Canadian Government to Invest $900,000 in Thermal Energy's Bioenergy Technology



    Repayable investment approved for pending bioenergy facility at Eastern
    Canada pulp and paper mill

    OTTAWA, Feb. 20 /CNW Telbec/ - Thermal Energy International Inc.
(TSX-V: TMG) (www.thermalenergy.com) is pleased to announce that Natural
Resources Canada (NRCan) has committed $900,000 in funding toward the
development of a green energy power facility proposed for an eastern Canada
pulp and paper mill.
    The funding would be provided under a repayable contribution agreement
from NRCan's Climate Change Interim Strategy Technology Early Action Measures
(TEAM) Fund to "demonstrate the performance and energy efficiency improvements
of a combined biomass dryer/energy recovery system in order to reduce
emissions and fossil fuel use at a Canadian pulp and paper mill."
    Thermal Energy President and CEO Tim Angus said the Company "is very
pleased to receive this important support from the federal government for a
project which could become a showcase solution for many industries looking to
reduce their fossil fuel consumption and replace that demand with efficient
use of biofuel created from biowaste."
    The project under consideration stems from a Letter of Intent (LOI)
signed with an Eastern Canada pulp and paper mill (see press release dated
September 18, 2007) for the design and installation of a DRY-REX(TM) low
temperature biomass drying system. As per the LOI, Thermal Energy has
completed a detailed feasibility study which has been presented to the mill
for its review. A decision by the mill is expected this fiscal year.

    To Reduce Oil Use and Cut Greenhouse Gases

    The proposed project would provide significant energy cost reductions and
environmental benefits. These would be achieved in part by diverting more than
120 tonnes per day of pulp and paper sludge away from landfill for use as
biofuel. This would reduce the use of fuel oil and achieve a commensurate
reduction in emissions including an estimated 69,000 tonnes of greenhouse
gases (i.e. C02) a year.
    The proposal as submitted would also see the mill enter into a
multi-million dollar green energy supply contract using the Thermal-AUD(TM)
(Alternate Utility Delivery) program through Thermal Energy's energy services
subsidiary ForEverGreen Energy Inc. The green energy would be created from
drying the mill's biomass waste stream including paper sludge for use as a
biofuel, utilizing a combination of Thermal Energy's FLU-ACE(R) waste heat
recovery technology and the DRY-REX(TM) technology.
    The project would require no upfront capital investment from the mill,
which would start to realize the benefits from the first day of operation. The
project would also provide Thermal Energy with a recurring revenue stream from
the energy sales throughout the life of the proposed multi-year contract.
Under the terms of the TEAM agreement, Thermal Energy will repay the
government an amount equal to two per cent (2%) of the revenue from the sale
of bioenergy systems, up to a maximum of $100,000 a year.
    Thermal Energy also announced today that Mr. Oliver Toffoli has been
appointed Chief Operating Officer of the Company, taking over from Mr. Denis
Forget who becomes Director of Project Development and Vice President of
Strategic Business Development. Mr. Toffoli will carry out the duties of COO
in addition to his current role as Chief Financial Officer.

    NOTE: This press release may contain forward-looking statements relating
to, and among other things, based on management's expectations, estimates and
projections. Such statements including those about the Company's strategy for
growth, product development, market position, expected expenditures and
financial results are forward looking statements. These statements are not
guarantees of future performance and involve a number of risks, uncertainties
and assumptions. Many factors could cause results to differ materially from
those stated. The Company disclaims any obligation to publicly update or
revise any such statements.

    About Thermal Energy

    Thermal Energy International Inc. is an innovative technology company
providing custom energy and emission reduction, and bioenergy solutions.
Headquartered in Ottawa, Canada, TEI is a designer, design build developer,
fabricator, owner, operator and supplier of proprietary and patented energy
conservation, renewable energy and environmental technology solutions. Thermal
Energy is a fully accredited professional engineering firm, and offers
advanced process and applications engineering services. The Company is a proud
member of the Chicago Climate Exchange (CCX). FLU-ACE(TM), Dry-Rex(TM),
THERMALONOx(TM) and THERMALOZOMAx(TM), THERMAL AUD(TM) are trademarks of
Thermal Energy International. GEM(R) is a trademark used under exclusive
license from Gardner Energy Management Ltd.

    About ForEverGreen

    ForEverGreen Energy Inc. ("ForEverGreen") is a wholly-owned subsidiary of
Thermal Energy International Inc. (TSX-V: TMG). ForEverGreen owns and operates
Thermal Energy assets to be used under the Thermal AUD(TM) (Alternate Utility
Delivery) green power program, which will let Thermal Energy's customers
benefit from energy savings without capital investments. ForEverGreen
administers the Thermal AUD(TM) program.

    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
    %SEDAR: 00007994E




For further information:

For further information: Stuart McCarthy, Investor Relations and
Communications, (613) 723-6776 x 220, stuart.mccarthy@thermalenergy.com; or
visit our website at www.thermalenergy.com

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