Update re Settlement of Funds and Operations

IPSA Group PLC

("IPSA" or the "Company")

Update re Settlement of Funds owed by Rurelec PLC and Operational update

IPSA notes the announcement made on 17 July 2015 by Rurelec PLC regarding the completion of the sale of its stake in the Canchayllo hydroelectric plant in Peru. Since the update on 2 March 2015 regarding the deferred consideration owed by Rurelec , Rurelec has made an interim payment to the Company's main creditor, Ethos Energy, on behalf of IPSA so that the residual amount of the deferred consideration still owed to IPSA from the sale of the Westinghouse Siemens gas turbines to Rurelec is now £2.91 million. The Company is in discussion with Rurelec regarding the timing of the receipt of this balance although there is no clarity yet on the timing of it.

IPSA also announces that, following its recent draw down of funds from the IDC for the expansion of power capacity onsite at Newcastle, it has progressed its search to bring in a black economic empowerment (BEE) partner at its operating subsidiary, Newcastle Cogeneration Pty Limited ("NewCogen"). IPSA is now in negotiations with suitable BEE partners willing to acquire for cash a holding in NewCogen, although there can be no certainty a successful sale will be completed. Having a BEE partner would assist the Board's plans to add additional capacity at Newcastle under the new Gas to Power programme of the South African Government.

The Board is satisfied with trading conditions at NewCogen following the successful MTPPP contract extension with Eskom and the plant continues to operate well.

The Company's working capital remains tight and is being carefully managed. This will remain to be the case and the Company is reliant on the receipt of the remaining balance of funds owed by Rurelec from the sale of turbines to satisfy the amount of €2.85 (euros) now due to its principal creditor, being Ethos Energy, and a loan of £500,000 together with accrued interest repayable to Radix together with the forbearance of these creditors. A further sum of €2.6 million (euros) is due to Ethos Energy by 30 September 2015. The Company also intends to sell its remaining balance of plant in relation to the previously sold turbines held in its balance sheet at a value of £4 million and the proceeds from any sale of a minority interest in NewCogen in order to satisfy its remaining creditors and provide additional working capital for the Company.

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