Morgan Stanley Infrastructure and Ontario Teachers’ Pension Plan Announce Agreement to Acquire PSEG’s Chilean Electricity Assets

New York —

Morgan Stanley Infrastructure (“MSI”) and The Ontario Teachers’ Pension Plan (“Teachers’”) today announced that they have entered into a definitive agreement to acquire jointly SAESA Group (“SAESA”), a Chilean electric distribution, transmission and generation subsidiary of Public Service Enterprise Group Incorporated (“PSEG”), a U.S.-based integrated power company headquartered in New Jersey.  The purchase price is approximately US$870 million, and MSI and Teachers’ will also assume more than $400 million in existing company debt.  There will be a price adjustment based on timing of the closing, which is expected to occur in the third quarter of 2008.  Ownership of the US$1.3 billion enterprise will be shared equally between MSI and Teachers’. 

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 in excess of 135 mega watts of wind, hydro, diesel, and gas electric generating capacity, and through its transmission company, owns and operates 949 km of secondary transmission lines.

“As the first Latin American country to privatize and restructure its electricity industry over twenty years ago, Chile has established a sophisticated and stable regulatory framework that we find attractive,” said Ron Lepin, Chief Operating Officer of MSI.  “SAESA is a 90%-regulated business that generates predictable cash flows and steady returns 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. “SEASA 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.  For further information about Morgan Stanley Infrastructure, please visit www.morganstanley.com/infrastructure.

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.  For more information, visit www.otpp.com.

Media Relations Contacts:

Morgan Stanley Infrastructure, Marie Ali, 212.762.6884

Ontario Teachers’ Pension Plan, Deborah Allan, 416.730.5347