Shear Wind Inc.

Shear Wind Inc.

October 14, 2010 16:30 ET

Shear Wind Announces Debt Financing for Glen Dhu Project

HALIFAX, NOVA SCOTIA--(Marketwire - Oct. 14, 2010) - Shear Wind Inc. ("Shear Wind") (TSX VENTURE:SWX) announces today that Glen Dhu Wind Energy Limited Partnership ("Glen Dhu LP"), has signed a credit agreement, in connection with the debt financing (the "Debt Financing") for its 62.1 megawatt Glen Dhu wind power project in Nova Scotia (the "Glen Dhu Project"). The Glen Dhu Project is anticipated to be the largest wind farm in Nova Scotia, and is presently on track to begin commissioning turbines in December 2010 and to be fully operational by March, 2011. The Glen Dhu Project will consist of 27 ENERCON E-82 2.3 MW wind turbines.

The total amount of the Debt Financing is approximately CDN $114,522,510, and the closing of Debt Financing is subject to meeting certain conditions precedent. The Debt Financing includes approximately CDN$107,000,000 in construction financing for the Glen Dhu Project, which converts to a term loan with an 18 year term, subject to the provisions of the credit agreement. This loan has a floating interest rate based on the CDOR rate, and an interest rate swap for hedging purposes. The lenders under the Debt Financing are the Spanish Bank Banco Bilbao Vizcaya Argentaria, S.A. ("BBVA") and Instituto de Credito Oficial ("ICO"), a state-owned corporate entity attached to the Ministry of Economy and Finance of the Spanish Government. In addition, as part of the Debt Financing, BBVA and ICO are providing a CDN$1,552,500 letter of credit for security pursuant to Glen Dhu LP's power purchase agreement with Nova Scotia Power Inc. BBVA is also providing a letter of credit in the amount of approximately CDN$5,970,010 for debt reserve.

"We are very pleased to sign the credit agreement for the Glen Dhu Wind Project with BBVA and ICO," said Mike Magnus, President and CEO of Shear Wind. "Completing this financing, in addition to our equity contributions, will ensure that the Glen Dhu Project is fully financed. This is an important milestone in building what is expected to be Nova Scotia's largest wind farm and which is a major construction project in the Province this year." Mr. Magnus added, "Environmental and engineering work is complete, financing is in place, roads and foundations are being built, wind turbines are ordered and being delivered and Nova Scotians are working on-site. These are very exciting times for our Company."

Shear Wind owns approximately 51% of the limited partnership units (the "Units") of Glen Dhu LP, and Genera Avante Holdings Canada Inc. ("GAHC") owns the approximately 49% of the Units of Glen Dhu LP. In addition, GAHC owns approximately 62% of Shear Wind on a fully diluted basis, following its investment in Shear Wind in November 2009. GAHC is owned by Inveravante Inversiones Universales, S.L. ("Inveravante"), an international corporation based in Spain. The credit facilities forming the Debt Financing will be secured by a first priority lien on substantially all of the assets of Glen Dhu LP, including all of the Units owned by Shear Wind and GAHC in Glen Dhu LP and all of the outstanding shares owned by Shear Wind and GAHC in Glen Dhu Wind Energy Inc., the general partner of Glen Dhu LP.

"The experience gained in the development, financing, construction and commissioning process of the Glen Dhu project will serve as the executional foundation to strategically develop Shear Wind's portfolio of projects in Canada. Our focus now turns to building out our 100MW Willowridge project in Alberta. Shear Wind is also engaged in preparations towards a Request for Proposal (RFP) for a portion or all of an offering of 175 MW of wind generation in Saskatchewan, said Mike Magnus. "Our strategic plan is to continue to grow Shear Wind and provide value to the shareholders."

In addition to the Debt Financing, Inveravante will be providing a CDN$2,100,000 subordinated loan (the "Subordinated Loan") to Glen Dhu LP. The Subordinated Loan will be unsecured, postponed and subordinate to the Debt Financing, subject to certain permitted payments that will be paid in priority to any distributions by Glen Dhu LP to Shear Wind or GAHC as limited partners, as set out in a Subordinated Loan agreement.

Shear Wind has agreed with Inveravante to use reasonable efforts to put forward to its shareholders (in accordance with all requirements under applicable Canadian securities and corporate law as well as any requirements of the TSX Venture Exchange) a resolution, which, if approved by the shareholders, would allow Shear Wind to become a party to the contingent equity commitment agreement among Inveravante, BBVA and ICO for the Glen Dhu North Project, as described in Shear Wind's news release dated October 7, 2010.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Shear Wind in any jurisdiction.

About Shear Wind

Founded in 2005, Shear Wind is headquartered in Halifax, Nova Scotia and is engaged in the exploration and development of renewable wind energy properties in Canada. Shear Wind is focused on building a strong company based on a secure and sustainable supply of clean wind energy. Shear Wind is committed to building shareholder value governed by environmental stewardship. Inveravante Inversiones Universales, S.L., an international corporation based in Spain, indirectly owns 62% of Shear Wind on a fully-diluted basis through Genera Avante Holdings Canada Inc., following its investment in Shear Wind in November 2009. Additional information on the various projects may be viewed on Shear Wind's website:

Forward-Looking Statements / Information

This news release may include certain forward-looking information, including statements relating to business and operating strategies, plans and prospects, using words including "anticipate", "believe", "could", "expect", "intend", "may", "plan", "potential", "project", "seek", "should", "will", "would" and similar expressions, which are intended to identify a number of these forward-looking statements. More particularly, and without limitation, this press release contains forward-looking statements concerning the commissioning of wind turbines for the Glen Dhu Project, the projected operational date for the Glen Dhu Project and details relating to the Glen Dhu Project. Forward-looking information reflects current views with respect to current events and is not a guarantee of future performance and is subject to risks, uncertainties and assumptions. Actual results may differ materially from information contained in the forward-looking information as a result of a number of material factors, including failure to secure adequate financing to develop projects of Shear Wind. Shear Wind undertakes no obligation to publicly update or revise any forward-looking information contained in this news release, except as may be required by applicable laws, rules and regulations. Readers are urged to consider these factors carefully in evaluating any forward-looking information.

Shear Wind Inc. trades on the TSX Venture Exchange under the symbol "SWX".

Neither 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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