BELIZE ELECTRICITY LIMITED

BELIZE ELECTRICITY LIMITED INFORMATION CIRCULAR ORDINARY SHARE OFFERING MAY 19, 2006

BELIZE ELECTRICITY LIMITED Registered Office, 2 ½ Miles Northern Highway, Belize City, Belize May 19, 2006 34,377,623 BZ$2.00 Par Value Ordinary Shares The Board of Directors of Belize Electricity Limited ( the Company ) subsequent to an increase in the authorized ordinary share capital of the Company hereby offers ( the Offering ) to shareholders 34,377,623 ordinary shares ( the Shares ) at the par value price of $2.00 per ordinary share. The Offering is for a total of $68,755,246 in aggregate proceeds. All the Shares are hereby being offered in Belize and the proceeds will accrue to the Company. The Shares will not be listed on any stock exchange. Therefore the ability to resell the Shares may, in certain circumstances, be restricted. The Company normally facilitates the buying and reselling of its outstanding ordinary shares. All amounts contained herein are expressed in Belizean currency unless otherwise so indicated. Price: $2.00 per Ordinary share Subscriptions will be received subject to rejection or allotment, in whole or in part, and the right is reserved to close the subscription books at any time without notice. Subscriptions are subject to a minimum subscription of $2.00 for one ordinary share. It is expected that the closing will take place on June 19, 2006, subject to the Company s right to extend such date. Share Certificates will be available for delivery on or about two months after closing. 1

INFORMATION ON THE OFFERING AND THE COMPANY The Share Purchase Offer and Share Purchase Rights On May 16, 2006, shareholders confirmed an increase in the Company s authorized ordinary share capital of 62,000,000 ordinary shares of $2.00 par value (the New Shares ) from 38,000,000 ordinary shares to 100,000,000 ordinary shares. Consequent on this increase in ordinary share capital, the Board of Directors of the Company has resolved that the Company now offer for sale to each shareholder one ordinary share of the New Shares for each ordinary share the shareholder holds as at May 19, 2006. This offer confers on each existing shareholder the right to purchase (the Share Purchase Rights ) the ordinary shares being offered at par value ($2.00 per share). [See Ordinary Share Purchase Offer Subscription Form (Shareholder) and Ordinary Share Purchase Offer Subscription Form (Assignee) attached.] Any existing shareholder may sell or assign all or a portion of its/his or her rights to purchase the shares being offered (the Share Purchase Rights ) to any person or company whether such person or company is an existing shareholder or not, subject to the conditions noted in the paragraphs that follow in this section, provided that any such sale or assignment shall be a private transaction between such parties and the Company shall not be deemed to have made any representations or incurred any obligations under any such private transaction or contract relating thereto. [See Form of Sale/Assignment of Share Purchase Rights attached.] An existing shareholder may decline to purchase all or a portion of the ordinary shares being offered. In the event any existing shareholder does not accept the offer for the purchase of the ordinary shares either in whole or in part, then such ordinary shares shall be available (the Available Shares ) for purchase by other existing shareholders (the Interested Shareholders ). Interested Shareholders must register with the Company their interest in any Available Shares by the closing date. [See Available Shares Interest Form.] Each such Interested Shareholder shall have a pre-emptive right to purchase such portion of the Available Shares as shall ensure that their respective percentages of total issued shareholding of the Company are maintained. In the event an Interested Shareholder decides not to purchase all of the Available Shares to which it/he/she is entitled then the remainder of such shares may be purchased by other Interested Shareholders. The Other Interested Shareholders shall each have a pre-emptive right to purchase such additional portion of the Available Shares as shall ensure that its/his/her respective percentage of the total issued shareholding of the Company is maintained. Any Interested Shareholder may purchase the remaining Available Shares that no Other Interested Shareholder is willing to purchase. Share Purchase Rights not exercised by the closing date (June 19, 2006 or such other date as the Company may appoint) will expire at such closing date. The Board of Directors of the Company reserves the right to accept or decline any share purchase offer subscription not complying with the above conditions. 2

