
                                                                    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:
                              THE BANK OF NEW YORK

<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: Odell Romeo
Attention:  Odell Romeo              or for Information Call:                    Reorganization Section     
            Reorganization Section       (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>

--------------------------------------------------------------------------------
                 DESCRIPTION OF OLD NOTES TENDERED HEREWITH
--------------------------------------------------------------------------------
                                              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>
                          TENDERING HOLDER(S) SIGN HERE

                            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  capacity,  please set forth the
full title of such person.) See Instruction 3.

Name(s): _______________________________________________________________________

________________________________________________________________________________
                                 (Please Print)
Capacity (full title): _________________________________________________________

Address: _______________________________________________________________________

________________________________________________________________________________
                              (Including Zip Code)
Area Code and Telephone No.: ___________________________________________________

________________________________________________________________________________
                             Tax Identification No.

                            GUARANTEE OF SIGNATURE(S)
                        (IF REQUIRED--SEE INSTRUCTION 3)

Authorized Signature: __________________________________________________________

Name: __________________________________________________________________________

Title: _________________________________________________________________________

Address: _______________________________________________________________________

Name of Firm: __________________________________________________________________

Area Code and Telephone No.: ___________________________________________________

Dated: ________________________, 199_

<PAGE>
                                  INSTRUCTIONS

                   FORMING PART OF THE TERMS AND CONDITIONS
                              OF THE EXCHANGE OFFER

1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. Certificates for all
physically delivered Old Notes or confirmation of any book-entry transfer to the
Exchange  Agent's account at The Depository  Trust Company of Old Notes tendered
by book-entry  transfer,  as well as a properly completed and duly executed copy
of this Letter of  Transmittal  or facsimile  thereof,  and any other  documents
required by this Letter of  Transmittal,  must be received by the Exchange Agent
at any of its addresses set forth herein on or prior to the Expiration Date.

THE METHOD OF  DELIVERY  OF THIS  LETTER OF  TRANSMITTAL,  THE OLD NOTES AND ANY
OTHER REQUIRED  DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER AND,  EXCEPT
AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE EXCHANGE  AGENT.  IF SUCH  DELIVERY IS BY MAIL,  IT IS SUGGESTED
THAT REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED.

Holders  whose Old Notes are not  immediately  available  or who cannot  deliver
their Old Notes and all other  required  documents to the  Exchange  Agent on or
prior to the Expiration Date or comply with book-entry  transfer procedures on a
timely  basis may tender  their Old Notes  pursuant to the  guaranteed  delivery
procedure  set forth in the  Prospectus  under "The  Exchange  Offer--Guaranteed
Delivery Procedures." Pursuant to such procedure: such tender must be made by or
through  an  Eligible  Institution  (as  defined  therein);  on or  prior to the
Expiration  Date the  Exchange  Agent  must have  received  from  such  Eligible
Institution, a letter, telegram or facsimile transmission setting forth the name
and  address  of the  tendering  holder,  the names in which  such Old Notes are
registered,  and, if possible,  the  certificate  numbers of the Old Notes to be
tendered;  and all  tendered  Old Notes  (or a  confirmation  of any  book-entry
transfer of such Old Notes into the Exchange  Agent's  account at The Depository
Trust  Company) as well as this Letter of  Transmittal  and all other  documents
required by this Letter of  Transmittal  must be received by the Exchange  Agent
within five New York Stock Exchange  trading days after the date of execution of
such  letter,  telegram  or  facsimile  transmission,  all  as  provided  in the
Prospectus   under  the  caption  "The   Exchange   Offer--Guaranteed   Delivery
Procedures."

No alternative,  conditional,  irregular or contingent tenders will be accepted.
All tendering holders,  by execution of this Letter of Transmittal (or facsimile
thereof),  shall waive any right to receive  notice of the acceptance of the Old
Notes for exchange.

2. PARTIAL  TENDERS;  WITHDRAWALS.  Tenders of Old Notes will be accepted in all
denominations of $1,000 and integral  multiples in excess thereof.  If less than
the entire principal amount of Old Notes evidenced by a submitted certificate is
tendered, the tendering holder must fill in the principal amount tendered in the
box entitled  "Principal  Amount  Tendered." A newly issued  certificate for the
principal  amount of Old Notes  submitted  but not tendered will be sent to such
holder as soon as practicable after the Expiration Date. All Old Notes delivered
to the  Exchange  Agent will be deemed to have been  tendered  unless  otherwise
indicated.

Tenders of Old Notes pursuant to the Exchange Offer are irrevocable, except that
Old Notes  tendered  pursuant to the Exchange Offer may be withdrawn at any time
prior  to  the  Expiration  Date.  To be  effective,  a  written,  or  facsimile
transmission notice of withdrawal must be timely received by the Exchange Agent.
Any such notice of  withdrawal  must  specify the person  named in the Letter of
Transmittal  as having  tendered  Old  Notes to be  withdrawn,  the  certificate
numbers  of the Old Notes to be  withdrawn,  the  principal  amount of Old Notes
delivered  for  exchange,  a  statement  that such a holder is  withdrawing  its
election to have such Old Notes exchanged, and the name of the registered holder
of such Old Notes,  and must be signed by the  holder in the same  manner as the
original  signature  on  the  Letter  of  Transmittal  (including  any  required
signature  guarantees) or be accompanied by evidence satisfactory to the Company
that the person withdrawing the tender has succeeded to the beneficial ownership
of the Old Notes being  withdrawn.  The Exchange  Agent will return the properly
withdrawn Old Notes promptly  following receipt of notice of withdrawal.  If Old
Notes have been tendered pursuant to the procedure for book-entry transfer,  any
notice of  withdrawal  must  specify  the name and number of the  account at The
Depository  Trust  Company  to be  credited  with  the  withdrawn  Old  Notes or
otherwise comply with The Depository Trust Company's procedures.

