PPG.L Regulatory News (PPG)

Plutus PowerGen Plc / Ticker: PPG / Index: AIM

3 July 2015

Plutus PowerGen plc ('PPG' or 'the Company')

Agreement with Reliance Energy Ltd to Build UK Power Portfolio and PPG Balance Sheet

Plutus PowerGen plc, the AIM listed power company focused on the development, construction and operation of flexible stand-by electricity generation in the UK, has signed a Heads of Terms with the newly established funding provider Reliance Energy Limited ('Reliance'), a developer of renewable energy and flexible generation projects in the UK, for the development of further individual 20MW flexible power generation sites in the UK. Reliance has developed a strong pipeline of projects which it will seek to deliver in conjunction with its partners over the next few years. Therefore this agreement offers PPG a compelling opportunity to build its balance sheet.

Under the Heads of Terms, both parties will focus on securing new sites suitable for the construction of flexible generation facilities. When procured, each project will be constructed and managed by PPG in return for a management fee and funded by Reliance. The equity structure of the project will be 70:30 with the majority interest granted to the party that successfully introduces the site. Importantly, PPG has a 500MW pipeline of flexible energy generation under consideration.

This funding arrangement is complementary and in addition to the management services PPG offers to the five EIS companies funded thus far by Rockpool Investments LLP.

Phil Stephens, CEO of PPG said, "This agreement provides us with an excellent opportunity to build a complementary portfolio of power projects in the UK on terms that strengthen PPG's balance sheet. This new agreement with Reliance, which provides the potential to gain up to a 70% stake in a project, reflects our ongoing focus on strengthening the Company's revenue streams and provides us with the opportunity to monetise the potential within our project pipeline."

**ENDS**

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

Notes to Editors

Plutus PowerGen plc is an AIM listed company focused on the development, construction and operation of flexible stand-by power generation sites in the UK. At present, the market dynamics for flexible power generation are positive as a result of the continued downward pressure on capacity available to National Grid to balance supply and demand, leading to their announcements about possible power shortages over the next few years.

Flexible Power generators such as PPG offer a viable and timely solution to the power capacity shortfall in the UK. To this end, PPG is initially focusing on delivering 200MW of capacity over the next three years and currently has a project pipeline of potential development sites with 500MW of power generation capacity.

PPG has a straightforward multi-revenue stream model with large and stable counter-parties and is using project/EIS funding through SPVs to finance construction of the generation assets. This structure has the benefit of limiting dilution to plc shareholders as the assets are financed and built.