The relevant forms noted above are to be completed and submitted to the Company by the existing shareholders as the situation requires in accordance with the instructions contained in the respective forms and the conditions contained in this circular. The Offering The Ordinary Shares Issue: $2.00 par value Ordinary Shares Amount: 34,377,623 Ordinary Shares for total proceeds of $68,755,246 Price to Shareholder: $2.00 per Ordinary Share Use of Proceeds: The net proceeds will be used by the Company to assist in financing the Company s five-year capital investment plan, to retire debt and to assist in meeting certain operating costs. Currency: The Ordinary Shares are fully Belize Dollar denominated securities. The need for increased capital investment is as a result of economic growth and the Company s continued efforts to improve service. Increased equity is required to enable the Company to proceed with its medium and long term plans which include: (i) (ii) (iii) (iv) Implementation of preventative upgrades to minimize damages and service interruptions from Tropical Storms; Meeting the high demands for expansion of the distribution system; Upgrading of the Transmission System to reduce system losses and improve power quality; and Investing in technology and equipment to improve efficiencies, productivity and services to customers. Plan of Distribution Up to 34,377,623 Ordinary Shares are being offered for sale at a price of BZ$2.00 (US$1.00) per share payable in full on application and submission of the properly completed and executed subscription form ( Ordinary Share Purchase Offer Subscription Form (Shareholder) or Ordinary Share Purchase Offer Subscription Form (Assignee) ) appended to this Information Circular. These Ordinary Shares are being offered by the Company in Belize and are not registered pursuant to requirements of any jurisdiction other than Belize. Applications are prescribed within the body of this Information Circular, and will be made available from offices of the Company located in Corozal, Orange Walk, Belize City, Belmopan, San Ignacio, Dangriga, Independence, Punta Gorda, and San Pedro, the Company s collection agents countrywide and at the Company s website at www.bel.com.bz. The Subscription Form should be completed, filed, signed and dated, and cash in Belize or United States dollars or check for the appropriate amount drawn in Belize dollars on a bank with branches in Belize or a banker s check in United States dollars, and made payable to Belize Electricity Limited should be attached to the Subscription Form. Someone other than the subscriber may execute the Subscription Form if they are authorized to do so, and a power of attorney in respect thereof must accompany the form. The completed Subscription Form, cash or check and power of attorney (if any) should be sent by post or delivered by hand to BEL Ordinary Share Purchase Offer, Securities Officer, Belize Electricity Limited, 3

PO Box 327, 2½ Miles Northern Highway, Belize City. Alternatively, the cash or check can be deposited directly into the Company s appropriate bank account at any of the Bank of Nova Scotia branches countrywide (see Subscription Form) with the subscription form, power of attorney (if any) and copy of deposit slip evidencing deposit of such funds in the Company s bank account sent by post or delivered by hand to BEL Ordinary Share Purchase Offer, Securities Officer, Belize Electricity Limited, PO Box 327, 2½ Miles Northern Highway, Belize City. Additionally, a copy of said documents should be faxed immediately to the Company s headquarters at fax number 501-223-0892. By completing and delivering a Subscription Form each subscriber is making an offer to purchase the number of Ordinary Shares designated for purchase on the Subscription Form, subject to the conditions set out in this document. In addition, each subscriber is authorizing the Company under hand of the Chief Executive Officer, the Secretary or any Director to send a letter of acceptance for the number of Ordinary Shares in respect of which the subscription is made, and a check or cash for any money returnable by post at the subscriber s risk, to the address of the person named in the Subscription Form. Each subscriber also will agree, that the completion and delivery of the Subscription Form constitutes a warranty that any remittance attached thereto will be honored on first presentation, and a warranty that no other application has been made on his/her or its behalf. A shareholder will receive his share certificate within two months after the closing of this offering. Subscriptions are subject to a minimum of one (1) Ordinary Share. Subscriptions must be received on or before the closing date of the offering. Subscriptions will be received subject to rejection and allotment, in whole or in part, and the right is reserved to close the subscription books at any time without notice once the offering is fully subscribed. It is expected that the closing of the offering will take place on 19 th June 2006 or such other date as may be agreed on. Dividend Policy The Company plans to pay quarterly dividends to shareholders. The amount of any dividend so declared will be determined by the Board of Directors on a quarterly basis after reviewing the Company s cash flow, earnings, financial position, debt retirement obligations, covenants and other factors. Principal shareholders and Relationship with the Government of Belize Fortis Inc. of St. John s, Newfoundland, Canada currently holds 68.5% of the issued and outstanding Shares and Belize Social Security Board owns 26.5%. No other single shareholder holds more than 1%. Applicable Law The offering is being conducted in Belize, pursuant to applicable laws therein and subject to that jurisdiction. 4

