The AES Corporation (AES)

Recent Initiatives

We are developing an Alternative Energy business. Alternative Energy includes strategic initiatives such as wind generation and other renewable energy sources, liquefied natural gas regasification (“LNG”), greenhouse gas emissions offset projects and new technologies. Of these initiatives, we currently only have wind generation facilities that are operational. Our Buffalo Gap wind project, which is located in Texas, began full commercial operations in April 2006. An expansion of Buffalo Gap, called Buffalo Gap 2, is currently under construction. We also acquired wind generation assets in California from Enron Wind Systems. In Europe, we have acquired stakes in wind development businesses in Scotland, France, and Bulgaria.

We currently have three LNG projects that are in pre-construction phases of development. We are also pursuing projects which will allow us to develop greenhouse gas emission offsets. To that end, we have developed a joint venture with AgCert International called AES AgriVerde, which will deploy greenhouse gas emissions reduction technology in selected countries in Asia, Europe and North Africa. Although, Alternative Energy represents a very small portion of our business compared to Utilities and Generation, Alternative Energy is an important initiative in our long-term strategy because we believe it may represent a significant growth opportunity for us.

Some of the important drivers of performance for us developing our alternative energy businesses include continued government support through regulation and incentives, continued progress towards liquid and transparent markets, particularly in the area of greenhouse gas emission credit trading and the successful identification, execution and commercialization of new market opportunities in these nascent markets. While this initiative represents a growth opportunity for us, alternative energy is not material to our financial statements at this time.

Recent Initiatives

We are developing an Alternative Energy business. Alternative Energy includes strategic initiatives such as wind generation and other renewable energy sources, liquefied natural gas regasification (“LNG”), greenhouse gas emissions offset projects and new technologies. Of these initiatives, we currently only have wind generation facilities that are operational. Our Buffalo Gap wind project, which is located in Texas, began full commercial operations in April 2006. An expansion of Buffalo Gap, called Buffalo Gap 2, is currently under construction. We also acquired wind generation assets in California from Enron Wind Systems. In Europe, we have acquired stakes in wind development businesses in Scotland, France, and Bulgaria.

We currently have three LNG projects that are in pre-construction phases of development. We are also pursuing projects which will allow us to develop greenhouse gas emission offsets. To that end, we have developed a joint venture with AgCert International called AES AgriVerde, which will deploy greenhouse gas emissions reduction technology in selected countries in Asia, Europe and North Africa. Although, Alternative Energy represents a very small portion of our business compared to Utilities and Generation, Alternative Energy is an important initiative in our long-term strategy because we believe it may represent a significant growth opportunity for us.

Some of the important drivers of performance for us developing our alternative energy businesses include continued government support through regulation and incentives, continued progress towards liquid and transparent markets, particularly in the area of greenhouse gas emission credit trading and the successful identification, execution and commercialization of new market opportunities in these nascent markets. While this initiative represents a growth opportunity for us, alternative energy is not material to our financial statements at this time.