Teachers' and Morgan Stanley Infrastructure to acquire PSEG’s Chilean Electricity Assets

NEW YORK / TORONTO: Morgan Stanley Infrastructure (MSI) and the Ontario Teachers' Pension Plan (Teachers') today announced that they have entered into a definitive agreement to jointly acquire SAESA Group (SAESA), a Chilean electric distribution, transmission and generation unit of Public Service Enterprise Group (PSEG) for a purchase price of approximately US$870 million. Teachers' and MSI will also assume more than $400 million in existing company debt. Ownership of the US$1.3 billion enterprise will be shared equally.

SAESA is the second largest electricity distributor in Chile in terms of geographical coverage, and is the main provider of electricity in the rapidly growing southern regions of the country. The company serves 16% of Chile's population, providing electric service to approximately 2.6 million people. In addition, SAESA owns and operates 135MWs of wind, hydro, and thermal power generation capacity, and through its transmission company, owns and operates 950 km of transmission lines.

"We were attracted to the sophisticated and stable regulatory environment in Chile, which has been serving the country and its customers since 1982," said Ron Lepin, Chief Operating Officer of MSI. "SAESA is a 90%-regulated business that will generate steady returns and predictable cash flows over the long term, which is well suited to our investment objectives. We look forward to supporting the company's platform and growth prospects in a country that has been Latin America's fastest-growing economy over the last 15 years."

Stephen Dowd, Teachers' Vice-President, Infrastructure, said Teachers' invests globally in regulated industries that will provide stable, inflation-adjusted returns over the long term. "SAESA Group is a well-run company with diversified electricity assets and a strong market position in Chile's regulated energy sector, making this an excellent investment for our portfolio," said Mr. Dowd. "As an active owner, we are committed to working in a strategic capacity with management and our partner to support the long-term growth of the company."

About Morgan Stanley Infrastructure

Morgan Stanley Infrastructure is a global investment platform that focuses on long-term investments associated with providing essential public goods and services to societies across the globe. With offices in North America, Europe and Asia, Morgan Stanley Infrastructure is part of the Merchant Banking Division within Morgan Stanley Investment Management. Morgan Stanley Investment Management has $577 billion in assets under management as of February 29, 2008.

About the Ontario Teachers' Pension Plan

The Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada, with C$108.5 billion (US$107.1 billion) in net assets as of December 31, 2007. An independent corporation, it is responsible for investing the pension fund's assets and administering the pensions of Ontario's 278,000 active and retired teachers. Teachers' Infrastructure portfolio was initiated in 2001 and focuses on the acquisition and long-term retention of assets that have a long economic life and offer low-risk, reliable returns linked to inflation to pay inflation-indexed pensions.

Contact:

Marie Ali
Vice President, Corporate Communications
Morgan Stanley Infrastructure
212-762-6884
Marie.Ali@morganstanley.com

Deborah Allan
Director, Communications and Media Relations
Ontario Teachers' Pension Plan
(416) 730-5347
deborah_allan@otpp.com