Less Than 24 Months After its Foundation, H2O Innovation India Announces the Commissioning of its First Major Water Treatment System, for Larsen and Toubro Heavy Engineering

QUEBEC CITY, QUEBEC--(Marketwire - Jan. 31, 2012) -

Editors Note: A photo for this release will be available on the Canadian Press picture wire via Marketwire.

H₂O Innovation Inc. ("H₂O Innovation" or the "Company") (TSX VENTURE:HEO)(ALTERNEXT:MNEMO:ALHEO) announces today that its Indian joint-venture H₂O Innovation India Limited ("H₂O Innovation India"), based in Mumbai, India, is presently completing the water treatment system which it has designed, assembled, and installed for the nuclear forging facility of Larsen & Toubro Heavy Engineering ("Larsen & Toubro" or "L&T"), an India company located in Hazira, Surat Metropolitan Region, State of Gujarat, India. Combining state-of-the-art ultrafiltration and reverse osmosis technologies, this world-class water treatment and reuse system is unique in India. It has been designed and assembled on site for Larsen & Toubro, an Indian multinational manufacturer counting over 29,000 employees and generating US$ 11.7 billion in sales.

Fed with Tapi river's water, the membrane filtration system developed by H₂O Innovation India has a total capacity exceeding 7,000 m³/day (approx. 1,321 gpm). The water purified through reverse osmosis is then used as process water for the steel forging facility, but subsidiary treatment systems have also been provided for steam boilers, compressors and cooling towers. The system's global recovery rate reaches 90%, which reduces losses in this arid region of India. The system uses Amiad automatic pre-filters, Dow PVDF ultrafiltration membranes and Hydranautics high-tech ESPA2-LD reverse osmosis membranes with low fouling potential.

As well as occupying limited space thanks to its integrated and optimized design, the system provides a quiet operation. In order to reduce noise produced by the system, H₂O Innovation India's and L&T's engineers have installed the feed and recirculation pumps below ground level - a vanguardist practice in India.

This flagship project was signed shortly after the foundation of H₂O Innovation India and has been completed following an accelerated timeframe of 18 months.

"We are very proud that H₂O Innovation India has commissioned this world-class water treatment system for Larsen & Toubro, a most admired Indian company. I am really grateful to L&T's managers who have not hesitated to trust us from the beginning. The technology transfer between H₂O Innovation and our Indian joint-venture has been instrumental for the execution of this project, and it will remain a key factor for our future achievements in India", stated Guillaume Clairet, Vice President, Strategic Business Development of H₂O Innovation. "Our engineering and sales team in India can now build on this unique reference, which demonstrates our knowledge and puts us in an excellent position on the Indian market of industrial water treatment systems", concluded Guillaume Clairet.

"H₂O Innovation India will continue to provide a long-term support of its system's operations for Larsen & Toubro in Hazira, a flagship project for a prestigious client. Simultaneously, our Indian team will focus on the execution of the other projects of its backlog. Our Indian pairs will have the opportunity to call on H₂O Innovation's engineers and experts, who will be numerous to visit them over the next weeks and months to continue knowledge sharing between our teams", specified Frédéric Dugré, President & CEO of H₂O Innovation. "The Indian industrial market is growing fast and abounds with opportunities. Our joint-venture has all the assets necessary to go on growing and developing this booming market, and we are confident that it will soon contribute positively to H₂O Innovation's results", added Frédéric Dugré.

"If India is seen as a potential investor because of its solid and continuing economic growth, H₂O Innovation is a good example of investment profitable to Quebec. Foreign partnerships are one of the avenues available to Quebec businesses to remain competitive and to retain or create jobs while generating benefits for Quebec", stated the Minister of Health and Social Services of Quebec, Yves Bolduc, who heads Quebec 2012 trade mission to India.

Created barely two years ago, in February 2010, during the economic mission to India led by Mr. Jean Charest, Premier of Quebec, H₂O Innovation India is a joint-venture between Chembond Chemicals Limited ("Chembond"), an Indian company based in Mumbai, and H₂O Innovation from Quebec City. Chembond and the Company respectively own 51% and 49% of H₂O Innovation India's shares. The setting up of this joint-venture has consolidated management and engineering positions at the Company's head office in Quebec City, but also at its main plant in Ham-Nord, Quebec, and in its US offices of Minneapolis, Minnesota, and Vista, California, while improving the Company's competitiveness on international markets.

Operating out of Mumbai, H₂O Innovation India inaugurated in March 2011 a 10,000 sq. ft. (929 m²) manufacturing plant near Vadodara, State of Gujarat. This plant has been instrumental in the manufacturing and pre-assembly of some key components of the system delivered to L&T. The plant's manufacturing capabilities are equivalent to those of the Company's plants located in Quebec and in the United States.

About H₂O Innovation India Limited

H₂O Innovation India Limited is a joint venture between H₂O Innovation Inc. and Chembond Chemicals Limited of Mumbai, India providing water treatment systems and operation & maintenance services to the Indian & Southeast Asian industrial, commercial, and institutional markets, more specifically for the production of high-quality water for use in industrial processes, for reclamation and reuse of industrial waste waters, as well as for treatment of domestic waste waters. Headquartered in Mumbai, India, H₂O Innovation India also operates a manufacturing plant near Vadodara, State of Gujarat, India and has over 30 employees, among which about half are engineers.

About H₂O Innovation

Building on 11 years of experience, H₂O Innovation designs, manufactures, and integrates state-of-the-art custom-built water treatment systems for the production of drinking water and industrial process water, the reclamation and reuse of water, and the treatment of wastewater in the municipal, commercial, institutional, industrial, oil & gas, mining, and energy markets. The Company also offers operating and maintenance solutions for membrane filtration and reverse osmosis systems. H₂O Innovation has over 100 employees, seven offices including three manufacturing plants in Canada and the United States and is a founding partner of H₂O Innovation India, a joint venture based in Mumbai, India. Shares of H₂O Innovation are listed on the TSX Venture Exchange (HEO) and on the NYSE Euronext Alternext Exchange (MNEMO: ALHEO). For more, visit www.h2oinnovation.com.

Prospective disclosures

Certain statements set forth in this press release regarding the operations and the activities of H₂O Innovation as well as other communications by the Company to the public that describe more generally management objectives, projections, estimates, expectations or forecasts may constitute forward-looking statements within the meaning of securities legislation. Forward-looking statements concern analysis and other information based on forecast future results and the estimate of amounts that cannot yet be yet determined. Forward-looking statements include the use of the words "expect", "believe", "estimate" and other similar terms as well as those usually used in the future and the conditional, notably regarding certain assumptions as to the success of a venture. Those forward-looking statements involve a number of risks and uncertainties, which may result in actual and future results of the Company to be materially different than those indicated. Information about the risk factors to which the Company is exposed is provided in the Annual Information Form dated September 28, 2011 available on SEDAR (www.sedar.com). Unless required to do so pursuant to applicable securities legislation, H₂O Innovation assumes no obligation to update or revise forward-looking statements contained in this press release or in other communications as a result of new information, future events and other changes.

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