
                                                                    EXHIBIT 99.1

                              LETTER OF TRANSMITTAL
                                OFFER TO EXCHANGE
               8 3/8% SENIOR SUBORDINATED EXCHANGE NOTES DUE 2007
                           FOR ANY AND ALL OUTSTANDING
                    8 3/8% SENIOR SUBORDINATED NOTES DUE 2007
                                       OF
                               THE AES CORPORATION

                  THE EXCHANGE OFFER WILL EXPIRE AT 5:00P.M.,
                    NEW YORK CITY TIME ON SEPTEMBER __, 1997
                            (THE "EXPIRATION DATE")
                     UNLESS EXTENDED BY THE AES CORPORATION

                                EXCHANGE AGENT:

<TABLE>
<CAPTION>
<S>                                <C>                           <C>
 By Hand or Overnight Delivery:      Facsimile Transmissions:    By Registered or Certified Mail: 
                                   (Eligible Institutions Only)                                    
       The Bank of New York                                             The Bank of New York       
        101 Barclay Street                (212) 815-6339               101 Barclay Street, 7E      
  Corporate Trust Services Window                                     New York, New York 10286     
           Ground Level               To Confirm by Telephone    Attention: Reorganization Section,
Attention: Reorganization Section,   or for Information Call:                Odell Romeo           
            Odell Romeo
                                         (212) 815-6337         
</TABLE>

DELIVERY OF THIS  LETTER OF  TRANSMITTAL  TO AN ADDRESS  OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS  VIA A FACSIMILE  TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

The  undersigned  acknowledges  receipt of the Prospectus  dated August __, 1997
(the  "Prospectus") of The AES Corporation (the "Company") which,  together with
this  Letter  of  Transmittal  (the  "Letter  of  Transmittal"),  describes  the
Company's offer (the "Exchange Offer") to exchange $1,000 in principal amount of
a new series of 8 3/8%  Senior  Subordinated  Exchange  Notes due 2007 (the "New
Notes")  for each  $1,000 in  principal  amount  of  outstanding  8 3/8%  Senior
Subordinated  Notes due 2007 (the "Old  Notes").  The terms of the New Notes are
identical in all material respects  (including  principal amount,  interest rate
and  maturity)  to the terms of the Old Notes  for which  they may be  exchanged
pursuant to the Exchange  Offer,  except that the offering of the New Notes will
have  been  registered  under  the  Securities  Act of  1933,  as  amended  and,
therefore, the New Notes will not bear legends restricting the transfer thereof.

The undersigned  has checked the appropriate  boxes below and signed this Letter
of  Transmittal  to  indicate  the action the  undersigned  desires to take with
respect to the Exchange Offer.

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE
CHECKING ANY BOX BELOW.

THE  INSTRUCTIONS  INCLUDED  WITH THIS LETTER OF  TRANSMITTAL  MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS
AND THIS LETTER OR TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.

List below the Old Notes to which this  Letter of  Transmittal  relates.  If the
space  provided  below is  inadequate,  the  Certificate  Numbers and  Principal
Amounts should be listed on a separate signed schedule affixed hereto.



<PAGE>

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                 DESCRIPTION OF OLD NOTES TENDERED HEREWITH
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                                              AGGREGATE                   
                                              PRINCIPAL                   
NAME(S) AND ADDRESS(ES)                       AMOUNT          PRINCIPAL   
OF REGISTERED HOLDER(S)      CERTIFICATE      REPRESENTED     AMOUNT      
(PLEASE FILL IN)             NUMBER(S)*       BY NOTES*       TENDERED**  
--------------------------------------------------------------------------------
                                              
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
                                   TOTAL SHARES 
------------

*    Need not be completed by book-entry holders.
**   Unless otherwise indicated,  the holder will be deemed to have tendered the
     full aggregate  principal amount  represented by Old Notes. See Instruction
     2.

<PAGE>


This Letter of  Transmittal is to be used either if  certificates  for Old Notes
are to be  forwarded  herewith  or if  delivery  of Old  Notes  is to be made by
book-entry  transfer  to an  account  maintained  by the  Exchange  Agent at The
Depository Trust Company  ("DTC"),  pursuant to the procedures set forth in "The
Exchange Offer--Book-Entry Transfer" in the Prospectus. Delivery of documents to
a book-entry  transfer  facility  does not  constitute  delivery to the Exchange
Agent.


Unless the context  requires  otherwise,  the term "Holder" for purposes of this
Letter of Transmittal means any person in whose name Old Notes are registered on
the books of the  Company  or any  other  person  who has  obtained  a  properly
completed  bond power from the  registered  holder or any person whose Old Notes
are held of record by DTC who  desires to deliver  such Old Notes by  book-entry
transfer at DTC.


Holders  whose Old Notes are not  immediately  available  or who cannot  deliver
their Old Notes and all other documents required hereby to the Exchange Agent on
or prior to the  Expiration  Date may tender  their Old Notes  according  to the
guaranteed delivery procedure set forth in the Prospectus under the caption "The
Exchange Offer--Guaranteed Delivery Procedures."


