IFC Grants $3 Million to IST and Plug Power for Fuel Cell Project in South Africa

Washington, DC, December 15, 2005— The International Finance Corporation, the private sector arm of the World Bank Group, awarded today a $3 million grant to IST Holdings (PTY) Ltd and Plug Power Inc., who will install 400 fuel cells in remote locations and cities of South Africa over the next three years. The fuel cells will provide a reliable source of electricity and will replace polluting technologies such as diesel generators.
Plug Power, a U.S. company based in Latham, New York, will produce the five kilowatt fuel cell systems, which IST, a South African company based in Pretoria, will import, distribute, install, and maintain. The project is worth a total of $14 million. When completed, the fuel cell installations will have the capacity to generate about two megawatts – which is equivalent to the electricity needed to power 1,300 households. The electricity is targeted initially for use in backup and prime power applications in telecommunications and other industries across South Africa.

The project will represent the largest number of commercial fuel cells to be installed in a developing country to date. The cells installed using this grant will provide a reliable source of electricity for industrial and information technology applications and for telecommunications systems, including wireless infrastructure. They will help displace highly polluting and noisy diesel generators, providing electricity more efficiently, emitting very little greenhouse gas emission, and operating virtually noise-free.

Rachel Kyte, IFC’s Director for Environment and Social Development, commented, “IFC is committed to helping bring sustainable energy solutions to emerging markets. Cleaner technologies are part of the solution. This project will not only provide a clean energy source in South Africa, but will also provide reliable electricity to remote areas of the country.”

Harry Coetzee, IST’s Group Chief Executive, said, “This project is another major step in IST’s drive to implement leading edge technology on the African continent. For more than 25 years we have been in the business of applying engineering technology, and we look forward to strengthening our presence in this area with our Plug Power partnership.”

Mark Sperry, Plug Power’s Chief Marketing Officer, said, “This funding is essential as we begin to work with IST in the distribution of our fuel cell systems throughout the telecom and utility markets in South Africa. We expect this initiative to positively impact businesses and customers who are regularly affected by power outages resulting in decreased reliability throughout their networks and infrastructure.”

The IFC grant is the first under the Fuel Cell Financing Initiative for Distributed Generation Applications, a $54 million program funded by the Global Environmental Facility. The program aims to bring clean, reliable electrical power to places in developing countries where grid power is either not available or unreliable. Its long-term objective is to catalyze the creation of sustainable markets for fuel cells in developing countries. The initiative is currently the only multilateral program that promotes stationary fuel cells.

In its first stage, the Fuel Cell Financing Initiative will subsidize commercial and pre-commercial fuel cell projects, granting a total amount of $9 million between 2004 and 2008. Projects will be subsidized up to $2000 per kilowatt, or 50% of the capital costs of the units, whichever is lower. During the second stage, the program will provide as much as $45 million in funding, but the subsidy level will be lower and will reflect the near commercial costs of the technologies. Fuel cells use an electrochemical reaction, rather than combustion to produce electricity.

Plug Power Inc. (NASDAQ: PLUG), is an established leader in deploying clean, reliable, on-site energy products. More than 550 Plug Power fuel cell systems have been delivered to customers worldwide in commercial, public sector, telecommunications, utility and uninterruptible power supply markets.

IST Holdings (PTY) Ltd is a South African company that offers installation and commissioning of equipment, network planning and design engineering, manufacturing, marketing, submission of tenders, technical training and a local backup service. The name was an acronym of Integrators of System Technology, which remains an accurate overall description of the group’s business.

The International Finance Corporation, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.

From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.

The Global Environment Facility helps developing countries fund projects and programs that protect the global environment. Established in 1991, it is the designated financial mechanism for international agreements on biodiversity, climate change, and persistent organic pollutants. It also supports projects that combat desertification and protect international waters and the ozone layer. Its activities, funded by member countries, are implemented largely through the World Bank, UNDP, and UNEP. IFC acts as a private sector interface for the facility, operating through the World Bank as a GEF implementing agency. To date, IFC has developed GEF-eligible projects amounting to $174 million.

Contact Information

Lucie Giraud

International Finance Corporation

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