AES Corp (NYSE: AES) Announces Strategic Partnership with CDPQ to Support AES Ohio’s Robust Growth Plans

The AES Corporation (NYSE: AES) today announced that it reached an agreement to sell a 30% indirect equity interest in AES Ohio to CDPQ, a global investment group, for approximately US$546 million, with closing expected in the first half of 2025.

This agreement expands upon AES’ existing partnership with CDPQ at AES Indiana and creates a similar ownership structure for the two utilities, with no change in management or operational control of AES Ohio. CDPQ’s partnership with AES, now in both US utilities, will bring continued funding to support the high growth ahead.

“We have a successful track record of incorporating strategic partners into our businesses in support of our growth initiatives. CDPQ has been a long-term partner to AES and this transaction marks another strong step forward for AES Ohio, enabling the increased capital investments needed to support our customers’ growing needs,” said Andrés Gluski, AES President and CEO.

AES Ohio plans to invest more than US$1.5 billion from 2024 through 2027 to improve system reliability, through extensive investment in transmission infrastructure and grid modernization improvements (AES Ohio’s 2023 rate base was US$1,564 million). AES Ohio recently reached a settlement agreement for Phase 2 of its Smart Grid program, which, if approved by the Public Utilities Commission of Ohio (PUCO), will enable investment of more than US$240 million over a four-year period to deploy smart technology that will support impactful system improvements. As a result of these needed investments, AES Ohio anticipates compound annual rate base growth in the mid-teens through 2027.

Additionally, AES Ohio sees potential for incremental investment to support growing data center demand, which could increase peak load on the system by more than 50% by the end of the decade. This growth will be transformational for the utility and demonstrates the value of AES’ broader portfolio in serving important technology customers.

As part of this agreement, CDPQ is committed to funding its pro rata share of AES Ohio’s near-term capital requirements to support AES Ohio’s extensive growth plans, including incremental growth opportunities stemming from new data centers in the service territory.

“AES has been an excellent partner of CDPQ for the last 10 years, and we’ve supported the company in the modernization and decarbonization of its operations at AES Indiana since then,” said Emmanuel Jaclot, Executive Vice President and Head of Infrastructure at CDPQ. “We now embark on a new chapter in our relationship to support the growth plans of AES Ohio. This is a unique opportunity to invest alongside a trusted partner in regulated assets that play an important role meeting the electricity demands for over half a million customers.”

“AES Ohio is committed to delivering reliable energy to enable economic growth and job creation,” said Ken Zagzebski, President of AES’ Utilities business. “Our partnership with CDPQ will support AES Ohio’s US$1.5 billion investment program to strengthen our system and support the growing demand from data centers, which has the potential to increase our peak load by more than 50% by the end of the decade.”

This transaction is expected to close in the first half of 2025. With this sale, AES will have achieved over US$2.7 billion of its US$3.5 billion asset sale target for 2023 through 2027.

This agreement is subject to customary regulatory approvals, including from the Public Utilities Commission of Ohio, the Federal Energy Regulatory Commission and the Committee on Foreign Investments in the United States.