Polaris Signs Construction Contract With Queiroz Galvao

Polaris Geothermal Inc. (“Polaris” or the “Company”), (TSX: GEO) a renewable energy producer, is pleased to announce that its Nicaraguan subsidiary, Polaris Energy Nicaragua S.A. (“PENSA”), has signed a construction contract with the Brazilian company Queiroz-Galvao providing for the expansion of PENSA’s installed capacity from 10 MW to 34 MW at its San Jacinto Tizate geothermal project in Nicaragua. The expansion is underway and the first four wells (2 production and 2 reinjection) have been completed. Plant construction is forecast to be completed by the end of 2009.

The contract was signed by Mr. Tom Ogryzlo, President for PENSA & CEO for PGI and Mr. Mauricio Mariani, Commercial Director of the construction company Queiroz Galvao in the presence of the Nicaraguan Minister of Mines and Energy, Ing. Emilio Rappaccioli, Mr. Hugo Lorenzetti, Commercial Officer from the Brazilian Embassy, Mr. Richard Sanders, Commercial Officer from the US Embassy and Mr. Silvio Conrado, Nicaragua’s Country Director for The Central American Bank for Economic Integration (“CABEI”).

Loan Approval

The total investment for this expansion is currently estimated at US$96 million. It is anticipated that this amount will be funded by a US$77 million syndicated loan to be provided by a consortium of banks led by CABEI, with the balance of funds being provided by shareholder capital. The Company has not however entered into a binding commitment letter with CABEI or syndicate members and therefore any firm commitments for funding remain subject to receipt of formal internal credit approvals, due diligence and delivery and acceptance of a binding commitment letter.

About Queiroz Galvao

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

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 enter successfully complete negotiations with CABEI and other potential lenders upon satisfactory terms and conditions 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 proposed US$96 million project financing facility with CABEI or other lenders will be finalized. 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.

 Contacts: Polaris Geothermal Inc. John Clark Director and CFO (416) 367-0150 x 22 Email: john@itmcorp.ca Website: www.polarisgeothermal.com

SOURCE: Polaris Geothermal Inc.