AES Takes Stake in Johannesburg Power Station, in an Advisory by Industrialinfo.com.

Business Editors

HOUSTON--(BUSINESS WIRE)--Oct. 5, 2001

The following is an advisory by Industrialinfo.com (Industrial Information Resources Inc.; Houston, Texas). A power purchase deal worth more than US$300 million over 20 years will flow from the sale by the city of Johannesburg, South Africa of a 50% stake of the Kelvin power station to a consortium of the US group AES and a local empowerment company, Global African Power. Due to insufficient funding, the coal-fired 600 mega-watt (MW) Kelvin station has been operating at about half capacity. Now, upwards of US$10 million will be spent on renovating the plant over three years and the consortium will take responsibility for the maintenance budget, which runs at over US$9 million per annum.

The re-furbished station is projected to supply 25% of Johannesburg's peak electricity demand. At present the city purchases 10% of power utility Eskom's power output. The South African National Electricity Regulator granted the first license for independent power production to Kelvin and this will be the first step in introducing limited competition to Eskom which has held a monopoly over electrical power generation. AES, the US$20 billion Virginia based NYSE Fortune 500 company, consider their first South African deal an important step in their African strategy which already sees power interests in Angola, Tanzania, Uganda, Cameroon and Senegal and a gas pipeline and power project in Tanzania.

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