Free Energy International Inc.

Free Energy International Inc.

May 05, 2011 14:45 ET

Free Energy Secures Debt Facility for Swan Hills Heat Recovery Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 5, 2011) -Free Energy Power Corporation ("FEPC" and/or the "Company"), a subsidiary of Free Energy International Inc. ("Free Energy") (TSX VENTURE:FFX), today announced the Company has secured a direct loan with the Agricultural Financial Services Corporation (AFSC) for $1,400,000 in conjunction with the construction of the electricity generation plant in Swan Hills, Alberta.

The loan will bear an interest rate of 6.24% and is payable in equal monthly installments over a term of eighty four months. Proceeds of the loan are to be used to construct a 1000 kW electricity generation plant at the Swan Hills oil and gas production facility in Swan Hills, Alberta. Total capital cost of the project is expected to be $5.5 million. On April 6, 2011, Free Energy confirmed it had become a co-recipient of a 2.6 million grant from the Government of Alberta. Remaining funds of approximately $1,500,000 will be generated through a combination of project financing directly into FEPC and a proposed equity issuance through the parent company, Free Energy.

Free Energy also announced its intent to complete a private placement ("Placement") of up to 10,000,000 common shares of Free Energy at a price of $0.10 per share. Gross proceeds of the Placement are expected to be $1,000,000. Proceeds of approximately $750,000 will be used to fund the construction of the Swan Hills Heat Recovery Project with the balance to supplement general working capital of Free Energy.

All shares issued in connection with the Private Placement will be subject to a four month hold period. Completion of the private placement is subject to acceptance of a filing respecting the financing by the TSX Venture Exchange.

About Free Energy International Inc.

Free Energy International Inc. is a British Columbia corporation with its head office in Vancouver, British Columbia. The Company is listed on the TSX Venture Exchange as a Tier 2 company. The Company has a total of 13,102,526 common shares issued and outstanding, of which 3,780,000 shares are subject to escrow arrangements.

Additional information on Free Energy may be found on SEDAR at or the Company's website at

This press release shall not constitute an offer to sell or a solicitation of an offer to buy securities in any jurisdiction. The common shares of Free Energy will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.

ADVISORY: This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "Continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, these statements concerning the anticipated closing date of the Placement, the anticipated use of the net proceeds of the Placement and all statements in the first two paragraphs of "About Free Energy International Inc" are forward looking statements. Although Free Energy believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Free Energy can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the Private Placement could be delayed if Free Energy is not able to obtain the necessary regulator and stock exchange approvals on the timelines it has planned. The Placement will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the Placement will not be completed within the anticipated time or at all. The forward looking statements contained in this press release are made as of the date hereof and Free Energy undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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