Operational Update

04 July 2014

IPSA Group PLC

("IPSA" or the "Company")

Operational Update

IPSA announces that it has secured a short term loan of £500,000 from Radix International Limited for the next 6 months at an interest rate of 1 per cent per month. This will provide working capital until such time as the installation programme for the two Jenbacher gas engines, acquired at the end of 2013 adding 3.4MW at the cogeneration site , is completed which will be by the end of September this year. The engines have arrived in South Africa and are expected to materially add to the profitability of the Newcastle Cogeneration plant bringing the total increase in plant capacity to 40% since the end of 2013. The Company continues to manage its working capital.

IPSA also advises that it is progressing the transfer to Rurelec PLC of the two Siemens Westinghouse 701DU turbines (ex Fiat Avio TG50DS turbines) subject to the sale and purchase agreement entered into on the 10th June 2013. Rurelec is completing arrangements for storage and shipment of the two turbines as part of the agreed hand-over arrangements. The deferred consideration remains outstanding for the time being.

For further information contact: