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Clean Air Power Raises $6.4 Million in Latest Round of Venture Funding

New Investment to Finance Continuing Product and Market Expansion

SAN DIEGO, July 13 -- Clean Air Power, the premier global technology company delivering affordable, clean power to diesel markets, announced today that it has closed its third round of venture capital funding in the amount of $6.4 million. EnerTech Capital, Nth Power, CIBC Capital Partners, RBC Capital Partners, Angeleno Investors, and Endeavor Capital Management invested in Clean Air Power to finance ongoing product and market expansion for its Dual-Fuel(TM), MicroPilot(TM) and aftertreatment technologies for transportation and electric power generation applications.

Clean Air Power's products include the world's only heavy-goods vehicle to be Euro-IV certified by meeting the stringent European emissions standards that will come into effect in 2006. These Dual-Fuel vehicles operate on both diesel and natural gas providing significant cost and emissions reduction. Because of the favorable diesel to natural gas fuel cost ratio in the UK and other countries, customers are experiencing 10,000 to 15,000 Pounds Sterling annual fuel cost savings from their Dual-Fuel vehicles.

Clean Air's Dual-Fuel technology is also available for stationary power generation engines. By adding the technology to an existing diesel generator, emissions and operating costs are both reduced. These natural gas/diesel hybrid generators are especially attractive in urban areas where air pollution is a concern or where electricity is expensive.

"Clean Air Power continues to be interesting to investors because it has a strong technology platform with dual market opportunities and dual value propositions," said lead investor Scott Ungerer, managing director of EnerTech Capital Partners. "The company's technology is effective in both transportation and energy applications and it can offer customers both significant cost savings and emissions reduction due to the high use of natural gas."

"We have significant commercial traction in the transportation sector of the UK where we are launching Clean Air Capital(TM), a financial solution which gives fleet owners huge savings on day-one," said Dan Kabel, Clean Air Power's president and chief executive officer. "We also have a number of pilot programs for transportation applications in Europe, the United States and Australia and new pilot opportunities in the United States and Australia for electric power generation applications."

The company's technology position contributed directly to securing the $6.4 million of blue chip funding which will further advance the introduction of products based on both fuel substitution and emissions reduction technology. Previously, Clean Air Power received $26 million in its first round of venture funding in 2001 and secured $11.6 million in a second round in 2003.

About Dual-Fuel(TM) Technology

Clean Air Power's Dual-Fuel technology enables diesel engines to operate with the low emission benefits of natural gas while retaining the inherent power, efficiency, low cost and long life of compression ignition engines. Dual-Fuel technology combines the benefits of a diesel engine (quick response to load change, reliability, high efficiency and low cost) with the benefits of a natural gas engine (low emissions and typically lower fuel cost) to provide a high performance, low emission, cost-effective, cleaner system that may also reduce fuel costs. Dual-Fuel engines operate on both natural gas and diesel fuel simultaneously. During normal operation, the majority of the fuel burned is natural gas, while diesel fuel serves as a pilot for combustion. This combination of fuels produces substantially less oxides of nitrogen (NOx), particulate matter, and greenhouse gasses than engines burning only diesel fuel but without sacrificing diesel engine performance.

About Clean Air Power

Clean Air Power, Inc. is the only global technology company that delivers affordable, clean power to the diesel markets today by enabling natural gas and diesel to burn simultaneously. Today, Clean Air Power's Dual-Fuel(TM), FuelSolution(TM), MicroPilot(R), aftertreatment, and subcomponent products provide diesel engine performance while lowering emissions. Since 1991, Clean Air Power has focused on developing solutions that save customers money while reducing emissions. With more than 4,000 heavy-duty vehicle and power generation installations worldwide, Clean Air Power leads the industry in meeting even the most stringent emissions regulations without sacrificing diesel's formidable power or fuel efficiency. Clean Air Power's financial strength is backed by some of the world's most influential energy investors including Canadian Imperial Bank of Commerce (CIBC), Endeavor Capital, Epcor, EnerTech Capital, Emerson Electric, Nth Power, and the Royal Bank of Canada.

For more information, visit the company's website: www.cleanairpower.com.