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NOTICE IS HEREBY GIVEN that the Annual General Meeting (AGM) of International Power plc (the Company) will be held at 10.30 am on Wednesday 17 May 2006 at The Lowry Hotel, 50 Dearman’s Place, Chapel Wharf, Manchester M3 5LH for the following purposes:

As ordinary business

1. To receive the Accounts for the financial year ended 31 December 2005 and the Report of the Directors, the Directors’ remuneration report and the report of the auditors on the Accounts and on the auditable part of the Directors’ remuneration report.
2. To re-appoint Bruce Levy as a Director.
3. To re-appoint Mark Williamson as a Director.
4. To re-appoint Tony Isaac as a Director.
5. To declare a final dividend of 4.5p per Ordinary Share in respect of the financial year ended 31 December 2005.
6. To re-appoint KPMG Audit Plc as auditors of the Company to hold office from the conclusion of the AGM to the conclusion of the next general meeting at which accounts are laid before the Company and to authorise the Directors to set their remuneration.

As special business

7. To consider, and if thought fit, pass the following as an Ordinary Resolution: That the Directors’ remuneration report for the financial year ended 31 December 2005 be approved.
8. To consider and, if thought fit, pass the following as an Ordinary Resolution: That the Directors be generally and unconditionally authorised pursuant to and in accordance with Section 80 of the Companies Act 1985 (the Act) to exercise all the powers of the Company to allot relevant securities (as defined in Section 80(2) of the Act) up to an aggregate nominal value of £245,947,373. The authority hereby conferred shall expire at the conclusion of the AGM of the Company to be held in 2007 or on 17 August 2007, whichever is the earlier, unless such authority is renewed prior to such time. Under the authority hereby conferred, the Directors may during such period make offers and agreements which would or might require relevant securities to be allotted after the expiry of such period and the Directors may allot relevant securities in pursuance of that offer or agreement notwithstanding that the authority conferred hereby has expired.
9. To consider and, if thought fit, pass the following as a Special Resolution:
   That, subject to the passing of Resolution 8, the Directors shall be authorised, pursuant to Section 95(1) of the Act, to allot equity securities (as defined in Section 94(2) of the Act) wholly for cash pursuant to the general authority conferred by Resolution 8, as if Section 89(1) of the Act did not apply to any such allotment provided that such power shall be limited to:
   1. the allotment of equity securities in connection with a rights issue in favour of the holders of ordinary shares in the Company (the International Power Ordinary Shares) on the register of members at such record date or dates as the Directors may determine for the purpose of the issue, made in proportion (as nearly as may be) to their respective existing holdings of such shares, subject only to such exclusions or other arrangements as the Directors may deem necessary or expedient to deal with fractional entitlements or legal or practical problems arising in any overseas territory, or by virtue of the International Power Ordinary Shares being represented by depositary receipts or uncertificated accounts, or the requirements of any statutory or regulatory body or stock exchange or any other matter whatsoever;
   2. the allotment (otherwise than pursuant to paragraph (i) above) of equity securities up to an aggregate nominal value of £36,892,106.
      The authority hereby conferred shall expire at the conclusion of the AGM of the Company to be held in 2007 or on 17 August 2007, whichever is the earlier, unless such authority is renewed prior to such time. Under the authority hereby conferred the Directors may during such period make offers or agreements which would or might require equity securities to be allotted after the expiry of such period and the Directors may allot equity securities in pursuance of any such offers or agreements notwithstanding that the power conferred hereby has expired. The power conferred on the Directors by this resolution shall also apply to a sale of treasury shares, which is an allotment of equity securities by virtue of Section 94(3A) of the Act.
10. To consider and, if thought fit, pass the following as a Special Resolution: That the Company is generally and unconditionally authorised to make one or more market purchases (within the meaning of Section 163(3) of the Act) of International Power Ordinary Shares provided that:
    1. the maximum aggregate number of International Power Ordinary Shares hereby authorised to be purchased is 147,568,424 representing approximately 10% of the issued share capital as at 6 March 2006;
    2. the minimum price which may be paid for an International Power Ordinary Shares is 50p per share which amount shall be exclusive of expenses; and
    3. the maximum price which may be paid for an International Power Ordinary Share is an amount (exclusive of expenses) equal to 105% of the average of the middle market quotations for an International Power Ordinary Share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the International Power Ordinary Share is purchased.
    
