Trading Update

Rurelec PLC
04 April 2008


                                  Rurelec PLC

                          ('Rurelec' or 'the Company')

                    Trading Update re Empresa Guaracachi SA


       Empresa Guaracachi SA Releases Preliminary Results for Year Ended
                                31 December 2007



Executive President Statement


2007 has been a good year for Guaracachi and I am pleased to report record net
income of US$ 9.63 million (Bs 73.8 million) and revenues of US$ 40.89 million
(Bs.313.7 million).  This compares with restated net income of US$ 8.13 million
(Bs. 62.3 million) and revenues of US$ 35.25 million (Bs. 270.4 million) for the
same period in 2006. Based on these results, which have been prepared under
Bolivian GAAP, the Board of Guaracachi is recommending to its shareholders a
dividend of US $7.16 million.  The dividend attributable to Rurelec PLC will be
approximately US $3.1 million after deduction of Bolivian withholding taxes at
the rate of 12.5 per cent.

Part of this improvement was due to the successful completion of GCH 11, the 71
MW nominal capacity General Electric 6FA turbine commissioned and inaugurated in
March 2007 which has since the middle of the year operated as one of the
principal gas turbines in both Santa Cruz and in Bolivia. GCH 11 was developed
and installed in record time by a joint Anglo-Bolivian team of Guaracachi
engineers. Had the unit not been installed on time, Bolivia would most certainly
have experienced the same kind of power shortages which have afflicted its
neighbours in Argentina, Brazil and Chile. Instead in 2007 Bolivia enjoyed a
power capacity reserve margin unparallelled in the Southern Cone of Latin
America.

Guaracachi is the only private power company to have installed new capacity in
recent years bringing on 8 MW in 2006 and 71 MW in 2007. In 2008 Guaracachi will
install a further 6 MW nominal capacity in Sucre and an additional 96 MW in
Santa Cruz in 2009 in the form of the long-awaited combined cycle gas turbine
(CCGT) conversion project, the first in Bolivia.

Guaracachi is Bolivia's most environmentally aware power generator. Its smaller
new Jenbacher gas engines are the most thermally efficient power production
units in the country. With a 42 per cent thermal efficiency, they have the lo
west emissions of greenhouse gases of any thermal generator. They have replaced
older Worthington and Nordberg reciprocating engines which need to be run partly
on diesel and which consume more fuel for every kilowatt hour of electricity
generated.

Guaracachi's new CCGT unit at Santa Cruz, when completed in 2009, will use the
waste heat from existing gas turbines to produce more power for every unit of
fuel used. This re-capture of heat, currently being vented into the atmosphere,
makes the project eligible for carbon credits under the United Nations Clean
Development Mechanism under the Kyoto Protocol. In a ground breaking agreement
with the Vice-Ministry of Land Planning and Environment of the Government of
Bolivia, Guaracachi has agreed to share part of the financial benefit of those
CERs by sponsoring and investing in social programmes for rural electrification
and isolated generation for those communities who today have no access to the
national grid and only limited and sporadic electricity from small diesel
powered generators. Guaracachi's new social programme is the first such
public-private partnership in Bolivia.

Guaracachi has a very strong balance sheet when compared with most power
companies in Latin America, the United States or Europe. For this reason the
company's expansion programme - adding a total of 181 MW in four years between
2006 and 2009 - has been accomplished through a combination of Guaracachi's own
cash reserves and judicious use of debt. At the end of December 2007, Guaracachi
announced that it had achieved a debt rating with Fitch of A+ (BoC) for its
US$40 million unsecured bond programme, of which US$ 20 million was issued with
a coupon of 8.55 per cent for a ten year maturity, a milestone for any Bolivian
power company. Guaracachi has also reached preliminary agreement with CAF for a
US$20 million project loan for the CCGT expansion with a highly competitive
interest rate coupon supported by KfW of Germany. Guaracachi enjoys strong
domestic banking relationships with Banco de Credito de Peru, Banco Mercantil
Santa Cruz, Banco BISa and Banco Economico .

Bolivia is growing in importance as a regional energy hub, exporting high levels
of gas to Argentina and Brazil. Guaracachi continues to develop its Yacuiba
Export Project for exporting electricity to Argentina and hopes to finalise the
necessary fuel supply agreements for this 120 MW project during the course of
2008.

Guaracachi is exploring further domestic and international power projects in
conjunction with its Bolivian and British shareholders and with other overseas
partners.

In recent years the company has demonstrated its commitment to environmental
improvements, not only in terms of emissions reductions in accordance with the
Kyoto Protocol but also in its noise reductions from existing generation
activities.

In 2007 Guaracachi built noise reduction housings around some of its oldest
peaking Frame 5 gas turbines to reduce noise emissions to a level considerably
below Bolivia's current legal noise level standards. In 2008 Guaracachi is
moving two of its remaining Frame 5 Units to an industrial park in Santa Cruz to
form the core of a 40 MW combined heat and power ('CHP') project, using waste
heat to produce steam for industrial users. This will be Bolivia's first
gas-fired CHP and is intended to provide steam for a new soya crushing plant to
be built on site. The Santa Cruz CHP Project will not only reduce noise
emissions at Guaracachi's principal city centre location, for the benefit of its
residential neighbours, but is also designed to create new CERs from the use of
waste heat. It will increase the thermal efficiency of the Frame 5 gas turbines
when operating in CHP mode which should, in turn, allow these units to run as
base load rather than peaking units. Guaracachi is also considering the
possibility of obtaining an extra 20 MW of power capacity from the CHP by a
further conversion to combined cycle.

In other areas too, Guaracachi has been acting as a catalyst for social change
with sponsorship of educational, cultural and sporting projects as benefits one
of Bolivia's largest companies. I am proud of the leadership which Guaracachi
had demonstrated in 2007 and I look forward to maintaining our policies of
growth and innovation in the years to come.


Peter Earl
Executive President



For further information, please contact:


Rurelec PLC
Peter Earl/Elizabeth Shaw                                    Tel: [phone]

Daniel Stewart & Company plc
Paul Shackleton                                              Tel: [phone]

Park Green Communications
Simon Robinson                                               Tel: [phone]







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