CAP.L Regulatory News (CAP)

26 April 2013

Clean Air Power Limited

("Clean Air Power" or "Company")

Significant US Grant Funding Win

Clean Air Power (AIM: CAP), the developer and global leader in dual-fuel engine management software for heavy duty vehicles, is pleased to announce it has executed an agreement to receive a grant to support its development of a Genesis EDGE Dual-Fuel™ product for the important US market (the "Program"). The commencement of this Program was originally announced on 29 August 2012 and will deliver a US Genesis product certified to US2010 emissions levels and enable the Company to access the growing demand in the US for natural gas vehicles.

In support of the Program, Clean Air Power will receive approximately $2.6m between May 2013 and October 2014 to produce, demonstrate and refine a commercially viable Dual-Fuel product for the US market. Based on the assumption that the current Program timeline and deliverables are met, the majority of the funds are expected to be received by December 31 2013.

To receive the funds Clean Air Power has to satisfy certain deliverables including achieving the deployment of 12 trial vehicles and demonstrating agreed levels of vehicle performance and efficiency and the proportion of diesel replaced by natural gas.

The funds will be managed through a subcontract with Gas Technology Institute (GTI), who will manage grant on behalf of the California Energy Commission (CEC). These grants are made possible under California's Alternative and Renewable Fuel and Vehicle Technology Program (AB 118) specifically designed to accelerate the use of alternative fuels in California's transportation market. In accordance with the terms of the agreement Clean Air Power will develop the US Genesis product and will deploy 12 Dual-Fuel trucks into various applications to optimise them for emissions, driveability and efficiency. Clean Air Power has been in discussions with GTI and CEC since February 2012 and therefore, as indicated in the preliminary results for the year ended 31 December 2012 announced on 4 April 2013, the receipt of these funds was already included in the Company's forecasts.

 John Pettitt says:

"With the abundance of domestically produced natural gas, the US represents an extraordinary opportunity for Clean Air Power's Dual-Fuel technology. We are pleased to have the support from CEC to adapt and optimise our European product for the important US market where demand for natural gas vehicles is growing rapidly. We are also looking forward to working with GTI, managing the grant on behalf of CEC, as they are leaders in promoting adoption of natural gas throughout the US."

For further information, please contact:

Notes to Editors

About Clean Air Power

Clean Air Power is the developer and provider of Dual-Fuel™ combustion technology for heavy duty diesel engines. Dual-Fuel™ engines substantially cut fuel costs and carbon emissions without sacrificing the original engine's characteristic efficiency or reliability. Clean Air Power is well positioned to assist corporations and governments to deliver on their environmental commitments while at the same time reducing transport operators overheads.

Initially founded in the USA in 1991, around £40m has been invested in developing the technology with the result that 65 patents are currently held or pending. The holding company of the Group is based in Bermuda with operational subsidiaries in the UK, the USA and Australia. The Group was admitted to the AIM market of the London Stock Exchange in February 2006.

Further information on Clean Air Power is available at www.cleanairpower.com

About Gas Technology Institute

GTI is the leading U.S. research, development and training organization addressing energy and environmental challenges to enable a secure, abundant, and affordable energy future. For more than 70 years, GTI has been providing economic value to the natural gas industry and energy markets by developing technology-based solutions for industry, government, and consumers.

GTI's research initiatives address issues impacting natural gas and energy markets across the industry's value chain. GTI offers an integrated systems perspective to expand the supply of affordable energy, ensure a safe and reliable energy delivery infrastructure, and promote the efficient use of energy resources.

GTI is an independent technology organization, established as an Illinois not-for-profit corporation. They are tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

About California Energy Commission (CEC)

The California Energy Commission is the state's primary energy policy and planning agency. Created by the Legislature in 1974 and located in Sacramento, six basic responsibilities guide the Energy Commission as it sets state energy policy: forecasting future energy needs; licensing thermal power plants 50 megawatts or larger; promoting energy efficiency and conservation by setting the state's appliance and building efficiency standards; supporting public interest energy research that advances energy science and technology through research, development, and demonstration programs; developing renewable energy resources and alternative renewable energy technologies for buildings, industry and transportation; planning for and directing state response to energy emergencies