Tonbridge Power Inc.

Tonbridge Power Inc.

December 27, 2006 13:07 ET

Tonbridge Power Inc. Completes CAN $13,000,000 Development Loan Facility and Appoints HSH Nordbank AG as Its Project Finance Bank for Its Senior Debt

TORONTO, ONTARIO--(CCNMatthews - Dec. 27, 2006) - Tonbridge Power Inc. (TSX VENTURE:TBZ) ("Tonbridge" or the "Company"), through its wholly-owned subsidiary as borrower, Montana Alberta Tie Ltd. ("MATL"), is pleased to announce the arrangement of a CAN $13 Million Loan Facility with HSH Nordbank AG, Cayman Branch ("HSH Nordbank") to fund the Company and MATL in the completion of final regulatory requirements to permit construction of an approximately 337 kilometre, 300 MW, 230kV AC transmission line between Lethbridge, Alberta and Great Falls, Montana. This arrangement together with other equipment purchase financing and specific financing is designed to fund the remaining development and regulatory costs until the project construction commences. Certain committed payments on long lead items and required fees and a debt service interest reserve account will also be paid with these funds.

This facility will be available as to CAN $9 million upon initial advance, bearing interest, at the option of MATL, at either a Canadian Prime Rate or a BA Rate (plus applicable spread), and has a term of five years plus a day. It requires a security interest over all the present and future assets of the Company, MATL and the two subsidiaries and one partnership of the Company and a specific pledge of the shares in MATL and such other entities. In addition, the Company has agreed to pay a placement fee, and to deposit monies in an interest reserve account to cover interest obligations on funds advanced. The CAN $4 million balance of the facility is anticipated to be available in March, 2007, subject to the usual conditions precedent.

Tonbridge has granted HSH Nordbank 10,384,615 non-transferable warrants exercisable at a price of $0.360089 per share for an 18 month term in connection with the funding of the initial $9 million advance. Tonbridge has also granted HSH Nordbank a further 4,615,385 non-transferable warrants exercisable at a price of $0.392825 per share for a 24 month term. The latter warrants are only exercisable if the second $4 million tranche is advanced.

It is intended that this facility will be replaced at the Company's option with the senior project finance debt at Notice to Proceed with construction expected in early 2007 when all regulatory permits are in hand.

The Company has appointed HSH Nordbank as its project finance bank. The Company and HSH Nordbank are discussing a senior secured facility. Availability of this facility would be subject to several conditions precedent, including: receipt of all permits; execution of all material contracts; satisfactory progress in the development of the underlying project of certain counterparties to transmission shipping rights agreements; and final bank approval of all definitive agreements.

The completion of this debt financing arrangement is a critical milestone for the Company because it will now be able to devote its full efforts on finishing the regulatory tasks as recently reported in the Company's MD&A for the period ended September 30, 2006.

Johan van't Hof, President of Tonbridge Power commented, "With a large project finance bank like HSH Nordbank behind us, we benefit from flexible and creative solutions that their depth of global experience in financing large projects in the renewable energy sector brings us. Their support will assist our type of project in maximizing returns to investors. The addition of HSH Nordbank as a funding partner not only gives us a boost to our overall benchstrength but it signals to the market that this project is nearing the construction phase and has earned credibility."

Francis Ballard, Senior Vice President of HSH Nordbank commented "We are extremely pleased to be able to provide financial support to this project and look forward to working with the Company on this and other projects in the expanding North American transmission market."

HSH Nordbank is based in Germany with twin headquarters in Hamburg and Kiel. It has total assets of EUR 192 billion and roughly 4,400 employees around the world. HSH Nordbank is heavily involved in project finance in the energy sector in both Europe and North America with a particular focus on renewable and wind energy projects. HSH Nordbank is a leading leading provider of financial services in the transport sector and is the world's largest provider of marine finance.

Tonbridge Corporation acted as financial advisor and arranger of the Development Loan Financing on behalf of the Company and MATL.

Tonbridge Power Inc. is a Toronto-based investor in power projects, whose principal asset is its 100% interest in Montana Alberta Tie Ltd. MATL is a project designed to interconnect the electricity markets of Alberta and the US Pacific Northwest through a 230Kv transmission line.

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Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information ", within the meaning of applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of the Company. Forward-looking information includes, but is not limited to, statements with respect to financing arrangements with Nordbank and related matters as well as a possible senior debt project financing. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "should", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to:, risks related to the financing or construction of the transmission line; risks related to the performance of parties contracting for transmission capacity; delays in obtaining governmental approvals, permits or project financing or in the completion of development or construction activities, requirements for additional capital, government regulation, environmental risks as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2005, available on Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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