Consortium Agreement

Oracle Power Plc / EPIC: ORCP / Market: AIM / Sector: Mining

19 February 2020

Oracle Power PLC

("Oracle", the "Company" or the "Group")

Consortium Agreement signed with China National Coal Development Company Ltd. and His Highness Sheikh Ahmed Bin Dalmook Juma Al Maktoum

Oracle Power PLC (AIM:ORCP) is pleased to announce that it has signed a Consortium Agreement with its partners, China National Coal Development Company Ltd. ("CNCDC") and Sheikh Ahmed Dalmook Al Maktoum Private Office One Person Company LLC ("HH Private Office"), the private office of His Highness Sheikh Ahmed Bin Dalmook Juma Al Maktoum ("His Highness"), and, together with Oracle, referred to as "the Parties".

This Consortium Agreement has been entered into following significant due diligence, administrative and operational work undertaken by Oracle on behalf of the Parties since entering into the Joint Development Agreement (the "JDA"), as announced on 16 December 2019. This Consortium Agreement is a material development, superceding the JDA, as it establishes the proposed project shareholding structure as required under the Government of Pakistan's 2010 Independent Power Production (IPP) policy guidelines. The Company has now taken all necessary steps to formally obtain a Letter of Intent ("LOI") from the Pakistani Government as a result of the proposed shareholding structure. The final equity interests of the Parties at financial close are subject to definitive agreements being entered into in due course.

Under the Consortium Agreement, the Parties intend to jointly develop a combined lignite coal mine in Block VI (the "Project") of the Thar desert in the south-east of Sindh Province, Pakistan, for a 1,320MW (2x 660MW) mine mouth power plant and coal to gas and liquid. The Board believes that the proposed development of Block VI should produce sustainable and cheap energy for Pakistan, as well as enable the use of coal for the production of gas (primarily for use in the production of fertiliser) to meet the growing demand for gas as Pakistan's gas reserves decline. In addition, development of the Project would enable the opportunity for coal to liquid production to counter the import of expensive fuel into Pakistan.

Pursuant to the Consortium Agreement, it is intended that Oracle will hold a 12% equity interest in the Project via local project companies (anticipated to be the Company's subsidiaries Sindh Carbon Energy Limited and Thar Electricity (Private) Limited). CNCDC, being the main sponsor, is intended to hold 73%, with HH Private Office intended to hold the remaining 15%. Accordingly, the Consortium Agreement provides the necessary assurance to the appropriate Pakistani authorities, under IPP policy guidelines, of the Parties' proposed equity commitments and will allow Oracle to proceed with obtaining an LOI for power production from the Government of Pakistan.

With the Consortium Agreement in place, and the Parties now focused on the issuance of the LOI and subsequent financial close of the Project, Oracle's primary responsibility will be obtaining all licences, approvals and permissions as required by the Pakistani Government. Given the Project's inclusion on the Priority List in the China Pakistan Economic Corridor ("CPEC") for both power and oil and gas, CNCDC has confirmed, pursuant to the Consortium Agreement, its intention to be responsible for sourcing all debt for the Project from Chinese banks. The Consortium Agreement is subject to the laws of Pakistan.

Ms. Naheed Memon, CEO of Oracle, said:

"I am delighted to confirm the formal signing of this Consortium Agreement following two months of extensive work from all of the Parties. Our partners in the Project comprise one of the largest coal mining and development companies in the world and a prominent member of the UAE Royal Family, who bring with them the financial and technical wherewithal to bring a project of this stature and size to fruition.

Today's development marks a major step for Oracle and enables us to progress on our journey, with the LOI being the next major step, in developing the Project and, we believe, demonstrates that the Parties are united in their focus to make this Project a modern and first-class mining development to build, own and operate 2x 660MW (totalling 1,320MW) coal based power plant, with the potential for coal to gas and liquid and coal production for trade, recognising Pakistan's growing needs for power, gas and liquids from coal."

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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