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Environmental Services Befesa Medio Ambiente, the holding company of Abengoa’s environmental services Business Unit, focuses its activity on providing environmental services for industry and on the construction of environmental infrastructures, while conducting aluminum waste recycling, zinc recycling, industrial waste management and environmental engineering activities. International leader in industrial waste treatment and environmental engineering With wastes... we produce new materials by recycling, and we also treat and desalt water to achieve a sustainable globe www.befesa.es

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Environmental Services Sustainable Development

ABENGOA Activity Report 200539

Environmental Services

Befesa Medio Ambiente, the holding company of Abengoa’s environmental servicesBusiness Unit, focuses its activity on providing environmental services for industry and onthe construction of environmental infrastructures, while conducting aluminum wasterecycling, zinc recycling, industrial waste management and environmental engineeringactivities.

International leader in industrial waste treatment and environmentalengineering

With wastes... we produce new materials by recycling, and wealso treat and desalt water to achieve a sustainable globe

www.befesa.es

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ABENGOA Activity Report 200540

2005 has been an important year for Befesa. Firstly,the changes made in various business areas havebeen consolidated and secondly, the foundations tobring about a quantitative and qualitative shift inthe development of the company have beenestablished. More than 1,653,000 tons of industrialwaste were treated in 2005, with more than708,000 tons going towards the production of newmaterials through recycling, and we have increasedour desalination capacity to 900,000 m3/day,equivalent to supplying 4.5 million people.

The restructuring processes in the Aluminium WasteRecycling unit that began the previous year havebeen concluded and are already showing positiveresults.

In the Zinc Wastes Recycling unit the modernisationworks of the Aser plant have begun and will becompleted by mid 2006. These works will allow usto increase the volume of treated waste by morethan fifty percent. In addition, long term supplycontracts for steel powder have been signed withthe most important steel producers, guaranteeingthe supply of raw materials until 2016.

It has also been an important year for the IndustrialWaste Management business, which has maintainedit leadership position in the hazardous wastes andindustrial cleaning market and has experienced asignificant increase in the treatment of non-hazardous wastes. The drive to sign a significantnumber of facilities management contracts withlarge companies also deserves special mention.

Finally, the internationalisation of EnvironmentalEngineering which was initiated in previous yearswas completed in 2005, most significantly in thedesalination business. With the contracts awardedin 2005 for the desalination plants in Chennai(India) and Tlencem-Hounaime (Algeria), combinedwith contracts from previous years, Befesa isconsolidating its position as the global leader indesalination, with an installed production capacityof 400,000 m3/day and projects in progress for afurther 500,000 m3/day.

In relation to Latin America, Befesa has continuedto satisfactorily carry out its business in Argentina,Chile and Peru. Furthermore, it has obtained all thenecessary licences to begin the works in thehazardous industrial waste treatment andconfinement center that it is going to construct inMexico. This center, with a capacity of 170,000 t/yr,expects to meet the waste managementrequirements of industries in central Mexico.

In 2005, Befesa has continued with its R&D&I policy,primarily focusing on projects related to aluminiumand the management of industrial wastes, whichhas allowed Befesa to meet the objectives set theprevious year. Befesa has also developed a strategicthree year research and development plan whichwill be implemented in 2006. This plan establishesthe objectives and lines of action that the companywill follow through to 2009, which will involvesignificant investment and effort in terms oftechnical and human resources in order toconsolidate the plan.

From a quality and environment perspective, in2005 a concerted effort was made to develop andimplement the ISO 14001 and ISO 9001 quality andenvironmental standards, respectively. To date,nearly all the entities in the company have a validmanagement system in accordance with thesestandards.

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An additional important development has been theachievement of the Occupational Risks Preventioncertificate based on the OSHAS 18001 standard,which underlines the concern and the growinginterest of the company to stay at the cutting edge,as well as for the occupational health of itsemployees. Similarly, in relation to human resources,we have continued to work with the competencemanagement system during the year, which promotesemployee development within the company.

volume of treated wastes, but also due to theintegration in the same company of the twoprocesses that close the aluminum recovery cycle:Firstly, the recovery through the metallurgicalprocesses of the metal aluminum and, secondly, therecovery of the fluxes utilized and of the aluminumoxide.

Also of note within the Business Unit is theTechnology and Machinery Sales Division where weexecute the design, construction and installation of awide range of equipment for the aluminum industry.Out most outstanding product in recent years is theingot belt for both aluminum and zinc, which has thehighest performance rate in themarket.

The conjunction of the threeaforementioned pillars; Recycling ofthe metal, recycling of the oxide, andthe pursuit of technology, form aunique and referential mode in theworld of recycling.

The sale of aluminum alloys forsmelting is mainly to the automotiveindustry and for the manufacturing ofcomponents. Within this sector inEurope, there are bright and darksides to the business of light metalssuch as aluminum. On the one hand,they are the key to the future strategythat pursues lower consumption andless contaminating cars while, on theother, they are right in the middle ofthe sector’s structural problem andthe demand for them has not yetmanaged to set out on the road tosustainable growth.

