AES to Acquire Electric Distribution Business in India; Dave McMillen Named to Lead AES' Drax Business in England.

ARLINGTON, Va.--(BUSINESS WIRE)--Aug. 27, 1999--

The AES Corporation (NYSE:AES) announced today that it has been selected by the Government of Orissa State in India to acquire 95% of the equity in the holding company of the Central Electricity Supply Company of Orissa Limited (CESCO).

An investment of approximately $10 million by AES in the holding company will secure a 51% equity interest in CESCO. The remaining 49% equity interest in CESCO would be held by the State Government controlled Grid Corporation of Orissa Limited (GRIDCO). The transaction is subject to certain Government approvals and funding is expected in September.

CESCO serves the eastern and central parts of Orissa, including the communities of Bhubaneshwar, Puri, Dhenkanal and Paradeep. It supplies electricity to more than 500,000 customers in an area with a population of 10,000,000. CESCO has a total network of 28,300 km and an average load demand of 450 MW. Electric power is purchased from GRIDCO.

Shahzad Qasim, Managing Director of AES Oasis, said, "We are very pleased with the acquisition of our first distribution business in India. Orissa is a pioneer in electricity sector reforms in India and is the first state to set up an independent regulatory commission and unbundle generation, transmission and distribution.

Given the present 48 percent losses (18 percent technical and 30 percent non-technical), AES has a great opportunity to make a significant improvement in the efficiency of the business and reliability of service."

Dennis W. Bakke, President and Chief Executive Officer, commented, "This expansion of our business in India is another significant step for AES in the high potential Indian electricity business. The technical condition of this system is good. The World Bank has been actively supporting the upgrade of the CESCO system and we look forward to working with them as we take steps to run this as a business."

Separately, AES announced today that David McMillen has been named to be the leader of the 4,000 MW coal-fired Drax power plant in England, which AES is presently purchasing from National Power. He will become the Co-Manager of the AES Electric group together with Michael Armstrong.

Mr. McMillen is a Vice President of AES, and the current President of AES Shady Point, Inc. in Oklahoma. He has led various AES plants since 1985 and serves as Chairman of the AES Council of Presidents, which consists of the roughly 60 plant leaders in AES.

Dennis Bakke observed, "We are absolutely delighted that Dave has decided to take on this assignment. This demonstrates the importance of the Drax plant to AES that our most experienced operational person is stepping forward to assume this job."

AES is a leading global power company that currently owns or has an interest in one hundred and five power facilities totaling over 32,000 megawatts in the United States, Canada, Australia, Argentina, Brazil, Dominican Republic, Panama, Mexico, Pakistan, India, Bangladesh, the Netherlands, Hungary, Kazakhstan, China and the United Kingdom.

AES also distributes electricity to nearly 14 million customers and is also a retail marketer of heat and electricity. In addition to having assets in excess of $10 billion, the Company has a significant number of projects in construction or development. AES is dedicated to providing electricity worldwide in a socially responsible way.

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