Sale of Seawater Desalination Technology in China

20 April 2017

Modern Water plc

("Modern Water" or "the Company")

Sale of Seawater Desalination Technology in China

Modern Water plc (AIM:MWG), the owner of world-leading technologies for water and wastewater treatment and for water quality monitoring, announces that it has secured a sale of its proprietary Forward Osmosis ("FO") technology for seawater desalination to Hangzhou Water Treatment Technology Development Center Co. Ltd ("Hangzhou Water") in China.

The Company will license its patented FO technology and provide its extensive engineering know-how to Hangzhou Water, for use in a new 500m3/day seawater desalination plant, to be built at the Shengsi Seawater Desalination Base on Sijiao Island.

Hangzhou Water is one of the region's leading providers of water desalination and through its ultimate parent, the China National Chemical Corporation, is part-owned by the Chinese government.

Modern Water will receive licence fees in the short term; and commissioning fees for supervising commissioning of the plant; as well as selling Hangzhou Water specialised equipment and spares on a long term basis. Hangzhou Water anticipates that the new desalination plant will be completed and commissioned into service in early 2018.

This is the first example of Modern Water's platform FO process being deployed in China. In this case, the innovative technology is being used to produce desalinated water, where, compared to conventional processes, it will reduce membrane fouling and as a result, require less energy consumption. The process inherently produces a high quality product water on a long term basis, with a double membrane barrier between the seawater and the desalinated water. These advantages reduce the operating costs for Hangzhou Water, as well as helping to mitigate any environmental impact of the operation.

Simon Humphrey, CEO of Modern Water, commented: "The first sale of our Forward Osmosis desalination system in China, to an organization of Hangzhou Water's calibre, represents exciting progress for us. We believe it is proof that our revised strategy to license our membrane technologies to high-quality industrial partners in key geographies is paying off. Furthermore, it is a pleasing recognition of the benefits that our unique technology can generate in this globally important field. This deal, together with the other transactions recently announced, give us confidence the Membrane division will meet this year's market forecasts.

"We look forward to working with Hangzhou Water on this project and will continue to pursue further opportunities to commercialise the innovative technology we have created."

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About Modern Water

Modern Water owns, installs and operates world-leading membrane technology and develops and supplies advanced systems for water monitoring. Its shares trade on the Alternative Investment Market of the London Stock Exchange.

Modern Water has developed and commercialised world-leading patented Forward Osmosis desalination technology which can be used in a variety of industries. Its benefits include lower energy consumption, improved water quality and lower environmental impact. With a sales presence in almost 60 countries, the Group's Monitoring Division includes a leading real-time continuous toxicity monitor and trace metal analysers for monitoring the quality of drinking water.

www.modernwater.com