AES Reaches Restructuring Agreement With BNDES; New Company to Be Created with AES and BNDES as Partners.

Business Editors

ARLINGTON, Va.--(BUSINESS WIRE)--Sept. 8, 2003

The AES Corporation (NYSE: AES) announced today that it has entered into a memorandum of understanding with Banco Nacional de Desenvolvimento Economico e Social (BNDES) to restructure the outstanding loans owed to BNDES by several of AES' Brazilian subsidiaries. The restructuring will include the creation of a new company that will hold AES' interests in AES Eletropaulo, AES Uruguaiana and AES Tiete. AES Sul will be contributed upon the successful completion of its financial restructuring. AES will own 50.1%, and BNDES will own 49.9%, of the new company. Under the terms of the agreement, 50% of the currently outstanding BNDES debt of $1.2 billion will be converted into 49.9% of the new company. The remaining outstanding balance of $515 million (which remains non-recourse to AES) will be payable over a period of 10 to 12 years. AES and its subsidiaries will also contribute $85 million as part of the restructuring, of which $60 million will be contributed at closing and $25 million will be contributed one year after closing.

Closing of the transaction is subject to the negotiation and execution of definitive documentation, certain lender and regulatory approvals and valuation diligence to be conducted by BNDES.

Paul Hanrahan, President and Chief Executive Officer of AES, stated, "We are encouraged by the Brazilian government's recent commitments to address the lingering effects of rationing on the sector. In doing so, Brazil is taking a crucial step toward creating a climate that is conducive to new investment. We look forward to working with BNDES."

"This agreement with BNDES places AES' Brazilian businesses on a financially sound footing and allows AES to renew our commitment to doing business in Brazil," said Joseph C. Brandt, Executive Vice President and Chief Operating Officer of AES. "The past eighteen months have been a difficult period for our investments in Brazil, the Brazilian power sector and our relationship with the Bank. With this agreement, we welcome BNDES as our partner and look forward to the shared successes of these businesses."

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain "forward-looking statements" regarding The AES Corporation's business. These statements are not historical facts, but statements that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report on Form 10-K for the most recently ended fiscal year.

AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses.

The company's generating assets include interests in 119 facilities totaling over 46 gigawatts of capacity, in 28 countries. AES' electricity distribution network sells 89,614 gigawatt hours per year to over 11 million end-use customers.

For more general information visit our web site at www.aes.com or contact investor relations at [e-mail].