Thermal Energy Signs $4 million Contract with Kruger Products Limited to
provide FLU-ACE(R) Heat Recovery Solution

OTTAWA, March 12 /CNW Telbec/ - Thermal Energy International Inc, (TSX-V: TMG) (www.thermalenergy.com) ("Thermal Energy" or the "Company") is pleased to announce it has today signed a contract for approximately $4 million with Kruger Products Limited, a subsidiary of Kruger Inc., to provide a FLU-ACE(R) heat recovery solution for its tissue mill operations located in Gatineau, Quebec.

The contract was signed following issue of a conditional purchase order previously announced on December 23, 2009, and following the successful completion of the project development phase during which time a number of options and potential solutions were evaluated in close cooperation with the customer. The project is expected to be completed by the end of September with approximately $4 million in project revenue earned during this time. The project qualified under the Heavy Oil Consumption Reduction Program of the Agence de l'efficacité énergétique in Québec, and Kruger Products Limited will benefit from a $1.93M grant to support the project's implementation.

Thermal Energy will design, fabricate and install the FLU-ACE(R) heat recovery solution on two paper machines which is expected to reduce consumption of fossil fuel at the mill by more than 20%, based on pre project engineering work performed by Thermal Energy and Kruger Products Limited. The project is expected to reduce the site's fuel consumption by delivering roughly 190,000 mmBtu of recovered energy per year to existing systems, displacing steam (produced with oil) and gas in the plant.

This in turn is expected to lower the facility's GHG emissions by 10,000 tonnes of CO(2), or the equivalent of removing nearly 2,500 cars from Canada's highways annually or planting 1.3 million trees.

"This very important project will significantly improve our energy efficiency and strengthen our environmental position," said Frank van Biesen, Vice President of Technology for Kruger Products Limited. "We are committed to an aggressive sustainability plan and this project addresses one aspect by lowering our carbon footprint."

"Over the last several months Thermal Energy has worked closely with the Kruger Products Limited team to develop this customized solution. We are now very pleased to be delivering the expected financial and environmental benefits of this very important project for our customer." said Thermal Energy President and CEO William Crossland.

About Kruger Products

Kruger Products is Canada's leading tissue manufacturer and serves the Canadian consumer market with such well-known brands as Cashmere, Purex, SpongeTowels, Scotties and White Swan, as well as away-from-home products for industrial and commercial use across Canada. Kruger Products is wholly owned by Kruger Inc., which operates facilities in Quebec, Ontario, Alberta, British Columbia, Newfoundland and Labrador, in the United States and the United Kingdom and has 9,000 employees.

To find out more about Kruger Products, visit www.krugerproducts.ca.

About Thermal Energy

Thermal Energy International Inc. is an innovative technology company providing custom energy and emission reduction, and bioenergy solutions. With offices in Ottawa, Canada and Bristol UK, TEI is a designer, design build developer, fabricator, owner, operator and supplier of proprietary and patented energy conservation, renewable energy and environmental technology solutions. Thermal Energy is a fully accredited professional engineering firm, and offers advanced process and applications engineering services. FLU-ACE(R), DRY-REX(R), THERMALONOx(R), THERMAL AUD(R) and GEM(R) are trademarks of Thermal Energy International.

To find out more about Thermal Energy International Inc. (TSX-V: TMG), visit our website at www.thermalenergy.com.

NOTE: This press release contains forward-looking statements relating to, and amongst other things, based on management's expectations, estimates and projections with respect to, expected agreement on and execution of definitive agreements, timing of installation and implementation, the anticipated effectiveness of the Company's products and services and the revenues to be received by the Company from the project described. Statements with respect to anticipated effectiveness of the Company's products and services are based on studies conducted by the Company and third parties as well as the Company's experience with similar installations for other customers. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, some of which are outside of the Company's control, could cause events and results to differ materially from those stated. The Company disclaims any obligation to publicly update or revise any such statements.

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.

For further information: Robert Triebe, COO, Americas & Asia, [phone]