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Thermal Energy International Inc.: Multi- Million Dollar Renewable Energy and Environmental Solutions Sales Growth to Be Generated as a Result of New Direct Sales and Marketing Strategy

    OTTAWA--July 30, 2002--

Target Markets Responding Positively, with Over $20 Million of Potential New Business Under Development Since New Strategy Initiated This Spring

    Thermal Energy International Inc. (TSX Venture:TMG) (www.tse-cdnx.com) is pleased to report that the Company's new renewable energy and environmental solutions direct sales and marketing approach is being well received by the targeted industrial and institutional potential customers.
    The target market represents potential candidates for the economical application (i.e. Return on Investment between 20% to 50%) of small to medium size FLU-ACE(R) solutions, with specific sale sizes varying from $300,000 to $3,000,000 per contract. Furthermore, prior to its first strategic alliance initiated in 1999, the Company had already established a solid track record of proven direct sales success in this target market. Since 1999, while marketing through a strategic alliance, the Company has been disappointed that the alliance failed to produce any FLU-ACE(R) sales in this market.
    The new direct sales and marketing offering is more attractive to many potential small to medium size customers, as it gives them the choice and flexibility how they wish to proceed to develop and implement the FLU-ACE(R) solution. By buying directly from Thermal Energy International Inc., the potential customer may elect to participate in the solution development and implementation process, thereby acquiring the complete FLU-ACE(R) solution at the lowest cost and best return on investment (ROI).
    "As a result of the new direct approach, we are presently involved in negotiating over a half dozen Letters Of Agreement (LOA) to move forward with the design and implementation of the proposed FLU-ACE(R) solutions. The new business under development represents over $20 million of potential sales in the coming years. The response to our new offering has been excellent. Even potential customers that did not buy through our Honeywell alliance are interested again," says Michel Blain, Director of Business Development.
    "We are very pleased with the initial progress that we have made with our targeted direct sales development efforts to the small to medium size FLU-ACE(R) customer market. We wish to stress, however, that this direct sales and marketing strategy is very much compatible with our new Siemens and Alfa Laval strategic alliances, which value our participation in the sales development and solution implementation process. Also, we are still working through alliances to develop larger size FLU-ACE(R) projects. In summary, we are now utilizing a more diversified and flexible marketing approach which is designed to maximize our revenue and profit growth opportunities through a variety of channels, while better serving our customers' needs," says Thomas V. Hinke, President & CEO.
    Thermal Energy International Inc. is a leading environmental and energy technology company since 1986. Headquartered in Ottawa, Canada, the Company is an established designer, developer, fabricator, and supplier of Superior proprietary and patented environmental compliance (air) and energy conservation products and technology solutions. The Company is also a fully accredited professional engineering firm, and offers advanced process and applications engineering services. More on Thermal Energy can be found at www.thermalenergy.com. FLU-ACE(R) is a registered trademark of Thermal Energy. Common shares of Thermal Energy are traded on the TSX Venture Exchange (formerly CDNX) under the symbol TMG.

    The contents of this release have neither been approved nor disapproved by the TSX Venture Exchange.