AES Completes Financing Agreements for 163 MW Kelanitissa Power Plant in Sri Lanka; Facility is First AES Business in Sri Lanka.

Business Editors

ARLINGTON, Va.--(BUSINESS WIRE)--June 19, 2001

The AES Corporation (NYSE: AES) announced today that its subsidiary, AES Kelanitissa (Private) Limited, signed agreements on June 15, 2001 with the Asian Development Bank (ADB) and ANZ Investment Bank, the investment banking arm of Australia and New Zealand Banking Group Limited (ANZ), for the financing of its $104 million, 163 MW combined cycle diesel-fired power plant in Sri Lanka.

Funding is subject to the satisfaction of certain conditions precedent.

Up to $25 million is provided by ADB as a direct loan and $52 million of commercial loan will be underwritten by ANZ Investment Bank.

A commercial loan for $31 million has the benefit of a Partial Risk Guarantee (PRG) of ADB, which is in turn counter-guaranteed by the Government of Sri Lanka. Political Risk Insurance (PRI) coverage provided by Sovereign Risk Insurance Limited, backs up the remaining $21 million.

The project is the largest ever independent power project in Sri Lanka with non-recourse debt financing package.

AES will own and operate the Kelanitissa plant, which is located within the premises of the existing CEB Kelanitissa Power Complex, located in the northern part of the city of Colombo, Sri Lanka. Electricity will be sold to the Ceylon Electricity Board under a 20-year power purchase agreement.

The Ceylon Petroleum Corporation (an enterprise of the Government of Sri Lanka) will supply low sulfur diesel fuel to the power plant for the term of the power purchase agreement.

Larsen & Toubro (L&T) of India is constructing the plant. L&T has already completed the preliminary site work and commenced piling work at site. Final Notice to Proceed was issued on June 15, 2001. The facility is expected to be in commercial operation in the open-cycle mode by June 2002 and combined-cycle mode by May 2003.

Ravi Chandran, Director of AES Kelanitissa, commented, "This project was awarded and developed in a very transparent manner. The capacity payment offered by AES is the lowest for any thermal power plant in Sri Lanka. With the commissioning of this facility, the Ceylon Electricity Board will retire the existing 50 MW steam-fired plant and turbines and, accordingly, reduce the overall emissions from the Kelanitissa complex substantially."

Dennis W. Bakke, President and Chief Executive Officer of AES, stated, "It gives us great pleasure to be involved with the largest independent power plant in Sri Lanka. This plant will not only provide low-cost power but will also provide a more desirable balance between hydro and thermal power generation in Sri Lanka. We look forward to expanding our business in Sri Lanka.

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

The company's generating assets include interests in one hundred and sixty six facilities totaling over 58 gigawatts of capacity.

AES's electricity distribution network has over 920,000 km of conductor and associated rights of way and sells over 126,000 gigawatt hours per year to over 18 million end-use customers. In addition, through its various retail electricity supply businesses, the company sells electricity to over 154,000 end-use customers.

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

This news release may include forward-looking statements. Actual events and results may differ materially from those projected. Factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, and readers are encouraged to read those filings to learn more about the risk factors associated with AES's businesses.

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