Polaris Geothermal Inc.
TSX VENTURE : GEO

Polaris Geothermal Inc.

August 11, 2006 12:50 ET

Polaris Geothermal Inc. Enters Agreement to Expand its Generating Capacity to 31.4 MW

TORONTO, ONTARIO--(CCNMatthews - Aug. 11, 2006) - Polaris Geothermal Inc. ("PGI" or the "Company") (TSX VENTURE:GEO) is pleased to announce that its subsidiary, Polaris Energy Nicaragua ("PENSA"), has entered into a contract with Queiroz Galvao, a Brazilian construction company, for the procurement and installation of all equipment and materials required to expand the generating capacity of PENSA's San Jacinto geothermal power project to 31.4 MW.

This expansion from 10 MW to 31.4 MW is scheduled to start in the fourth quarter of this year and is expected to be completed in 18 months. The investment for this expansion is estimated at US $54 million, a significant part of which is expected to come from Banco Nacional de Desenvolvimento Economico e Social of Brazil in the form of an export credit.

About Polaris Geothermal Inc

PGI is a Canadian company, focused on the generation of renewable energy in Latin America and elsewhere in the world. For more information about PGI visit www.polarisgeothermal.com

About Queiroz-Galvao S.A.

Group Queiroz-Galvao was started in 1953, in Recife, Pernambuco, by brothers Mario and Antonio de Queiroz Galvao. In 1967 the company moved its head quarters to Rio de Janeiro and began international operations. The company has been involved in important oil and gas, iron ore, urban transportation and public utility projects both in Brazil and internationally. Queiroz Galvao is renowned for its determination and commitment to successful completion of complex projects. For more information about Queiroz-Galvao visit www.queirozgalvao.com

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking statements". All statements regarding the ability of the Company to seek and progress renewable energy projects, the ability of the Company to become a global player in the renewable energy industry and the ability of the Company to increase the generating capacity of the San Jacinto geothermal power project, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. All statements that are not historical facts, including without limitation statements regarding future estimates, plans, objectives, assumptions or expectations of future performance, are "forward-looking statements". We caution you that such "forward looking statements" involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include unpredictable results of exploration activities, uncertainties inherent in the estimation of geothermal resources, fluctuations in the costs of goods and services, problems associated with production operations, changes in legal, social or political conditions in the jurisdictions where the Company operates, lack of appropriate funding and other risk factors, as discussed in the Company's filings with Canadian securities regulatory agencies. The Company expressly disclaims any obligation to update any forward-looking statements.

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