Endesa's Italian Affiliate Elettrogen Signs an Agreement With the Italian Trade Unions; Elettrogen Also Becomes Grupo Fiat's New Supplier of Electricity.

Business Editors

NEW YORK--(BUSINESS WIRE)--Dec. 20, 2001

The Italian electricity generator Elettrogen, controlled by an Endesa-led consortium, has signed an important agreement with the main Italian trade unions FNLE - CGIL, FLAEI - CISL and UILCEM - UIL.

The agreement will enable the company to get ready for the market deregulation and face the new workforce needs resulting from the new competitive scenario and more specifically from the repowering of some of Elettrogen's plants, contemplated in the industrial plan which ENDESA designed.

This is also Elettrogen's first agreement signed with the unions after its recent acquisition by the ENDESA-led consortium. This agreement contemplates a voluntary mobility scheme for those workers who will reach their retirement age in the next three to four years and will be implemented next year, with an estimated number of 267 eligible employees.

The agreement also guarantees the continued operation of the facilities and confirms the current remuneration schemes and applicable labour regulations.

Elettrogen possesses an installed capacity of 5,738 MW, representing 7.3% of the Italian system.

Elettrogen has also reached a commercial agreement for the supply of electricity to FIAT for a total annual volume of 1,600 GWh, which will cover around 70% of the firm's needs in Italy.

The agreement is renewable on an annual basis, and marks the beginning of ENDESA's commercial activities in the Italian deregulated market, where it expects to achieve a 10% market share in 2002.