Additional Production Facility Investment Approved

6 March 2012

AFC Energy PLC

("AFC Energy" or the "Company")

Additional Production Facility Investment Approved

AFC Energy (AIM: AFC), a leading developer of low cost alkaline fuel cells, is pleased to announce that the Company's board has approved a £180,000 investment necessary to create an additional production facility at Dunsfold Park, Surrey, UK.

The facility will enable the increased production of fuel cells with full cartridge assembly. In addition it will provide an intermediate step between small-scale and high volume in-line production. The plant will start producing its annually expected output of up to several thousand fuel cells by mid-Summer.

This facility will support on-going development and commercial activities in addition to providing the platform to demonstrate full quality assured manufacture. Licenced manufacture at larger scales remains AFC Energy's intended manufacturing route for full scale commercial products.

Ian Williamson, AFC Energy's Chief Executive, said:

"This year has seen significant progress in the transition of AFC Energy from a research and development focussed organisation to a product driven organisation. The business plan demands increased numbers of fuel cells and cartridges. Recent technical progress has allowed the Company's management to approve the investment in this additional facility. The relatively low investment required to establish this facility is further evidence of just how far our approach to low cost manufacturing has come. The company has explored many options and believes it has identified the most cost effective and efficient solution and regards this is a critical development on its path to commercialisation of its world leading fuel cell technology. This facility meets the needs for the coming months whilst we finalise our designs and line architecture for large scale production."

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About AFC Energy

Founded in 2006, AFC Energy plc is re-engineering proven alkaline fuel cell technology to reduce the cost of electricity. Alkaline fuel cells have been used on US and Russian manned space missions for decades to provide electrical power and drinking water. By using modern materials, design tools and manufacturing processes at scale, AFC Energy is developing fuel cells that will compete with conventional technologies such as turbines for electrical power generation. Today, AFC Energy is pursuing opportunities in several sectors where hydrogen is readily available including the chlorine, clean coal and waste-to-energy industries as well as applications for distributed/back-up power. For further information, please visit our website: www.afcenergy.com.

About fuel cells

A fuel cell is a device that produces electricity, heat and water by reacting a hydrogen-rich fuel with oxygen. Conventional engines and turbines combust fuel to produce mechanical energy prior to generating electricity. The direct generation of electricity allows fuel cells to be highly energy efficient. There are several different types of fuel cell, each with its own characteristic but they are all based around a common central design. Fuel cells are increasingly being deployed for applications ranging from vehicles, domestic boilers, powering portable equipment and large scale power stations.