Proposals

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AMERICA OR TO US PERSONS

THIS ANNOUNCEMENT IS AN ADVERTISMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD
NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT
EXCEPT ON THE BASIS OF INFORMATION IN THE PROSPECTUS PUBLISHED BY PREMIER
ENERGY AND WATER TRUST PLC.

Premier Energy and Water Trust PLC (the "Company")

24 November 2009

Extension of the life of the Company, Tender Offers, Matching Purchase Facility
and Placing, adoption of New Articles of Association and Notices of Meetings

Introduction

The Company has today published a circular which also incorporates a prospectus
(the "Shareholder Document") in relation to proposals relating to the extension
of the life of the Company beyond 31 December 2010. Terms used in this
announcement shall have the same meaning as set out in the Shareholder
Document.

The Proposals include the amendment of the terms of the ZDP Shares and the
implementation of the Tender Offers which will enable Shareholders who do not
wish to continue in the Company to realise part, and possibly all, of their
investment in the Company. The Tender Offers are being made available, in
aggregate, in respect of up to 40 per cent. of the Ordinary Shares and 40 per
cent. of the ZDP Shares in issue.

Concurrently with the Tender Offers, the Directors have arranged for J.P.
Morgan Cazenove to operate a Matching Purchase Facility pursuant to which
Shareholders may purchase additional Shares tendered under the Tender Offers.
J.P. Morgan Cazenove has also agreed to place Shares with its institutional
clients (other than from certain overseas jurisdictions) to the extent they are
available through tenders made under the Tender Offers and not taken up under
the Matching Purchase Facility. Any surplus applications for Shares under the
Placing will be met by the issue of New Shares. The Tender Offers, Matching
Purchase Facility and issue of New Shares are subject to any scaling back
required to maintain the Relevant Proportion, further details of which are set
out below.

None of the Directors will be tendering Shares in the Tender Offers, and the
Directors intend to apply for an investment in aggregate of £73,000 in Ordinary
Shares (including non-beneficial holdings) under the Matching Purchase
Facility. However, the Directors are making no recommendation to Shareholders
as to whether or not they should tender Shares in the Tender Offers or apply to
purchase Shares in the Matching Purchase Facility. Whether or not Shareholders
decide to tender Shares or participate in the Matching Purchase Facility will
depend, among other things, on their view of the Company's prospects and their
own individual circumstances, including their tax position, on which they
should seek their own independent advice.

Background to, and Reasons for, the Proposals

The Company had total assets of approximately £61 million as at 18 November
2009 (being the latest practicable date prior to the publication of this
announcement), an increase of approximately 71 per cent. since launch
(adjusting for the repurchase of Ordinary Shares made in November 2003).

The Company was launched in 2003 as a successor company to LeggMason Investors
International Utilities Trust PLC, with total assets of £36.8 million. The ZDP
Shares were issued with a redemption yield of 7.0 per cent. and a fixed life
that ends on 31 December 2010. Total net dividends paid to date are 38.875
pence per Ordinary Share. Under the Company's Articles of Association, the
Directors are obliged to put a winding up proposal to Shareholders on 31
December 2010.

The Company's performance from launch on 3 November 2003 to 18 November 2009
(being the latest practicable date prior to the publication of this
announcement) has been as follows:

                                                                              %
                                                                               
Ordinary Share price total return                                         110.7
                                                                               
Ordinary Share NAV total return                                           134.8
                                                                               
ZDP Share price total return                                               54.0
                                                                               
FTSE 100 total return                                                      54.1
                                                                               
Source: Datastream, unaudited                                                  

In light of the performance of the Company to date and following discussions
with a number of Shareholders who have indicated a desire to remain invested in
the Company, your Board has been considering proposals which involve the
extension of the life of the Company beyond the scheduled winding up date in
2010, as well as providing an opportunity for a partial, or possibly full, exit
for those Shareholders who wish to do so. The Board is also aware that certain
Shareholders may wish to increase their investment in the Company and that new
investors might wish to gain exposure to the Company. Accordingly, the Board
has arranged with J.P. Morgan Cazenove to operate the Matching Purchase
Facility and make available the Placing concurrently with the Tender Offers.
Any surplus applications for Shares under the Placing will be satisfied by the
issue of up to 18,000,000 New Ordinary Shares and up to 20,000,000 New ZDP
Shares.

Summary of the Proposals

The Board is seeking Shareholders' approval for the Proposals, which in summary
comprise:

  * the extension of the life of the Company to 31 December 2015 by releasing
    the Directors of the Company from the obligation to put forward winding up
    proposals on 31 December 2010;
   
  * a revision of the rights attaching to the ZDP Shares, such that their life
    will continue until 31 December 2015 and their yield to redemption will
    also be changed;
   
  * effecting the Tender Offers for Ordinary Shares and ZDP Shares;
   
  * operating a Matching Purchase Facility to enable Shareholders to purchase
    Shares tendered under the Tender Offers;
   
  * making available a Placing of (i) Shares tendered under the Tender Offers
    and not taken up under the Matching Purchase Facility, and (ii) New Shares
    to J.P. Morgan Cazenove's institutional clients to the extent that more
    Shares are required to satisfy demand under the Placing than are available
    following the Tender Offers and take up under the Matching Purchase
    Facility; and
   
  * amending the Articles of Association to accommodate the new rights
    attaching to the ZDP Shares and to make various changes to reflect final
    implementation of the 2006 Act.
   