Aluminum and Salt Slag Recycling

The objective of the Business Unit is the integralrecycling of aluminum-content industrial andhousehold wastes, in a global manner and withoutgenerating solid wastes in the process, irrespective ofwhether their origin lies in the recycling process itselfor in the contamination that accompanies the wasteitself. This mission is carried out through the pursuitof the signing of stable long-term agreements, withboth customers and providers that guarantee aframework for growth and the providing of servicesin addition to the simple delivery of the high-valueproduct/waste, and quality

Befesa is the leader in Spain and Europe, not only asa result of the position it occupies owing to the

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In this context, Befesa wishes to continue to play animportant role and to this end, it has made thenecessary adjustments to provide its facilities withthe flexibility the demand requires and a coststructure suited to the high level of demand fromthe entire chain of value. In this sense, in 2005 andas a continuance of the restructuring efforts madein previous years, we have reduced the activity inthe Galdan plant to 50% with Fagor Ederlan. Thisaction enabled a clear reduction of operating costsand guarantees not only the fulfillment of ourplans, but it is also a tool for the strategicdevelopment of our customer. In addition, weinvested five million euro in 2005. The objectivewith all the actions taken was to increase theproductivity of the facilities, reduce operating costsand enhance the quality of the services provided toour customers.

The salt recovery plants of Befesa that operate aspart of this Business Unit presented very highproduction and productivity indexes, way above thedemanding programs we had established. Globally,they treated 198,000 tons, a 13% increase on theprevious year’s figure, which was then considered arecord. During the year, the restructuring of thefacility in Wales was successfully completed.

Production levels were consolidated there and anarray of measures that brought the facility up to thegroup’s production standards were developed andimplemented. In spite of the steps that were taken,

the economic profitability of the facility is belowthat which the group demands of its investmentsand additional steps must be taken to guaranteethe medium-term viability of the facility. To this end,we are holding negotiations with our customers toachieve a framework that will allow us to continueto provide salt slag recycling services, at the currenthigh levels of quality, and develop the aluminumrecycling industry in the UK in a sustainablemanner.

In 2005, the total volume of treated wastes was318,000 tons, a 10% increase on the previousyear’s figure.

Zinc and Desulphurization Waste Recycling

Befesa’s zinc and desulphurization waste recyclingactivity is executed by the following companies:Befesa Zinc Aser, Befesa Zinc Sondika, Befesa ZincAmorebieta, and Befesa Desulfuración.

Befesa Zinc AserIn 2005, Befesa Zinc Aser received more than100,000 dry tons of steel powders originating fromelectric arc furnaces and die-casting processes, and3,220 dry tons of other wastes with high zinc-content, which represented 100% of the rawmaterial supply.

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Most of the common wastes from the home marketwere captured thanks to framework agreementssigned with Oñeder and Arcelor for themanagement of the powders generated in the mainBasque steelworks.

It is important to underline the contracts signed in2005 with the Basque steelworks, and with othersfrom the area of influence of these siderurgygroups, for the valorization, through the recyclingof zinc, of 100% of the powders captured in thesleeve filters installed in their kilns up untilDecember 31, 2016. These agreements are part ofthe Hazardous Waste Management Plan of theCAPV 2003-2006 and, with them, Befesa Zinc Aserensures the availability of the raw material requiredto cover the growth capacity of its Asúa-Erandiofacilities in forthcoming years.

The marketing and sale to end-customers of BefesaZinc Aser’s zinc concentrate was done by BefesaZinc Comercial, who sold 40,200 tons of treatedWaelz Oxide. The product deliveries went to thenational and European market. In this sense, ofnote is the strengthening of the presence of theD-L.W.O.‚ in its historic areas, and the sold productwent to the traditional large-size customers fromthe zinc electrolysis sector, such as Asturiana deZinc and Umicore.

As part of the Company’s investment plan, of noteis the Modernization and EnvironmentalImprovement Project for its Asúa-Erandio facility.The most important activities carried out under thisProject included the signing of two contracts for16.3 million euro for the installation, in the lattermonths of 2005, of a new cleaning system for thegases from the Waelz plant and for the replacementof the existing Waelz kiln with a larger-sized andmore technologically advanced one that will comeinto operation in September 2006.

This Project is being developed in harmony with theCompany’s environmental strategy to ensurefulfillment of the Voluntary Agreements signed bythe Territorial and Environmental Planning

Department of the Basque Government and themain companies from the Ferrous Smelting, Non-Ferrous Smelting and Non-Ferrous Metallurgy sectorand to anticipate the coming into force of Act 16/2002 of July 1 governing Integrated PollutionPrevention and Control (IPPC). In virtue of thesecommitments, Befesa Zinc Aser requested theIntegrated Environmental Authorization (AAI) of theBasque Government in April 2005.

