AES Corp to sell interest in Ohio unit for $546 million

(Reuters) - U.S. utility firm AES Corp said on Tuesday it would sell a 30% indirect equity interest in its Ohio subsidiary to Canada's second-largest pension fund CDPQ for $546 million, which will be used to support infrastructure investments.

AES Ohio said it would invest more than $1.5 billion from 2024 through 2027 to improve reliability by upgrading transmission infrastructure and modernizing the grid.

Utilities are expected to benefit from a surge in demand for power driven by AI and data centers, prompting companies and investors across the board to strike deals with them.

"(Deal with CDPQ) will support AES Ohio's $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," AES said in a statement.

The sale, expected to close in the first half of 2025, expands on AES' existing partnership with CDPQ at its Indiana unit.

The Virginia-based company has a long-term asset sale target of $3.5 billion through 2027.

Earlier this year, AES sold its operations in Brazil to power company Auren, in a deal expected to generate $640 million in proceeds for the U.S. company.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Anil D'Silva and Vijay Kishore)