SOURCE: Schneider Power Inc.

July 16, 2008 11:54 ET

Schneider Power Inks Tentative Project Equity Financing With Energy Farming International

TORONTO--(Marketwire - July 16, 2008) - Schneider Power Inc. announced today that it has entered into a non-binding memorandum of understanding ("MOU") for an estimated C$22 million ($21.8 million) in project equity financing with Energy Farming Ontario LLC ("EFI") a subsidiary of German wind project developer Energy Farming International AG to construct and commission 36.5 MW of Ontario wind farms.

Under the terms of the deal, Schneider Power and EFI propose to establish a joint venture to construct, commission and operate the Providence Bay Expansion Project, the Arthur Wind Farm, the Innisfil Wind Farm and the Trout Creek Wind Farm. The EFI MOU contemplates that Schneider Power would transfer ownership of these projects to a joint-venture vehicle in exchange for a significant retained interest in the long-term cash flows of the projects and a cash fee. Schneider will also provide ongoing operations and management services to the jointly owned Company. EFI would acquire a majority equity interest in the JV by contributing sufficient capital to construct the projects contemplated by the joint venture. The total capital cost to realize the projects is expected to be C$86 million ($85.2 million). The balance of the project costs will be met with debt financing.

Conditions

The EFI MOU is subject to the completion of a definitive agreement. Pursuant to the MOU the parties will make best efforts to finalize the definitive agreement within 90 days. There can be no assurance that a definitive agreement will be concluded or, if concluded, that any conditions contained therein will be satisfied such that the joint venture contemplated by the EFI MOU will be completed. Completion of the definitive agreement is subject to a number of conditions, including but not limited to, due diligence, board approval by both companies, completion of the Financing, negotiation and signing of a definitive agreement. The agreement cannot close until all the conditions are satisfied. There can be no assurance that the agreement will be completed as proposed or at all. If a definitive agreement is not reached with EFI, Schneider Power will be required to find an alternate source of financing to develop the projects that are the subject of the EFI MOU.

Schneider Power Inc.

Schneider Power Inc. is a Canadian-based renewable energy company and independent power producer with a strong focus on the exploitation of renewable resources in North America. Its current portfolio consists of one operational wind farm and a portfolio of potential renewable power facilities totalling approximately 1.7 Gigawatts. The Company is currently expanding its capacity in Ontario with the addition of 40 MW of construction ready wind projects and a 10 MW solar photovoltaic facility. Schneider Power Inc. is a licensed electricity generator and wholesaler of electricity and also supplies EcologoM certified green electricity to Ontario electricity retailer Bullfrog Power Inc. from its Providence Bay Wind Farm on Manitoulin Island.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the US Securities Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements

This news release contains or refers to forward-looking information. All information other than statements of historical fact that address activities, events or developments that Schneider Power believes, expects or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements contained in this news release include without limitations, statements regarding the total capital cost of the projects of C$86 million; statements regarding potential project equity financing of C$22 million: statements regarding potential joint venture. These forward-looking statements reflect the current expectations or beliefs of Schneider Power based on information currently available to Schneider Power. These forward-looking statements are subject to a variety of risks and uncertainties beyond Schneider Power's ability to control or predict that may cause actual events or results to differ materially from those discussed in such forward-looking statements. Factors that could cause actual events or results to differ materially from current expectations include, among other things: future costs varying significantly from estimates; inability to obtain projected project financing; failure to conclude a definitive joint venture agreement; and other factors. Any forward-looking statement, speaks only as of the date on which it is made and, except as may be required by applicable securities laws, Schneider Power disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although Schneider Power believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be placed on these forward-looking statements due to the inherent uncertainty therein.

Contact Information

  • Dena Fehir
    Head of Public Relations
    Schneider Power Inc.
    49 Bathurst St., Ste. 101
    Toronto, ON
    M5V 2P2
    416-847-3724 x 235
    Blackberry 416-418-8583
    Fax 416-847-3729
    dfehir@schneiderpower.com