Benefits of the Proposals

The Board believes that the Proposals will result in the following principal
benefits:

  * a London listed closed-ended investment trust for those Shareholders who
    wish to continue their investment beyond 2010;
   
  * an opportunity for Shareholders to remain invested and delay
    crystallisation of any charge to UK capital gains tax until 2015;
   
  * an opportunity for Shareholders (other than Excluded Overseas Shareholders)
    to realise up to 40 per cent., and possibly more, of their investment in
    the Company at a discount to NAV of 5 per cent. as at the Calculation Date
    (in the case of Ordinary Shareholders), and at a price of 156 pence
    representing a premium to NAV of 3 per cent. at the Calculation Date (in
    the case of ZDP Shareholders);
   
  * offering existing Shareholders the opportunity to increase their investment
    in the Company through the Matching Purchase Facility and, where
    institutional clients of J.P. Morgan Cazenove, the Placing; and
   
  * introducing new investors to the Company through the Placing.

Investment outlook and market opportunity
   
The water, power, gas distribution and infrastructure markets are amongst the
largest industries in the world. They provide essential services to
individuals, industry, businesses and the public sector. Utility companies
generally have predictable cash flows and secure business franchises which
provide them with a level of protection in an economic downturn and, at the
same time position them for growth as economic activity picks up.

The perceived principal drivers of change in those markets are set out below
and will continue to be the basis for investment opportunities in the future:

  * Ongoing liberalisation of utility markets;
   
  * The need for capital to replace ageing or outdated infrastructure;
   
  * Future capacity shortages despite the recession;
   
  * Environmental considerations in the light of climate change;
   
  * Growth in demand for energy and water; and
   
  * A growing focus on national and regional energy security.
   
Over the past several decades electricity markets around the world have
developed albeit with the pace of liberalisation progressing at varying speeds.
These markets have developed against a background of shifting growth patterns
of energy use towards the non-OECD region, which overtook that of the OECD in
2005. The region is now forecast to account for 87 per cent. of the increase in
world primary energy demand between 2006 and 2030, with China and India
expected to account for just over half of this increase. Meanwhile the mix of
generating plants being built to meet these demand shifts is influenced by
government policies on energy security and the reduction of carbon emissions.
Both factors are likely to continue to encourage a revival in nuclear power as
a sustainable energy source, alongside the growth in renewable energy, and both
will in turn necessitate significant additional expenditure in the upgrading
and extension of electricity grids throughout the world.

The United Nations Climate Change Conference, to be held in Copenhagen in
December 2009, is the designated opportunity to negotiate a new global climate
change policy post-2012, to follow the Kyoto Protocol. The energy sector,
responsible for a large proportion of global greenhouse gas emissions, will
play a central role in curbing emissions, through improvements in efficiency,
switching to renewables, and other low carbon technologies. As renewable
technologies mature, their falling costs, together with strong policy 
support and assumed higher fossil-fuel prices should provide the opportunity
for the renewables industry to eliminate its reliance on subsidies and bring
emerging technologies into the mainstream.

The increasing demand for water is driven by population growth, urbanisation,
industrialisation and intensive agriculture. In developed economies, ageing
infrastructure is a key issue. In the United States, for example, the
Environment Protection Agency estimated in 2003 that it would take almost
US$277 billion to maintain the water distribution system in the US over the
next 20 years. Much of the projected expenditure is the product of deferred
maintenance, inadequate capital replacement, and a generally ageing
infrastructure. In addition, populations are increasing and shifting
geographically, thus requiring investment in existing or new infrastructure.
Despite the economic downturn, rapid urbanisation and industrialisation in Asia
have significantly increased demands on water and wastewater treatment systems.
Economic growth in China and other emerging Asian economies is expected to
continue significantly to outpace those of developed nation. China is leading
the growth of water treatment, and its eleventh five year plan (2006-2010)
contains a commitment that the Chinese government will invest RMB143 billion
approximately £12.5 billion in urban water supply and a further RMB 330 billion
approximately £28.9 billion in wastewater treatment.



The Proposals

Extension of the Life of the Company

In order to facilitate the return of capital due to ZDP Shareholders in 2010,
the Company's Articles of Association require the Directors to put proposals to
Shareholders on 31 December 2010 to wind up the Company voluntarily unless
previously released from the obligation to do so. In order to proceed with the
Proposals, the Directors are therefore proposing to extend the life of the
Company by a further five years to 31 December 2015 and are seeking to be
released from the obligation to put such winding up proposals to Shareholders
in 2010 by proposed changes to the Articles of Association. Accordingly,
subject, inter alia, to Shareholder approval, the Directors are proposing that
amendments be made to the Articles to extend the date upon which winding up
proposals are to be put to the Company's Shareholders to 31 December 2015. The
Articles will also be amended to include a number of consequential amendments
to the terms of the ZDP Shares and certain changes following the final
implementation of the 2006 Act.

Amendment to terms of existing ZDP Shares

In addition to the extension of the Company's life, the Proposals include the
amendment of the rights attaching to the ZDP Shares by extending their life,
revising the protections afforded to ZDP Shares in the Articles to a level of
cover of 1.5 times and revising their redemption yield in order to align it
with current market rates. Under the Proposals, the gross redemption yield on
the ZDP Shares will accrue at a rate per annum to be determined by the
Directors.

The gross redemption yield will be set at the level which reflects the GRY at
which (having regard to tenders of Ordinary Shares and the requirement to
maintain a balanced capital structure) the maximum number of ZDP Shareholders
wish to remain invested in the Company, after taking into account applications
for Shares under the Matching Purchase Facility and the Placing. It will
therefore be dependent on the extent to which Shareholders choose to exit the
Company through the Tender Offers. The proposed GRY rates have been set at
intervals of 0.25 per cent. between 4 per cent. and 7.5 per cent. per annum on
the proposed ZDP Share Tender Price. For illustrative purposes, in the event
that the GRY per ZDP Share is fixed at 6 per cent. per annum on the ZDP Share
Tender Price until 31 December 2015, this would produce a final capital
entitlement of 221.78 pence per ZDP Share at such date. On the net asset value
per ZDP Share of 151.39 pence (as at 17 December 2009, being the Calculation
Date under the Proposals) this represents a gross redemption yield of 6.53 per
cent.