As a result of the semi-industrial scale testsperformed in 2004 and 2005, the efficiency ofFerrosita ® (waste from the Waelz process) as acoagulant for the treatment of the Cr(VI) and otherheavy metals contained in the effluent from thegalvanizing industry was proven. Nonetheless, inorder to determine the viability of themanufacturing at industrial level of the coagulantobtained from Ferrosita®, a new project will have tobe developed.

Befesa Zinc AmorebietaIn 2005, Befesa Zinc Amorebieta recycled 13,850tons of diverse zinc waste: 2,600 tons of raw zincashes, an 18% increase on 2004, and 2,071 tons ofzinc scrap, which was a 40% increase.

Product manufacturing increased 14% to 11,850tons. Of special note, the 3,100 tons of raw zincingots and the 600 tons of electrolytic zinc ingots.In addition, the production of fine zinc ashes rose to2,500 tons.

There was significant optimization of theproduction of zinc oxide and a 95% increase in theoutput of this product was achieved compared tothe previous year, which led to 3,000 tons of ZnObeing put on the market.

The increase in the average price of zinc on theLondon Metal Exchange (LME) in 2005 results inadditional margins when the time comes to sell-offthe accumulated stocks. This circumstance has apositive effect on the company’s competitiveness asit results in higher prices for the end-product thanfor the raw material.

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In addition, the following have been established aspriority objectives for the next twelve months: to godeeply into the pursuit of alternative materials forthe manufacturing of zinc oxide and to optimize thetransformation processes, of both ingoting andcrushing of raw materials, so that the company mayincrease its processing capacity to 14,500 tons ofwastes.

Befesa Zinc SondikaIn 2005, the Sondika facility recycled 12,300 tons ofdifferent zinc wastes, most of which came from thegalvanizing industry. This figure represents a 32%increase on the previous year.

In order to achieve this higher treatment volume,agreements were signed with large wasteproducers, zinc foams, and 3,200 tons werecaptured, which is equivalent to 26% of the overallsupply for the period.

Zinc mattes represented 28% of the total rawmaterial supply with 3,563 tons having beenutilized (763 tons more than in the previous year)for the manufacturing of zinc oxide. Of the mattesacquired, 1,700 tons were supplied by Befesa ZincAmorebieta and the remainder was purchased fromgalvanizers or intermediaries.

The production of zinc oxide rose to 11,650 tons, a12% increase on 2004, due to the improvementsmade in the process. The generation of subproductsalso increased to 1,372 tons intended for direct saleor subsequent reutilization.Product sales rose to 11,400 tons, 1,000 tons morethan in 2004.

Befesa DesulfuraciónThe Befesa Desulfuración industrial facility, locatedin Barakaldo (Biscay) and initially conceived as aproduction plant for sulfuric acid from pyrite, is afurther example of Befesa’s commitment to theEnvironment. Since 1995, and following its re-conversion, Befesa Desulfuración recycles residualsulfur recovered through the processes operated byoil refineries.

Befesa Desulfuración is a recycling facility capableof solving one of the environmental problems of theoil companies, by applying the cleanest and safestprocess for residual sulfur exploitation. At the sametime, the products obtained, sulfuric acid andoleum (a compound with a high concentration ofSQ3) is, due to its high-quality level, well-received inthe market by customers from the chemical,papermaking, pharmaceutical, foodstuffs, manureand fertilizer, and water treatment sectors.

In 2005, 103,000 tons of sulfur originating fromdesulphurization wastes were processed to obtain315,300 tons of acid equivalent, with an associatedgeneration of electric energy of 80,500 MWhwhich, after deducting auto-consumption, resultedin the sale of 53,000 MWh of surplus electricenergy. Both the production and surplus electricenergy figures are an absolute record in the historyof the Company, in both the pyrite and the sulfurphases.

As regards the origin of the sulfur, the supply fromRepsol Derivados increased from 60% in 2004 tothe current 64%, to the detriment of the supplyfrom France. The supply of liquid sulfur alsocontinued but large quantities were not reached.

The investments made in the year focused especiallyon the improvement of port terminal, road and railinfrastructures, the adapting of machines andinstallations to the requirements of safetyinspections, and the acquisition of spare parts forprocess equipment.

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Befesa Industrial waste and industrial cleaning

This Business Unit operates through the followingactivities: industrial waste management, industrialcleaning, PCB management, and plastic materialmanagement.

Industrial Waste ManagementBefesa Gestión de Residuos Industriales focuses itsactivity on providing integral environmental servicesfor industry, in accordance with a clear wastehierarchy: minimize, reutilize, recycle and valorize.

Befesa is currently one of the leaders on the IberianPeninsula in the integral management of industrialwastes and maintained its notable position as anauthorized final manager. The non-hazardous wastemanagement activity has been developed with in-house means of transportation, together withcontainers and compactors. In addition, integralmanagement was developed in 2005 by assigningpersonnel to production centers to ensure greatercontrol of the procedures.

Based on a highly-qualified and experienced teamof professionals, Befesa provides its managementservices for any type of company and for a wide-ranging list of industrial wastes.

