PROCEDURE RELATING TO THE REGULATIONS MADE UNDER THE ANTITRUST AND ANTIOLIGOPOLY LAW IN THE ELECTRICITY SECTOR

According to the Law (Antitrust and Antioligopoly Law for the Electricity Sector), all companies directly or indirectly involved in merger operations shall notify such operations before performing them, considering their market share in the activities of electric power generation, and/or transmission, and/or distribution in the Peruvian territory.

With respect to the calculation of the market share of companies involved in the merger operations, the Regulations establish that, only for notification purposes, each company's share shall be determined on the basis of its market share in terms of revenues received for the year previous to the notification by all the companies engaged in the same activity (electric power generation, transmission or distribution), which shall not imply a prejudgment of such operation's effects on competition.

Companies' notification shall be accompanied by the information described in the Regulations. This information shall be provided in a "Notification Form", approved by the Free Competition Commission pursuant to the powers that have been vested in it by the Article 14 thereof. The information required shall include the terms of operation, the parties thereto and their relationships with companies in the electricity sector, as well as data on the markets affected by the operation and its effects on the market.

Pursuant to the Regulations, the criteria to be considered by the Free Competition Commission to authorize or reject a merger operation include the possible effectiveness of that operation in the market, as well as other aspects related to the merger level and the effects that could restrict competition. According to the above Regulations, the burden of proof of the effectiveness likely to be generated by the operation lies on companies making the notification.

Once all the information required for the operation evaluation has been provided, the Commission shall decide whether or not authorize the operation or request an extra period of time for the evaluation within thirty (30) working days. If, after this period of time, the Commission does not issue a decision in an explicit manner, it shall be understood that the operation has not been authorized. The Commission's decisions can be appealed before the INDECOPI Tribunal, who shall also issue a decision regarding the appeal within thirty (30) working days.