AES Chigen announces funding of gas-fired power project in Chengdu, Sichuan Province.

BEIJING--(BUSINESS WIRE)--Sept. 24, 1996--AES China Generating Co. Ltd. (NASDAQ: CHGNF) ("AES Chigen") Tuesday announced the funding of Chengdu AES Kaihua Gas Turbine Power Company Ltd. ("Kaihua"), a joint venture organized to construct, own, and operate a natural gas fired simple cycle gas turbine facility with a net capacity of 42 MW located in Chengdu City, Sichuan Province.

The joint venture partners include AES Chigen (35%), Chengdu Huaxi Power Holding Company (Group) Ltd. (25%) ("Huaxi"), a company formed by 15 state-owned enterprises specifically to acquire power from independent producers, China National Aero-Engine Corp. (30%) ("CAREC"), a company which concentrates on the gas turbine aeroderivative generation business, and Chengdu Huachuan Petroleum and Natural Gas Exploration and Development Company (10%) ("Huachuan"), a company engaged in natural gas development and sales. AES Chigen is committed to fund approximately US$18 million.

Kerry Yeager, vice president of AES Chigen, commented, "We are pleased about this opportunity to provide electricity using clean burning, efficient gas turbine technology. The accelerated construction schedule will enable Kaihua to provide power to the City of Chengdu in time to meet its needs in the dry season.

"The size of the project is designed to be able to grow with Chengdu through a combined cycle expansion as the need for power increases. We look forward to continuing to provide cost effective and environmentally clean electricity generation to the people of Chengdu."

Dennis Bakke, president and chief executive officer of The AES Corporation, added, "Kaihua is a prime example of the kind of cooperation between industry and government that make Chengdu City a good place for business. This is AES Chigen's second project in Sichuan Province where the supportive environment for large infrastructure investment enables companies to realize developments quickly.

"We are pleased to be able to broaden our relationship with CAREC through a second project and look forward to continuing joint development with them. We are especially excited about our new partnership with Huaxi and Huachuan. These energy companies will be part of the future emerging market economy in China and should enable Kaihua to expand easily as the power demand increases."

Paul Hanrahan, president and chief executive officer of AES Chigen, stated, "This has been a very successful year for AES Chigen. In addition to the closing of the 42 MW gas-fired Kaihua project in Chengdu, we have had several significant accomplishments in this fiscal year, including:

-- funding of the 45 MW coal-fired Fuling Aixi project in Fuling Prefecture, Sichuan Province. This project is under construction and will utilize an environmentally advanced circulating fluidized bed ("CFB") boiler to burn local high sulfur coal. This project is expected to enter commercial operation by mid-1998.

-- funding of the 250 MW coal-fired Jiaozuo Wan Fang project in Jiaozuo City, Henan Province. The project is under construction and is expected to place the first 125 MW unit in commercial operation by the third quarter of 1997 and the second unit by the second quarter of 1998.

-- financial closing of a US$65 million project finance loan for the 250 MW coal-fired Wuhu Shaoda project in Wuhu City, Anhui Province. The first 125 MW unit of this project successfully completed performance testing and entered commercial operation in September. The second 125 MW unit is expected to enter commercial operation by the second quarter of 1997.

-- completion of construction of the 15 MW Yangchun Fuyang diesel generation project, in Yangchun City, Guangdong Province. This project entered commercial operation in April.

-- completion of the first 10.5 MW unit of the 26.2 MW Xiangci-AES hydro power project in Cili County, Hunan Province. The first unit has been in operation since May along with the existing 5.2 MW facility. The second 10.5 MW unit is expected to enter commercial operation in the fourth quarter 1996.

-- completion of construction of the 63 MW combined cycle operation of the Wuxi-AES-CAREC/Zhonghang facilities in Xishan City, Jiangsu Province. The 48 MW simple cycle gas turbine has been in operation since March 1996 and the combined cycle steam turbine completed performance testing in September.

-- execution of the Joint Venture Contract for the 2100 MW minemouth coal-fired Yangcheng project in Yangcheng City, Shanxi Province. While several project contracts remain to be finalized, this is a very significant achievement for the project.

"These accomplishments, along with substantial progress which has been made in the development of several other combined cycle power projects, have made 1996 a very important year in the development of AES Chigen."

AES Chigen, an affiliate of The AES Corporation, a U.S. corporation based in Arlington, Va., develops, owns and operates power generation facilities in the People's Republic of China. It currently has investments in seven projects in China representing net capacity of 691 megawatts.

CONTACT: AES Corp., Arlington

Kenneth R. Woodcock, 703/522-1315

or

AES China Generating Co. Ltd.

Hong Kong Contact:

Jeffery Safford, 011 852 2842 5111

or

Beijing Contact:

Paul Hanrahan, 011 8610 6508 9619