AES announces record earnings for 1996.

ARLINGTON, Va.--(BUSINESS WIRE)--Jan. 30, 1997--

AES increases offer to AES Chigen shareholders

The AES Corporation (NYSE:AES) announced Thursday that net income increased for the twelfth consecutive year to a record $125 million, or $1.62 per share for the year ended Dec. 31, 1996.

This is up 17% from a net income of $107 million for 1995. Revenues increased 23% to $835 million from $679 million for 1995 while income before taxes increased 13% to $185 million.

For the fourth quarter of 1996, net income was $36 million or $0.46 per share, up 29% over the same quarter in 1995.

Dennis W. Bakke, co-founder, president and chief executive officer of AES, commented, "The earnings performance was a great way to celebrate our 15th year in business. Our existing operations performed very well and new business development was extraordinary. Starting 1997 with a winning bid for the 484 MW Merida III combined cycle project in Mexico was also gratifying."

Roger W. Sant, co-founder and chairman of AES stated, "We took giant steps in 1996 toward our goal of being the leading global power company. AES people are well positioned around the world to respond to new market opportunities that seem to open daily. The ownership that has been demonstrated by our talented people has been outstanding."

1996 was an extraordinary development year for AES. Milestones include the following:

-- In October, AES started the construction of a 230 MW gas-fired

combined cycle plant in Barry, South Wales, United Kingdom.

-- In September, AES Chigen funded a 42 MW natural-gas-fired

simple-cycle gas turbine facility in Chengdu City, Sichuan

Province, China.

-- In August, AES and a partner acquired the 4000 MW Ekibastuz

GRES-1 coal-fired power station in Kazakstan.

-- In August, AES Chigen funded Wuhu Zhaoda, a 250 MW coal-fired

facility under construction in Anhui Province, China.

-- In July, AES acquired three power plants totaling 1,281 MW and

a coal mine through the purchase of an 81% share of Tisza Eromu

Rt., an electricity generation company in Hungary.

-- In July, AES won a bid to supply electricity from a new,

greenfield 288 MW simple cycle, gas turbine power station in

Townsville, Queensland, Australia.

-- In May, AES, along with three partners completed the purchase

of a controlling interest in Light, the 3,800 MW integrated

electric utility that serves Rio de Janeiro, Brazil, which

includes 800 MW of generating capacity at four hydroelectric

facilities.

-- In April, AES Chigen funded Jiaozuo Wan Fang, a 250 MW

coal-fired facility which is under construction and located

in Henan Province, China.

-- In April, AES reached agreement to acquire a site in northern

Poland, which included the exclusive right to negotiate a power

sales agreement for a natural-gas-fired project. This step

was the result of a competitive solicitation in 1995.

-- In March, AES purchased AES San Juan, a hydro-thermal company

in Argentina that consists of the 45 MW Ullum hydro facility and

the 33 MW Sarmiento thermal plant.

-- In January, AES closed the financing of the 337 MW PakGen

oil-fired plant in Pakistan.

There was also strong progress in the development of projects that did not reach financial closure during 1996. This group was led by the $650 million coal-fired facility in Puerto Rico, the $1.8 billion coal-fired Yangcheng facility in China and the $75 million simple cycle Mt. Stuart facility in Australia.

Construction proceeded on schedule at the two 337 MW facilities in Pakistan (AES Lal Pir and AES Pak Gen), the 180 MW coal-fired AES Warrior Run facility in Maryland, the 11 MW El Tunal hydro facility in Argentina, and three facilities with a total capacity of 358 MW in China.

AES also announced Thursday that it was increasing its offer to the Class A shareholders of AES China Generating Co. Ltd. by removing the possibility of a downward adjustment to the 0.29 exchange ratio in the proposed amalgamation of AES Chigen with a subsidiary of AES in the event that the price for AES's common stock trades above $50 per share.

