ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2006

Feb 9, 2006

SOLUTIONS ENVIRONMENTAL INTERNATIONAL ITD

ABN 28 009 120 405

10 February 2006

Company Announcements Office Australian Stock Exchange Limited

Dear Sir /Madam

By e-Lodgement 3 pages

ESI ENTERS INTO AN AGREEMENT TO ACQUIRE 100% OF ASIA PACIFIC COAL AND STEEL PTY LTD

The Directors of Environmental Solutions International Limited ("ESI") are pleased to announce that agreement has been reached for the acquisition of 100% of Asia Pacific Coal and Steel Pty Ltd ("APCS") for a consideration of 16,000,000 fully paid ordinary ESI shares.

All of the major shareholders and Directors in APCS have agreed to the acquisition and settlement under the agreement is conditional upon all of the APCS shareholders agreeing to the acquisition, in addition, the agreement is also conditional on ESI completing due diligence on APCS and ESI obtaining shareholder approval to complete the acquisition. Assuming no issues are discovered in the due diligence process, ESI intends to convene a meeting of shareholders to be held towards the end of March 2006.

On completion of the acquisition of APCS, ESI intends to ask three nominees of APCS to join ESI's board of directors.

This strategic acquisition will secure the key dewatering technology identified by ESI in the Notice of Meeting sent to shareholders in respect of the shareholders' meeting held on 5 December 2005. The APCS patented dewatering process enables highly efficient dewatering of sewage waste and brown coal and can reduce moisture content by as much as 85% resulting in a stable, transportable, exportable high energy feedstock for power generation and other uses.

The acquisition of this unique process will mean the Company will be able to provide an economical solution to its aggressive program (previously announced) to roll out transportable ENERSLUDGE™ units which can be applied in cooperation with contract holders or waste management authorities. The proposed integration of the APCS dewatering process with these units would enable ESI to process sewage waste containing 80% moisture content, reduce moisture levels to 10% and better enable conversion of remaining components into re-saleable char, fertilizer pellets, syngas and oil. The strong commercial potential of this renewable process has enabled ESI's investment banking advisors, Securities International Limited ("SIL") to access US Medium Term Note Investors interested in adding such infrastructure investments to their portfolio.

ENVIRONMENTAL SOLUTIONS INTERNATIONAL LTD

ABN 28 009 120 405 On reviewing the ENERSLUDGE™ technology, SIL formed the opinion that this world class technology is a viable infrastructure solution to provide sustainable and environmentally friendly waste processing. The process mimics nature by thermo-chemically converting sludges to oil, char, gas and reaction water. The result is saleable by-products instead of costly landfill and incineration.

To this end. ESI directors are also pleased to announce that they have signed a mandate with SIL to procure a funding agreement that will provide up to US\$100 million to finance the first stage of the global rollout. It is intended that US\$75 million will be off balance sheet finance where the capital equipment required for the rollout will be owned by the funding source and operated by ESI in conjunction with contractors or waste management companies, US\$20 million is intended to be provided to ESI as an up front facility to secure licensing arrangements in two Asian countries and finally, a US\$5m equity injection into ESI at a value to be determined by ESI. Further details of the funding agreement will be provided to the market once details have been confirmed and finalised with SIL.

The securing of APCS's strategically important technology will enable ESI to investigate substantial commercial opportunities for dewatering other materials, including the potential production of a brown coal and iron ore composite pellet for the production of high quality low cost steel.

About Asia Pacific Coal & Steel Pty Ltd (APCS):

APCS is a privately owned Australian environmental technology company which was formed to commercialise and license its patented Coldry Process® and Matmor Process®.

The patented Coldry Process® is a unique process that dewaters brown coal and similar materials by as much as 85% in a mechanically simple and economic way creating an equivalent high energy value feedstock equal to black coal. The Matmor Process® utilises mixes wet brown coal with low grade un-marketable ores such as iron and nickel and produces high quality steel and nickel via a low cost, low emission retort.

About Securities International Limited (SIL):

SIL operates under an Australian Financial Services Licence No 260231 pursuant to section 913B of the Corporations Act 2001. SIL's directors are highly experienced international Investment Bankers.

SIL offers financial and investment banking services to the corporate, government and private sectors.

SIL is positioned globally within major financial centres with operating offices in Sydney and Hong Kong. SIL has approval from the Jersey Financial Service Commission to act as Arranger for a multi-use, multi-seller medium term notes ("MTN") Programme. SIL specialises in the generation and distribution of this programme targeted to support project and infrastructure finance with a particular emphasis on Asia.

Environmental Solutions International Limited

C/- FJH Solutions Pty Ltd, 21 Teddington Road, Burswood WA 6100 PO Box 6918, East Perth WA 6892 T: (08) 9486 2333 F: (08) 9355 4580

SOLUTIONS INTERNATIONAL ENVIRONMENTAL ITD

ABN 28 009 120 405

About Environmental Solutions International Ltd:

ESI is a publicly listed Australian waste management solutions company which specialises in the desian, construction and operation of plants for clients in the water, wastewater and waste disposal businesses.

ESI has embarked on an aggressive and comprehensive global development programme for the ENERSLUDGE™ technology. The key to this patented technology is the molecular rearrangement by a process of slow pyrolysis plus intimate contacting of the product streams in the main conversion reactor to obtain the optimum quality of products. A series of lower cost and more flexible 'second-generation' designs are now ready for market and backed by 'off balance sheet' financing.

The ENERSLUDGETM technology provides enormous environmental and operational flexibility. The variety of potential uses for the ENERSLUDGETM output products from a particular sludge or waste give the technology considerable market and commercial flexibility.

Ends.

For further information, please contact:

MR SACHLAN FRAVAL

Chairman

Contact: 0408 574 252