HICL Infrastructure Regulatory News (HICL)

8 November 2010

HSBC Infrastructure Company Limited

HICL completes acquisition of two PFI/P3 projects

Further to its announcement of 7 October, HSBC Infrastructure Company Limited ("HICL", and together with its subsidiaries the "Group"), the listed infrastructure investment company, announces today that the Group has completed the acquisition of interests in a UK PFI and in a Canadian P3 project from subsidiaries of Bilfinger Berger SE ("Bilfinger Berger").

The two interests are:

·; a 50% interest in the Kent Schools PFI project, and

·; a 50% interest in the Kicking Horse Canyon Transit P3 project in British Columbia, Canada, part of the Trans-Canada Highway.

Both projects are operational, and Bilfinger Berger will remain a 50% shareholder in each of the projects.

Receipt of the necessary conditions in relation to the remaining two projects announced on 7 October (North-West Anthony Henday ring road P3 project and the M80 motorway DBFO project) are proceeding to plan and should be acquired before the end of 2010.

-ends-

HSBC Infrastructure Company Limited

The Company is a long term investor in infrastructure projects which are predominantly in their operating phase and yielding steady returns. Once all 4 acquisitions from Bilfinger Berger are completed, the Company will own a portfolio of 38 infrastructure projects of which 35 will be operational. Based on the 31 March 2010 Directors' valuation plus subsequent acquisitions at cost, on completion of these acquisitions, around 10% of the portfolio by value will be projects under construction.

The Company is seeking further suitable investment opportunities in line with its strategy set out most recently in the Company's results announced on 25 May 2010, and its Investor Update RNS of 23 September 2010.

Further details of the Company can be found on its website www.hicl.hsbc.com

Investment Adviser

The Investment Adviser to the Company is HSBC Specialist Fund Management Limited, the infrastructure investment team of which has successfully invested in infrastructure projects since 1997 and which is part of HSBC Specialist Investments, the infrastructure and real estate investment arm of the HSBC Group. It was announced on 4 June 2010 that heads of terms had been agreed with HSBC for the business to become an affiliate of HSBC (from its current status of a 100% owned subsidiary). HSBC Specialist Fund Management Limited is authorised and regulated by the Financial Services Authority.

Further information on the two new Projects

The Kent Schools PFI project has been operational since June 2007 and involves the ongoing operation and maintenance of six secondary schools in Kent. The revenue is based on the Availability revenue model. The schools were constructed by Costain Ltd and William Verry Ltd and benefit from a long-term facilities management agreement with Mitie PFI Ltd. The concession contract expires in 2035.

The Kicking Horse Canyon Transit P3 project forms part of the Trans-Canada Highway, extending through the Canadian Rocky Mountains between British Columbia and Alberta. The project comprised the upgrading of approximately six kilometres of highway and the operation and maintenance of a 26 kilometre stretch of highway in total. The key feature is a 400m four-lane bridge across Kicking Horse Canyon. Construction works were carried out by Trans-Park Highway Constructors, a joint venture comprising Flatiron Constructors Canada Ltd and Parsons Overseas Company of Canada Ltd. Revenue on the project is based on an availability payment, a safety payment and a traffic payment, dependent on traffic volumes in different tariff bands. Traffic volumes are currently above the highest band, thus generating the maximum annual revenue. The revenue is relatively insensitive to changes in traffic volumes due to the banding structure. In other respects the revenue is similar to an Availability Revenue stream in that it is paid by the public sector client rather than by drivers of vehicles using the road. Operations began in March 2008 with operations and maintenance services being performed by HMC Services Inc. The concession runs to 2037.