1. What are the strategic challenges AES Tiete is facing in early 2014? Why is AES pursing the gas-fired power plant in Brazil?

2. Considering the base-case assumptions, should AES bid at the price of BRL50/MWh? What is the minimum price AES could bid and still meet its investment return target?

3. Calculate the bidding price under the optimistic and the pessimistic scenarios in which AES would be able to have same level of returns. Do you believe that AES should still pursue this power plant?

4. What are the levers that AES has at its disposal to improve the return of this project? How would they impact the project and the return?

5. What are the risks that AES Tiete faces in this project? How could it mitigate them?

Answer rating: 100% (QA)

1 AES Tiete is a pure generation company in Brazil with all of its efforts now focused on free market customers AES has structured this company to be its growth vehicle in Brazil and a clean balance s... View the full answer