DERIVATIVE INSTRUMENTS

Financial derivatives that Gener and its subsidiaries hold correspond primarily to transactions entered into with the intent to hedge interest and exchange rate volatility arising from financing development projects.

The Company, in line with its risk management policy, enters into interest rate and cross currency swaps to reduce the anticipated variability of the un- derlying debt’s future cash flows.

The portfolio of derivative instruments as of December 31, 2012 and 2011, is detailed as follows:

(A) CASH FLOW HEDGES (A.1) INTEREST RATE SWAPS:

These swap contracts partially hedge the syndicated loan related to Empresa Eléctrica Angamos S.A. and Empresa Eléctrica Ventanas S.A. The fair values are as follow:

DERIVATIVE

INSTRUMENT COUNTERPARTY CLASSIFICATION INTEREST RATE

DECEMBER 31, 2012 DECEMBER 31, 2011

ASSET LIABILITY ASSET LIABILITY

CURRENT CURRENT CORRIENTENON- CURRENTNON- CURRENT CURRENTNON- CURRENT CURRENTNON-

MUS$ MUS$ MUS$ MUS$ MUS$ MUS$ MUS$ MUS$

Interest Rate

Swap Various Cash Flow Hedge 2,80% - 5,77% - - 24,793 83,305 - - 24,521 81,036

TOTAL - - 24,793 83,305 - - 24,521 81,036

Empresa Eléctrica Ventanas S.A.

In June 2007, Empresa Eléctrica Ventanas S.A. signed four interest rate swap contracts with the banks Standard Chartered, Scotiabank, Calyon New York Branch and BNP Paribas, maturing in 15 years for ThUS$315,000, to fix variable interest rates during the construction and operating periods of its facility. These swap contracts partially hedge the loan led by BNP Paribas (formerly Fortis) for the Nueva Ventanas Power Plant whose construction finalized in December 2009.

Empresa Eléctrica Angamos S.A.

In December 2008, Empresa Eléctrica Angamos executed seven interest rate swap contracts, which are currently held by SMBC, the Royal Bank of Scotland Bank, BNP Paribas (formerly Fortis), Credit Agricole (formerly Calyon), HSBC and ING, maturing in 17 years for ThUS$690,000, to fix variable interest rates during the construction and operating periods of its facility.

(A.2) CROSS CURRENCY SWAPS

DERIVATIVE

INSTRUMENT COUNTERPARTY CLASSIFICATION

DECEMBER 31, 2012 DECEMBER 31, 2011

ASSET LIABILITY ASSET LIABILITY

CURRENT CURRENTNON- CURRENT CURRENTNON- CURRENT CURRENTNON- CURRENT CURRENTNON-

MUS$ MUS$ MUS$ MUS$ MUS$ MUS$ MUS$ MUS$

Cross Currency

Swap Credit Suisse - Deutsche Bank Cash Flow Hedge - 6,295 4,720 1,737 - 1,330 5,511 13,650

TOTAL - 6,295 4,720 1,737 - 1,330 5,511 13,650

In December 2007, AES Gener signed two cross currency swaps with Credit Suisse International to fix in U.S. Dollars the UF 5.6 million obligation in two series of locally placed bonds (N and O), equivalent to approximately ThUS$ 217,000 as of the date of issuance, maturing in 2015 and 2028.

On September 2009, AES Gener S.A. signed a modification to the cross currency swap contract associated with the N Series of the locally placed bond. The previous contract was terminated and replaced by new contracts that were executed with Credit Suisse and Deutsche Bank. Both swap contracts include provisions that require AES Gener to grant a guarantee when the swap market value exceeds the limit established in the contracts.

(A.3) FOREIGN CURRENCY FORWARDS

In February 2012, AES Gener S.A. executed foreign currency forwards, related to accounts receivable from regulated customers, with Deutsche Bank and JP Morgan Chile for a total nominal amount of ThUS$124,588, with partial maturities with the last payment on November 29, 2012. As of December 31, 2012, there is no nominal amount outstanding.

In April 2012, AES Gener S.A. executed foreign currency forwards, related to accounts receivable from regulated customers, with Corpbanca for a total nominal amount of ThUS$21,986, with partial maturities with the last payment on November 29, 2012. As of December 31, 2012, there is no nominal amount outstanding.

In August 2012, AES Gener S.A. executed foreign currency forwards, related to accounts receivable from regulated customers, with Banco de Chile, JP Morgan and Banco Santander for a total nominal amount of ThUS$131,004, with partial maturities with the last payment on May 27, 2013. The nominal amount outstanding as of December 31, 2011 is ThUS$108,133.

The nominal amount outstanding is classified as current assets.

(A.4). OTHER INFORMATION - CASH FLOW HEDGES Hedge maturities are included in the following table:

EMPRESA DERIVATIVE INSTRUMENT COUNTERPARTY HEDGED ITEM

PERIOD

START END

2013 2014 2015 THEREAFTER TOTAL

THUS$ THUS$ THUS$ THUS$ THUS$

AES Gener S.A. Cross Currency _Swap Credit Suisse Cash Flow 01-12-07 01-06-15 - - _47,042 - 47,042 AES Gener S.A. Cross Currency _Swap Deutsche Bank y Credit _Suisse Cash Flow 01-12-07 01-12-28 - - - 172,264 172,264 Emp Eléctrica Angamos S.A. Interest Rate Swap Various Interest Rate 30-12-08 30-09-25 30,169 27,194 32,213 583,128 672,704 Emp Eléctrica Ventanas S.A. Interest Rate Swap Various Interest Rate 31-08-07 30-06-22 16,000 18,000 20,000 226,000 280,000

TOTAL 46,169 45,194 99,255 981,392 1,172,010

For more details on debt maturity, see Note 20 Other Financial Liabilities.

The Company has not executed cash flow hedge instruments for highly probable transactions that then failed to occur. Amounts recognized in Other Comprehensive Income (OCI) for the years 2012 and 2011 are:

DECEMBER 31, 2012 DECEMBER 31, 2011

THUS$ THUS$

Amount recognized in Other Comprehensive Income 13,704 66,230

Amounts transferred from OCI to Net Income:

DECEMBER 31, 2012 DECEMBER 31, 2011

THUS$ THUS$

Amortization of Cross Currency Swap, Series N Bonds 627 627

Amortizastion of Capitalized Interest 304 239

135

(B) DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

In March 2012, AES Chivor executed currency forward contracts, with Bancolombia for a nominal amount of ThUS$76,541, maturing in December 2012. As of December 31, 2012, no nominal amounts were outstanding.

In April 2012, AES Chivor executed currency forward contracts, with Bancolombia for a nominal amount of ThUS$28,606, maturing in March 2013. The nominal amounts as of December 31, 2012 are ThUS$13,367.

In July 2012, AES Chivor executed currency forward contracts, with JP Morgan for a nominal amount of ThUS$35,181, maturing in September 2013. The nominal amounts as of December 31, 2012 are ThUS$35,181.

Amounts are classified as current.

(C) EMBEDDED DERIVATIVES

During 2010 AES Gener S.A. entered into a coal purchase agreement with AES Hawaii containing a fuel index in the purchase price that is not considered to be closely related to the host contract and, therefore, it has been separated and accounted for at fair value.

As of December 31, 2012, no amounts were recognized for this embedded derivative.