Trading Statement - PPA Signed

31 August 2010

IPSA PLC (AIM: IPSA), the developer, owner and operator of power generation capacity in Southern Africa, announces that its wholly-owned subsidiary, Newcastle Cogeneration (Pty.) Limited has entered into a power purchase agreement ("PPA") with Eskom, the South African electricity parastatal, under the medium term power purchase programme ("MTPPP").  Under the new PPA all electricity output from the plant would be sold to Eskom for the period to 31 March 2015, and is based on 13 MW of capacity. 

NewCogen, which owns and operates South Africa's first gas-fired independent power plant, has consistently supplied power to the grid since the plant re-started in June this year under a short-term PPA with Eskom which expires today. 

The start date under the PPA will be notified separately as NewCogen is in the process of finalising a long term gas agreement with Sasol Gas and negotiating revised terms for the steam supply agreement.  NewCogen is expected to refinance some of IPSA's shareholder loans to the power plant once these contracts are in place, thereby releasing funds to IPSA in due course.  

With these agreements in place and the refinancing completed, IPSA expects to be able to look forward to a period of sustained revenue generation at NewCogen.

Speaking today in Johannesburg, IPSA Chairman, Richard Linnell, said, "We are delighted that this contract has been signed.  We are grateful to the tireless efforts of all those who have worked hard to enable us to achieve this result.  I am looking forward to a return to full operations as soon as possible."

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