The waste management services it provides includetransportation, removal, treatment, environmentalassessment, minimization studies, advance storage,on-site treatment and conditioning, and thehandling of the wastes.

During 2005, Befesa achieved a 9% increase to652,296 tons in its management activity. Thisgrowth came about thanks to the dependability itoffers its customers, and to the commercial andcoordination efforts made by the company’s entireteam of professionals.

In April 2005, the non-hazardous waste transferand classifying facility in the municipal district ofAlcala de Guadaira, in Seville, was inaugurated. TheAjalvir non-hazardous waste facility continued itsconsolidation process and, through theincorporation of this activity, strengthened andprovided an integral waste management service for

its customers. Of note in this non-hazardous wastemanagement activity was the consolidation of theCevico de la Torre deposit, which representedBefesa’s positioning in Castilla y Leon in the non-hazardous waste management sector.

In the last quarter of the year, an industrial waste,organic and inorganic, conditioning plant thatutilizes leading-edge technologies was inaugurated,with satisfactory results, in the center Albega S.L.(Alianza Befesa-Egmasa) has in Palos de la Frontera.The hierarchy principles employed are thoseestablished in the European Community forhazardous waste management, as well as those inthe National and Autonomous Regions’ Plan for themanagement thereof (minimization, reutilization,recycling, valorization and disposal). This projectrepresents an advance in research into new wastemanagement techniques.

The company Residuos Industriales de la Madera deCórdoba (Rimacor), in which there is a 69.97%interest through Albega, technically completed theLucena hazardous waste transfer center. It isscheduled to be brought into operation in January2006.

Befesa signed an agreement with Empresa deGestión Medioambiental, S.A (Egmasa), by which ithas purchased the fifty percent shareholding inAlbega that was in the hands of Egmasa, whichnow makes it the 100% owner of the company. Atthe time of signing of the agreement, the assetsand elements of the Industrial Waste TreatmentEnvironmental Platform belonging to Egmasa wereintegrated into Albega.

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Industrial & Hydrocarbon CleaningThis company carries out its activities in theindustrial services sector for public and privatesector customers. It offers a wide range of servicesthat include suction and blowing of solids, liquidsand sludge, high pressure cleaning works, theutilization of water at extremely high pressures fordemolition, cutting and cleaning operations, the on-site management and treatment of wastes at oilrefineries, chemical cleaning, loading, unloadingand management of used catalysts, as well as wastemanagement and treatment services at thecustomers’ own facilities, tank cleaning services inrefineries and large oil product facilities, chemicalcleaning, loading, unloading and management andrecovery of contaminated soils.

Following the merging process of the differentcompanies involved in this activity and thecompletion of the geographic area structuringprocess, 2005 represented the consolidation of thecompany and its different activities such as:chemical cleaning, extraction, loading andunloading of catalysts, tank cleaning with automaticprocesses, management and operation of mobile,centrifuge and filter press plant.

New activities and services to be made available toits customers were developed in 2005, such ashydrodemolition, hydrocutting, oxycuttingoperations, and the integral management activityfor large customers. Different offers of thesecharacteristics were made with very satisfactoryresults.

In addition, activities abroad were consolidatedduring the year and, as regards tank cleaning withthe automated system, 2005 saw thecommencement of a contract awarded by GrupoTotal.

Befesa PlásticosBefesa Plásticos is specialized in the manufacturingof special screenings from low-density polyethyleneby recycling sheeting utilized as greenhousecovering. The screenings purchased by its customersare put to different uses, of note among the same isthe manufacturing of sheeting for constructionpurposes (waterproofing and protection); large sizesacks and rubbish bags; signal panels, irrigationpiping, electric and telecommunication tubing;moulds such as flower pots, jutties and decantercases; and for obtaining modified asphalts.

Its production capacity, together with the constantand homogenous quality of its screenings has madeit the leading provider of recycled screenings inSpain and the European Union, with 80% of itsoverall production being exported.

As part of its active commitment to theconservation and improvement of the environment,Befesa Plásticos brought an integral managementservice into operation for the agricultural plasticsheeting generated in the Costa Tropical pool ofvillages in Granada and the company therebymanaged almost 1,000 tons of agricultural plastics,obtaining, on the one hand, the raw materialrequired for its production process and, on theother, managing the waste plastic in the mostsuitable and environment-friendly manner.

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In 2005, Befesa Plásticos recycled more than 11,855tons of sheeting and used irrigation pipes andachieved a production of 9,600 tons. In addition, itsold 9,550 tons. These data confirm theconsolidation of the company as the leader in thelow-density polyethylene recycling sector.

Befesa Gestión de PCBLocated in Cartagena (Murcia), Befesa Gestión PCB,S.A. specializes in providing efficient solutions forthe collection, transportation and disposal of PCB-contaminated transformers, condensers andmaterials while recovering, thanks to the utilizationof leading-edge technology, all the reusablematerials and disposing, in a definitive manner, ofthe contaminated materials.

