Empresa Guaracachi, S.A. Update

24th August 2009

Rurelec PLC announces that Empresa Guaracachi SA ("Guaracachi"), its 50.001 per cent owned Bolivian subsidiary, has agreed terms with the Government of Bolivia for installing a 1.4 MW gas fired power plant at San Matias. San Matias is located in the Department of Santa Cruz, Bolivia, adjacent to Brazil's Mato Groso and is not linked to Bolivia's national grid. It serves as one of the main transit points for road transport between Bolivia and Brazil and improvement of the reliability of the power supply in the immediate area has been a key aim of the Bolivian Government.

Guaracachi has acquired a Deutz gas engine for immediate delivery. This will be Guaracachi's first installation of a gas engine for isolated generation and the Government of Bolivia has agreed terms for a premium capacity payment for the project. The Deutz unit is expected to commence operations early in the fourth quarter of 2009. All the relevant licenses and approvals have been gained and construction will commence immediately.

Rurelec is exploring other expansion possibilities in Bolivia by way of public - private partnership initiatives with the Government of Bolivia.

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