The revised terms of the ZDP Shares will be contained in the New Articles of
the Company to be adopted at the General Meeting.

Tender Offers

The Tender Offers are being made by J.P. Morgan Cazenove to Shareholders (other
than Excluded Overseas Shareholders) on the Register at the Record Date. Under
the Tender Offers, Shareholders are able to tender all or part of their holding
of Shares, subject to an overall limit, in aggregate, of 40 per cent. of the
issued Ordinary Share capital and 40 per cent. of the issued ZDP Share capital
in each case as at the Record Date but after matching tenders with applications
for Shares under the Matching Purchase Facility and the Placing. Tenders in excess
of 40 per cent. of an individual holding of Shares will only be satisfied to
the extent that other Shareholders do not tender their Shares of the relevant
class (or tender less than 40 per cent. of their holding) and there is demand
under the Matching Purchase Facility and the Placing. Shareholders do not have
to tender any Shares if they do not wish to do so, but once submitted, subject
to the Directors' discretion, a Tender Form or TTE Instruction cannot be
withdrawn and is irrevocable. Accordingly, Shares tendered under the Tender
Offers may not be sold, transferred, charged or otherwise disposed of.

The Tender Offers will be implemented by means of on-market purchases by J.P.
Morgan Cazenove, which will, as principal, purchase the Ordinary Shares and the
ZDP Shares tendered (subject to the overall limits of the Tender Offers, the
Matching Purchase Facility, the Placing and the operation of the scaling back
arrangements described in the Shareholder Document). The Ordinary Shares and
ZDP Shares tendered under the respective Tender Offers (to the extent they are
not matched with applications to purchase under the Matching Purchase Facility
or purchased pursuant to the Placing) will, subject to the scaling arrangements
described below, then be purchased by the Company from J.P. Morgan Cazenove
pursuant to the Repurchase Agreement. The Ordinary Shares and ZDP Shares which
the Company acquires from J.P. Morgan Cazenove will be cancelled and the number
of Ordinary Shares and ZDP Shares in issue reduced accordingly.

The Company will fund the acquisition of Shares purchased under the Repurchase
Agreement by realising investments in its investment portfolio and by utilising
its distributable reserves. The Company will liquidate part of the current
portfolio of assets in order to provide J.P. Morgan Cazenove with sufficient
cash by 17 December 2009 to purchase up to 40 per cent. of each class of Shares
under the Tender Offers. In the event that J.P. Morgan Cazenove is required to
purchase less than 40 per cent. of each class of Shares, then any surplus funds
will be paid to the Company and reinvested in accordance with the Company's
investment policy as soon as practicable.

Further details on the tender for each class of Shares are set out below:

 a. Ordinary Share Tender Offer
   
Under the Ordinary Share Tender Offer, Ordinary Shareholders (other than
Excluded Overseas Shareholders) will be able to tender all or any part of their
holdings. As stated above, there is an overall limit under the Ordinary Share
Tender Offer of, in aggregate, 40 per cent. of the issued Ordinary Share
capital (after matching tenders with applications under the Matching Purchase
Facility and the Placing).

The Ordinary Share Tender Offer is being made at a price which represents a 5
per cent. discount to the Net Asset Value per Ordinary Share at the Calculation
Date. Further details of the calculation of the Ordinary Share Tender Price are
set out in the Shareholder Document. Further details on any scaling back under
the Ordinary Share Tender Offer are set out in Part 3 of the Shareholder
Document.

 b. ZDP Share Tender Offer
   
Under the ZDP Share Tender Offer, ZDP Shareholders (other than Excluded
Overseas Shareholders) will be able to tender all or any part of their
holdings. As stated above, there is an overall limit under the ZDP Share Tender
Offer of, in aggregate, 40 per cent. of the issued ZDP Share capital (after
matching tenders with applications under the Matching Purchase Facility and the
Placing).

The ZDP Share Tender Offer is being made at a price of 156p which represents a
3 per cent. premium to the Net Asset Value per ZDP Share at the Calculation
Date.

Under the ZDP Share Tender Offer, in order to provide an opportunity for ZDP  
Shareholders to tender their Shares only if the gross redemption yield on the 
ZDP Shares is set below a certain level, ZDP Shareholders may elect to tender 
their Shares by reference to the level at which the gross redemption
yield at the ZDP Share Tender Price (being the ZDP Share Purchase Price) is set
for the period following implementation of the Proposals. The gross redemption
yield on the ZDP Shares following implementation of the Proposals will be
determined depending on the extent to which: (i) Shareholders choose to exit
the Company through the Tender Offers and (ii) Shareholders and other investors
purchase Shares under the Matching Purchase Facility and the Placing. The
possible gross redemption yields are 4.0, 4.25, 4.50, 4.75, 5.0, 5.25, 5.50,
5.75, 6.0, 6.25, 6.50, 6.75, 7.0, 7.25 or 7.5 per cent. per annum, in each case
based on the ZDP Share Tender Price. ZDP Shareholders should indicate on the
Tender Form or within the TTE Instruction the number of Shares they wish to
tender if the gross redemption yield is below a certain percentage in the
range.

For illustrative purposes, in the event that the GRY per ZDP Share is fixed at
6 per cent. per annum on the ZDP Share Tender Price until 31 December 2015,
this would represent a final capital entitlement as at that date of 221.78
pence per share and an accrual rate of 6.53 per cent. per annum from the Net
Asset Value per ZDP Share on 18 December 2009 of 151.39p.

All ZDP Shares to be purchased by J.P. Morgan Cazenove under the ZDP Share
Tender Offer will be purchased at the same price, being the ZDP Share Tender
Price. The gross redemption yield per ZDP Share will be announced on 18
December 2009. Further details on scaling back under the ZDP Tender Offer and
how the gross redemption yield will be fixed are set out in Part 3 of the
Shareholder Document.

