Acquisition

Rurelec PLC
25 January 2005


FOR IMMEDIATE RELEASE


Rurelec PLC ('Rurelec')


Acquisition of power generation equipment out of receivership


On-sale to Independent Power Corporation PLC ('IPC')


25th January 2005


Rurelec announces that yesterday it acquired for a purchase consideration of  £1
million in cash nine Jenbacher 616 gas engines with a total nominal capacity of
18 MW (together with associated ABB generators and heat recovery systems) from
Trevor O'Sullivan and Simon Bower acting as Receivers to Medina Finance Limited,
a company in administrative receivership (the 'Vendors').


£800,000 of the purchase consideration was paid to the Vendors yesterday from
Rurelec's own resources.  Payment of the balance, which has been guaranteed by
IPC as part of the onward sale transaction described below, is due to be paid to
the Vendors on 15th February 2005.


The Jenbacher is a high efficiency gas engine of 2 MW installed capacity which
runs on natural gas.  Rurelec intends to use three of the engines for a new
rural electrification project in Tarija in southern Bolivia, where there are
large reserves of natural gas, local demand for affordable power and where the
possibility also exists of electricity supply to isolated power systems in
Northern Argentina, which are currently experiencing acute shortages of
electricity as demand growth increases.


Yesterday, Rurelec also entered into a contract to sell on to IPC the remaining
six Jenbacher machines for  £1 million, excluding VAT. in cash.  This
transaction is due to complete on 15th February 2005. No residual liability will
remain with Rurelec following their sale.  The sale of the six machines to IPC
will give rise to a gross profit to Rurelec on the sale of approximately
£333,000 and the carrying value of engines retained will also be approximately
£333,000.


Rurelec's Managing Director Peter Earl, due to his holding of a controlling
stake in IPC, is a related party as defined by the AIM Rules for the purposes of
the sale by Rurelec of the six machines to IPC.  The directors of Rurelec, with
the exception of Peter Earl (the 'Rurelec Directors'), consider, having
consulted with Rurelec's nominated adviser Arbuthnot Securities Limited, that
the sale of the six machines to IPC is fair and reasonable insofar as Rurelec's
shareholders are concerned.  In consulting with the Rurelec Directors, Arbuthnot
has relied upon the Rurelec Directors' commercial assessments.


Rurelec also announces the appointment of Carlos Garcia Agreda as General
Manager of its Bolivian isolated power subsidiary, Energia para Sistemas
Aislados SA ('ESA').  Carlos Garcia is an electrical and mechanical engineer who
spent six years at Co-operativa Rural de Electrificacion ('CRE'), a distribution
co-operative that serves Bolivia's Santa Cruz department and which is also
Bolivia's largest rural electrification co-operative, before taking
responsibility for rural electrification projects at Bolivia's Vice-Ministry of
Electricity.  ESA is currently working on the installation of 6 MW of
Worthington reciprocating engines in Trinidad in Central Bolivia and on the
development of a 10 MW isolated power project serving Yacuiba in southern
Bolivia at a time when the provision of power for isolated generation has become
an important political issue in Bolivia.  ESA is in discussions, which may lead
to new joint ventures with local partners in Bolivia and Argentina and with
multi-lateral agencies for an accelerated roll-out of new power capacity in the
Southern Cone of Latin America.


Elizabeth Shaw

Finance Director

For further information contact:

Elizabeth Shaw
Tel: [phone]

Rurelec PLC is a British company established to develop rural electrification
projects in Latin America.  It is managed by a team with a strong track record
in developing power projects worldwide and with considerable experience in the
electricity sector in Latin America.


Rurelec has two principal businesses:


-Ownership of power generation facilities in isolated areas


-Management of rural electrification expansion projects funded by the World Bank
 or multi-lateral development agencies.


Rurelec recently floated on the AIM market of the London Stock Exchange in order
to have access to European institutional capital for new power projects and to
ensure transparency for its public sector-funded project management activities.


Arbuthnot Securities Limited which is authorised by the Financial Services
Authority is acting as nominated adviser to Rurelec and for no one else in
connection with the transactions described herein and will not be responsible to
any person other than Rurelec for providing the protection afforded to its
customers or for advising any other person in relation to the transactions
described herein.


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