Project Financing

Asia Energy PLC
20 August 2004

                                Asia Energy Plc

                                  NEWS RELEASE

  BARCLAYS CAPITAL TO PROVIDE PROJECT FINANCING ASSISTANCE FOR PHULBARI ENERGY
                             PROJECT IN BANGLADESH

Asia Energy Plc ('Asia Energy' or 'the Company') (AIM: AEN) is pleased to
announce that Barclays Capital, the investment banking division of Barclays Bank
PLC, has been appointed to provide advice and services in connection with the
financing of the Phulbari coal deposit in Bangladesh (the 'Project').  Barclays
Capital will provide these services through their Mining & Metals team.

'We are delighted to appoint an adviser of the calibre of Barclays Capital. This
reflects the development of Phulbari as a major mining project. Asia Energy is
using leading mining, social and environmental consultants to conduct its
feasibility study on Phulbari and now has one of the world's leading mining
finance groups assisting the Company in the co-ordination of the equally
important financing aspects of the study,' said Mr Chris Eager, Asia Energy's
Chairman.

'Barclays Capital is one of the world's leading investment banks with a focus on
debt and risk management.  The Mining and Metals team assists a wide variety of
clients throughout the global mining industry and is delighted to be working
with Asia Energy to develop one of the world's most exciting greenfield coal
deposits,' said Mr Gerard Holden, Global Head of Mining & Metals, Barclays
Capital.

Barclays Capital, in its capacity as Adviser, will work with the Asia Energy
team in advancing the Project with the aim of securing finance for the
construction and commissioning of the future coal mining operation. The
Engagement has been split into two phases that reflect the different activities
necessary to ultimately secure funding for the Project:

Phase 1. Commencement of Engagement through finalisation of bankable feasibility
study ('BFS') and structuring of debt package

During Phase 1 Barclays Capital will:

  • Work with Asia Energy to review the Project's technical, environmental and
    social information and assist with legal, regulatory, political and
    financial issues.

  • Provide assistance in reviewing and negotiating material Project contracts
    including construction contracts; infrastructure agreements for
    transportation, power and water; land purchase agreements; off-take
    agreements and any regulatory, operational or fiscal agreements that may be
    reached with regional or federal government bodies.

  • Facilitate and coordinate the marketing of the Project to Export Credit
    Agencies ('ECA's'), multi-lateral institutions, commercial bank lenders and
    other potential funding sources and potential investors in the Project.

Phase 2.  Financing

            Phase 2 will commence when Barclays Capital and Asia Energy both
regard the Project to be sufficiently advanced from a technical, environmental,
regulatory and legal perspective to support a financing in the international
debt markets.

During Phase 2, Barclays Capital will:

  • Assist in the preparation of an information memorandum which will be used
    to market the Project to the financial community.

  • Assist with the preparation and negotiation of a term sheet to cover the
    basis of the financing arrangements.

  • Assist in gaining underwriting commitments and oversee syndication/
    distribution of funding.

  • Assist, together with Asia Energy's legal advisers, in the finalisation of
    documentation and funding for the Project.

Options

In consequence of the above, the Company will issue to Barclays Capital 2.1
million options to subscribe for ordinary shares in the Company, exercisable at
a price of 75p until 19th August 2009. Of these options, 600,000 become
exercisable when the five day average closing share price of Asia Energy is
greater than or equal to £1.00 and a further 500,000 options become exercisable
when the five day average closing share price of Asia Energy is greater than or
equal to £1.50.

ABOUT ASIA ENERGY Plc

Asia Energy is the 100% owner of the Phulbari Energy Project in north-west
Bangladesh, which contains a coal basin with over 400 million tonnes (Mt) of
resources of which a current estimated in-situ coal resource is calculated
according to the JORC Code of 370Mt. Asia Energy has development agreements in
place with the government of Bangladesh for the development and exploitation of
this major asset. The Project is situated 30 metres above sea level and was not
affected by the recent flooding in Bangladesh.

The Company plans to establish a 15Mt per annum coal mine at Phulbari to sell
coal to the local and export markets, including India, one of the world's
promising emerging markets. The Company also intends to participate in the local
development of a power station complex with a generating capacity of up to 2,500
MW for the next 40 years.

The development of a major coal mine and coal fired power station complex in
this mainly agricultural country would result in immediate and ongoing social
and economic benefits to the local, regional and national economies.  The US
Department of Energy estimates that only 18% of the population of an estimated
140 million has access to electricity with wood and other bio-mass generating
over half of the country's current energy supply.  The consumption of wood for
fuel has contributed to deforestation and other environmental problems in
Bangladesh. In addition, the World Bank estimated that Bangladesh lost
approximately $1 billion due to power outages and unreliable energy supplies.

For further information:

Asia Energy PLC                                       Parkgreen Communications
Michael Frayne, Joint Managing Director               Justine Howarth / Cathy Malins
David Lenigas, Joint Managing Director                Tel: [phone]
Tel: [phone]                             [e-mail]
Laith Reynolds - Executive Director (CEO- Bangladesh)
Bangladesh: [phone]
www.asia-energy.com

W.H  Ireland Limited
Philip Haydn-Slater
Tel: [phone]






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