete support on

the human resources and technology levels.

vi. To ensure that a constructive dialogue is maintained between the

management and shareholders, an Energy Committee, comprising

members of the board of Suez Lyonnaise des Eaux and

representatives of both Societe Generale de Belgique and the

Tractebel Group will meet regularly. This committee will help to

coordinate the strategy of the Energy business and the global

strategy of Suez Lyonnaise des Eaux, while at the same time

respecting the powers of the statutory bodies of Suez Lyonnaise

des Eaux, Societe Generale de Belgique and Tractebel. It will

ensure that, for the sake of maximum management effectiveness,

relations between the operational departments of Suez Lyonnaise

des Eaux, Societe Generale de Belgique and Tractebel develop in

harmony.

4. Additional information

The Board set up an internal Board of Auditors, chaired by Count Goblet d'Alviella, with Mr. Alain Chaigneau and Baron Croes as its members.

In addition on the proposal of Mr. Hansen, Mr. Willy Bosmans, managing director of Electrabel, has been appointed a member of Tractabel's General Management Committee by the Strategy Committee.