Electricity was first made available in Argentina in 1887 with the first public street lighting in Buenos Aires. The Argentine government\\\'s involvement in the electricity sector began in 1946 with the creation of the General Directorate of Electric Power Plants of the State to construct and operate electricity generation plants. In 1947, the Argentine government created Water and Electricity, or AyEE, to develop a system of hydroelectric generation, transmission and distribution for Argentina.

In 1961, the Argentine government granted a concession to the Italian-Argentine Electricity Company, or CIADE, for the distribution of electricity in a part of the City of Buenos Aires.

In 1962, the Argentine government granted a concession formerly held by the Argentine Electricity Company, or CADE, to Electricity Services of Greater Buenos Aires, or SEGBA, for the generation and distribution of electricity to parts of Buenos Aires. In 1967, the Argentine government granted a concession to Hidroeléctrica Norpatagónica S.A. (Hidronor) to build and operate a series of hydroelectric generation facilities. In 1978, CIADE transferred all of its assets to the Argentine government, following which CIADE\\\'s business became government-owned and operated.

At the end of 2001 and beginning of 2002, Argentina experienced an unprecedented crisis that virtually paralyzed the country\\\'s economy through most of 2002 and led to radical changes in government policies.

The distribution system of medium/low voltage was comprised of 13,660 transformers of medium/low voltage, representing 4,767 MVA of transformer capacity, 8,795 kilometers of medium-voltage power lines 33 and 13.2 kV and 23,726 kilometers of low-voltage power lines 380 V.

The Company’s transmission and sub-transmission system (the HV system) forms, together with the Edesur and Edelap systems, the Greater Buenos Aires (GBA) system. The GBA system is operated by the Sociedad Anónima Centro de Movimiento de Energía (SACME), of which Edenor and Edesur own 50% of the shares.

SACME is responsible for the management of regional high-voltage distribution in the greater Buenos Aires metropolitan area, coordinating, controlling and supervising the operation of the generation, transmission and sub-transmission network in the City of Buenos Aires and the greater Buenos Aires metropolitan areas, including coordination with Sistema Interconectado Nacional (the National Network System or NIS) in the Edenor and Edesur concession areas. SACME also represents its shareholders in the control of distribution for those concession areas.

The Company distributes energy from the sub-stations of high/medium voltage through the primary 13.2kV and 33kV system to a secondary 380/220 V low-voltage system. The Company’s distribution network, consisting of several transformers, power lines and substations, distributes the electricity to final users with varied voltages depending on the requirements of end users. Certain customers, however, are supplied with power at significantly higher voltages.

Electric power purchases increased 5.5% to Ps. 799.1 million for the year ended December 31, 2006 from Ps. 757.7 million for the year ended December 31, 2005.

Gross margin increased 14.8% to Ps. 579.3 million in the year ended December 31, 2006 from Ps. 504.5 million in the year ended December 31, 2005.

Transmission and distribution expenses increased 4.6% to Ps. 362.1 million in the year ended December 31, 2006 from Ps. 346.1 million in the year ended December 31, 2005.

Net income was Ps. 293.1 million for the year ended December 31, 2006, compared to net loss of Ps. 149.6 million for the year ended December 31, 2005.