PPG.L Regulatory News (PPG)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Plutus PowerGen Plc / Ticker: PPG / Index: AIM

29 August 2019

PLUTUS POWERGEN PLC

("Plutus", the "Group" or the "Company")

Collaboration Agreement for Equity Funding of Gas Site Portfolio & FlexGen Site Update

Notice of Termination of agreement with Rockpool Investments LLP

Collaboration Agreement for Equity Funding of Gas Site Portfolio & FlexGen Site Update

Plutus PowerGen (AIM: PPG), the AIM quoted power company focused on the development and operation of flexible energy generation ('FlexGen') projects in the UK, is pleased to announce that it has entered into a collaboration agreement (the 'Collaboration Agreement') for the equity funding portion of its proposed initial 80MW and contemplated further portfolio of 160MW of Peaker gas sites in the UK.

The Collaboration Agreement has been signed with an FCA regulated and accredited investment adviser whose leadership team has a strong track record in sizeable civil project funding in the energy generation space and has recognised the potential of the Plutus portfolio, understands the current UK power dynamics and the need for UK Peaker sites. Plutus has agreed to give the counterparty to the Collaboration Agreement a first right of refusal on the funding for both its proposed as well as its contemplated gas site portfolio on an ongoing basis which currently totals 240 MW.

The Company anticipates that it will maintain a majority equity interest in its portfolio of gas powered Peaker sites, which the Board expects to be ultimately significantly larger than its interests in the current six FlexGen and one gas site portfolio which have been funded by EIS investors through Rockpool Investments LLP ("Rockpool"). The new funding for the Peaker gas sites will be provided on a site-by-site basis and is subject, inter alia, to completion of full due diligence and investment committee approval.

Plutus and the counterparty intend to work together to initially develop and fund a pipeline of four identified projects totalling c.80MW and the counterparty have been granted exclusivity over these projects until 31 December 2019. The counterparty and Plutus intend to agree heads of terms for each project.

The role of Plutus in the development of these projects is expected to cover Plutus being responsible for: (i) continuing the development and evaluation of these sites in respect of planning, other consents and power and gas connections; (ii) inputting into the technical solution at each site, assembling appropriate professional teams and developing draft contractual documentation with key counterparties; and (iii) developing a standard project operating contract under which Plutus will subcontract certain key services in respect of merchant trading and plant maintenance.

The gas site portfolio will run Merchant (i.e. within day, day ahead and balancing mechanism markets) which the Company recognises as a major advancement in progressing in the energy provision space. Moreover, the Company is currently in talks regarding support of asset financing to complement equity funding where we have expressions of interest and, as such, Plutus intends to inform the market in due course of the determination of a preferred partner.

Until the execution of binding terms for the initially contemplated site build out, the name of the counterparty to the Collaboration Agreement shall remain confidential.

Notice of termination of agreement with Rockpool Investments LLP

Additionally, the Company announces that it received notice on 27 August 2019 from the non-executive directors of Rockpool that its management of the existing Rockpool EIS funded sites is to be terminated, on a six month notice period. The Board believes this will assist in accelerating the sale of the portfolio of six 20MW diesel sites, and one gas site in development, in which the Company retains a 44.5% equity stake. The Company will continue to retain the management of Attune Energy.

Plutus, through its subsidiary, Plutus Energy Limited, is currently owed £507,809 in accrued and deferred fees from the six co-invested companies. Plutus anticipates accruing, under the existing management agreements, a further £312,498 in management fees during the six month notice period in addition to receiving ongoing management fees. The directors of Plutus expect that the ending of these management contracts will dovetail with the commencement of the development of the new gas Peakers portfolio.

Interim CEO, James Longley, commented: "The collaboration agreement for the equity funding portion of our gas powered Peaker portfolio is a milestone development for Plutus and is the culmination of extensive negotiations over a long period. The counterparty is highly experienced in the energy generation space and the agreement recognises the potential of the current proposed and contemplated portfolio. The financial metrics for the gas sites are superior to that of the existing portfolio, and with an established entity who understands the demand and potential of the Peaker market. The asset financing negotiations are progressing well and we are therefore very positive about the future of the Company. With regard to the Rockpool sites we believe the ending of the management contracts will assist in the facilitation of the sale of the assets which should generate significant profit and have an attractive yield potential for investors and potential buyers once Capacity Mechanism is reinstated. We look forward to updating shareholders with details of our progress in due course."

**ENDS**

 For further information, please visit www.plutuspowergen.com, or contact: