Polaris Geothermal Inc.
TSX : GEO

Polaris Geothermal Inc.

June 11, 2008 12:20 ET

Polaris Geothermal Inc.: Nicaraguan Congress Approves Law

Law of Exploration and Exploitation of Geothermal Resources amended

TORONTO, ONTARIO--(Marketwire - June 11, 2008) - Polaris Geothermal Inc. ("Polaris" or the "Company"), (TSX:GEO) a renewable energy producer and its Nicaraguan subsidiary, Polaris Energy Nicaragua S.A. ("PENSA"), are pleased to announce that on June 4, 2008 the Nicaraguan Congress amended the existing Law of Exploration and Exploitation of Geothermal Resources. This amendment is an important step forward since it shows the will of the government to promote new and established investments in this sector.

Tariff Increase

Among the most important changes of the amendment is the establishment of a floor of US cents8.5 per kWh for power produced by licenced geothermal production companies. If a higher tariff was negotiated with the energy distributor then it would need the regulators' approval.

For PENSA, the amendment is expected to result in an increase in the tariff to at least US cents8.5 per KWh once it begins generating power resulting from Phase I-MCT (24 MW) and Phase II-MCT (48 MW).

The Law

This law also improves the existing fiscal incentives such as income tax holiday was extended from 7 to 10 years. It also makes sales tax exemptions on goods easier to process with the government agencies.

For new geothermal concessions the law establishes a concession area for exploitation of 20 square kilometers that can be extended by approval of the Ministry of Energy and Mines a further 20 square kilometers if the concessionaire complies with its investment plan and geophysical studies that prove an extension is required. This does not apply to PENSA due to its existing exploitation contract which was approved under a previous law whereby PENSA has a 40 square kilometer concession area.

"We feel very satisfied with these amendments to the law since it clears the way for more investments in this sector which are expected to considerably improve the returns on investment for the existing geothermal concessionaires" said Tom Ogryzlo, CEO of Polaris Geothermal Inc.

About Polaris Geothermal Inc.

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

FORWARD-LOOKING STATEMENTS

This press release includes certain "forward-looking statements". Statements respecting the ability of the Company to successfully attain an increased production rate to 72 MW 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". There is no assurance that the anticipated increase in production to 72 MW will be achieved. 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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