Further Update re Settlement of Funds and Iris

20 August 2015

IPSA Group PLC

("IPSA" or the "Company")

Further Update re Settlement of Funds and Iris Claim

IPSA, the owner, operator and developer of power generation capacity in South Africa, announces that further to its announcements of 20 July 2015 and 30 July 2015, a sum of €1 million of the outstanding balance due to Ethos Energy has been paid by Rurelec PLC ("Rurelec") on behalf of the Company and that a proposal has been received from Rurelec regarding the timing of the further payments still due to IPSA. Rurelec proposes to pay to Ethos Energy a further €1.5 million before the end of September 2015 and the balance of approximately €355,000 by the end of October 2015. These sums will constitute further payments to IPSA of deferred consideration still outstanding under the agreement dated 10 June 2013 for the disposal of the Company's two remaining Siemens Westinghouse 701 DU gas turbines to Rurelec. This proposal has been referred to Ethos Energy for its review and consideration.

The remaining balance of deferred consideration has been further reduced since the announcement on 30 July 2015 by sums advanced to IPSA from Rurelec and amounts owed by IPSA to Rurelec. Subject to Rurelec settling the amounts referred to above to Ethos Energy the remaining balance due from Rurelec amounts to approximately £265,000 and is expected to be received before the end of October 2015.

The arrangements to pay the final €2.6 million due directly from the Company to Ethos Energy which is due by the end of September 2015 are subject to discussion between the parties. IPSA is still in discussion with Radix Investments Limited regarding the extension or refinancing of the loan of £500,000 plus interest.

The Company's working capital is tight and being carefully managed. The Company remains reliant on the receipt of the remaining funds owed by Rurelec and the forbearance of its principal creditors of Ethos Energy and Radix.

The Company will also need to raise further funds in the near term in order to meet the separate payment of €2.6m due to Ethos Energy by 30 September 2015 and to meet remaining creditors and for additional working capital. As previously announced the Company intends to sell its remaining balance of plant in relation to the previously sold turbines as well looking as selling a minority interest in its operating subsidiary Newcastle Cogeneration Pty Limited ('NewCogen') although there can be no certainty the Company will be successful in raising funds from these sources or by other means.

In relation to the previously reported dispute over the the non- refundable deposit for the failure of Iris Ecopower SDN Berhad ('Iris') to complete the purchase of turbines in 2012 and for which the Malaysian Courts have twice found in favour of IPSA, a hearing date of 3rd November has been set in the Federal Court of Malaysia for a final appeal by Iris

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