AES To Acquire 75% Stake In Tbilisi -- Georgia -- Distribution Company.

ARLINGTON, Va.--(BUSINESS WIRE)--Oct. 27, 1998--The AES Corp. (NYSE: AES) announced Tuesday that it won a bid to acquire a 75 percent interest in Telasi, the electricity distribution company of Tbilisi, Georgia, for approximately $25.5 million.

The shares will be acquired from the government, which sold this stake in Telasi pursuant to a competitively bid process. The acquisition is subject to receipt of government approvals and satisfaction of conditions precedent, and is expected to be completed in December, 1998. The sale of this stake in Telasi marks the first significant privatization in the Georgian power sector.

Telasi serves 370,000 industrial, commercial, and residental customers or roughly half of the total power needs of Georgia. The company operates no power plants but rather purchases power from the state-owned utility, Sakenergo, as well as directly from a number of hydro-electric stations. AES will have the right to purchase some of those hydro facilities.

Georgia was one of the wealthiest republics of the former Soviet Union. Georgia's economy is based on tourism, agriculture (mainly citrus, tea, and grapes), and industries such as food processing, mining, and textiles. Its strategic location between the Caspian and Black Seas allows it to serve as a transit center and trade gateway to the West for the neighboring oil rich former Soviet republics.

In 1996 and 1997, Georgia achieved the highest GDP growth rate among former Soviet Republics at 11% per year in real terms.

Paul Stinson, president of AES Silk Road, said, "We are delighted to have the chance to supply electricity to the people of Tbilisi. Furthermore, I want to compliment the people of the government of Georgia and their advisors, Merrill Lynch, who ensured that the privatization process for the electricity industry addressed the issues of concern for strategic investors while also providing a solid base for future development of the electricity market."

Dennis Bakke, president and CEO of AES, stated, "We believe we have the chance to initiate significant reforms in the way this business is run. This should allow us to make a positive contribution to the people and economy of Georgia."

AES' business development successes in 1998 include the following: -0-

--   In January, AES acquired the CLESA distribution company in El
     Salvador for $96.5 million.

--   In January, AES won a bid to sell electricity from a 360 MW
     gas-fired plant in Haripur, Bangladesh.

--   In April, AES Caracoles signed a 40 year concession agreement for
     its 230 MW Caracoles project and has taken over the operation of
     Quebrada de Ullum, an existing 45 MW hydroelectric plant in
     Argentina.

--   In April, AES' affiliate, Light-Servicos de Electricidade,
     acquired Eletropaulo Metropolitana, the distribution company
     serving the city of Sao Paulo, Brazil.

--   In May, AES completed its purchase of three electric generating
     stations from Southern California Edison.

--   In May, AES acquired 90% of Edelap, an electric distribution
     company in the province of Buenos Aires, Argentina.

--   In June, AES raised $173 million of non-recourse project
     financing for the AES Merida III 484 MW gas-fired combined cycle
     power plant in the City of Merida, Yucatan, Mexico.

--   In June, AES won a bid to sell electricity from a 450 MW
     gas-fired plant, Meghnaghat, in Bangladesh.

--   In June, AES completed the $350 million acquisition of Edelap, an
     electric distribution company in the province of Buenos Aires,
     Argentina.

--   In August, AES won a bid to acquire six coal-fired, electric
     generating plants from NGE Generation Inc., an affiliate of New
     York State Electric & Gas Corp. ("NYSEG") for approximately
     $950 million.

--   In October, AES signed a Shareholders Agreement with the
     Government of Orissa as part of the process to acquire a 49%
     share in the Orissa Power Generation Corporation ("OPGC") for
     approximately $144 million

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AES is a leading global power company that currently owns or has an interest in ninety power facilities totaling over 27,000 megawatts in the United States, Canada, Australia, Argentina, Brazil, Dominican Republic, Pakistan, the Netherlands, Hungary, Kazakhstan, Mexico, China and the United Kingdom. AES also distributes electricity to nearly 13 million customers.

In addition to having assets in excess of $9 billion, the Company has more than $5 billion of projects in construction or late stages of development. 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.