Bakke commented, "We continue to feel that a ratio of 0.29 of a share of AES common stock for each share of Class A common stock of AES Chigen is a fair deal for both companies. Since the announcement of the AES-AES Chigen merger, AES's stock price has risen appreciably, and we have decided to remove the requirement that the ratio be adjusted downwards.

"The Class A shareholders now have the possibility of receiving more than $14.50 per share. We look forward to the upcoming shareholder vote and a merger of the two companies."

AES currently owns or has an interest in 33 power facilities totaling over 11,000 megawatts in the United States, Argentina, Brazil, Pakistan, Hungary, Kazakstan, China and the United Kingdom.

In addition to having assets of $3.7 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] -0-

THE AES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED DEC. 31, 1996 AND 1995

---------------------------------------------------------------------
                                                      Change
                Quarter      %     Quarter      %     From
                 Ended      of      Ended      of     Previous   %
               12/31/96     Sales  12/31/95  Sales    Year     Change
---------------------------------------------------------------------
($ in millions, except per share amounts)

REVENUES:
Sales and
 services        $284      100%      $172     100%    $112       65%

OPERATING COSTS AND EXPENSES:
Cost of sales
 and services     186       66%        98      57%     (88)     -90%
Selling, general
 and administrative
 expenses          12        4%        10       6%      (2)     -20%
Provision to
 reduce contract
 receivable        20        7%        --      --      (20)    -100%
                -----               -----             -----

Total operating
 costs and
 expenses         218       77%       108      63%    (110)    -102%
                -----               -----             -----

OPERATING INCOME   66       23%        64      37%       2        3%

NON-OPERATING INCOME
 AND (EXPENSE):
Interest expense  (41)     -14%       (31)    -18%     (10)     -32%
Interest income     8        3%         7       4%       1      -14%
Equity in net
 earnings of
 affiliates        19        7%         5       3%      14      280%
                -----               -----            -----

INCOME BEFORE INCOME
 TAXES AND MINORITY
 INTEREST          52       19%        45      26%       7       16%

Income taxes       14        5%        14       8%      --       --
Minority interest   2        1%         3       2%       1       33%
                -----               -----            -----

NET INCOME        $36       13%       $28      16%      $8       29%
                =====               =====            =====

NET INCOME PER
 SHARE:         $0.46       --      $0.37      --    $0.09       --
                =====               =====           ======


THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DEC. 31, 1996 AND 1995
---------------------------------------------------------------------
                 Year        %      Year        %  Change From
                 Ended       of     Ended       of   Previous   %
               12/31/96     Sales   12/31/95  Sales   Year     Change
---------------------------------------------------------------------
($ in millions, except per share amounts)

REVENUES:
Sales and
 services        $835      100%      $679     100%    $156       23%

OPERATING COSTS AND EXPENSES:
Cost of sales
 and services     502       60%       394      58%    (108)     -27%
Selling, general
 and
 administrative
 expenses          35        4%        32       5%      (3)      -9%
Provision to
 reduce contract
 receivable        20        3%        --      --      (20)    -100%

Total operating
 costs and
 expenses         557       67%       426      63%    (131)     -31%
                 ----               -----             -----

OPERATING INCOME  278       33%       253      37%      25       10%

NON-OPERATING INCOME AND (EXPENSE):

Interest expense (144)     -17%      (127)    -19%     (17)     -13%
Interest income    24        3%        27       4%      (3)     -11%
Equity in net
 earnings of
 affiliates        35        4%        14       2%      21      150%
                -----               -----            -----

INCOME BEFORE INCOME
 TAXES AND MINORITY
 INTEREST         193       23%       167      24%      26       16%

Income taxes       60        7%        57       8%      (3)      -5%
Minority interest   8        1%         3       0%      (5)    -167%
                -----               -----             -----

NET INCOME       $125       15%      $107      16%     $18       17%
               ======               =====             ====

NET INCOME PER
 SHARE:         $1.62       --      $1.41      --    $0.21       --
                =====               =====            =====

CONTACT: The AES Corporation

Kenneth R. Woodcock, 703/522-1315