US$13.5million agreement

AFC Energy Plc
11 June 2007

11 June 2007

                                 AFC Energy plc

   Low-cost, alkaline fuel cell company with clear route to commercialisation


 MOU to produce clean energy signed (including US$13.5 million initial order),
  exclusive supplier relationship and manufacturing JV with the government of
                                   Indonesia.


AFC Energy plc ('AFC Energy' or 'the Company') has entered into a Memorandum of
Understanding ('M.O.U.') with the Government of Indonesia, and specifically with
the State Ministry for Development of Disadvantaged Areas of the Republic of
Indonesia.

The M.O.U. relates to the CIUP (Community Integrated Utility Program) project
that aims to provide 32 million households with the ability to produce
electricity and potable drinking water over the next 10 years. AFC Energy has
been appointed as the exclusive fuel cell supplier to this program, whether with
AFC Energy proprietary fuel cells or as an agent for third party fuel cells.

The M.O.U. contains an initial order totalling US$13.5 million for three
thousand 3.5kW systems at US$4,500 per system. Supplies are scheduled to begin
around the fourth quarter of 2008. The primary trial of 3,000 units will be in
the Nabire-Papua region.

The M.O.U. also confirms that both parties undertake to enter into a joint
venture to establish, within 18 months, a manufacturing facility in partnership
with a number of interested Indonesian corporations. The intention is that over
the following 8 - 10 years up to six million 5kW units could be manufactured.

A deposit of US$3.15 million will be paid within 30 days of the signing of the
M.O.U. in order to assist in financing and accelerating the new project.

It is intended that AFC Energy will fund the development of the manufacturing
facilities required to fulfil this project with funds provided by a number of
high profile public and private multinational companies.  AFC Energy is engaged
in early stage discussions with several parties in this respect.

Ir. Tatag Wiranto MURP, Indonesia's Deputy Minister for the Development of
Disadvantaged Regions said: 'We are pleased to commence this program now that we
have identified a low-cost solution to the fuel cell component of the project.'

Howard White, AFC Energy's Business Development director said: 'We are delighted
to have been chosen exclusively to supply the fuel cell component for this
landmark. The project, developed by Prof. Dr. Ir. Reginald A. Theijs, Senior
Advisor to the Deputy Minister for Economic & Private Business Development, is
groundbreaking in that it addresses existing shortages of the fundamental
commodities in Indonesia, electricity and potable water.

'The program will utilise bio-mass and other renewable sources to produce
hydrogen for AFC Energy's fuel cell to convert the hydrogen to electricity, and
some of the electricity to run reverse osmosis potable water production units.'

'The program has been designed to achieve a payback period of between three and
five years on the installed equipment. This would mean that the program is
financially self funding after the initial build up period. This project will be
part of the CIUP.'

Gerard Sauer, Chief Executive, AFC Energy said: 'This M.O.U. is further evidence
of our strategy to develop and manufacture low-cost high volume fuel cell
products working well. There is ample evidence that the market place will expand
if the right commercial conditions can be created.'

Maxi Gunawan, co-chairman of the IBBC (Indonesian British Business Council)
said: 'This agreement is a showcase project that embodies the ideals that were
expressed in the joint statement made between the UK and Indonesian Governments
represented by Prime Minister Tony Blair and President Susilo Bambang Yudhoyono
in enhancing bi-lateral relationships in trade and investment.'

                                    - Ends -

For further information:

Madano Partnership (media)                            + 44 20 7593 4000
Mark Way (mobile)                                     + 44 7786 116991
Graham Moonie

AFC Energy plc                                        + 44 1483 276726
Tim Yeo MP, Chairman
Gerard Sauer, Chief Executive

Nabarro Wells                                         + 44 20 7710 7400
Richard Swindells
Anthony Rowland

IR Focus (analysts)                                   + 44 20 7593 4000
Neville Harris


About AFC Energy:

• AFC Energy listed on the London Stock Exchange's AIM market in April 2007
  (AIM ticker symbol AFC).

• AFC Energy is developing alkaline fuel cells that will produce clean
  energy without cost disadvantage.

• The AFC Energy fuel cell is based on proven existing technology, as used
  by NASA in the Apollo space missions, and by the Russian navy.

• The use of precious metals has been largely eliminated and all materials
  are expected to have at least a 50 year security and multiple source of
  supply.

• The Company's primary route to commercialisation is to provide fuel
  cells to locations where hydrogen is produced in large amounts as waste or
  by-product, such as the chlor-alkali industry.

• The Company has already received a contractual purchase order from
  Akzo Nobel under which it expects to deliver its first fuel cells to Akzo
  Nobel's Bitterfeld site during the first quarter of 2008. The Directors 
  believe that the AFC Energy fuel cell will have a two year payback for 
  purchasers

• AFC Energy has improved the processes and reduced the costs and number
  of components required in an alkaline fuel cell

• The AFC Energy fuel cell is designed to enable rapid construction and
  easy routine maintenance, including individual electrode replacement.


                      This information is provided by RNS
            The company news service from the London Stock Exchange