Bolivia Update

Rurelec PLC 29 August 2006 29th August, 2006 AIM: RUR Bolivian Expansion on Track for Rurelec's Empresa Guaracachi S.A. Rurelec plc, ('Rurelec' or 'the Company') the AIM-quoted power developer and owner of power plants in Latin America, today announces that its Empresa Guaracachi S.A. ('Guaracachi') subsidiary has successfully commissioned its new 8 MW addition to its Aranjuez power plant in Sucre, the federal capital of Bolivia. At the same time the Guaracachi's 71 MW expansion of capacity under construction in Santa Cruz in the east of Bolivia remains on track for commissioning in November of this year. Together the two new power facilities represent some 10 per cent. of the peak demand of Bolivia. Rurelec acquired control of Guaracachi in January 2006. By the end of the year, Guaracachi's installed capacity in Bolivia will have increased by 22 per cent. from 360 MW to 440 MW. Guaracachi is Bolivia's largest power generation company. At the same time as completing its current new power capacity, Guaracachi has been working on two further expansion projects. The first consists of 120 MW of power capacity to be based in Yacuiba in Bolivia's Department of Tarija close to the border with Argentina. This capacity is intended to stimulate economic growth to the south of Bolivia where the national transmission grid has not yet been extended. This plant will also be interconnected to the northern grid system of Argentina which currently suffers from power shortages. Guaracachi is in negotiation with the Bolivian national oil and gas company, YPFB, for a long term gas supply for its new plant. A preliminary agreement for the sale of electricity has already been signed with CEMSA, the Argentine power trading subsidiary of Endesa of Spain. The second project is the 80 MW combined cycle gas turbine ('CCGT') expansion project which consists of the conversion in Santa Cruz of two existing General Electric 6FA gas turbines to combined cycle operation. This project has already been submitted for approval as Bolivia's first carbon credit power generation project under the Kyoto Protocol. The new capacity is due to be brought into service at the end of 2007 and will meet Bolivia's growing demand for new power capacity to match its 6 per cent. growth in GDP, the highest level of economic growth that Bolivia has experienced in a decade. Guaracachi continues to trade well and remains committed to a high level of dividend payout consistent with its policy of distributing profits to shareholders. Rurelec intends to continue with its progressive dividend policy. For further information please contact: Peter Earl, Managing Director, Rurelec PLC: +44(0) 20 7793 7676 Paul Shackleton, Daniel Stewart +44(0) 20 7776 6550 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

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