Conditions of the Tender Offers

The Tender Offers are conditional, inter alia, on Shareholder approval of the
Resolutions to be proposed at the Shareholder Meetings. The conditions are set
out in full in the Shareholder Document. In addition, the Tender Offers may be
suspended or terminated in certain circumstances as set out in the Shareholder
Document. The Tender Offers are only available to Shareholders (other than
Excluded Overseas Shareholders) on the Register at the Record Date and in
respect of their Shares held on the Record Date.

Matching Purchase Facility

The Directors are aware that some Shareholders may wish to increase their
investment in the Company and have reviewed with their advisers the options to
facilitate such investment. Concurrently with the Tender Offers, the Directors
have therefore arranged for J.P. Morgan Cazenove to operate a Matching Purchase
Facility whereby Shares tendered under the Tender Offers will be available for
purchase at the relevant Purchase Price (plus stamp duty) by Shareholders who
wish to increase their investment in the Company. J.P. Morgan Cazenove will
also place Shares with its institutional clients (other than from certain
overseas jurisdictions) to the extent they are available through tenders, and
not taken up under the Matching Purchase Facility, at the relevant Purchase
Price (plus stamp duty) under the Placing.

The Matching Purchase Facility and the Placing are each conditional upon the
Tender Offers proceeding and Shareholder approval. Shareholders should read the
Purchase Forms for further information on the Matching Purchase Facility and
details of how to complete the Purchase Forms.

Under the Matching Purchase Facility, Shareholders (other than Excluded
Overseas Shareholders) will be able to purchase Shares at the relevant Purchase
Price (plus stamp duty) by way of on-market transactions to the extent that
there are Shares available to be so purchased through valid tenders. Subject to
the scaling back arrangements set out below, Shares purchased by J.P. Morgan
Cazenove under the Tender Offers will first be allocated to the Matching
Purchase Facility and then to the Placing, and any balance will be repurchased
by the Company.

Under the Matching Purchase Facility, Shareholders will be able to select the
GRY at which they are prepared to invest further in the ZDP Shares from a range
of gross redemption yields between 4.0 per cent. and 7.5 per cent. on the ZDP
Share Tender Price at 0.25 per cent. intervals.

Investors will be able to participate in the Matching Purchase Facility if they
have acquired Shares prior to the closing date for the Matching Purchase
Facility (being 1.00 p.m. on 10 December 2009) and either their name or the
name of their nominee, is on the Register 5.00 p.m. as at the close of business
on 15 December 2009, being the Record Date.

Placing

Investors who are not currently Shareholders, as well as Shareholders who are
institutional clients of J.P. Morgan Cazenove, will be able to participate in
the Placing.

To the extent that more Shares are required to satisfy demand under the Placing
than are available following the Tender Offers and the Matching Purchase
Facility, then the Company is proposing to issue New Shares to placees, subject
to the scaling arrangements set out below, up to a maximum of 18,000,000 New
Ordinary Shares and 20,000,000 New ZDP Shares.

Stamp duty will be payable by placees to the extent that they purchase Shares
tendered under the Tender Offers. No stamp duty is payable upon the issue of
New Shares.

Ordinary Shares and ZDP Shares tendered and then sold by J.P. Morgan Cazenove
to placees under the Placing will be registered in the Company's register of
members on or around 23 December 2009.

Applications will be made to the UK Listing Authority for the New Shares to be
issued under the Placing to be admitted to the Official List of the UK Listing
Authority and to the London Stock Exchange for all the New Shares to be
admitted to trading on the London Stock Exchange's Main Market. It is expected
that such admissions will become effective, and that dealings will commence, on
23 December 2009.

The New Shares will be in registered form and may be issued either in
certificated or in uncertificated form. No temporary documents of title will be
issued. Pending despatch of definitive certificates, transfers of New Shares in
certificated form will be certified against the Register. All documents or
remittances will be sent through the post at the risk of the Shareholder or new
investor.

It is expected that CREST accounts will be credited with New Shares on 23
December 2009, and that share certificates for New Shares will be despatched to
Shareholders who wish to hold New Shares in certificated form no later than the
week commencing 29 December 2009.

Scaling back under the Proposals

The Board has, in conjunction with the Investment Manager, deemed it desirable
to have, as near as practicable, a balanced capital structure for the Company
going forward. Therefore, the Proposals have been formulated so that the
capital structure of the Company immediately following full implementation of
the Proposals will reflect as near as practicable, the same aggregate Net Asset
Value of ZDP Shares as for Ordinary Shares (referred to in the Shareholder
Document as the "Relevant Proportion"). As a consequence, tenders of Shares
under the Tender Offers will be scaled back after taking into consideration the
gross redemption yields on the ZDP Share Tender Price below which ZDP
Shareholders have elected to tender and applications for Shares under the
Matching Purchase Facility and under the Placing, in each case so as to achieve
the Relevant Proportion. Full details of how the scaling back will operate and the
way in which the gross redemption yield for the ZDP Shares will be set are set
out in the Shareholder Document.

The basis on which scaling back to achieve the Relevant Proportion has been
undertaken will be announced via a Regulatory Information Service immediately
following the General Meeting. As a consequence, Shareholders may not be able
to successfully tender all their Shares under the Tender Offers.

New Articles of Association

As mentioned above, in light of the proposed changes to the life of the Company
and the proposed amendments to the rights attaching to the ZDP Shares, the
Directors are proposing that the Company adopt new articles of association to
incorporate these changes. In addition, the Directors have also taken the
opportunity to update the Articles to bring them into line with current law and
practice and to incorporate a number of statutory changes which have come into
effect since the Company adopted the current Articles earlier this year.

