Operations Update

3 May 2017

Andalas Energy and Power Plc

(‘Andalas’, or the ‘Company’)

Operations Update

Andalas Energy and Power Plc, the AIM traded Indonesian focused energy company (AIM: ADL), is pleased to provide an update on the Company’s plans to develop a portfolio of wellhead independent power projects (‘IPPs’) targeting 250MW to 500MW of installed capacity fired with gas from proven fields.

• As previously announced, the issue of new regulations on 2 February 2017, by the Ministry of Energy and Minerals (the “Minister”), prioritises wellhead gas to power projects.
• The Minister has issued Decree No. 1415K/20/MEM/2017 (“Decree”) which approves the national energy procurement plan (subject to various qualifications) delivered by PT PLN (Persero), Indonesia’s national electricity distribution company (“PLN”).
• The Minister decrees that PLN will give priority to wellhead natural gas plants where energy sources are available in business areas identified in the plan and that he may vary the plan throughout the year.

• The regulations outline a fast-track approvals process via direct appointment of wellhead IPP projects without the need for a public tender. 
• Andalas has commenced the next steps in advancing its projects through this process.

Andalas CEO, David Whitby, said “Andalas is pioneering the concept of rolling out wellhead IPPs using established technologies to help tackle Indonesia’s energy crisis at the local level.  In our view, the recent regulatory changes demonstrate that the Government recognises that these projects can make a significant contribution towards achieving its 35,000MW target of new capacity and delivering affordable power to the people of Indonesia.  Being a first mover has the potential to generate significant rewards for our shareholders as we look to rapidly build an initial portfolio targeting 500MW of installed capacity.

“The new regulations and Decree are the first time wellhead IPPs have been recognised as a distinct class of project and given special consideration outside the usual planning and approval cycle.  The Decree prioritising wellhead IPPs opens the door for Andalas and our partner Pertamina to identify and propose further projects for approval by the Minister, capitalising on the progress made on our recently announced project pipeline.”

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR).  Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

**ENDS**

For further information, please contact:

David Whitby	Andalas Energy and Power Plc	Tel: [phone]
Sarah Wharry Craig Francis	Cantor Fitzgerald Europe (Nominated Adviser and Joint Broker)	Tel: [phone]
Jon Belliss	Beaufort Securities Limited (Joint Broker)	Tel: [phone]
Frank Buhagiar Susie Geliher	St Brides Partners Limited	Tel: [phone]