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The AES Corporation (AES - Analyst Report) has opened a coal-fired power plant at Galabovo in southeastern Bulgaria worth $1.74 billion with an initial capacity of 420 megawatts (MW). It is expected to reach 100% capacity of 600 MW by the end of fiscal 2011, which accounts for 9% of Bulgaria’s installed power capacity.

The plant is supported by a 15-year lignite supply agreement with the state-owned mining company, Maritsa East Mines, and a 15-year power purchase agreement with Bulgaria's state-owned electricity monopoly, National Energy Company. In order to meet the Euraopean Union anti-pollution requirements, the company has also built a 93 million- euro waste disposal facility at the plant.

Total funding was provided by a group of banks led by the European Bank for Reconstruction and Development.

AES Corp. has a highly diversified earnings base that insulates it from specific risks in any single region or country. It is also well positioned for capitalizing on regional differences in power prices and weather-driven demand. Looking forward, key growth drivers include its selective wind energy projects and strong balance sheet.

However, AES Corp’s focus on long-term supply contracts exposes the company to commodity price risk and its significant presence around the globe makes it vulnerable to foreign currency volatility. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Arlington, Virginia-based The AES Corporation is a global power company that owns and operates electric power generation and distribution businesses in many countries worldwide. AES Corporation operates in two lines of business – Generation and Utilities. In the near term, we would advise investors to accumulate its short-term Zacks #1 Rank (Strong Buy rating) peers Portland General Electric Company (POR - Snapshot Report) and TransAlta Corp. (TAC - Snapshot Report).

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