Proposed Acquisition

HSBC Infrastructure Company Limited
20 November 2007


                      HSBC INFRASTRUCTURE COMPANY LIMITED


 PROPOSED ACQUSITION OF ADDITIONAL DEBT AND EQUITY INTEREST IN THE HOME OFFICE
                         PFI PROJECT for £14.4 million


HSBC Infrastructure Company Limited ('HICL' or 'the Company')*, the listed
infrastructure investment company, announces that it has today conditionally
agreed to acquire additional equity and debt interests in the Home Office PFI
Project (the 'Project'), one of the Company's current portfolio investments for
a fixed cash amount of £14.4 million (the 'Price'), from HSBC Infrastructure
Limited ('the Transaction').


HICL currently holds 65.87 per cent. of the issued share capital of the Holding
Company for the Project and 81.53 per cent. of the Loan Notes. Following
conclusion of the Transaction, the Company will be the registered holder of
80.01 per cent. of the issued share capital of the Holding Company and will own
all of the Loan Notes and therefore own 100 per cent. of the subordinated debt
issued by the Holding Company.


The Company's investment adviser, HSBC Specialist Fund Management Limited
('Investment Adviser'), is part of the same group as HSBC Infrastructure Limited
('the Seller') and as such the Transaction is classified as a related party
transaction under the Listing Rules and is therefore subject to and conditional
on the approval of the Company's Shareholders. A circular will be sent to
Shareholders to convene an Extraordinary General Meeting in order to seek this
approval.


The Extraordinary General Meeting of the Company will be held at 12.00 noon on
17 December 2007 at Dorey Court, Admiral Park, St Peter Port, Guernsey, Channel
Islands GY1 3BG.


Graham Picken, Chairman of HSBC Infrastructure Company Limited said: 'I am
pleased to be able to announce this potential acquisition that represents an
opportunity to increase the Company's holding in a quality asset with a proven
track record. This is in line with the Company's strategy of increasing its
holding in investments already in the portfolio, an approach which is both cost
and risk effective. We are recommending shareholders to vote in favour of the
resolution at the Extraordinary General Meeting'.


Enquiries

HSBC Specialist Fund Management Limited**                   020 7991 9554
Tony Roper

Oriel Securities Limited                                    020 7710 7600
Tom Durie

M: Communications                                           020 7153 1523
Ed Orlebar
Tilly von Twickel


* All references to the Company acquiring or holding equity or debt interests in
the Project shall be construed as references to the Company acquiring or holding
such interests through the subsidiary of the Company making the acquisition


** HSBC Specialist Fund Management Limited is authorised and regulated by the
Financial Services Authority



Background to and reasons for the Transaction


One of the ways that the Company seeks to enhance value for Shareholders over
the long-term is by the acquisition of further investments in projects in which
the Company is already invested. The Directors believe that making incremental
investments in quality assets with a proven track record is both cost and risk
effective.


Since its initial fundraising and admission of the Shares to the Official List
in March 2006, the Company has followed this investment approach by making
follow-on investments in five of the projects comprised in the initial portfolio
of infrastructure investments described in the Prospectus and acquired shortly
after launch. These follow-on investments were acquired from third party
sellers.


The Transaction is a continuation of the Company's established investment
policy. The Price at which the incremental investment in the Project will be
acquired is consistent with the Company's current valuation methodology as
applied to the Company's existing interest in the Project. The Directors believe
that the Transaction represents an attractive investment opportunity enabling
the Company to increase its holding in a quality asset that has performed well.


Information on the Home Office PFI Project


The Project is a 29 year concession commissioned by the Home Office to build,
finance, operate and maintain a new headquarters building to replace their
former London office accommodation with purpose-built serviced offices. The new
building occupies the site of the former Department of Environment in Marsham
Street in Westminster.


The Project involved capital expenditure of approximately £200 million, and the
demolition of the former offices on a 4.3 acre site and the construction of a
Terry Farrell Partners designed building comprising three purpose built
interconnecting office blocks totalling approximately 75,000 square meters, for
up to 3,450 staff. Construction was carried out by Byhome Limited, a joint
venture between Bouygues (UK) Limited and its sister facilities management
company Ecovert FM Limited (both subsidiaries of Bouygues Construction S.A.).
The Project was completed and has been occupied by the Home Office since January
2005. More recently the building has also been occupied by the Ministry of
Justice.


