Performance at month end

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 January 2007 and unaudited.

DATA AND PERFORMANCE


Data                          Pricing & Performance
                                                     IEM  MSCI  Impax
                                                     Net  World ET50
Share price                                         Asset
(pence)                 116.4                       Value
Warrants (pence)         43.3
Total fund size     GBP 229.3   Diluted NAV (pence) 112.8  n/a   n/a
(m)
Market              GBP 233.2  Premium/discount (%) +3.2
capitalisation
(m)
Management fee            1.0 Undiluted NAV (pence) 114.4
(%)
Established       22 February          Performance*
                         2002
Fund structure     Investment           1 month (%) +2.3  +1.1  +3.7
                        Trust
Number of stocks           79          3 months (%) +9.7  +2.7  +11.2
held
Exchange               London            1 year (%) +11.9 +3.7  +6.9
Currency                  GBP           3 years (%) +68.4 +32.6 +55.6
ISIN number      GB0031232498          Since launch +16.5 +15.8 +9.6
                                   (22/02/2002) (%)
Sedol                 3123249
Reuters RIC code        IEM.L
                              * Performance data is for undiluted
Bloomberg code         IEM LN NAV.


TOP TEN HOLDINGS


Company             Holding %   Description                   Country
Itron                     2.9   Meters & software             US
LKQ Corp                  2.7   Automotive recycling          US
                                High efficiency electric
Regal Beloit              2.7   motors                        US
Chloride Group            2.7   UPS systems                   UK
Tomra                     2.2   Reverse vending machines      Norway
Dionex                    2.1   Testing & monitoring          US
Abengoa                   2.1   Bioethanol & recycling        Spain
Horiba                    2.1   Environmental testing         Japan
Vestas Wind Systems       2.1   Wind                          Denmark
Gamesa                    2.0   Wind                          Spain

Total                    23.6


PORTFOLIO ANALYSIS*


Geographical           Company Size
North America      43% >£500m         54%
Europe             51% £100-500m      31%
Rest of the World  7%  <£100m         14%

Sectoral               Profitability
Energy             41% Profitable     91%
Water              28% Pre-Profitable 9%
Waste              31%
* of funds invested as of 31 January 2007













MANAGER'S COMMENTARY (January 2007)


The Company NAV was up 2.3% over the month compared with the MSCI
World, which rose 1.1%, and the Impax ET50, which increased by 3.7%
over the same period.  In the broader markets, Industrial Goods and
Telecoms were the best performing sectors.  Interestingly, Energy and
Energy Equipment & Services were significant underperformers.

During the month, The European Commission announced its new Energy
Plan, calling for a "post-industrial revolution", including a 20%
reduction in greenhouse gases by 2020.  The EC foresees energy
imports rising from 50% of consumption to 65% by 2030, and estimates
that the electricity sector will require a ¤900 billion investment
over 25 years to replace ageing capacity and to cope with rising
demand.  In the US, an alliance of companies including General
Electric, Duke Energy and Alcoa called on the government to introduce
national legislation to slash greenhouse gas emissions.  A week
later, in the State of the Union address, President Bush called for
the US to cut petrol use by 20% over 10 years.  Whilst the President
failed to set any mandatory targets on carbon emissions, the
Renewable Fuels Standard was raised to 35 billion gallons by 2017
from the current 7.5 billion gallons by 2012, with alternative fuels
to displace 15% of gasoline by 2017.  The 2008 budget includes nearly
$2.7 billion for the Advanced Energy Initiative, a 26% increase on
2007.

In the water sector, Prime Minister John Howard unveiled a Aus$10
billion investment in irrigation infrastructure in response to
Australia's worst drought in 100 years.  This follows a decision by
the Queensland government to pump recycled drinking water into the
state's water reservoirs next year.  The 10-point plan includes Aus$6
billion allocated to line and pipe major delivery channels, aimed at
saving 3000 gigalitres of water a year, and a programme to improve
on-farm irrigation technology and metering.

In the waste sector, the Waste Electronic and Electrical Equipment
(WEEE) and End of Life Vehicles (ELV) Directives came into force in
the UK.  Both directives implement the principle of "extended
producer responsibility" and encourage the separate collection and
recycling of materials.  During the month, AVR (owned by KKR and CVC)
announced the acquisition of Van Gansewinkel to double in size and
become a leading waste management company in the Netherlands,
highlighting the ongoing attraction of waste assets to private equity
firms.

Stocks that contributed to the increase in the company's NAV during
January included Tanfield (electric vehicles and powered access
platforms, UK), which rose 31% on a large order from logistics group
TNT, and TEG (composting, UK), which increased by 26% following the
announcement of the Viridor-Laing consortium as preferred bidder for
the Greater Manchester Waste PFI contract - TEG is expected to build
four plants as part of the consortium.  On the downside, Energy
Developments (Landfill gas developments, Australia) declined by 10%
on project delays and cost overruns.


Latest information available at: www.impax.co.uk/asset/iemdown.htm

23 February 2007

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