TEG.L Regulatory News (TEG)

The TEG GROUP Plc (AIM:TEG)

("TEG" or "the Company")

Update Re: Dagenham Contract

" TEG 'Breaks Ground' in the Construction of its New Facility in Dagenham, Representing Central London's First AD Energy and Composting Plant"

The TEG Group Plc ("TEG"), the AIM listed cutting edge green technology company, which develops and operates organic composting and energy plants, is pleased to announce that it has commenced construction of the £21 million organic waste facility at East London's Dagenham Dock in the London Borough of Barking and Dagenham, which is the first anaerobic digestion ("AD") energy plant to be constructed in Central London.

The new facility will process 49,000 tonnes per annum of food and green waste via AD and In-vessel composting ("IVC") technology on a 4.7 acre site on the Mayor of London's 60 acre London Sustainable Industries Park ("LSIP"). The plant will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes. It will also produce over 36,000 tonnes p.a. in AD digestate and 14,000 tonnes p.a. of compost for agricultural use. The feedstock will come from source segregated food waste and mixed food and green waste produced by local households, commercial and manufacturing enterprises

TEG has now commenced the groundworks for the new facility in preparation for construction to commence later in 2012.

Foresight Group ("Foresight"), the specialist recycling and green energy investor, has raised the full capital required to fund the facility, through a special purpose vehicle ("SPV") called TEG Biogas (London) Limited of which TEG has taken a 24.5% shareholding. Construction of the plant will generate approximately £16 million in revenues for TEG over the period of construction and the facility is scheduled for completion in early 2014, following the commissioning period that is expected to commence in quarter 3 of 2013.

Commenting, Mick Fishwick, Chief Executive of TEG, said:

"'We are delighted to have commenced construction as planned and we are pleased that the project is proceeding well. This will be a flagship plant for the Company and we look forward to opening its doors later in 2013".

ENDS

Editor's 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. 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.

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.

About the London Sustainable Industries Park

Located in Dagenham, the London Sustainable Industries Park is a flagship project funded by the Mayor of London which aims to become the UK's largest concentration of environmental industries and technology companies, attracting up to 750 jobs and up to 500 construction jobs. It is bringing new life and opportunities to a former industrial brownfield site, providing an attractive destination for businesses delivering waste to energy projects, combined heat & power schemes, recycling & reprocessing facilities and renewable energy technologies. The Mayor is committing over £10million to complete infrastructure works for the 670,000 sq ft development including roads, pedestrian and cycleways, utilities, sustainable drainage and landscaping. The site is also expected to include a decentralised heat network. The activity on the Park will also support the Mayor's climate change, waste and energy policies helping to deliver low carbon infrastructure and 'green-collar' jobs.

About Foresight Group

Foresight is an independent specialist private equity, infrastructure and environmental investor, which focuses primarily on investments in unquoted UK and European companies or projects.Foresight has in excess of £650 million assets under management across a number of funds, including Institutional Limited Partnerships, Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs).

Foresight Environmental Fund (FEF), a £60 million fund, cornerstoned by the London Green Fund, was launched in March 2011 by the Mayor of London, Boris Johnson, and is part of London's drive towards becoming a world leading low carbon city. FEF seeks to finance waste management and recycling facilities to support sustainable and carbon neutral economic growth. The Fund's investment programme has the potential to divert over 1.4 million tonnes of municipal, commercial and other waste from landfill each year, reducing annual greenhouse gas emissions by nearly 1 million tonnes CO2 and creating new jobs in London.

Foresight has had a strategic focus on the waste and environmental sector since 2006 and in that time has assembled one of the most experienced technical and commercial teams in the market.www.foresightgroup.eu