The proposed release of the Directors from the obligation to put forward
winding up proposals to the Company's Shareholders, the proposed extension of
the Company's life and the proposed changes to the rights attaching to the ZDP
Shares referred to above (all of which will be effected by the adoption of the
New Articles by the Company) are subject to the prior approval of Shareholders
at the General Meeting and also of Ordinary Shareholders and ZDP Shareholders,
each as a separate class. Therefore, the Directors have convened separate Class
Meetings to be held immediately prior to the General Meeting at which ZDP
Shareholders and Ordinary Shareholders respectively will be asked to approve
the Proposals. Further details of the Class Meetings are set out under the
paragraph headed "Class Meetings" below.

The principal differences between the existing Articles and the New Articles
are set out in Part 10 of the Shareholder Document. Both the existing Articles
and New Articles showing all the changes from the existing Articles will be
available for inspection at the registered office of the Company and at the
offices of Maclay Murray & Spens LLP, One London Wall, London EC2Y 5AB from the
date of the Shareholder Document until the end of the General Meeting, and at
the General Meeting itself for the duration of the meeting and for at least 15
minutes prior to the start of the meeting.


Consequences of implementing the Proposals

Shares in issue

The number of Ordinary Shares and ZDP Shares in issue following the Tender
Offers will be reduced by the number of Shares successfully tendered under the
Tender Offers which are not matched with purchases under the Matching Purchase
Facility or purchased pursuant to the Placing. If demand for Shares under the
Placing exceeds the number of Shares tendered under the Tender Offers which are
not purchased under the Matching Purchase Facility, then the Company's issued
share capital will be increased by the number of New Shares issued under the
Placing to meet that demand.

ZDP Share Final Entitlement

A ZDP Shareholder who does not tender any ZDP Shares under the ZDP Share Tender
Offer will, following implementation of the Proposals, receive their final
capital entitlement (as revised following the setting of the GRY pursuant to
the Proposals) on 31 December 2015.

Costs

Over the last three months, the Company has incurred costs and expenses in
connection with the Proposals. Such advisory, legal costs and other third party
costs (including VAT where relevant) are estimated to amount to approximately £
418,000. In addition, the Company may incur stamp duty if it is required to buy
back its Shares from J.P. Morgan Cazenove under the Repurchase Agreement, fees
under the Placing Agreement, and London Stock Exchange fees to the extent that
New Shares are issued. These costs and expenses will be charged to the
Company's capital account and will not be deducted in computing the Ordinary
Share Tender Price.

Effect on NAV per Ordinary Share

By way of illustration only, based on the Company's NAV of 183.75p per share as
at 18 November 2009 (being the latest practicable date prior to the publication
of this announcement) and based on the relevant Assumptions set out in the
Shareholder Document, the effect of the Proposals on the Net Asset Value of the
Company's Ordinary Shareholders, comparing for these purposes the case of an
Ordinary Shareholder who tenders none of their Ordinary Shares with the case of
an Ordinary Shareholder who successfully tenders all of their Ordinary Shares,
will be as follows:

                                                               Effect on Net Asset Value
Shareholder's participation or otherwise in the Tender Offer   attributable to Ordinary Shares (%)

No Shares tendered                                                       -2.1
Successful tender of all Shares                                          -5.0

Consequences of the Proposals not being approved

Unless all the Resolutions are approved at the Shareholder Meetings, the
Proposals will not proceed and the Company will continue under its existing
arrangements until December 2010, when (in the absence of alternative proposals
approved by Shareholders) the Directors will propose a winding up resolution in
accordance with the Company's existing Articles of Association.

City Code on Takeovers and Mergers

Shareholders should note the following important information relating to
certain provisions of the City Code which will be relevant to purchases of
Shares following the date of the Shareholder Document.

Under Rule 9 of the City Code, any person or group of persons deemed to be
acting in concert who acquire an interest (as such term is defined in the City
Code) in shares which carry 30 per cent. or more of the voting rights in a
company to which the City Code applies is normally required by the Panel to
extend offers to the holders of any class of equity share capital in the
company whether voting or non-voting, and also to the holders of any other
class of transferrable securities in the company, carrying voting rights. Rule
9 of the City Code also provides that any person or group of persons deemed to
be acting in concert who are interested in shares which in aggregate carry not
less than 30 per cent. of the voting rights of the company but do not hold
shares carrying more than 50 per cent. of the voting rights of such company,
and who acquire an interest in any other shares in the company which increases
the percentage of shares carrying voting rights in which such person is
interested, is normally required by the Panel to extend offers to the holders
of any class of equity share capital in the company, whether voting or
non-voting, and also to the holders of any class of transferable securities in
the company carrying voting rights.

Under Rule 37.1 of the City Code, when a company purchases its own voting
shares, a resulting increase in the percentage of voting rights of the
directors and persons acting in concert with them is treated as an acquisition
for the purposes of Rule 9. A shareholder not acting in concert with the
directors will not incur an obligation to make an offer under Rule 9 if, as a
result of the purchase of its own shares by a company, he comes to exceed the
percentage limits set out in Rule 9. However, this exception will not normally
apply when a shareholder not acting in concert with the directors has purchased
shares at a time when he had reason to believe that such a purchase of its own
shares by the company would take place.

A Shareholder not acting in concert with the Directors may therefore incur an
obligation under Rule 9 to extend offers to the holders of any class of equity
share capital, whether voting or non-voting, and also to the holders of any
other class of transferable securities carrying voting rights if, as a result
of the purchase by the Company of its own Shares from other Shareholders, the
Shareholder comes to hold or acquire 30 per cent. or more of the Shares
following implementation of the Tender Offers or otherwise and the Shareholder
has purchased Shares when the Shareholder had reason to believe that the
Company would purchase its own Shares (under the Repurchase Agreement or
otherwise, and in particular, after 24 November 2009, being the date on which
the details of the proposed Tender Offers were announced).

