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U.S. Energy Systems to provide energy to Ciba Specialty Chemicals

WHITE PLAINS, N.Y., Jan. 28, 2003 — U.S. Energy Systems Inc., a provider of customer- focused energy solutions, announced the commissioning of energy supply to Ciba Specialty Chemicals Corp.’s facility in Suffolk, Va.

Under an agreement, which expands an earlier agreement, US Energy Biogas Corp., a subsidiary of US Energy Systems, Inc. will provide long-term energy supply to Ciba Specialty Chemicals Corp.’s Suffolk, Virginia facility, from recently completed capital improvements at US Biogas’ adjacent facility.

Goran Mornhed, Chief Executive Officer of U.S. Energy Systems, Inc., stated, “The agreement will enable Ciba Specialty Chemicals to reduce energy costs and improve supply reliability by switching to energy provided by U.S. Biogas’ local Suffolk plant. In addition to its financial benefits, the project will help to increase energy efficiency and reduce emissions at U.S. Biogas’ plant as well as at the Ciba facility. This expansion represents organic growth in energy outsourcing with a focus on industrial and other large retail energy end users.”

Ciba Specialty Chemicals’ Suffolk site produces products that help its customers efficiently manage water usage through advanced water treatment products, process efficiencies and services for industrial and municipal markets. Ciba Specialty Chemicals is an international company and a member of the New York Stock Exchange.

Additional energy supply opportunities are currently being evaluated to support the facility needs at Ciba Specialty Chemicals’ Suffolk, Virginia facility.

About U.S. Energy Systems, Inc.

U.S. Energy Systems, Inc., based in White Plains, NY, is a customer- focused provider of energy to large retail customers, including industrial, commercial and institutional end users. USEY owns, operates and/or is financing 35 energy projects in North America and Western Europe, totaling the equivalent of 264 megawatts and using combined heat and power (CHP) technology and renewable fuels. U.S. Energy Systems has formed a number of strategic business partnerships with leading companies, including Cinergy Solutions, a subsidiary of Cinergy Corp., which is a strategic investor and joint venture partner, and Arthur J. Gallagher & Co., an international insurance brokerage company (www.usenergysystems.com).
About Ciba Specialty Chemicals Corporation

Ciba Specialty Chemicals is dedicated to producing high-value effects for its customers’ products. Ciba’s specialty chemicals, added in small quantities, enhance the performance, look and feel of the final product.

Business success is driven by Ciba’s long-term strategy innovation and continuous operational improvements. Ciba brings new and creative thought to the processes and products of Ciba’s customers in more than 120 countries. Ciba’s continuing operations generated sales of CHF 7.4 billion in 2001 and CHF 276 million was spent on R & D to foster innovation across the company.