Internal Hydro Enters European Joint Venture for Production and Financing of Energy Units; Joint Venture to Add Large Asset Base to Company

June 27, 2006

TAMPA, Fla., June 27, 2006 (PRIMEZONE) — Internal Hydro International Inc., (OTC BB:IHDR.OB) (http://www.InternalHydro.com) announces that it has entered into an initial agreement for the production of its Energy Commander and other technologies through a European joint venture. Under the agreement, with Energia Futura S.r.l. of Italy, IHDR would receive necessary capital for production of its low impact hydro units and other technologies, which will be worth over $3,750,000 for the initial 500 units for domestic U.S. production alone in the first year out production. Under the agreement, IHDR would be part owner of the joint production facility which would have hard assets, including facilities and equipment of a projected $40,000,000 value, which will be bookable assets for IHDR. Financial requirements for the production and other costs related to the technologies will be secured and supplied through European banking and grant entities to the Joint Venture. IHDR will not be subject to any set equity based contribution to achieve financial aspects of the Joint Venture.

IHDR, as a founding partner of the Joint Venture can sponsor other companies as sub-partners of IHDR whose technologies will be built in Europe in the renewable energy arena. Energia Futura’s technology base will include wind projects, solar technologies, low head hydro systems, including the Energy Commander suite of technologies, and solid or bio waste remediation technologies. The Joint Venture agreement will be an expansion of the existing production and licensing agreement between IHDR and Cm2, the Italian energy products manufacturer. Energia and the production facility will be managed by Cm2’s senior management, who will have overall responsibility for the large facility. Initially, four companies will be owners and joint venture partners of Energia and the joint production facility. Under the initial agreement IHDR will become a joint venture partner with an ownership interest in the Joint Venture facility and equipment which has been preliminarily identified to be positioned at an extensive facility which has been revitalized in Narni, Italy. IHDR has identified other technologies which it may choose to introduce into the Joint Venture as IHDR sponsored technologies, giving IHDR an even larger stake in the Joint Venture ownership for such technologies. As a Joint Venture owner, IHDR will receive a share of the profit from the Joint Venture activities.Concurrent with the Joint Venture agreement, IHDR will proceed with the production of Energy Commander units through Cm2 in Terni, Italy, until the Joint Venture facility is ready to take over production. Under the agreement, IHDR will be a co-occupant of the facility with the other partner companies, however, due to its pre-existing contractual relationship with Cm2, IHDR’s production and staffing will be by Cm2, thus alleviating pay roll and other costs to the Company for production. In addition, under offered grants and other government backing from local and other entities, IHDR would receive long term loans and other financing, of 85% of all costs of production, materials, labor costs, and other expenditures for all production or activity at the facility. The Joint Venture was initiated by government and private entities in order to revitalize industries and produce jobs, while at the same time produce renewable energy technologies for Italian, European and other production.

The agreement was achieved by the CEO of IHDR during meetings with Energia and Cm2 in Narni and Rome, and was based upon a long held goal of Cm2 and sponsoring entities to achieve a production home for renewable technologies. The initial agreement is expected to reach the formal agreement phase upon completion of final identification and securing of the facility, and other governmental sponsorships which have been offered.

About Internal Hydro International, Incorporated

Internal Hydro International, Inc. is an alternative energy company that developed a clean energy power system, the Energy Commander Systems, which utilizes a patented technology using waste water, fluid or gas flow from any source where flow pressure is present, and yet wasted, to create electricity. Internal Hydro has grown into a multi-national enterprise with international contracts spanning over three continents. Internal Hydro is well positioned to gain major market share and dominate the niche of hydro energy and expansion into other renewable energy areas in the fragmented alternative energy marketplace. For more information, please visit the company’s Web site at http://www.InternalHydro.com.

Investors are cautioned that certain statements contained in this document as well as some statements in periodic press releases and some oral statement of IHDR officials are “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, which include words such as “believes,” “anticipates,” “intends,” “plans,” “expects,” and similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future IHDR actions, which may be provided by management, are also forward-looking statements as defined by the Act. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this report. These statements are not guarantees of future performance and IHDR has no specific intention to update these statements.

Contact:

          Internal Hydro International, Inc.
          William Englemen, Investor Relations
          (713) 320-3596
          contact@internalhydro.com


Source: Internal Hydro International, Inc.

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