By Pia A. Gaarder
AES' problems are caused by several factors: power prices has fallen and the country has suffered large losses in Latin America. In addition AES Corp is struggling after the Enron scandal with convincing their stockholders that they are not on the edge of collapse, but have a solid income basis.
The company is now planning to get rid of power plants worth between one and one and a half billion dollars that represents the non profitable parts of their activities. In addition, expenses are to be cut with as much as 41 percent. EAS who have owners interests in 182 power plants in 31 countries, will therefore close several projects in the US and other parts of the world.
The situation is in other words so that AES Corp can't invest in projects without the profit margin being high and secure. Many signs say that AES Corp will withdraw from two projects in Africa; Bujagali will according to the plan only be postponed two to four months.
Norwatch Newsletter 3-4/02