PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED AUGUST 25, 2000)

9,200,000 Securities

AES TRUST VII

$3.00 Trust Convertible Preferred Securities ("Preferred Securities")

(Liquidation amount $50 per security) fully and unconditionally guaranteed by
and convertible into Common Stock of

THE AES CORPORATION

         AES Trust VII, a statutory business trust created under the laws of the
state of Delaware, issued and sold 9,200,000 $3.00 Trust Convertible Preferred
Securities ("Preferred Securities"), liquidation preference $50 per security, in
transactions exempt from the registration requirements of the Securities Act of
1933, as amended. We filed a registration statement (Registration No. 333-40870)
on August 24, 2000 ("Registration Statement"), in order to permit the holders of
the Preferred Securities to resell their Preferred Securities in offerings
registered with the Securities and Exchange Commission. On pages 57 through 59
of the Registration Statement, there is a table that lists:

          (i)  each person selling Preferred Securities in connection with the
               prospectus (the "Selling Holders"); and

          (ii) the number of Preferred Securities beneficially owned by each
               such Selling Holder.

This prospectus supplement, which provides supplemental information to that
Registration Statement, adds certain additional information to the list of
Selling Holders:

          1)   Bancroft Convertible Fund, Inc. is added as a Selling Holder that
               owns 24,000 Preferred Securities

          2)   Ellsworth Convertible Growth and Income Fund, Inc. is added as a
               Selling Holder that owns 24,000 Preferred Securities

          3)   Donaldson, Lufkin & Jenrette Securities Corp. is added as a
               Selling Holder that owns 4,425 Preferred securities

          4)   SunAmerica Series Trust, on behalf of its Federated Utility
               Portfolio is added as a Selling Holder that owns 24,200 Preferred
               Securities

          5)   Federated Insurance Series, on behalf of its Federated Utility
               Fund II is added as a Selling Holder that owns 37,400 Preferred
               Securities

          6)   Federated Utility Fund, Inc. is added as a Selling Holder that
               owns 225,200 Preferred Securities

          7)   The number of Preferred Securities to be sold by Allstate
               Insurance Company is increased by 22,000

          8)   The number of Preferred Securities to be sold by Boulder II
               Limited is increased by 12,500

          9)   The number of Preferred Securities to be sold by Onex Industrial
               Partners is increased by 12,500

     None of such Selling Holders has a material relationship with AES Trust VII
or The AES Corporation except as we have described in the accompanying
prospectus.

          THE DATE OF THIS PROSPECTUS SUPPLEMENT IS SEPTEMBER 21, 2000