<PAGE>
3.  SIGNATURE  ON  THIS  LETTER  OF   TRANSMITTAL;   WRITTEN   INSTRUMENTS   AND
ENDORSEMENTS;  GUARANTEE OF SIGNATURES.  If this Letter of Transmittal is signed
by the registered holder(s) of the Old Notes tendered hereby, the signature must
correspond  with the  name(s)  as written  on the face of  certificates  without
alteration, enlargement or any change whatsoever.

If any of the Old Notes tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.

If a number of Old Notes registered in different names are tendered,  it will be
necessary to complete, sign and submit as many separate copies of this Letter of
Transmittal as there are different registrations of Old Notes.

When this Letter of Transmittal is signed by the registered holder or holders of
Old Notes  listed and  tendered  hereby,  no  endorsements  of  certificates  or
separate written instruments of transfer or exchange are required.

If this Letter of  Transmittal  is signed by a person other than the  registered
holder or  holders of the Old Notes  listed,  such  Notes  must be  endorsed  or
accompanied  by  separate  written  instruments  of transfer or exchange in form
satisfactory  to the Company  and duly  executed by the  registered  holder,  in
either  case  signed  exactly as the name or names of the  registered  holder or
holders appear(s) on the Old Notes.

If this Letter of Transmittal,  any certificates or separate written instruments
of transfer  or  exchange  are signed by  trustees,  executors,  administrators,
guardians,  attorneys-in-fact,  officers of  corporations  or others acting in a
fiduciary  or  representative  capacity,  such persons  should so indicate  when
signing, and, unless waived by the Company,  proper evidence satisfactory to the
Company of their authority so to act must be submitted.

Endorsements on certificates  or signatures on separate  written  instruments of
transfer or exchange  required by this  Instruction  3 must be  guaranteed by an
Eligible Institution.

Signatures on this Letter of  Transmittal  need not be guaranteed by an Eligible
Institution,  provided the Old Notes are tendered: (i) by a registered holder of
such Old Notes  and the  certificates  for New  Notes to be  issued in  exchange
therefor  are to be  issued  (or any  untendered  amount  of Old Notes are to be
reissued)  to the  registered  holder;  or (ii) for the account of any  Eligible
Institution.

4. TRANSFER TAXES. The Company shall pay all transfer taxes, if any,  applicable
to the  transfer  and  exchange of Old Notes to it or its order  pursuant to the
Exchange  Offer.  If,  however,  New Notes are to be delivered  to, or are to be
registered or issued in the name of, any person other than the registered holder
of the Old Notes tendered hereby, or if a transfer tax is imposed for any reason
other than the transfer of Old Notes to the Company or its order pursuant to the
Exchange  Offer,  the amount of any such transfer taxes (whether  imposed on the
registered  holder or any other person) will be payable by the tendering holder.
If satisfactory  evidence of payment of such taxes or exception therefrom is not
submitted  herewith the amount of such transfer taxes will be billed directly to
such tendering holder.

Except as provided in this  Instruction 4, it will not be necessary for transfer
tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal.

5. WAIVER OF CONDITIONS.  The Company  reserves the absolute right to waive,  in
whole or in part,  any of the  conditions to the Exchange Offer set forth in the
Prospectus.

6. MUTILATED,  LOST,  STOLEN OR DESTROYED NOTES. Any holder whose Old Notes have
been mutilated,  lost,  stolen or destroyed should contact the Exchange Agent at
the address indicated below for further instructions.

7.  REQUESTS FOR  ASSISTANCE  OR ADDITIONAL  COPIES.  Questions  relating to the
procedure  for  tendering,  as well as  requests  for  additional  copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone number set forth below. In addition,  all questions
relating to the Exchange Offer, as well as requests for assistance or additional
copies of the Prospectus and this Letter of Transmittal,  may be directed to the
Company at 1001 North 19th Street, Arlington,  Virginia 22209. Attention:  Barry
J. Sharp (202) 522-1315.

8.  IRREGULARITIES.   All  questions  as  to  the  validity,  form,  eligibility
(including  time of receipt),  and  acceptance of Letters of  Transmittal or Old
Notes will be resolved by the  Company,  whose  determination  will be final and
binding. The Company reserves the absolute right to reject any or all Letters of
Transmittal or tenders that are not in proper form or the acceptance

<PAGE>
of which  would,  in the opinion of the  Company's  counsel,  be  unlawful.  The
Company also  reserves the right to waive any  irregularities  or  conditions of
tender as to the  particular  Old Notes covered by any Letter of  Transmittal or
tendered pursuant to such letter. None of the Company, the Exchange Agent or any
other  person  will be under any duty to give  notification  of any  defects  or
irregularities  in tenders or incur any  liability  for failure to give any such
notification.  The Company's  interpretation  of the terms and conditions of the
Exchange Offer shall be final and binding.

9.  DEFINITIONS.  Capitalized  terms used in this Letter of Transmittal  and not
otherwise defined have the meanings given in the Prospectus.

IMPORTANT:  THIS LETTER OF  TRANSMITTAL  OR A FACSIMILE  THEREOF  (TOGETHER WITH
CERTIFICATES FOR OLD NOTES OR CONFIRMATION OF BOOK-ENTRY  TRANSFER AND ALL OTHER
REQUIRED  DOCUMENTS) OR A NOTICE OF GUARANTEED  DELIVERY MUST BE RECEIVED BY THE
EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.