In 2005, Befesa Gestión PCB maintained its leadingposition in the Spanish PCB market and treatedmore than 2,800 tons of PCB-contaminated devicesand materials. These figures confirm the Company’sstrength at a time in which this market has beenshowing a tendency to drop since 2003, in relationto the number of treated tons.

In addition, the importing of PCB-contaminatedequipment from Argentina continued. This activityis being carried out with the collaboration ofBefesa Argentina since the year 2000. Thenecessary administrative steps were taken to enablethe commencement of imports from Peru andChile.

It is important to mention that, in 2005, BefesaGestión PCB was awarded the contract to treat PCBfrom Hidrocantábrico (HC Energía) for the 2006-2007 period, and the contract to manage theRegional Government of Madrid’s PCB-contaminated electrical equipment stored in theSan Fernando de Henares Safety Deposit. It alsoobtained authorizations to manage transformersthat are not PCB-contaminated, and thus completethe management service the company offers.

Also in 2005, Befesa Gestión PCB completed theauthorization process for the hazardous wastecollection and transportation activity in all theAutonomous Regions of Spain, eliminating theintermediation of external agents and offering thecustomer an integral service.

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Environmental Engineering

Befesa’s Environmental Engineering activities arefocused on the construction and operation ofinfrastructures, and the providing of services for theintegral water cycle, and waste management.

As an important event in 2005, we would mentionthe consolidation of Befesa in the internationalmarketplace, especially as regards Desalination. Theawarding of two new contracts for the constructionand operation of desalination plants, one in Algeriaand the other in India reflect this situation andensure strong sustained growth.

The Environmental Engineering Business Unit isstructured into two lines of activity:

Construction, where Befesa Construcción yTecnología Ambiental, Befesa Fluidos, and Codesaare integrated.

Befesa Construcción y Tecnología Ambiental coversthe international market and the construction ofhydraulic and major-size waste managementinfrastructures in Spain. It maintains its leadership inthe home Desalination market and is a reference onthe international scenario in this sector. As regardsHydraulic Works, its leadership in this field wasconsolidated in 2005 with the contracts awardedunder the National Irrigation Plan. The rest of itsactivity focused on: supply and purification,

hydroelectric developments, water treatment,automatic information and control systems, andwaste plants.

As a reflection of the burden of the ever-increasinginternational activity, reorganization was carried outin 2005 and two Divisions were established:National and Foreign. In addition, a Departmentdedicated specifically to R&D&I was set up toagglutinate and strengthen the EnvironmentalEngineering activities that are being developed inline with Befesa’s strategy plan.

There are seven regional branch offices for thehome market. These are common for the threecompanies in the Construction sector.

Codesa, a company specialized in water treatment,supply, purification, and hydraulic activities andenvironmental measures for public administrationsand the private sector. Of note is its consolidation asa reference company in the treatment of effluentfrom the paper sector and the strengthening of itscollaboration activities with the environmentalmanagement companies of the RegionalGovernment of Andalusia.

Befesa Fluidos, a company specialized in industrialinput, process and waste waters. It complementsthis activity with others such as powder capturing,handling of fly-ash and slags in Thermal PowerPlants for the private sector.

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Operation. In the water sector, the activity isdeveloped through Befesa’s interest in the companyAgua y Gestión S.A. The companies IniciativasHidroeléctricas S.A., the concessionary of theCerrato (Palencia) working fall operation, andProcesos Ecológicos Vilches S.A., proprietor of thepig slurry treatment plant in the province of Jaen,are also included in this line of activity.

Construction. Main contracts in 2005

Of note was the awarding of the 25-yearconstruction and operation contract for the Minjur(India) seawater desalination plant to theconsortium formed by Befesa and the localconstruction company IVRCL Infrastructures &Projects. It will produce 100,000 m3/day ofdesalinated water to supply Chennai, formerlyMadras. Befesa will execute the design and turnkeyconstruction of the facility for the contractedconsortium.

Through the Spanish consortium Geida, a contractwas awarded for a third seawater desalination plantin Algeria, in Tlemclem-Hounaine. Befesa holds a33% interest in this desalination plant. It will bebuilt for the public enterprise Algerian EnergyCompany (AEC), and will utilize reverse osmosistechnology.

When the three desalination plants contracted inAlgeria in 2004 and 2005, the Chennai plant andthe plants in Spain (Atabal, Carboneras, Cartagenaand Almeria) are taken into account Befesa willdesalinate 900,000 m3 per day, and provide watersupplies for a population of 4,500,000. Estimatesare that earnings from the sale of water from thethree plants in Algeria over their 25-year operatinglife will be in excess of 2,300 million dollars.

Other important contracts:

Befesa Construcción y Tecnología Ambiental

In the irrigation modernization line of business:• The Sur-Andévalo Irrigation Area (Huelva)

expansion and modernization works. The irrigatedarea will increase from 5,000 to 9,000 hectares.

• The 12,836-hectare Marismas del GuadalquivirIrrigation Area (Seville) modernization works.

Hydraulic works:• Construction of ten drinking water regulating

reservoirs for several towns in Ciudad Real, forthe Ministry of the Environment.

