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Summary (SWOT analysis, News, Investing Strategies)

The AES Corporation, through its subsidiaries, engages in the generation and distribution of electricity. It operates electric utilities, and sells power to customers in the retail, commercial, industrial, and governmental sectors. The company also generates and sells power to wholesale customers, such as utilities or other intermediaries. In addition, it develops alternative energy, including wind generation, supply of liquefied natural gas, greenhouse gas emission reduction projects, and new energy technologies. Further, it owns and operates water desalination plants in Qatar and Oman. As of December 31, 2006, it held interests in 97 power generation facilities totaling approximately 35 gigawatts of capacity. The company operates in Latin America, North America Generation, Europe, Africa, and Asia. The AES was founded in 1981 and is headquartered in Arlington, Virginia.

Combining deep local insights, global presence and perspective, and a relentless commitment to operational excellence and values, we help communities and countries grow through reliable and responsible electric power. We operate in extremely diverse markets, from the world’s most developed countries to some of the fastest growing economies. Everywhere we operate, we believe that dependable electricity is essential to human progress and to advancing economic growth, public health and security.

As one of the world’s largest power companies, AES owns and operates a diverse and growing portfolio of generation and distribution businesses with the capacity to serve 100 million people worldwide. Our power plants encompass a broad range of technologies and fuel types, from coal to gas to renewables such as wind, hydro and biomass. Our utilities power major cities, from São Paulo to Indianapolis to Douala. Beyond power, we also mine coal, turn seawater into drinking water, and are committing significant resources to alternative sources of energy to ensure a sustainable future. We also are building a climate change business, to develop projects that offset greenhouse gas emissions and produce emissions offset credits.

AES brings the combined expertise of a global force of 28,000 people to each of our businesses. Sharing knowledge among that network is a core component of the way AES does business. It’s how we work, and how we improve. Our customers and business partners count on the unique insights of our people, benefiting from the collective experience of AES. That’s why we deploy networks of experts—circulating ingenuity and best practices throughout our global enterprise to continually bring insights and expertise to each particular challenge.

AES has always been a values-driven company. Rooted in the cultures in which we live and work, we are dedicated to improving the lives of the people we serve. Honoring our commitments to all of our stakeholders—our customers, teammates, communities, owners, suppliers and partners—is explicitly part of our shared values. Our stated values put safety first and stress that all of our people act with integrity and strive for excellence. We also embrace having fun through work. It’s a unique aspect of our culture and people, who bring to work every day a passion and belief that AES can and does make a difference. These values both reflect who we are, and help to shape our future and the world around us.

History

For more than two decades, AES has helped drive energy sector growth and pioneered advances in many markets, generating global industry leadership from innovation and operational excellence.

AES has become a global industry leader. We’ve helped transform communities worldwide through the generation and distribution of electricity. At the forefront of deregulation in the US and then privatization in markets around the world, today we retain our entrepreneurial spirit and proven ability to succeed wherever opportunities arise.

Founded in 1981, AES built its first power plant in 1985 in Texas, which was also one of the first competitive power plants in the United States. During AES’s first five years, we added an additional three plants in three states in the US, and began looking for opportunities to take our financing, construction and operational know-how global.

In the early 1990’s, as markets opened up globally, AES began generating electricity in the United Kingdom, soon followed by Argentina, Pakistan, China, Hungary, Brazil and other emerging markets worldwide. An early mover, in 1998 we acquired a minority stake in a power plant in the first and only generation privatization in India. In West Africa and Central America, we have brought electricity to places that never knew reliable power, while electrifying urban centers, including São Paulo and Indianapolis. We have helped pioneer new pollution control technologies in the US and biomass conversions in Hungary. And we have continued to expand into burgeoning markets worldwide—to Qatar, Oman, Sri Lanka, Cameroon—and more recently to Bulgaria, where we are building our single largest greenfield project investment to date, and the first large scale plant to be built in that country in 20 years.

Today, we are expanding into new lines of business — like wind, climate change and other alternative energy areas — while growing our core electricity business through platform expansions and by continuing to enter new markets, such as southeast Europe. Following the acquisition of significant wind generation assets in the US, we finalized the construction of our first wind farm in Texas in 2006, the same state in which twenty years before we constructed our first power plant. Since then, we have expanded our wind business into the UK, France and Bulgaria — some of the fastest growing markets for wind generation in Europe. Today, we have more than 6,000 MW of wind generation projects in development worldwide.

In 2006, we made a significant investment in a greenhouse gas emission offset project, AES AgriVerde. AES expects to generate 34 million tonnes of greenhouse gas emissions offsets annually by 2012 through the capture of methane and other gases from agricultural waste through this subsidiary. We continue to look for new ways to reduce and offset greenhouse gas emissions, and are evaluating future investments in alternatives such as solar power and wave technologies.

Throughout our history, the people of AES have always stayed at the forefront of change, as a positive force in the energy sector as well as the communities in which we work and live. With significant global reach, deep local knowledge and distinctive operational skills, AES will continue to expand into new energy and infrastructure markets worldwide.

Frequently Asked Questions

1. What does AES do?
We generate and distribute electric power that has the potential to serve 100 million people around the world. We seek to expand our business by maximizing the value of our existing asset base, by developing and building new generation plants, and by acquiring and operating generation and distribution facilities from third parties.

2. What does AES stand for?
The company was originally founded as Applied Energy Services, which was later contracted to AES. Today the company’s legal name is The AES Corporation.

3. What kinds of fuels do you use in your power plants?
We use natural gas, coal, oil and biomass. Some of our plants have the flexibility to burn several fuels. We also harness water flows to create hydroelectric power and wind for wind power. We choose the method that makes the most sense for a particular situation, based on the site, prevailing regulations, fuel availability and other factors.

4. How do you decide where to build a power plant?
We make our decision based on such factors as a region’s need for power, who our partners might be, the regulatory environment, and the potential for operating a profitable enterprise.

5. How does an electric plant work?
Essentially, an electric power plant turns some form of energy into electricity. Natural resources such as gas, coal or oil are burned in a controlled environment (or, for hydroelectric power, flowing water is harnessed) to drive massive machines called turbines. They are connected to the electric generation system that produces the electrical charge. The electric power is then distributed through high-voltage wires to substations, on the way to serving communities, industries and businesses through medium- and low-voltage distribution lines.

6. What is a megawatt (“MW”)?
A megawatt is a million watts, sufficient power to light 10,000 100-watt bulbs, or enough electricity for around 3,000 households.

7. When did AES go public?
AES went public on June 25, 1991.

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