13 August 2008

CLEAN ENERGY BRAZIL PLC

("CEB" or the "Company")

Investment update

Clean Energy Brazil plc, a leading specialist investment company focused on Brazil's sugar cane/ethanol industry, announces an investment update ahead of the publication of its results for the financial year ended 30 April 2008.

Usaciga (CEB interest 49% - acquired in March 2007)

Usaciga's trading for the year ended 30 April 2008 was in line with the Company's expectations, producing an estimated EBITDA of approximately R$25 million (US$15 million) on turnover of approximately R$129 million (US$80 million). Usaciga crushed a total of 1.9 million tonnes of sugar cane, representing an increase of about 22% over the prior year. These positive results for the 2007/08 crop season have been achieved against a backdrop of significant increases in production costs, arising mainly from weakness in the US dollar and higher oil prices.

Usaciga has continued to advance the development of the Rio Parana greenfield site, where approximately 500,000 tonnes of cane is expected to be available for the 2009/10 crop season, and progress has been made with the construction of the sugar mill site. However, Usaciga has not raised sufficient funds for the completion of this development; the capital expenditure involved in the development to date has resulted in a significant working capital shortfall and Usaciga now needs to raise funds in the short term in order to meet its financial obligations. Various potential sources of funding are being considered by Usaciga's management in conjunction with its co-owners, CEB and the Barea family, and Usaciga has retained leading advisory firm, Alvarez & Marsal, to assist with the process. CEB is supporting Usaciga's efforts to complete the fundraising in time for the Rio Parana mill to be operational for the 2009/10 crop season while at the same time considering all options in relation to the Rio Parana development. Further, in light of these developments, Usaciga has decided to recruit suitably experienced and qualified senior personnel including a new chief executive.

Unialco MS (CEB interest 33% - acquired in February 2008)

Trading at Unialco MS, in which CEB invested earlier this year, is in line with the Company's expectations.

The process of securing debt financing for the capital expenditure required for the development of Dourados, Unialco MS's greenfield project with a planned annual crushing capacity of 2.5 million tonnes, has not been completed yet. The delay in securing this funding is expected to result in an estimated 12 month delay in the commencement of operations at Dourados from the originally planned 2009/10 crop year. CEB is in discussions with the co-owner of Unialco MS, Unialco S/A, about procuring the funding necessary for the development. The agricultural development at Dourados is fairly advanced, with 1 million tonnes of sugar cane expected to be available for the 2009/10 crop season.

CEB's greenfield sites (Pantanal and Agua Limpa - CEB interest 100%)

The development of CEB's two wholly-owned greenfield sites, Pantanal and Agua Limpa, is not expected to commence in CEB's current financial year ending 30 April 2009; such development will require funding to be raised.  Significant progress has been made at Pantanal, where 2,500 hectares have been planted already, and the Company is in detailed talks with potential providers of the funds required to complete the development.

The Agua Limpa development, although not as advanced as Pantanal, has achieved the necessary licensing and the first seed cane field has been planted.

Reports of recent investment activity in the Brazilian sugar cane ethanol sector and recent discussions that CEB has been engaged in with potential investors, give the Company a degree of confidence that it will be able to conclude arrangements for the development of Pantanal and Agua Limpa.

CEB

Currently, CEB itself has cash of approximately US$39 million (of which US$6.7 million is held in escrow and may in due course be payable to Usaciga pursuant to the December 2006 investment agreement between CEB, Usaciga and the Barea family).

The Company expects to publish its final results for the year ending 30 April 2008 by the end of October 2008 and will announce any material developments in relation to its investments which occur prior to then.

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