Water treatment:• Drinking Water and Sewerage System works in

Ciudad Sandino (Nicaragua), under the EuropeanUnion’s Central America Regional ReconstructionProgram (PRRAC), with capturing reservoirs andinstallations, connection pipelines, sewage systemnetwork and a Served Waters Treatment Plant,capable of treating the sewage from a populationof 47,450.

• The Villafranca and Villa del Río (Cordoba)collectors and STWs, for the RegionalGovernment of Andalusia, to treat the sewagefrom 15,000 inhabitants.

• In Madrid, for Canal de Isabel II, the Meco STWwill be built. It will treat the sewage from apopulation of 58,686.

Information and Control Systems:• Maintenance and Expansion of the river

Guadalquivir Automatic Hydrological InformationSystem (SAIH), for the Ministry of the Environment.

Befesa Fluidos:• In Tarragona port, the supply and installation of

eleven units equipped with pumping andtreatment systems for the bilge and wastewatersoriginating from ship engine maintenanceoperations (classified under the MARPOL,Maritime Pollution legislation).

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• Water and effluent treatment plant for SolúcarEnergía’s PS10 solar power plant, in Seville.

• Lixiviate treatment plant for the city of PalenciaUrban Waste Treatment Center. It will treat10,000 cubic meters per year of a high pollutingload lixiviate.

• Improvement works at the lixiviate treatmentplant at the controlled non-hazardous wastedeposit of Consorcio para la Gestión de losResiduos Sólidos de Asturias (Cogersa).

Codesa:• In the private sector, the contract for a third

1,700 m3/h capacity effluent treatment plant forthe paper sector, for Papelera Guipuzcoana deZicuñaga.

• In the public sector, the most important contractwas for the sewage collectors and WastewaterTreatment Plants (STWs) for the towns of PedroAbad, El Carpio and Adamuz, for a population of14,000.

Other contracts:• Urgent Major Repair Project and conditioning of

the Crevillente (Alicante) drive pipelineelectromechanical elements for the Ministry ofthe Environment. Directorate General for WaterAffairs.

• Contract to improve the sewage system of Pozodel Camino and the Román Pérez district in IslaCristina, Huelva, for the Department of theEnvironment of the Regional Government ofAndalusia. Construction of three collectors thatwill redirect the flows from the area’s fourdrainage basins.

• Copero STW Deodorization System, entry,pretreatment and dehydration work.

Construction. Main works in 2005

Befesa Construcción y Tecnología Ambiental

Desalination:• Completion of the testing and commencement of

operation of the Almeria and Nuevo Canal deCartagena (Murcia) desalination plants, bothutilizing reverse osmosis, with a daily productwater flow of 50,000 and 65,000 m3, respectively,to supply a population of 500,000. One was

constructed for the City Council of Almeria andthe other for the Ministry of the Environment.

Irrigation:• Completion of the construction works on Section B

of the Alguerri-Balaguer Canal (Lerida), for theRegional Government of Catalonia.

• Completion of the modernization of the 5,792-hectare Tajo-Segura de Totana (Murcia) UserCommunity’s irrigation system, for Sociedad Estatalde Infraestructuras Agrarias (SEIASA) del Sur y Este.

• Completion of the modernization, automation andremote control monitoring of the hydraulicinfrastructure of the Sector B-XII 15,000-hectareirrigated area of the Lower Guadalquivir, in Lebrija,Seville.

• Work continued on:- The Modernization and Consolidation of the

Irrigation Systems of the Carlet (Valencia) usercommunity’s (693 hectares) common irrigationditch system, for Sociedad Estatal deInfraestructuras Agrarias (SEIASA) de la MesetaSur.

- The modernization of the Guiamets (Tarragona)reservoir user community’s irrigation system on1,978 hectares, for SEIASA del Nordeste.

- Phase I of the Improvement and Modernizationof the Canal de Babilafuente (Salamanca) usercommunity’s 3,688-hectare irrigated area, forSEIASA del Norte Salamanca.

- The two capturing pumping stations and the firstsection of the drive pipeline for the Segría Sud(6,000 hectares) irrigated area, in Lerida, for Regsde Catalunya, of the Regional Government ofCatalonia.

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Hydraulic works:• The following are under construction:

- The “Villanueva de Córdoba connection with thewater supply system of the Province’s NorthernSector”, awarded by the Regional Government ofAndalusia.

- Supply works for the new urban areas of Malagatown, for the Malaga Municipal Water Company(EMASA).

- Hydroelectric harnessing of the Sahechores (Leon),for the Duero Hydrographic Confederation, withtwo vertical turbines for 40 m3/sec and 21,200kVA.

Water Treatment:• Completion of the Villaviciosa de Córdoba and

Casares (Malaga) wastewater treatment plants(STWs), for the Department of the Environment ofthe Regional Government of Andalusia.

Information and Control Systems:• Work continued on the Automatic Hydrographic

Information System (SAIH) in the river Duerocatchment area.

