Performance at month end

Impax Environmental Markets PLC
08 January 2003

IMPAX ENVIRONMENTAL MARKETS plc

All information is at 31 December 2002 and unaudited

DATA AND PERFORMANCE

Data                                      Pricing & Performance
                                                                  IEM            MSCI         Impax
Price (pence)                       45.75                     Net Asset Value    World         ET50
Total Fund Size (m)               GBP27.2  Pence (31/12/02)       54.5            n/a          n/a
Management fee                       1.0%
Established              22 February 2002       Performance
Fund structure           Investment Trust       1 month (%)      -8.1%           -8.1%        -11.3%
Number of stocks                       52      3 Months (%)      +2.8%           +4.8%        +1.9%
held
Exchange                           London        1 year (%)        na           -28.6%        -47.3%
Currency                              GBP  Since launch (%)      -44.5%         -25.6%        -41.9%
ISIN Number                  GB0031232498
Sedol                             3123249
Reuters RIC Code                    IEM.L
Bloomberg Code                     IEM LN



TOP TEN HOLDINGS


Company                         Holding %     Description                Country
Vivendi Environnement                 6.6     Water & Waste              France
RPS Group                             4.8     Environmental Consulting   UK
Wedeco                                4.5     Water                      Germany
Ionics                                3.9     Water                      US
Tomra Systems                         3.8     Recycling                  Norway
Vestas Windsystems                    3.6     Wind                       Denmark
Casella Waste                         3.6     Disposal & Recycling       US
Kurita Water                          3.4     Water                      Japan
Insituform                            3.2     Sewer Repair               US
Technologies
Nordex                                3.1     Wind                       Germany
                 Total               40.5



PORTFOLIO ANALYSIS*

Geographical                         Company Size
North America             44%        >£500m                  21%
Europe                    50%        £100-500m               56%
Rest of the World          6%        <£100m                  23%

Sectoral                             Profitability
Energy                    30%        Profitable              88%
Water                     37%        Pre-Profitable          12%
Waste                     31%
Cash                       2%
* of funds invested as of 31 December 2002



MANAGER'S COMMENTARY


The Company NAV fell 8.1% during the month in line with the MSCI World Index
which also fell 8.1% and a decline of 11.3% in the Impax ET50 with energy
technology stocks particularly under pressure. The key developments in
Environmental Markets during December are discussed below.

The main news in the alternative energy sector came from Ballard Power (fuel
cells, Canada) with the announcement that it will be restructuring its
activities to focus on fuel cell production rather than R&D.  The changes come
with the loss of 400 jobs and were followed by an equity financing of $100
million which should give the company sufficient funds to finance the revised
business plan beyond 2007.   Ballard also announced a three-year agreement with
Honda which included an order for 32 fuel cell modules and the launch of the
Coleman Powermate 'Airgen' portable power product for the industrial market.  In
other news in the fuel cell sector, Hydrogenics (Canada, fuel cells) unveiled
its latest 20kW PEM fuel cell power module for stationary and vehicle
applications while FuelCell Energy (US, fuel cells) announced year-end results
and acknowledged that visibility remained poor for sales of its 250 kW molten
carbonate fuel cell for distributed generation applications citing weak power
equipment markets.


There was mixed news in the wind market as Vestas (Denmark, wind) laid off 10%
of its workforce in response to falling demand in the US but announced a large
order for 2 MW turbines in Germany.  Meanwhile Nordex's (Germany, wind) full
year results included a reduction in its medium term margin forecasts but the
company maintained >20% growth expectations for the global wind market.  In
turn, Gamesa (Spain, wind) will be affected by the 8% reduction in the subsidy
for wind power in Spain for 2003 but also announced the sale of 175 MW of wind
farm capacity to Electrabel (a Belgian utility).


Water decontamination was in the news in the water technology sector during the
month, with perchlorate contamination problems in California particularly in
focus. The chemical has been leaching into the State's underground water supply
network and is currently the subject of an ongoing debate between the EPA and
the Pentagon over the level of acceptable concentrations. This debate is
particularly topical given the resource constraint in the State and the recent
ruling by the Federal Government to limit extraction of freshwater from the
Colorado river. The increased profile of these water contamination & management
issues should serve to benefit the water treatment technology companies such as
Trojan Technologies (UV, Canada), Calgon Carbon (activated carbon, US) and Zenon
Environmental (membranes, Canada). In Austria, BWT (water, US) AG announced an
agreement with Nuvera Fuel Cells, Inc to develop a membrane for PEM Fuel Cell
applications. In pollution control, a distribution agreement was signed between
Cummins Power Generation and Kawasaki Gas Turbines-Americas last month for
Cummins Power Generation to market, sell and service generator sets and power
systems powered by Kawasaki gas turbines in the Americas. The agreement should
benefit Catalytica Energy Systems (clean gas turbines, US) who supply the
Xonon(R) system, which enables the Kawasaki gas turbine to operate with ultra-
low nitrogen oxides (NOx) emissions.


In the UK, RPS Group (environmental consultancy, UK) announced the acquisition
of Ecoscope Applied Ecologists Ltd (Ecoscope), a UK-based bio-diversity and
sustainability consultancy. The move highlights the company's growth strategy to
make bolt-on acquisitions of companies offering complementary consultancy
services.  In the US, Tetra Tech (environmental consultancy, US) was selected by
the US Air Force Centre for Environmental Excellence to negotiate a contract for
environmental consultancy services worth up to US$1.1bn, with a potential
extension to US$2.75bn.  This represents the highest contract ceiling in Tetra
Tech 's 34-year history and confirms the company's strong market position.  Also
in the US, Casella Waste (waste disposal & recycling, US) reported strong Q3
results with solid margins and good short-term growth potential. In Australia,
Energy Development's (waste technology, Australia) shares rose on rumours that
the previous Directors may put in an offer for the company.


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



8 January 2003


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