    The authority hereby conferred shall expire at the conclusion of the AGM of the Company to be held in 2007 or on 17 August 2007, whichever is the earlier, unless such authority is renewed prior to such time. Under the authority hereby conferred, the Company may, before the expiry of such authority, conclude contracts to purchase International Power Ordinary Shares which will or may be completed wholly or partly after the expiry of such authority, and may make purchases of International Power Ordinary Shares in pursuance of any such contracts
    as if the authority hereby conferred had not expired.
11. To consider and, if thought fit, pass the following as a Special Resolution:
    That the Articles of Association of the Company be amended by the deletion of Article 153 and the insertion of a new Article 153 as follows: 153 “Indemnity of officers and power to purchase insurance
    1. To the extent permitted by the Acts and without prejudice to any indemnity to which he may otherwise be entitled, every person who is or was a Director or other officer of the Company (other than any person (whether or not an officer of the Company) engaged by the Company as auditor) shall be and shall be kept indemnified out of the assets of the Company against all costs, charges, losses and liabilities incurred by him (whether in connection with any negligence, default, breach of duty or breach of trust by him or otherwise) in relation to the Company or its affairs, provided that such indemnity shall not apply in respect of any liability incurred by him:
       1. to the Company or to any associated company; or
       2. to pay a fine imposed in criminal proceedings; or
       3. to pay a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (howsoever arising); or
       4. in defending any criminal proceedings in which he is convicted; or
       5. in defending any civil proceedings brought by the Company, or an associated company, in which judgment is given against him; or
       6. in connection with any application under any of the following provisions in which the court refuses to grant him relief, namely:
          
          1. section 144(3) or (4) of the Act (acquisition of shares by innocent nominee); or
          2. section 727 of the Act (general power to grant relief in case of honest and reasonable conduct).
    2. In article 153(A) (iv), (v) or (vi) the reference to a conviction, judgment or refusal of relief is a reference to one that has become final. A conviction, judgment or refusal of relief becomes final:
       (i) if not appealed against, at the end of the period for bringing an appeal, or
       (ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

       An appeal is disposed of:
       (1) if it is determined and the period for bringing any further appeal has ended; or
       (2) if it is abandoned or otherwise ceases to have effect.

    3. In article 153, “associated company”, in relation to the Company, means a company which is a subsidiary of the Company, or a holding company of or a subsidiary of any holding company of the Company.
    4. Without prejudice to article 153(A) or to any indemnity to which a Director may otherwise be entitled, and to the extent permitted by the Act and otherwise upon such terms and subject to such conditions as the Board may in its absolute discretion think fit, the Board shall have the power to make arrangements to provide anyone who is or was a Director with funds to meet expenditure incurred or to be incurred by him in defending any criminal or civil proceedings or in connection with an application under section 144(3) or (4) of the Act (acquisition of shares by innocent nominee) or section 727 of the Act (general power to grant relief in case of honest and reasonable conduct) or to enable any such person to avoid incurring any such expenditure.
    5. Where at any meeting of the Board or a committee of the Board any arrangement falling within paragraph (D) above is to be considered, a Director shall be entitled to vote and be counted in the quorum at such meeting unless the terms of such arrangement confers upon such Director a benefit not generally available to any other Director; in that event, the interest of such Director in such arrangement shall be deemed to be a material interest for the purposes of article 107(C) and he shall not be so entitled to vote or be counted in the quorum.
    6. Subject to the Acts, the Board may exercise all the powers of the Company to purchase and maintain insurance for the benefit of a person who is or was:
       (i) a Director, alternate Director, secretary or auditor of the Company or of a company which is or was a subsidiary undertaking of the Company or in which the Company has or had an interest (whether direct or indirect); or
       (ii) a trustee of a retirement benefits scheme or other trust in which a person referred to in sub-paragraph F(i) above is or has been interested, indemnifying him and keeping him indemnified against liability for negligence, default, breach of duty or breach of trust or other liability which may lawfully be insured against by the Company.”
12. To consider and, if thought fit, pass the following as an Ordinary Resolution:
    That Rule 2.7 of the International Power plc 2002 Performance Share Plan adopted by the Company on 23 May 2002 be replaced by the following: “2.7 The number of shares which may be awarded to any person in any financial year shall not exceed such number as has a market value equal to 200 per cent of his salary”.

