AES CORPORATIONAES Alternative Energy Strategy

William LuraschiExecutive Vice President, Business Development

December 11, 2006

1www.aes.com

Safe Harbor Disclosure

Certain statements in the following presentation regarding AES’s business operations may constitute “forward looking statements.” 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 or better 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 from investments at investment levels and rates of return consistent with prior experience. For additional assumptions see the Appendix to this presentation. 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 the Company’s 2005 Annual Report on Form 10-K as well as our other SEC filings. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

2www.aes.com

AES Alternative Energy Strategic Overview

(1) Non-GAAP financial measure. See Appendix.

Contains Forward Looking Statements

AES Alternative Energy RoleAES 2008 TargetAES Goals

Financial goals

Revenue growth

Gross margin growth

Earnings per share growth

ROIC improvement (1)

Cash flow growth

Subsidiary distributions (1)

Restructuring opportunities

Growth goals

Platform expansion

Greenfield investment

Privatization/M&A

--

$3.5 Billion

13-19% per year

11%

$2.6-2.9 Billion

--

--

--

--

--

Above Average

Above Average

Above Average

Near-term Dampening

Above Average

Retain Cash for Growth

Not Applicable

Significant Opportunities

Significant Opportunities

Significant Opportunities

3www.aes.com

The Case for AES Alternative Energy

Energy demand increasingEnergy securityPublic policyTechnology

Alternative energy mission

To be a leader in:Providing energy derived from alternative sources that reduce dependence on traditional fuel and power suppliesInvesting in developing sectors and technologies, delivering high return, rapid growth, and superior shareholder value

Global platformGreenfield developmentProject structuring expertiseCulture

Why alternative energy?

Why AES?

Contains Forward Looking Statements

4www.aes.com

AES Alternative Energy Vision

Wind Generation

AES Alternative

Energy

Geothermal

Ethanol

Emerging Technology

Coal-to-Liquids

Biodiesel

Biomass

Solar

CarbonOffsets

LNG Regasification

Current Businesses

Businessesunder

Development

Contains Forward Looking Statements

5www.aes.com

0

100

200

300

400

500

600

700

2002 2006 2010 2014 2018

Energy Growth by Region

North America

Europe & Africa

Latin America

Asia

World Total Energy Consumption 2002-2020Quadrillion Btu

1.3%

1.5%

2.3%

3.5%

Annual Growth Rate

50% increase by 2020

Source: US Department of Energy.

Contains Forward Looking Statements

2020

6www.aes.com

New Investment OpportunitiesContains Forward Looking Statements

Source: CERA.

Global Energy Production 2005-2030Quadrillion Btu Non-hydroelectric renewables

Hydro

Coal

LNGNon-traditional liquids

Gas

Conventional oil

Nuclear

2005 2010 2015 2020 2025 2030

0

100

200

300

400

500

700

600

7www.aes.com

Select New Investment Opportunities: US

Geothermal

Municipal solid waste

Biomass

Solar

Wind

US Renewable Generation 2006-2030 (Excluding Hydro)Billion Kilowatthours

Contains Forward Looking Statements

2030

1.0%

4.9%

6.7%

8.0%

Annual Growth Rate

3.8%

0

50

100

150

200

250

20262021201620112006

Source: EIA.

8www.aes.comSource: CERA.

Contains Forward Looking Statements

Select Investment Opportunities: EU

European Union 2010 Renewable Electricity TargetsPercentH

unga

ry

Belg

ium

Pola

nd

Cze

ch R

epub

lic

Net

herla

nds

UK

Ger

man

y

Irela

nd

Gre

ece

Fran

ce

Italy

Den

mar

k

Spa

in

Slo

vaki

a

Finl

and

Por

tuga

l

Swed

en

Aus

tria0

20

40

60

80

100

EU Average21%

9www.aes.com

Saudi Arabia

Energy Security

Medium RiskMedium - Low RiskLow Risk

High RiskMedium - High Risk

Sources: CERA, AON, BP and EIA.(1) OPEC member.

Top 9 Oil Reserves: Proven and Potential Billion Barrels

Rank Country 2005 2015

1 Saudi Arabia (1) 12.7 13.02 Russia 9.6 11.53 Iran (1) 4.3 5.74 Iraq (1) 2.6 5.55 Canada 3.5 5.3

Rank Country 2005 2015

6 Venezuela (1) 3.0 4.57 UAE (1) 3.1 3.98 Kuwait (1) 2.9 3.79 Nigeria (1) 2.9 3.610 Kazakhstan 1.2 3.1

Contains Forward Looking Statements

Oil Production Capacity - Million Barrels per Day

USA 105

97 Venezuela

126

98

UAE

94

142Iran

157Iraq

346

Nigeria 67

Russia

Kuwait

10www.aes.com

Changing Environmental Regulations

Renewable production tax credits

RPScommitments:23 US states +

DC

US Energy Policy Act of 2005

Mercury standards

Waste disposal programs

SO2 and NOXprograms

EUETS

Particulate emissions

limits

Ethanolproduction credits

European renewable operating

credits

Global clean water initiatives

Australian GHG program

Kyoto Protocol:

163 countries

Create opportunities, especially in the areas of renewables and carbon offsets.

Contains Forward Looking Statements

11www.aes.com

0

3

6

9

12

15

18

21

Coal Gas IGCC Oil Nuclear Geo-thermal

Wind Biomass Solar

US 2005 Production CostCents/kWh

Advances in Technology

(1) Base costs include fixed and variable costs except carbon offset cost, less any production tax credit or subsidy.Sources: CERA, EIA, AWEA.

Contains Forward Looking Statements

Base costs (1)

High fuel price

Potential CO2 offset cost

Low capacity factor (wind)

Production tax credit

Development/construction contingency

12www.aes.com

0

200

400

600

800

1,000

1,200

1,400

Announced Capital Investments

Announced Capital Investments (1)

$Millions

Wind LNGClimate Change

AnnouncedInvestments(1) Includes all sources of funds.

WindPurchase of SeaWest, WEL, Innovent, California assets, KavarnaDevelopment and construction of Buffalo Gap 1 and 2

Carbon Offsets9% Equity stake in AgCert (AGC: LN)Up to $325 MM committed to AES AgriVerde (joint venture with AgCert)Forward CER purchases

LNGDevelopment costs including land acquisition

Contains Forward Looking Statements

13www.aes.com

Significant Ten Year Development Opportunities

(1) Includes all sources of funds, and is based on current assumptions, expectations and available knowledge.(2) Bio-Fuels includes Ethanol, Biodiesel and Biomass.

Contains Forward Looking Statements

Potential Capital Investment (1)

$Millions

Up to $10 billion investment potential over next 10 years

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Wind LNG ClimateChange

Bio-Fuels (2) Coal toLiquids

Solar Geo-Thermal