New 50 Million Gallon Cellulosic Ethanol Facility at Augusta, Georgia Site to Begin Production by Mid 2007; PRAJ Technology and The Facility Group Selected to Assist in Engineering and Construction

NEW YORK--(BUSINESS WIRE)--July 20, 2006--Xethanol Corporation (AMEX:XNL), a biotechnology driven ethanol company, announced today that it has completed its due diligence process on its previously announced acquisition of a Pfizer pharmaceutical manufacturing complex in Augusta, Georgia and will be closing on the complex within 30 days. The company also announced plans to construct a 50 million gallon per year cellulosic ethanol plant on the site which would begin producing ethanol by mid-2007.

PRAJ Technology, an India based world leader in bio-ethanol technology will provide detailed engineering services, process design and licensing as well as the supply of vital sections of the process plant. PRAJ was also selected to provide the same services for Xethanol's recently announced new 35 million gallon per year facility at its Blairstown, Iowa site.

The Facility Group of Atlanta, Georgia (www.facilitygroup.com) has been retained by the company to act as EPC (Engineering, Procurement and Construction) contractor for the new plant.

Christopher d'Arnaud-Taylor, Chairman and CEO of Xethanol, commented "Having completed our due diligence on the site, we decided to raise the capacity of this plant to 50 million gallons per year. It is being designed to run on a variety of feedstocks and we are already securing the necessary feedstock streams from the forest products industry to run at capacity when we begin production by mid-2007. By combining Xethanol's proprietary technologies with those of PRAJ, we believe that we will have achieved our goal of being a low-cost producer of fuel ethanol from cellulosic materials. With our recent announcement of expanding our Blairstown, Iowa facility to 41 million gallons per year and bringing Augusta on line with 50 million gallons per year, our stated production goals are within our sights."

Mr. Taylor further went on to say "We have selected two leading companies to facilitate the expeditious construction of the Augusta plant. PRAJ is a world leader in bio-ethanol technology, providing cutting edge design and construction and state-of-the-art engineering for ethanol production from a range of feedstocks. The Facility Group is one on the most highly regarded facilities contractors in the country. We are very pleased to be working with both PRAJ and The Facility Group on this project."

Lucas Rice, Xethanol's VP of Operations stated "This site is a prime example of Xethanol's strategy of exploiting shuttered industrial capacity and converting facilities that already have existing infrastructure to produce ethanol. In doing so, the company is able to save significant time and money in bringing facilities on line. This site, in particular, has millions of dollars in equipment and infrastructure in place and ready to use for ethanol production."

About PRAJ

PRAJ is a global Indian company that offers innovative solutions to significantly add value to ethanol production processes and related wastewater treatment systems for customers worldwide. PRAJ is a Knowledge based company with expertise and experience in Bioprocesses and engineering backed up by a well equipped research and development centre and manufacturing facility. It delivers Know how, License, engineering design, plant and equipment, project management, commissioning and customer care. Led by an accomplished and caring leadership, PRAJ is a socially responsible corporate citizen.

About The Facility Group of Atlanta

The Facility Group is a professional service organization providing consulting, program management, architecture, engineering and construction management services in a wide variety of technical and industrial niches as well as across a broad spectrum of government and public sectors. Headquartered in Atlanta, with offices in Chicago, Los Angeles, Denver and Amsterdam, the firm employs over 250 professionals.

About Xethanol Corporation

Xethanol Corporation's goal is to be the leader in the emerging biomass-to-ethanol and biofuels industry. Xethanol's mission is to optimize the use of biomass in the renewable energy field and convert biomass that is currently being abandoned or land filled into ethanol and other valuable co-products, especially xylitol. Xethanol's strategy is to deploy proprietary biotechnologies that will extract and ferment the sugars trapped in these biomass waste concentrations. Xethanol's strategic value proposition is to produce ethanol and valuable co-products cost effectively with ethanol plants located closer to biomass sources. Xethanol's biotechnologies are currently deployed in its two ethanol production facilities in Iowa. For more information about Xethanol, please visit its website at http://www.xethanol.com. To receive information on Xethanol in the future, please click on the following link: http://www.xethanol.com/alerts.htm?b=1387&l=1

Forward-Looking Statements

Certain matters discussed in this press release are "forward-looking statements." These forward-looking statements can generally be identified as such because the context of the statement will include words, such as "expects," "should," "believes," "anticipates" or words of similar import. Similarly, statements that describe Xethanol's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, including the financial performance of Xethanol, as appropriate, which could cause actual results to differ materially from those currently anticipated. Although Xethanol believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, it cannot give any assurance that their expectations will be attained. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating any forward-looking statements. Certain factors could cause results and conditions to differ materially from those projected in these forward-looking statements, and some of these factors are discussed below. These factors are not exhaustive. New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. These forward-looking statements are only made as of the date of this press release and Xethanol does not undertake any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.