J.P. Morgan Cazenove will purchase, as principal, Shares under the Tender
Offers which could result in J.P. Morgan Cazenove owning 30 per cent. or more
of the issued share capital of the Company. J.P. Morgan Cazenove has undertaken
that, immediately subsequent to such purchase, it will sell all those Ordinary
Shares and ZDP Shares not taken up under the Matching Purchase Facility and the
Placing to the Company at the Ordinary Share Tender Price and the ZDP Share
Tender Price respectively for cancellation. Accordingly, a waiver has been
obtained from the Panel in respect of the application of Rule 9 to the purchase
by J.P. Morgan Cazenove of the Shares under the Tender Offers.

Overseas Shareholders

The making of the Tender Offers and the availability of the Matching Purchase
Facility and the Placing to Shareholders who are Overseas Shareholders may be
prohibited or affected by the relevant laws and regulations of the jurisdiction
in which they are resident.

Therefore, none of the Tender Offers, the Matching Purchase Facility or the
Placing are being made available to Excluded Overseas Shareholders.
Shareholders who have registered or mailing addresses in any Restricted
Territory or who are citizens or nationals of or resident in a Restricted
Territory are being sent the Shareholder Document for information only and in
order to enable them to vote at the Shareholder Meetings.

ISAs/PEPs

Shares purchased will be a qualifying investment for the stocks and shares
component of an ISA if they are acquired by an ISA plan manager in the market;
however, if purchased through the Placing, New Shares will not be a qualifying
investment. Shares purchased will also qualify as an eligible security in an
existing PEP provided they are purchased by a PEP plan manager from the
proceeds raised from the sale of an existing PEP holding but not if they are
New Shares purchased through the Placing. Any Shareholder wishing to purchase
Shares through a PEP or ISA should contact their PEP or ISA plan manager as
soon as possible.

Participants in the Premier ISA Scheme

Participants in the Premier ISA Scheme will have received a letter from Premier
setting out the options for participants wishing to participate in the Tender
Offers or the Matching Purchase Facility Placing. Participants will find
enclosed with that letter a Form of Direction and Premier ISA Scheme Tender
Form and a Premier ISA Application Form which explain the actions which they
should take. Such individuals should complete and return the Form of Direction,
Premier ISA Scheme Tender Form and the Premier ISA Application Form so as to
arrive no later than the times and dates specified in that letter. Recipients
of the Shareholder Document who are the beneficial owners of Shares held
through any other savings scheme or ISA should follow the instructions provided
by the relevant plan manager or consult the plan manager or their professional
adviser if no instructions have been provided.

Interim Dividend

The Directors are declaring a third interim dividend of 1.5p per Ordinary Share
payable on 31 December 2009 to Ordinary Shareholders on the Register at 6.00
p.m. on Friday, 4 December 2009.

Shareholder Meetings

Class Meetings

As mentioned above, the proposed extension of the date upon which the Directors
are required to put winding up proposals to the Company's Shareholders and the
revision of the rights attaching to the ZDP Shares (all of which are summarised
below under "General Meeting") require the prior approval of ZDP Shareholders
and Ordinary Shareholders as separate classes. Accordingly, the separate Class
Meeting for the ZDP Shareholders has been convened for 18 December 2009 at
10.00 a.m. and the separate Class Meeting for the Ordinary Shareholders has
been convened for 18 December 2009 at 10.15 a.m., at which special resolutions
will be proposed sanctioning the Proposals. A special resolution requires the
approval of at least 75 per cent. of the votes cast at the meeting to be
passed.

Quorum requirements for Class Meetings

The quorum for the Class Meetings is, in each case, two persons present in
person or by proxy together holding not less than one third in nominal amount
of the issued shares of the class in question. Only Shareholders of the
relevant class may attend and vote at the relevant Class Meeting. In the event
that a quorum is not achieved at such meeting, it will be adjourned in each
case to such time and date as shall be announced as soon as possible following
such adjournment. The quorum at the adjourned Class Meeting in each case will
be one person present in person or by proxy holding shares of the class in
question. If, at the adjourned meeting, a quorum is not present, the meeting
will be dissolved.

General Meeting

To enable the Proposals to proceed, it is necessary to grant the Directors the
appropriate power and authority to implement the Proposals. Accordingly, a
general meeting of the Company is being convened for 18 December 2009 at 10.30
a.m. at which a special resolution (conditional upon the passing of the
Resolutions at the separate Class Meetings) will be proposed. The special
resolution comprises the following parts:

 i. Approval of the Proposals including, without limitation for the purposes of
    Listing Rule 9.5.10 R (3) (a), the issue of New Ordinary Shares under the
    Placing at a discount of 5 per cent. to Net Asset Value per Ordinary Share
    on the Calculation Date which may constitute a discount of more than 10 per
    cent. to the middle market price of an Ordinary Share at such date;
   
 ii. Approval of the adoption of the New Articles which will reflect the
    amendments made to the terms of the ZDP Shares, the extension of the life
    of the Company by a further five years to 31 December 2015, and the final
    implementation of the 2006 Act. Further details of the principal
    differences between the existing Articles and the proposed New Articles are
    set out in Part 10 of the Shareholder Document (unless previously revoked,
    varied or renewed by the Company in general meeting;
   
iii.Authorisation for the Directors to allot New Shares under the Placing up to
    an aggregate nominal amount of £380,000, representing in aggregate
    18,000,000 Ordinary Shares and 20,000,000 ZDP Shares being approximately 99
    per cent. of the Ordinary Shares and approximately 104 per cent. of the ZDP
    Shares respectively in issue as at 18 November 2009 (being the latest
    practicable date prior to the publication of the Shareholder Document). The
    Directors intend to use this authority to allot New Shares under the
    Proposals to the extent that they are required to satisfy demand under the
    Placing. The authority will expire on 31 March 2010;
   
