Killick Capital

OTTAWA, Dec. 3 /CNW Telbec/ - Plasco Energy Group Inc. ("PlascoEnergy" or the "Company") of Ottawa today announced that First Reserve Corporation ("First Reserve") of Greenwich, Connecticut, the largest U.S.-based private equity firm that specializes in the energy industry, has led an equity issue by the Company with the purchase of C$35 million in common shares. This issue of shares also triggers the exercise of outstanding warrants to purchase additional common shares for C$14.3 million scheduled to be received on December 31, 2007. Total proceeds of these issues will be C$54 million.

"First Reserve is investing C$35 million now and has allocated a further C$115 million for investment in PlascoEnergy during 2008 to fund the commercialization and construction of facilities that will be owned and operated by PlascoEnergy," said Glenn J. Payne, Director of First Reserve. "Our investment builds on our knowledge of the waste to energy business developed through prior investments and our continued appetite for economically attractive renewable energy opportunities. First Reserve has allocated up to 10 percent of its US$7.8 billion current fund to renewable energy".

Black River Asset Management, an independently managed subsidiary of Cargill based in Minnetonka, Minn., and Hera Holdings S.A. of Barcelona, Spain, will increase their prior investment by purchasing shares in this issue and by exercise of outstanding warrants. RAB Capital of London, England, Firebird Management LLC and Galtere International Fund, both of New York, N.Y., will also increase their prior investments by exercising outstanding warrants.

"This brings to over C$90 million the equity invested in PlascoEnergy since August 2005. The Company had nominal debt and a modest cash position prior to this issue, and is well funded for development of commercial facilities next year," said Rod Bryden, PlascoEnergy President and CEO."Commitment of funding from Sustainable Development Technology Canada ("SDTC") to the Ottawa demonstration project was a key factor in bringing the PlascoEnergy technology to reality and to attracting private capital that will fund its future commercial use around the world. SDTC has committed a non-repayable contribution of C$9.5 million," he said.

PlascoEnergy has built a waste conversion demonstration facility in Ottawa based on patented technologies developed and owned by PlascoEnergy. On September 19, 2006 onsite construction of the facility began. Construction was completed on June 7, 2007. During the past six months, commissioning of the plant has tested performance of the system from shredding feedstock to delivering electricity to Hydro Ottawa, generated by internal combustion engines operating on Plasco syngas. Converting the City's municipal solid waste ("MSW") to energy is the final step in the plant's commissioning process. The plant is designed to convert 100 tonnes per day and permitted to operate at 85 tonnes per day. Commercial facilities will be comprised of a number of these units as required for the waste volume to be handled at each site.

"Leadership by the City of Ottawa, by providing a site for the plant and waste to process, together with the cooperation from the Government of Ontario, including Ministries of the Environment, Energy and Research and Innovation, have come together to deliver a world-leading system for waste conversion," Mr. Bryden said.

Conversion of residual waste remaining after separation of recyclable material in the City's blue box (plastics) and black box (paper) program will produce valuable products from more than 99% of household garbage. A tonne of waste will produce clean synthetic fuel gas, which substitutes for natural gas, 300 litres of potable quality water, 150 kilograms of clean, inert granular material to replace sand in production of concrete and small quantities of industrial salt and fertilizer grade sulphur. There are no air emissions released from the conversion process.

The synthetic gas can be used for production of other products, including ethanol. At the Ottawa demonstration facility the gas is being used to fuel Jenbacher internal combustion engines to drive electrical generators. Engine exhausts produce emissions that are significantly better than Ontario standards, including zero dioxins and furans and non-detectable levels of mercury.

On average, each tonne of waste converted is expected to produce electricity to power a typical Ottawa household for two months, and reduce greenhouse gases by more than 2 tonnes. "The Plasco Conversion System ("PCS") is a new alternative for capturing the value in MSW. It is clean and efficient, with plants that can be attractive additions to the community. The cost to convert waste with the PCS will generally be less than the cost to bury that waste in a landfill," Rod Bryden said.

About Plasco Energy Group
Plasco Energy Group Inc. (PlascoEnergy) is an Ottawa-based private Canadian company. PlascoEnergy and its predecessor RCL Plasma, Inc. have operated plasma based R&D and test facilities in Ottawa and Spain for more than a decade. The Plasco Trail Road facility is a full scale semi-commercial demonstration plant using PlascoEnergy proprietary technologies. This project has been supported by a contribution from Sustainable Development Technology Canada, a loan from the Ontario Ministry of Research and Innovation under its Innovation Demonstration Fund, and the provision at nominal cost of the site and supply of waste during the demonstration period by the City of Ottawa.

About SDTC
SDTC is an arm's-length foundation which has received C$1.05 billion from the Government of Canada as part of its commitment to create a healthy environment and a high quality of life for all Canadians.

SDTC operates two funds aimed at the development and demonstration of innovative technological solutions. The C$550 million SD Tech Fund(™) supports projects that address climate change, air quality, clean water, and clean soil. The C$500 million NextGen Biofuels Fund(tm) supports the establishment of first-of-kind large demonstration-scale facilities for the production of next-generation renewable fuels.

SDTC operates as a not-for-profit corporation and has been working with the public and private sector including industry, academia, non-governmental organizations (NGOs), the financial community and all levels of government to achieve this mandate.

About First Reserve
First Reserve Corporation is the oldest and largest private equity firm specializing in the energy industry. Founded in 1983, First Reserve was the first private equity investment firm to actively pursue building a broadly diversified global investment portfolio of energy companies. Since 1992, First Reserve has raised over US$12.7 billion for its buyout-focused funds. Throughout its 24-year history, the strong franchise that the firm has developed by investing exclusively in the energy industry has served as a competitive advantage for First Reserve. For more information on First Reserve Corporation, visit www.firstreserve.com