REG completes first tranche of wind farm financing

Renewable Energy Generation Ltd ("REG" or "The Group")

REG completes first tranche of wind farm financing

Renewable Energy Generation (AIM: WIND), the UK wind farm developer and operator, has completed the project financing of five operational wind farms. This is in line with the strategy set out by the Board to introduce project financing into existing operational sites in order to release equity for deployment into new projects.

The 12 year project finance, covering 13.9MW of plant with a book value of £14.5 million, is provided by the Co-operative Bank at an all-in rate of 6.038%. It has released £12 million of equity which, when added to existing resources, will provide REG with a total of £20 million for reinvestment.

REG expects that planning applications for a further 140MW of projects will be submitted in its next financial year. This is in addition to the 38.3MW of applications already submitted and awaiting decision. These represent a potential investment of over £230 million. Given the likely acceleration of its construction programme during 2012, REG has initiated the financing of a second tranche of wind farms, with a total capacity of 20.5MW, which is expected to be completed by the end of 2011. This second and larger project financing should release in excess of £20 million, increasing total available equity for investment in new projects to over £40 million.

The equity released from the two financings will ensure that REG is fully funded both to deliver on its three-year strategy of committing £100 million to new renewable energy projects by the end of 2012 and to facilitate its next stage of growth.

REG's current operational portfolio generates, on average, around 106,000 MWh of electricity per annum and the resultant cash flows cover both the cost of running the group, including development spend, and of servicing the new debt. The Group's trading performance has improved significantly in the second half of the year with an improvement in wind conditions having a positive effect on output. The Group therefore expects to record a positive EBITDA and cash flow for the second half to around break even on an EBITDA basis for the year ending 30 June 2011.

Two further sites, at Sancton Hill, Yorkshire, (10MW) and South Sharpley, Country Durham, (6MW) have been granted planning consent subject to certain conditions which are currently being fulfilled. Construction is expected to begin at both sites in Q4 2011, subject to finalisation of turbine supply contracts.

Andrew Whalley, Chief Executive Officer of REG, said: "This first phase of our project financing represents an important milestone for REG as it demonstrates our ability to finance multiple small wind projects at competitive rates. Successful financing of our existing operational wind farms, allied to the rapid growth of projects in the planning system, is expected to deliver accelerating returns to equity holders over the next few years."

James Sutcliffe, Senior Manager in The Co-operative Bank's Renewable Energy Team, said: "We're delighted to be backing REG with this project and be playing a part in helping their ambitious strategy to develop more renewable energy schemes.

"We believe medium scale renewables projects such as these can make a significant contribution to the country's future energy mix and help with the required transition to a low carbon economy."

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Notes to editors

Renewable Energy Generation Ltd (REG) is a UK renewable energy group. The Group's main business is the development, construction and operation of wind farms in the UK and generating power from refined used cooking oil in the UK.

The wind farms financed are:

REG Windpower: based in Cornwall and Bath, UK, it currently operates ten wind projects in Cambridgeshire, Cornwall, County Durham, Yorkshire, Cumbria and Gwynedd, with a total capacity of 41.15MW and has a development pipeline of over 1000MW.

REG Bio-Power UK Ltd: based in Nottingham, UK: it operates electricity generation plant fuelled by waste vegetable oil.

Headquartered in Jersey, REG was admitted to trading on AIM, a market operated by the London Stock Exchange, in May 2005 (AIM: WIND).

www.renewableenergygeneration.co.uk