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TAS Energy awarded EPC contract for San Emidio geothermal project

Oilfield Technology,

U.S. Geothermal Inc announced today that it has entered into an agreement for the engineering procurement and construction (EPC) of a new 8.6 MW modular binary cycle power plant at its San Emidio project. TAS Energy Inc. will manufacture the plant.

The agreement calls for TAS Energy to provide a non-recourse project loan for the US$ 30 million construction capital together with an Engineering, Procurement and Construction services contract for Phase 1 of the San Emidio project in northern Nevada. The construction loan is expected to be repaid with long term financing from available sources, such as the loan guarantee program from the U.S. Department of Energy (DOE) which US Geothermal expect to apply for in the near future.

“This is a fully financed, turnkey engineering, procurement and construction arrangement,” said Daniel Kunz, President and CEO of U.S. Geothermal Inc. “We are excited to get construction started

this year, which will insure that our 35 MW San Emidio development project qualifies for the special 30% Investment Tax Credit cash grant.”

The project will construct a new water-cooled binary cycle power plant with an estimated output of 8.6 MW of renewable baseload electricity. No well drilling is required for Phase 1 since production and injection wells are currently in use by the existing San Emidio power plant which will

be replaced with the new plant. The anticipated Phase 1 commercial operations date is the fourth quarter of 2011.

The US$ 200 million San Emidio project is a planned two-phase development. The US$ 30 million Phase 1 has a planned output of 8.6 MW and the US$ 170 million Phase 2 has a planned output of 26.4 MW. Phase 2 is expected to be completed in late 2013, subject to satisfactory completion of new well drilling, a transmission upgrade and obtaining the required permits.

Phase 2 reservoir resource expansion efforts are already underway using funding assistance from a US$ 3.77 million DOE Innovative Exploration Grant awarded to U.S. Geothermal in 2009. Approximately 3 MWs of the Phase 1’s output has been sold until 2018 under the terms of an existing power purchase agreement (PPA) with Sierra Pacific, a subsidiary of NV Energy. U.S. Geothermal Inc. is currently negotiating with a number of interested parties for a new 35 MW PPA for the project.

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