Independent power producer, The AES Corporation (AES) announced that it is planning to invest R$1.1 billion ($683 million) in Brazil via its Brazilian arm AES Tiete. The new investment will increase its energy-generation capacity in the state of Sao Paulo enabling it to meet the conditions of a court order. A court has ordered AES Corporation to enhance its power-generation capacity in Sao Paulo after it failed to meet the terms of the state-owned utility's purchase agreement in 1999.
This fresh induction of funds will allow the company to start a new thermoelectric plant in Sao Paulo. The new facility will have a generation capacity of 550 megawatts (MW), and will surpass the power generation capacity required under the agreement by 152 MW. AES Tiete has already applied for an environmental license to build the plant.
AES Tiete is AES Corporation's largest generation business in Latin America. Generation from Tiete accounted for 18% of the total generation capacity in the state of Sao Paulo in 2010. AES Tiete recorded revenue of R$6.2 million ($3.7 million) in 2010.
Adjusted earnings of AES Corporation at the end of second-quarter 2011 were 28 cents per share, 4 cents above the Zacks Consensus Estimate as well as the year-ago figure.
During the earnings call the company reiterated the earnings per share guidance for 2011 in a range of 97 cents – $1.03. The Zacks Consensus Estimates for 2011 and 2012 are currently $1.03 per share and $1.30 per share, respectively.
AES Corporation currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes with Edison International (EIX) and Duke Energy Corporation (DUK).
Based in Arlington, Virginia, AES Corporation operates globally and is involved in the generation, distribution, transmission, and sale of electricity to end-user customers in the residential, commercial, industrial, and governmental sectors.
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