Endesa Close to Acquiring 30% of SNET, Second Largest French Generator by Installed Capacity, From Charbonnages De France.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 7, 2000

-- In the controlled bid for 30% of SNET, Endesa has won over the French
Lyonnaise des Eaux and the German RWE.

-- SNET possesses five coal-fired plants with an installed capacity of 2,600
MW.

Endesa SA (NYSE:ELE) has announced that it is close to reaching an agreement with Charbonnages de France (CDF), owner of 81% of the generating company SNET, for the acquisition of a 30% stake in the latter.

This acquisition, which still needs the approval from the French government, will represent an investment of above Euro 360 million (Pta. 60 billion).

SNET is France's second largest electricity generator by capacity and the third largest by output. It owns five coal-fires plants totalling 2,600 MW which produce 6,838 GWh per year, and its market share in the French market is 2,5%. Its share capital is currently held by Charbonnages de France (CDF) (81%) and Electricite de France (EDF) (19%).

SNET currently sells most of its output to EDF under contract, and the rest to eligible customers. Forecasts indicate that SNET's sales to eligible customers will show a considerable increase over the next years.

The owners of SNET have implemented the sale of 30% of the company through a controlled bid process, which has included, among others, Suez Lyonnaise des Eaux, RWE and Endesa. In the awarding to Endesa, its industrial and commercial projects designed for SNET's as well as the price offered future were positively valued, among other parameters.

The acquisition of 30% of SNET is conditioned upon Endesa's being able to carry out, through SNET, its industrial development plan in France, which includes the possibility to increase its stake in the medium term to reinforce the co-operation with the company. In that respect, according to the basis for the agreement, Endesa will have the possibility to exercise a call option on the share capital of SNET in the hands of CDF at the moment in which it is put up for sale.

This French generator constitutes an interesting opportunity for Endesa to enter the French electricity market under favourable conditions in a moment in which it is starting its liberalisation process.

SNET's attractiveness resides in its wide experience in coal-based generation, its solid technological position in the field and its good management. Besides, Endesa and SNET are partners in France in the Gardanne fluidised bed coal-fired plant.

For all the above, Endesa intends to turn SNET into its vehicle to enter the French market, where it started activities last October with the signing of a 3-year electricity supply contract with the home appliance manufacturer SEB.

For additional information, please contact Jacinto Pariente, North America Investor Relations, [phone]. http://www.endesa.es