Plutus PowerGen Plc / Ticker: PPG / Index: AIM

24 February 2016

Plutus PowerGen plc ('PPG' or 'the Company')

Update on Funding Strategy for Future Projects

Plutus PowerGen plc, the AIM listed power company focused on the development, construction and operation of flexible stand-by electricity generation in the UK, is pleased to announce an update with respect to its financing strategy for its future pipeline of projects.  As previously stated, the Company is committed to raising the total funding of approx. £5.4m required for each 20MW project of flexible power generation, including capital expenditure, working capital, fees and contingency, with minimal dilution to shareholders.

To date, the nine projects for which PPG has management contracts have been equity funded by third party investors whereby PPG does not hold a majority shareholding in these vehicles. In order to capture a greater return for the Company and to maximise the Company's exposure to project uplift in the future, PPG is aiming to secure larger majority equity stakes in projects (between 80-100%) going forward. The Directors believe that the funding for each new project could typically comprise of 80% debt and 20% equity funding and it is expected that the equity portion will be funded by PPG.  Accordingly the Company has appointed a corporate finance house to raise a minimum of £3.5 million by way of a five year listed bond the proceeds of which are intended to fund the PPG equity component for three additional 20MW projects where PPG controls a majority stake.  Concurrently the Company is in discussions with a range of third party debt providers for senior lending for the debt component of the individual projects which will be majority or wholly owned by PPG.  The Directors are confident the projected cash flow from these 20MW projects is capable of servicing both interest and capital repayments on this increased element of debt funding. In addition, it is envisaged that each new project will pay a management charge to PPG. The management fees received from the new majority owned projects are expected to be more than sufficient to pay the interest on the proposed listed bond.

PPG CFO James Longley said, "We believe that the next important milestone for PPG is the delivery of non-dilutive financing for individual projects in which the Company has a majority or 100% stake.  Our success in gaining £33.2 million from Rockpool for our first nine projects is testament to the strong appetite for flexible energy generation projects in the UK due to the considerable supply/ demand imbalance, and in consideration of this, I am delighted to have commenced work to raise a minimum of £3.5 million via a listed bond."

**ENDS**

For further information, please visit www.plutuspowergen.com, or contact:

Notes to Editors

Plutus PowerGen plc is an AIM listed company focused on the development, construction and operation of flexible stand-by power generation sites in the UK. At present, the market dynamics for flexible power generation are positive as a result of the continued downward pressure on capacity available to National Grid to balance supply and demand, leading to their announcements about possible power shortages over the next few years.

Flexible Power generators such as PPG offer a viable and timely solution to the power capacity shortfall in the UK. To this end, PPG is initially focusing on delivering 200MW of capacity by the end of 2017 and currently has a project pipeline of potential development sites with 700MW of power generation capacity.

PPG has a straightforward multi-revenue stream model with large and stable counter-parties and is using project/EIS funding through SPVs to finance construction of the generation assets. This structure has the benefit of limiting dilution to plc shareholders as the assets are financed and built.