DieDolly was using
ANSI INI file. I have UTF-8 file. Here is one solution.
SS := TStringStream.Create('', TEncoding.UTF8);
SS.LoadFromFile(ParamStr1);
S := StringReplace(SS.DataString, 'Å', 'A', [rfReplaceAll]);
SS2 := TStringStream.Create(S, TEncoding.UTF8);
SS2.SaveToFile(ParamStr2);
SS2.Free;
SS.Free;