The contract runs to 2031 and the services being provided include health and
safety, cleaning, catering and energy management. Operations are managed by
Ecovert FM Limited.


The Project formed part of the initial portfolio of infrastructure investments
acquired by the Company shortly after launch and described in the Prospectus.
The Seller currently holds a 14.14 per cent. interest in the equity and a 18.47
per cent. interest in the subordinated debt in the Project and it is these
equity and debt interests that are now proposed to be acquired.


The Company's existing investment in the Project (through the Holding Company)
is not treated as a subsidiary of the Company as the Company is not able to
control the financial and operating policies of the Holding Company by virtue of
the various agreements constituting the Project. Consequently, the Company's
current investment in the Project is accounted for as a financial asset at fair
value in the Company's balance. This additional investment in the Project will
not change the method that the Company accounts for its interest in the Project,
and the Holding Company will not be consolidated within the Company's accounts.


On completion the Company's enlarged investment in the Project will not
represent more than 20 per cent. of the Company's total assets.


Summary of the Transaction and Valuation


The Company has entered into a conditional Sale and Purchase Agreement with the
Seller to purchase the Seller's entire interest in the shares in the capital of,
and loan notes issued by, the Holding Company in respect of the Project.


The Sale and Purchase Agreement provides that the Company will purchase 77,779
fully paid ordinary A shares of £1 each in the capital of the Holding Company
and £5,535,965 Loan Notes of the Holding Company, in each case registered in the
Seller's name. The consideration for the Transaction, payable on Completion will
be a fixed cash amount of £14.4 million, which will be satisfied from the
Company's own cash resources and/or existing debt facilities.


The Price represents an amount that the Directors (with advice from the
Investment Adviser) consider to be the Fair Market Value for the equity and
subordinated debt interests in the Project proposed to be acquired pursuant to
the Transaction. The Fair Market Value has been calculated using a valuation
methodology which is in accordance with the European Private Equity and Venture
Capital Association's valuation guidelines, using the discounted cash flows
methodology and standard industry practice. This is the same methodology used by
the Company: (i) to determine the Fair Market Value of the initial portfolio of
assets acquired by the Company shortly after launch as detailed in the
Prospectus; and (ii) to determine the Fair Market Value of all of the Company's
investments as detailed in the Company's report and financial statements for the
year ended 31 March 2007. The Price for the equity and subordinated debt
interests proposed to be acquired is consistent with the Company's current
valuation methodology for the Company's existing interest in the Project and
contained as part of the Directors' valuation in the interim financial
announcement of the Company dated 20 November 2007. The Directors have satisfied
themselves on the valuation methodology and the discount rates used.


Completion is conditional upon Shareholder approval of the Transaction being
obtained at the Extraordinary General Meeting or any adjournment thereof and
conditional upon no notice being given to terminate the Project agreement and no
event of default being called under the funding documents in respect of the
Project prior to the date of Completion. Subject to satisfaction of these
conditions, Completion is expected to be on 18 December 2007. No consents are
required to effect Completion (other than the approval of Shareholders) due to
the inter group relationship between the Seller and the Company.


The Sale and Purchase Agreement contains limited warranties consistent with
market practice for the acquisition of PFI projects in the secondary market
where the purchaser is already an investor and includes warranties as to title
and authority of both the subsidiary of the Company making the acquisition and
the Seller.


Additional information


Oriel Securities Limited, which is authorised and regulated by the Financial
Services Authority for investment business activities, is acting for HSBC
Infrastructure Company Limited in relation to the matters set out in this
announcement and is not acting for any other person in relation to such matters.
Oriel Securities Limited will not be responsible to anyone other than HSBC
Infrastructure Company Limited for providing the protections afforded to its
clients or for providing advice in relation to the matters set out in this
announcement or any arrangement referred to herein.










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