Smartcool signs Memorandum of Understanding for expansion into German marketplace



    VANCOUVER, Oct. 17 /CNW/ - Smartcool Systems Inc. (TSXV: SSC), is pleased
to report that Smartcool International Inc., a wholly owned subsidiary of the
Company, has signed a Memorandum of Understanding with a German group for the
purpose of becoming the exclusive distributor for all Smartcool products in
the territory of Germany.
    Smartcool and the German group have agreed, as part of the due diligence
process, to conduct a feasibility study that will involve the installation of
Smartcool's Energy Savings Module (ESM(TM)) with clients selected by the
potential distributor that have a national presence and multiple locations.
The potential distributor will enter into agreements with these clients that
will allow for a test period of no longer than four weeks from commencement in
order to validate the economic feasibility of the technology at their
facilities. At the end of the evaluation period the clients will be provided
with a Savings Report which will form the basis for a purchase proposal.
    "As we have previously stated, it is our intention to expand Smartcool's
identity in the international energy efficiency market place," states George
Burnes, President. "By establishing a presence in Germany, we will be entering
a marketplace that currently imports over 60% of the energy it uses and is
widely recognized as a world leader in the adoption of energy efficiency
technologies."
    As part of its business plan, Smartcool has implemented an aggressive
international distribution model that has identified industry partners with an
existing presence in their geographical area of exclusivity. In addition, our
distributors have experienced sales and marketing and technical teams in order
to ensure Smartcool's technology is well supported.
    "Each distribution agreement commits the distributor to acquiring a
minimum level of equipment from Smartcool in order to maintain exclusivity in
their region," comments Allan Thompson, CFO. "By identifying a distributor
that is fully equipped to support Smartcool's initiatives, we expect that the
revenues generated from our International division will exceed the levels that
are set by the minimum requirements of the distribution agreements."

    Target Market - Germany:

    Germany is one of the world's largest energy consumers with limited
domestic energy resources which results in Germany importing most of its
energy. Germany has one of the largest economies in the world with GDP in
excess of US$2.8 trillion and is also one of the world's largest energy
consumers. In 2004, Germany produced 566.9 billion kilo watt hours (BkWh) and
consumed 524.6 BkWh of electric power.
    Germany is the third largest carbon dioxide emitter in the OECD, behind
the United States and Japan. Germany has a strong commitment to protecting its
environment. It has actively promoted the use of renewable energy, both under
the Kohl government with the Electricity Feed Law and under Schroeders'
government with eco-taxes. However, Germany's reliance on coal, particularly
brown coal, for electricity generation and the heavy industrialization of the
economy has lead to serious problems with air pollution, acid rain and habitat
degradation. These problems are particularly acute in the former East Germany.
    Germany ratified the Kyoto Protocol on climate change in May 2002 however
the EU has decided to meet its Kyoto obligations as a whole, rather than
individual signatories. Under the EU's burden-sharing program, Germany must
cut its carbon dioxide emissions by 21% relative to the 1990 baseline during
the 2008-2012 commitment period.

    About Smartcool Systems Inc.:

    Smartcool Systems Inc. is an advanced energy savings solutions company
specializing in energy and cost reduction technologies for commercial and
retail businesses. The company's wholly owned subsidiary, SmartCool
International Inc., is the owner, developer, manufacturer and worldwide
distributor of the Energy Saving Module (ESM(TM)). This green technology
reduces the electricity consumption (kWh) and maximum demand (kW) of air
conditioning and refrigeration compressors. Rather than replacing existing
equipment, the ESM(TM) works in conjunction with existing controls in order to
ensure that compressors work at maximum efficiency, while maintaining preset
temperature levels and without causing over-cycling.
    Rising global energy demand is resulting in significant increases in
energy prices. Environmental concerns are causing both government and industry
to re-examine the way they do business. SmartCool provides companies with
solutions to address the growing pressure to reduce energy costs, increase
profits and reduce green house gas emissions. For more information, please
visit www.smartcool.net.

    The TSX Venture Exchange has neither approved nor disapproved the
    contents of this press release.

    %SEDAR: 00015981E




For further information:

For further information: Allan Thompson, (604) 669-1388 or
1-888-669-1388 or allant@smartcool.net

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