The Company Belize Electricity Limited is Belize s main commercial transmitter, seller, supplier and distributor of electricity in the country. Aggregate annual energy sold approximates 350,000,000 KWh (Kilowatt Hours) and the Company has over 68,000 customers - residential, commercial, industrial and street light. The Company s aggregate peak demand is currently 63.5 MW (Megawatt). Electricity is supplied to customers either from a 115 KV (Kilovolt) national grid or from one isolated diesel power plant. The national grid receives energy from BEL s diesel generating plants at Belize City and Belmopan along with mobile generating units, a 115 KV interconnection with Comision Federal de Electricidad (CFE), Mexico north of the country and a 115 KV interconnection with Belize Electric Company Limited s (BECOL) two hydro plants in the West of the country - the 25 MW Mollejon hydro plant and the 7.3 MW Chalillo hydro plant. Sales growth over the last 5 years has averaged approximately 9% per annum. The Shareholder is also directed to the 2005 Annual Report for additional information on the operations of the Company. Summary Financial Information and Selected Statistics (In thousands of dollars, except for operating and per unit data) HISTORICAL Years Ended December 31 2005 2004 2003 2002 2001 $ $ $ $ $ Income Statement Data Electricity Revenues 120,540 105,512 101,420 96,017 90,799 Cost of Power 67,573 57,746 53,822 48,816 44,925 52,967 47,766 47,598 47,201 45,874 Other Revenues 4,821 4,655 3,851 3,031 2,629 Operating Expenses 17,700 16,895 16,847 16,020 18,315 Depreciation 9,815 9,670 9,089 10,876 10,323 Finance and other charges 9,303 8,530 10,022 9,012 6,651 Net Earnings Before Taxes 20,970 17,326 15,491 14,324 13,214 Corporate Tax 2,087 1,504 1,412 1,279 1,153 Net Earnings 18,883 15,822 14,079 13,045 12,061 Earnings per Share 0.59 0.53 0.50 0.47 0.44 Balance Sheet Data Current Assets 20,987 20,636 26,220 24,289 25,152 Property, Plant and Equipment 322,163 310,536 296,609 252,658 238,070 Rate Stabilization Account 29,205 13,829 13,578 18,585 11,474 Transmission Rights and Goodwill 1,318 1,471 1,713 1,986 2,258 Total Assets 373,673 346,472 338,120 297,518 276,954 Current Liabilities 62,521 47,330 40,594 43,339 36,749 Long-Term Debt 75,276 89,576 107,465 88,394 88,406 Debentures 56,016 53,062 49,346 38,394 36,615 Consumer Deposits 6,329 5,742 5,340 5,988 5,612 Shareholders Equity 173,531 150,762 135,375 121,403 109,572 Total Liabilities and Shareholders Equity 373,673 346,472 338,120 297,518 276,954 Select Operating Data Sales (MWh) 349,726 329,977 307,553 278,946 256,715 Customers (Number) 68,635 66,081 63,076 59,815 57,083 Net Generation (MWh) 403,823 377,861 347,757 315,244 293,375 Peak Demand (MW) 63.5 61.1 57.4 53.7 49.3 5