TEG.L Regulatory News (TEG)

The TEG GROUP PLC (TEG/L)

("TEG" or "the Company")

Re: Update on Projects

Market Update

The Company previously announced its joint venture subsidiary with Alkane Energy PLC, NEAT Biogas Limited ("NEAT"), had been awarded preferred bidder status by three Councils in North East Wales ("the Hub") to construct and operate an Anaerobic Digestion ("AD") facility. The preferred bidder status was subject to NEAT securing satisfactory finance for the project and whilst NEAT had received an offer of bank finance, it has not been possible to agree contractual terms with the funders that are satisfactory to the joint venture partners or the Hub. Consequently, NEAT is unable to continue as Preferred Bidder.

Good progress has been made with regards to the Dagenham project, the combined in vessel composting ("IVC") and AD facility to be constructed in London. Foresight is expecting to close the funding package and proceed to financial close during Quarter 2 2012. The planning permission and Section 106 agreement have both been completed. Under the terms of this project, a new special purpose vehicle ("SPV") will be created, TEG will receive a contract from the SPV to construct the facility and an additional 15 year operating contract. TEG will hold a minority shareholding in the SPV and will have a seat on its board of directors.

Commissioning of the Perth AD facility is continuing to go well and the facility is now continuously generating renewable power.

TEG's own operations continue to perform well. Waste volumes and revenues continue to grow as Local Authority and private sector customers maintain the drive to divert organic waste from landfill.

The Company announced on 23 January 2012 that it had appointed KPMG to conduct a strategic review and announced on 26 January 2012 that it had entered into an Offer Period. KPMG continues to advise the Company in relation to the Offer process. N+1 Brewin continues to advise the Company in relation to the alternative funding options also announced on 26 January 2012. A further announcement in relation to the strategic review will be made in due course.

ENDS

Editors notes:

TEG

TEG provides state of the art technology for handling organic wastes. Its in-vessel composting (IVC) system is one of the few approved technologies capable of treating animal by-product (ABP) waste and it is now providing an anaerobic digestion (AD) technology to produce power from food waste. IVC plant economics are predominantly driven by the gate fees charged, rather than the value of the end product (compost).

The AD plants also benefit from power sales and Renewable Obligations Certificates ("ROCS") or Feed-in Tariffs ("FITs"). TEG owns its composting technology, the TEG Silo Cage System, and has an agreement with UTS Biogastechnik GmbH ("UTS") for the provision of AD technology into the UK waste markets. The TEG processes are an economic and sustainable alternative to landfill.

The TEG Silo Cage System

The Silo Cage system, one of the few technologies capable of treating this waste, is a natural process producing compost as an end product. The compost is an excellent soil conditioner that fertilises, retains moisture, provides structure and reduces the incidence of plant disease. TEG's Silo-Cages are housed in self-contained buildings, suitable for urban environments, are not unsightly and are environmentally friendly.

Collaboration with UTS

UTS Biogastechnik GmbH is one of the world's leading biogas companies offering services in the planning, construction, delivery and installation of biogas plants and their key components. The company has its own production facilities and service shops, technical design and development departments as well as mobile mechanical and biological customer service technicians to support the international client base.

UTS also develops and sells specialized mixers, pumps and a variety of solid/liquid separating devices related to the biogas and agro/food markets. The company is headquartered near Munich, Germany with subsidiaries in Italy, Hungary, Spain, the Czech Republic and now a rapidly developing company UTS Biogas Limited, to service the United Kingdom & Ireland markets.

TEG Biogas (Perth) Limited

TEG Biogas (Perth) Limited ("TEG Biogas") is a joint venture company established by TEG with Albion LLP. TEG Biogas is constructing a 16,000 tonnes per annum AD plant at TEG's Glenfarg site to produce 0.7MW of electrical power and 0.2MW of heat that is to be used by Binn Eco Park. Commissioning of the Perth AD facility is continuing and the facility is now continuously generating renewable power.

General

Customers include local authorities, waste management companies, food processors, farmers and landowners. The Company's expanding market is driven by increasingly stringent EU and UK legislation regulating the treatment and disposal of organic waste. Statutory targets for the diversion of waste from landfill increase annually through to 2020, increasing TEG's market opportunity year on year.