AES Begins Construction On $800 Million Cogeneration Facility in Puerto Rico; 454 MW Plant Expected to be Cleanest Coal-fired Plant in the World.

ARLINGTON, Va.--(BUSINESS WIRE)--Dec. 16, 1999--

The AES Corporation (NYSE:AES) announced today the start of construction of the AES Puerto Rico cogeneration facility in Guayama, on the southeast coast of Puerto Rico.

The 454 MW facility will provide electricity under a 25-year power purchase agreement to a Puerto Rico Electric Power Authority (PREPA) and steam to the petrochemical facility of Phillips Puerto Rico Core Inc., a subsidiary of the Phillips Petroleum Company. The AES facility is projected to start operations in mid 2002.

The plant will provide 9 percent of the island's electric generating capacity and will supply approximately 15% of the existing demand for electricity. This will be the first solid-fuel-fired power generating facility on the island. The plant will greatly reduce the electrical system's dependence on fuel oil, which today is 98 percent.

The $800 million facility is designed and will be constructed under a lump-sum engineering, procurement and construction contract by Duke/Fluor Daniel, a joint venture of Duke Energy Corportion and Fluor Corporation. Circulating fluidized bed boilers with additional scrubbing technology on the back-end will be used to achieve extremely low emission levels.

The plant will use recycled water from the neighboring wastewater treatment facility, thereby conserving scarce fresh water resources. In addition, the plant utilizes innovative zero liquid discharge technology.

Sarah Slusser, President, AES Aurora, stated, "This project is a landmark facility in Puerto Rico. It will bring fuel diversity to the island and it is projected to be the lowest marginal cost unit in the electrical system. Coal-fired capacity provides long-term electric rate stability because of global abundance of coal. Furthermore, it will be the cleanest coal-fired facility in the world, with extremely low emissions of sulfur, nitrogen oxides and particulates. We are proud to be serving PREPA and the people of Puerto Rico with this first-rate facility."

Dennis W. Bakke, President and Chief Executive Officer, commented, "The ultimate reason for AES' existence is to help the world's need for safe, clean, reliable and reasonably priced electricity. This plant will fulfill that mission in a remarkable way."

Business development milestones in 1999 include the following:

-- In November, a subsidiary of AES completed the acquisition of the

Drax power station from National Power for approximately $3

billion in cash.

-- In October, AES won a bid to purchase a controlling interest in

Tiete, a generating company in Brazil for approximately $486

million.

-- In October, a subsidiary of AES completed the acquisition of

CILCORP, Inc.

-- In August, AES was selected by the Government of Orissa State in

India to acquire 95% of the equity in the holding company of the

Central Electricity Supply Company of Orissa Limited (CESCO).

-- In August, AES formed a new subsidiary called Power Direct to

compete for electricity and natural gas retail customers in the

United States markets.

-- In August, AES announced that it has won a bid to acquire a

controlling 51% interest in Eletronet in Brazil.

-- In August, AES announced that it has completed the acquisition of

50% of the Empresa Distribuidora de Electricidad del Este, S.A.,

the distribution company providing electricity to approximately

400,000 users in the eastern portion of the Dominican Republic.

-- In July, AES announced that it has completed its acquisition of

NewEnergy by acquiring all of the outstanding shares of

NewEnergy.

-- In June, a subsidiary of AES has completed a $448 million

financing for its 826 MW (net) natural gas-fired combined cycle

power plant in San Nicolas, Province of Buenos Aires, Argentina.

-- In June, a subsidiary of AES has completed a $308.5 million

non-recourse bond financing for the construction of a 705 MW

natural gas-fired combined cycle plant to be located in South

Lebanon Township, Pennsylvania.

-- In June, AES announced that it has assumed management control of

two regional electric distribution companies (REC's) in

Kazakhstan.

-- In May, a subsidiary of AES has completed a (pound)122 million

(approximately $195 million) non-recourse project refinancing for

its 230 MW gas-fired combined cycle power plant in Barry, South

Wales, United Kingdom.

-- In May, a subsidiary of AES agreed to acquire subscription rights

from Eletrobas Centrais Eletricas Brasileiras, S.A., which will

allow it to purchase additional shares in Light Servicos de

Eletricidade S.A. ("Light") and Eletropaulo S.A.

-- In May, a subsidiary of AES completed the purchase of two Ecogen

Energy power plants from the government of Victoria, Australia

for approximately $227 million.

-- In May, a subsidiary of AES completed the financing for a 393 MW

coal-fired plant, AES Fifoots Point, in South Wales, United

Kingdom.

-- In May, AES completed the financing of six power plants it

purchased in New York from NGE Generation, Incorporated ("NGE")

for approximately $953 million.

-- In April, AES Thames reached agreement to a partial prepayment of

future electricity sales with Connecticut Light & Power Company

(CL&P).

-- In February, a subsidiary of AES was selected by the Hungarian

utility, the MVM, to build, own and operate a 190 MW gas-fired

combined cycle power plant, AES Phoenix, in eastern Hungary.

-- In February, a subsidiary of AES executed a Power Purchase

Agreement ("PPA") with Williams Energy Marketing and Trading

Company, a subsidiary of The Williams Company, Inc., for the

entire output of the planned 700 MW AES Ironwood power generating

facility.

AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Canada, China, Dominican Republic, El Salvador, Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, the United Kingdom and the United States.

The company's generating assets include interests in one hundred and nineteen facilities totaling over 42 gigawatts of capacity. AES' electricity distribution network has over 940,000 km of conductor and associated rights of way. In addition, through its various retail electricity supply businesses, the company sells over 110,000 gigawatt hours per year to over 15 million end-use customers.

AES is dedicated to providing electricity worldwide in a socially responsible way.

For more general information visit our web site at www.aesc.com or contact investor relations at [e-mail]. The list aes-pr-announce is an automated mailing list and can be found on the investing page of our web site. Those who subscribe to this list will receive updates when AES issues a press release.