ARLINGTON, Va., Aug. 10, 2020 /PRNewswire/ -- The AES Corporation (NYSE: AES) announced today that its subsidiary, AES Gener, reached an agreement for the early termination of two tolling agreements (Power Purchase Agreements, PPAs) with the 558 MW Angamos coal-fired plant in Chile. Per this agreement, the PPAs will cease in August 2021. This year, Angamos will receive a payment of $720 million, primarily reflecting the present value of fixed charges through 2029, as stipulated in the PPAs.
"As a result of this agreement, AES Gener is accelerating all future payments from two of its long-term coal generation contracts, for a total of $720 million," said Andrés Gluski, AES President and Chief Executive Officer. "This transaction also expedites the timeline of AES Gener's decarbonization program, while providing additional funding for AES Gener's current backlog of 2 GW of renewable projects."
"After paying down debt to strengthen its balance sheet and investment grade ratings, AES Gener will use the remaining proceeds of approximately $200 million to fund its renewable growth," said Gustavo Pimenta, AES Executive Vice President and Chief Financial Officer. "This announcement demonstrates that the real value of AES Gener's businesses is in its long-term contracts and customer relationships, as the company transforms its portfolio, while delivering sustainable and growing earnings."
As of 2022, Angamos will be fully merchant and once the system no longer requires the plant to ensure the reliability of the grid, AES Gener will proceed to shut it down, having fully recovered its expected return and investment.
This agreement is subject to certain conditions to be satisfied by August 31, 2020 and Angamos receiving the net sum of $720 million this year.
AES is reaffirming its 2020 guidance, expectations and average annual growth rate target through 2022.
The AES Corporation (NYSE: AES) is a Fortune 500 global power company. We provide affordable, sustainable energy to 14 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce is committed to operational excellence and meeting the world's changing power needs. Our 2019 revenues were $10 billion and we own and manage $34 billion in total assets. To learn more, please visit www.aes.com. Follow AES on Twitter @TheAESCorp.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. 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' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding the COVID-19 pandemic, accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels and rates of return consistent with prior experience.
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' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2019 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
Any Stockholder who desires a copy of the Company's 2019 Annual Report on Form 10-K filed February 27, 2020 with the SEC may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Form 10-K may be obtained by visiting the Company's website at www.aes.com.
SOURCE The AES Corporation