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Notice of Class Action Lawsuit Proceeding Against AES Corporation

This notice is intended to inform members of the following proposed class that a lawsuit arising out of activities in connection with the California energy market is pending against AES Corporation ("AES" or the "Company") and others on behalf of all persons who purchased securities of AES, including those who engaged in option transactions concerning AES securities, between July 27, 2000 and November 8, 2002, inclusive (the "Class Period") and were damaged thereby, excluding defendants and certain others (the "Class"). The action is pending in the United States District Court for the Southern District of Indiana, Indianapolis Division (the "Court"), Consolidated Cause No. 1:03-cv-0284-LJM-WTL, and names as defendants, in addition to AES, Dennis W. Bakke, Roger W. Sant and Barry J. Sharp, who were officers and/or directors of the Company during part or all of the applicable time period.

The named plaintiffs are Stanley L. Moskal and Barbara A. Moskal. The Moskal plaintiffs' Amended Complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by making materially false and misleading statements and omissions regarding the California energy market. The Amended Complaint further alleges that as a result of these materially false and misleading statements and omissions the price at which AES' securities were traded in the public market was artificially inflated.

Specifically, the Amended Complaint alleges, among other things, that AES and others were manipulating California's electricity market by withholding supply, causing prices for electricity in California to skyrocket; that AES's reported revenues from its sale of electric power during the Class Period were inflated, in part, from AES's role in manipulating the California energy market and were not sustainable; and that AES was, and is, exposed to substantial contingent legal liabilities as a result of the foregoing.

The Moskal plaintiffs' action was consolidated with another action also alleging materially false and misleading statements and omissions in connection with the California energy market, and these two cases were separately consolidated by the Court from other actions alleging violations of the federal securities laws arising from misrepresentations or omissions in connection with the United Kingdom energy market.

Specifically, the allegations of the lawsuits that were separately consolidated by the Court, which have been styled Imler v. AES Corp., No. 1:03-cv-00194-LJM-WTL, originally asserted claims arising from the adoption by the United Kingdom of a new framework for the pricing of energy that exerted downward pressure on prices and adversely affected the Company's ability to be profitable in the United Kingdom, particularly in connection with AES' Fifoots Point Power Plant in Wales, which began operations during the Spring of 2001. The amended complaint in Imler v. AES Corp., No. 1:03-cv-00194-LJM-WTL, in addition to the allegations related to AES's United Kingdom businesses, also alleges that AES and certain individual defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 based on statements or omissions concerning AES's role in alleged manipulation of the California electricity market, the effect thereof on AES's reported revenues, and AES's alleged contingent liabilities as a result thereof.

If you purchased securities of AES during the purported class period of July 27, 2000, to November 8, 2002, and either lost money on the transaction or still hold the securities, you may seek to serve as lead plaintiff on behalf of the purported class in the Moskal plaintiffs' action. In order to serve as lead plaintiff, however, you must meet certain legal requirements set forth in the applicable law and file appropriate papers with the Court no later than sixty days from the date of this notice. You do not need to seek appointment as a lead plaintiff in order to share in any recovery. Under certain circumstances, one or more class members may together serve as lead plaintiff.

The Moskal plaintiffs are represented by the law firm of Abraham, Fruchter & Twersky which has significant experience in prosecuting investor class actions and actions involving financial fraud. You may retain Abraham, Fruchter & Twersky, or other counsel of your choice, to serve as your counsel in this action.

If you have any questions concerning this case or your rights or interests with respect to these matters, please contact: Jack G. Fruchter, Esq. or Lawrence D. Levit, Esq. of Abraham, Fruchter & Twersky, One Penn Plaza, Suite 1910, New York, New York 10119, by telephone at (212) 279-5050 or (212) 714-2444 or toll free at (800) 938-0015, by facsimile at (212) 279-3655, or by e-mail at Jfruchter@FruchterTwersky.com or LarryL@Abrahamlaw.com.