iv. Conferral of powers on the Directors to allot New Shares free of statutory
    pre-emption rights under section 561(1) of the 2006 Act up to a maximum
    aggregate nominal amount of £380,000, representing in aggregate 18,000,000
    Ordinary Shares and 20,000,000 ZDP Shares. This power will expire on 31
    March 2010 unless previously revoked, varied or renewed by the Company in
    general meeting; and
   
 v. Authorisation for the Company to make market purchases of Ordinary Shares
    and ZDP Shares respectively. The Directors intend to use the authority to
    buy back Ordinary Shares and ZDP Shares to the extent that there are
    Ordinary Shares and/or ZDP Shares tendered under the Tender Offers that are
    not purchased through the Matching Purchase Facility and the Placing. Under
    the authority sought, a maximum of 40 per cent. of the issued Ordinary
    Share capital and 40 per cent. of the issued ZDP Share capital,
    representing 7,257,373 Ordinary Shares and 7,657,373 ZDP Shares
    respectively, may be purchased for immediate cancellation. The price
    payable for the Ordinary Shares will be the Ordinary Share Tender Price,
    and the price payable for the ZDP Shares will be the ZDP Share Tender Price
    (being 156 pence).
   
A special resolution requires the approval of at least 75 per cent. of the
votes cast at the meeting to be passed.

General

The Shareholder Meetings will all be held at the offices of J.P. Morgan
Cazenove Limited, 20 Moorgate, London EC2R 6DA and notices convening such
meetings are set out in the Shareholder Document.

EXPECTED TIMETABLE

Event                                                          Time and/or Date
                                                                               
                                                                           2009
                                                                               
Ex-dividend Date                                                     2 December
                                                                               
Dividend Record Date                                                 4 December
                                                                               
Last time and date for receipt of Premier ISA Scheme     3:00 p.m. on 4 December
Purchase Forms                                                                 
                                                                               
Last time and date for receipt of Purchase Forms under  1:00 p.m. on 10 December
the Matching Purchase Facility                                                 
                                                                               
Last time and date for receipt of Premier ISA Scheme   12:00 noon on 14 December
TenderForms                                                                                                                                          
Last time and date for receipt of Forms of Direction   3:00 p.m. on 14 December
for Shareholders in the Premier ISA Scheme                                     
                                                                               
Latest time and date for receipt of Tender Forms and   1:00 p.m. on 15 December
TTE Instructions                                                               
                                                                               
Tender Offer Record Date                               5:00 p.m. on 15 December
                                                                               
Latest time and date for receipt of Forms of Proxy  
for:                                                                   
                                                                               
(a) Class Meeting of ZDP Shareholders                10:00 a.m. on 16 December
                                                                       
(b) Class Meeting of Ordinary Shareholders           10:15 a.m. on 16 December                          
                                                               
(c) General Meeting                                  10:30 a.m. on 16 December
                                                                               
Last time and date for receipt of applications under  3:00 p.m. on 17 December
the Placing                                                                    
                                                                               
Calculation Date for Tender Offers                    5:00 p.m. on 17 December
                                                                               
Class Meeting of ZDP Shareholders                    10:00 a.m. on 18 December
                                                                     
                                                                              
Class Meeting of Ordinary Shareholders             10:15 a.m. on 18 December (2)
                                                                                                                                                  
General Meeting                                    10:30 a.m. on 18 December(3)
                                                                               
Announcement of Tender Price for Ordinary Shares,                              
results of ZDP Shares, Tender Offers, Gross redemption                         
yield and Final Capital Entitlement for ZDP Shares,          by 2.00 p.m. on 18
and results of Matching Purchase Facility and Placing                  December
                                                                               
Ordinary Shares and ZDP Shares purchased by J.P.                               
Morgan Cazenove pursuant to the Tender Offers                       18 December
                                                                               
Admission of the New Shares to the Official List and                           
dealings in New Shares commence                        8:00 a.m. on 23 December
                                                                               
Settlement of Matching Purchase Facility and Placing                           
proceeds and CREST accounts credited in respect of                  23 December
Shares purchased under the Matching Purchase Facility                          
and Placing                                                                    
                                                                               
CREST accounts credited with proceeds of the Tender                 23 December
Offers, balances of unsold Ordinary Shares and ZDP                             
Shares held in uncertificated form and New Shares                              
                                                                               
Certificates despatched in respect of Shares purchased    on or round 29 December
under the Matching Purchase Facility and Placing, and                          
in respect of New Shares issued                                                
                                                                               
Cheques despatched in respect of proceeds of the                    23 December
Tender Offers and balance certificates despatched in                           
respect of unsold Ordinary Shares and ZDP Shares held                          
in certificated form                                                           
                                                                               
Date for payment of dividend                                      31 December                                            
                                                                    
                                                                               

Notes:

 1. References to times above and in the Shareholder Document generally are to
    London times unless otherwise specified.
   
 2. If later, immediately following the conclusion of the Class Meeting of ZDP
    Shareholders.
   
 3. If later, immediately following the conclusion of the Class Meeting of
    Ordinary Shareholders.
   
Capitalised terms in this announcement shall have the same meaning as ascribed
to them in the Shareholder Document dated 24 November 2009.

Copies of the Shareholder can be obtained, subject to all applicable law, at no
cost from the registered office of the Company or from the Document Viewing
Facility, UK Listing Authority, The Financial Services Authority, 25 The North
Colonnade, Canary Wharf, London, E14 5HS.

