Bolivia Update

Rurelec PLC
29 August 2006



29th August, 2006


AIM: RUR

                               
                   Bolivian Expansion on Track for Rurelec's

                            Empresa Guaracachi S.A.


Rurelec plc, ('Rurelec' or 'the Company') the AIM-quoted power developer and
owner of power plants in Latin America, today announces that its Empresa
Guaracachi S.A. ('Guaracachi') subsidiary has successfully commissioned its new
8 MW addition to its Aranjuez power plant in Sucre, the federal capital of
Bolivia. At the same time the Guaracachi's 71 MW expansion of capacity under
construction in Santa Cruz in the east of Bolivia remains on track for
commissioning in November of this year. Together the two new power facilities
represent some 10 per cent. of the peak demand of Bolivia.


Rurelec acquired control of Guaracachi in January 2006. By the end of the year,
Guaracachi's installed capacity in Bolivia will have increased by 22 per cent.
from 360 MW to 440 MW. Guaracachi is Bolivia's largest power generation company.
At the same time as completing its current new power capacity, Guaracachi has
been working on two further expansion projects.


The first consists of 120 MW of power capacity to be based in Yacuiba in
Bolivia's Department of Tarija close to the border with Argentina. This capacity
is intended to stimulate economic growth to the south of Bolivia where the
national transmission grid has not yet been extended. This plant will also be
interconnected to the northern grid system of Argentina which currently suffers
from power shortages. Guaracachi is in negotiation with the Bolivian national
oil and gas company, YPFB, for a long term gas supply for its new plant. A
preliminary agreement for the sale of electricity has already been signed with
CEMSA, the Argentine power trading subsidiary of Endesa of Spain.


The second project is the 80 MW combined cycle gas turbine ('CCGT') expansion
project which consists of the conversion in Santa Cruz of two existing General
Electric 6FA gas turbines to combined cycle operation. This project has already
been submitted for approval as Bolivia's first carbon credit power generation
project under the Kyoto Protocol. The new capacity is due to be brought into
service at the end of 2007 and will meet Bolivia's growing demand for new power
capacity to match its 6 per cent. growth in GDP, the highest level of economic
growth that Bolivia has experienced in a decade.


Guaracachi continues to trade well and remains committed to a high level of
dividend payout consistent with its policy of distributing profits to
shareholders. Rurelec intends to continue with its progressive dividend policy.


For further information please contact:

Peter Earl, Managing Director, Rurelec PLC: [phone]

Paul Shackleton, Daniel Stewart [phone]





Notes to Editors


Rurelec PLC is a British company established to develop rural electrification
and power generation projects in Latin America. It is managed by a team with a
strong track record in developing power projects worldwide and with considerable
experience in the electricity sector in Latin America.


Rurelec has two principal businesses:


   • Ownership of power generation facilities in the Southern Cone of Latin
    America


   • Management of rural electrification expansion projects funded by the
    World Bank or multi-lateral development agencies.


Rurelec has existing power assets in Argentina and Bolivia.


In Argentina it owns a fifty per cent. stake in Energia del Sur, a 76 MW gas
fired plant which Rurelec is converting to combined cycle operation to add a
further 50 MW in 2007.


In Bolivia, it owns a 50.001 per cent. stake in Guaracachi, Bolivia's largest
power generation company which has a 29 per cent. national market share. In 2006
Guaracachi installed capacity will increase from 360 MW nominal capacity to 439
MW nominal capacity. In 2007 Guaracachi expects to bring into production 120 MW
of dedicated export capacity serving Northern Argentina and 80 MW of combined
cycle capacity serving the Bolivian domestic market. All Guaracachi's power
capacity is gas fired.


Rurelec floated on the AIM market of the London Stock Exchange in August 2004.
Guaracachi is independently listed on the Bolsa Boliviana de Valores.






                      This information is provided by RNS
            The company news service from the London Stock Exchange