• Completion of the Regulation and AutomationImprovement Project for the Villoria Canal irrigatedarea, awarded by the Agricultural TechnologicalInstitute of Castilla y Leon.

Waste treatment and management:• Completion of the four urban waste transfer stations

in Guadalajara: Sigüenza, Molina de Aragón,Cifuentes, and Yedra, for the Regional Governmentof Castilla La Mancha.

Befesa Fluidos:• Completion of the supply, installation and testing of

the Effluent Treatment Unit for the Primary Phase ofthe urban waste deposit, for the Ecoparc 3 jointventure, in Sant Adriá del Besos (Barcelona), with a200 m3/day capacity MBR process.

• Works were completed on the Lixiviate TreatmentPlant for the Los Ruices-Limasa EnvironmentalCenter (Malaga), with a 200 m3/day capacity MBRprocess.

• Completion of the following works and installationsfor Aceralia’s factory in Aviles, Asturias:- Treatment plant for the effluents from the slag

quenching area and a treatment plant for thewaters from the B.O.F. for discharge to the publicwaterway through the Steelwork’s perimeter

canal, complying with the legislative parameters inforce.

- Installations for the emptying of the scarfercircuit’s rectangular settler.

• Completion of the effluent treatment plant and thesettler for drawing process water from the riverTormes, for the Biocarburantes Castilla-Leonbioethanol production facility in Babilafuente(Salamanca).

• Completion of the installation of the effluenttreatment plant for Ecoinsa, Barcelona.

Codesa:• The Benamahoma collector and STW, in Grazalema,

Cadiz, for the Department of the Environment of theRegional Government of Andalusia. Capacity for3,000 inhabitants.

• Improvement works in the recreational areas innatural parks in the southern region of Alicante, forValenciana de Aprovechamiento Energético deResiduos, S.A.

• Commissioning of the Ence effluent treatment plantat its Pontevedra cellulose production plant.

• For Gestión de Infraestructuras de Andalucía, work isbeing carried out on the Montemayor (Cordoba)STW, capacity for 5,500 inhabitants, and on thedesign and construction of the 10,867-inhabitantcapacity Fuente Ovejuna STW and collectors(Cordoba).

• Treatment and affected services works in theAznalcollar Environmental Activities Park in Seville,for the Andalusia Development Institute.

• Work is being carried out on the Facinas (TarifaM.D.) collector system and STW project, thedischarges from which affect the Los AlcornocalesN.P., in Cadiz. Capacity for 3,500 inhabitants, for theDepartment of the Environment of the RegionalGovernment of Andalusia.

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• In Tarifa (Cadiz), the Wastewater Treatment Stationis being built for Atlanterra Inmobiliaria S.A, for itshousing estate. Treatment capacity for 22,000inhabitants.

• The Arcas del Villar and Villar de Olalla (Cuenca)STWs are being constructed for the Department ofPublic Works of Castilla La Mancha. Treatmentcapacity for 5,250 inhabitants.

• Treatment, supply and STW network for 4,000inhabitants for the Puente Esuri Complex promotedby Fadesa, in Ayamonte, Huelva.

• Services continued to be provided for the CataloniaWater Agency in accordance with the operationand maintenance concession regime for thetreatment systems in different townships ofBarcelona, Gerona and Tarragona, with an overalltreatment flow of 4,000 m3/day.

Operation. Main activities in 2005

Since 2003, Befesa holds, through BefesaConstrucción y Tecnología Ambiental and Codesa, a43,5% interest in the company Agua y Gestión deServicios Ambientales, S.A.

Over this time, Aguas y Gestión has managed theMunicipal Services of El Ejido (Elsur), Almeria, and theWater Services of Baena, in Cordoba, San José delValle, Barbate and Vejer, in Cadiz, Herrera, in Seville,and La Puebla de D. Fadrique and Ugíjar, in Granada.This means that Agua y Gestión manages the supplyfor more than 150,000 inhabitants in Andalusia.

In addition, in 2005, Agua y Gestión operated theVillarejo de Salvanés, Fuentidueña de Tajo,Villamanrique de Tajo, Estremera and Brea de TajoUrban Wastewater Treatment Plants, in Madrid forCanal de Isabel II, and the Teulada and MorairaSTWs in Alicante, for Entidad de Saneamiento de laGeneralitat Valenciana, all of which wereconstructed by Befesa Construcción y TecnologíaAmbiental.

In another field of activity, in 2005, Agua y Gestiónwas awarded, under a joint venture with BefesaConstrucción y Tecnología Ambiental and Ayesa, thetwo-year (extendible to four) maintenance,monitoring and auscultation services contract foreleven dams in Cordoba and Granada provinces, forthe Guadalquivir Hydrographic Confederation.

The treatment of pig slurry continued through theoperation of the Vilches Treatment Plant (Jaen).

Latin America

Befesa ArgentinaMost important works executed- Conditioning, exportation and final disposal of

Thallium Sulfate and Lindane: 80 drums (9,050 kg)with Thallium Sulfate and Lindane were exportedfor treatment. They had been in storage at the Cityof Buenos Aires Government’s Ecological Reserve.

