Amended Loan Agreement

26 March 2012

Turbo Power Systems Inc.("TPS" or the "Company")

Amended Loan Agreement

TPS, the innovative electrical machines and electronic systems provider, announces that its wholly owned UK subsidiary, Turbo Power Systems Limited, has today entered into an agreement to amend its existing loan agreement with TAO Sustainable Power Solutions (UK) Limited ("Tao") (the "Existing Debt") so as to extend its finance facility by a total of £1,800,000 (the "Extension Loan").

The Extension Loan represents an amendment to the agreement in respect of the Existing Debt (as previously notified and amounting to £9.17 million). Accordingly the terms of the Extension Loan mirror those of the Existing Debt, with the exception that:

·; Term: the Extension Loan will be repayable on 1 April 2014 (the Existing Debt remains repayable on demand); and

·; Annual interest rate: 6.0%, payable quarterly in arrears beginning in September 2012 (interest in respect of the Existing Debt accrue and are repayable on final repayment of the capital sum).

It is intended that the Extension Loan is to run for its full term, whilst, and as notified in the Company's final results for the year ended 31 December 2011, the directors of the Company continue to consider a range of options to address the Company's financial constraints, including, but not limited to, options for addressing the Existing Debt.

Related Party Transaction

Tao, which holds 75.4% of the issued share capital of the Company, is a related party for the purposes of the AIM Rules for Companies ("AIM Rules") and the entry into the agreement as set out above with Tao therefore constitutes a related party transaction for the purpose of the AIM Rules.

The Company's independent director considers, having consulted with finnCap Ltd, the Company's nominated adviser, that the terms of the transaction being entered are fair and reasonable insofar as the Company's shareholders are concerned.

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