Explanatory notes

The formal Notice of the 2006 AGM is set out above. The Notice asks International Power shareholders to approve a number of items of business. For your information, the explanatory notes below summarise the purpose of each Resolution to be voted on by International Power shareholders at this year’s AGM.

Resolution 1: To receive the Annual Report and Accounts

The Chairman will present the Report and Accounts for the year ended 31 December 2005 to the meeting. These accounts were sent to shareholders in April 2006.

Resolutions 2 - 4: Re-appointment of Directors

In accordance with the Company’s Articles of Association, as a Director appointed since the 2005 AGM, Mr Bruce Levy will be standing down and offering himself for re-appointment by International Power shareholders. Bruce Levy was appointed an Executive Director on 1 June 2005. He is the Regional Director of North America. In addition, Mark Williamson and Tony Isaac are the Directors who will be retiring by rotation this year and are standing for re-appointment in accordance with the Company’s Articles of Association. Mark Williamson is the Chief Financial Officer of International Power plc. Tony Isaac is a Non-Executive Director, the Senior Independent Director and Chairman of the Audit Committee. Brief details of all the Directors appear on page 19 of the Summary Annual Report and pages 44 and 45 of the Annual Report.

Resolution 5: Dividend

The Directors have proposed a final dividend of 4.5p per Ordinary Share. If approved at the AGM, the dividend will be paid on 23 June 2006 to members on the register as at the close of business on 26 May 2006.

Resolution 6: Re-appointment of auditors

This resolution relates to the re-appointment of KPMG Audit Plc as the Company’s auditors to hold office until the next AGM of the Company, and to authorise the Directors to set their remuneration. The Directors have delegated the responsibility of setting the auditors’ remuneration to the Audit Committee of the Board.

Resolution 7: Approval of the Directors’ remuneration report

In accordance with the Directors’ Remuneration Report Regulations 2002, shareholders are asked to approve the Directors’ remuneration report and policy set out on pages 64 to 75 of the Annual Report, a summary of which is set out on pages 20 to 22 of the Summary Annual Report.

Resolution 8: General authority to allot shares

As required by the Act, this resolution, to be proposed as an Ordinary Resolution, relates to the grant to the Directors of authority to allot unissued International Power Ordinary Shares for a period of one year. In accordance with best practice, if approved, this authority is limited to a maximum of 491,894,746 shares, which is equivalent to one third of our issued share capital as at 6 March 2006. The Directors have no present plans to issue International Power Ordinary Shares using this authority. The authority granted under this resolution will expire at the 2007 AGM or on 17 August 2007, whichever is the earlier. This authority replaces the existing authority given at the AGM in May 2005.

Resolution 9: Disapplication of pre-emption rights

Should the Directors decide to allot unissued International Power Ordinary Shares or sell International Power Ordinary Shares held in treasury for cash, the Act requires that these shares are offered first to shareholders in proportion to their existing holdings. This is known as shareholders’ pre-emption rights. There may be occasions, however, when in order to act in the best interests of the Company, the Directors need the flexibility to allot shares for cash without regard to this requirement. Therefore this Resolution, to be proposed as a Special Resolution, seeks International Power shareholder authority to enable the Directors to allot, or sell out of treasury, a limited number of International Power Ordinary Shares, namely up to 73,784,212 International Power Ordinary Shares, which is equivalent to 5% of our issued share capital as at 6 March 2006, without such International Power Ordinary Shares first being offered to International Power shareholders.

