React Energy : 23rd December 2016Final Results 2016 and Notice of AGM

("REACT" or the "Company")

REACT, the renewable energy developer and operator focusing on the production of clean energy in the UK and Ireland, today announces its audited final results for the year ended 30 June 2016.

The Annual Report is available for viewing on the Company's website www.reactenergyplc.com.

REACT also announces that the Annual General Meeting of the Company will be held at the Cork International Airport Hotel, Cork, on 31 January, 2017 at 11.00 a.m.

The Notice of the AGM is being posted to shareholders today and copies are available on the Company's website www.reactenergyplc.com.

REACT Energy plc is committed to operating clean electricity and heat generation plants in the UK and Ireland. The Company seeks to identify, build, own and operate renewable projects and possesses significant knowledge of energy markets, clean technologies, fuel sources, project development, project finance and project delivery. REACT currently has four operational clean energy plants generating revenue from the sale of electricity and heat. The generation of clean electricity and heat from sustainable sources has the potential to address the key energy challenges of energy security and carbon commitment and provide strong returns on capital employed.

The Company is quoted on AIM and trades as REAC. Further information on the Company can be found at www.reactenergyplc.com.

The Company presents the 2016 Annual Report, which gives an update on the activities of the Company over the 2016 financial period as well as updating on recent activities, including, as announced on 12 December 2016, an increase in amount and extension of an existing loan facility with EBIOSS to cover working capital requirements of the Company.

EBIOSS is an industrial engineering group and is involved in the engineering, construction, project development and operation of waste-to-synthesis gas plants. It operates at an international level and owns a state of the art technology and differential positioning in designing and construction of waste gasification power plants with power capacity from 500 kilowatts ("kWs") to 10 megawatts ("MWs"). EBIOSS has developed its own technology, the EQTEC Gasifier Technology (EGT) by which different types of waste are transformed into synthesis gas. This leading technology on waste gasification has made possible the design construction and/or operation of waste gasification plants in Spain, France, Germany, India, Italy and Bulgaria among other countries, for third party international energy groups and for use by EBIOSS itself. EBIOSS is quoted on Mercado Alternativo Bursátil ("MAB"), the alternative market of the Spanish Stock Exchanges.

Whilst the Company continues to execute on its strategy, general market conditions continue to impact investment sentiment. As a result of this ongoing uncertainty, and to ensure that the Company continues to have in place the necessary resources to meet this dynamic business environment, the Board continuously reviews the Company's strategy, cost base and financing structures to ensure it is well positioned and appropriately capitalised to take advantage of opportunities that present in the sector in which it operates.

During the financial year in question the Company also:

• Exited the Examinership process in July 2015

• Recommenced trading of the Company's shares on AIM

• Secured a €750,000 loan facility in January from EBIOSS which the Company has now fully utilised.

• Secured £1m in funding by way of a Secured Loan facility with EcoFinance (GLI) Limited which included a refinancing of a number of existing debt facilities with Altair Group Investment Limited.

• Entered into an agreement in December with EBIOSS to purchase its EGT technology with a power output of 4MW, which NBL will use in the repowering of the Newry Biomass gasification project

• The gasification equipment purchased from EBIOSS cost €4.963 million (subsequently increased to

  €5.150 million and will form part of an Engineer, Procure and Construct ("EPC") contract to be signed between NBL and EQTEC Iberia ("EQTEC"), a subsidiary of EBIOSS, in respect of the Newry Project. REACT has granted EQTEC exclusivity to provide gasification technology as part of EPC contracts for its biomass gasification project pipeline in the UK

• NBL applied and received confirmation from The Office of Gas and Electricity Markets ("Ofgem") that they have been granted an extension to 31 March 2018 for the Renewables Obligation ("RO") registration of the Newry Project

• Gained planning approval for the construction and operation of an energy recovery facility using EGT at Clay Cross in Derbyshire by Clay Cross Biomass Limited a company in which REACT has a 90% interest, subject to finalising a Section 106 agreement pursuant to the conditions set out in the report by the planning authorities

• Continued to operate its wind turbine at Pluckanes and three biomass heat projects in the UK

  Post period end:

• In October 2016, signed conditional heads of agreement with several parties to potentially fund, through a combination of equity and debt, the circa £11.2 million repowering of the NBL 4MW biomass gasification project using EGT

• It was announced on 12 December 2016 that the terms of the working capital facility with EBIOSS had been amended by agreement between that parties such that the amount of the facility was increased by

€600,000 to €1,350,000 and the repayment date of the increased facility was extended to 7 January 2018. The increased facility is to cover the working capital requirements of the Company.

The Company is a clean energy project developer and operator. The Company seeks to take projects from "Greenfield" (greenfield land) stage to "Shovel Ready" stage (projects where planning and development is advanced enough that, given sufficient funding, construction can begin within a very short time frame) with turnkey construction contracts and financial packages in place. Debt and equity partners are then sought to fund the construction phase in return for a share of the project equity.

The Company develops and builds projects currently using wood and waste wood as the sustainable fuel source. The core focus has been on converting biomass or wood into clean electricity and heat. This was based primarily on the technology available to convert the fuel into power and the level of government subsidies available specifically for biomass fuel and the relevant conversion technology.

