Rurelec Regulatory News (RUR)

 9th August 2013

Rurelec PLC

("Rurelec" or "the Company")

Rurelec Progress with Arica Power Plant

Rurelec PLC (AIM: RUR), the owner, operator and developer of power generation capacity internationally, today announces that it plans to convert its power project in Arica in northern Chile from diesel to either a propane based liquid petroleum gas (LPG) or liquid natural gas (LNG) as part of a commitment to maintain the Company's record in Latin America for Clean Tech energy generation. Rurelec and its wholly owned subsidiary, Independent Power Corporation PLC ("IPC"), have pioneered the use of Clean Tech power conversion as a means of obtaining United Nations recognition for carbon emission reductions (CERs). Rurelec sponsored projects today earn over 500,000 CERs a year. IPC obtained the first United Nations approval for carbon credits based on combined cycle gas turbine conversion. IPC and Rurelec are now seeking to promote the use of LPG for power generation as a means of reducing SO2 and NOx emissions from diesel fired plants as well as reducing CO2 from the increased efficiency available to CCGT power projects based on gas turbines rather than diesel engines.

Rurelec acquired its initial 50 per cent stake in Termoelectrica del Norte, S.A. ("Termonor"), the local Chilean project company, in 2012 at a time when the Parinacota Project in Arica was designed around diesel engines. In early 2013, Rurelec increased its holding to 100 per cent and switched the project design to be based on General Electric 6B gas turbine technology, as installed at Rurelec's Energia del Sur plant in Patagonia, Argentina. Now Rurelec is proposing to upgrade the Parinacota power plant to enable it to run on LPG immediately upon commissioning as a Clean Tech plant with a possible later switch to LNG as that fuel becomes available. A final feasibility study is now being conducted but it is expected that this will confirm the decision to switch to LPG before construction starts at the end of September of this year. Commercial operation is due in the middle of 2014.

Rurelec also announces that it is considering the development of an additional 10 MW of photovoltaic solar power generation in Arica to complement the Parinacota plant, which is presently designed to run only at peak hours in order to maintain system reliability in the far north of Chile where grid access is weak. Eventually, when the plant is running on LPG or mini LNG, a conversion to CCGT operation is expected, much as Rurelec successfully converted Energia del Sur to CCGT in 2009. This solar capacity may in due course be increased to 40 MW subject to the availability of suitable project finance.

Rurelec is continuing to progress its application to the Foreign Securities Registry of the Chilean Securities and Insurance Supervisor ("SVS") for its shares to be admitted to a Santiago Stock Exchange listing. This listing is expected to provide future access to the attractive Chilean corporate debt market for long term fixed rate bonds as Rurelec rolls out its programme of new thermal power plants at Arica and Mejillones in the north of Chile.

Commenting on the new approach to the project, Peter Earl, CEO of Rurelec said: "We have always been Britain's premier Clean Tech power generator in Latin America. By pioneering the use on LPG in northern Chile, we expect to create a showcase for clean power which will serve us well as our IPC subsidiary competes to install environmentally acceptable thermal capacity in Europe and Central Asia as well as in Chile and Peru."

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