In a move that underscores the robust growth potential of AES Ohio, The AES Corporation (AES) has announced a strategic partnership with CDPQ, a global investment group. CDPQ will acquire a 30% indirect equity interest in AES Ohio for approximately US$546 million, solidifying their commitment to the utility’s future. This partnership builds upon the existing relationship between AES and CDPQ at AES Indiana, establishing a consistent ownership structure for both utilities while ensuring no changes in management or operational control for AES Ohio.
This investment signifies a pivotal moment for AES Ohio, facilitating the company’s ambitious growth plans. The utility is poised to invest over US$1.5 billion between 2024 and 2027, focusing on strengthening its system reliability through strategic upgrades to its transmission infrastructure and grid modernization. This commitment is reflected in the recent settlement agreement for Phase 2 of the Smart Grid program, pending approval by the Public Utilities Commission of Ohio (PUCO), which will channel over US$240 million over four years to implement cutting-edge smart technologies. These investments are expected to fuel a significant compound annual rate base growth in the mid-teens for AES Ohio through 2027.
Furthermore, AES Ohio recognizes the immense opportunity presented by the growing demand for data centers, a key factor in the region’s economic development. This demand is projected to increase peak load on the system by more than 50% by the end of the decade, underscoring the utility’s critical role in supporting the burgeoning technology sector. CDPQ’s commitment extends beyond financial support. They are prepared to fund their pro rata share of AES Ohio’s near-term capital requirements, ensuring the company can effectively manage its growth initiatives, including those stemming from new data centers within the service territory.
This partnership represents a significant milestone for both organizations. “We have a successful track record of incorporating strategic partners into our businesses in support of our growth initiatives,” said Andrés Gluski, AES President and CEO. “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.” “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.”
Ken Zagzebski, President of AES’ Utilities business, emphasized the importance of this partnership for the community. “AES Ohio is committed to delivering reliable energy to enable economic growth and job creation. 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.”
The closing of this transaction is anticipated in the first half of 2025, subject to the customary regulatory approvals from the Public Utilities Commission of Ohio, the Federal Energy Regulatory Commission and the Committee on Foreign Investments in the United States. This agreement marks a significant achievement for AES, as it represents a substantial step towards achieving their asset sale target of US$3.5 billion between 2023 and 2027.
The AES Corporation (AES) is a Fortune 500 global energy company dedicated to accelerating the future of energy. With a diverse workforce committed to innovation and operational excellence, AES is committed to providing greener and smarter energy solutions for a sustainable future. CDPQ is a global investment group managing funds for public pension and insurance plans, actively investing in major financial markets, private equity, infrastructure, real estate, and private debt. This partnership signals a commitment to the future of AES Ohio, supporting its growth and ensuring a reliable energy supply for the region.