In reporting its interim results for the six months to 31 December 2015, the Company stated that the political and regulatory environment within the UK continued to be challenging, with a lack of direction and continued changes to the long-term support mechanisms available for renewable energy projects developed under the Electricity Market Review (EMR), with the introduction of Contracts for Difference (CfD) in place of the Renewables Obligation (RO) regime. As part of its ongoing cooperation and collaboration with EBIOSS Energy, the Company has reviewed its strategy for developing and operating clean energy power plants in the UK.

The UK developed its renewable energy sector based on the Renewables Obligation (RO), a quota scheme that led to the only publicly subsidised electricity investments in the UK after the 1989 privatisation era. In 2010, the UK government also introduced the Feed in Tariff (FIT) scheme for supporting small scale low-carbon installations up to a maximum capacity of 5MW.

Post 2014, the UK's electricity sector is governed by the Electricity Market Reform (EMR). Based on the EMR, all electricity investments are publicly subsidised with the fossil-fuel sectors receiving subsidies by way of the capacity market and the renewable energy sector by way of the Contracts for Difference (CfDs) scheme. Having announced the closing of the RO Scheme, the last projects under the RO Scheme, which needed confirmation of a "grace period" from Ofgem, must be completed before 31 March 2018. The UK Government published, in November 2016, a draft of the Budget Notice ahead of the CfD allocation round opening in April 2017. This set an overall budget for total support payments for projects delivered in the two years from the middle of 2021 to 2023 and also set out strike prices for the various less well established technologies including advance conversion technologies, such as advanced gasification.

The UK has, over the past ten years, seen a transformation in its management of household waste. This has been most marked within local authorities as they make the transition from landfill to recycling / composting and energy recovery. The waste market is now moving towards what is termed 'merchant' projects. These are projects which utilise private, specialist fuel supply such as refuse derived fuel (RDF), municipal solid waste (MSW), commercial and industrial waste and waste wood. RDF or solid recovered fuel / specified recovered fuel (SRF) is a fuel produced by shredding and dehydrating municipal solid waste (MSW) with a waste converter technology. In addition, these merchant projects tend to utilise new advanced conversion technologies and include specialist sub sectors, like advanced gasification.

Gasification is a process that converts organic or fossil based carbonaceous materials at elevated temperatures with controlled amounts of oxygen into carbon monoxide, hydrogen, carbon dioxide and methane. It is a well- known technology, and its advanced use with mixed waste feedstock is continually evolving. By its nature "energy from waste" bridges two sectors both of which are evolving. It has its roots firmly in waste management but is becoming of increasing importance to energy generation.

Waste management is changing to be much less about how society get rid of things it no longer wants and more about managing discarded resources back into the economy. Likewise, energy generation is evolving to make best use of renewables, novel fuels and different energy outputs always with an eye to energy security. The need to meet 2020 landfill diversion targets for biodegradable waste has been a major driver for waste policy and infrastructure development in the UK over the last ten years. The landfill tax is a key instrument to meeting the target along with other policies and initiatives. There are wider societal and environmental benefits associated with energy generation and use that will drive energy policy and impact on energy from waste. Energy from waste in particular has the potential to deliver low carbon energy in a cost-effective way and as a non- intermittent source helps provide energy security.

The term 'energy from waste' (commonly abbreviated to EfW) covers a range of different processes and technologies and describes a number of treatment processes and technologies used to generate a usable form of energy and which also reduce the solid volume of residual waste. This energy can be in the form of electricity, heating and/or cooling or a combination of these forms. Conversion treatments are processes which convert residual waste or RDF/SRF into a more useable form of energy such as heat or electricity. These processes include gasification such as the EGT.

By choosing the right location, the right technology and the right processing, energy from waste can help to deliver much needed long-term affordable, low carbon and secure energy.

The EGT can operate economically over a wider range of scales and is therefore potentially more flexible and has the potential to generate much greater efficiencies through a range of outputs.

The UK faces a potential energy gap, with the margin of supply over demand expected to diminish to very-thin levels from 2015 onwards. The scheduled closure of old nuclear facilities has not been matched by the construction of replacement new-build nuclear sites and/or other power station facilities.

Local Authority managed waste going for combustion with energy recovery rose 13% to 5.5 million tonnes in 2012/13 and has more than doubled in the last ten years. A 2010 survey found only 2% of commercial and industrial waste was combusted with energy recovery in England. In 2012, 24 Energy from Waste plants operating in England were treating almost 4 million tonnes of residual MSW and SRF. In 2010, the combustion of the biodegradable component of MSW provided 6.2% of the UK's total renewable electricity generation and 4.7% of total combined renewable heat and electricity generation. Waste derived renewable electricity from thermal combustion in England is forecast to grow from the current 1.2 terrawatt hours ("TWh") to between 3.1TWh and 3.6TWh by 2020.

REACT and EBIOSS Energy have entered into mutually beneficial business arrangements over the last year with the objective of working closer together to avail of opportunities initially in the UK EfW market.