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16th May 2008
Executive Board of United Nations Framework Convention on Climate Change Approves Significant Carbon Credits for Rurelec's Energia del Sur
The Directors of Rurelec PLC ("Rurelec"), the Latin American power generation company, are pleased to announce that the Executive Board of the United Nations Framework Convention on Climate Change ("UNFCCC") has confirmed its approval and registration of 148,019 tonnes per year of C02 reductions in the form of Certified Emission Reductions certificates ("CERs") for the Argentine power company, Energia del Sur ("EdS") in which Rurelec has a 50% equity interest.
The registration is valid for three separate crediting periods of seven years each. This is Rurelec's first formal registration of CERs at the United Nations and follows on from nearly three years of exhaustive project design work on the part of both Rurelec and its 16 per cent. shareholder, Independent Power Corporation PLC which pioneered the carbon credit methodology for the conversion of gas fired power plants from open cycle to combined cycle as a means of creating officially recognised CERs.
Based on the registration of EdS's CERs, Rurelec has negotiated a preliminary agreement with BNP Paribas for a forward purchase of CERs for the life of the Kyoto Protocol. This will give EdS, subject to contract, CER income of around US$3 million a year until the end of 2012 from the moment that the EdS CCGT plant in Comodoro Rivadavia enters full commercial operation in August 2008. Rurelec is also finalising terms for a securitisation of the income from the CER forward sale which is a ground-breaking transaction intended to pay down a significant amount of project debt at EdS.
Rurelec's Bolivian subsidiary is also in the process of registering at UNFCCC 330,000 tonnes per year of CERs on its 96 MW CCGT conversion project in Santa Cruz, Bolivia. Finalisation of this registration is expected in the second half of 2008.
For further information, please contact:
Peter Earl
Managing Director Tel. 020 7793 5610
Paul Shackleton/ Stewart Dick
Daniel Stewart & Company Tel. 020 7776 6578
Ana Ribeiro
Park Green Communications Tel. 020 7851 7480