Argentina Update -Replacement

Rurelec PLC
29 August 2006


The following replaces the Argentina Update announcement released today at 
9.30 a.m. under RNS number 1688I. The stated dividend policy within the last 
paragraph of the announcement has been amended. The full amended announcement 
follows.



       Argentina CCGT Expansion for Rurelec's Energia del Sur SA ('EdS')


DATE: 29 August, 2006


Rurelec plc, the AIM-quoted power developer and owner of power plants in Latin
America, today announces that it has begun construction on the 60 MW combined
cycle expansion of its Energia del Sur power plant in Patagonia.


EdS is the Argentine power generation company which owns and operates one of the
most southerly power plants in Argentina, serving the partially isolated power
grid based on Commodoro Rivadavia. Existing capacity is 76 MW and Rurelec owns
an effective 50 per cent. interest in EdS following its July 2005 purchase of a
50 per cent. stake in Patagonia Energy Limited ('PEL').


For some time the shareholders in PEL have been examining the feasibility of
adding a steam turbine and heat recovery steam generator to the two open cycle
General Electric 6B gas-fired turbines of EdS. PEL has now acquired a suitable
steam turbine and air cooling system at very favourable prices for the combined
cycle conversion, which is expected to be eligible for carbon credits under the
Kyoto Protocol. The steam turbine and cooling system are currently being
transported to Patagonia from the United States. When completed in the second
half of 2007, the plant conversion will add some 60 MW of new capacity in the
south of Argentina where demand growth has out-stripped reserve capacity in the
southern power grid. Rurelec's EdS expects to qualify for carbon credits under
the Clean Development Mechanism of the Kyoto Protocol.


In the last week EdS has received initial approvals from the Credit Committee of
Standard Bank, London for a loan of US $18 million for the financing of the new
CCGT capacity. Financial close is expected to occur in the third quarter of
2006.


EdS continues to trade well and remains committed to maximizing cash payments to
its shareholders. Rurelec in turn intends to maximize the payout to its own
shareholders of cash receipts from Rurelec subsidiaries such as EdS.





For further information please contact:

Peter Earl, Managing Director, Rurelec PLC: [phone]

Liz Shaw, Finance Director, Rurelec PLC [phone]


Notes to Editors


Rurelec PLC is a British company established to develop rural electrification
and power generation 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 the Southern Cone of Latin
    America


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


Rurelec has existing power assets in Argentina and Bolivia.


In Argentina it owns a fifty per cent. stake in Energia del Sur, a 76 MW gas
fired plant which Rurelec is converting to combined cycle operation to add a
further 50 MW in 2007.


In Bolivia, it owns a 50.001 per cent. stake in Guaracachi, Bolivia's largest
power generation company which has a 29 per cent. national market share. In 2006
Guaracachi installed capacity will increase from 360 MW nominal capacity to 439
MW nominal capacity. In 2007 Guaracachi expects to bring into production 120 MW
of dedicated export capacity serving Northern Argentina and 80 MW of combined
cycle capacity serving the Bolivian domestic market. All Guaracachi's power
capacity is gas fired.


Rurelec floated on the AIM market of the London Stock Exchange in August 2004.
Guaracachi is independently listed on the Bolsa Boliviana de Valores.





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