New Power Capacity Gain

Rurelec PLC
06 March 2007



                                  Rurelec PLC

                          ('Rurelec' or 'the Company')



Rurelec PLC, the AIM-quoted power developer and owner of power plants in Latin
America, today announces that its new General Electric 6FA open cycle gas
turbine in Santa Cruz, Bolivia has reached Full Speed No Load ('FSNL') during
the current testing and commissioning cycle. The turbine, owned by Rurelec's
Bolivian subsidiary, Empresa Guaracachi SA, was installed in less than 15 months
and constitutes capacity equivalent to 10 per cent. of Bolivia's total demand
for electricity.



The new Guaracachi turbine will be inaugurated on 13th March after which time it
is expected to enter into full commercial service. The 71MW gas turbine was
acquired from El Paso in November 2005 at a substantial discount to the list
price of GE 6FA turbines. A joint English and Bolivian engineering team led by
Independent Power Corporation PLC ('IPC') supervised the transport of the unit
across the Andes at a highest crossing point of 17,000 feet and the installation
in Santa Cruz to the east of Bolivia. They also undertook the successful
conversion of the unit from 60Hz to 50Hz, the first time that such a conversion
has occurred. As a result, the installed cost per MW of the Guaracachi GCH11
unit is some US$260,000, a much lower cost than that recorded for other 6FA
units. In 1999 Guaracachi's first two 6FA turbines were installed by the
previous US controlling shareholders (prior to the transfer of all engineering
to IPC as technical operator in 2003 and the acquisition of 50.001 per cent. of
Guaracachi in December 2005) at US$460,000 per MW.


As at 31st December, 2006 Guaracachi had total nominal installed capacity of
368MW. The addition of 71MW of new capacity represents an increase of 19 per
cent. Power generation revenues are directly linked to installed capacity and
the capacity price paid for every MW available to generate electricity.


In addition to the 439 MW of nominal power capacity which will be in operation
following the commissioning of GCH11, Guaracachi is also developing two other
major power projects.


The first of these, is a conversion to combined cycle gas turbine ('CCGT')
operation of the two 1999 vintage GE 6FA gas turbines. Originally planned as an
80MW expansion, this CCGT conversion is now being increased to just under 100MW
to meet Bolivia's growing need for electricity to meet the country's 6 per cent
growth in GDP. The new CCGT capacity is expected on stream in the second half of
2008.


The second project is a greenfield power plant of 120MW in Yacuiba which is
planned to export electricity to Argentina. Negotiations continue with YPFB to
finalise both a price for the gas to be consumed in the plant and to cement
partnership arrangements with the state-owned Bolivian gas company.


Preliminary agreements have already been signed with Endesa of Spain for its
CEMSA subsidiary to buy all the power produced at the Yacuiba export plant.
Endesa has agreed to construct a power transmission line connecting Bolivia to
northern Argentina, where there are power shortages.


The Yacuiba plant is also expected to act as a catalyst to complete Bolivia's
domestic power transmission grid to link Tarija to Yacuiba, thereby bringing up
to 200,000 Bolivian households onto mains electricity where today they have no
access to the grid and are dependent on high cost portable generators or, worse
still, have no electricity at all.


It is part of the mission of Rurelec to promote rural electrification and to
provide low emission, sustainable isolated generation to those parts of the
southern cone of Latin America which can not gain access to on-grid power.


GHC11 was financed from Guaracachi's own cash resources and a term loan of US$13
million from Banco de Credito de Peru's Bolivian branch. Guaracachi has
completed preliminary filings for a Fitch-rated domestic bond issue. Rurelec is
also exploring options for an international bond issue backed by the CER carbon
credits generated by Guaracachi's combined cycle conversion project.









For further information, please contact:


Peter Earl
Managing Director                Tel. [phone]


Stewart Dick
Daniel Stewart & Company         Tel. [phone]





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