Works in progress- Oil Company Services

1. Operation of the Alfa Laval Plant and US FilterPlant, La Plata Refinery, Repsol YPF: Two horizontalcentrifuge units belonging to Befesa Argentina arebeing operated. They are installed in the effluenttreatment plant (US Filter) and the Alfa Laval Plantis being operated. They are owned by Repsol YPF.These plants operate 24 hours a day, 365 days ayear.

2. Slop Oil Unit, Tank 265, at Repsol YPF’s La PlataRefinery: The unit installed by Befesa Argentinacontinues to operate. It is for the recovery ofHydrocarbons by means of the three-phaseseparation of the product contained in the 10,000m3 capacity Tank 265. This tank also functions as areceiver of the slop oils from the refinery’s othertanks. Over 16 months Befesa has processed42,531 m3 of product and has delivered to RepsolYPF, as subproducts, 71% of water with HC, 24%of solids and 5% of light HC according tospecification. This facility comprises two HorizontalDecanter centrifuge units and two verticalcentrifuge units, Alfa Laval make, a laboratory foranalysis purposes and workshop modules, adeposit, offices, canteen and changing rooms.

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Transportation, Incineration, Inerting and FinalDisposalThe main customers for special waste transportationand treatment services are:- Automobile Industry: Daimler Chrysler, Ford,

Peugeot – Citroen, Toyota Argentina andVolkswagen, for whom transportation, incinerationand final disposal by safety landfilling services wereprovided for maintenance wastes, paint sludge,cataphoresis sludge, oils, empty containers, etc.

- Oil Industry: Esso, Repsol YPF, Shell CAPSA, forwhom transportation, incineration and finaldisposal by safety landfilling services were providedfor maintenance wastes, coke carbon, insulatingmaterials, spent catalysts, contaminated soils, etc.

- For pharmaceutical laboratories such as BayerArgentina, S.A., Lanxess, S.A., Raffo,Glaxosmithkline Argentina and Cardinal Health,transportation, incineration and final disposal bysafety landfill services were provided for out-of-date medicines, products outside specification, rawmaterial packing, etc.

- For chemical industry companies such as Rohm &Haas, TFL and Procter & Gamble transportation,incineration and final disposal by safety landfillservices were provided for maintenance, effluentplant sludge, raw materials outside specification,etc.

Contracted worksConditioning, consolidation, exportation and finaldisposal of PCB-contaminated material:Befesa Argentina has been awarded contracts toexecute these works for the following companies:Repsol YPF – Comodoro Rivadavia, Sacan, ObrasSanitarias de Mar del Plata and Alpargatas.

Befesa ChileWorks in progress- Design and operation of mining and industrial

sector integral waste management systems: during2005, works continued on the Hazardous and Non-Hazardous Solid, Domestic and Industrial WasteIntegral Handling Contract at the AltonorteSteelworks, owned by Falconbridge Chile Ltda.(formerly Noranda).During 2005, the volume of wastes treatedexceeded 5,000 tons.

- Hazardous and Non-hazardous Wastes TreatmentCenter in Antofagasta. (CMR Norte): In

Antofagasta, Befesa Chile Gestión AmbientalLimitada is currently elaborating the constructionand operation project for the North HazardousWaste Handling Center to be installed in the SierraGorda municipality. It will be the first solidhazardous and non-hazardous waste managementcompany to meet the needs of the mining andindustry sectors and, in general, of the companiesin the northern Segunda Región, while at the samefavoring the conservation of the Environment.This project is being executed on a 40-hectare sitein a deserted area, some 40 kilometers from thenearest town, Baquedano. Its waste processingcapacity will be approximately 53,700 tons per year,of which 43,200 tons per year will be hazardouswaste and the remaining 10,500 tons non-hazardous. The useful life of the facility will be 45years.

Befesa PeruIn 2005, Befesa Peru increased its customerportfolio by more than 50% on the previous yearand currently has more than 113 customers on itsbooks. This number is expected to continue itsupward trend in 2006.During the year, more customers were gained fromthe industrial sector, and they now number 68.We have observed a growing interest from themarket operators (Generators, Administration,Managers), through the number of orders received, inhaving their wastes managed properly.Main Customers: Repsol, Pluspetrol, Antamina,Yanacocha, Petroperú.

Befesa MexicoWithin the activity of Befesa Mexico, the main projectunderway is that for the construction and operationof a hazardous industrial waste treatment andstorage center. This project, which is known asSustainable Development Systems, consists of amaximum capacity 179,000 tons/year waste inerting/stabilization plant, a 2,150 kg/h capacity lixiviatetreatment plant and a storage basin that, in a firstphase, could accommodate more than 500,000 tonsof waste. Construction work is scheduled tocommence in the first quarter of 2006 on the center,which is intended to meet the management needs ofthe industries in the central area of Mexico, once thefinal permits for construction have been obtained,and start-up is scheduled for early 2007.

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ABENGOA Activity Report 200554