ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2015

Aug 18, 2015

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Shareholder)Update)

Wednesday,)19)August)2015:) Environmental!Clean!Technologies!Limited!(ASX:!ESI)!(ECT!or! Company)!is!pleased!to!provide!the!following!update!on!its!activities!in!project!development!in! India!and!other!topics:

• Tripartite!Collaboration!Agreement!progressing!to!conclusion!of!Indian!National! Government!clearance!processes!

• NLC!Chairman!B.!Surender!Mohan!discusses!lignite!upgrading!potential!during! Independence!Day!address!

• Project!Financing!solutions!development!advances!

Tripartite)Agreement)Status)

Following!on!from!recent!updates,!the!Company!confirms!it!is!nearing!conclusion!of!the!Indian! National!Government!clearance!process!ahead!the!planned!execution!of!a!tripartite!collaboration! agreement!with!two!significant!Indian!Public!Sector!Undertakings!(PSU’s),!Neyveli!Lignite! Corporation!(NLC)!and!the!National!Mineral!Development!Corporation!of!India!(NMDC),!for!the! advancement!of!its!Coldry!and!Matmor!technologies!to!demonstration!and!pilot!stage,!respectively.!

The!Company!will!advise!shareholders!when!formal!written!clearance!is!received!and!expects!to! progress!to!formal!signing!of!the!tripartite!agreement!shortly!thereafter,!subject!to!co]ordinating!the! availability!of!the!signatories.!

ECT!Managing!Director!Ashley!Moore!stated!“While!we!may!desire!a!faster!pace,!we!understand! and!respect!that!this!is!part!and!parcel!of!dealing!with!Indian!companies!of!this!stature.!That!said,! we!are!working!on!various!means!to!accelerate!progress!once!we!formally!sign!off!the!Tripartite! agreement.!As!we!announced!in!July,!the!company!has!begun!Stage!1!of!the!Indian!project.!In!this! last!month,!we’ve!begun!the!initial!stages!of!our!upgrade!works!on!the!Matmor!test!plant!to!ready!it! for!engineering!development!runs!as!part!of!our!Pilot!Plant!development!program.!We!will!have! more!to!communicate!on!the!program!in!the!coming!weeks.”!

The!tripartite!agreement!sets!the!collaborative!framework!for!the!parties!to!deliver!an!integrated! Coldry!demonstration!and!Matmor!pilot!project.!The!agreement!defines!roles!and!responsibilities,! lays!a!development!path!with!high!level!activity!sets!and!key!milestones!covering!the!end!to!end! development!of!the!project.!In!addition!to!the!engineering!aspects,!the!tripartite!agreement! identifies!the!development!pathway!for!further!agreements!required!to!cover!commercial!aspects! such!as!project!ownership!structures,!investment!options!and!timing!of!funding.!

The!Company!has!continued!to!update!the!market!on!its!India!activities,!including:!

• Coldry!demonstration!project!feasibility!study!submitted!to!NLC!last!August!

• Agreement!by!NLC!to!proceed!to!high!level!Board!review!process!last!September!

• Discussions!with!NMDC!on!Matmor!development!announced!last!October!

• Tripartite!collaboration!agreement!negotiations!commenced!last!December!&!Feasibility! Study!recast!to!include!Matmor!pilot!plant!through!to!March!2015!

• ECT!hosting!a!visit!by!NLC!and!Ministry!of!Coal!in!May!ahead!of!NLC!and!NMDC!Board! approval!of!the!DRAFT!tripartite!agreement,!subject!to!Indian!National!Government! clearance!processes!

• ECT!announces!commencement!of!Stage!1!of!the!Indian!Project!in!July!

Suite!502,!Level!P5,!9!Yarra!Street,!South!Yarra,!VIC!3141!Australia!|!Phone!+613!9939!4595!|!www.ectltd.com.au!|!ABN!28!009!120!405! Listed!on!the!Australian!Stock!Exchange!(ASX:ESI)

During!the!past!year!both!NLC!and!NMDC!have!made!public!reference!in!support!of!our! engagement!with!the!most!recent!occurring!in!an!address!by!Mr!B.!Surender!Mohan,!the!Chairman! and!Managing!Director!of!NLC,!during!India’s!Independence!Day!festivities!recently.!

In!his!speech,!as!reported!by!Indian!Government!Sector!news!consolidation!portal! www.sarkaritel.com,!Mr!Mohan!briefly!highlighted!NLC’s!pursuit!of!projects!for!the!upgrading!of! lignite!to!enhance!its!calorific!value!and!to!displace!metallurgical!coke.!!

Given!the!community]based!audience,!neither!ECT!or!its!technologies!were!quoted!by!name,! however!this!latest!reference!serves!to!reinforce!the!consistently!stated!intent!to!proceed!with!the! development!of!both!Coldry!and!Matmor!at!NLC.!

We!expect!to!receive!confirmation!on!the!above!in!due!course!and!will!provide!an!update! accordingly.!

Project)Finance)

In!preparation!for!the!Indian!project,!the!Company!has!been!developing!a!range!of!project! financing!options.!Currently!we!have!been!considering!a!number!of!options!and!are!in!receipt!of!a! draft!terms!sheet!for!a!debt!based!finance!package!of!around!A$30!million!to!contribute!to!our! overall!project!development!activities!in!India!and!elsewhere.!The!terms!sheet!remains!draft,! though!is!now!in!review!as!part!of!a!portfolio!of!solutions!to!fully!fund!the!projects.!!

Ashley!Moore!noted!that!“While!the!terms!sheet!is!the!first!received!as!part!of!a!broader!program! within!our!project!capital!solutions!plan,!we’re!not!yet!able!to!disclose!details!due!to!the! commercial]in]confidence!nature!of!the!proposal.!It!is,!however,!from!a!reputable!source!who!are! willing!to!work!with!us!to!tailor!their!offering!to!the!project!specifics.”!He!went!on!to!note!that,!“It’s! important!that!we!plan!our!project!finance!solutions!ahead!of!time!for!our!project!pipeline!and! where!possible,!seek!financing!solutions!which!are!low!in!dilutive!impact!on!our!current! shareholders.”!

For)further)information,)contact:

Ashley'Moore'–'Managing'Director info@ectltd.com.au''

About)ECT)

ECT!is!in!the!business!of!commercialising!leading]edge!coal!and!iron!making!technologies,!which!are!capable!of! delivering!financial!and!environmental!benefits.!

We!are!focused!on!advancing!a!portfolio!of!technologies,!which!have!significant!market!potential!globally.!!

ECT’s!business!plan!is!to!pragmatically!commercialise!these!technologies!and!secure!sustainable,!profitable!income! streams!through!licencing!and!other!commercial!mechanisms.!

About)Coldry)

When!applied!to!lignite!and!some!sub]bituminous!coals,!the!relatively!simple!Coldry!beneficiation!process!produces!a! black!coal!equivalent!(BCE)!in!the!form!of!pellets.!Coldry!pellets!have!equal!or!superior!energy!value!to!many!black!coals! and!produce!lower!CO2!emissions!than!raw!lignite.!

About)MATMOR

The!MATMOR!process!has!the!potential!to!revolutionise!primary!iron!making.!

MATMOR!is!a!simple,!low!cost,!low!emission,!production!technology,!utilising!the!patented!MATMOR!retort,!which! enables!the!use!of!cheaper!feedstocks!to!produce!primary!iron.!