Resolution 10: Authority to purchase own shares

In certain circumstances it may be advantageous for the Company to purchase International Power Ordinary Shares in the market in accordance with the Act. This resolution, to be proposed as a Special Resolution, seeks International Power shareholder authority to renew the Company’s authority to purchase International Power Ordinary Shares in the market. The maximum number of shares which can be purchased is 147,568,424 equivalent to 10% of our issued share capital as at 6 March 2006. Any International Power Ordinary Shares purchased would be thereby cancelled or held in treasury at the Directors’ discretion. The Directors intend to exercise this authority only where, in the light of market conditions at the time, they believe that a purchase of shares would result in an increase in earnings per share and that it would be in the best interests of International Power shareholders as a whole. The authority sought under this resolution will expire at the 2007 AGM or on 17 August 2007, whichever is the earlier. As at 6 March 2006, there were in total 130,378,456 warrants and options outstanding to subscribe for equity shares of the Company which together represent 8.84% of the Company's issued share capital. These warrants and options arise out of the outstanding amounts of the 2023 Convertible Bond (90,269,872 Ordinary Shares ( representing 6.12% of the current issued share capital)) and options outstanding under the Company's employee share option plans (40,108,584 Ordinary Shares (representing 2.72% of the current issued share capital)). If the authority to purchase the Company's Ordinary Shares were to be exercised in full, these warrants and options would represent 9.81% of the Company's issued share capital.

Resolution 11: Amendment to the Articles of Association – Directors’ and Officers’ indemnities

An amendment to the Act, which came into force on 6th April 2005, permits companies to indemnify their directors and officers against liabilities (including against legal costs) to a greater extent than was previously possible. This amendment was introduced by the Government following its consultation process in respect of director and auditor liability and addresses concerns raised in that process that exposure to liabilities arising from legal action against directors by third parties and the cost of lengthy court proceedings were adversely affecting the recruitment and behaviour of directors. The Board believes it is in the interests of the Company to take advantage of this amendment and it is therefore proposed to adopt a new Article 153 of the Company’s Articles of Association to give the Directors and officers the benefit of the new indemnity provisions to the extent permitted by the Act (as amended).

Resolution 12: Amendment to the rules of the 2002 Performance Share Plan (the Plan)

The Remuneration Committee has recently carried out a review of Directors’ remuneration, details of which are set out in the Directors’ remuneration report. The proposed amendment to the rules of the Plan is a direct result of this review. It increases the maximum annual level of an award under the plan to 200% of salary, from the previous limit of 100%. It also deletes the power for making awards pursuant to the Plan in exceptional circumstances above the maximum.

Recommendation
The Board unanimously recommends International Power shareholders to vote in favour of resolutions 1-12.

Please note:

1. International Power shareholders entitled to attend and vote at the AGM are entitled to appoint one or more proxies to attend and, on a poll, to vote in their place. A proxy need not be an International Power shareholder.
2. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those people registered as shareholders in the register of members of International Power as at 6.00 pm on Monday 15 May 2006 shall be entitled to attend and to vote at the AGM in respect of the number of shares registered in their name at that time. Changes to entries on the register of members after 6.00 pm on Monday 15 May 2006 shall be disregarded in determining the rights of any person to attend or vote at the AGM.
3. The Register of Directors’ interests in the share capital of the Company and copies of Directors’ service contracts are available for inspection at the registered office of International Power plc during normal business hours on any day (except Saturdays, Sundays and public holidays) from the date of this Notice, and at the place of the AGM from 9.30 am on the day of the AGM until the conclusion of the AGM.

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