AES & Natural Gas: The Dominican Republic case and next steps January, 2015, San Juan - Puerto Rico

Freddy Obando, AES Dominicana Commercial Director

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This presentation may contain forward-looking statements speculative in nature based on the information, operational plans and forecasts currently available about future trends and facts. As such, they are subject to risks and uncertainties. A wide variety of factors may cause future real facts to differ significantly from the issues presented or anticipated in this presentation, including, among others, changes in general economic, political, government and business conditions. In the event of materializing any of these risks or uncertainties, or if underlying assumptions prove to be mistaken, future real facts may vary significantly. AES Corp. is not bound to update or correct the information contained in this report.

Safe Harbor Disclosure

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Agenda

AES in Latin America

AES in the Dominican Republic

Natural Gas in the Dominican Republic

Bringing Natural Gas to the Caribbean

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Latin America represents over 50% of AES’ business

20 years of presence in the region

Over 10,500 people

15,168 MW installed capacity

6 distribution companies serving 8.8m clients

Coal 24%

Gas 29%

Renewables 40%

Oil/Diesel/Pet Coke

7%

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AES’ future is interconnected with the future of the markets we serve

Our Mission Improving lives by providing safe, reliable and sustainable energy solutions in every market we serve.

Our Business definition Leveraging electricity platforms and knowledge to provide energy and infrastructure solutions in our markets of choice.

Our commitment to sustainability Delivering results that exceed our stakeholders’ expectations today by providing innovative resource management and infrastructure solutions to ensure we will meet stakeholder needs in the future.

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Agenda

AES Global presence

AES in the Dominican Republic

Natural Gas in the Dominican Republic

Bringing Natural Gas to the Caribbean

7 AES en el mundo

Over US$1.0 billion invested to support and develop the local energy sector

850MW of base load installed capacity supplies 37% of the country’s energy

Currently building a brownfield project to add 114 MW with a US$260M additional investment.

Development and construction of LNG

terminal and AES Andres combined

cycle

AES Los Mina Natural Gas Conversion and Pipeline development

ITABO acquisition and turnaround - international port

construction

Retail sales of natural gas and third party

access to LNG/CNG

CAPEX invested in Infrastructure maintenance

to date

AES has invested in the Dominican Republic since 1997

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Agenda

AES Global presence

AES in the Dominican Republic

Natural Gas in the Dominican Republic

Bringing Natural Gas to the Caribbean

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AES Andres LNG Terminal Only LNG terminal in the Dominican Republic, including: an on-load-pier and jetty one 160,000 m3 LNG tank 3 regas trains x 125 mmscf/d a 34-km gas pipeline

A clear and simple strategy based on three fundamental principles: Optimization of the use of the current natural gas

infrastructure, Maximization of value in the natural gas supply

chain and Guaranteeing sustainable growth of the LNG

market by promoting modern regulation

AES seeks to optimize the use of the AES Andres LNG terminal in the Dominican Republic

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The introduction of natural gas resulted in a more competitive wholesale electricity market and a substantially more diversified energy matrix for the power sector.

Power Sector Fuel Market Share

Natural Gas Demand Evolution

Since 2003, LNG has saved the Dominican Republic ~$600 million per year

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Industrial / Commercial (65 clients)

Distributors / Wholesale Buyers

Transport (NGV) (more than 15,000 vehicles

and 27 service stations)

A Gas Market created from scratch!

Third Party

Power Plants (4 clients)

Retail Market/ End Buyers Importer

The AES Andres LNG Terminal enabled AES to create a new market for natural gas

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Agenda

AES Global presence

AES in the Dominican Republic

Natural Gas in the Dominican Republic

Bringing Natural Gas to the Caribbean

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Total Potential Demand In the Caribbean estimated in 140 TBTU/yr

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• Caribbean Energy Matrix, highly dependent in Oil & Derivate. • Direct impact on Oil Price Volatility • Potential market identified to convert to an alternative fuel (Natural Gas).

Wind Coal

Solar

Gas 5%

Hydro 5%

Oil

83%

7789

1821

39

24

6

0

5

10

15

20

25

30

35

40

Mar

tiniq

ue

Baha

mas

Cay

man

Hai

ti

Barb

ados

Guy

ana

Oth

er

Gua

delo

upe

Jam

aica

Potential LNG Demand: ~140 Tbtu (excluding DR) Energy Mix:

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AES Dominicana

LNG Terminal – Reloading Opps

LNG Barges

Mid & Small Scale Vessels

by ISO Containers On board regas

Re-export from AES Andres can be achieved through multiple options

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Maximizing the use of the current assets provides the most efficient, timely and economic way to increase access to LNG

The AES Andres infrastructure could serve incremental demand in the DR and the Caribbean

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AES DR LNG Hub Advantages

• DR’s closer distance to customers allows for smaller inventory and ship size, and offsets DR hub costs.

• Timing advantage to DR as currently none of the existing or under construction

LNG terminals allow small vessels. First Deliveries expected in 1H 2016

• By aggregating demand, AES would provide a more efficient and less risky balancing and inventory services, including the ability to divert volumes.

• Tailor made solutions to be implemented on a costumer by costumer basis.

• Existing infrastructure in place will allow for a competitive cost structure.

Shipping and Storage AssumptionsAndres - Hub USG Direct

Roundtrip Voyage (Days) 5.32 10.60Emergency Inventory (Days) 7.00 7.00Total Inventory Req (Days) 12.32 17.60Total Inventory Req (CM) 11,000 17,000Vessel Size Req (CM) 6,000 11,000

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Market demand agregation: multiple marketing efforts in different markets.

Logistics: optimization of existing infrastructure, vessels, port facilities.

Regulatory risk: ease of access and taxes structures at the different countries could compromise the strategy

Safety risks: largely mitigated by selection of large multinational LNG player

Natural gas competitiveness risk: as replacement of diesel, a low probability of occurrence is expected

Offtaker credit risk: credit quality of offtakers and host countries impacts pricing and required returns

Challenges ahead

Several challenges will need to be addressed in order to bring gas to the Caribbean

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LNG Supplier Provides access to gas portfolio

Manage logistics and operations

AES Provides access

to existing infrastructure

Invests to expand

infrastructure Enables small market access

to LNG

Receiving Countries Facilitates

permitting and consents

Encourages gas conversions

Customers Provides demand

assurance Converts existing

infrastructure to natural gas

In Example: IDB

Could provide guarantees and

financing Support

government regulation and

investment Support regional

coordination

Public-Private partnership is critical to realizing the potential of natural gas in the Caribbean

Multilaterals can create a bridge between the public and private sectors to accelerate investments

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Thanks for your attention

Freddy Obando Prestol DR Commercial Director & MCAC Regional Fuel Director Av. Winston Churchill No. 1099 Ensanche Piantini Torre Citi Group en Plaza Acrópolis, Piso 23 CP 10148 Santo Domingo República Dominicana T: (809) 955-2223 ; Ext. 3382 www.aesdominicana.com.do www.fundacionaesdominicana.org.do