ENQUIRIES

Premier Asset Management - Andrew Whalley / Nigel Sidebottom 
01483 400 465

J.P. Morgan Cazenove Ltd - Angus Gordon Lennox
020 7588 2828


                                  DISCLAIMER                                   

THIS ANNOUNCEMENT HAS BEEN ISSUED BY, AND IS THE SOLE RESPONSIBILITY OF PREMIER
ENERGY AND WATER TRUST PLC.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND IS NOT AN OFFER
TO SELL OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES IN THE UNITED STATES
OR IN ANY OTHER JURISDICTION

This announcement does not constitute or form part of an offer to sell,
purchase, exchange or subscribe for any securities or solicitation of such an
offer in the United States of America or any other jurisdiction. The Company
has not been and will not be registered under the United States Investment
Company Act of 1940, as amended. The securities referred to in this
announcement have not been and will not be registered under the United States
Securities Act 1933, as amended, and will not be offered or sold or otherwise
transferred within the Unites States or to, or for the account or benefit of US
Persons (as defined in Regulations of the Securities Act of 1933 as amended)
except in accordance with the United States Securities Act of 1933, as amended,
or an exemption therefrom and under the circumstances which will not require
the company to register under the United States Investment Act of 1940, as
amended.

Any offering will only be made in any jurisdiction in compliance with local
laws. In the United Kingdom, this announcement is directed only at persons (i)
who have professional experience in matters relating to investments falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "order") or who fall within Article 49
(2) (a) to (d) of the order, or (ii) to whom it may otherwise lawfully be
communicated (all such persons being referred to "RELEVANT PERSONS").

THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT INTO CERTAIN
JURISDICTIONS OTHER THAN THE UK MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS
IN SUCH JURISDICTIONS INTO WHICH THIS ANNOUNCEMENT IS RELEASED, PUBLISHED OR
DISTRIBUTED SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH RESTRICTIONS.
NO ACTION HAS BEEN TAKEN BY THE COMPANY OR JPMC THAT WOULD PERMIT AN OFFERING
OF SUCH SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER
OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH SHARES IN ANY JURISDICTION
WHERE ACTION FOR THAT PURPOSE IS REQUIRED. ANY FAILURE TO COMPLY WITH ANY SUCH
RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OR REGULATION OF
SUCH JURISDICTIONS.

THIS ANNOUNCEMENT INCLUDES FORWARD-LOOKING STATEMENTS THAT ARE PREDICTIONS OF
OR INDICATE FUTURE EVENTS AND FUTURE TRENDS. THESE FORWARD-LOOKING STATEMENTS
INCLUDE ALL MATTERS THAT ARE NOT HISTORICAL FACTS. UNDUE RELIANCE SHOULD NOT BE
PLACED ON FORWARD-LOOKING STATEMENTS BECAUSE THEY INVOLVE KNOWN AND UNKNOWN
RISKS, UNCERTAINTIES AND OTHER FACTORS THAT ARE IN MANY CASES BEYOND THE
COMPANY'S CONTROL. BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE RISKS
AND UNCERTAINTIES BECAUSE THEY RELATE TO EVENTS AND DEPEND ON CIRCUMSTANCES
THAT MAY OR MAY NOT OCCUR IN THE FUTURE.

FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE, AND THE
COMPANY'S ACTUAL RESULTS OF OPERATIONS, FINANCIAL CONDITION AND LIQUIDITY, AND
THE DEVELOPMENT OF THE INDUSTRY IN WHICH IT OPERATES MAY DIFFER MATERIALLY FROM
THOSE MADE IN OR SUGGESTED BY THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS
ANNOUNCEMENT. THE CAUTIONARY STATEMENTS SET FORTH ABOVE SHOULD BE CONSIDERED IN
CONNECTION WITH ANY SUBSEQUENT WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS THAT
THE COMPANY, OR PERSONS ACTING ON ITS BEHALF, MAY ISSUE. THESE FORWARD-LOOKING
STATEMENTS ARE MADE AS OF THE DATE OF THIS ANNOUNCEMENT AND ARE NOT INTENDED TO
GIVE ANY ASSURANCES AS TO FUTURE RESULTS. SAVE AS REQUIRED BY LAW OR
REGULATION, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE
FORWARD-LOOKING STATEMENTS, AND WILL NOT PUBLICLY RELEASE ANY REVISIONS IT MAY
MAKE TO THESE FORWARD-LOOKING STATEMENTS THAT MAY RESULT FROM EVENTS OR
CIRCUMSTANCES ARISING AFTER THE DATE OF THIS ANNOUNCEMENT.

JPMC, which is authorised and regulated in the United Kingdom by the Financial
Services Authority, is acting for the Company and for no one else in connection
with the matters referred to in this announcement and will not be responsible
to anyone other than the Company for providing the protections afforded to
clients of JPMC or for affording advice in relation to the contents of this
announcement or on any matters referred to herein.

This announcement is not for distribution directly or indirectly in or into the
United States, Canada, Australia, Republic of South Africa or Japan. No public
offering of securities will be made in the United States, Canada, Australia,
Republic of South Africa or Japan.

This Announcement is only addressed to and directed at persons in member states
of the European Economic Area who are "qualified investors" ("Qualified
Investors") within the meaning of Article 2(1)(e) of the EU Prospectus
Directive (Directive 2003/71/EC) (the "Prospectus Directive"). Any person in
the EEA who acquires any securities in the Placing or to whom any offer of
securities is made will be deemed to have acknowledged and agreed that they are
such a Qualified Investor.

In the case of any securities acquired by a financial intermediary as that term
is used in Article 3(2) of the Prospectus Directive, such financial
intermediary will also be deemed to have represented and warranted that the
securities acquired by it in the Placing have not been acquired on a
non-discretionary basis on behalf of, nor have they have been acquired with a
view to their offer or resale to, persons in circumstances which may give rise
to an offer of securities to the public other than an offer or resale in a
member state of the EEA which has implemented the Prospectus Directive to
Qualified Investors or in circumstances in which the prior consent of JPMC has
been given to each such proposed offer or resale.

This Announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty express or implied, is or will be made
as to, and no responsibility or liability is or will be accepted by JPMC or by
any of its affiliates or agents as to or in relation to, the accuracy or
completeness of this Announcement or any other written or oral information made
available to or publicly available to any interested party or its advisers, and
any liability therefore is expressly disclaimed.