[ ]  CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
     MADE TO AN ACCOUNT  MAINTAINED  BY THE EXCHANGE  AGENT WITH THE  DEPOSITORY
     TRUST COMPANY AND COMPLETE THE FOLLOWING:


     Name of Tendering Institution                                              
                                   ---------------------------------------------
                                                                                
     ---------------------------------------------------------------------------
                                                                                
     The Depository Trust Company                                               
                                                                                
     Account Number                                                             
                    ------------------------------------------------------------
                                                                                
     Transaction Code Number                                                    
                              --------------------------------------------------
     

[ ]  CHECK HERE IF TENDERED OLD NOTES ARE BEING  DELIVERED  PURSUANT TO A NOTICE
     OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING:


     Name of Registered  Holder(s) 
                                   ---------------------------------------------
     Name of Eligible Institution that Guaranteed Delivery

     ---------------------------------------------------------------------------

     IF DELIVERED BY BOOK-ENTRY TRANSFER:


     Account Number 
                    ------------------------------------------------------------


[ ]  CHECK HERE IF YOU ARE A  BROKER-DEALER  AND WISH TO  RECEIVE 10  ADDITIONAL
     COPIES OF THE  PROSPECTUS  AND 10 COPIES OF ANY  AMENDMENTS OR  SUPPLEMENTS
     THERETO.


     Name: 
           ---------------------------------------------------------------------

     Address: 
              ------------------------------------------------------------------

     ---------------------------------------------------------------------------



<PAGE>


              PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY


Ladies and Gentlemen:


Upon the  terms  and  subject  to the  conditions  of the  Exchange  Offer,  the
undersigned hereby tenders to the Company the  above-described  principal amount
of Old Notes. Subject to, and effective upon, the acceptance for exchange of the
Old Notes tendered  herewith,  the  undersigned  hereby  exchanges,  assigns and
transfers to, or upon the order or, the Company all right, title and interest in
and to such Old  Notes.  The  undersigned  hereby  irrevocably  constitutes  and
appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of
the undersigned  (with full knowledge that said Exchange Agent acts as the agent
of the undersigned in connection with the Exchange Offer) to cause the Old Notes
to be assigned,  transferred  and  exchanged.  The  undersigned  represents  and
warrants  that it has full power and authority to tender,  exchange,  assign and
transfer  the Old Notes and to acquire New Notes  issuable  upon the exchange of
such tendered Old Notes, and that, when the same are accepted for exchange,  the
Company will acquire good and unencumbered title to the tendered Old Notes, free
and clear of all liens,  restrictions,  charges and encumbrances and not subject
to any adverse claim.  The undersigned also warrants that it will, upon request,
execute and deliver any additional documents deemed by the Exchange Agent or the
Company to be necessary or desirable to complete the  exchange,  assignment  and
transfer of tendered  Old Notes or transfer  ownership  of such Old Notes on the
account books maintained by the Depository Trust Company.


The  Exchange  Offer  is  subject  to  certain  conditions  as set  forth in the
Prospectus  under the caption "The Exchange  Offer." The undersigned  recognizes
that as a result of these conditions  (which may be waived, in whole or in part,
by the Company),  as more particularly set forth in the Prospectus,  the Company
may not be  required to exchange  any of the Old Notes  tendered  hereby and, in
such event,  the Old Notes not exchanged will be returned to the  undersigned at
the address shown below the signature of the undersigned.


By  tendering,  each holder of Old Notes  represents to the Company that (i) the
New Notes  acquired  pursuant to the  Exchange  Offer are being  obtained in the
ordinary course of business of the person  receiving such New Notes,  whether or
not such  person is such  holder,  (ii)  neither the holder of Old Notes nor any
such  other  person  has an  arrangement  or  understanding  with any  person to
participate in the distribution of such New Notes,  (iii) if the holder is not a
broker-dealer  or is a broker-dealer  but will not receive new Notes for its own
account in exchange for Old Notes,  neither the holder nor any such other person
is engaged in or intends to participate  in a distribution  of the New Notes and
(iv)  neither  the  holder nor any such other  person is an  "affiliate"  of the
Company  within the  meaning of Rule 405 under the  Securities  Act of 1933,  as
amended (the "Act"). If the tendering holder is a broker-dealer  (whether or not
it is also an  "affiliate")  that will  receive New Notes for its own account in
exchange for Old Notes, it represents that the Old Notes to be exchanged for the
New Notes were acquired by it as a result of  market-making  activities or other
trading  activities,  and acknowledges that it will deliver a prospectus meeting
the  requirements of the Act in connection with any resale of such New Notes. By
acknowledging  that it will deliver and by  delivering a prospectus  meeting the
requirements  of the Act in  connection  with any resale of such New Notes,  the
undersigned  is not  deemed  to admit  that it is an  "underwriter"  within  the
meaning of the Act.


All  authority  herein  conferred  or agreed to be conferred  shall  survive the
death,  bankruptcy or incapacity of the undersigned and every  obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the  undersigned.  Tendered Old Notes may be withdrawn
at any time prior to the Expiration Date.


Certificates  for all New Notes delivered in exchange for tendered Old Notes and
any Old Notes delivered  herewith but not exchanged,  in each case registered in
the  name of the  undersigned,  shall be  delivered  to the  undersigned  at the
address shown below the signature of the undersigned.



<PAGE>

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                         TENDERING HOLDER(S) SIGN HERE

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                           Signature(s) of Holder(s)


Dated:             , 199_


(Must be  signed  by  registered  holder(s)  exactly  as  name(s)  appear(s)  on
certificate(s) for Old Notes or by any person(s) authorized to become registered
holder(s) by  endorsements  and  documents  transmitted  herewith or, if the Old
Notes  are held of record by DTC,  the  person in whose  name such Old Notes are
registered  on  the  books  of  DTC.  If  signature  by  a  trustee,   executor,
administrator,  guardian,  attorney-in-fact,  officer of a corporation  or other
person acting in a fiduciary or representative

