AES and BNDES Reach Agreement for AES to Retain Full Ownership of Its Brazilian Utility, AES Sul.

ARLINGTON, Va. -- The AES Corporation (NYSE:AES) today announced it has reached an agreement with the Brazilian national development bank (BNDES) for AES to retain full ownership of AES Sul, a regulated utility serving approximately one million customers in the state of Rio Grande do Sul in southern Brazil, pending finalization of legal documentation. As part of the agreement, BNDES' call option to acquire a majority economic interest in Sul, previously granted as part of the 2004 restructuring of AES's Brazilian operations, will be terminated.

In addition, AES will pay BNDES $15 million and contribute its 100% interest in AES Infoenergy Ltda., a commercial energy trading company, to Brasiliana Energia S.A. (Brasiliana), a holding company jointly owned by AES and BNDES. AES controls Brasiliana through majority ownership of the company's voting shares, while BNDES owns a majority economic interest of 53.85%, including voting and non-voting preferred shares.

"This is a good agreement for both parties, incorporating our energy trading company, AES Infoenergy, under the Brasiliana umbrella and maintaining our ownership of AES Sul," said Andres Gluski, AES President of Latin America. "We are pleased with BNDES' constructive stance to resolve these issues."

About AES

AES is one of the world's largest global power companies, with 2005 revenues of $11.1 billion. With operations in 26 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide. Our 14 regulated utilities amassed 2005 annual sales of over 82,000 GWh and our 127 generation facilities have the capacity to generate over 44,000 megawatts. Our global workforce of 30,000 people is committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at [e-mail].

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES's current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, continued normal levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth investments at normalized investment levels and rates of return consistent with prior experience. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, including, but not limited to, the risks discussed under Item 1A "Risk Factors" in AES's 2005 Annual Report on Form 10-K. Readers are encouraged to read AES's filings to learn more about the risk factors associated with AES's business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.