MHI Receives Full-turnkey Coal-fired Power Plant Order from Chile - Fourth Plant Order from Electrica Guacolda -

The power plant on order to be built in Huasco, approximately 700 kilometers north of Santiago, Chile's capital, will consist of a boiler, steam turbine, generator and steam condenser. MHI will manufacture the boiler at its Yokohama Dockyard and Machinery Works, which is also responsible for the plant construction work, and the steam turbine and steam condenser at its Nagasaki Shipyard and Machinery Works. Mitsubishi Electric Corporation will supply the generator and Mitsubishi Corporation will handle the trade particulars.

Electrica Guacolda, headquartered in Santiago, is a mid-sized electricity provider in Chile that conducts power generation and transmission. The Guacolda Power Station is advantageously located in Huasco in the proximity of customers and supply 55% of electricity needed in Norte Chico area. The high evaluation accorded by Electrica Guacolda to MHI's technological expertise and the proven operational record of its previously delivered power plants resulted in the award of the latest order.

Due to the rise in international copper prices among others, Chile's real gross domestic product (GDP) grew 6.3% in 2005. While the growth rate slightly slowed down to 4.0 % in 2006, Chile's economy continues to expand, with growth in 2007 now estimated to exceed 5%. Accordingly, the nation's electricity demand is also increasing.

Historically, hydropower has been Chile's major power source, but hydropower is vulnerable to seasonal and climatic changes - i.e. fluctuations in rainfall quantity. In response, the Chilean government began to diversify its energy mix to increase thermal power generation by natural gas and coal. However, to secure the energy resources to fuel its thermal power generation plants, Chile must rely on imports. Ever since the country faced a natural gas crisis in 2004, when the government of Argentina limited natural gas exports to Chile, coal-fired power plants have begun to receive renewed attention as a substitute for plants fired by natural gas.

Gaining momentum from the latest order, MHI will now further strengthen its marketing activities in Central and South America, especially in Chile where the economy is expanding steadily.