Canadian Hydro Developers Inc.

Publicly listed since 1990, Canadian Hydro Developers Inc. is an independent green power company devoted to generating electricity from renewable, non-polluting resources. The company owns and operates 10 hydroelectric facilities located in British Columbia, Alberta, and Ontario and four wind power plants in Alberta. Canadian Hydro is also currently in the final commissioning state of its first biomass plant in Grande Prairie, Alberta.

The Pingston project, located at Pingston Creek south of Revelstoke B.C., began generating electricity in April 2004 and is the company’s largest operational hydroelectric plant. Pingston generates approximately 45 megawatts (MW) of electricity which will be sold to BC Hydro for the next 20 years.

During fiscal 2004, the company raised over $14 million through private placements and exercised warrants which provided some of the funds required to finance the development of renewable energy projects. In February 2005, Canadian Hydro and Pingston project partner Brascan Corp. (BNN.LV.A:TSX) began issuing, through private placement, $70 million of senior secured bonds maturing in 10 years at an interest rate of 5.28%. The senior bonds are secured by the jointly owned Pingston hydroelectric plant. Net proceeds from this financing will be used for the further development of existing projects.

Canadian Hydro’s developmental hydroelectric projects include Upper Mamquam in B.C. and Dunvegan in Alberta. Located in the Squamish area just north of Vancouver, Upper Mamquam will be a 25 MW run-of-the-river facility. This project is valued by BC Hydro due to its location within the lower mainland and a high regional load requirement area. Currently under construction, the company expects the plant to be operational by June 2005. The Dunvegan project will be located approximately two kilometres upstream from a bridge crossing over the Peace River on Highway #2 and requires the construction of a powerhouse and weir, a wall built across a river to raise the water level. The facility will be a 100 MW run-of-the-river hydro plant that produces power from river currents without the need for water storage and downstream flow interruptions. To date, the company has invested $7 million into research on ice flows and fish migration as part of the application process to begin project construction.

Canadian Hydro currently operates three wind power plants in southwestern Alberta near the small town of Cowley, as well as a new wind plant at the Taylor facility near Magrath, Alberta. The next high growth market for wind power is believed to be Ontario, as the provinces government plans to have renewable energy projects generating 2,700 MWs of power in place by 2010. In November 2004, Canadian Hydro was awarded a 20 year renewable energy supply contract from Ontario Electricity Financial Corp., the statutory body of the Ontario Government, to supply 67.5 MWs of electricity from wind sources. Power for this contract will come from phase one of the proposed 240 MW Melancthon Grey wind project located in the southern part of Melancthon Township, which includes 45 wind turbines generating an estimated 180,000 MW hours per year, enough to supply 25,000 households. Cost for the initial phase of this project is estimated at $120 million with construction expected to begin in spring 2005 and project completion scheduled for March 2006.

In order to fund this project, Canadian Hydro and Canadian Renewable Energy Corporation (CREC), a renewable energy development company focused on the Ontario marketplace, were contemplating a partnership arrangement; however, in January 2005, the company acquired CREC in exchange for 4,037,687 common shares and 2.25 million warrants. This acquisition gives Canadian Hydro 100% ownership of the Melancthon Grey wind project as well as developmental prospects in Ontario and the 3.2 MW Misema hydro plant.

The company’s biomass plant, the Grande Prairie Eco Power Centre, is nearing completion and will use wood waste to generate both electricity and steam. Canadian Hydro partnered with the City of Grande Prairie, the Government of Alberta and Canfor Corporation (CFP:TSX), in order to fund this $58 million project. The Government of Alberta, will purchase 110,000 MW hours per year of the green power generated from this facility for a 20 year period. The City of Grande Prairie has also supported this project by committing to the long-term purchase of electricity with an option to acquire steam for a future heating system project.